Anaconda Mining Inc. ("Anaconda" or "the Company") (TSX:ANX) is
pleased to report its financial and operating results for the
fiscal year ended May 31, 2013. The Company generated net income of
$7,438,629 or $0.04 per fully diluted share compared with net
income of $3,298,063 or $0.02 per fully diluted share for the
fiscal year ended May 31, 2012. Fiscal 2013 net income consisted of
income from operations of $3,460,629 or $0.02 per share and the
recording of a deferred income tax recovery of $3,978,000 or $0.02
per share. Deferred income tax assets were recorded when the
Company removed its going concern note to the financial statements
and recognized the tax value of its income tax loss carry forward
amounts.
President and CEO, Dustin Angelo, stated, "The Company had
another record year in terms of sales volume, revenue, operating
cash flow and net income. We generated nearly $7 million in EBITDA
and over $9 million in mine level cash flow, which is tremendous
when you consider our market capitalization. We were also
successful in achieving our number one goal for the fiscal year,
which was to pay off all of our high cost debt. As at May 31, 2013,
we had a very clean balance sheet with only approximately $260,000
in low cost, government issued loans. The balance sheet will be
fortified in September when the Company receives the US$1 million
commercial production milestone payment from our partners in Chile.
Going forward, we will also begin to receive royalty payments from
Chile so this non-core asset has, once again, become a cash
generator."
The Company's core gold mining business continues to improve and
management has set challenging goals for fiscal 2014. The Company
has budgeted to produce and sell approximately 18,000 ounces of
gold for the year and generate nearly $4 million in net income
using a gold price of $1,400 per ounce and an average head grade of
approximately 2.1 grams per tonne. Cash operating costs at the mine
level (production, royalty, Pine Cove G&A, etc.) are expected
to be approximately $960 per ounce and all in cash costs including
corporate, capital expenditures and exploration are projected to be
approximately $1,200 per ounce.
Highlights for the fiscal year ended May 31, 2013
BALANCE SHEET IMPROVEMENT:
-- As at May 31, 2013, the Company had cash and cash equivalents of
$466,899 and net working capital of $1,333,047.
-- During the year ended May 31, 2013, the Company made principal payments
of $4,054,727 and reduced its overall principal amount of debt to
$262,338. Of the total principal paid, $3,697,280 went against its
Series I Debenture, Series II Debenture and the Thorsen loan, paying off
these obligations in full.
OPERATING PERFORMANCE:
-- For the year ended May 31, 2013, the Company sold 14,879 ounces of gold
and generated $24,173,439 in revenue at an average sales price of $1,625
per ounce.
-- Cash operating cost per ounce sold at the Pine Cove Project for the year
ended May 31, 2013 was $1,004 per ounce.
-- Total cash cost per ounce sold, including corporate administration,
capital expenditures and exploration and evaluation asset costs for the
year ended May 31, 2013 was $1,341 per ounce.
-- At the Pine Cove project, earnings before interest, depreciation and
depletion and share based compensation ("EBITDA") for the year ended May
31, 2013 was $9,233,758.
-- On a consolidated basis, EBITDA for the year ended May 31, 2013 was
$6,914,426.
-- Net income for the year ended May 31, 2013 was $7,438,629 or $0.04 per
share basic and $0.04 per fully diluted share, respectively. Net income
attributable to operations was $3,460,629 or $0.02 per share and net
income related to the recording of a deferred income tax asset was
$3,978,000 or $0.02 per share.
-- Purchase of property, mill and equipment for the year ended May 31, 2013
was $1,665,632.
GROWTH INITIATIVES:
-- Approximately $1,023,000 was spent at the Pine Cove project on
exploration for the year ended May 31, 2013. The Company's exploration
initiatives focused on drilling the down-dip and western extensions of
the pit, prospecting the properties across the Pine Cove project and
obtaining a bulk sample from the Romeo and Juliet prospect.
-- During fiscal 2013, the Company entered into 3 option agreements and
staked nearly 300 acres, increasing its land package within the Pine
Cove project to approximately 4,785 hectares.
Operations overview
During the year ended May 31, 2013, the gold sales volume of
14,879 ounces represented a 24% increase over the same period in
2012. Average sales price for the year was $1,625 per ounce versus
$1,662 per ounce for the year of fiscal 2012, a 2% decrease. As a
result of the higher sales volume, gross revenue during the year
ended May 31, 2013, of $24,172,439, was significantly higher than
the same period in the previous fiscal year by $4,266,683. The
higher overall gold output compared to the previous year was a
result of higher grade and recovery.
The following table summarizes the key operating metrics for
fiscal 2013 and 2012.
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May 31 May 31
2013 2012
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OPERATING STATISTICS:
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Mill
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Operating days 323 314
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Availability 87% 85%
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Dry tonnes processed 287,747 286,139
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Tonnes per 24-hour period 890 925
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Grade (grams per tonne) 1.99 1.81
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Overall mill recovery 83% 80%
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Gold sales volume (troy oz.) 14,879 11,978
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Mine
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Operating days 234 239
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Ore production (tonnes) 309,059 272,854
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Waste production (tonnes) 1,649,408 1,306,163
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Total production (tonnes) 1,958,467 1,579,017
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Waste: Ore ratio 5.34 4.80
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MILLING OPERATIONS
The Pine Cove mill operated for 323 days during the year at 87%
availability. The mill processed 287,747 dry tonnes of ore (890
tonnes per operating day) at an average head grade of 1.99 grams
per tonne ("g/t"), higher than the 1.90 g/t projected for the year.
Overall mill recovery averaged 83% for the year, which was on
budget.
Mill availability and throughput was best in the second and
fourth quarters when there were no significant weather issues or
maintenance down time. In the first quarter, the mill was down in
August 2012 for a two week maintenance period, slightly longer than
planned. In the third quarter, significant snowfall followed by
extended periods of rain and freezing rain contributed to some
mechanical failures and lower availability of the crushing plant
during the winter. In addition, there were two weather related
power outages/incidents causing site shutdowns. Subsequent
mechanical improvements together with an extension in the crushing
schedule alleviated availability issues going into the final
quarter of fiscal 2013. These improvements allowed the site to
achieve crushing capacity in excess of the mill capacity.
Consequently, the site maintained consistent feed to the ball mill
and several days of crushed ore for unscheduled mechanical
downtime. The following table summarizes the key mill operating
statistics for the year ended May 31, 2013.
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Total/
Q1 '13 Q2 '13 Q3 '13 Q4 '13 Avg.
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OPERATING STATISTICS:
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Operating days 74 86 77 86 323
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Availability 77% 94% 85% 94% 87%
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Dry tonnes processed 62,865 76,292 63,822 84,768 287,747
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Tonnes per 24-hour period 854 884 830 982 890
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Grade (grams per tonne) 1.84 1.76 2.17 2.18 1.99
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Overall mill recovery 84% 83% 83% 84% 83%
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Gold sales volume (troy oz.) 4,217 3,194 3,101 4,367 14,879
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MINING OPERATIONS
Mining activities operated for a total of 234 days during the
year and excavated a total of 1,958,467 tonnes of ore and waste.
Ore production totaled approximately 309,000 tonnes which was right
at budget, while waste was approximately 1,649,000 tonnes for a
strip ratio of 5.3 : 1, also very close to plan. Operating days
were reduced in the final two quarters as a result of over
production relative to budget in the first two quarters. The
following table summarizes the key mine operating statistics for
the year ended May 31, 2013.
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Total/
Q1 '13 Q2 '13 Q3 '13 Q4 '13 Avg.
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OPERATING STATISTICS:
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Operating days 66 64 52 52 234
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Ore production (tonnes) 88,159 61,172 86,025 73,703 309,059
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Waste production (tonnes) 517,021 494,856 335,669 301,862 1,649,408
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Total production (tonnes) 605,180 556,028 421,694 375,565 1,958,467
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Waste: Ore ratio 5.86 8.09 3.90 4.10 5.34
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EXPLORATION
The Company, through a combination of staking and option
agreements holds mineral exploration rights to approximately 4,785
hectares comprising the Pine Cove Project. These rights cover
highly prospective rocks of the Point Rousse ophiolite complex
which is known to host "Mother-Lode-Style" gold mineralization. The
fiscal 2013 exploration program had three objectives:
1) to re-evaluate the exploration potential immediately north
and west of the Pine Cove deposit;
2) to identify trenching and diamond-drill targets regionally
across the Pine Cove project; and
3) to obtain a bulk sample from the Romeo and Juliet prospect
for metallurgical testing.
1. Pine Cove Down-Dip and Western Extension Exploration: Historic drilling
immediately north of the Pine Cove deposit indicated potential for
additional gold mineralization down-dip of the Pine Cove deposit. In
2011 and 2012, drilling was completed approximately 100 meters north of
the mine. Drill hole PC-11-181 intersected 2.50 grams per tonne gold
over 40.8 meters and PC-12-189 intersected 32 meters grading 0.848 grams
per tonne. During the fiscal year, the Company completed a twenty-hole,
3,296-metre program successfully exploring the area immediately west and
down-dip of the Pine Cove deposit. Subsequent to the end of fiscal 2013,
a review and compilation of diamond-drill results from the winter drill
program was completed. A detailed structural interpretation was
recommended to guide future exploration efforts. A structural study of
the Pine Cove mine area was initiated in late July, 2013. Results are
anticipated by the fall of 2013.
Highlights:
Western Extension Area
-- Hole PC-13-196 intersected 11.4 metres of 2.19 grams per tonne ("g/t")
gold from a depth of 26.6 meters;
-- Additional mineralization in hole PC-13-196 was intersected at 63.9
metres and again at 96.0 metres;
-- Hole PC-13-202 intersected 26.87 metres of 1.81 g/t from a depth of 73
metres and 12.7 metres of 1.28 g/t gold from a depth of 108.9 metres;
-- Hole PC-13-210 intersected 41 metres of 2.34 g/t gold from a depth of 51
metres.
Down-dip Extension Area
-- Hole PC-13-195 intersected 12.06 metres of 3.32 g/t gold from a depth of
168.66 metres;
-- Hole PC-13-199 intersected 3.06 metres of 7.69 g/t gold from a depth of
147.2 metres:
-- Four, widely spaced drill holes all intersected mineralization up dip
from PC-11-181, which assayed 2.50 g/t gold over a core length of 40.8
metres (Anaconda Press Release, July 27, 2011).
2. 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 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.
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 820 ppb over one meter channel intervals.
Additional work is planned for both the Pine Cove North and
Goldenville areas.
In June, after the fiscal year end, Fugro Airborne Services
completed a helicopter-borne Electromagnetic/Magnetic survey over
the entire Pine Cove Project. The Dighem EM/Horizontal Magnetic
Gradiometer survey targeted ophiolitic and cover sequence rocks of
the Point Rousse Complex. The survey covered approximately 700 line
kilometers at a flight line spacing of 75 meters. The data will be
used in conjunction with archived gold-in-soil geochemical data and
prospecting to further delineate exploration targets.
3. 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.
Five representative samples of crushed quartz, averaging 12.6
kg, were processed at Accurassay Laboratories in Thunder Bay by
cyanide extraction (bottle roll testing). The weighted average
assay of the five samples is 5.71 g/t gold and is representative of
the gold grade within the near surface portion of the Juliet zone
where the bulk sample was extracted. Table 1 contains the head
grade assay results for the five samples.
Table 1. Gold head grade assay results
from Anaconda's Romeo and Juliet bulk
sample.
Mass Grade
Sample (grams) (g/t gold)
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68956 11,842 6.32
68957 12,774 5.14
68958 12,299 5.15
68959 13,061 4.91
68960 13,018 7.05
Romeo and Juliet Project Plan
The Company initiated metallurgical testing and pilot milling of
the Romeo and Juliet material. Ideally, the quartz vein hosted
mineralization would supplement the current sulfide hosted
mineralization to maximize the current circuit configuration of the
mill. The Company is also planning to calculate a preliminary
resource estimate after receiving the results from the 2,000 metre
in-fill diamond-drill program that was initiated in July and
completed by mid-August, 2013. Pending a favorable resource
estimate, Anaconda is considering an underground exploration
program, to better define grades and geometry.
The information in this 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) 260-1248dangelo@anacondamining.com www.anacondamining.com
ProConsul Capital Ltd. Andreas Curkovic Investor Relations (416)
577-9927acurkovic@proconsulcapital.com
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