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Anaconda Mining Posts $2.6 Million in Net Income and Sells 3,852 Ounces for Q2 Fiscal 2014

TORONTO, ONTARIO -- (Marketwired) -- 01/13/14 -- Anaconda Mining Inc. ("Anaconda" or "the Company") (TSX: ANX) is pleased to report its financial and operating results for the three months ended (the "Quarter") and six months ended November 30, 2013. The Company generated net income of $2,646,938, or $0.015 per fully diluted share, and $4,139,163 in earnings before interest, depreciation and depletion and share based compensation ("EBITDA") for the Quarter. The Company sold 3,852 ounces of gold and generated $5,299,446 in revenue at an average sales price of $1,376 per ounce. Cash operating cost per ounce sold at the Pine Cove Project for the Quarter was $1,021. The Company also recognized property and royalty income of $3,289,040 from its sold Chilean iron ore properties.

For the six months ended November 30, 2013, the Company generated net income of $3,243,234, or $0.018 per fully diluted share, and $5,925,515 in EBITDA. The Company sold 7,948 ounces of gold and generated $11,031,229 in revenue at an average sales price of $1,388 per ounce. Cash operating cost per ounce sold at the Pine Cove Project for the six months ended November 30, 2013 was $929.

During the Quarter, the Company entered into two three-year option agreements to acquire a 100% undivided interest in the Deer Cove and Stog'er Tight gold projects, which are adjacent to the Pine Cove Project. Anaconda considers Deer Cove and Stog'er Tight to be key components in its regional exploration program. The Company is planning an exploration program beginning with detailed compilation, structural interpretation and ground geophysical surveys at Stog'er Tight, followed up with a winter diamond-drill campaign. Detailed compilation of all Deer Cove data will also be undertaken with follow-up diamond-drilling to commence in the spring of 2014.

President and CEO, Dustin Angelo, stated, "The second quarter milestones and financial results were quite strong even in this continued volatile gold price environment. We recognized $3,289,040 in property and royalty payments from our sold Chilean iron ore assets, including the receipt of a US$1 million property payment, US$121,705 in the first of now ongoing quarterly royalty payments, and we have recognized the future receipt of US$2 million in commercial production milestone payments due by May 2015. We generated over $2.6 million in net income, over $4.1 million in EBITDA and almost $1.4 million in mine level cash flow. As a result, our cash position was in excess of $2.2 million at the quarter end. We sold 21% more ounces in the Quarter relative to the same period last year and, despite the gold price being lower, our actual average gold selling price was $65 per ounce higher than the average London PM gold fix price for the quarter and $75 higher on a year to date basis due to a successful hedging strategy. The Company completed a major strategic initiative during the Quarter with the acquisition of the Deer Cove and Stog'er Tight properties, consolidating our land position on the peninsula. These properties contain two advanced gold projects and will be a significant focus in our drive to increase resources and production in the coming months."

Highlights for the six months ended November 30, 2013

BALANCE SHEET:


--  As at November 30, 2013, the Company had cash and cash equivalents of
    $2,272,713 and net working capital of $1,864,314.

OPERATING PERFORMANCE:


--  For the three months ended November 30, 2013, the Company sold 3,852
    ounces of gold and generated $5,299,446 in revenue at an average sales
    price of $1,376 per ounce.
--  For the six months ended November 30, 2013, the Company sold 7,948
    ounces of gold and generated $11,031,229 in revenue at an average sales
    price of $1,388 per ounce.
--  Cash operating cost per ounce sold at the Pine Cove Project for the
    three and six months ended November 30, 2013 was $1,021 and $929 per
    ounce, respectively.
--  Total cash cost per ounce sold, including corporate administration,
    capital expenditures and exploration costs for the three and six months
    ended November 30, 2013 was $1,276 and $1,271 per ounce, respectively.
--  Milestone payments and royalty revenue from Chilean iron ore properties
    were $3,289,040, which included the receipt of US$1 million in
    September, the receipt of a US$121,705 royalty payment and the
    recognition of the US$2 million commercial production milestone payment
    due no later than May 15, 2015.
--  At the Pine Cove Project, earnings before interest, depreciation and
    depletion and share based compensation ("EBITDA") for the three and six
    months ended November 30, 2013 was $1,365,722 and $3,643,423,
    respectively.
--  On a consolidated basis, EBITDA for the three and six months ended
    November 30, 2013 was $4,139,163 and $5,925,515, respectively.
--  Net income for the three months ended November 30, 2013 was $2,646,938
    or $0.015 per basic and fully diluted share, respectively.
--  Net income for the six months ended November 30, 2013 was $3,243,234 or
    $0.018 per basic and fully diluted share, respectively.
--  Purchase of property, mill and equipment for the six months ended
    November 30, 2013 was $748,469. Key items include crusher upgrades of
    205,000, mining software of $88,000 and mill laboratory additions of
    $54,000.
--  Additions to production stripping assets for the six months ended
    November 30, 2013 were $362,361; depreciation of production stripping
    assets during the same period was $70,154.

GROWTH INITIATIVES:


--  The Company completed two three-year option agreements to acquire a 100%
    undivided interest in the Deer Cove and Stog'er Tight gold projects,
    which are adjacent to the Pine Cove Project and are key components in
    its regional exploration program.
--  Approximately $600,000 was spent at the Pine Cove Project on exploration
    for the six months ended November 30, 2013. The Company's exploration
    initiatives focused on drilling the Romeo and Juliet prospect, an
    airborne survey across the entire project and structural interpretations
    in and around the Pine Cove pit.

Operations overview

During the three months ended November 30, 2013, the gold sales volume of 3,852 ounces represented a 21% increase over the same period in fiscal 2013. Average sales price for the Quarter was $1,376 per ounce versus $1,686 per ounce for the second quarter of fiscal 2013, an 18% decrease. As a result of the higher sales volume and a lower selling price, gross revenue during the three months ended November 30, 2013, of $5,299,446, was lower than the same period in the previous fiscal year by $97,117 or 2%.

The following table summarizes the key operating metrics for fiscal 2014 and 2013.


                     For the three months ended    For the six months ended
----------------------------------------------------------------------------
                      November 30   November 30   November 30   November 30
                             2013          2012          2013          2012
----------------------------------------------------------------------------
OPERATING
 STATISTICS:
----------------------------------------------------------------------------
Mill
----------------------------------------------------------------------------
Operating days                 79            86           164           160
----------------------------------------------------------------------------
Availability                   87%           94%           90%           88%
----------------------------------------------------------------------------
Dry tonnes processed       76,114        76,292       160,004       139,157
----------------------------------------------------------------------------
Tonnes per 24-hour
 period                       956           887           976           870
----------------------------------------------------------------------------
Grade (grams per
 tonne)                      1.80          1.76          1.86          1.80
----------------------------------------------------------------------------
Overall mill
 recovery                      83%           83%           83%           84%
----------------------------------------------------------------------------
Gold sales volume
 (troy oz.)                 3,852         3,194         7,948         7,411
----------------------------------------------------------------------------
Mine
----------------------------------------------------------------------------
Operating days                 62            64           126           130
----------------------------------------------------------------------------
Ore production
 (tonnes)                  84,533        61,172       158,722       151,687
----------------------------------------------------------------------------
Waste production
 (tonnes)                 427,845       494,856       912,359     1,009,521
----------------------------------------------------------------------------
Total production
 (tonnes)                 512,378       556,028     1,071,081     1,161,208
----------------------------------------------------------------------------
Waste: Ore ratio              5.1           8.1           5.8           6.7
----------------------------------------------------------------------------

Milling operations

The Pine Cove mill operated for 79 days during the Quarter at 87% availability. The mill processed 76,114 dry tonnes of ore (956 tonnes per operating day) at an average head grade of 1.80 grams per tonne ("g/t") and an overall mill recovery of 83%. During the month of November, the Baie Verte Peninsula experienced a winter storm, which caused power outages at the mine site. As a result of the weather and subsequent difficulty in restarting the ball mill, the Pine Cove mill was down for a total of six (6) days during the month. Despite the interruption, the Company processed almost exactly the same amount of tonnes in the Quarter as it did in the similar period in fiscal 2013 because of an 8% year-over-year increase in tonnes per operating day.

Mining operations

Mining activities operated for a total of 62 days during the Quarter and excavated a total of 512,378 tonnes of ore and waste. Ore production totaled approximately 84,533 tonnes, while waste was 427,845 tonnes for a strip ratio of 5.1 : 1. During the Quarter, the mine experienced dewatering issues caused by power outages. The combination of power outages and unusually high precipitation (snow and rain) delayed access to the newly developed bench at the 5006 level where higher grade ore mining is scheduled. Mining activities were therefore redirected to upper benches to allow dewatering of the lower yet potentially higher grade areas of the mine.

Exploration

The first half of fiscal 2014 exploration program focused on the following objectives:


   1) A diamond drill program at the Romeo and Juliet prospect;
   2) An airborne survey over the Ming's Bight Peninsula; and
   3) Follow-up work from the winter drill program around the Pine Cove pit.

1. Romeo and Juliet: During the first quarter of fiscal 2014 the Company
   completed diamond drilling at its Romeo and Juliet prospect and
   intersected a new gold-bearing zone dubbed the Balcony Zone, located
   between the Romeo and Connecting Zones. It appears to dip steeply to the
   north, trends roughly east-west and is spatially associated with a
   northeast-trending topographic linear. Mineralization has been traced for
   approximately 100 meters and is open to the east, west and down dip. Gold
   is associated with pyritic altered mafic volcanic rocks, which is
   different from the Romeo and Juliet massive quartz vein hosted-style of
   gold mineralization.

   Anaconda drilled seven holes into the Balcony Zone. Hole RJ-13-26
   intersected strongly altered mafic volcanic rock containing abundant
   disseminated pyrite and fine quartz-carbonate veinlets, which assayed 8.4
   g/t Au over a core length of 12 meters. The hole is interpreted to have
   cut the mineralization at a low angle. Hole RJ-13-33 was subsequently
   drilled to intersect the mineralization perpendicular to hole RJ-13-26.
   It also contained altered mafic volcanics with heavy disseminated pyrite
   and quartz-carbonate veining. Hole RJ-13-33 assayed 4.35 g/t Au over 8.44
   meters including 6.22 g/t Au over 1.64 meters and 5.45 g/t Au over 4.85
   meters. This intersection confirms the scale and significance of the
   mineralization, but further work is required to establish true widths.
   Holes RJ-13-34 to RJ-13-37 targeted the Balcony Zone with all, but RJ-13-
   34, returning anomalous gold intercepts, highlighted by RJ-13-35
   returning 2.91 g/t Au over 11.1 meters. Fine visible gold was observed in
   quartz veins in holes RJ-13-26, 35, 36 and 37. Following structural
   analyses performed during the Quarter, the Company plans to drill
   additional holes in the Balcony Zone to further delineate the target.

   To date, Anaconda has drilled 19 holes totaling 2,004 meters at the Romeo
   and Juliet prospect. The original goal of the program was to target down-
   dip extensions of the Romeo and Juliet gold-bearing quartz veins. While
   Anaconda intersected the Romeo and Juliet quartz veins in 13 out of 19
   holes, assays results from the down-dip extensions of the Juliet and
   Connecting Zones were generally lower than anticipated. However, in the
   Romeo Zone, hole RJ-13-32 returned 10.4 g/t Au over 0.54 meters and hole
   RJ-13-29 returned 3.45 g/t Au over 1.23 meters, both at depths over 100
   meters. PC-13-27 intersected both the Balcony and the Romeo Zones. (See
   press release dated September 16, 2013 for full details of drill
   results).

2. Regional Exploration / Airborne Survey: Past mineral exploration
   activities in the Ming's Bight area on the Baie Verte Peninsula, dating
   mainly from the period 1985-1990, resulted in an extensive collection of
   archived data that includes more than 30,000 gold-in-soil geochemical
   analyses. Much of this data has never been adequately followed up and
   many anomalies have not been explained. Compilation and digitizing of
   this historic geophysical and soil geochemical data was initiated by
   Tenacity and completed by Anaconda. Prospecting teams have followed up
   much of the historic soil data and completed infill sampling in some
   areas.

   In June 2013, Fugro Airborne Services completed a helicopter-borne
   Electromagnetic/Magnetic survey over the entire Pine Cove Project. The
   Dighem EM/Horizontal Magnetic Gradiometer survey targeted ophiolitic and
   cover sequence rocks of the Point Rousse Complex. The survey covered
   approximately 700 line kilometers at a flight line spacing of 75 meters.
   The data will be used in conjunction with archived gold-in-soil
   geochemical data and prospecting to further delineate exploration
   targets.

3. Pine Cove Down-Dip and Western Extension Exploration: Historic drilling,
   immediately north of the Pine Cove deposit, indicated potential for
   additional gold mineralization down-dip of the deposit. In 2011 and 2012,
   drilling was completed approximately 100 meters north of the mine. Drill
   hole PC-11-181 intersected 2.50 grams per tonne gold over 40.8 meters and
   PC-12-189 intersected 32 meters grading 0.848 grams per tonne. A review
   of the historic data indicated the need for additional drilling to test
   both up dip of PC-11-181 and to test a sparsely drilled area immediately
   northwest of the deposit. During the fiscal 2013, the Company completed a
   twenty-hole, 3,296-metre program successfully exploring the down-dip and
   the northwest areas (the "Western Extension Area") of the Pine Cove
   deposit. The down-dip drilling successfully established continuity of
   gold mineralization with four, widely spaced drill holes all intersecting
   mineralization up dip from PC-11-181 (Anaconda Press Release, February
   28, 2013). Hole PC-13-195 intersected 12.06 metres of 3.32 g/t gold from
   a depth of 168.66 metres and hole PC-13-199 intersected 3.06 metres of
   7.69 g/t gold from a depth of 147.2 metres.

   The Western Extension Area returned significant near surface
   mineralization with PC-13-196 intersecting 11.4 meters of 2.19 grams per
   tonne ("g/t") from a depth of 26.6 meters and PC-13-210 returning 2.34
   g/t gold over 41 meters starting at a depth of 51 meters (See press
   release dated June 5, 2013 for full details of drill results).

   During the Quarter, a review and compilation of diamond-drill results
   from the winter drill program was completed along with detailed
   structural geologic mapping of the Pine Cove pit area. Mapping identified
   a broad alteration halo surrounding the ore comprised of an outer
   gradational calcite to iron carbonate zone surrounding a zone of intense
   iron-carbonate, sericite, pyrite and quartz veining/silicification - the
   ore zone. The alteration and gold mineralization is hosted by strongly
   deformed mafic volcanic and volcaniclastic rocks.

   In the eastern and central portions of the pit the mineralized zones
   appear to dip moderately to steeply to the northeast towards the area
   tested by the down-dip drilling. While the down-dip area has returned
   significant intervals of gold mineralization it is probably too deep to
   access by open pit. Additional drilling is warranted to test its
   amenability to underground mining methods.

   Mapping and mine development in the western portion of the pit has
   revealed that the geology and distribution of the gold mineralization is
   much more complex. There appears to be a significant, but as of yet
   unresolved, strong northeast structural control on the gold
   mineralization particularly in the Western Extension Area where the
   mineralization is lensoidal and more quartz-rich. This lensoidal nature
   both along strike and vertically currently precludes its inclusion in the
   mine plan. Drilling as part of the planned "North Waste Dump"
   condemnation drill program will test for the potential northeast
   extension of this mineralization.

The information in this news release has been reviewed and approved by David Evans, P. Geo., with Silvertip Exploration Consultants Inc., a "Qualified Person" under National Instrument 43-101.

ABOUT ANACONDA

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.

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