TORONTO, Oct. 27, 2016 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (TSX: ANX) is pleased to report that it has entered into an aggregates royalty agreement with Shore Line Aggregates ("SLA"), a subsidiary of the Company's local contract miner, Guy J. Bailey Ltd., where Anaconda has granted a right to SLA to mine, crush and ship an aggregates product made from Anaconda's surplus stockpiled rock and in-situ rock from the Pine Cove pit at the Point Rousse Project in exchange for a production royalty (the "Royalty Agreement") worth approximately $2,000,000. SLA is working with a dry bulk ship owner/operator, Phoenix Bulk Carriers (BVI) Ltd. ("Phoenix"), a subsidiary of Pangaea Logistics Solutions Ltd., to fulfill a 3,500,000-tonne aggregates contract (the "Aggregates Venture") for a project located on the eastern seaboard of the United States. SLA and Phoenix began shipping the aggregates product at the end of September and expect it will take up to approximately 14 months to fulfill the contract. All dollar amounts are in Canadian dollars unless otherwise noted.
President and CEO, Dustin Angelo, states, "This Aggregates Venture is a tremendous opportunity for Anaconda, Guy J. Bailey, the local communities and the Baie Verte region as a whole. The additional economic development and jobs that come from this project will be a boon for the local economy. For Anaconda, we have an opportunity to generate additional revenue through a royalty and strengthen the infrastructure already established at the Point Rousse Project. In addition to a well performing gold mill, plenty of tailings capacity and mineral resources, we now have infrastructure in place that allows us to export waste rock and, with modifications, import ore to the benefit of the project."
Owner of Guy J. Bailey Ltd., Scott Bailey, states, "We have made a significant investment in this project and it demonstrates our commitment to helping boost the economy of the Baie Verte region. We're proud to be able to bring more employment to the area and we look forward to developing a longstanding venture with our partners."
Vice President of Phoenix Bulk Carriers, Peter Koken, states, "We are proud to be a part of this venture and to have the opportunity to work with a group of highly motivated professionals. The port facility at the Point Rousse Project has the potential to generate a substantial long term benefit to the project and the community. Its location is ideal to effectively penetrate the seaborne aggregates market, particularly along the East and Gulf Coasts of the United States."
To be able to crush and load the aggregates product, SLA purchased the requisite crushing equipment and developed the production site just west of the Pine Cove pit on the shore of the Baie Verte Harbour. The dock facility consists of two causeways with cribbing at the end of them. A temporary, floating barge, approximately 100 feet wide by 400 feet long, serves as a platform for loading the aggregates onto ocean-going transport vessels.
Anaconda has received permits and/or approvals to construct facilities and operate the Aggregates Venture from the Newfoundland and Labrador Department of Natural Resources, the Newfoundland and Labrador Department of Environment and Conservation, the Federal Department of Fisheries and Oceans and Transport Canada. The Company is also presently working with the Canadian Environmental Assessment Agency ("CEAA") as part of CEAA's routine compliance assessment procedures. Anaconda has submitted a project description and expects a response from CEAA by the middle of December.
The Royalty Agreement will generate approximately $2,000,000 of ancillary revenue for the Company over the next 14 months and turn a cost centre into a revenue centre. Under typical open pit mining operations at the Pine Cove pit, Anaconda has to remove and dispose of waste rock to extract the gold bearing ore. Consequently, the Company has to create waste dump areas to stockpile the waste rock. With the Aggregates Venture, the waste rock now becomes an innovative and environmentally friendly commercial product that can be shipped off site and generate revenue.
In addition, Anaconda is not required to provide any capital for the development or operation of the Aggregates Venture, but will own any improvements made to the site and any fixed, permanent infrastructure associated with the dock facility. Equally important, because of the logistics involved in the production of the aggregates product, Anaconda's haul distance for its gold mining operation will be reduced, thus lowering mining costs.
The quality of rock and location of the Point Rousse Project present a unique opportunity for Anaconda. Material testing confirms that the rock is suitable for general aggregates purposes with acceptable LA Abrasion values, good absorption and soundness qualities. With water export access, this product is competitive in the seaborne aggregates market, resulting in an additional revenue stream for the Company and diversifying the Baie Verte area economy. Furthermore, the deposit at Pine Cove is located approximately 500 metres from the shore of the Baie Verte Harbour.
Economic and Environmental Impact:
The Aggregates Venture is anticipated to create approximately 40 shore side positions, particularly related to crushing and material handling, employed by SLA. In addition, it is anticipated that sea-side crews to staff two tugs will be required, in addition to other services required for vessel docking. There will also be a positive economic impact for local and regional vendors who are expected to supply goods and services to the Aggregates Venture as part of normal operations.
The shipment of aggregates for the Aggregates Venture will reduce the need for waste rock disposal on site and will decrease the overall environmental footprint of the Point Rousse Project.
ABOUT ANACONDA MINING
Anaconda Mining is a growth-oriented, gold mining and exploration company with a producing project called the Point Rousse Project and an exploration/development project called the Viking Project in Newfoundland.
The Point Rousse Project is approximately 6,300 hectares of property on the Ming's Bight Peninsula located in the Baie Verte Mining District in Newfoundland, Canada. Since 2012, Anaconda has increased its property control by ten-fold on the peninsula and gold production to nearly 16,000 ounces per year. In an effort to expand production, it is currently exploring three primary, prospective gold trends, which have approximately 20 km of cumulative strike length and include five deposits and numerous prospects and showings, all within 8 km of the Pine Cove mill.
Anaconda also controls the Viking Project, which has approximately 6,225 hectares of property in White Bay, Newfoundland, approximately 100 km by water (180 km via road) from the Pine Cove mill. The project contains the Thor Deposit and other gold prospects and showings. The company's plan is to discover and develop more resources within these project areas and substantially increase annual production at the Pine Cove Mill from its current rate of nearly 16,000 ounces.
As the only pure play gold producer in Atlantic Canada, Anaconda Mining is turning the rock we live on into a growing and profitable resource. With a young and motivated workforce, innovative technology and the support of local suppliers, Anaconda is investing in the people of Newfoundland & Labrador and giving back to the communities in which we operate – building a better future for all our stakeholders, from the ground up.
This document contains or refers to forward-looking information. Such forward-looking information includes, among other things, statements regarding 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 final approval of the private placement 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: Anaconda Mining Inc., Dustin Angelo, President and CEO, (647) 260-1248, [email protected], www.AnacondaMining.com; High Stakes Strategy & Communications, Lynn Hammond, Executive Consultant, (709) 330-1260, [email protected]