TORONTO, June 27, 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. Since terminating the concentrate processing agreement at Nugget Pond with Rambler Metals and Mining Canada Limited on April 13, 2011, Anaconda has been operating its entire gold processing circuit at the Pine Cove mill. Overall gold recovery from the mill has improved to nearly 80% due, primarily, to the production of a higher grade concentrate. In addition, the mill has maintained ore throughput at 950 to 1,000 tonnes per day.

As a result of the enhanced performance from the mill and the processing performed at Nugget Pond, Anaconda generated positive earnings before interest, taxes, depreciation and amortization ("EBITDA"), before inventory adjustment, at the Pine Cove operating level and the corporate level for both April and May.  The following table summarizes selected operating and financial results for these two months.

May marked the first full month of operations using the entire Pine Cove mill circuit at the improved operating levels. Pine Cove generated approximately $500,000 in EBITDA, before inventory adjustment, and had a cash cost per ounce sold of $998 despite an average grade of 1.72 grams per tonne.  Year-to-date May 2011 grade has been approximately 2 grams per tonne and Anaconda expects the grade to steadily increase, from the May levels, through fiscal 2012, which began June 1, 2011. In addition, during fiscal 2012, the Company expects to drive down unit costs from current levels as Pine Cove's gold output increases. Given the renewed confidence in the performance of the mill, the Company has discontinued any discussions with third parties regarding shipping a gold concentrate product off-site.

As a result of continuing progress at the Pine Cove mill, the Company generated sales volume of 1,081 troy ounces in May and had record sales volume for the fiscal fourth quarter 2011 of 2,363 troy ounces. Un-hedged gold sales also allowed the Company to capitalize on rising gold prices.  The table below summarizes the strong upward trend in quarterly sales volume for fiscal year 2011.

As stated in the press release dated June 6, 2011, the Company has recently undertaken exploration activities at the Pine Cove mine. More specifically, it has drilled three holes totaling approximately 800 linear meters in an area down dip of holes drilled in 2007 (See press release dated March 19, 2008). The current target holes are designed to further test the down-dip potential of the existing deposit as well as a possible strike extension.  Three holes, drilled on 50-meter sections, have been completed. The Pine Cove exploration team is currently in the process of core logging and sample cutting for delivery of samples to a third-party assay lab. The Company expects to have all assay results back by the end of July or the beginning of August, depending on lab availability.

President and CEO, Dustin Angelo, stated, "The Pine Cove mill has officially completed the commissioning phase and is in a period of optimization. There is a high level of confidence in the operation and it is expected that Pine Cove will continue to improve performance in fiscal 2012, resulting in higher gold output and lower unit costs. In addition, we look forward to the prospect of extending the mine life through the exploration of the down dip extension as well as other anomalous exploration targets within the project area."

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.

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.