Anaconda Mining Commences Formal Takeover Bid to Acquire New Island Resources

TORONTO, June 11 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX) announced today that it has formally commenced a share exchange takeover bid (the "Offer") for New Island Resources Inc. ("New Island") (TSXV: NIS) to acquire all of the issued and outstanding common shares of New Island.

"This transaction will allow New Island shareholders to benefit immediately from the ramp-up in production and future exploration upside of Pine Cove. In addition, New Island shareholders will also participate in the advancement of Anaconda's significant iron ore exploration and development portfolio in Chile (see Anaconda press release dated June 1, 2010), whereby Anaconda has recently increased its equity interest in a portfolio of assets with both near-term development potential and significant exploration upside." said Mr. Lew Lawrick, President and CEO of Anaconda. "We firmly believe that the shareholders of both New Island and Anaconda will realize tangible benefits from this transaction."

Offer Reflects Full Value for New Island's Assets

    
    -  The consideration, in the form of Anaconda common shares, values New
       Island at $0.1083 per New Island share, representing a substantial
       premium of approximately 54.8% based on the June 10, 2010 closing
       trading prices for each company.

    -  Since the Offer is a share exchange transaction, shareholders of New
       Island will, upon the successful completion of the Offer, continue to
       benefit from any significant developments from the Pine Cove Gold Mine
       near Baie Verte, Newfoundland and will continue to share in any future
       increases in value associated with the development and operation of
       the existing assets of Anaconda and New Island.

    -  On June 10, 2010, the last day prior to the commencement of the Offer,
       the closing price of the New Island common shares was $0.07 and the
       closing price of the Anaconda common shares was $0.325.
    

Benefits of the Offer

Anaconda expects the combination of Anaconda and New Island to produce benefits for New Island shareholders including:

    
    -  New Island shareholders will participate immediately in the Pine Cove
       Gold Mine cash flow versus waiting 12-18 months until after Anaconda's
       capital expenditures are paid back;

    -  New Island shareholders will not suffer further significant dilution
       during the capital payback period as a result of enjoying immediate
       access to cash flow from the Pine Cove Gold Mine;

    -  New Island shareholders will gain exposure to the significant growth
       potential of Anaconda's Chilean iron assets and access to a greatly
       diversified asset base outside of the province of Newfoundland;

    -  New Island shareholders will gain exposure to the seasoned Anaconda
       management team and independent Board of Directors that include
       significant entrepreneurial company building and value creation
       successes; accounting and audit committee experience, financial
       reporting knowledge, M&A experience, capital markets and fundraising
       capability, operations and mineral processing expertise, and industry
       accredited corporate governance stewardship; and

    -  New Island shareholders will participate in a growth-oriented company
       with a cash flow platform and focused, motivated management team.
    

Pursuant to the Offer, each New Island shareholder will receive 0.3333 of an Anaconda common share for each New Island common share tendered under the Offer. The takeover bid is subject to customary conditions, including that a minimum of 66 2/3% of the outstanding New Island common shares on a fully diluted basis are tendered to the Offer, receipt of all required regulatory approvals, including the approval of the TSX Venture Exchange, the absence of any material adverse change with respect to New Island, the absence of certain prohibited activities on the part of New Island (including security issuances, acquisitions and dispositions) and no untrue statements or omissions in New Island's public disclosure. Anaconda intends to take all necessary steps to acquire any New Island common shares that remain outstanding following the expiry of the Offer.

Full details of the Offer are contained in the formal offer to purchase and takeover bid circular to be filed today with securities regulatory authorities and to be mailed subsequently to New Island Shareholders. The Offer will remain open until 5:00 p.m. (Toronto time) on July 19, 2010.

Investors may obtain a free copy of the Offer documents filed by Anaconda today with Canadian securities regulators at www.sedar.com. In addition, you may request these documents free of charge, once they have been mailed, from Anaconda's information agent, Kingsdale Shareholder Services Inc. within North America at 1-888-518-1558 (outside North America at 1-416-867-2272).

This press release does not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any of the securities of New Island. Such an offer can only be made pursuant to an offer to purchase and accompanying an offering circular filed with the securities regulatory authorities in Canada.

    
    ABOUT ANACONDA
    --------------
    

Anaconda is a Toronto, Canada based mining development and exploration company focused on advancing its principal assets, the Pine Cove Gold Mine in Canada and its portfolio of Chilean iron ore assets. Anaconda is committed to bringing the Pine Cove Gold Mine into full Commercial Production, as well as advancing the exploration and near-term production opportunities of its Chilean iron ore assets. Anaconda continues to evaluate strategies to 'unlock' value attributable to its Chilean iron portfolio for the benefit of its shareholders.

    
    FORWARD-LOOKING INFORMATION
    ---------------------------
    

This news release contains certain "forward-looking information" under applicable Canadian securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking information. Forward-looking information is often characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Assumptions upon which such forward-looking information is based include Anaconda's ability to acquire 100% of the New Island common shares and the benefits that may be obtained as a result of the business combination of the two companies. Many of these assumptions are based on factors and events that are not within the control of Anaconda and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in ore grade or recovery rates, risks relating to international operations, fluctuating prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, the business of New Island and Anaconda not being integrated successfully or such integration proving more difficult, time consuming or costly than expected as well as those risk factors discussed or referred to in the Annual Information Form for Anaconda filed with securities regulatory authorities and available at www.sedar.com. Although Anaconda has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Anaconda undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.

%SEDAR: 00007625E

SOURCE Anaconda Mining Inc.

For further information: For further information: Lew Lawrick, President and CEO, Anaconda Mining Inc., (647) 478-5307, Email: llawrick@anacondamining.com; or Greg DiTomaso, Investor Relations, Anaconda Mining Inc., (647) 436-2592, Email: info@anacondamining.com; Or visit Anaconda's website at: www.anacondamining.com


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