Anaconda Mining receives second US$2 million payment for Chile deal
Tuesday, Jun 05, 2012
TORONTO, June 4, 2012 /CNW/ - Anaconda Mining Inc. ("Anaconda" or "the Company") - (TSX: ANX) announced that, on May 30, 2012, it received a payment of US$2 million from Hierro Tal Tal S.A. ("Tal Tal"), the second and final guaranteed payment from the sale of the Company's 50% ownership stake in Minera Hierro San Gabriel S.A.("MHSG") and its 20% ownership stake in Inversiones Hierro Antofagasta S.A. ("IHA"), which closed December 7, 2011. The Company, through its wholly owned subsidiary Inversiones La Veta SpA ("La Veta"), has the right to receive an additional US$3 million upon achievement of commercial production, as defined by the stock purchase agreement (the "SPA"), by any of the properties, directly or indirectly, controlled by MHSG or IHA (the "Properties"). La Veta can earn up to another US$4 million based on the sales price realized on certain volumes of production from the Properties, as defined in the SPA. Furthermore, La Veta shall earn a gross sales royalty for all production sold from the Properties.
With the proceeds from the transaction with Tal Tal and operating cash flow, the Company made another principal payment against the outstanding Convertible Loan, Series I Debentures and Series II Debentures (collectively, the "Loans"). The principal payments totaled $2,300,000 and were divided pro rata across the Loans. Since March 28, 2012, the Company has made approximately $3,300,000 in principal payments against the Loans and reduced the outstanding balance from $6,900,000 to $3,599,280.
President and CEO, Dustin Angelo, stated, "Receipt of this payment illustrates Anaconda's ability to create value in a challenging market. We have now achieved our goal to reduce our interest bearing debt nearly in half by the end of fiscal 2012. We are especially pleased that Pine Cove was a major source of cash for the principal repayment, providing approximately $1.3 million in just the last five months. Operations at Pine Cove are running well so we will focus more effort on defining the exploration potential around our mine, which offers the promise of more resources and production growth."
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
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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.
SOURCE Anaconda Mining Inc.