TORONTO AND ST. JOHN'S, Dec. 10 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX) and New Island Resources Inc. ("New Island") (TSXV: NIS) are pleased to announce they have entered into an arrangement agreement (the "Arrangement Agreement") in connection with their previously announced transaction, whereby Anaconda will acquire New Island's interest in the Pine Cove Mine and Mill.

The Transaction will be structured as a Plan of Arrangement under the Business Corporations Act (Alberta) between Anaconda and New Island.

Highlights of the Transaction

The Arrangement will result, through a series of transactions, in New Island selling to Anaconda all of its interest in the Pine Cove Mine and Mill in exchange for common shares in Anaconda (each, an "Anaconda Share") on the basis of a share exchange ratio of 0.45 of an Anaconda Share for each one common share of New Island (each, a "New Island Shares"). New Island will then immediately distribute the Anaconda Shares to its shareholders (other than Anaconda) by way of a return of capital. Former shareholders of New Island (the "Tendered New Island Shareholders") who tendered their shares in New Island (the "Tendered New Island Shares") to Anaconda pursuant to Anaconda's takeover bid offer in the summer of 2010 (the "Offer") and received 0.42 of an Anaconda Share for each one New Island Share they tendered, will have issued to them by Anaconda an additional 0.03 of an Anaconda Share for each one New Island Share they tendered. In addition, pursuant to the Arrangement, Anaconda will return to the Tendered New Island Shareholders the New Island Shares it acquired from them pursuant to the Offer.

Board Recommendation

The Arrangement has been unanimously approved by the boards of directors of both Anaconda and New Island and will be subject to customary conditions, including a favourable vote of 66 2/3% of the New Island common shares voted at a special meeting of shareholders called to approve the transaction and the receipt of court and necessary regulatory approvals. In addition, the Arrangement resolution must be approved by a simple majority of the votes cast by the minority shareholders of New Island. The board of directors of New Island unanimously recommends that holders of New Island Shares vote in favour of the transaction.

The Arrangement Agreement includes a commitment by New Island not to solicit or initiate discussions concerning alternative transactions, including the acquisition or sale of material assets or subsidiaries of New Island. Anaconda and New Island have each agreed to pay to the other a break fee of C$300,000 in certain circumstances. New Island has also granted Anaconda the right to match competing offers.

In addition to the approximate 49.97% ownership of New Island acquired by Anaconda pursuant to the Offer, holders of approximately 12.82% of the outstanding New Island shares, which includes all directors and officers of New Island, have agreed to vote in favour of the Arrangement.

Advisors and Fairness Opinions

Salman Partners Inc. were engaged by New Island as a financial advisor to provide financial advice to the New Island board of directors and its opinion as to the fairness, from a financial point of view, of the consideration to be received by the New Island Shareholders pursuant to the Arrangement. The fairness opinion delivered by Salman Partners states that, as of the date of their opinion and subject to and based on the various considerations referred to in their opinion, the consideration to be received by New Island Shareholders pursuant to the Arrangement is fair, from a financial point of view, to New Island Shareholders.

Cassels Brock & Blackwell LLP is acting as external legal counsel to Anaconda and Cox & Palmer is acting as external legal counsel to New Island.

Closing

The Arrangement is subject to New Island obtaining the required shareholder approval at a special meeting of its shareholders and to the receipt of court and all necessary regulatory approvals.

An management information circular for the special shareholders meeting of New Island is expected to be mailed by December 21, 2010 and New Island will hold the special meeting to approve the Arrangement on January 11, 2011. The Arrangement is scheduled to close shortly thereafter. The record date for the special meeting has been fixed as December 17, 2010.

About Anaconda Mining Inc.

Anaconda is a Toronto, Canada-based mining and exploration company focused on operating the Pine Cove gold mine located near Baie Verte in Newfoundland, Canada and, with its joint venture partner, Inversiones SBX Limitada, advancing the development and exploration of its iron ore portfolio in Chile.

Additional information concerning Anaconda may be obtained on Anaconda's website at: www.anacondamining.com or from the System for Electronic Document Analysis and Retrieval ("SEDAR") website at: www.sedar.com under Anaconda's profile.

About New Island Resources Inc.

New Island is a diversified junior exploration company holding gold and base metal properties in the Province of Newfoundland and Labrador. New Island has entered into an agreement for the sale of its interest in the gold mine and mill project at Pine Cove in central Newfoundland.

Additional information concerning this sale and New Island may be obtained on New Island's website at: www.newislandresources.com or from the SEDAR website at: www.sedar.com under New Island's profile.

Cautionary Notice: This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information concerning the proposed arrangement between Anaconda and New Island and matters relating thereto. 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 statements 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 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. Assumptions upon which such forward-looking information is based include, without limitation, that the shareholders of New Island will approve the transaction, that all required third party regulatory and governmental approvals to the transaction will be obtained and all other conditions to completion of the transaction will be satisfied or waived. Many of these assumptions are based on factors and events that are not within the control of Anaconda or New Island 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, fluctuating metal prices, 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 in Anaconda's Annual Information Form for the year ended December 31, 2009 available at www.sedar.com and New Island's Management Information Circular, a copy of which will be available on www.sedar.com. Although Anaconda and New Island have 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 information. Anaconda and New Island undertake no 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.

This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release".

For further information:
Anaconda Mining Inc.
Dustin Angelo
President and CEO
Tel: (647) 260-1248
Email: dangelo@anacondamining.com
Website: www.anacondamining.com
New Island Resources Inc.
Harold Wareham
President
Tel: (709) 576-7711
Email: info@newislandresources.com
Website: www.newislandresources.com