TORONTO, Oct. 15, 2015 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (TSX: ANX) is pleased to report its financial and operating results for the three months ended August 31, 2015.  The Company sold 3,956 ounces of gold resulting in $5,785,801 in revenue at an average sales price of $1,463 per ounce. Cash cost per ounce sold at the Point Rousse Project for the three months ended August 31, 2015 was $1,093. The Company generated positive earnings before interest, taxes, depreciation and amortization and other non-cash expenses ("EBITDA") of $1,462,428 at the Point Rousse Project. Net loss for the three months ended August 31, 2015 was $184,919. As at August 31, 2015, the Company had cash and cash equivalents of $584,261 and net working capital of $1,461,838.

President and CEO, Dustin Angelo, stated, "During the first quarter of fiscal 2016, Anaconda continued to excel as Company initiatives resulted in record operational metrics and solid financial performance. The Pine Cove mill hit new highs of 1,122 tonnes per operating day and 87% recovery. EBITDA at the project level was very strong at nearly $1.5 million. After the first quarter, the Company is on pace to meet its annual sales volume budget and exceed its financial goals."

Highlights for the three months ended August 31, 2015 

• As at August 31, 2015, the Company had cash and cash equivalents of $584,261 and net working capital of $1,461,838.
• The Company sold 3,956 ounces of gold and generated $5,785,801 in revenue at an average sales price of $1,463 per ounce.
• Cash cost per ounce sold at the Point Rousse Project was $1,093 per ounce.
• All-in sustaining cash cost per ounce sold ("AISC") (see Reconciliation of Non-GAAP Financial Measures), including corporate administration, capital expenditures and exploration costs, was $1,493 per ounce.
• The mill achieved record throughput of 1,122 tonnes of ore per operating day and record overall recovery of 87%.
• At the Point Rousse Project, earnings before interest, taxes, depreciation and amortization and other non-cash expenses ("EBITDA") was $1,462,428.
• Consolidated EBITDA for the three months ended August 31, 2015 was $939,977.
• Adjusted net loss (see Reconciliation of Non-GAAP Financial Measures) was $174,218.
• Purchase of property, mill and equipment was $760,904. Key items included tailing expansion costs of $253,000; cone crusher and other equipment of $202,000; mill automation of $110,000; waste dump and pit development of $98,000 and Stog'er Tight development of $40,000.
• Production stripping assets included additions of $414,397.
• Approximately $324,000 was spent at the Point Rousse Project on exploration.

Operations overview

During the three months ended August 31, 2015, the gold sales volume of 3,956 ounces represented a 1% increase over the same period in fiscal 2014, largely due to increased mill throughput and recovery. Ore tonnes processed increased from 83,782 ore tonnes to 96,532, a 15% increase compared to the three months ended August 31, 2014. Recovery also increased from 84% to 87% period over period. Average sales price for the three months ended August 31, 2015 was $1,463 per ounce compared to $1,401 per ounce the same period in fiscal 2014. As a result of the higher sales volume, gross revenue for the three months ended August 31, 2015 of $5,785,801 was higher period over period by $274,189 or 5%.

The following table summarizes the key operating metrics for the three months ended August 31, 2015 and 2014:

MILLING OPERATIONS
The Pine Cove mill operated for 86 days during the first quarter of fiscal 2016 at an availability rate of 94%. For the Quarter, the mill processed 96,532 dry tonnes of ore at an average head grade of 1.62 grams per tonne. Overall mill recovery was 87%, compared to 84% in Q1 of fiscal 2015. The mill's run rate for the Quarter was a new record at 1,122 tonnes per operating day versus 963 in the same period in the previous fiscal year, a 17% increase.

MINING OPERATIONS
The mine operated for 78 days in the first quarter of fiscal 2016, producing 104,278 tonnes of ore and 642,828 tonnes of waste. Mining production increased 29% in the first quarter of fiscal 2016 compared to the first quarter of fiscal 2015 to accommodate the increased levels of throughput at the Pine Cove mill and a higher planned strip ratio.

EXPLORATION
The Company is pursuing a strategy to leverage the existing infrastructure at the Point Rousse Project by exploring and developing its mineral licenses and mining leases in search of two general mineralization styles: Pine Cove-like, quartz-carbonate-pyrite hosted (2+ g/t) mineralization (baseload production sources) and higher-grade (5+ g/t) quartz vein ± carbonate ± pyrite mineralization. The Company is working on expanding the current Pine Cove pit resource and bringing the Stog'er Tight deposit into production to extend the life of the Point Rousse Project beyond its current three plus years. Anaconda is also exploring and delineating potentially higher-grade deposits such as Romeo & Juliet to blend with relatively lower-grade Pine Cove and Stog'er Tight ore. With the high-grade "layer" and a marginal increase to throughput, the Company expects to increase annual production to approximately 30,000 ounces. The Company envisions growing the operating complex on the Ming's Bight Peninsula with multiple pits and trucking the ore back to the Pine Cove mill.

Consistent with this strategy, in the quarter ended August 31, 2015, the Company has made the following advances in exploration:

• Diamond drilling, stripping and mapping of the Stog'er Tight deposit;
• Reprocessed historical ground IP surveys for the Anoroc, Pine Cove and Stog'er Tight areas; and
• Digitizing and compiling historical rock samples and geological maps from throughout the Point Rousse Project.

During the course of Anaconda's exploration and development efforts, three primary gold trends have been identified within the Point Rousse Project area, with a cumulative prospective strike length of approximately 20 kilometres. The Company's recent exploration work, combined with historical results, has brought more clarity, understanding and confidence to the Company's geological interpretations and models. The Company believes it has the potential to discover and develop multiple deposits on the Ming's Bight Peninsula. As a result, Anaconda believes that the Point Rousse Project area could double production and continue for 10 years or more. Exploration and development efforts during the past nine months have focused entirely on implementing this strategy by focusing on extending the baseload production centred on Pine Cove and Stog'er Tight, as well as evaluating a potential high-grade gold source at Romeo & Juliet and advancing grass roots projects at Goldenville and Argyle.

Below is a brief overview of the gold trends on the Ming's Bight Peninsula and Anaconda's exploration efforts within them, with specific reference to the Pine Cove and Stog'er Tight deposits and recent exploration work on these deposits:

The Scrape Trend
The Scrape Trend consists of a belt of highly prospective rocks approximately 7 kilometres long and approximately 1 to 2 kilometres wide. It begins southwest of the Pine Cove mine site and continues eastward to the community of Ming's Bight. The Scrape Trend includes the Pine Cove, Stog'er Tight and Romeo & Juliet deposits, the Anoroc and Animal Pond prospects and a new discovery referred to as the Argyle zone. These gold occurrences align with a fault delineated by a topographic lineament coincident with a broad airbourne EM conductor. The Scrape Trend hosts both baseload and high-grade styles of mineralization.

The Pine Cove Deposit
The purpose of past drill programs at Pine Cove was to ultimately achieve the following three goals; to increase total mineral resources and reserves (which will extend the Pine Cove mine life), to reduce the stripping ratio by outlining near-surface mineral resources and reserves, and to reduce the haul distance of waste-rock material by placing a waste storage facility near the northern margin of the pit design. These drill programs identified shallow mineralization within the Pine Cove Pond and Northwestern Extension areas and continuity of the main deposit down-dip, immediately adjacent to current mineral reserves. Recent geological mapping and drilling confirmed the presence and geometry of mineralization within the Northwestern Extension zone and brought clarity and understanding of the geological setting and prospectivity of the geological structures hosting the Northwestern Extension. The drill results also sterilized the area beneath the new North Pit Waste Dump to allow a reduction in haul distance for waste rock. The results of mapping and drilling will be further used to modify the current resource model and a new estimate will be calculated with the aim of bringing more resources into the mine plan.

No exploration-related field work was conducted on the Pine Cove deposit during the three months ended August 31, 2015.

The Stog'er Tight Deposit
During the Quarter, development work at Stog'er Tight included stripping of the overburden to expose the historical mining surface, detailed geological mapping, channel sampling and near-surface drilling in the main pit area where Anaconda ultimately expects to begin mining of the Stog'er Tight deposit. The purpose of these exploration activities was to lay the groundwork for mining and build a higher level of confidence in the initial NI 43-101 resource calculation anticipated in the second quarter of fiscal 2016. More specifically, Anaconda drilled several holes on the western side of the main pit area to establish the outer limits of the mineralization and pit in that direction. The Company stripped overburden to expose the historical mining surface which will assist in refining the block model. Lastly, the results from the exploration work will be used to determine the location of a 2,800-tonne sample.

The channel sampling program consisted of 58 channels and a total of 323 metres sampled on the exposed central and eastern portions of the main pit area. Channels were chosen to coincide with drill section lines with regularly spaced infilling.

In conjunction with the channel sampling, the Company tested the margins of the western portion of the main pit area near-surface via an 8-hole, 222-metre diamond drill program. Five holes (BN-15-200 to BN-15-224) were drilled to condemn the immediate footwall of the central and western portion of the main pit area. Hole BN-15-219 tested one northerly margin of a preliminary pit design and holes BN-15-218 and BN-15-217 tested the western extension of the Stog'er Tight deposit. Hole BN-15-217 located approximately 15 metres west of the previously known limits of the deposit (see press release of July 29, 2015).

Romeo & Juliet
The Romeo & Juliet prospect is a gold-bearing quartz vein system located 1.5 kilometres northwest of the Pine Cove mine. The vein has been outlined using 39 diamond drill holes; no resource has yet been calculated on the vein. 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 and processed. 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. The Romeo & Juliet vein has possible down-dip and along-strike expansion potential.

No work was conducted on the Romeo & Juliet project during the three months ended August 31, 2015.

The Argyle Zone
With the goal of discovering another source of baseload production along the Scrape Trend, Anaconda conducted a trenching program in the fall of 2014 to follow up on anomalous gold-in-soil values, which resulted in the discovery of the Argyle zone. The new discovery is located approximately 5 kilometres from the Pine Cove mill and consists of two areas of mineralization located approximately 200 metres apart (see press release dated January 8, 2015). The Argyle zone is a significant discovery because it extends the length of the Scrape Trend and demonstrates that new discoveries can be made near the Pine Cove mill using the Company's geological understanding and exploration model.

No exploration field work was conducted during the three months ended August 31, 2015. The Company plans to conduct geophysical and geological mapping to test the surface extent of the Argyle zone prior to drilling.

The Goldenville Trend
The Goldenville Trend is an 8-kilometre long trend of highly-prospective rocks centered on an iron stone unit referred to as the Goldenville Horizon. The Company believes the trend to be highly prospective because the trend is thought to contain ironstone-hosted gold deposits including the Corkscrew deposit recently optioned from Seaside (see press release dated August 4, 2015). Mineralization within the Goldenville Trend is a well-established geological model and the region is known to host these deposits. The Goldenville Trend has numerous gold prospects including four small, historical, hand-dug shafts, which were developed to mine visible gold. Anaconda is exploring the Goldenville Trend for high-grade deposits on the order of approximately 250,000 ounces of gold at 5 g/t or more (based on similar deposits and historical production within the region). If the Company is successful, it will have a longstanding high-grade feed source for the Pine Cove mill to layer on top of the baseload production from other sources like Pine Cove or Stog'er Tight.

No exploration field work was conducted during the three months ended August 31, 2015.

The Deer Cove Trend
The Deer Cove Trend is located in the northern part of the Ming's Bight Peninsula and consists of a belt of prospective rocks approximately 3.5 kilometres in strike length. It is associated with the Deer Cove thrust fault and includes the Deer Cove deposit as well as various other showings and prospects.

Historical drill results suggested that the Deer Cove deposit could be a source of high-grade feed for the Pine Cove mill. Past development work includes a drill program on the Deer Cove deposit in 2014 to better outline the distribution of high-grade gold within the vein and to test the vein down-dip. The program consisted of 2,090 metres of diamond drilling in 20 holes (see press release dated February 27, 2015). The results indicate that the deposit does continue at depth but that the high-grade portion of the deposit was not present to the depths tested.

No exploration field work was conducted during the three months ended August 31, 2015. The Company plans to update the deposit model with the most recent drill results and assess the deposits ability to be developed and included within the mine plan as a source of high-grade ore.

Completed and anticipated fiscal 2016 exploration work
In June of fiscal 2016, the Company conducted stripping at the Stog'er Tight deposit to expose its surface expression and outline the past pit configuration, channel sampled the deposit and is planning a bulk sample. Anaconda will continue to pursue its strategy of leveraging the existing infrastructure at the Point Rousse Project by exploring and developing its mineral licenses and mining leases in search of the two general mineralization styles. The Company is attempting to demonstrate a minimum of 10 years of baseload production as well as develop a high-grade deposit to layer with the baseload. Work in fiscal 2016 will thus focus on three key deposits: Pine Cove, Stog'er Tight and Romeo & Juliet. The goal at the Pine Cove deposit is to outline at least three more years of production by focusing on the Northwest Extension and Pine Cove Pond areas. The goal at the Stog'er Tight deposit is to outline and begin development of at least five years of production, focusing initially on the extension of known mineralization as well as testing the strike and dip extents of other mineralized zones such as the Gabbro zone. The goal at Romeo & Juliet is to demonstrate the presence of five years of high-grade ore.

Work currently planned for fiscal year 2016 will be focused on the Pine Cove, Stog'er Tight, Romeo & Juliet, and Argyle projects. Work at Pine Cove will initially consist of approximately 1,000 metres of diamond drilling in the southern margin of the deposit with the goal of outlining new mineralization and expanding the Pine Cove resource. Work at Stog'er Tight will consist of approximately 1,000 metres of trenching and 350 metres of channel sampling to outline the surface extent of mineralization outside of the main Stog'er Tight deposit, with the ultimate goal of discovering other deposits within the Stog'er Tight area. Work on the Romeo & Juliet project will include the reprocessing of historical IP data, geological mapping and prospecting of possible surface extensions of the gold bearing vein. Work on the Argyle project will include geological mapping and sampling in the area of the new discovery.

The above technical information was confirmed and/or reviewed by Paul McNeill, P. Geo., VP Exploration, a qualified person under NI 43-101.

Reconciliation of Non-GAAP Financial Measures

The Company has included certain non-GAAP financial measures in this document. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.

Adjusted net earnings measures the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company's underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, impairment charges, and non-hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results.

The following table provides a reconciliation of adjusted net earnings for the three months ended August 31, 2015 and 2014:

Cash cost per ounce sold is cost of sales before depreciation divided by gold ounces sold. All-in sustaining cash cost per ounce sold is cash cost, corporate administration, purchase of property, mill and equipment and purchase of exploration and evaluation assets divided by gold ounces sold.

The following table provides a reconciliation of cash cost per ounce sold and all-in sustaining cash cost per ounce sold for the three months ended August 31, 2015 and 2014:

EBITDA is earnings before finance expense, foreign exchange loss (gain), unrealized gain on forward sales contract derivative, share-based compensation, income tax recovery and depreciation and depletion.

Point Rousse Project EBITDA is EBITDA before corporate administration, other revenues and expenses and write down of Chilean assets.

The following table provides a reconciliation of EBITDA for the three months ended August 31, 2015 and 2014:

ABOUT ANACONDA
Headquartered in Toronto, Canada, Anaconda is a growth oriented, gold mining and exploration company with a producing project, called the Point Rousse Project, and approximately 6,316 hectares of exploration 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 almost ten-fold. It is currently exploring three primary, prospective gold trends, which have approximately 20 kilometres of cumulative strike length and include four deposits and numerous prospects and showings, all within 8 kilometres of the Pine Cove mill. The Company's plan is to discover and develop more resources within the project area and double annual production from its current rate of approximately 15,000 ounces to 30,000 ounces.

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.