TORONTO, April 15 /CNW/ - Anaconda Mining Inc. ("Anaconda") - (TSX:
ANX); is pleased to report its results for the three and nine months
ended February28, 2011. 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 (www.sedar.com).
FISCAL THIRD QUARTER HIGHLIGHTS
Pine Cove gold mine, Baie Verte, Newfoundland:
During the third quarter ended February 28, 2011, Anaconda continued to
increase gold production over the previous fiscal quarters with
approximately 1,790 ounces produced versus 980 ounces and 380 ounces
during the second and first fiscal quarters, respectively.
The mill processed 56,892 tonnes of ore with a weighted average grade of
2.2 grams per tonne, which equates to an average of 632 dry tonnes per
day ("tpd") of throughput throughout the fiscal third quarter. The
average throughput takes into account downtime due to inclement
weather, scheduled and unscheduled maintenance and holidays. Through
the end of the quarter, the mill had been able to consistently process
800 to 850 tpd on a sustained basis.
Subsequent to quarter end, the Company made a series of modifications to
the crusher and cyclones to increase throughput to 950 to 1,000 tpd on
a sustained basis.
At the end of January 2011, the Company initiated a multi-step process
to minimize the adverse effects clay minerals in the ore were having on
leach recovery and filtration. The recently completed modifications to
the circuit have resulted in the production of a higher grade
flotation concentrate (ranging from 40 grams per tonne to 50 grams per
tonne) and flotation recoveries have improved to approximately 89% to
Iron-ore assets, Chañaral, Chile:
Anaconda and Inversiones SBX Limitada ("SBX"), Anaconda's Chilean Joint
Venture Partner, have focused their resources on moving the Esperanza
iron deposit forward toward a commercial development decision.
Esperanza is a small, fully permitted for development, near surface
magnetite hosted iron deposit in the greater San Gabriel project area
that hosts a resource of 4.5 million tonnes grading 41% total iron (see
Anaconda press release dated August 14, 2008).
Detailed metallurgical studies along with preliminary process
engineering have been completed. The JV partners have requested
equipment pricing from suppliers in order to finalize a detailed mine
plan (including capital expenditures and operating costs) to determine
the economic scope under which a near term development decision can be
based. The Esperanza mineral resource is near surface and as a result
will require minimal pre-stripping and could be in production within
approximately 12 months following a production decision.
Based on preliminary work performed to date, Esperanza is expected to
produce approximately 700,000 tonnes per year of iron concentrate
grading greater than 63 percent iron (based on metallurgical tests
indicating an optimal 3 millimetre sinter fines product).
Anaconda, with the assistance of Gryphon Partners, is reviewing
potential off-take arrangements for the product to be produced from
Precious metals sales for the third quarter and for the nine-month
period ended February 28, 2011, were $2.2 million and $3.9 million,
Sales were offset by $3.0 million ($6.2 million for the 9-month period)
for costs of goods sold.
Administrative expenses were $0.89 million for the quarter and $3.0
million over the 9 months ended February 28, 2011.
Consolidated net loss for the three and nine months ended February 28,
2011was approximately $1.9 million ($0.015 per basic and fully diluted
share) and $10.3 million ($0.091 per basic and fully-diluted share),
As at February 28, 2011, Anaconda had cash and cash equivalents of
$504,000, of which $326,000 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 February 28, 2011, Anaconda had a working capital deficiency of
approximately $6.875 million. Anaconda utilized the proceeds from its
precious metals sales over the first nine 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 continues to work closely with vendors with which it has
made payment plans as well as arranging new 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 output.
The Company detailed the terms of its rights offering, as discussed in
the press release dated April 1, 2011. One right (a "Right") will be
issued for each common share outstanding and 4 Rights will entitle the
shareholder to purchase one common share for $0.07. Use of proceeds
from the rights offering will be used to repay aged payables and fund
other working capital requirements.
On April 11, 2011, the Company announced that it was extending the
maturity date of its unlisted common share purchase warrants with
expiry dates of April 23, 2011, May 11, 2011 and July 25, 2011, for all
non-insider holders. The expiry dates of the share purchase warrants
have been extended by 1 year.
Anaconda is a Toronto, Canada based mining and exploration company
focused on operating the Pine Cove gold mine located near Baie Verte in
Newfoundland, Canada and, with its joint venture partner, Inversiones
SBX Limitada, advancing the development and exploration of its iron ore
portfolio in Chile.
FORWARD LOOKING STATEMENTS
This document contains or refers to forward-looking information. Such
forward-looking information includes, among other things, statements
regarding the proposed amendment to the expiry date of warrants,
targets, estimates and/or assumptions in respect of future production,
mine development costs, unit costs, capital costs, timing of
commencement of operations and future economic, market and other
conditions, and is based on current expectations that involve a number
of business risks and uncertainties. Factors that could cause actual
results to differ materially from any forward-looking statement
include, but are not limited to: the approval of the amendment to the
expiry date of warrants by the Toronto Stock Exchange; the grade and
recovery of ore which is mined varying from estimates; capital and
operating costs varying significantly from estimates; inflation;
changes in exchange rates; fluctuations in commodity prices; delays in
the development of the any project caused by unavailability of
equipment, labour or supplies, climatic conditions or otherwise;
termination or revision of any debt financing; failure to raise
additional funds required to finance the completion of a project; and
other factors. 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. Forward-looking statements are subject
to significant risks and uncertainties and other factors that could
cause actual results to differ materially from expected results.
Readers should not place undue reliance on forward-looking statements.
These forward-looking statements are made as of the date hereof and we
assume no responsibility to update them or revise them to reflect new
events or circumstances, except as required by law.
SOURCE Anaconda Mining Inc.
For further information:
Company website: www.anacondamining.com