00:29:00 EDT Sat 26 May 2018
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Anaconda Mining Inc
Symbol C : ANX
Shares Issued 381,500,492
Close 2017-05-19 C$ 0.07
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Anaconda Mining, Orex Exploration close arrangement

2017-05-19 14:36 ET - News Release

Also News Release (C-OX) Orex Exploration Inc

Mr. Dustin Angelo of Anaconda reports


Anaconda Mining Inc. and Orex Exploration Inc. have completed the previously announced plan of arrangement pursuant to which Orex has now become a wholly owned subsidiary of Anaconda.

Dustin Angelo, president and chief executive officer of Anaconda, commented: "We are extremely appreciative of the strong support we received from our shareholders and the Orex shareholders in completing this transaction. This marriage of an experienced gold producer with operating infrastructure and a large mineral resource is expected to create significant shareholder value. We have already started down the path of building that value by beginning the Goldboro permitting process, resource optimization, economic analysis and planning for a diamond drill program, among other project development initiatives. We are targeting to have a preliminary economic assessment completed by the end of 2017."

Under the arrangement, Anaconda issued 172,167,741 common shares of Anaconda to former shareholders of Orex. As a result, on closing Anaconda had 381,500,492 Anaconda shares issued and outstanding, with approximately 54.9 per cent of the Anaconda shares being held by former Anaconda shareholders and 45.1 per cent of the Anaconda shares being held by former Orex shareholders, on a non-diluted basis.

Full details of the arrangement and certain other matters are set out in the joint management information circular of Anaconda and Orex dated April 3, 2017. A copy of the information circular can be found under Anaconda's and Orex's respective profiles on SEDAR.

Information for former Orex shareholders

Trading in the common shares of Orex are expected to be formally delisted from the TSX Venture Exchange, effective at the close of business on Tuesday, May 23, 2017.

Pursuant to the arrangement, former Orex shareholders are entitled to receive 0.85 of an Anaconda share for each Orex share held. In order to receive Anaconda shares in exchange for Orex shares, former Orex registered shareholders must complete, sign, date and return the letter of transmittal that was mailed to each registered Orex shareholder prior to the special meeting of securityholders of Orex. The letter of transmittal is also available under the SEDAR profile of Orex. For those shareholders of Orex whose shares are registered in the name of a broker, investment dealer, bank, trust company, trust, or other intermediary or nominee, they should contact such nominee for assistance in depositing their Orex shares and should follow the instructions of such intermediary or nominee.

Board and management

The board of directors of the combined company now comprises the following individuals:

  • Jonathan Fitzgerald (non-executive chairman);
  • Dustin Angelo;
  • Kevin Bullock;
  • Michael Byron;
  • Lewis Lawrick;
  • Jacques Levesque;
  • Maruf Raza.

The board of directors would like to thank Tim Casgrain and Glenn Dobby, former directors of Anaconda, and Dany Cenac Robert, Marcel Faucher, Robert Schafer, Jean-Pierre Landry and Claude Poulin, former directors of Orex, for their dedication and continued support. In addition, the board of directors of Anaconda would like to thank Jonathan Fitzgerald, the former chairman and CEO of Orex, Jacques Levesque, the former chief financial officer of Orex, and Julie Godard, the former corporate secretary of Orex, for their steadfast stewardship of Orex through this transaction.

Arrangement highlights

The arrangement is intended to provide significant benefits, including:

  • Acceleration of development of the Goldboro project by combining the mineral resources with Anaconda's proven operating infrastructure at the Point Rousse project and experienced management team;
  • Potential for substantial capital cost reductions at the Goldboro project through leveraging Anaconda's existing port, mill and tailings facilities;
  • Potential for gold-producing operations in two mining-friendly jurisdictions in Atlantic Canada -- Newfoundland and Labrador and Nova Scotia;
  • Establishment of a strong position from which to participate in any future consolidation in the mining industry in Atlantic Canada;
  • Greater market presence, enhanced liquidity and a broader capital markets profile.

Anaconda's Point Rousse project has been producing gold for nearly seven years, and, in that time, Anaconda has incrementally improved its operating infrastructure, which includes a 1,300-tonne-per-day mill, tailings capacity for approximately 15 years (based on the current mill throughput rate) and a port facility. Both the Point Rousse project and Goldboro project are located on tidewater. With favourable logistics and existing infrastructure in place, Anaconda expects it will be able to accelerate the development of the Goldboro project at a lower capital cost than if it were a stand-alone project.

The arrangement has created a company with expanded mineral resources, most of which are high grade. The mineral resource portfolio now includes 457,400 measured and indicated ounces of gold and 372,900 inferred ounces at the Goldboro project in Nova Scotia (see Orex's news release dated March 1, 2017); 107,230 indicated ounces of gold and 37,030 inferred ounces at the Point Rousse project; and 83,000 indicated ounces of gold and 31,000 inferred ounces at the Viking project in Newfoundland and Labrador (see attached table). Detailed resource tables prepared in accordance with National Instrument 43-101 are presented.

                                                          Point Rousse,                       Viking,
                     Goldboro, Nova Scotia          Newfoundland and Labrador         Newfoundland and Labrador 
                           Grade (1)                         Grade (1)                         Grade (1)
Category          Tonnes       (g/t)    Ounces      Tonnes       (g/t)    Ounces      Tonnes       (g/t)   Ounces

Measured and
indicated      2,556,000       5.57    457,400   1,764,100       1.89    107,230   1,817,000       1.42    83,000
Inferred       2,669,000       4.35    372,900     460,700       2.50     37,030     847,000       1.15    31,000

(1) Tonnage weighted average grade.

Note: Goldboro includes all three zones described in the technical report titled "Updated Mineral Resource Estimate Technical Report for the Goldboro Property, Guysborough County, Nova Scotia, Canada," with an effective date of Feb. 28, 2017, authored by independent qualified persons Michael P. Cullen, PGeo, and Stewart R.D. Yule, PGeo (Mercator Geological Services Ltd.), and Point Rousse includes the Pine Cove and Stog'er Tight deposits.

Recent developments

Prior to closing of the arrangement, Anaconda already started to work on advancing the Goldboro project. The permitting process has been under way, beginning with an initial meeting with regulatory officials organized by the Nova Scotia mineral development division, the completion of certain environmental studies related to moose and owl surveys, and the preparation for next steps in the process. Anaconda management has also begun community and first nations engagement. In addition, Anaconda initiated work on the Goldboro mineral resource model to optimize it based on its conceptual development plan. Multiple operating plans are currently being evaluated, and the optimal scenario will be determined in the coming months. Anaconda will provide additional updates on its progress as it meets its development milestones going forward.

NI 43-101 resource summary

Anaconda's mineral resource portfolio now includes three mineral projects with current NI 43-101 mineral resources, including the Goldboro project, the Point Rousse project and the Viking project. Mineral resources for each of these projects are summarized in the attached table.

                      A SUMMARY OF NI 43-101 MINERAL RESOURCES (5) (6)
                                             Goldboro, Nova Scotia

             Boston Richardson (1) zone     West Goldbrook (1) zone       East Goldbrook (1) zone 
                        Grade                        Grade                         Grade
Category       Tonnes    (g/t)    Ounces    Tonnes    (g/t)   Ounces      Tonnes    (g/t)    Ounces

Measured      171,000    5.39     29,600                                                      
Indicated   1,507,000    5.27    255,400   464,000    5.39    80,400     414,000    6.91     92,000 
Inferred    1,083,000    4.56    158,800   459,000    4.42    65,200   1,127,000    4.11    148,900
                           Point Rousse (PR)/Viking (VK), Newfoundland and Labrador  
                                               Stog'er Tight (3)

              Pine Cove (2) deposit (PR)          deposit (PR)              Thor (4) deposit (VK)
                        Grade                        Grade                         Grade
Category       Tonnes    (g/t)    Ounces    Tonnes    (g/t)   Ounces      Tonnes    (g/t)    Ounces

Indicated   1,560,000    1.67     83,690   204,100    3.59    23,540   1,817,000    1.42     83,000 
Inferred      208,700    1.57     10,570   252,000    3.27    26,460     847,000    1.15     31,000 

(1) Resource stated using a two-gram-per-tonne cut-off as per Orex's technical report referenced
(2) Resource is stated using a 0.7-gram-per-tonne cut-off as per "NI43-101 Technical Report,
Mineral Resource and Mineral Reserve Update on the Pine Cove Mine and Mineral Resource Estimate on
the Stog'er Tight Deposit, Point Rousse Project, Baie Verte, Newfoundland and Labrador, Canada,"
with an effective date of Oct. 22, 2015, and authored by independent qualified persons David A.
Copeland, MSc, PGeo (an independent consultant), and Catherine Pitman, PGeo (AMC Mining Consultants
(Canada) Ltd.), and qualified persons David Evans, PGeo (Silvertip Exploration Consultants Inc.),
Paul McNeill, PGeo (Anaconda Mining), and Gordana Slepcev, PEng (Anaconda Mining). The Pine Cove
reserves are reported in the annual information form dated Aug. 29, 2016.
(3) Resource is stated using a 0.8-gram-per-tonne cut-off as per "NI43-101 Technical Report,
Mineral Resource and Mineral Reserve Update on the Pine Cove Mine and Mineral Resource Estimate on
the Stog'er Tight Deposit, Point Rousse Project, Baie Verte, Newfoundland and Labrador, Canada,"
with an effective date of Oct. 22, 2015, and independent qualified persons Mr. Copeland and
Ms. Pitman, and qualified persons Mr. Evans, Mr. McNeill and Ms. Slepcev.
(4) Resource is stated using a 0.5-gram-per-tonne cut-off as per "NI 43-101 Technical Report and
Mineral Resource Estimate on the Thor Deposit, Viking Project, White Bay Area, Newfoundland and
Labrador, Canada," with an effective date of Aug. 29, 2016, and authored by independent qualified
persons Mr. Copeland, Dr. Shane Ebert, PhD, PGeo (an independent consultant), and Gary Giroux,
MASc, PEng (Giroux Consultants Ltd.).
(5) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
This estimate of mineral resources may be materially affected by environmental permitting, legal,
title, taxation, socio-political, marketing or other relevant issues.
(6) Mineral resource estimates were prepared in accordance with NI 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum standards.

About Anaconda Mining Inc.

Anaconda is a growth-oriented, Atlantic Canada regional gold producer, developer and explorer with a producing project called the Point Rousse project on the Baie Verte peninsula, Newfoundland, and a major development project called the Goldboro project in Nova Scotia. Anaconda also has three other exploration projects called the Viking and Great Northern projects and the Tilt Cove property in Newfoundland. Including all projects, Anaconda controls over 600,000 ounces of measured and indicated gold resources and over 400,000 ounces of inferred gold resources. Approximately 70 per cent of the measured and indicated resources are greater than five grams per tonne, and approximately 85 per cent of the inferred resources are more than four grams per tonne.

Paul McNeill, Anaconda's vice-president of exploration and a qualified person pursuant to NI 43-101, has reviewed and approved the scientific and technical data of Anaconda and Orex contained in this press release.

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