Anaconda signs milling deals with Crew and New Island

2009-06-01 08:17 ET - News Release

See News Release (C-ANX) Anaconda Mining Inc

Mr. Lew Lawrick of Anaconda reports

ANACONDA ANNOUNCES DEFINITIVE AGREEMENTS WITH CREW GOLD AND NEW ISLAND RESOURCES FOR CUSTOM MILLING

Anaconda Mining Inc. has entered into a toll processing agreement with Crew Gold Canada Inc. whereby Anaconda will deliver ore for processing from its Pine Cove gold mine to Crew's Nugget Pond mill. The toll processing arrangement will commence no later than July 1, 2009, and continue for a period of 12 months.

Further, Anaconda has also entered into a side agreement with its joint venture partner, New Island Resources Inc., pertaining to the toll processing opportunity as defined in the agreement with Crew. The side agreement outlines, among other things, the recovery by Anaconda of certain agreed to capital expenditures up to a maximum of $4-million, as well as the basis where net cash flows from the custom milling arrangement will be distributed to both Anaconda and New Island on an equal basis. As a result, the arbitration process that commenced March 3 and was suspended on April 15 has been withdrawn in its entirety.

"The execution of these agreements will allow us to proceed as planned with custom milling ore from our Pine Cove mine at Crew's Nugget Pond milling facility without delay," stated Lewis Lawrick, president and chief executive officer of Anaconda. "The arrangements we now have in place are beneficial to all parties involved. Anaconda will continue to undertake modifications to the Pine Cove mill to facilitate commercial production in the near term."

Anaconda has recommenced mining operations (drilling and blasting) to facilitate the stockpiling of ore ahead of the scheduled start-up of the custom milling contract. Currently, ore delivery to the Nugget Pond mill site is set to begin during the week of June 15, with preliminary milling to commence the week of June 22, once sufficient ore is in stockpile at Nugget Pond. Anaconda will be providing regular updates to this schedule as well as an update on its Pine Cove milling operations.

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