Anaconda's Pine Cove gold mine generates over $500,000 in EBITDA in June and July 2011

TORONTO, Aug. 25, 2011 /CNW/ --
TORONTO, Aug. 25, 2011 /CNW/ - Anaconda Mining Inc. ('Anaconda' or 'the
Company') - (TSX: ANX) is pleased to provide an update on the
performance of the Pine Cove mine, located on the Baie Verte Peninsula,
Newfoundland, for the months of June and July. Pine Cove sold nearly
1,900 ounces generating over $2.8 million in revenue and nearly
$514,000 in EBITDA. The following table summarizes selected operating
and financial results for the two-month period.

 ____________________________________________________________________
|                                   |  June '11|  July '11| Total/Avg|
|___________________________________|__________|__________|__________|
|OPERATING STATISTICS:              |          |          |          |
|___________________________________|__________|__________|__________|
|Calendar days                      |        30|        31|        61|
|___________________________________|__________|__________|__________|
|Operating days                     |        28|        29|        57|
|___________________________________|__________|__________|__________|
|Availability                       |       94%|       98%|       96%|
|___________________________________|__________|__________|__________|
|Dry tonnes processed               |    27,650|    29,805|    57,455|
|___________________________________|__________|__________|__________|
|Tonnes per 24-hour day             |       980|     1,046|     1,014|
|___________________________________|__________|__________|__________|
|Grade                              |      1.30|      1.52|      1.41|
|___________________________________|__________|__________|__________|
|Pine Cove only plant recovery      |       74%|       75%|       74%|
|___________________________________|__________|__________|__________|
|                                   |          |          |          |
|___________________________________|__________|__________|__________|
|Gold sales volume (troy oz.)       |       802|     1,075|     1,877|
|___________________________________|__________|__________|__________|
|                                   |          |          |          |
|___________________________________|__________|__________|__________|
|FINANCIAL RESULTS:                 |          |          |          |
|___________________________________|__________|__________|__________|
|Revenue                            |$1,185,265|$1,626,460|$2,811,725|
|___________________________________|__________|__________|__________|
|Pine Cove EBITDA                   |  $358,712|  $154,931|  $513,643|
|___________________________________|__________|__________|__________|
|Pine Cove   Corp. EBITDA           |  $199,702|   $36,865|  $236,567|
|___________________________________|__________|__________|__________|
|                                   |          |          |          |
|___________________________________|__________|__________|__________|
|UNIT ECONOMICS:                    |          |          |          |
|___________________________________|__________|__________|__________|
|Revenue per oz. sold               |    $1,479|    $1,513|    $1,498|
|___________________________________|__________|__________|__________|
|Pine Cove cash cost per oz. sold   |    $1,031|    $1,369|    $1,224|
|___________________________________|__________|__________|__________|
|Pine Cove   Corp. cash cost per oz.|    $1,230|    $1,478|    $1,372|
|sold                               |          |          |          |
|___________________________________|__________|__________|__________|

President and CEO, Dustin Angelo, stated, 'The Pine Cove mine is
generating cash on a consistent basis and the Company expects this
trend to continue. For June and July, we have already sold nearly 1,900
ounces and we expect to have another record quarter for gold sales
volume and revenue. The rising price of gold has been beneficial,
especially in August where we have sold our production at $1,650 to
$1,850 per ounce. Near term plans are in place to increase recovery,
which will continue to drive down unit costs, further increasing cash
flow. With operations now performing consistently, attention has been
turned to exploration activities. Our recently announced drill program
exceeded expectations. We have engaged a geophysical consultant and a
structural geologist to advance the significant exploration potential
that exists at Pine Cove in an effective and methodical manner.'

The financial results above are not presented on a consolidated basis to
include activities in the subsidiaries associated with the Chilean iron
ore assets. The amounts only represent activities accounted for at the
Pine Cove and corporate level.  All amounts are in Canadian dollars
unless stated otherwise. The financial and operating results are
unaudited and subject to adjustment.

Overall mill recovery:

During June and July, overall mill recovery was in the mid 70% range
primarily due to mechanical difficulties with the No. 1 drum filter. In
May, the Company ordered two new, refurbished drum filters from Tristar
Ltd. in Buffalo, New York. The 2.5m X 3.0m rotary vacuum drum filters
provide the first filtration step associated with the solids/solution
separation that is required for the Merrill Crowe type gold processing.
The current drums are wood over steel construction and have been used
since Pine Cove began operating. During the past several months, the
drum filters have been hampered by mechanical or operational
availability. As a result, they have not been able to operate
consistently in series to provide a re-wash for the slurry.  When
operating in series, drum filtration can achieve recovery rates as high
as 98% to 99%. Because the drum filter units had to be operated in
single stage for periods of time during June and July, the average drum
filter recovery was 91%.

Anaconda expects the new drum filters to be shipped by the end of
August, 2011 and installed during the first two weeks of September. In
addition to the drum replacements, the operations and maintenance staff
are finalizing plans to use the one week, scheduled down-time to make
other operational changes and maintenance repairs, which are not
capital intensive, including;

    --  Modifications to the leach tanks, which include larger baffles
        and up-comer piping.
    --  Incorporate a fourth, existing leach tank into the leach
        circuit to allow for greater retention.
    --  Fabricate and install new pregnant solution tank with internal
        baffles to help fines settling.
    --  Replace liners and lifters in the primary grinding mill. These
        liners and lifters have been designed to serve a primary grind
        application versus the configuration currently in use, which is
        more suitable for a secondary grinding application.

The Company anticipates that the circuit changes and maintenance items
will enable the Pine Cove mill to achieve recovery and throughput
targets of 80% and 1,000 tonnes per 24-hour day, respectively, on a
regular basis going forward.

Grade:

The average feed grade through the mill for June and July was 1.41 grams
per tonne ('g/t') versus a projected feed grade of 1.78g/t. The
variance can be attributed, in part, to pit dewatering activities. Pine
Cove experienced higher than average rain fall during the months of
June and July exceeding pumping capacity. The pit design allows mining
to take place in the upper areas of the deposit during these situations
but, as was the case in these particular months, the grade that was
mined was lower than plan due to the distribution of the grade within
the blocks. The implementation of additional dewatering capacity was
fast-tracked providing additional protection in the future. These items
include larger pumps, portable mine MCC with additional capacity and
large diameter de-watering lines.

During the first half of August, feed grade increased approximately 4%
(1.58 g/t) compared to July, which was 1.52 g/t. The pit area described
in the paragraph above has been dewatered and partially excavated. The
most recent feed grades in the last few days have been recorded at
slightly above and below 2.00 g/t.

In addition to implementing increased dewatering capacity, mine
technical staff continues to evaluate improvements in excavation
techniques to maximize grade delivered to the mill. The initiatives
include:

    --  A review of the actual mining sequence and geological structure
        control that may be present and identifiable.
    --  A series of tests to monitor blast movement in an effort to
        predict actual ore displacement within a particular blast and
        to compensate for such displacement.
    --  An evaluation of tools that can effectively determine actual
        ore location within a particular blast hole such as visual
        equipment and IP equipment.

The Company's budget for grade for fiscal year 2012 is 2.19 g/t and it
was projected to rise steadily from 1.78 g/t at the beginning of the
fiscal year to 2.64 g/t at the end. From June until October, it was
budgeted to be no higher than 2.04 g/t at a weighted average of 1.95
g/t. Although Pine Cove is currently approximately 20% below planned
feed grade for the first two months of the fiscal year, it expects to
achieve its overall budget for the fiscal year.

Despite recent lower grades being realized, the Pine Cove mine has
excavated more ore (confirmed by percussion blast hole assays) than its
block model projected for the past seven months. For the period from
January through July 2011, the blast hole assays suggest a 23% increase
in gold content at a 7% less grade as compared to the block model.

Exploration update:

The Company continues to evaluate options to further its recent
exploration success at the down dip extension to the north of Pine
Cove's current operating pit. Because delineation of this new discovery
requires a better understanding of the orientation of the zone (both
its dip and strike) to plan additional drilling, geophysical and
structural geologists have been engaged. The geophysical evaluation
will include a review of archival data for this area of the mining
lease followed by a plan to perform an IP survey. The structural
geological evaluation, on the other hand, will focus on the existing
deposit areas to look for and identify features that may help explain
the physical location of this new zone and its likely orientation.

In addition, plans are being finalized to extract a sample from the
other targeted gold zone in the area - Romeo & Juliet. The gold within
this area is associated with quartz veining and has limited sulfide
content so it is unlikely to need or benefit from flotation during
processing.  Consequently, it requires metallurgical testing to
determine the optimal processing methodology. The Company has initiated
discussions with metallurgical consultants on a scope of sampling and
testing required.

ABOUT ANACONDA

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

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. 

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