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:
OPERATING
STATISTICS:
|
For the three
months ended
|
August
31
|
August 31
|
2015
|
2014
|
Mill
|
|
|
Operating
days
|
86
|
87
|
Availability
|
94%
|
95%
|
Dry tonnes
processed
|
96,532
|
83,782
|
Tonnes per 24-hour
period
|
1,122
|
963
|
Grade (grams per
tonne)
|
1.62
|
1.80
|
Overall mill
recovery
|
87%
|
84%
|
Gold sales volume
(troy oz.)
|
3,956
|
3,933
|
Mine
|
|
|
Operating
days
|
78
|
64
|
Ore production
(tonnes)
|
104,278
|
89,239
|
Waste production
(tonnes)
|
642,828
|
492,040
|
Total production
(tonnes)
|
747,106
|
581,279
|
Waste: Ore
ratio
|
6.2
|
5.5
|
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:
|
|
For the three
months ended
|
|
|
August
31
|
August
31
|
|
|
2015
|
2014
|
|
|
$
|
$
|
Net income
(loss)
|
|
(184,919)
|
(175,810)
|
|
|
|
|
Adjusting
items:
|
|
|
|
|
Foreign exchange loss
(gain)
|
|
2,851
|
(9,884)
|
|
Unrealized loss
(gain) on forward sales contract derivative
|
|
2,808
|
(15,222)
|
|
Write down of Chilean
assets
|
|
-
|
-
|
|
Reclamation
expense
|
|
5,042
|
14,358
|
Total
adjustments
|
|
10,701
|
(10,748)
|
Adjusted net
earnings (loss)
|
|
(174,218)
|
(186,558)
|
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:
|
|
For the three months
ended
|
|
|
August
31
|
August 31
|
|
|
2015
|
2014
|
Cost of
sales
|
|
5,376,801
|
5,528,029
|
Less: Depletion and
depreciation
|
|
(1,053,428)
|
(1,080,633)
|
Cash operating
cost
|
|
4,323,373
|
4,447,396
|
Corporate
administration
|
|
497,144
|
504,496
|
Purchase of property,
mill and equipment
|
|
760,904
|
355,419
|
Purchase of
exploration and evaluation assets
|
|
324,202
|
384,031
|
All-in cash
cost
|
|
5,905,623
|
5,691,342
|
|
|
|
|
Gold ounces
sold
|
|
3,956
|
3,933
|
Cash cost per
ounce sold
|
|
1,093
|
1,131
|
All-in sustaining
cash cost per ounce sold
|
|
1,493
|
1,447
|
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:
|
|
For the three months
ended
|
|
|
August
31
|
August 31
|
|
|
2015
|
2014
|
|
|
$
|
$
|
Net income
(loss)
|
|
(184,919)
|
(175,810)
|
|
|
|
|
Add back:
|
|
|
|
Finance
expense
|
|
-
|
336
|
Foreign exchange loss
(gain)
|
|
2,851
|
(9,884)
|
Unrealized loss
(gain) on forward sales contract derivative
|
|
2,808
|
(15,222)
|
Share-based
compensation
|
|
80,809
|
48,119
|
Income tax expense
(recovery)
|
|
(15,000)
|
(63,000)
|
Depletion and
depreciation
|
|
1,053,428
|
1,080,633
|
EBITDA
|
|
939,977
|
865,172
|
Corporate
administration
|
|
497,144
|
504,496
|
Other revenues and
expenses
|
|
25,307
|
(305,452)
|
Point Rousse
Project EBITDA
|
|
1,462,428
|
1,064,216
|
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.