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Anaconda Mining sells 4,526 ounces of gold in Q1 2018, generating $7.6M in revenue

TORONTO , April 12, 2018 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") (ANX.TO) is pleased to announce production results and certain financial information from the three months ended March 31, 2018 ("Q1 2018"). All dollar amounts are in Canadian Dollars. The Company expects to file its first quarter financial statements and management discussion and analysis by May 3, 2018 .

In 2017, the Company changed its fiscal year-end to December 31 , from its previous fiscal year end of May 31 . Consequently, Anaconda has now reverted to a customary quarterly reporting calendar based on a December 31 financial year-end, with fiscal quarters ending on the last day in March, June, September, and December each year.  For comparative purposes, the results for the three months ended March 31, 2018 , have been compared to the three months ended February 28 , 2017. 

First Quarter 2018 Highlights

  • Anaconda sold 4,526 ounces of gold in Q1 2018, a 25.8% increase over the three months ended February 28, 2017 , generating gold revenue of $7.6 million at an average realized gold price of C$1,677 per ounce.
  • The Company produced 143,840 tonnes of ore during the first quarter, which included 138,807 tonnes from the Pine Cove Pit and an initial 5,033 tonnes from the Stog'er Tight West Pit. The strip ratio for mining in the Pine Cove Pit was a low 0.65 waste tonnes to ore tonnes.
  • The Company made significant development progress at Stog'er Tight, achieving 159,927 tonnes of waste development, the dewatering of Fox Pond, and the completion of a settling pond and pit dewatering system.
  • Anaconda achieved mill throughput of 109,219 tonnes, a 1.4% increase over the comparative three month period ended February 28, 2017 , at a throughput rate of 1,300 tonnes per day.
  • The Company has commenced the conversion of the Pine Cove Pit into a fully permitted tailings storage facility, which will provide 15 years of capacity based on throughput rates of 1,350 tonnes per day.
  • The Company announced a positive PEA for its 100% owned Goldboro Gold Project (the "Project") in Nova Scotia , which reflected a pre-tax net present value of $120 million at a 7% discount rate, with a 38% internal rate of return and a 2.9-year payback period when using a long-term gold price of C$1,550 per ounce. At a current gold price around C$1,700 per ounce, the Project has a pre-tax net present value of $162 million at a 7% discount rate, with a 47% internal rate of return and a 2.6-year payback period.
  • The Company announced a Mineral Resource for the Argyle Gold Deposit ("Argyle"), located 4.5 kilometres from the Pine Cove Mill, comprising Indicated Resources of 38,300 ounces (543,000 tonnes grading 2.19 g/t gold and Inferred Resources of 30,300 ounces (517,000 tonnes at 1.82 g/t gold). The Company has since announced further high-grade intercepts at Argyle and has commenced the environmental application process as it works towards the start of development in the latter half of 2019.
  • Anaconda was recognized with the Natural Resources Magazine's Industry Excellence Award for Environmental Stewardship.


"With a strong start to 2018, Anaconda continues to demonstrate its ability to develop and successfully operate gold mining operations in Atlantic Canada . The Company produced 4,293 ounces of gold, well ahead of plan and on track for its 2018 production guidance of 18,000 ounces. We have successfully permitted and are in the process of developing the Stog'er Tight mine, which will start to contribute higher grade ore in the second quarter of 2018. At the end of March, Anaconda completed mining of the main Pine Cove Pit, which generated approximately $49.4 million in project level EBITDA1 over eight years. The main Pine Cove Pit will become the primary tailings facility, and we also plan to mine certain extensions to the pit in 2019. We also commenced environmental permitting for the Argyle Deposit, where we announced a maiden Mineral Resource Estimate in January 2018 and have since reported further high-grade intercepts. Also noteworthy, Anaconda has built a brand name and reputation as a socially responsible operator in Atlantic Canada , particularly in Newfoundland , and we are proud to have been recognized as a leader in Environmental Stewardship by Natural Resource Magazine. It's another testament to the tremendously talented workforce at Anaconda, and the Company's commitment to safe and responsible mining."

~Dustin Angelo, President and CEO, Anaconda Mining Inc.

1

Refer to Non-IFRS Measures Section below.

 

First Quarter Operating Statistics



Three months
ended March
31, 2018

Three months
ended February
28, 2017

Mine Statistics




Ore production (tonnes)


143,840

102,531

Waste production (tonnes)


250,132

325,076

Total material moved (tonnes)


393,972

427,607

Waste: Ore ratio


1.7

3.2





Mill Statistics




Availability (%)


93.4

95.0

Dry tonnes processed


109,219

107,762

Tonnes per day


1,300

1,268

Grade (grams per tonne)


1.44

1.28

Recovery (%)


85.2

85.0

Gold Ounces Produced


4,293

3,767

Gold Ounces Sold


4,526

3,597

 

Operations Overview for the Three Months Ended March 31, 2018

Anaconda sold 4,526 ounces of gold during the first quarter of 2018, generating gold revenue of $7.6 million . The Company is well on track to meet its 2018 production guidance of 18,000 ounces at operating cash costs of C$1,100 per ounce1. At a budgeted gold price of C$1,550 this will generate approximately $28.0 million of revenue, noting that the average realized gold price in Q1 2018 was C$1,677 per ounce. The increase in gold production over the previous fiscal guidance of 15,500 ounces reflects the increasing grade profile as the mine operation transitions to Stog'er Tight. 

1

Refer to Non-IFRS Measures Section below.

 

Point Rousse Mill Operations – The Pine Cove Mill processing facility remains a cornerstone asset of the Company.  Availability during the quarter of 93.4% was lower compared to the 98.6% availability during the final four months of 2017 due to a planned preventative maintenance shutdown to allow for a liner change in the ball mill and other related maintenance activities.  During Q1 2018, the mill processed 109,219 tonnes of ore at a throughput rate of 1,300 tonnes per day, consistent with the throughput rate maintained during the final months of 2017. The Company replaced the jaw crusher in the latter part of Q1 2018 due to a bearings failure; however, it was able to maintain consistent throughput from its crushed ore stockpiles to achieve strong quarterly production.

Average grade during Q1 2018 was 1.44 g/t, a 12.5% increase over the comparative period ending February 28, 2017 and an 11.6% increase over the final four months of 2017. The mill achieved an average recovery rate of 85%, consistent with previous periods, resulting in gold production in Q1 2018 of 4,293 ounces.

Point Rousse Mine Operations – The later part of December 2017 saw mining activity focused on development activity at Stog'er Tight and the completion of mining in the main Pine Cove Pit, which continued into the first quarter of 2018. In Q1 2018, the nearby Fox Pond dewatering was completed prior to mining at Stog'er Tight, the operation established a settling pond and dewatering system for the Stog'er Tight West Pit, and work was commenced on a fish passage. The Company achieved 159,927 tonnes of waste removal at Stog'er Tight, which will be capitalized as development. In addition, 5,033 tonnes of ore were mined from Stog'er Tight during development activities, which were in a stockpile at quarter-end. 

During Q1 2018, mine operations produced 143,840 tonnes of ore, which included 138,807 tonnes from the Pine Cove Pit, where mining of the main pit finished in the middle of March. The strip ratio for the Pine Cove Pit during Q1 2018 was 0.65 waste tonnes to ore tonnes. The Company will commence planning in 2018 for pushbacks for Pine Cove Pond and the North West Extension to the pit, which are expected to contribute ore in 2019.

The grade of ore delivered to the mill was high compared to previous periods as the mine operation focused on delivering higher grade ore from the lower benches of the Pine Cove Pit, while maintaining its existing stockpile of ore, which will be fed over the coming months as the operation transitions to Stog'er Tight. As at March 31, 2018 , the mine operation had an ore stockpile of 176,807 tonnes.  The operation has achieved strong grade reconciliation to the block model in the first quarter and was able to achieve higher than expected grades in March from the bottom of the main pit due to operational improvements.

With mining in the main pit now complete, the Company is now converting the Pine Cove Pit into a seven (7) million-tonne in-pit storage facility, which is fully permitted by the Newfoundland and Labrador Department of Natural Resources and has approximately 15 years of capacity, based on a throughput rate of 1,350 tonnes per day.

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, development, and exploration 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 Stog'er Tight Mine, the Argyle Mineral Resource, the fully-permitted Pine Cove Mill and tailings facility, and approximately 5,800 hectares of prospective gold-bearing property. Anaconda is also developing the Goldboro Gold 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 Great Northern Project on the Northern Peninsula of Newfoundland and the Tilt Cove Property on the Baie Verte Peninsula , also in Newfoundland .

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking information" within the meaning of applicable Canadian and United States securities legislation. 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 December 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.

NON-IFRS MEASURES

Anaconda has included certain non-IFRS performance measures as detailed below. In the gold mining industry, these are common performance measures but may not be comparable to similar measures presented by other issuers. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Operating Cash Costs per Ounce of Gold – Anaconda calculates operating cash costs per ounce by dividing operating expenses per the consolidated statement of operations, net of silver sales by-product revenue, by the gold ounces sold during the applicable period. Operating expenses include mine site operating costs such as mining, processing and administration as well as royalties, however excludes depletion and depreciation and rehabilitation costs.

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") - EBITDA is earnings before finance expense, deferred income tax expense and depletion and depreciation.

Point Rousse Project EBITDA is EBITDA before corporate administration and other expenses (income).

SOURCE Anaconda Mining Inc.


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