ANACONDA MINING ANNOUNCES FISCAL 2010 FINANCIAL RESULTS

TORONTO, Sept. 1 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX); is pleased to report its results for the year ended May 31, 2010. All amounts are in Canadian dollars unless stated otherwise. The financial results and Management's Discussion and Analysis of these results may be found on Anaconda's website (www.anacondamining.com) and on its SEDAR profile (www.sedar.com).

FINANCIAL OVERVIEW

    
    -   As at May 31, 2010, Anaconda had total assets of $21.4 million
        including cash and cash equivalents of $534,000. In addition, the
        Company has $873,000 of restricted cash as a result of
        letters-of-credit guarantees with a Canadian financial institution
        and amounts held in a debt-reduction escrow account to be utilized
        for debt service and/or principal repayments to Anaconda's debenture
        holders.
    -   Consolidated net loss for the year ended May 31, 2010 was
        approximately $3.3 million ($0.04 per basic and fully-diluted share).
        Revenues included $11.4 million of precious metals sales offset by
        $9.9 million for costs of goods sold, administrative expenses of
        $3.5 million, write-down of mineral properties and deferred
        exploration expenditures of $655,000 and depletion, depreciation and
        amortization of $585,000. Foreign exchange losses and future income
        taxes of $33,000 increased the loss further,.
    -   The increase in cash during the year ended May 31, 2010 of
        approximately $247,000 was comprised of cash used in operating
        activities of $1.9 million, cash provided from financing activities
        of $5.6 million, offset by cash used in investing activities of
        $3.5 million. The effect of exchange rates on foreign currency held
        by the Company increased cash balances by $6,000.
    -   As at May 31, 2010, Anaconda had a working capital deficiency of
        approximately $723,000. Anaconda utilized the proceeds from the
        private placements completed throughout the year, to fund operations
        and to discharge some of its current operating obligations as well as
        providing funding for its capital requirements for the mill expansion
        project at Pine Cove.
    

PINE COVE EXPANSION UPDATE

    
    -   Construction of the expanded mill facilities was completed in late
        June 2010 whereupon commissioning commenced, the expanded mill
        successfully began full operations on July 30, 2010
    -   Achieved round the clock processing on August 02, 1010
    -   Availability through the first 3 weeks averaged 97% with downtime
        attributed to power outages on the main line from an electrical
        storm.
    -   Throughput for the first three weeks averaged above 600 TPD with the
        most recent 7 days averaging725 TPD
    -   Mining resumed on August 25, 2010 with combined ore/waste production
        in excess of 10,000 TPD
    -   The company has completed Habitat Compensation Project relating to
        the diversion of Pine Cove Brook to allow mining to proceed in this
        portion of deposit
    -   Initial units cost are estimated to be within expectation for
        processing
    

ABOUT ANACONDA

Anaconda is a Toronto, Canada based mining and exploration company focused on advancing its principal assets, the Pine Cove gold mine in Canada and the San Gabriel Iron Project in Chile. Anaconda is committed to bringing Pine Cove into full Commercial Production, as well as developing near-term production opportunities for San Gabriel.

FORWARD-LOOKING INFORMATION

This news release contains certain "forward-looking information" under applicable Canadian securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking information. Forward-looking information is often characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking information is based on the opinions and estimates of management of either Anaconda or New Island or both as the context indicates at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Many of these assumptions are based on factors and events that are not within the control of either Anaconda or New Island and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in ore grade or recovery rates, risks relating to international operations, fluctuating prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, as well as those risk factors discussed or referred to in the Annual Information Form for Anaconda filed with securities regulatory authorities and available at www.sedar.com. Although Anaconda has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Anaconda does not undertake any obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.

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For further information: Lew Lawrick, President and CEO, Anaconda Mining Inc., [phone], Email: [email protected]; Greg DiTomaso, Investor Relations, Anaconda Mining Inc., [phone], Email: [email protected]; Or visit Anaconda's website: www.anacondamining.com; For a copy of the early warning report, please contact Greg DiTomaso at [phone]