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TORONTO , Aug. 27, 2015 /CNW/ - Anaconda Mining Inc. ("Anaconda" or "the Company") – (ANX.TO) is pleased to report its financial and operating results for the fiscal year ended May 31 , 2015. The Company sold 15,821 ounces of gold in fiscal 2015 resulting in $22,234,071 in revenue at an average sales price of $1,405 per ounce. Cash cost per ounce sold at the Point Rousse Project for fiscal 2015 was $1,100 . The Company generated positive earnings before interest, taxes, depreciation and amortization and other expenses ("EBITDA") for the year ended May 31, 2015 of $2,794,648 , excluding the impact of Chilean assets and other revenue. EBITDA for the Point Rousse Project was $4,826,913 . Because of a non-cash write down of Chilean assets of $2,260,158 and high depreciation and amortization of $4,288,132 , the Company generated a net loss for the year ended May 31, 2015 of $2,774,766 or $0.02 per fully-diluted share. As at May 31, 2015 , the Company had cash and cash equivalents of $1,435,160 and net working capital of $1,902,429 .
President and CEO, Dustin Angelo , stated, "Operationally, the Point Rousse Project had a tremendous fiscal 2015. We set records in nearly every major operating metric in the mill and the mine, topped off by selling nearly 16,000 ounces, approximately 1,000 ounces more than our previous high. Continuous improvement initiatives led to increased mill availability, greater recovery and more ore tonnes mined and processed than ever before. The Point Rousse Project continues to demonstrate the ability to generate cash with $4.8 million in EBITDA in fiscal 2015. We have several productivity and efficiency programs in process that we expect to translate into even better financial performance going forward. In addition, we are optimistic that we can extend the life of the project beyond the Pine Cove pit. We can then leverage our high-performing mill and generate substantial cash flow for several years to come."
The Company's core gold mining business has maintained positive operating cash flows and earnings for four years in a row. The Company has budgeted to produce and sell over 16,000 ounces of gold in fiscal 2016 and generate nearly $23 million of revenue using a gold price of $1,400 per ounce. Due to an expected higher strip ratio and slightly lower grade, Anaconda is projecting to generate lower EBITDA at the Point Rousse Project ( $2.5 million ) compared to fiscal 2015. The Company is currently modifying its mining plan, implementing automation in the mill and working on productivity and efficiency programs across the operation. These initiatives, along with a currently-higher gold price compared to budget, are expected to maximize cash generation and improve operating margins.
Highlights for the fiscal year ended May 31 , 2015
OPERATING PERFORMANCE:
- As at May 31, 2015 , the Company had cash and cash equivalents of $1,435,160 and net working capital of $1,902,429 .
- The Company sold 15,821 ounces of gold and generated $22,234,071 in revenue at an average sales price of $1,405 per ounce.
- The mill processed 1,021 tonnes of ore per operating day.
- The overall recovery in the mill was 84%.
- Mill availability was 92%.
- Cash flow from operations was $2,861,432 .
- Cash cost per ounce sold at the Point Rousse Project was $1,100 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 $1,449 per ounce.
- At the Point Rousse Project, EBITDA was $4,826,913 .
- EBITDA for the year ended May 31, 2015 was $2,794,648 , excluding the impact of Chilean assets and other revenue.
- The write down of Chilean assets was $2,260,158 .
- Adjusted net loss was $403,303 , which excluded the write down of the Chilean assets.
- Purchase of property, mill and equipment was $1,745,818 . Key items included tailing expansion costs of $897,000 ; waste dump and pit development of $164,000 ; mill automation and upgrades of $160,000 ; a compressor of $107,000 ; crusher and power upgrades of 79,000; men's dry upgrades of $59,000 ; a forklift of $45,000 and survey equipment of $38,000 .
- Production stripping assets included additions of $586,725 and depreciation of $153,421 .
GROWTH INITIATIVES:
- Approximately $1,745,000 was spent at the Point Rousse Project on exploration. The Company's exploration initiatives included:
- Diamond drill programs at the Deer Cove, Stog'er Tight and Pine Cove deposits.
- Trenching at multiple locations within the Point Rousse Project resulting in the discovery of the Argyle zone.
- Mapping and soil sampling along the Goldenville trend resulting in the identification of new drill targets.
Operations overview
During the year ended May 31, 2015 , the gold sales volume of 15,821 ounces represented a 9% increase over fiscal 2014, largely due to increased mill availability, throughput and recovery. Mill availability increased from 88% to 92%, an additional 14 operating days during fiscal 2015. Ore tonnes processed increased from 304,696 ore tonnes to 343,178, a 13% increase compared to fiscal 2014. Recovery also increased from 83% to 84% year over year. Average sales price for the year ended May 31, 2015 was $1,405 per ounce compared to $1,384 per ounce in fiscal 2014. As a result of the higher sales volume, gross revenue for the year ended May 31, 2015 of $22,234,071 was higher than fiscal 2014 by $2,058,745 or 10%.
The following table summarizes the key operating metrics for the years ended May 31, 2015 and 2014:
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OPERATING STATISTICS:
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For the year ended
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May 31
2015
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May 31
2014
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Mill
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|
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Operating days
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336
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322
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Availability
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92%
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88%
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Dry tonnes processed
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343,178
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304,696
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Tonnes per 24-hour period
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1,021
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946
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Grade (grams per tonne)
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1.72
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1.83
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Overall mill recovery
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84%
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83%
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Gold sales volume (troy oz.)
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15,821
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14,577
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Mine
|
|
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Operating days
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250
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245
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Ore production (tonnes)
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321,532
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296,235
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Waste production (tonnes)
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1,762,312
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1,623,461
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Total production (tonnes)
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2,083,844
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1,919,696
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Waste: Ore ratio
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5.5
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5.5
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MILLING OPERATIONSThe mill operated for 336 days during fiscal 2015 and processed 343,178 dry tonnes of ore resulting in an average run rate of 1,021 tonnes per operating day. Tonnes processed in fiscal 2015 was a 13% increase from fiscal 2014. Mill availability was 92%, 4% higher than fiscal 2014. Recovery also increased from 83% in fiscal 2014 to 84% in fiscal 2015.
During fiscal 2015, many initiatives were completed which contributed to increased availability and throughput. In the second quarter of fiscal 2015, a preventative mill maintenance program was started, which included a liner and lifter change and repairs to the thickener tank, cyclone feed pump and flotation air compressor. On the crushing plant, the crusher enclosure was completed to mitigate previous winter weather effects and conveyor belts were vulcanized. These changes resulted in processing run rates above 1,000 tonnes per day which were consistently maintained through the remainder of fiscal 2015. In the third quarter, the Company improved its approach to crushing ore, introduced new reagents to control dust, prevent freezing and managed well the overall impact of winter weather at the crusher and on stockpiles. In the fourth quarter, further efficiencies were gained with the installation of a new cyclone feed pump motor which removed a previous bottleneck from the circuit and extensive work was carried out to optimize the circulating load in the grinding circuit. In fiscal 2016, the focus on mill operations will be increasing recovery and improving operating consistency through a mill automation project.
The following table summarizes the key mill operating statistics by quarter for the fiscal year ended May 31, 2015 :
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For the three months ended
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August 31
2014
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November 30
2014
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February 28
2015
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May 31
2015
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Mill
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|
|
|
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Operating days
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87
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81
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83
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85
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Availability
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95%
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88%
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92%
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92%
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Dry tonnes processed
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83,782
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85,515
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87,386
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86,495
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Tonnes per 24-hour period
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963
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1,056
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1,053
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1,018
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Grade (grams per tonne)
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1.80
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1.60
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1.84
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1.65
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Overall mill recovery
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84%
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85%
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83%
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86%
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Gold sales volume (troy oz.)
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3,933
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3,431
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4,508
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3,949
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MINING OPERATIONSThe mine operated for 250 days in fiscal 2015 and produced 321,532 tonnes of ore and 1,762,312 tonnes of waste. The mining group completed several initiatives including expanding the tailings storage facility and improving mining methods. Ore solids and the block model were updated for the Pine Cove deposit and pit mapping tools were used to provide more accurate mine planning and ore identification. Blast movement monitoring technology and a GPS system installed on the excavator have maximized grade and reduced dilution from 20% to less than 10%. In fiscal 2016, mining operations will focus on continuing to open up Phase III in the Pine Cove pit to gain access to new areas of ore and will focus on constructing the North Pit Dump to reduce truck haul distance.
The following table summarizes by quarter the key mine operating statistics for the fiscal year ended May 31, 2015 :
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For the three months ended
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August 31
2014
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November 30
2014
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February 28
2015
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May 31
2015
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Mine
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|
|
|
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Operating days
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64
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63
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59
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64
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Ore production (tonnes)
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89,239
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77,489
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81,459
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73,345
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Waste production (tonnes)
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492,040
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457,387
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370,209
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442,676
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Total production (tonnes)
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581,279
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534,876
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451,668
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516,021
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Waste: Ore ratio
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5.5
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5.9
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4.5
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6.0
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EXPLORATIONThe 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 creating an 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 year ended May 31, 2015 , the Company has made the following advances in exploration:
- Diamond drill programs at the Deer Cove, Stog'er Tight and Pine Cove deposits to outline and upgrade resources.
- Trenching at multiple locations within the Point Rousse Project, resulting in the discovery of the Argyle zone.
- Mapping and soil sampling along the Goldenville trend resulted in the identification of new drill targets.
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 centered 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.
The Scrape TrendThe 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 Anaroc 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 an airbourne EM conductor. The Scrape Trend hosts both baseload and high-grade styles of mineralization.
The Pine Cove Deposit
The purpose of the drill programs at Pine Cove was to ultimately achieve the following three goals; to increase total resources/reserves, which will extend the Pine Cove mine life, to reduce the stripping ratio by outlining near surface mineral resources/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. The drill program 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. Further north, around the proposed waste rock storage area, two holes intersected several broad zones of low-grade mineralization at depths in excess of 200 metres. Recently, geological mapping and five Diamond drill holes 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.
The Stog'er Tight Deposit
Development work at the Stog'er Tight deposit included drilling, stripping of the reclaimed historical mining surface and geological mapping. The goals of the drill program were; to intersect shallow mineralization, to intersect down-dip mineralization in areas where gold is anticipated, but not previously intersected, and to verify historical drilling programs by twinning existing drill holes in anticipation of publishing an NI 43-101 compliant resource. The results from the drill program were positive (see press release dated December 16, 2014 ) and will be used to assess the current resource and ultimately the feasibility of advancing the Stog'er Tight deposit to production. Stripping of the historical mining surface exposed the deposit at surface and allowed detailed mapping and investigation of geological controls on mineralization. This surface was then channel sampled, with results published on July 29, 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. The Company plans to conduct geophysical and geological mapping to test the surface extent of the Argyle zone prior to drilling.
The Goldenville TrendThe 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. This 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.
In the past six months, Anaconda has conducted geological mapping, prospecting and soil sampling along the eastern portion of the Goldenville Trend, specifically concentrating on the historical workings. Geological mapping identified several veins adjacent to the Goldenville horizon that should intersect the horizon at depth. The intersection of quartz-carbonate veins and the ironstone is a key target for mineralization within ironstone hosted gold deposits. To better delineate potential deposits exposed at surface, the Company conducted a detailed soil sampling program and identified several zones with anomalous gold-in-soil values, which are coincident with quartz veins. These samples have recently been analysed, with final results indicating several key targets for follow up work, including trenching and potentially drilling.
The Deer Cove TrendThe 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. In the summer of 2014, Anaconda carried out a drill program on the Deer Cove deposit 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.
Completed and anticipated fiscal 2016 exploration workIn 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.
The above technical information was confirmed and/or reviewed by Paul McNeill , P. Geo., VP Exploration, qualified person under NI 43-101.
Reconciliation of Non-GAAP Financial MeasuresThe 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 years ended May 31, 2015 and 2014:
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|
For the year ended
|
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May 31
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May 31
|
|
2015
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2014
|
|
$
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$
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Net income (loss)
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(2,774,766)
|
4,292,356
|
|
|
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Adjusting items:
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|
|
|
Foreign exchange loss (gain)
|
(11,927)
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(2,599)
|
|
Unrealized loss (gain) on forward sales contract derivative
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65,800
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(39,185)
|
|
Write down of Chilean assets
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2,260,158
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-
|
|
Reclamation expense
|
57,432
|
54,916
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Total adjustments
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2,371,463
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13,132
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Adjusted net earnings (loss)
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(403,303)
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4,305,488
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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 years ended May 31, 2015 and 2014:
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|
For the year ended
|
|
May 31
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May 31
|
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2015
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2014
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Cost of sales
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21,695,290
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17,838,720
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Less: Depletion and depreciation
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(4,288,132)
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(2,970,568)
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Cash operating cost
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17,407,158
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14,868,152
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Corporate administration
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2,032,265
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1,909,310
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Purchase of property, mill and equipment
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1,745,818
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1,452,627
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Purchase of exploration and evaluation assets
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1,745,058
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900,686
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All-in cash cost
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22,930,299
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19,130,775
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|
|
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Gold ounces sold
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15,821
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14,577
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Cash cost per ounce sold
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1,100
|
1,020
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All-in sustaining cash cost per ounce sold
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1,449
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1,312
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EBITDA is earnings before finance expense, foreign exchange loss (gain), unrealized gain on forward sales contract derivative, share based payments, 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 years ended May 31, 2015 and 2014:
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Reconciliation of Non-GAAP Financial Measures
|
|
|
|
|
For the year ended
|
|
May 31
|
May 31
|
|
2015
|
2014
|
|
$
|
$
| |
Net income (loss)
|
(2,774,766)
|
4,292,356
|
|
|
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Add back:
|
|
| |
Finance expense
|
433
|
272,771
| |
Foreign exchange loss (gain)
|
(11,927)
|
(2,599)
| |
Unrealized loss (gain) on forward sales contract derivative
|
65,800
|
(39,185)
| |
Share-based payments
|
136,921
|
200,583
| |
Income tax expense (recovery)
|
(929,865)
|
(31,000)
| |
Depletion and depreciation
|
4,288,132
|
2,970,568
| |
EBITDA
|
774,728
|
7,663,494
| |
Corporate administration
|
2,032,265
|
1,909,310
| |
Other revenues and expenses
|
(240,238)
|
(4,265,630)
| |
Write down of Chilean assets
|
2,260,158
|
-
| |
Point Rousse Project EBITDA
|
4,826,913
|
5,307,174
|
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 6,346 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.
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