TORONTO, Jan. 13 /CNW/ - Anaconda Mining Inc. ("Anaconda") - (TSX: ANX);
is pleased to report its results for the three and six months ended
November 30, 2010. All amounts are in Canadian dollars unless stated
otherwise. The financial results and Management's Discussion and
Analysis of these results may be found on Anaconda's website (www.anacondamining.com) and on its SEDAR profile href="http://www.sedar.com/">(www.sedar.com).
FISCAL SECOND QUARTER HIGHLIGHTS
Pine Cove gold mine, Baie Verte, Newfoundland:
During the second quarter ended November 30, 2010, Anaconda produced
980 ounces of gold versus 380 ounces during the first fiscal quarter, an
approximately 600 ounces or 157%.
Consistent recoveries in the processing circuit remained constrained by
a combination of
operator inexperience with the higher tonnage operation and mill
down-time associated with
the replacement of the primary ball mill starter.
Changes implemented during the second fiscal quarter allowed for greater
operational efficiency at the mill resulting in higher gold production
over the first fiscal quarter.
Ongoing optimization efforts of the mill processing circuit resulted in
steady improvements in gold recoveries as notably approximately 59%, or
566 ounces, of the 978 ounces produced in the second quarter came
during November, driving down unit operating costs, including site
level general and administrative expenses, to $1,091 per ounce for the
Iron-ore assets, Chañaral, Chile:
On November 30, 2010, the Company announced a strategic plan to realize
the value contained within its portfolio of Chilean iron-ore assets
together with its joint venture partner, Inversiones SBX Limitada
Anaconda and SBX agreed in principle to roll their respective Chilean
iron ore assets held in Minera Hierro San Gabriel and Inversiones
Hierro Antofagasta into a single dedicated company, creating a large,
stand-alone, world-class Chilean iron-ore company, separate and apart
from Anaconda's gold-producing assets.
Precious metals sales for the second quarter were $1.1 million, and $1.6
million for the six-month period ended November 30, 2010.
These were offset by $1.7 million ($2.7 million for the 6-month period)
for costs of goods sold.
Administrative expenses were $1.5 million for the quarter and $3.5
million over the 6 months.
The Company realized losses on the sale of investments during the second
quarter of $1.5 million and the loss on the sale of 50% of the
Anaconda's interest in its San Gabriel project (including the loss of
future VAT credits) increased by $41,000 over the second quarter to
bring the 6-month loss to a total of $2.0 million.
Consolidated net loss for the three and six months ended November 30,
2010 was approximately $4.2 million ($0.04 per basic and fully diluted
share) and $8.5 million ($0.08 per basic and fully-diluted share),
As at November 30, 2010, Anaconda had cash and cash equivalents of
$1,013,000, of which $836,000 was restricted for letters-of-credit
guarantees with a Canadian financial institution and amounts held in a
debt-reduction escrow account to be utilized for debt service and/or
principal repayments to Anaconda's Series I debenture holders.
As at November 30, 2010, Anaconda had a working capital deficiency of
approximately $4.9 million. Anaconda utilized the proceeds from its
precious metals sales over the first six months together with funds
drawn under new loans and debenture issues to fund operations and to
discharge some of its current operating obligations as well as
providing funding for its capital requirements.
The Company has also worked closely with its vendors to arrange payment
plans for past due payables. Many vendors have been highly receptive to
working with the Company to stage payments in a manner that mirrors the
timing of expected revenue, as the Pine Cove project increases its gold
The Company has undertaken to complete a rights offering, as discussed
in the press release dated December 23, 2010. Use of proceeds from the
rights offering will be used to repay aged payables and fund other
working capital requirements.
Anaconda President and CEO, Dustin Angelo, stated, "We continue to see
encouraging results out of the Pine Cove mill as evidenced by the
production in November, but we still have to make improvements in the
circuit, particularly related to leaching and filtration, to optimize
our recovery. We are pleased with the developments in Chile and look
forward to creating a sizable, stand-alone iron ore company."
Anaconda is a Toronto, Canada-based mining company focused on advancing
its principal assets, the Pine Cove Gold Mine in Canada and its
portfolio of Chilean iron ore assets. Anaconda has reached full
Commercial Production at Pine Cove and continues to work towards
optimizing the operation. Anaconda is also evaluating strategies to
'unlock' value attributable to its Chilean iron portfolio for the
benefit of its shareholders.
FORWARD LOOKING STATEMENTS
Certain statements contained herein constitute "forward-looking
statements". These forward- looking statements are based on current
expectations. The nature, timing and extent of mining and processing of
Pine Cove ore under the Crew Gold toll processing arrangement may
materially change from current intentions for a number of reasons.
Additionally, forward-looking statements look into the future and
provide an opinion as to the effect of certain events and trends on the
business. Forward-looking statements may include words such as "plans,"
"may," "estimates," "expects," "indicates," "targeting," "potential"
and similar expressions. These forward-looking statements, including
statements regarding Anaconda's beliefs in the potential
mineralization, are based on current expectations and entail various
risks and uncertainties. Actual results may materially differ from
expectations as more information regarding the property is gathered or
if known and unknown risks or uncertainties affect Anaconda's business,
or if Anaconda's estimates or assumptions prove inaccurate. Anaconda
assumes no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or any
SOURCE Anaconda Mining Inc.
For further information:
Anaconda Mining Inc.
President and CEO