TORONTO, Dec. 7, 2011 /CNW/ - Anaconda Mining Inc. ("Anaconda" or "the Company") - (TSX: ANX) is very happy to announce that, pursuant to an agreement dated today, it offers closed the sale of that Chilean iron ore exploration assets with a private Chilean company, Hierro Tal Tal S.A. ("Tal Tal"), for US$11 million in cash payments, a revenue royalty and a 1.25% carried interest in Compania Portuaria Tal Tal S.A. ("CPTT"). Using the cash proceeds received at closing of US$2 million, Anaconda will repay the total principal amount plus accrued interest of approximately $711,000 towards the holders on the Series III Debentures within 1 week of the closing. Also, the Company are going to pay other outstanding debt service obligations and vendor payables. Per the the share purchase agreement (the "SPA"), Anaconda will get another cash payment of US$2 million on May 31, 2012, that the Company expects make use of primarily to settle portions of other debts for example the Convertible Loan and also the Series I and II Debentures. All amounts are in Canadian dollars unless stated otherwise.
President and CEO of Anaconda, Dustin Angelo, stated, "The sale in the Chilean iron ore assets is an extremely positive step to the Company in realizing its long term strategic goals. The Company has sought a way to derive value from the iron ore assets while separating them from your gold asset, as well as the sale achieves those objectives. Anaconda can now focus its efforts on improving the performance of the Pine Cove mine and build off its recent success at the producing project. Furthermore, the business plans to pursue growth through exploration initiatives within the Pine Cove mining license. grinding mill for sale Anaconda will also evaluate expansion opportunities about the Baie Verte Peninsula as well as through corporate transactions or asset acquisitions of other gold assets throughout North America. In addition, the money infusion from the sale helps the Company improve its balance sheet. Together with the other US$2 million payment in approximately 6 months and cash flow from Pine Cove, Anaconda could potentially pay down a significant amount of its debt because of the summer 2012."
Breakdown of the transaction:
Anaconda's wholly owned subsidiary, Inversiones La Veta SpA ("La Veta"), sold its shares representing a 50% ownership stake in Minera Hierro San Gabriel S.A. ("MHSG") plus a 20% ownership stake in Inversiones Hierro Antofagasta S.A. ("IHA") to Tal Tal for approximately US$11 million in cash payments, ones US$2 million was paid at closing plus an additional US$2 million is due on May 31, 2012. La Veta will have the right to get an additional US$3 million upon achievement of economic production, as based on the SPA, by the properties, directly or indirectly, controlled by MHSG or IHA (the "Properties"). Gold Mining Equipment La Veta can earn nearly another US$4 million based on the sales price realized without a doubt volumes of production from the Properties, as defined in the SPA.
Furthermore, La Veta shall earn a income royalty for those production sold in the Properties. For the Properties controlled by MHSG, the gross sales royalty will probably be 0.80% and also for the Properties indirectly controlled by IHA, the revenue royalty will probably be 0.50%. Lastly, La Veta shall receive a 1.25% carried fascination with CPTT, a private Chilean company whose principal asset is a concession giving it the legal right to build a port inside the city of Taltal.
General Manager of Tal Tal, Antonio Barros, stated, "Tal Tal happens to be undertaking advanced economic studies in preparation for financing the building of an iron mine, near the town of Taltal in northern Chile, that may produce sinter feed to the Asian markets. Production is expected to begin by December of 2012. Tal Tal is additionally planning further exploration while using goal of expanding resources in your neighborhood."
ABOUT ANACONDA
Headquartered in Toronto, Canada, Anaconda is usually a growth oriented, gold mining and exploration company that has a producing asset located on the Baie Verte Peninsula in Newfoundland, Canada called Pine Cove mine.
FORWARD LOOKING STATEMENTS
This document contains or is the term for forward-looking information. Such forward-looking information includes, amongst other things, statements regarding targets, estimates and/or assumptions in respect of future production, mine development costs, unit costs, capital costs, timing of commencement of operations and future economic, market as well as other conditions, and it is based on current expectations that involve a number of business risks and uncertainties. Factors which could cause actual leads to differ materially from any forward-looking statement include, but aren't limited to: the final approval from the private placement from the Toronto Stock Exchange; the grade and recovery of ore that's mined varying from estimates; capital and operating costs varying significantly from estimates; inflation; modifications in exchange rates; fluctuations in commodity prices; delays in the development of the any project attributable to unavailability of equipment, labour or supplies, climatic conditions or otherwise not; termination or revision of a typical debt financing; failure to lift additional funds needed to finance the completion of a project; as well as other factors. Additionally, forward-looking statements look at the future and provide an opinion for the effect of certain events and trends within the business. Forward-looking statements occasionally includes words including "plans," "may," "estimates," "expects," "indicates," "targeting," "potential" and similar expressions. These forward-looking statements, including statements regarding Anaconda's beliefs inside potential mineralization, are based on current expectations and entail various risks and uncertainties. Forward-looking statements are be subject to significant risks and uncertainties and also other factors which could cause actual brings about differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are produced as of the date hereof so we assume no responsibility to update them or revise the crooks to reflect new events or circumstances, except as necessary for law. [ball mill manufacturer]
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