Anaconda Mining Inc. (“Anaconda” or the “Company”) is a junior gold producer that owns and operates the Point Rousse Project, including Pine Cove open pit mine and mill, and has control of approximately 6,316 hectares of exploration property in the Baie Verte Mining District on the Ming’s Bight Peninsula, Newfoundland, Canada (the “Point Rousse Project” or the “Project” – formerly known as the “Pine Cove Project”). Since 2010, the Company has consistently grown and become a reliable and profitable gold producer at its flagship project. Anaconda plans to expand production from 15,000 to 30,000 ounces of gold per year.
On a larger scale, the Company’s vision is to become a prominent junior gold mining company in North America, initially focusing on Atlantic Canada, with annual production of approximately 100,000 ounces per year via organic and corporate growth. As the only pure play gold producer in the region, the Company feels it is well positioned to lead a consolidation effort in Atlantic Canada. Anaconda has a track record of success, a strong management team and a flagship asset. It is looking for a partner to provide capital and technical assistance to grow the Company and be a part of a much larger entity.
In the last few years, the Company has developed the organic growth potential of the Point Rousse Project. Currently, the Point Rousse Project has approximately 105,000 ounces of probable reserves (as of the beginning of fiscal 2015), all within the Pine Cove open pit. Since 2012, the Company has increased its property control on the Ming’s Bight Peninsula by nine-fold to approximately 6,000 hectares and acquired three other deposits with historical resources and prospective geology. Anaconda is currently exploring three primary gold trends within the project area, with a cumulative twenty-kilometre strike length. The Company believes that it can discover and develop approximately 1,000,000 ounces of gold from multiple deposits.
The Company has methodically implemented exploration programs since 2011 with the general goal of finding resources to increase production and extend the life of the mill. The Ming’s Bight Peninsula is roughly 10 kilometres from north to south and 5 kilometres from east to west and is accessible by an existing road network. The Company envisions creating an operating complex on the peninsula with multiple pits and trucking the ore back to the Pine Cove mill.
Anaconda expects to develop multiple deposits similar in size and style to the current Pine Cove pit as well as other higher grade deposits. The Company’s strategy at the Point Rousse Project is to double production from the current 15,000 ounces to approximately 30,000 ounces of gold per year. To accomplish the strategy, the Company will attempt to develop two styles of mineralization: (1) More Pine Cove-like pits (i.e. Stog’er Tight) that provide bulk tonnage at roughly 2 grams per tonne (“g/t”) to support the base load production at the mill and to extend the life of the Project, and (2) High-grade veins like Deer Cove, Romeo & Juliet and, possibly, Goldenville that can be blended with the Pine Cove pit feed (or future Pine Cove-like pits) at a lower incremental cost while increasing the overall head grade.
A multi-deposit mining facility with baseload production and high-grade layering is critical to the long term success of the Point Rousse Project. Generating additional ounces out of potentially lower incremental costs will fortify the Project’s ability to withstand negative fluctuations in the gold price by having a lower unit cost. A high-level preliminary analysis has indicated that the incremental production from a high-grade source would have an incremental unit cost that was only about 60% of the Point Rousse Project’s current unit cost.
To reach the goal of 100,000 ounces per year in production, Anaconda believes it will have to acquire other operating assets or near-production development projects with established resources. If production at the Point Rousse Project expanded to 30,000 ounces per year, then the Company would need these acquisition targets to ultimately contribute the remaining 70,000 ounces of annual production. The Company has focused its mergers and acquisitions target search primarily on Canada and the United States, with a particular concentration on Atlantic Canada. Anaconda envisions doing two or possibly three transactions over the next five years to enable it to reach the 100,000-ounce per year production level.