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Press release from CNW Group

Anaconda generates $3.3 million in net income for 2012

Thursday, August 30, 2012

Anaconda generates $3.3 million in net income for 201207:00 EDT Thursday, August 30, 2012TORONTO, Aug. 30, 2012 /CNW/ - Anaconda Mining Inc. ("Anaconda" or the "Company") - (TSX: ANX) is pleased to report its results for the year ended May 31, 2012. The Company generated net income for the year ended May 31, 2012 of $3,298,062 (or $0.02 per fully diluted share) versus a loss of $9,393,911 (or $0.08 per fully diluted share).Anaconda's performance was buoyed by record sales volume at the Pine Cove project. During the year, the Company sold 11,977 ounces of gold, generated $19,905,756 in revenue and $6,627,600 in earnings before interest, taxes, depreciation, amortization and non-cash share-based compensation ("EBITDA"). The average gold sales price was $1,662 per ounce.With the proceeds from the sale of its Chilean iron ore assets on December 7, 2011 and operating cash flow, the Company paid off the Series III debentures totaling approximately $711,000 (including accrued interest), paid down the Thorsen loan, Series I and Series II debentures (the "Loans") by $3.3 million and reduced aged payables significantly. Anaconda also made another payment on the outstanding Loans at the end of August 2012 of $600,000. The Company plans to repay all of the outstanding Loans before maturity in September 2013.Anaconda President and CEO, Dustin Angelo, stated, "The Pine Cove project has developed into a very strong operating gold mine as demonstrated by the year end results.  The Pine Cove team continues to optimize the operation, which has generated the necessary cash flow to enable the Company to make progress on various initiatives like de-levering the balance sheet, exploration, property expansion and further operational improvements."All amounts are in Canadian dollars unless stated otherwise.  The financial results and Management's Discussion and Analysis of these results may be found on Anaconda's website (www.anacondamining.com and on its SEDAR profile www.sedar.com).Highlights for the year ended May 31, 2012:CHILE:On December 7, 2011, Anaconda's wholly owned subsidiary, Inversiones La Veta SpA ("La Veta"), sold its shares representing a 50% ownership stake in Minera Hierro San Gabriel S.A. ("MHSG") and a 20% ownership stake in Inversiones Hierro Antofagasta S.A. ("IHA") to Hierro Tal Tal S.A. ("Tal Tal"), a private Chilean company, for up to US$11 million in cash payments, a gross sales royalty and a 1.25% carried interest in Compania Portuaria Tal Tal S.A. ("CPTT"). La Veta received US$2 million at closing and received another US$2 million on May 29, 2012. The remaining payments are contingent upon Tal Tal meeting certain production and sales milestones.BALANCE SHEET IMPROVEMENT:As at May 31, 2012, the Company had cash and cash equivalents of $678,672 and a working capital deficit of $348,171 compared to cash and cash equivalents of $290,882 and a working capital deficit of $5,329,850 as at May 31, 2011.In December 2011, the Company repaid the full principal amount plus accrued interest of approximately $711,000 to the holders of the Series III Debentures.During the fourth quarter the Company repaid approximately $3.3 million in principal on the Loans.Total liabilities were reduced during the year from $15.8 million to $7.5 million.On August 28, 2012, the Company made further principal payments against the Loans of $600,000.OPERATING PERFORMANCE:For the year ended May 31, 2012, the Company sold 11,977 ounces of gold (5,345 in 2011) and generated $19,905,756 ($7,325,083 in 2011) in gold sales at an average sales price of $1,662 per ounce.Earnings before interest, taxes, depreciation, amortization, and non-cash stock based compensation for the year ended May 31, 2012 was $6,627,600.Net income for the year ended May 31, 2012 was $3,298,062 or $0.02 per share.Purchase of property, mill and equipment for the year ended May 31, 2012 was $1,465,865.ABOUT ANACONDAHeadquartered in Toronto, Canada, Anaconda is a growth oriented, gold mining and exploration company with a producing operation located on the Baie Verte Peninsula in Newfoundland, Canada called Pine Cove mine.FORWARD LOOKING STATEMENTSThis 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 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.For further information: Anaconda Mining Inc. Dustin AngeloPresident and CEO (647) 260-1248Email: dangelo@anacondamining.com  Company website: www.anacondamining.com