TORONTO, ONTARIO--(Marketwire - Oct. 6, 2011) - Anaconda Mining Inc. ("Anaconda" or "the Company") (News - Market indicators) is pleased to announce certain preliminary financial results for the first quarter of fiscal year 2012, ended August 31, 2011. During the first quarter, the Company sold 2,858 ounces of gold, generating over $4.5 million in revenue and approximately $1.1 million in earnings before interest, taxes, depreciation and amortization ("EBITDA")¹. Anaconda's Pine Cove gold mine generated over $1.5 million in EBITDA at an average gold sales price of $1,581 per ounce and total cash costs (before exploration expenses) of $1,012 per ounce. The following table summarizes selected operating and financial results for the first quarter ended August 31, 2011.

The financial results were achieved during a period where the mine and mill were not operating at levels indicative of expected long-term performance levels. These operating shortfalls were described in the press release dated September 14, 2011 and included:

• the ore mined was below life-of-mine grade with the average grade being 1.51 grams per tonne for the first quarter of fiscal year 2012 versus life-of-mine average grade of 2.07 grams per tonne;
• the average recovery for the quarter was approximately 76%, but had climbed to 80% by August, indicative of improvements to the processing circuit achieved during the quarter; and
• the Pine Cove mill only had 84% availability in August due primarily to drum filter limitations, of which, as noted in the September 14th press release, the original drum filters are currently in the process of being replaced by new filters.

Anaconda expects the overall mill recovery to maintain an 80% target rate and the mill modifications that are currently being finalized will help sustain availability rates in the mid 90% range. Grade has been improving as Pine Cove has experienced average mill feed over 2 grams per tonne for September.

President and CEO, Dustin Angelo, stated, "We're quite pleased with the results achieved during the first quarter despite less than average ore grade levels and lower plant availability. Pine Cove is nearing completion of its mill modifications, including the installation of two new drum filters. The grades that are currently being mined and processed are above the average mine grade of 2.07 grams per tonne gold. We expect that by mid October we should begin to see the mill perform more consistently at higher levels of availability and overall gold recovery as we process the higher grade material now available to the mill. The cash we generated during this quarter has helped to pay down payables, service our debt and invest in the mine."

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.

Company website: www.anacondamining.com

¹ 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.