Anaconda Mining Generates $126,032 in Net Income for FY Q2 2013
TORONTO, ONTARIO -- (Marketwire) -- 01/15/13 -- Anaconda Mining Inc. ("Anaconda" or the "Company") - (TSX: ANX) is pleased to report its financial and operating results from the fiscal 2013 second quarter ended November 30, 2012. The Company generated net income for the three and six months ended November 30, 2012 of $126,032 and $1,638,880 or $0.00 and $0.01 per basic and fully diluted share, respectively. Earnings before interest, taxes, depreciation, amortization and non-cash share-based compensation ("EBITDA") was $849,173 and $3,256,657 for the three and six months ended November 30, 2012, respectively.
During the second quarter, the Company sold 3,194 ounces of gold and generated $5,395,563 in revenue at an average gold sales price of $1,686 per ounce. Cash cost per ounce sold for the second quarter on a consolidated basis and at Pine Cove were $1,423 per ounce and $1,256 per ounce, respectively. For the first half of fiscal 2013, the Company sold 7,411 ounces of gold and generated $12,255,862 in revenue at an average gold sales price of $1,654 per ounce. Cash cost per ounce sold for the first half of the fiscal year on a consolidated basis and at Pine Cove were $1,214 per ounce and $1,081 per ounce, respectively.
During the six months ended November 30, 2012 the Company incurred certain one-time expenses, which contributed to the higher than expected cash operating unit costs. In the mill, the Company had to make unscheduled repairs to the foundation of the thickener for $115,000. Additionally, in November, a portable crusher was utilized at a cost of approximately $80,000 for a short period of time to supplement production while Pine Cove's permanent crusher was undergoing a detailed evaluation. Lastly, the removal of Pasture Pond, an area at the north end of the ultimate pit that contained a pond and considerable overburden, cost approximately $270,000. All of these costs added roughly $63 per ounce to the operating expenses over the first two quarters of fiscal 2013.
Anaconda President and CEO, Dustin Angelo, stated, "The Company had a profitable quarter despite a slow restart after Pine Cove's scheduled maintenance shutdown at the end of August, lower than expected head grade and some one-time expenses. Mill throughput improved from 856 tonnes per day in Q1 to 884 in Q2 with October and November both averaging over 900 tonnes per day. The Company also continued to advance its organic growth story around Pine Cove with two more property option agreements during the second quarter. In addition, we made progress with respect to our peninsula-wide exploration and trenching program as well as the bulk sample at the Romeo and Juliet prospect. More recently, we began drilling the down-dip area just north of our pit."
During the three months ended November 30, 2012, the gold sales volume of 3,194 ounces represented a 47% increase over the same period in 2011 (second quarter of fiscal 2012). Average sales price for the second quarter of fiscal 2013 was $1,686 per ounce versus $1,751 per ounce for the second quarter of fiscal 2012. As a result of higher sales volume, gross revenue during the three months ended November 30, 2012, which was $5,395,563, exceeded the same period in the previous fiscal year by $1,603,519.
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 and six months ended November 30, 2012:
BALANCE SHEET:
-- As at November 30, 2012, the Company had cash and cash equivalents of
$98,945 and a net working capital deficit of $2,127,821. The Company had
$581,800 in outstanding accounts receivable related to gold sales, which
were collected just after quarter end. The working capital deficit is
primarily due to the loans and debentures becoming current.
-- During the six months ended November 30, 2012, the Company made
principal payments of $1,476,628 and reduced its overall debt to
$2,840,436. Of the total principal paid, $1,298,000 went against its
Series I, Series II and the Thorsen loans on a pro-rata basis.
OPERATING PERFORMANCE:
-- For the three and six months ended November 30, 2012, the Company sold
3,194 and 7,411 ounces of gold and generated $5,395,563 and $12,255,862
in revenue at an average sales price of $1,686 and $1,654 per ounce,
respectively.
-- Cash operating cost per ounce sold at the Pine Cove project for the
three and six months ended November 30, 2012 was $1,256 and $1,081 per
ounce, respectively.
-- At the Pine Cove project, EBITDA for the three and six months ended
November 30, 2012 was $1,384,528 and $4,247,328, respectively.
-- On a consolidated basis, EBITDA for the three and six months ended
November 30, 2012 was $849,173 and $3,256,657.
-- Net income for the three and six months ended November 30, 2012 was
$126,032 and $1,638,880 or $0.00 and $0.01 per basic and fully diluted
share, respectively.
-- Purchase of property, mill and equipment for the six months ended
November 30, 2012 was $916,042.
-- Approximately $395,000 was spent at the Pine Cove project on exploration
for the six months ended November 30, 2012.
STRATEGIC REVIEW:
-- On July 19, 2012 the Company entered into a five-year property option
agreement with Fair Haven Resources Inc. ("Fair Haven") to acquire a
100% undivided interest in 11 exploration licenses (the "Fair Haven
Property") totaling 71 claims or approximately 1,804 hectares.
-- On August 2, 2012, the Company staked additional property near the Pine
Cove project totaling 3 mining licenses and nearly 300 hectares.
-- On November 13, 2012 the Company entered into a five-year property
option agreement (the "Agreement") with Herb Froude ("Froude") to
acquire a 100% undivided interest in one exploration license (the
"Froude Property") totaling 11 claims or approximately 275 hectares.
-- On November 19, 2012 the Company entered into a five-year property
option agreement (the "Agreement") with Messieurs Duffitt and Strong
("Duffitt and Strong") to acquire a 100% undivided interest in 2
exploration licenses (the "Duffitt and Strong Property") totaling 7
claims or approximately 175 hectares.
-- During the first and second quarters, the Company's exploration
initiatives focused on prospecting the properties across the Pine Cove
project and obtaining a bulk sample from the Romeo and Juliet prospect.
OPERATIONAL OVERVIEW
Pine Cove project, Baie Verte, Newfoundland:
Mill operations:
The Pine Cove mill operated for 86 days during the three months ended November 30, 2012. Mill availability was 95% for the quarter. The mill processed 76,292 dry tonnes of ore (884 tonnes per operating day) at an average head grade of 1.75 grams per tonne ("g/t"), slightly lower than the 1.83 g/t projected for the quarter. Overall mill recovery averaged 83% for the quarter, which was on budget. The following table summarizes the key mill operating statistics for the three months ended November 30, 2012 and November 30, 2011.
OPERATING STATISTICS:
November 30 November 30
Three months ended 2012 2011
----------------------------------------------------------------------------
Availability 95% 72%
Dry tonnes processed 76,292 55,369
Tonnes per 24-hour period
(throughput) 884 837
Grade (g/t) 1.75 2.04
Overall mill recovery 83% 78%
Gold sales volume (troy oz.) 3,194 2,166
Year over year mill performance for the second quarter improved substantially, primarily due to increases in mill availability, throughput, and recovery. The disparity in availability and throughput is because the mill underwent a scheduled shutdown in Q2 FY 2012 to replace the drum filters and perform routine maintenance. For the current fiscal year, the scheduled maintenance already occurred in the first quarter. The new filtration equipment combined with a new coagulant provided a significant boost in both recovery and availability in the drum filter circuit beginning after the second quarter of fiscal 2012. Capital improvements in the leaching circuit, consisting of modifications to the down-comers, improved leach recovery as well. Mill operations also benefited from finer graduation of feed to the grinding circuit and through the regrind mill after the filtration circuit was no longer impeded by filter blinding, which was solved by the introduction of the aforementioned new coagulant. Head grade in the mill was 1.75 g/t in the period versus 2.04 g/t for the same period in the prior fiscal year.
Mining operations:
During the three months ended November 30, 2012, mining activities operated for a total of 64 days and excavated a total of 556,028 tonnes of ore and waste. Ore production totaled approximately 61,000 tonnes while waste production was approximately 495,000 tonnes for a strip ratio of 8.1:1. The following table summarizes the mining production for the three months ended November 30, 2012 and November 30, 2011:
OPERATING STATISTICS:
Three months ending November 30 November 30
2012 2011
----------------------------------------------------------------------------
Operating days 64 53
Ore production (tonnes) 61,172 46,276
Waste production (tonnes) 494,856 178,271
Total production (tonnes) 556,028 224,547
Waste to ore ratio (strip ratio) 8.1 3.9
The removal of Pasture Pond from the north side of the pit, which started in the first quarter of fiscal 2013, continued through September, the first of month of the second quarter. To complete the removal of the pond, 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. As of the end of the second quarter, the Pasture Pond stripping project was complete.
Year-to-date November 30, 2012, because of the Pasture Pond project, the Company budgeted to have a strip ratio of approximately 6.2 : 1 while the actual strip ratio was slightly higher at approximately 6.8 : 1. Excluding the Pasture Pond project, the actual strip ratio in the pit was approximately 5.4 : 1. The budgeted strip ratio for the balance of fiscal 2013 is under review, due to potential changes in pit design and pending results from the drilling activity down-dip of the pit, which is currently underway.
Exploration update:
During the first half of fiscal 2013, the Company focused on the regional exploration potential across the 4,785 hectares it controls on the Ming's Bight Peninsula and the Romeo and Juliet bulk sample, as described below.
1. 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. Prospecting teams have
followed up much of the historic soil data and completed infill
sampling in some areas.
As a result of the positive sampling results, trenching targets have
been identified in the Ming's Bight and Goldenville areas. Trenching
permits have been approved for the Ming's Bight targets and trenching
will get under way after spring breakup. 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 430 ppb over
one meter channel intervals.
Additional work is planned for both the Pine Cove North and
Goldenville areas. A regional airborne magnetic survey is planned and
it is anticipated that the magnetic data will outline structural
breaks (faults) that when combined with the soil geochemical data will
help identify trenching and diamond-drilling targets.
2. 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 the Company). 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. In
the late fall of 2012 Anaconda extracted a 1,000-tonne bulk sample
from the Juliet zone and stockpiled the broken quartz vein material at
the Pine Cove mine where it was crushed. Samples have been selected
from the stockpile and submitted for assaying followed by
metallurgical testing.
All Company generated 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.
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
dangelo@anacondamining.com
www.anacondamining.com
ProConsul Capital Ltd.
Andreas Curkovic
Investor Relations
(416) 577-9927
acurkovic@proconsulcapital.com
