Mr. Kevin Bullock reports
ANACONDA MINING ANNOUNCES Q4 AND FULL YEAR 2020 PRODUCTION RESULTS, ACHIEVES RECORD METAL REVENUE OF $41.5 MILLION
Anaconda Mining Inc. has released production results and certain financial information for the three months and year ended Dec. 31, 2020. The company expects to file its full audited annual financial statements and management discussion and analysis by March 2, 2021.
- Anaconda produced 18,268 ounces of gold in 2020 from its Point Rousse operation, achieving its annual guidance of 18,000 to 19,000 ounces, predominantly from Pine Cove pit mine production, with the processing of ore from the Argyle gold mine commencing in late Q4 2020.
- Anaconda sold 17,918 ounces of gold in 2020, generating record metal revenue of $41.5-million at an average sales price1 of $2,316 ($1,728 (U.S.)) per ounce of gold. As at Dec. 31, the company also had over 525 ounces in gold dore inventory, which was subsequently sold in January.
- The Pine Cove mill achieved annual throughput of 459,085 tonnes during 2020, just short of its annual record throughput, representing a 14-per-cent increase over 2019, when the mill was impacted by unplanned maintenance.
- Mine operations moved 512,028 tonnes of ore during the year, including 103,557 tonnes of ore from Argyle in Q4 2020, at an average grade of 1.50 grams per tonne and at a strip ratio of 3.8 waste tonnes per ore tonne.
- The Pine Cove pit has now transitioned to a fully permitted in-pit tailings facility, with over 10 years of capacity at current throughput rates.
- The company announced the full exercise of share purchase warrants expiring on Jan. 10, 2021, resulting in proceeds of $3,526,895 and the issuance of 7,837,544 common shares.
- As of Dec. 31, 2020, the company had a cash balance of $14.6-million and preliminary working capital of $13.8-million. The company's current loan balance as of Dec. 31, 2020, was $1.9-million and the non-current portion was $800,000.
"While 2020 was an unusual year in so many ways, with all the uncertainty brought with the global pandemic, it ended up being a very strong year for Anaconda Mining and its operations at Point Rousse. Firstly, and above all, I would like to thank all our employees for their hard work and commitment under very challenging circumstances, ensuring the sustainability of the operation while maintaining the highest level of commitment to the health and safety of all members of the community in which we operate. The company produced 18,268 ounces of gold to meet its annual guidance and achieved record metal revenue of $41.5-million, with excellent performance from the mine and mill operations. We are excited with the commencement of ore processing from our newest mine at Point Rousse, the Argyle gold mine, which will provide most of the mill throughput in 2021 as we guide to produce between 18,000 and 19,000 ounces of gold in the upcoming year. With a strong treasury and continued free cash flow generation we begin the year in a robust financial position and with a clear focus on growth," said Kevin Bullock, president and chief executive officer, Anaconda Mining.
Anaconda is projecting to produce between 18,000 and 19,000 ounces of gold in 2021. Mill feed in 2021 will be predominantly from mining at the Argyle gold mine, with supplemental ore feed from Pine Cove and marginal stockpiles, although the company continues to investigate opportunities to defer marginal ore feed. Operating cash costs per ounce for the full year are expected to be between $1,425 and $1,475 per ounce of gold sold ($1,100 (U.S.) to $1,145 (U.S.) at an approximate exchange rate of 0.775), reflecting the relatively lower-grade profile of Argyle in the earlier part of the mine plan, the impact of processing lower-grade marginal ore and increased trucking costs to the Pine Cove mill from Argyle. Mine grade will increase significantly toward the end of 2021 and into 2022 at Argyle, which, along with a decrease in the stripping ratio, will lead to a marked decrease in operating cash costs per ounce sold. Furthermore, any opportunity to displace marginal ore will positively impact operating costs on a per-ounce-sold basis.
The company expects to incur $6.6-million of sustaining capital expenditures for the mine and mill operations in 2021, which includes approximately $3.8-million of mine development for pushbacks at the Argyle gold mine, which will also support continuing mining in 2022. Looking further ahead at Point Rousse, the company continues to infill drill the Stog'er Tight extension and advance baseline permitting activities, given its strong potential to extend the life of mine of the Point Rousse operation.
In addition, milestones and catalysts for growth in 2021 include:
- Continuing production and free cash flow generation from Argyle throughout 2021;
- Infill drilling at Stog'er Tight deposit to complete an updated mineral resource;
- Final drill results from the Goldboro gold project infill drill program in Q1 2021;
- An updated mineral resource for the Goldboro gold project in Q1 2021;
- Continuing initial 10,000-metre drill program at the Tilt Cove gold project in Q1 and Q2 2021;
- Drill program at the Lower Seal Harbour property in Nova Scotia, proximal to Goldboro;
- Completion of the Goldboro feasibility study in Q4 2021.
Operating statistics for the three months and year ended Dec. 31, 2020
During the fourth quarter of 2019, the company processed a bulk sample for Goldboro at its Pine Cove mill (see press release dated Jan. 16, 2020). Fourth quarter and annual 2019 mill statistics are presented both including the bulk sample, and on a Point Rousse stand-alone basis.
Three months Three months Year Year
ended ended ended ended
Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2019
Ore production (tonnes) 110,455 123,302 512,028 413,139
Waste production (tonnes) 453,859 518,698 1,964,689 1,771,408
Total material moved (tonnes) 564,314 642,000 2,476,717 2,184,547
Waste:ore ratio 4.1 4.2 3.8 4.3
sample in 2019)
Availability (%) 91.5 97.1 96.3 89.6
Dry tonnes processed 107,257 110,474 459,085 401,499
Tonnes per day (tpd) 1,274 1,236 1,302 1,228
Grade (grams per tonne) 1.39 1.49 1.42 1.52
Recovery (%) 86.8 83.1 87.4 82.3
Gold ounces recovered 4,171 4,411 18,268 16,181
Gold ounces sold 3,970 4,209 17,918 17,265
Excluding the operating results from the bulk sample, the Pine Cove mill statistics specifically for production from the Point Rousse operation are as shown in the associated table.
Dry tonnes processed 107,257 100,689 459,085 391,714
Tonnes per day (tpd) 1,274 1,318 1,302 1,248
Grade (grams per tonne) 1.39 1.27 1.42 1.46
Recovery (%) 86.8 84.0 87.4 82.8
Gold ounces produced 4,171 3,441 18,268 15,211
Gold ounces sold 3,970 3,306 17,918 16,362
Operations overview for the year ended Dec. 31, 2020
Anaconda sold 17,918 ounces of gold in 2020 to generate record metal revenue of $41.5-million at an average realized gold price1 of $2,316 ($1,728 (U.S.)) per ounce, representing a 41-per-cent increase in metal revenue compared with 2019 due to a combination of significantly higher gold prices and higher gold production. During the fourth quarter, the company sold 3,970 ounces of gold from production from its Point Rousse operations, generating metal revenue of $10.0-million at an average realized gold price of $2,503 per ounce ($1,921 (U.S.)).
The Point Rousse operation produced 18,268 ounces of gold during 2020, achieving annual guidance of 18,000 to 19,000 ounces, and representing a 13-per-cent increase over 2019 as a result of higher throughput and stronger recoveries. Production was predominantly from the Pine Cove pit, where mining ceased in early Q4 2020 and mill production was maintained from the established stockpile of 100,000 tonnes. In 2021, production will be focused exclusively at Argyle, with mill throughput supplemented with marginal ore from the Pine Cove pit.
Point Rousse mine operations
During the fourth quarter, the mine operation produced 110,455 tonnes of ore (of which 103,557 tonnes were from Argyle), a 10-per-cent decrease from Q4 2019 when mining was focused exclusively in the Pine Cove pit. For 2020, the mine operation produced 512,028 tonnes of ore, a significant increase over 2019 when the first half of the year was focused on the lower tonnage profile Stog'er Tight mine. The strip ratio for 2020 was 3.8 waste tonnes to ore tonnes, a decrease from 4.3 in 2019, as the mine operation completed mining in the Pine Cove pit throughout 2020 and the tonnes of waste moved decreased accordingly. The strip ratio of 4.1 waste tonnes to ore tonnes in Q4 2020 reflects the impact of the commencement of development at Argyle.
As at Dec. 31, 2020, the mine operation had stockpiled over 102,300 tonnes of ore, which included approximately 72,000 tonnes from Argyle at an average grade of 1.79 g/t. Going forward into 2021, the mine operations will be exclusively focused on production from Argyle, which together with existing stockpiles will contribute approximately 70 per cent of mill throughput in the upcoming year, with Pine Cove and marginal stockpiles providing the balance.
Point Rousse mill operations
The Pine Cove mill processing facility milled 107,257 tonnes during the fourth quarter of 2020, a 3-per-cent decrease compared with Q4 2019, the result of lower mill availability due to a planned shutdown for a mill liner change. For the 2020 year, the mill processed 459,085 tonnes of ore, an increase of 14 per cent compared with 2019 due to strong mill availability of 96.3 per cent in the most recent year compared with only 89.6 per cent in 2019. The Pine Cove mill has returned to consistent and sustainable operations since the challenges encountered in the early half of 2019, when unplanned maintenance of the regrind mill impacted mill availability, which in turn impacted throughput and recovery. Anaconda took the opportunity to accelerate other planned maintenance programs, invest in critical spares and bolster preventative maintenance programs, the result of which can be seen with the strong performance of the mill in 2020.
Average grade during the fourth quarter was 1.39 grams per tonne, a 7-per-cent decrease compared with Q4 2019 due to the impact of the Goldboro bulk sample in the comparative period; however, a 9-per-cent increase when compared with ore milled only from the Point Rousse operation. The fourth quarter of 2020 reflected the impact of processing of 30,324 tonnes of ore from the relatively higher-grade Argyle deposit. Average grade for 2020 was 1.42 g/t, down slightly from 1.46 g/t in 2019 when comparing only with Point Rousse results, as ore feed in the first half of the prior year was mainly from the higher-grade Stog'er Tight mine. The mill achieved an average recovery rate of 86.8 per cent in Q4 2020 and 87.4 per cent for the 2020 year, both representing strong increases over the comparative periods of 2019, further reflecting the strong improvements that have been implemented at the mill operation.
Mr. Bullock is a qualified person as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this press release.
About Anaconda Mining Inc.
Anaconda is a Toronto Stock Exchange- and OTCQX-listed gold mining, development, and exploration company, focused in Atlantic Canada. The company operates mining and milling operations in the prolific Baie Verte mining district of Newfoundland which includes the fully permitted Pine Cove mill, tailings facility and deep-water port, as well as approximately 11,000 hectares of highly prospective mineral lands including those adjacent to the past-producing, high-grade Nugget Pond mine at its Tilt Cove gold project. Anaconda is also developing the Goldboro gold project in Nova Scotia, a high-grade resource and the subject of a continuing feasibility study.
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