TORONTO, ONTARIO — (Marketwired) — 08/29/13 — Anaconda Mining Inc. („Anaconda“ or „the Company“) (TSX: ANX) is pleased to report its financial and operating results for the fiscal year ended May 31, 2013. The Company generated net income of $7,438,629 or $0.04 per fully diluted share compared with net income of $3,298,063 or $0.02 per fully diluted share for the fiscal year ended May 31, 2012. Fiscal 2013 net income consisted of income from operations of $3,460,629 or $0.02 per share and the recording of a deferred income tax recovery of $3,978,000 or $0.02 per share. Deferred income tax assets were recorded when the Company removed its going concern note to the financial statements and recognized the tax value of its income tax loss carry forward amounts.
President and CEO, Dustin Angelo, stated, „The Company had another record year in terms of sales volume, revenue, operating cash flow and net income. We generated nearly $7 million in EBITDA and over $9 million in mine level cash flow, which is tremendous when you consider our market capitalization. We were also successful in achieving our number one goal for the fiscal year, which was to pay off all of our high cost debt. As at May 31, 2013, we had a very clean balance sheet with only approximately $260,000 in low cost, government issued loans. The balance sheet will be fortified in September when the Company receives the US$1 million commercial production milestone payment from our partners in Chile. Going forward, we will also begin to receive royalty payments from Chile so this non-core asset has, once again, become a cash generator.“
The Company-s core gold mining business continues to improve and management has set challenging goals for fiscal 2014. The Company has budgeted to produce and sell approximately 18,000 ounces of gold for the year and generate nearly $4 million in net income using a gold price of $1,400 per ounce and an average head grade of approximately 2.1 grams per tonne. Cash operating costs at the mine level (production, royalty, Pine Cove G&A, etc.) are expected to be approximately $960 per ounce and all in cash costs including corporate, capital expenditures and exploration are projected to be approximately $1,200 per ounce.
Highlights for the fiscal year ended May 31, 2013
BALANCE SHEET IMPROVEMENT:
OPERATING PERFORMANCE:
GROWTH INITIATIVES:
Operations overview
During the year ended May 31, 2013, the gold sales volume of 14,879 ounces represented a 24% increase over the same period in 2012. Average sales price for the year was $1,625 per ounce versus $1,662 per ounce for the year of fiscal 2012, a 2% decrease. As a result of the higher sales volume, gross revenue during the year ended May 31, 2013, of $24,172,439, was significantly higher than the same period in the previous fiscal year by $4,266,683. The higher overall gold output compared to the previous year was a result of higher grade and recovery.
The following table summarizes the key operating metrics for fiscal 2013 and 2012.
MILLING OPERATIONS
The Pine Cove mill operated for 323 days during the year at 87% availability. The mill processed 287,747 dry tonnes of ore (890 tonnes per operating day) at an average head grade of 1.99 grams per tonne („g/t“), higher than the 1.90 g/t projected for the year. Overall mill recovery averaged 83% for the year, which was on budget.
Mill availability and throughput was best in the second and fourth quarters when there were no significant weather issues or maintenance down time. In the first quarter, the mill was down in August 2012 for a two week maintenance period, slightly longer than planned. In the third quarter, significant snowfall followed by extended periods of rain and freezing rain contributed to some mechanical failures and lower availability of the crushing plant during the winter. In addition, there were two weather related power outages/incidents causing site shutdowns. Subsequent mechanical improvements together with an extension in the crushing schedule alleviated availability issues going into the final quarter of fiscal 2013. These improvements allowed the site to achieve crushing capacity in excess of the mill capacity. Consequently, the site maintained consistent feed to the ball mill and several days of crushed ore for unscheduled mechanical downtime. The following table summarizes the key mill operating statistics for the year ended May 31, 2013.
MINING OPERATIONS
Mining activities operated for a total of 234 days during the year and excavated a total of 1,958,467 tonnes of ore and waste. Ore production totaled approximately 309,000 tonnes which was right at budget, while waste was approximately 1,649,000 tonnes for a strip ratio of 5.3 : 1, also very close to plan. Operating days were reduced in the final two quarters as a result of over production relative to budget in the first two quarters. The following table summarizes the key mine operating statistics for the year ended May 31, 2013.
EXPLORATION
The Company, through a combination of staking and option agreements holds mineral exploration rights to approximately 4,785 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 had three objectives:
1) to re-evaluate the exploration potential immediately north and west of the Pine Cove deposit;
2) to identify trenching and diamond-drill targets regionally across the Pine Cove project; and
3) to obtain a bulk sample from the Romeo and Juliet prospect for metallurgical testing.
Highlights:
Western Extension Area
Down-dip Extension Area
As a result of the positive sampling results, trenching targets have been identified in the Ming-s Bight and Goldenville areas. Because of positive sampling results from the Goldenville area, Anaconda optioned three mineral licenses from local prospectors (Press Release dated December 11, 2012) and now controls a 4-kilometer strike length of the Goldenville iron formation.
Trenching has also been completed in the Pine Cove North area. Three trenches exposed shear-related, strongly silicified and iron-carbonitized mafic volcanic rocks locally containing disseminated pyrite. These altered zones are anomalous in gold over exposed trench lengths of greater than 30 meters with assay values up to 820 ppb over one meter channel intervals.
Additional work is planned for both the Pine Cove North and Goldenville areas.
In June, after the fiscal year end, Fugro Airborne Services completed a helicopter-borne Electromagnetic/Magnetic survey over the entire Pine Cove Project. The Dighem EM/Horizontal Magnetic Gradiometer survey targeted ophiolitic and cover sequence rocks of the Point Rousse Complex. The survey covered approximately 700 line kilometers at a flight line spacing of 75 meters. The data will be used in conjunction with archived gold-in-soil geochemical data and prospecting to further delineate exploration targets.
Five representative samples of crushed quartz, averaging 12.6 kg, were processed at Accurassay Laboratories in Thunder Bay by cyanide extraction (bottle roll testing). The weighted average assay of the five samples is 5.71 g/t gold and is representative of the gold grade within the near surface portion of the Juliet zone where the bulk sample was extracted. Table 1 contains the head grade assay results for the five samples.
Romeo and Juliet Project Plan
The Company initiated metallurgical testing and pilot milling of the Romeo and Juliet material. Ideally, the quartz vein hosted mineralization would supplement the current sulfide hosted mineralization to maximize the current circuit configuration of the mill. The Company is also planning to calculate a preliminary resource estimate after receiving the results from the 2,000 metre in-fill diamond-drill program that was initiated in July and completed by mid-August, 2013. Pending a favorable resource estimate, Anaconda is considering an underground exploration program, to better define grades and geometry.
The information in this release has been reviewed and approved by David Evans, P. Geo., with Silvertip Exploration Consultants Inc., a „Qualified Person“ under National Instrument 43-101.
ABOUT ANACONDA
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.
Contacts: Anaconda Mining Inc. Dustin Angelo President and CEO (647) 260-1248
ProConsul Capital Ltd. Andreas Curkovic Investor Relations (416) 577-9927
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