Anaconda Mining Posts $596,000 in Net Income and Sells Over 4,000 Ounces for Q1 Fiscal 2014

TORONTO, ONTARIO--(Marketwired - Oct 11, 2013) - 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, 2013 (the "Quarter"). The Company generated net income of $596,295, or $0.003 per fully diluted share, and $1,786,382 in earnings before interest, depreciation and depletion, and share based compensation ("EBITDA"). The Company sold 4,096 ounces of gold and generated $5,731,783 in revenue at an average sales price of $1,399 per ounce. Cash operating cost per ounce sold at the Pine Cove Project for the three months ended August 31, 2013 was $950.

President and CEO, Dustin Angelo, stated, "The first quarter financial results in terms of revenue, operating cash flow and net income were very strong in the face of a volatile gold price environment. We generated nearly $1.8 million in EBITDA and almost $2.4 million in mine-level cash flow, despite a gold price reduction of approximately $225 per ounce from the first quarter in fiscal 2013. After completing the first quarter of fiscal 2014, we are at or better than budget on nearly all key financial and operating metrics. With the positive operating numbers at Pine Cove, the receipt of US$1 million from the commercial production milestone payment in September from our partners in Chile, and the future royalty payments from Chile, the Company is on very sound financial footing with less than $250,000 in debt and approximately $1.8 million dollars in the bank."

Highlights for the fiscal year ended May 31, 2013

BALANCE SHEET:

• As at August 31, 2013, the Company had cash and cash equivalents of $924 and net working capital of $1,667,136. It received $394,288 immediately after Quarter-end related to gold sold at the end of the Quarter.

OPERATING PERFORMANCE:

• For the three months ended August 31, 2013, the Company sold 4,096 ounces of gold and generated $5,731,783 in revenue at an average sales price of $1,399 per ounce.
• Cash operating cost per ounce sold at the Pine Cove Project for the three months ended August 31, 2013 was $950.
• Total cash cost per ounce sold, including corporate administration, capital expenditures and exploration costs for the three months ended August 31, 2013 was $1,267 per ounce.
• At the Pine Cove project, EBITDA for the three months ended August 31, 2013 was $2,277,701.
• On a consolidated basis, EBITDA for the three months ended August 31, 2013 was $1,786,352.
• Net income for the three months ended August 31, 2013 was $596,296 or $0.003 per share basic and $0.003 per fully diluted share, respectively.
• Purchase of property, mill and equipment for the three months ended August 31, 2013 was $403,060.
• Purchase of production stripping assets for the three months ended August 31, 2013 was $362,361.

GROWTH INITIATIVES:

• Approximately $478,000 was spent at the Pine Cove Project on exploration for the three months ended August 31, 2013. The Company's exploration initiatives focused on drilling the Romeo and Juliet prospect and an airborne survey across the entire project.

Operations overview

During the three months ended August 31, 2013, the gold sales volume of 4,096 ounces represented a 3% decrease over the same period in 2012. Average sales price for the year was $1,625 per ounce versus $1,662 per ounce for the year of fiscal 2012, a 2% decrease. As a result of the higher sales volume, gross revenue during the year ended May 31, 2013, of $24,172,439, was significantly higher than the same period in the previous fiscal year by $4,266,683. The higher overall gold output compared to the previous year was a result of higher grade and recovery.

The following table summarizes the key operating metrics for first quarter of fiscal 2014 and 2013.

Milling operations

The Pine Cove mill operated for 85 days during the Quarter at 93% availability. The mill processed 83,890 dry tonnes of ore (987 tonnes per operating day) at an average head grade of 1.92 grams per tonne ("g/t"), slightly higher than the 1.89 g/t projected for the year. Overall mill recovery averaged 83% for the Quarter. The operating metrics for the mill were all very close to budget and the completion of a crusher move and upgrade project during the quarter should lead to continued consistent operations.

Mining operations

Mining activities operated for a total of 64 days during the year and excavated a total of 558,703 tonnes of ore and waste. Ore production totaled approximately 74,189 tonnes, which was approximately 11,000 tonnes below budget, while waste was approximately 484,514 tonnes for a strip ratio of 6.5 : 1. The lower than planned ore production for the quarter was a result of excessive spring water runoff during a period when the mine was accessing a new level, making mucking of ore difficult. As a result, a greater emphasis was placed on waste hauling during the quarter. Future quarters will adjust for this in order to bring the strip ratio back to planned levels.

Exploration

The Company, through a combination of staking and option agreements, holds mineral exploration rights to approximately 4,785 hectares comprising the Pine Cove Project. These rights cover highly prospective rocks of the Point Rousse ophiolite complex which is known to host "Mother-Lode-Style" gold mineralization. The Q1 fiscal 2014 exploration program focused on the following objectives:

1. A diamond drill program at the Romeo and Juliet prospect;
2. An airborne survey over the Ming's Bight Peninsula; and
3. Follow-up work from the winter drill program around the Pine Cove pit.

1. Romeo and Juliet: During the quarter the Company completed diamond drilling at its Romeo and Juliet prospect and intersected a new gold-bearing zone dubbed the Balcony Zone, located between the Romeo and Connecting Zones. It appears to dip steeply to the north, trends roughly east-west and is spatially associated with a northeast-trending topographic linear. Mineralization has been traced for approximately 100 meters and is open to the east, west and down dip. Gold is associated with pyritic altered mafic volcanic rocks, which is different from the Romeo and Juliet massive quartz vein hosted-style of gold mineralization. A structural interpretation is therefore underway to help guide future drilling and to better understand these positive anomalies.
   
   Anaconda drilled seven holes into the Balcony Zone. Hole RJ-13-26 intersected strongly-altered mafic volcanic rock containing abundant disseminated pyrite and fine quartz-carbonate veinlets, which assayed 8.4 g/t Au over a core length of 12 meters. The hole is interpreted to have cut the mineralization at a low angle. Hole RJ-13-33 was subsequently drilled to intersect the mineralization perpendicular to hole RJ-13-26. It also contained altered mafic volcanics with heavy disseminated pyrite and quartz-carbonate veining. Hole RJ-13-33 assayed 4.35 g/t Au over 8.44 meters including 6.22 g/t Au over 1.64 meters and 5.45 g/t Au over 4.85 meters. This intersection confirms the scale and significance of the mineralization, but further work is required to establish true widths. Holes RJ-13-34 to RJ-13-37 targeted the Balcony Zone, with all but RJ-13-34 returning anomalous gold intercepts, highlighted by RJ-13-35 returning 2.91 g/t Au over 11.1 meters. Fine visible gold was observed in quartz veins in holes RJ-13-26, 35, 36 and 37.
   
   To date, Anaconda has drilled 19 holes totaling 2,004 meters at the Romeo and Juliet prospect. The original goal of the program was to target down-dip extensions of the Romeo and Juliet gold-bearing quartz veins. While Anaconda intersected the Romeo and Juliet quartz veins in 13 out of 19 holes, assays results from the down-dip extensions of the Juliet and Connecting Zones were generally lower than anticipated. However, in the Romeo Zone, hole RJ-13-32 returned 10.4 g/t Au over 0.54 meters and hole RJ-13-29 returned 3.45 g/t Au over 1.23 meters, both at depths over 100 meters. PC-13-27 intersected both the Balcony and the Romeo Zones. (See press release dated September 16, 2013 for full details of drill results).
   
   
2. Regional Exploration / Airborne Survey: Past mineral exploration activities in the Ming's Bight area on the Baie Verte Peninsula, dating mainly from the period 1985-1990, resulted in an extensive collection of archived data that includes more than 30,000 gold-in-soil geochemical analyses. Much of this data has never been adequately followed up and many anomalies have not been explained. Compilation and digitizing of this historic geophysical and soil geochemical data was initiated by Tenacity Gold Mining Company Ltd. and completed by Anaconda. Prospecting teams have followed up much of the historic soil data and completed infill sampling in some areas.
   
   In June 2013, Fugro Airborne Services completed a helicopter-borne Electromagnetic/Magnetic survey over the entire Pine Cove Project. The Dighem EM/Horizontal Magnetic Gradiometer survey targeted ophiolitic and cover sequence rocks of the Point Rousse Complex. The survey covered approximately 700 line kilometers at flight-line spacing of 75 meters. The data will be used in conjunction with archived gold-in-soil geochemical data and prospecting to further delineate exploration targets.
   
   
3. Pine Cove Down-Dip and Western Extension Exploration: Historic drilling immediately north of the Pine Cove deposit indicated potential for additional gold mineralization down-dip of the Pine Cove deposit. In 2011 and 2012, drilling was completed approximately 100 meters north of the mine. Drill hole PC-11-181 intersected 2.50 grams per tonne gold over 40.8 meters and PC-12-189 intersected 32 meters grading 0.848 grams per tonne. During the fiscal 2013, the Company completed a twenty-hole, 3,296-metre program successfully exploring the area west (the "Western Extension Area") and down-dip of the Pine Cove deposit. During the Quarter, a review and compilation of diamond-drill results from the winter drill program was completed The Western Extension Area returned significant near surface mineralization with PC-13-196 intersecting 11.4 meters of 2.19 grams per tonne ("g/t") from a depth of 26.6 meters and PC-13-210 returning 2.34 g/t gold over 41 meters starting at a depth of 51 meters (See press release dated June 5, 2013 for full details of drill results). Subsequent to the review and compilation, a structural study of the Pine Cove mine area was initiated in late July 2013 to guide future exploration efforts. Results are anticipated by the fall of 2013.

The information in this news release has been reviewed and approved by David Evans, P. Geo., with Silvertip Exploration Consultants Inc., a "Qualified Person" under National Instrument 43-101.

ABOUT ANACONDA

Headquartered in Toronto, Canada, Anaconda is a growth oriented, gold mining and exploration company with a producing asset located on the Baie Verte Peninsula in Newfoundland, Canada called the Pine Cove mine.

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.