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Anaconda Mining Inc.: Positioned for Productive, Efficient Mining
Anaconda Mining Inc. (AMI) witnessed a number of key milestones in 2011 - 2012 as the growth-oriented company shifted toward becoming a reliable producer of gold at its Pine Cove mine. AMI completed a mill expansion project in summer 2010 and shortly after Pine Cove endured a long commissioning period lasting till spring 2011, during which it was able to improve economically. A number of strategic goals for growth were determined along the path to recovery, and these investments included the 40-percent interest in Pine Cove that the company did not already own in addition to AMI’s interest in certain Chilean iron ore exploration assets.
“This company is very different today than it was last year at this time,” says Dustin Angelo, president and CEO of AMI, who has been on the board of directors since November 2009. “It is 100-percent focused on the gold industry and is making money at its flagship operation, that being Pine Cove.”
Angelo came into his current title in September 2010, which was just as the company began wrapping up a major expansion at its Pine Cove gold mine. Pine Cove is currently AMI’s primary operating asset, located on Baie Verte Peninsula in Newfoundland. Pine Cove’s original mill design included a gravity separation plant, which was constructed and commissioned in 2008, but the plant proved uneconomical to operate and was closed just a short while later. The company decided to pursue a custom milling arrangement and then ultimately settled on expanding the front end of its mill in late 2009.
Turning a Corner
AMI began the plant expansion project by installing a new 10-foot by 14-foot primary ball mill and flotation circuit to bring the plant into operation by August 2010. Pine Cove began full commercial production by September 2010, at approximately 700 tons per day of ore throughput. Overall gold recovery was a challenge; Pine Cove was only recovering approximately 50 percent of the gold in the ore and AMI needed recoveries around 80 percent to make the project viable. Throughout the fall and winter months, Pine Cove made some critical adjustments to its processing methodology to gain the needed recovery as well as increase throughput by an additional 250 tons per day approximately. The company had the project producing positive cash flow by May 2011.
AMI took the opportunity to make additional modifications to the Pine Cove plant to secure its productivity after the company’s major milestone in May. Modifications included repurposing one pregnant solution tank into a fourth leach tank, adding a new pregnant solutions tank, replacing two aged rotary drum filters and replacing the lining in the primary ball mill, all of which were completed in October 2011.
The perseverance of the Pine Cove team, as well as the operational improvements for AMI, manifested in a steady upward trend in gold sales volume. Since summer 2010 Pine Cove’s gold sales on a quarterly basis have gone from less than 1,000 ounces to over 3,000 ounces. Quarterly revenue has skyrocketed to over $5 million in the most recent third quarter ended February 2012 with the help of an unhedged gold sales price.
AMI began preliminary exploration efforts in summer 2011 at Pine Cove and discovered a zone down dip from its current operating pit that contained an intersection of approximately 40 meters of 2.5 grams-per-ton gold.
“The discovery of this zone opens up additional possibilities of expanding the mine’s life and we have begun additional geophysical surveys to analyze the extent of those possibilities,” says Angelo. Following the IP geophysical surveys, AMI will rely upon a network of geologists and third-party consultants to assist with a compilation of all geologic data from the area and the development of a more defined exploration strategy.
“We've made some remarkable improvements operationally and now, with the recent exploration developments, we have some growth opportunities right on our own mining license,” continues Angelo. “For us, the bigger challenge is catching the attention of investors and convincing them to invest in AMI versus another venture.”
A Shift in Strategy
To achieve that end AMI has been looking internally to increase efficiencies and cost-effectiveness at all levels, starting with greater focus on its most productive assets. AMI sold its shares in a Chilean iron ore exploration operation in December 2011. This was an important move that increased AMI’s available capital, reduced debt and concentrated the company’s attention on growing Pine Cove into a much larger operation with a regional focus.
Angelo hopes to see AMI continue to explore the Pine Cove property with increased sampling and an eye to expand the property on the Baie Verte Peninsula. AMI will continue to look for ways of boosting internal efficiencies through increased automation at the mill in addition to pursuing the right opportunities to diversify its asset base in the meantime.
If AMI’s highly productive 18 months of 2011 - 2012 are any kind of gauge for the company's future activity, what is to come should be smooth sailing. Dropping on its established resources and its proactive attitude, Anaconda Mining Inc. will move swiftly from a turnaround company to a full-fledged reliable producer of gold in Canada.