Anaconda Mining produces 10,002 ounces of gold and generates $15.4M in gold sales for the seven month period ended December 31, 2017

 

TORONTO, Jan. 11, 2018 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") (TSX:ANX) is pleased to announce production results and certain financial information for the four month and seven month periods ended December 31, 2017. The Company recently announced a change to its fiscal year end to December 31, from its previous fiscal year end of May 31. Consequently, the Company will report audited financial results for the seven month transitional fiscal year from June 1, 2017 to December 31, 2017 (the "Transition Year").

All dollar amounts are in Canadian Dollars. The Company expects to file its full audited financial statements and management discussion and analysis for the Transition Year by March 1, 2018.

Highlights for the seven month Transition Year Ended December 31, 2017

• Anaconda produced 10,002 ounces of gold and sold 9,509 ounces during the Transition Year ended December 31, 2017, on track to exceed original guidance of 15,500 ounces for the twelve month period ending May 31, 2018, or pro-rated guidance of 9,042 ounces for the seven month period;
• The Company generated $15.4 million in revenue at an average sale price of $1,615 per ounce, and earned a further $0.8 million from the sale of waste rock as aggregate from its Point Rousse Project;
• The Pine Cove Mill achieved throughput of 275,640 tonnes during the seven months ended December 31, 2017, reflecting a throughput rate of 1,316 tonnes per day, an 8% improvement over the previous fiscal year;
• Anaconda mined 382,111 tonnes of ore during the Transition Year at a strip ratio of 1.8 waste tonnes to ore tonnes, a 65% reduction from the previous fiscal year strip ratio of 5.1;
• Anaconda has extended mining in the Pine Cove Pit into early 2018, and has commenced planning for the transition to the Stog'er Tight deposit;
• Anaconda strengthened its Point Rousse infrastructure with the government approval to convert the Pine Cove Pit into a tailings facility with a 15-year storage capacity based on existing throughput rates;
• The Company announced a Mineral Resource for the Argyle Deposit, located 4.5 kilometres from the Pine Cove Mill, comprising 543,000 tonnes of Indicated Resources at 2.19 g/t (38,300 ounces) and 517,000 tonnes of Inferred Resources at 1.8 g/t (30,300 ounces);
• With the completion of a $3 million non-brokered private placement in October 2017, the Company is undertaking extension and infill drill programs at the Goldboro Project and the Point Rousse Project.

President and CEO, Dustin Angelo, stated, "The Point Rousse Project achieved strong performance across all metrics for the Transition Year, and with gold production of 10,002 ounces, the Company was well on track to exceed its guidance of 15,500 ounces for the fiscal year that was to end May 31, 2018. Looking ahead to 2018, Point Rousse will be transitioning to the higher grade Stog'er Tight deposit by the end of Q2 2018, and the Company is guiding to 18,000 ounces of gold production.  Anaconda will also be putting into service its in-pit tailings facility, and progressing with the permitting process for the recently announced Argyle deposit, located only 4.5 kilometres from the Pine Cove Mill."

2018 Guidance

For the 2018 calendar year, the Company is projecting to produce and sell approximately 18,000 ounces of gold, which at a budgeted gold price of $1,550 will generate revenue of approximately $28.0 million. The increase over the previous fiscal year guidance of 15,500 ounces reflects the increasing grade profile as the mine operation transitions to the Stog'er Tight deposit. Production in the first two quarters is expected to be primarily from remaining mining in the Pine Cove Pit and the existing ore stockpiles, with ore delivery from Stog'er Tight expected to commence in late Q2 2018. Quarterly mill throughput is expected to remain consistent throughout the year, as lower relative tonnage from Stog'er Tight is supplemented by marginal ore stockpiles. Operating cash costs for the full year are expected to be around $1,100 per ounce of gold sold, consistent with historical levels over the past three years, with a decreasing operating cost per ounce profile in the later part of 2018 as the operation transitions fully to higher-grade ore production from Stog'er Tight.

Operating Statistics for the Transition Year Ended December 31, 2017

 

Operations Overview for the Transition Year Ended December 31, 2017

Anaconda sold 9,509 ounces of gold during the Transition Year, generating gold revenue of $15.4 million, and had 600 ounces of gold doré in finished goods as at December 31, 2017. Production for the seven month period of 10,002 ounces was on track to exceed the Company's guidance of 15,500 ounces for the twelve month period ending May 31, 2018.

Point Rousse Mill Operations – The Pine Cove Mill continues to demonstrate its value as a cornerstone asset of the Company, demonstrating increases in availability and throughput rates during the Transition Year. Preventative maintenance continues to be a focus to maintain consistent levels of production, with a liner change in ball mill planned for early Q1 2018.

During the seven month period ended December 31, 2017, the mill processed 275,640 tonnes of ore, representing a throughput rate of 1,316 tonnes per day, an 8% increase over the prior year. This enabled the mill to achieve record quarterly throughput of 119,401 tonnes for the three months ended August 31, 2017, and it achieved production of 118,539 tonnes in the following three month period ended November 30, 2017.

Overall mill recovery for the Transition Year was 85.8%, up slightly from the previous year, at an average grade of 1.32 g/t, which is consistent with the prior year. Gold production was 10,002 ounces for the seven months ended December 31, 2017, compared to 15,566 ounces in the full twelve month period ended May 31, 2017, reflecting the increase in throughput rate and average recovery rate.  

Point Rousse Mine Operations – The mining operation at the Point Rousse Project operated for 135 days during the seven month period ended December 31, 2017, with activity in the later part of December focused on development activity at Stog'er Tight, as mining areas become constrained in the bottom of the Pine Cove Pit. 

Ore produced from the Pine Cove Pit was 382,111 tonnes during the Transition Year, which compares favourably to the 432,081 tonnes of production for the full year ended May 31, 2017. Total material moved during the Transition Year of 1,074,926 tonnes is significantly lower than the prior year, notwithstanding the shorter comparative period, which is reflective of reduced mining rates as the operation approaches the planned base of the Pine Cove Pit. 

The decrease in material moved wholly relates to lower waste material mined, due to the sequencing of the mine plan which resulted in less waste mined in the current period as the mine operation moved into the lower levels of the Pine Cove Pit. As a result, the strip ratio for the Transition Year of 1.8 waste tonnes to ore tonnes is significantly improved from 5.1 in the prior year, which was also impacted by waste rock placement on the second tailings storage facility. 

Anaconda expects to complete mining in the main pit at Pine Cove in the later part of the first quarter of 2018, and will commence planning for small pushbacks of the main pit in 2018. As at December 31, 2017, the Company maintained an ore stockpile of 145,000 tonnes, which will be processed over the first two quarters of 2018 as the mine operation transitions to the Stog'er Tight deposit.

The mine operation has commenced development activities at the Stog'er Tight deposit, including the dewatering of the nearby Fox Pond, the construction of a settling pond, and pre-stripping of the West Pit. Mining from the West Pit is expected to start in the first quarter of 2018. 

Upon completion of mining in the main Pine Cove Pit, the Company plans to covert the Pit into a 7 million-tonne in-pit storage facility, which will allow for the deposition of tailings into the facility in the first quarter of 2018 (refer to press release dated September 7, 2017). The conversion of the Pit to a tailings facility has received approval from the Newfoundland and Labrador Department of Natural Resources.

Qualified Person

Gordana Slepcev, P. Eng., Chief Operating Officer, Anaconda Mining Inc., is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this press release.

ABOUT ANACONDA

Anaconda Mining is a TSX-listed gold mining, exploration and development company, focused in the prospective Atlantic Canadian jurisdictions of Newfoundland and Nova Scotia. The Company operates the Point Rousse Project located in the Baie Verte Mining District in Newfoundland, comprised of the Pine Cove open pit mine, the fully-permitted Pine Cove Mill and tailings facility, the Stog'er Tight and Argyle deposits, and approximately 5,800 hectares of prospective gold-bearing property. Anaconda is also developing the recently acquired Goldboro Project in Nova Scotia, a high-grade Mineral Resource, with the potential to leverage existing infrastructure at the Company's Point Rousse Project.

The Company also has a pipeline of organic growth opportunities, including the Viking and Great Northern Projects on the Northern Peninsula and the Tilt Cove Property on the Baie Verte Peninsula. 

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking information" within the meaning of applicable Canadian and United States securities legislation. Forward-looking information includes, but is not limited to, 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 several business risks and uncertainties. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Anaconda to be materially different from those expressed or implied by such forward-looking information, including risks associated with the exploration, development and mining such as economic factors as they effect exploration, future commodity prices, changes in foreign exchange and interest rates, actual results of current production, development and exploration activities, government regulation, political or economic developments, environmental risks, permitting timelines, capital expenditures, operating or technical difficulties in connection with development activities, employee relations, the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of resources, contests over title to properties, and changes in project parameters as plans continue to be refined as well as those risk factors discussed in Anaconda's annual information form for the year ended May 31, 2017, available on www.sedar.com. Although Anaconda has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Anaconda does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

SOURCE Anaconda Mining Inc.

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