TORONTO, Oct. 18 /CNW/ - Anaconda Mining Inc. ("Anaconda" or "the Company") - (TSX: ANX); is pleased to report its results for the three months ended August 31, 2010. All amounts are in Canadian dollars unless stated otherwise. The financial results and Management's Discussion and Analysis of these results may be found on Anaconda's website (www.anacondamining.com) and on its SEDAR profile (www.sedar.com).
- During the first quarter ended August 31, 2010, Anaconda produced limited gold while proceeding with the ongoing commissioning of its expanded mill. Approximately 380 ounces of gold were produced and sold at an average price of $1,300 (US$1,250) per ounce.
- Consolidated net loss for the first quarter ended August 31, 2010 was approximately $4.3 million ($0.04 per basic and fully-diluted share). Revenues included $497,000 of precious metals sales offset by $947,000 for costs of goods sold, administrative expenses of $1.5 million, depletion, depreciation and amortization of $195,000 and loss on the sale of 50% of the Anaconda's interest in its San Gabriel project (including the loss of future VAT credits) of $1.9 million . Foreign exchange losses and future income taxes increased the loss by $249,000.
- As at August 31, 2010, Anaconda had total assets of $22.4 million including cash and cash equivalents of $847,000, of which $778,000 was restricted for letters-of-credit guarantees with a Canadian financial institution and amounts held in a debt-reduction escrow account to be utilized for debt service and/or principal repayments to Anaconda's Series I debenture holders. The decrease in cash during the three months ended August 31, 2010 of approximately $464,000 was comprised of cash provided from operating activities of $308,000, cash provided from financing activities of $959,000, offset by cash used in investing activities of $1.7 million. The effect of exchange rates on foreign currency held by Anaconda increased cash balances by $15,000.
- As at August 31, 2010, Anaconda had a working capital deficiency of approximately $2.5 million. Anaconda utilized the proceeds from its sales over the first quarter together with funds drawn under a new loan to fund operations and to discharge some of its current operating obligations as well as providing funding for its capital requirements for the mill expansion project at Pine Cove.
Anaconda President and CEO, Dustin Angelo, stated, "The quarter had many positive developments that will set the stage for building and realizing more value in the Company. Getting the mill expansion behind us, reaching Commercial Production and being able to focus on optimizing the facility is a key milestone. The transaction with New Island, upon closing, will eliminate uncertainty around the Pine Cove project and consolidate ownership into a single entity. In Chile, we have hired financial advisors to begin the process of determining strategic alternatives for our iron ore assets."
Anaconda is a Toronto, Canada-based mining company focused on advancing its principal assets, the Pine Cove Gold Mine in Canada and its portfolio of Chilean iron ore assets. Anaconda has reached full Commercial Production at Pine Cove and continues to work towards optimizing the operation. Anaconda is also evaluating strategies to 'unlock' value attributable to its Chilean iron portfolio for the benefit of its shareholders.
FORWARD LOOKING STATEMENTS
Certain statements contained herein constitute "forward-looking statements". These forward- looking statements are based on current expectations. The nature, timing and extent of mining and processing of Pine Cove ore under the Crew Gold toll processing arrangement may materially change from current intentions for a number of reasons. 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. Actual results may materially differ from expectations as more information regarding the property is gathered or if known and unknown risks or uncertainties affect Anaconda's business, or if Anaconda's estimates or assumptions prove inaccurate. Anaconda assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.
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Company website: www.anacondamining.com