Anaconda Mining produces 2,813 ounces of gold at Point Rouse in Q1, Newfoundland

Anaconda Mining Inc. [ANX-TSX; ANXGF-OTCQX] reported production results and certain financial information from the three months ended March 31, 2022, as well as providing a production update with regard to a water management issue at the Argyle open pit mine that impacted mining operations. The company expects to file its first quarter financial statements and management discussion and analysis by April 28, 2022.

Kevin Bullock, President and CEO, said, “During the first quarter of 2022, the 100%-owned Point Rousse mine in Newfoundland produced 2,813 ounces of gold, an 11% increase compared to the prior year however lower than plan as operational challenges at Argyle required mill throughput to be maintained with low-grade Pine Cove stockpiles.

“The temperatures at site during the period, fluctuating above and below the freezing point, impacted our ability to drill and blast at times and material handling was impeded due to frozen stockpiles. Moreover, in early March we experienced a water management issue with the detection of ammonia levels in the Argyle pit which exceeded our discharge parameters, thereby impacting our ability to continue mining. The site operations team immediately mobilized a UV water treatment system which achieved an instant improvement in water quality based on independent lab testing. The water quality is now compliant, and the Company has begun discharging water from the pit sump, which should allow for a return to continuous operations this week. The company is assessing the impact on production for the remainder of the year and will provide further updates accordingly.

“The company confirms that at no time during this incident was any impacted water discharged into the environment, as the company’s robust water management protocols identified the matter in a timely manner. The Company remains committed to the strong environmental management it has demonstrated over the past 10 years of operation in the Baie Verte Peninsula.”

Anaconda accepted the resignation of its Chairman, Jonathan Fitzgerald, from the Board of Directors. Mary-Lynn Oke has been appointed interim Chair of the Board of Directors while the company seeks a new Chair. As a result of his resignation, Fitzgerald will no longer stand for re-election as a board member at the company’s annual and special shareholders meeting on May 12, 2022. The remaining five members of the board will continue to stand for re-election.

Anaconda sold 3,491 ounces of gold in Q1 2022, generating metal revenue of $8 million at an average realized gold price of $2,296 (US$1,813) per ounce sold. Point Rousse produced 2,813 ounces of gold in Q1 2022, an 11% increase compared to Q1 2021; however, lower than planned due to operational challenges in the Argyle Pit which required mill throughput to be maintained with low-grade Pine Cove stockpiles.

Mine operations moved 68,877 tonnes of ore during Q1 from Argyle, an increase over the previous year but behind plan for 2022, as water management issues impacted the mine’s ability to drill and blast in March.

The Pine Cove Mill processed 104,495 tonnes during Q1 2022, of which 28,301 tonnes were from low-grade Pine Cove stockpiles. The mill achieved a strong average recovery rate of 86.1% despite the lower-grade profile of mill throughput.

For Stog’er Tight, Anaconda is finalizing internal pit designs in anticipation of a potential development scenario; the company has now received tree cutting and Crown Land permits and is in the process of finalizing the Mining Lease. Exploration drilling at Point Rousse identified two new mineralized systems within the Goldenville Trend, intersecting 2.09 g/t over 5.7 metres and 1.38 g/t over 5.7 metres.

As of March 31, 2022, the company had a cash balance of $3.6 million and an undrawn revolving credit facility of $3.0 million. Preliminary working capital deficit at the end of the quarter was $6.5 million, which includes $3.2 million in deferred revenue associated with a gold prepayment facility which will be delivered into over the next six months. The deficit also reflects the short-term impact of the cessation of mining due to a water management issue.