Anaconda Mining Sells Chilean Iron Ore Assets to Hierro Tal Tal; Proceeds to Assist in Debt Repayment

TORONTO, Dec. 7, 2011 /CNW/ - Anaconda Mining Inc. ('Anaconda' or 'the Company') -

is pleased to announce that, pursuant to an agreement dated today, it has closed the sale of its Chilean iron ore exploration assets to a private Chilean company, Hierro Tal Tal S.A. ('Tal Tal'), for up to US$11 million in cash payments, a gross sales royalty and a 1.25% carried interest in Compania Portuaria Tal Tal S.A. ('CPTT'). With the cash proceeds received at closing of US$2 million, Anaconda will repay the full principal amount plus accrued interest of approximately $711,000 to the holders of the Series III Debentures within one week of the closing. In addition, the Company will pay other outstanding debt service obligations and vendor payables. Per the terms of the share purchase agreement (the 'SPA'), Anaconda will receive another cash payment of US$2 million on May 31, 2012, which the Company expects to use primarily to repay portions of other debts including the Convertible Loan and the Series I and II Debentures. All amounts are in Canadian dollars unless stated otherwise.

President and CEO of Anaconda, Dustin Angelo, stated, 'The sale of the Chilean iron ore assets is a very positive step for the Company in realizing its long term strategic goals.  The Company has sought a way to derive value from the iron ore assets while separating them from our gold asset, and the sale achieves those objectives. Anaconda can now focus its efforts on enhancing the performance of the Pine Cove mine and build off its recent success at the producing project. Furthermore, the Company plans to pursue growth through exploration initiatives within the Pine Cove mining license. Anaconda will also evaluate expansion opportunities on the Baie Verte Peninsula as well as through corporate transactions or asset acquisitions of other gold assets throughout North America. In addition, the cash infusion from the sale has helped the Company improve its balance sheet. With the other US$2 million payment in approximately six months and cash flow from Pine Cove, Anaconda could potentially pay down a significant amount of its debt by the summer 2012.'

Overview of the transaction:

Anaconda's wholly owned subsidiary, Inversiones La Veta SpA ('La Veta'), sold its shares representing a 50% ownership stake in Minera Hierro San Gabriel S.A. ('MHSG') and a 20% ownership stake in Inversiones Hierro Antofagasta S.A. ('IHA') to Tal Tal for up to US$11 million in cash payments, of which US$2 million was paid at closing and an additional US$2 million is due on May 31, 2012. La Veta will have the right to receive an additional US$3 million upon achievement of commercial production, as defined by the SPA, by any of the properties, directly or indirectly, controlled by MHSG or IHA (the 'Properties'). La Veta can earn up to another US$4 million based on the sales price realized for certain volumes of production from the Properties, as defined in the SPA.

Furthermore, La Veta shall earn a gross sales royalty for all production sold from the Properties.  For the Properties controlled by MHSG, the gross sales royalty shall be 0.80% and for the Properties indirectly controlled by IHA, the gross sales royalty shall be 0.50%. Lastly, La Veta shall receive a 1.25% carried interest in CPTT, a private Chilean company whose principal asset is a concession giving it the right to build a port in the city of Taltal.

General Manager of Tal Tal, Antonio Barros, stated, 'Tal Tal is currently undertaking advanced economic studies in preparation for financing the construction of an iron mine, near the town of Taltal in northern Chile, which will produce sinter feed for the Asian markets.  Production is expected to begin by December of 2012.  Tal Tal is also planning further exploration with the goal of expanding resources in the area.'

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 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.

Anaconda Mining Inc.

CONTACT:

Anaconda Mining Inc. Terre Partners

Dustin Angelo or Joanna Longo

President and CEO Investor Relations

(647) 260-1248 (416) 775-8771

Email: dangelo@anacondamining.com Email: jlongo@terrepartners.com





Company website: www.anacondamining.com