Anaconda hits milestone in strategy to extend the life of the Point Rousse Project
October 22, 2015 (Source: CNW) — Anaconda Mining Inc. (“Anaconda” or the “Company”) – (TSX: ANX) is pleased to provide an updated Mineral Resource estimate for the Point Rousse Project (Exhibit A) with new resource calculations at the Stog’er Tight and Pine Cove deposits with an effective date of October 22, 2015 which conforms to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101 Standards”). These resource calculations represent an important step in the Company’s strategy to extend the life of the Point Rousse Project. One of Anaconda’s goals is to expand the Pine Cove deposit and develop the Stog’er Tight deposit so that the project will extend to over ten years. With these new resource calculations, the Company is beginning to build a portfolio of ounces and demonstrate the potential to reach its goal. A technical report will be filed on SEDAR within 45 days of this press release.
2015 Mineral Resources and Reserves Estimate
The following tables summarize the Mineral Resources and reserves estimate for the Point Rousse Project:
2 – Grams per tonne
3 – The Pine Cove Resource statement includes the Pine Cove Reserves
President and CEO, Dustin Angelo, states, “This Mineral Resource update represents a significant milestone towards reaching our goal of extending the Point Rousse Project life to 10 or more years. We have only just begun to demonstrate the longevity of the project. We control over 6,300 hectares of contiguous property containing three gold trends, with a cumulative strike length of approximately 20 kilometres, five deposits and numerous prospects and showings. We have spent considerable effort to leverage and marry historical work with modern geological thinking and exploration. Our understanding of the Point Rousse geology and the refinement of our exploration models has led to new discoveries such as the Argyle zone and brought us to the point of outlining new resources at Stog’er Tight. We are confident that our project level exploration and development know-how will not only lead to an expansion of the Pine Cove and Stog’er Tight deposits, but also to the discovery and expansion of other deposits, prospects and showings on the Ming’s Bight Peninsula, all of which would be within 8 kilometres of the Pine Cove mill.”
The Stog’er Tight deposit is located 3.5 kilometres from the Pine Cove mill along the existing mine road. The deposit (Exhibit B) outcrops at surface along its entire current strike length of approximately 400 metres and to a depth ranging between 15 and 115 metres. The deposit is characterized by intense carbonate, albite, pyrite alteration of gabbroic rocks with gold closely associated with pyrite as at the Pine Cove deposit.
The Pine Cove deposit (Exhibit C) consists of a series of stacked mineralized zones across 350 metres that vary in strike length from 25 to 250 metres. Mineralization extends down dip for approximately 800 metres, though approximately 300 metres of the dip extent has been excluded from the current resource estimate since it is not currently feasible for open-pit mining because of its depth (between 175 and 300 metres from surface). The deposit is characterized by carbonate, quartz, pyrite, albite alteration with gold occurring with pyrite. The deposit has been continually mined since 2009 with a current production rate of approximately 15,000 ounces per year.
Additional Resource Potential at Stog’er Tight and Pine Cove
Anaconda’s goal is to develop a gold mine at Stog’er Tight that has a minimum of five years of life, producing approximately 15,000 ounces annually, to continue the baseload production at the Point Rousse Project. The Company believes there is significant potential for further resource expansion east, west and southwest of the current Stog’er Tight deposit to meet this goal (Exhibit D). In the next stage of exploration, Anaconda plans to step out to the West and East Zones, the Gabbro Zone and the East Gabbro Zone, which are closest to the current resource. Based on historical drill intercepts and trenching results, these zones have numerous intersections of alteration and mineralization similar to the Stog’er Tight resource in style and geological setting. The Company has begun to verify the historical results and expand the area of known surface mineralization in these areas. It plans to follow up with a trenching program later this fall.
The geological characteristics of Stog’er Tight are found in a much larger area around the deposit that is approximately 1.5 kilometres long by 0.5 kilometres wide. Five other zones of alteration and mineralization, beyond the East and West Zones, Gabbro and East Gabbro Zones, have been identified throughout the greater Stog’er Tight area. Anaconda plans to review these five zones for their potential to host gold deposits and develop specific drill targets to test the area for new deposits.
Anaconda is exploring for additional resources east and west of the southern margins of the Pine Cove deposit around the Pine Cove Pond. This area is contiguous with geology, alteration and mineralization within the previously mined resource. It is associated with chargeability anomalies, outlined through ground IP surveys, similar to those associated with the main Pine Cove deposit. In November 2015, the Company plans to conduct a 1,000-metre diamond drill program to test the potential for mineralized zones in the Pine Cove Pond area.
Overview of Geological Trends within the Point Rousse Project
During the course of Anaconda’s exploration and development efforts, three primary gold trends have been identified within the Point Rousse Project area, with a cumulative prospective strike length of approximately 20 kilometres. The Company’s recent exploration work, combined with historical results, has brought more clarity, understanding and confidence to the Company’s geological interpretations and models. The Company believes it has the potential to discover and develop multiple deposits on the Ming’s Bight Peninsula.
The Scrape Trend consists of a belt of highly prospective rocks approximately 7 kilometres long and approximately 1 to 2 kilometres wide. It begins southwest of the Pine Cove mine site and continues eastward to the community of Ming’s Bight. The Scrape Trend includes the Pine Cove, Stog’er Tight and Romeo & Juliet deposits, the Anoroc and Animal Pond prospects and a new discovery referred to as the Argyle zone. These gold occurrences align with a fault delineated by a topographic lineament coincident with a broad airbourne EM conductor. The Scrape Trend hosts both baseload (approximately 1.8 g/t – as currently processed at the Pine Cove mill) and prospects that contain higher grades of mineralization.
The Goldenville Trend is an 8-kilometre long belt of highly-prospective rocks centered on an iron stone unit referred to as the Goldenville Horizon. The Company believes the trend to be highly prospective because it contains numerous prospects of ironstone-hosted gold as well as the Corkscrew deposit recently optioned by Anaconda (see press release dated August 4, 2015). Further the Goldenville Horizon is clearly associated with the historic Nugget Pond mine, which produced high grade gold. If the Company is successful, it will have a longstanding high-grade feed source for the Pine Cove mill to layer on top of the baseload production from other sources like Pine Cove or Stog’er Tight.
Deer Cove Trend
The Deer Cove Trend is located in the northern part of the Ming’s Bight Peninsula and consists of a belt of prospective rocks approximately 3.5 kilometres in strike length. It is associated with the Deer Cove thrust fault and includes the Deer Cove deposit as well as various other showings and prospects.
Notes on Mineral Resource Estimation Methodology:
- Mineral Resources are estimates conform to the 2014 CIM Mineral Resource definitions referred to in the NI 43-101 Standards. Cath Pitman, P. Geo., Geology Manager/Senior Geologist with AMC Mining Consultants Inc., is a Qualified Person as described within the NI 43-101 Standards and is independent of the Company. Ms. Pitman has prepared and authorized the release of the Mineral Resource estimates for Stog’er Tight and Pine Cove deposits presented within this press release. Ms. Pitman has verified the data used for the resource calculations including sampling protocols and analytical methods and the laboratory conducting the analysis.
- Mineral Reserves are estimated conform to the 2014 CIM Mineral Resource definitions referred to in the NI 43-101 Standards. Gordana Slepcev, Manager of Technical Services with Anaconda Mining Inc., is a Qualified Person as described within the NI 43-101 Standards. Ms. Slepcev has prepared and authorized the release of the mineral reserves estimate for the Pine Cove mine presented within this press release.
- The Stog’er Tight deposit Mineral Resource was estimated using a block model with parent blocks 3 mE x 3 mN x 3mRL in size. Block gold grades were estimated in parent blocks using Ordinary Kriging and Datamine (CAE) software. The mineralization was divided into two zones: higher grade (>0.5 g/t gold), using a wireframe produced by Anaconda and Ms. Pitman and a background zone based on the results of indicator kriging. Dynamic anisotropy was used to adjust the search orientation to match the orientation of the trends in mineralization. The Mineral Resource was classified as either Indicated or Inferred according to the NI 43-101 Standards based on the drill hole spacing and understanding of the trends in geological and mineralization continuity.
- The Pine Cove deposit Mineral Resource was estimated using a block model with parent blocks 3 mE x 3 mN x 3mRL in size. Block gold grades were estimated in parent blocks using Ordinary Kriging and Datamine (CAE) software. The mineralization was divided into two zones of higher grade and background based on wireframes provided by Anaconda Mining. Dynamic anisotropy was used to adjust the search orientation to match the orientation of the trends in mineralization. The Mineral Resource was classification as either Indicated or Inferred according to the NI 43-101 Standards based on the drill hole spacing and understanding of the trends in geological and mineralization continuity.
- The Mineral Reserve estimate was derived by utilizing the gold price of $1,400 CAD/oz (the company averaged $1470 CAD/oz in gold sales over the past three fiscal years) pit shell design created in Surpac 6.6 and running a reserve report between this shell and the topographic surface provided by Anaconda. The block model used for the Pine Cove Reserve report was the undiluted gold grade model.
The internal cut-off grade of 0.70 g/t Au was derived from Anaconda’s mining, processing, general administration costs and process recovery. This internal cut-off grade is the minimum ore grade required to mine economically. Below are some of the key assumptions and costs used in the Mineral Reserve estimate.
Anaconda has concluded that, on average, there are 5% tonnes more tonnes by blasthole drilling and assay compared to the block model, while gold loss is around 3% (unrealized outlined grams compared with block model). Blasthole data reconciles very well with grades and tonnes mined and processed. Anaconda is currently using those parameters to determine mineral reserves and more accurately forecast mined and processed tonnes and grades.
This news release has been reviewed and approved by Paul McNeill, P. Geo., VP Exploration with Anaconda Mining Inc., a “Qualified Person”, under National Instrument 43-101 Standard for Disclosure for Mineral Projects.
Headquartered in Toronto, Canada, Anaconda is a growth oriented gold mining and exploration company with a producing project, called the Point Rousse Project, and approximately 6,300 hectares of exploration property on the Ming’s Bight Peninsula located in the Baie Verte Mining District in Newfoundland, Canada. Since 2012, Anaconda has increased its property control by ten-fold. It is currently exploring three primary prospective gold trends which have approximately 20 kilometres of cumulative strike length and include four deposits and numerous prospects and showings, all within 8 kilometres of the Pine Cove mill. The Company’s plan is to discover and develop more resources within the project area and double annual production from its current rate of approximately 15,000 ounces to 30,000 ounces.
FORWARD LOOKING STATEMENTS
This document contains or refers to forward-looking information. Such forward-looking information includes, among other things, statements regarding growth and is based on current expectations and assumptions of management that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to: the expectations of the Company in expanding Mineral Resources and project mine life and the timing thereof, current and future market trends and growth opportunities and whether the Company will be able to capitalize upon them. Forward-looking statements may include words such as “plans,” “may,” “estimates,” “expects,” “indicates,” “targeting,” “potential” and similar expressions. These forward-looking statements are based on current expectations and are subject to significant risks and uncertainties, including the risks factors outlined in the Company’s latest annual information form and other continuous disclosure documents filed at www.sedar.com, 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 the Company assumes no responsibility to update them or revise them to reflect new events or circumstances, except as required by law.
SOURCE Anaconda Mining Inc.
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Image with caption: “Exhibit A. A map of the Point Rousse Project area showing the three prospective trends and the location of key deposits and prospects within the project area. (CNW Group/Anaconda Mining Inc.)”. Image available at: http://photos.newswire.ca/images/download/20151022_C5287_PHOTO_EN_526867.jpg
Image with caption: “Exhibit B. A map showing the Stog’er Tight resource block model and drill holes viewed from above. Purple refers to Indicated Resources and blue refers to Inferred Resources. (CNW Group/Anaconda Mining Inc.)”. Image available at: http://photos.newswire.ca/images/download/20151022_C5287_PHOTO_EN_526869.jpg
Image with caption: “Exhibit C. A view towards the southwest from above the horizon of the Pine Cove resource block model with drill holes and the current pit configuration. Pink refers to Indicated Resources and green refers to Inferred Resources. The deposit continues down dip (to the right) of the block model shown, but this portion of the deposit was not included in the resource estimate because it does not currently meet the requirement of demonstrating the potential for profit through open pit mining. (CNW Group/Anaconda Mining Inc.)”. Image available at: http://photos.newswire.ca/images/download/20151022_C5287_PHOTO_EN_526871.jpg
Image with caption: “Exhibit D. A map of the Stog’er Tight deposit and surrounding prospects (modified from Kirkwood and Dube, 1991) illustrating the distribution of geological units and the association of altered and gold bearing zones as outlined by drilling, trenching and geological mapping. This map illustrates the potential to expand the Stog’er Tight deposit along strike as well as the potential to discover other Stog’er Tight like ore bodies. (CNW Group/Anaconda Mining Inc.)”. Image available at: http://photos.newswire.ca/images/download/20151022_C5287_PHOTO_EN_526873.jpg
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