Anaconda Mining maximizing Pine Cove deposit potential through recent drilling

TORONTO, Feb. 26, 2015 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") – (TSX: ANX) recently conducted 1,938 metres of diamond drilling, in 10 holes, adjacent to the Pine Cove Mine.  The purpose of the drill program was to achieve the following three goals: 1) increase total resources to extend the mine life of the Pine Cove pit, 2) reduce the stripping ratio of the remaining life of mine by outlining near-surface mineral resources, and 3) reduce the haul distance of waste-rock material by placing a waste dump near the northern margin of the pit design. All ten holes were successful in advancing these goals.

"We are following through on our objective of extending the life of the Pine Cove deposit and maximizing its economic potential," states President and CEO, Dustin Angelo. "Outlining mineable, near-surface resources, extending the down-dip portion of the deposit and constructing a near-pit, waste-rock storage facility will maximize the deposit's value.  We are optimistic that the resultant resource estimate, economic analysis and mine planning will demonstrate that the Pine Cove Mine can continue to be a cornerstone of the Point Rousse Project."

Near-Surface Resources

To outline near-surface mineral resources, five holes were drilled in two areas: the Pine Cove Pond and the Northwestern Extension areas (Exhibit A).  All holes intersected mineralization near surface to down-hole depths of 62 metres.  Highlights from these holes include:

Pine Cove Pond

• 2.91 grams per tonne ("g/t") gold over 3.1 metres from 48.3 to 51.4 metres in hole PC15-240
• 1.01 g/t gold over 13.1 metres from 1.1 to 21.0 metres in hole PC15-241
• 2.23 g/t gold over 4 metres from 15.0 to 19.0 metres in hole PC15-242

Northwestern Extension

• 11.43 g/t gold over 0.9 metres from 31.6 to 32.5 metres in hole PC15-239
• 0.89 g/t gold over 10.7 metres from 15.9 to 26.6 metres in hole PC15-238

The Pine Cove Pond area is underlain by gold resources that were not previously incorporated into the Pine Cove mine plan.  The three drill holes in the current drill program were designed to extend the limits of known mineralization and assess if there is further potential for resource expansion in this area.  The results indicate that mineralization is more extensive than previously known and that more mineralization may be present to the east, along strike in the Pine Cove Pond area.

The Northwestern Extension is a zone of near-surface gold mineralization at the northwestern edge of the current Pine Cove pit design, which extends for at least 125 metres along strike (See press release dated February 28, 2013 on SEDAR).  The two holes drilled during the recent drill program in the area of the Northwestern Extension were designed to test the limits of this mineralized zone.  The results of the drilling in this area will be incorporated into an ongoing structural study of this zone of mineralization to determine the geometry of the mineralized zone.

The intersections of near-surface gold mineralization at the Pine Cove Pond and Northwestern Extension areas will be incorporated into existing data and used in a planned resource calculation and economic analysis.  If the results of the economic analysis are positive, the Pine Cove Pond and Northwestern Extension areas may be incorporated into the Pine Cove mine plan.  If these areas are added to the mine plan, then Anaconda expects the overall stripping ratio at the Pine Cove mine to be reduced (the magnitude of which will be determined in the upcoming economic analysis).

Down-Dip Resources

To increase the total resources at the Pine Cove Deposit, five holes were drilled along the northern margin of the current ultimate pit design.  All holes intersected mineralization indicating that the Pine Cove Deposit continues beyond the current pit design.  Highlights of significant intersections from these five holes include:

• 2.85 g/t gold over 11 metres from 168 to 179 metres in hole PC14-239
• 5.06 g/t gold over 7 metres from 183 to 190 metres in hole PC15-243  

The Pine Cove Deposit is known to extend down-dip; however, drilling density immediately adjacent to the current ultimate pit limit is low with up to 100 metres between drill intersections.  The five holes drilled in this area of the Pine Cove Deposit were designed to test the extent of mineralization.  The results appear to indicate that the Pine Cove Deposit does extend locally beyond the current ultimate pit design and beyond current resource modeling. Anaconda will generate a new resource estimate with the aim of increasing the overall Pine Cove resource and, ultimately, the mine life.

Reduction of Waste-Rock Haul Distance

To assess if a waste rock storage site and other mine workings can be placed north of the current pit design, it was necessary to determine if there is potential to develop either open pit or underground resources in that area.  During the recent drill program, two holes were designed to test if mineralization continued to the northern most area coincident with the proposed waste rock storage area and associated mine workings.  These holes intersected several broad zones of low grade mineralization at depths in excess of 200 metres.  The results will be compared with other drill data from the immediate area near and underlying the proposed waste rock storage area to determine if a mineable resource exists.

Table 1.  Composited gold intercepts from the recent drill program at Pine Cove.

This news release has been reviewed and considered accurate by Paul McNeill, P. Geo., VP Exploration with Anaconda Mining Inc., a "Qualified Person", under National Instrument 43-101 Standard for Disclosure for Mineral Projects.  The drilling program was supervised by Silvertip Exploration Consultants Inc., of Bishops Falls NL. 

All samples are collected using QA/QC protocols including the regular insertion of duplicates, standards and blanks within the sample batch for analysis.  All samples quoted in this release are analyzed at Eastern Analytical Ltd. in Springdale, NL, for Au by fire assay (30g) with an AA finish, as well as 34 element analysis using four acid dissolution with ICP-OES. 

All results are reported as drill thickness, whereas, true thickness are interpreted to be approximately 80-100% of drill thickness. 

ABOUT ANACONDA

Headquartered in Toronto, Canada, Anaconda is a growth oriented, gold mining and exploration company with a producing mine and approximately 6,000 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 nine-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 km 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 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 growth and is based on current expectations and assumptions of management that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to: current and future market trends and growth opportunities and whether the Company will be able to capitalize upon them. 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 are based on current expectations and 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 the Company assumes no responsibility to update them or revise them to reflect new events or circumstances, except as required by law.

SOURCE Anaconda Mining Inc.

Image with caption: "Exhibit A: A 3d view of the ultimate Pine Cove pit viewed from approximately 45 degrees above the horizon towards the Northwest, showing the location of drill holes described within this release. Mineralized zones are shown as green. Previous diamond drill hole traces are shown as black lines with circles illustrating collar locations. A transparency is applied to the surrounding topography to glimpse the ore below the topographic surface, outside of the current pit design. (CNW Group/Anaconda Mining Inc.)". Image available at: http://photos.newswire.ca/images/download/20150226_C7779_PHOTO_EN_12599.jpg