TORONTO, Oct. 12, 2012 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") - (TSX: ANX) is pleased to report its financial and operating results from the fiscal 2013 first quarter ended August 31, 2012. The Company generated net income for the three months ended August 31, 2012 of $1,512,848 or $0.01 per basic and fully diluted share.
Anaconda's first quarter performance was buoyed by record sales volume at the Pine Cove project. During the period, the Company sold 4,217 ounces of gold and generated $6,860,300 in revenue and $2,407,485 in earnings before interest, taxes, depreciation, amortization and non-cash share-based compensation ("EBITDA"). The average gold sales price was $1,627 per ounce. Cash cost per ounce sold for the first quarter on a consolidated basis and at Pine Cove were $1,056 per ounce and $948 per ounce, respectively.
During the three months ended August 31, 2012, the gold sales volume of 4,217 ounces represented a 48% increase over the same period in 2011 (first quarter of fiscal 2012). Average sales price for the first quarter of fiscal 2013 was $1,627 per ounce versus $1,581 per ounce for the first quarter of fiscal 2012. As a result of higher sales volume and sales price, gross revenue during the three months ended August 31, 2012, which was $6,860,300, exceeded the same period in the previous fiscal year by $2,340,845. The improvement in overall gold output compared to the first quarter of fiscal 2012 was due to substantial improvement in head grade and overall mill recovery.
Anaconda President and CEO, Dustin Angelo, stated, "The Company had a strong first quarter, exceeding budget expectations in several categories including gold sales volume, revenue and EBITDA. Our goal is to hit our full year financial and operating targets and the first quarter has given us a very good start. We performed our scheduled maintenance during the latter half of August and have been ramping up to normalized levels during the current quarter. The Company also continues to advance its organic growth story around Pine Cove with the property option agreement with Fair Haven Resources and the initiation of its peninsula-wide exploration program and bulk sample at the Romeo and Juliet prospect. Subsequent to quarter end, we began trenching the more prospective targets, received the bulk sample permit for Romeo and Juliet and applied for a drill permit for the down dip area just north of our pit."
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).
Highlights for the three months ended August 31, 2012:
- As at August 31, 2012, the Company had cash and cash equivalents of $1,615,293 and a net working capital surplus of $519,634.
- During the first quarter, the Company made principal payments of $786,963 and reduced its overall debt to $3,530,102. Of the total principal paid, $600,000 went against its Series I, Series II and the Thorsen loan on a pro-rata basis.
- For the three months ended August 31, 2012, the Company sold 4,217 ounces of gold and generated $6,860,300 in revenue at an average sales price of $1,627 per ounce.
- At the Pine Cove project, EBITDA for the three months ended August 31, 2012 was $2,862,801.
- Cash operating cost per ounce sold at the Pine Cove project for the three months ended August 31, 2012 was $948 per ounce.
- On a consolidated basis, EBITDA for the three months ended August 31, 2012 was $2,407,485.
- Net income for the three months ended August 31, 2012 was $1,512,848 or $0.01 per basic and fully diluted share.
- Purchase of property, mill and equipment for the three months ended August 31, 2012 was $362,628.
- Approximately $166,000 was spent at the Pine Cove project on exploration for the three months ended August 31, 2012.
- On July 19, 2012 the Company entered into a five-year property option agreement with Fair Haven Resources Inc. to acquire a 100% undivided interest in 11 exploration licenses (the "Fair Haven Property") totaling 71 claims or approximately 1,804 hectares near the Pine Cove project. The Fair Haven Property increases the Company's land package around the Pine Cove project to approximately 4,335 hectares.
- During the first quarter, the Company initiated an exploration program which includes prospecting the properties across the Pine Cove project, obtaining a bulk sample from the Romeo and Juliet prospect and re-evaluating the exploration potential down dip from the current Pine Cove pit.
Pine Cove project, Baie Verte, Newfoundland:
The Pine Cove mill operated for 74 days during the period. Mill availability was 96% for the first two months of the quarter. In August, the mill was down for scheduled maintenance during a period that coincided with Newfoundland Hydro's planned, area wide power outages. Pine Cove's maintenance included relining the ball mill and repairing the thickener (one-time, unbudgeted item costing approximately $112,000 or $27 per ounce sold) as well as some other miscellaneous, unscheduled items. The shutdown began August 14, 2012 and continued for 16 days, accounting for the reduced availability and throughput. The Company does not have any more scheduled maintenance periods for the remainder of the fiscal year.
The mill processed 62,865 dry tonnes of ore (856 tonnes per operating day) at an average head grade of 1.85 grams per tonne ("g/t"), slightly lower than the 1.90 g/t that is projected for the fiscal year. Overall mill recovery averaged 84% for the quarter, which was 1% greater than budget. The following table summarizes the key mill operating statistics for the three months ended August 31, 2012 and August 31, 2011.
|August 31||August 31|
|Three months ended||2012||2011|
|Dry tonnes processed||62,865||79,935|
|Tonnes per 24-hour period||856||963|
|Overall mill recovery||84%||76%|
|Gold sales volume (troy oz.)||4,217||2,858|
Year over year mill performance for the first quarter improved substantially, primarily due to increases in grade and recovery. Head grade in the mill was 1.85 g/t in the first quarter of fiscal 2013 versus 1.51 g/t for the same period in the prior fiscal year. In the same comparative period, overall mill recovery went from 76% in fiscal 2012 to 84% in fiscal 2013. The scheduled shutdown in August 2012, described above, accounts for the year over year reduction in dry tonnes processed while tonnes per 24-hour period was less than the prior year due to wearing of the ball mill lifters. Both the lifters and liners were replaced during the aforementioned scheduled shutdown.
Mining activities operated for a total of 74 days and excavated a total of 605,180 tonnes of ore and waste. Ore production totaled approximately 90,000 tonnes exceeding budget by 15%, while waste was approximately 515,000 tonnes for a strip ratio of 5.7 : 1. The following table summarizes the mining production for the three months ended August 31, 2012 and August 31, 2011:
|Three months ending||August 31||August 31|
|Ore production (tonnes)||90,515||63,137|
|Waste production (tonnes)||514,665||552,094|
|Total production (tonnes)||605,180||615,231|
|Waste to ore ratio (strip ratio)||5.7||8.7|
During the first quarter ended August 31, 2012, the Company employed a second mining crew to remove organic and waste surface material at Pasture Pond and extend the pit on the north side to its ultimate limit. The waste removal performed by the additional crew accounts for the 5.7 : 1 strip ratio, which is greater than the life-of-mine ratio of 4.3 : 1. As of the end of the first quarter, the Pasture Pond stripping project was approximately 90% complete.
During the first quarter of fiscal 2013, mining activities also included the use of waste rock for the final earth moving and construction phase of the tailings dam upgrade (now complete). The completion of the tailings dam upgrade includes the placement of a non-permeable membrane to the top of the dam structure which is expected to be completed in the second quarter of this fiscal year. The tailings dam construction project began in the first quarter of fiscal 2012, which explains the high strip ratio of 8.7 : 1. The Company wanted to take advantage of better weather during the summer months and it excavated approximately 150,000 additional tonnes.
The Company, through a combination of staking and option agreements holds mineral exploration rights to approximately 4,335 hectares comprising the Pine Cove project. These rights cover highly prospective rocks of the Point Rousse ophiolite complex which is known to host "Mother-Lode-Style" gold mineralization. The fiscal 2013 exploration program has three objectives:
1) to re-evaluate the exploration potential immediately north of the Pine Cove deposit;
2) to identify drill targets regionally across the Pine Cove project; and
3) to obtain a bulk sample from the Romeo and Juliet prospect for metallurgical testing.
During the first quarter of fiscal 2013, the Company focused on the Regional Exploration plan and the Romeo and Juliet Bulk Sample, as described below.
- Regional Exploration: Past mineral exploration activities in the Ming's Bight area on the Baie Verte Peninsula, dating mainly from the period 1985-1990, resulted in an extensive collection of archived data that includes more than 30,000 gold-in-soil geochemical analyses. Much of this data has never been adequately followed up and many anomalies have not been explained. Compilation and digitizing of this historic geophysical and soil geochemical data was initiated by Tenacity Gold Mining Company Ltd. and completed by Anaconda as of the end of August 2012. Beginning in June 2012, prospecting teams started following up the historic soil data. To better define exploration targets and to validate the historic data, approximately 430 soil samples were collected and sent for analyses during the quarter. As a result of the positive sampling results, various trenching targets were identified and work will commence pending receipt of the respective permits for each target area. Subsequent to quarter end, the Company received the permit for the initial trenching target, which is located approximately one kilometer northeast of the Pine Cove mine.
- Romeo and Juliet Bulk Sample: The Romeo and Juliet prospect is a gold-bearing quartz vein system located 1.5 kilometers northwest of the Pine Cove mine. The veins were discovered in 1988 and have been trenched and tested by 18 shallow diamond-drill holes. The veins contain very fine, free gold making sampling a challenge ("nugget effect") as historic chip and channel samples returned quite variable assay values including 1.15 grams per tonne gold over 6 metres from the Romeo zone up to 23 grams per tonne over 1.0 metre from the Juliet zone. In 1993, a 10-tonne "mini" bulk sample was collected from the Juliet zone and 3,035 kilograms were processed returning a head grade of 36.68 grams per tonne gold (this data is historic in nature and has not been verified by Anaconda). In August 2012, 24 grab samples were collected from the Juliet zone and assay results ranged from a low of 10 parts-per-billion gold up to 130.7 grams per tonne gold. Anaconda plans to extract a 1,000-tonne bulk sample, pending permitting, which would help better define gold grade and provide samples for metallurgical testing. Subsequent to quarter end, the Company received the bulk sample permit.
All Anaconda samples were submitted by Anaconda personnel to Eastern Analytical Laboratory in Springdale, Newfoundland for assay.
The information in this press release has been reviewed and approved by David Evans, P. Geo., with Silvertip Exploration Consultants Inc., a "Qualified Person" under National Instrument 43-101.
Headquartered in Toronto, Canada, Anaconda is a growth-oriented, gold mining and exploration company with a producing asset located on the Baie Verte Peninsula in Newfoundland, Canada called the Pine Cove mine.
FORWARD LOOKING STATEMENTS
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.
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Anaconda Mining Inc.
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Company website: www.anacondamining.com