Anaconda Mining Posts $2.6 Million in Net Income and Sells 3,852 Ounces for Q2 Fiscal 2014

TORONTO, ONTARIO--(Marketwired - Jan 13, 2014) - Anaconda Mining Inc. ("Anaconda" or "the Company") (TSX:ANX) is pleased to report its financial and operating results for the three months ended (the "Quarter") and six months ended November 30, 2013. The Company generated net income of $2,646,938, or $0.015 per fully diluted share, and $4,139,163 in earnings before interest, depreciation and depletion and share based compensation ("EBITDA") for the Quarter. The Company sold 3,852 ounces of gold and generated $5,299,446 in revenue at an average sales price of $1,376 per ounce. Cash operating cost per ounce sold at the Pine Cove Project for the Quarter was $1,021. The Company also recognized property and royalty income of $3,289,040 from its sold Chilean iron ore properties.

For the six months ended November 30, 2013, the Company generated net income of $3,243,234, or $0.018 per fully diluted share, and $5,925,515 in EBITDA. The Company sold 7,948 ounces of gold and generated $11,031,229 in revenue at an average sales price of $1,388 per ounce. Cash operating cost per ounce sold at the Pine Cove Project for the six months ended November 30, 2013 was $929.

During the Quarter, the Company entered into two three-year option agreements to acquire a 100% undivided interest in the Deer Cove and Stog'er Tight gold projects, which are adjacent to the Pine Cove Project. Anaconda considers Deer Cove and Stog'er Tight to be key components in its regional exploration program. The Company is planning an exploration program beginning with detailed compilation, structural interpretation and ground geophysical surveys at Stog'er Tight, followed up with a winter diamond-drill campaign. Detailed compilation of all Deer Cove data will also be undertaken with follow-up diamond-drilling to commence in the spring of 2014.

President and CEO, Dustin Angelo, stated, "The second quarter milestones and financial results were quite strong even in this continued volatile gold price environment. We recognized $3,289,040 in property and royalty payments from our sold Chilean iron ore assets, including the receipt of a US$1 million property payment, US$121,705 in the first of now ongoing quarterly royalty payments, and we have recognized the future receipt of US$2 million in commercial production milestone payments due by May 2015. We generated over $2.6 million in net income, over $4.1 million in EBITDA and almost $1.4 million in mine level cash flow. As a result, our cash position was in excess of $2.2 million at the quarter end. We sold 21% more ounces in the Quarter relative to the same period last year and, despite the gold price being lower, our actual average gold selling price was $65 per ounce higher than the average London PM gold fix price for the quarter and $75 higher on a year to date basis due to a successful hedging strategy. The Company completed a major strategic initiative during the Quarter with the acquisition of the Deer Cove and Stog'er Tight properties, consolidating our land position on the peninsula. These properties contain two advanced gold projects and will be a significant focus in our drive to increase resources and production in the coming months."

Highlights for the six months ended November 30, 2013

BALANCE SHEET:

• As at November 30, 2013, the Company had cash and cash equivalents of $2,272,713 and net working capital of $1,864,314.

OPERATING PERFORMANCE:

• For the three months ended November 30, 2013, the Company sold 3,852 ounces of gold and generated $5,299,446 in revenue at an average sales price of $1,376 per ounce.
• For the six months ended November 30, 2013, the Company sold 7,948 ounces of gold and generated $11,031,229 in revenue at an average sales price of $1,388 per ounce.
• Cash operating cost per ounce sold at the Pine Cove Project for the three and six months ended November 30, 2013 was $1,021 and $929 per ounce, respectively.
• Total cash cost per ounce sold, including corporate administration, capital expenditures and exploration costs for the three and six months ended November 30, 2013 was $1,276 and $1,271 per ounce, respectively.
• Milestone payments and royalty revenue from Chilean iron ore properties were $3,289,040, which included the receipt of US$1 million in September, the receipt of a US$121,705 royalty payment and the recognition of the US$2 million commercial production milestone payment due no later than May 15, 2015.
• At the Pine Cove Project, earnings before interest, depreciation and depletion and share based compensation ("EBITDA") for the three and six months ended November 30, 2013 was $1,365,722 and $3,643,423, respectively.
• On a consolidated basis, EBITDA for the three and six months ended November 30, 2013 was $4,139,163 and $5,925,515, respectively.
• Net income for the three months ended November 30, 2013 was $2,646,938 or $0.015 per basic and fully diluted share, respectively.
• Net income for the six months ended November 30, 2013 was $3,243,234 or $0.018 per basic and fully diluted share, respectively.
• Purchase of property, mill and equipment for the six months ended November 30, 2013 was $748,469. Key items include crusher upgrades of 205,000, mining software of $88,000 and mill laboratory additions of $54,000.
• Additions to production stripping assets for the six months ended November 30, 2013 were $362,361; depreciation of production stripping assets during the same period was $70,154.

GROWTH INITIATIVES:

• The Company completed two three-year option agreements to acquire a 100% undivided interest in the Deer Cove and Stog'er Tight gold projects, which are adjacent to the Pine Cove Project and are key components in its regional exploration program.
• Approximately $600,000 was spent at the Pine Cove Project on exploration for the six months ended November 30, 2013. The Company's exploration initiatives focused on drilling the Romeo and Juliet prospect, an airborne survey across the entire project and structural interpretations in and around the Pine Cove pit.

Operations overview

During the three months ended November 30, 2013, the gold sales volume of 3,852 ounces represented a 21% increase over the same period in fiscal 2013. Average sales price for the Quarter was $1,376 per ounce versus $1,686 per ounce for the second quarter of fiscal 2013, an 18% decrease. As a result of the higher sales volume and a lower selling price, gross revenue during the three months ended November 30, 2013, of $5,299,446, was lower than the same period in the previous fiscal year by $97,117 or 2%.

The following table summarizes the key operating metrics for fiscal 2014 and 2013.

Milling operations

The Pine Cove mill operated for 79 days during the Quarter at 87% availability. The mill processed 76,114 dry tonnes of ore (956 tonnes per operating day) at an average head grade of 1.80 grams per tonne ("g/t") and an overall mill recovery of 83%. During the month of November, the Baie Verte Peninsula experienced a winter storm, which caused power outages at the mine site. As a result of the weather and subsequent difficulty in restarting the ball mill, the Pine Cove mill was down for a total of six (6) days during the month. Despite the interruption, the Company processed almost exactly the same amount of tonnes in the Quarter as it did in the similar period in fiscal 2013 because of an 8% year-over-year increase in tonnes per operating day.

Mining operations

Mining activities operated for a total of 62 days during the Quarter and excavated a total of 512,378 tonnes of ore and waste. Ore production totaled approximately 84,533 tonnes, while waste was 427,845 tonnes for a strip ratio of 5.1 : 1. During the Quarter, the mine experienced dewatering issues caused by power outages. The combination of power outages and unusually high precipitation (snow and rain) delayed access to the newly developed bench at the 5006 level where higher grade ore mining is scheduled. Mining activities were therefore redirected to upper benches to allow dewatering of the lower yet potentially higher grade areas of the mine.

Exploration

The first half of fiscal 2014 exploration program focused on the following objectives:

The information in this news 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.