Press release from Marketwire
Anaconda Mining to Receive First Commercial Production Payment of US $1 Million From Tal Tal by September 9, 2013
Monday, August 26, 2013
Anaconda Mining to Receive First Commercial Production Payment of US $1 Million From Tal Tal by September 9, 201307:00 EDT Monday, August 26, 2013
TORONTO, ONTARIO--(Marketwired - Aug. 26, 2013) - Anaconda Mining Inc. ("Anaconda" or "the Company") - (TSX:ANX) is pleased to announce that, pursuant to the stock purchase agreement dated December 7, 2011 ("SPA"), between Inversiones La Veta SpA ("La Veta"), a wholly owned subsidiary of Anaconda, and Hierro Tal Tal S.A. ("Tal Tal"), Tal Tal has achieved commercial production on its first producing iron ore property and made its first shipment of iron ore concentrate on August 10, 2013. Per the payment terms of the SPA relating to the commercial production milestones, Tal Tal shall pay La Veta US$1 million on or before September 9, 2013.
La Veta will also begin to receive a gross sales royalty of 0.80% on a calendar quarterly basis on the sale of iron ore concentrate from the first producing iron ore property. The first shipment that departed in early August contained 163,582 dry metric tonnes of iron ore concentrate grading 63.5% iron (certified by SGS). The total estimated royalty payment for this shipment is expected to be approximately US$125,000 and will be payable on or before October 15, 2013.
President and CEO of Anaconda, Dustin Angelo, stated, "Anaconda would like to congratulate Tal Tal on achieving the commercial production milestone and making its first shipment. The transaction has been mutually beneficial for both parties. For Anaconda, the cash generated from the transaction can be reinvested in its core gold mining business to assist with the Company's growth objectives."
Overview of lump sum payments from the transaction:
Anaconda's wholly owned subsidiary, 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 Tal Tal for up to US$11 million in cash payments, of which US$2 million was paid at closing and an additional US$2 million was paid on May 30, 2012. Now that commercial production has been achieved, La Veta will receive an additional US$3 million, of which the first US$1 million shall be paid on or before September 9, 2013. The remaining US$2 million is due the earlier of (1) 30 days after the first shipment from the second producing iron ore property and (2) two years from the anniversary date when Tal Tal achieved commercial production from the first producing iron ore property. Furthermore, La Veta can earn up to another US$4 million based on the sales price realized for certain volumes of production from the properties, as defined in the SPA.
Headquartered in Toronto, Canada, Anaconda is a growth oriented, gold mining and exploration company with a producing asset located on the Baie Verte Peninsula in Newfoundland, Canada called the Pine Cove mine.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Anaconda Mining Inc.
President and CEO
ProConsul Capital Ltd.