Anaconda Mining outlines high grade mineralization and processes a 3.08 g/t sample from the east zone of the Stog'er Tight Project

TORONTO, June 7, 2016 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (TSX: ANX) recently outlined and processed 7,880 tonnes of high-grade ore (the "High-Grade Sample") from the East Zone (Exhibit A), which is thought to be the continuation of the Stog'er Tight Deposit ("Stog'er Tight" or the "Deposit") (see press release of December 17, 2015).  The Company processed the High-Grade Sample along with 2,111 tonnes of relatively lower-grade ore (the "Processed Sample") from the eastern portion of the Stog'er Tight Deposit to produce a mill head grade of 3.08 grams per tonne ("g/t") gold, nearly double the grade currently coming from the Pine Cove Pit. Mill recovery of the Processed Sample was 83.2%, yielding a total of 823.6 ounces of gold.  The Processed Sample was excavated over several days, trucked 3.5 kilometres to the Pine Cove mill and processed from May 8th through May 15th.  The recovered gold generated $1.3M in revenue.

Dustin Angelo, CEO of Anaconda, states, "Because of the robust grade in this sample, we were able to generate 823.6 ounces in just a week, which is approximately two and a half times our typical production rate. The results demonstrate the tremendous leverage our operation can get from higher-grade ore. We see potential to find more high-grade ore in the East Zone along strike of this high-grade area and at depth. Our near-term efforts will concentrate on outlining more of this zone, as well as other sources of high-grade resources, and processing the ore to maximize gold production and profits."

The High-Grade Sample was outlined by percussion drilling during recent exploration efforts. It was intersected in 6 of 13 holes (Exhibit B) over a strike length of approximately 40 metres and to a depth of 10 metres. During excavation, the Company discovered a fault zone (the "Fault Zone") that appears to be a geologic feature constraining the area in the East Zone containing the High-Grade Sample (the "High-Grade Area"). The High-Grade Area is south of the Fault Zone and remains open along strike to the southeast and at depth. The Company is planning another diamond and percussion drill program at Stog'er Tight aimed at following the strike and depth extents of the High-Grade Area.

Highlights of the percussion drill program are as follows:

Diamond Drill Results

In February and March, the Company drilled nine, shallow diamond drill holes totaling 489 metres in the East Zone, north of the Fault Zone, to test the possible near-surface easterly extension of the Stog'er Tight Deposit (Exhibit B). Eight of nine holes intersected the expected alteration typical of Stog'er Tight mineralization, but only two holes intersected significant mineralization. Hole BN-16-252 intersected 7 metres of 0.55 g/t Au from 31 to 38 metres and BN-16-253 intersected 2 metres of 2.73 g/t Au from 32 to 34 metres. The eastern portion of the Stog'er Tight Deposit still remains open at depth.

A tenth diamond drill hole (BN-16-251) was drilled south of the High-Grade Sample, but did not intersect significant mineralization.  Subsequent to the diamond drill program, the percussion drill program (described above) intersected the High-Grade Area of the East Zone and resulted in the recognition of the Fault Zone.

Overview of the Stog'er Tight Deposit

The Stog'er Tight Deposit is located 3.5 kilometres from the Pine Cove mill along the existing mine road. The Deposit contains a 43-101-compliant resource, including an Indicated Resource of 204,100 tonnes with a grade of 3.59 g/t Au (23,540 oz Au) and an Inferred Resource of 252,000 tonnes with a grade of 3.27 g/t Au (26,460 oz Au) using a cut-off grade of 0.8 g/t Au (see Company's news release dated October 22, 2015). The Deposit is characterized by intense carbonate, albite, and pyrite alteration of gabbroic rocks with gold, strongly associated with pyrite, which is similar to the Pine Cove Deposit.  The geological characteristics of Stog'er Tight are found in a much larger area around the Deposit that is approximately 1.5 kilometres long by 0.5 kilometres wide. Besides the East, West and Gabbro Zones, several other zones of alteration and mineralization have been identified throughout the greater Stog'er Tight area, indicating the potential for further discovery.

This news release has been reviewed and approved by Paul McNeill, P. Geo., VP Exploration with Anaconda Mining Inc., a "Qualified Person", under National Instrument 43-101 Standard for Disclosure for Mineral Projects.

All samples are collected using QA/QC protocols including the regular insertion of duplicates, standards and blanks within the sample batch for analysis.  All samples quoted in this release are analyzed at Eastern Analytical Ltd. in Springdale, NL, for Au by fire assay (30g) with an AA finish. 

*Percussion drill samples and composited intervals are not as reliable as diamond drill core samples.  All samples quoted in this press release including QA/QC protocols.  The Company has not, however, completed sufficient tests to determine the exact potential for gold contamination from sample to sample within a given drill hole – a potential issue inherent in the percussion drilling technique.  The percussion drill results are, however, considered significant and, based on the results of the Processed Sample and geological mapping at the excavated zone, are considered generally representative of the Processed Sample.

ABOUT ANACONDA MINING

Anaconda Mining is a growth-oriented, gold mining and exploration company with a producing project called the Point Rousse Project and an exploration/development project called the Viking Project in Newfoundland.

The Point Rousse Project is approximately 6,300 hectares of property on the Ming's Bight Peninsula located in the Baie Verte Mining District in Newfoundland, Canada. Since 2012, Anaconda has increased its property control by ten-fold on the peninsula and gold production to OVER 16,000 ounces per year. In an effort to expand production, it is currently exploring three primary, prospective gold trends, which have approximately 20 km of cumulative strike length and include five deposits and numerous prospects and showings, all within 8 km of the Pine Cove mill.

Anaconda also controls the Viking Project, which has approximately 6,225 hectares of property in White Bay, Newfoundland, approximately 100 km by water (180 km via road) from the Pine Cove mill. The project contains the Thor Deposit and other gold prospects and showings. The Company's plan is to discover and develop more resources within these project areas and double annual production at the Pine Cove mill from its current rate of OVER 16,000 ounces to 30,000 ounces. 

As the only pure play gold producer in Atlantic Canada, Anaconda Mining is turning the rock we live on into a growing and profitable resource. With a young and motivated workforce, innovative technology and the support of local suppliers, Anaconda is investing in the people of Newfoundland & Labrador and giving back to the communities in which we operate – building a better future for all our stakeholders, from the ground up.

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.