TORONTO, Sept. 7 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX) is pleased to report that pursuant to the terms of its Option and Joint Venture Agreement with New Island Resources Inc. ("New Island") effective September 1, 2010, Anaconda has commenced Commercial Production and has now earned its 60% interest in the Pine Cove Gold Mine, with New Island holding the remaining 40% Interest in Pine Cove. As previously announced, Anaconda and New Island have reached agreement on a friendly transaction that would result in Anaconda acquiring New Island's 40% interest in the mine.
Anaconda President and CEO Lew Lawrick commented, "This is a significant milestone for Anaconda; in September 2009 we started the process of expanding and upgrading the Pine Cove mill operation. To complete the construction phase on time and on budget as well as facilitate the commissioning phase all in under 1 year is a testament to the hard work of our dedicated operations staff and contract support. We are now focused on optimizing both throughput and gold recovery in all areas of the circuit."
Anaconda and New Island have agreed on a transaction that would be structured as a plan of arrangement under which 22,602,315 Anaconda shares will be distributed to the shareholders of New Island in exchange for New Island's interest in the Pine Cove Gold Mine (the "Plan of Arrangement"). The exact share exchange ratio will be determined prior to the interim court application for the Plan of Arrangement and based upon the number of New Island shares outstanding at that time. The share exchange ratio shall not be less than 0.42 of an Anaconda share or greater than 0.45 of an Anaconda share per New Island share.
Pursuant to the Plan of Arrangement, expected to close on or before October 15, 2010, Anaconda would acquire New Island's 40% interest in the Pine Cove Gold Mine and New Island would continue as a public company and would retain the prospective Glover Island property and all of the remaining assets of New Island. Upon closing of the Plan of Arrangement all of the New Island shares acquired by Anaconda pursuant to the recently expired offer to purchase all of the outstanding New Island Shares ("Offer") will be returned to tendering shareholders and every New Island shareholder, whether or not they tendered to Anaconda's Offer will receive the same number of Anaconda shares and will continue to own a New Island share. Completion of the Plan of Arrangement is subject to the approval of New Island shareholders and all applicable regulatory approvals.
Anaconda is a Toronto, Canada based mining development and exploration company focused on advancing its principal assets, the Pine Cove Gold Mine in Canada and its portfolio of Chilean iron ore assets. Anaconda is committed to maximizing gold production and hence cashflow from its Pine Cove Gold Mine, as well as advancing the exploration and near-term production opportunities of its Chilean iron ore assets. Anaconda continues to evaluate strategies to `unlock' value attributable to its Chilean iron portfolio for the benefit of its shareholders.
This news release contains certain "forward-looking information" under applicable Canadian securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking information. Forward-looking information is often characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking information is based on the opinions and estimates of management of Anaconda as the context indicates at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Many of these assumptions are based on factors and events that are not within the control of Anaconda and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in ore grade or recovery rates, risks relating to international operations, fluctuating prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, as well as those risk factors discussed or referred to in the Annual Information Form for Anaconda filed with securities regulatory authorities and available at www.sedar.com. Although Anaconda has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Anaconda does not undertake any obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.
For further information: Lew Lawrick President and CEO, Anaconda Mining Inc., (647) 478-5307, Email: firstname.lastname@example.org; Greg DiTomaso, Investor Relations, Anaconda Mining Inc., (647) 436-2592, Email: email@example.com; Or visit Anaconda's website: www.anacondamining.com; For a copy of the early warning report, please contact Greg DiTomaso at (647) 436-2592