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Wednesday, January 18, 2017 Derek Macpherson

ANX Expands Argyle


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Anaconda Mining Inc (TSX:ANX) announced results from its ~2.2km (22 holes) Phase II drill program at the Argyle target at its Point Rousse project in Newfoundland. We view today’s results positively as the mineralization has potentially been extended to ~600m along strike, which represents a 50% increase, and ~225m down-dip (~100% increase). Although it is early days, based on these expanded potential deposit dimensions and the higher grades seen in these results we have increased our resource approximation for the deposit to ~40-45k oz Au (was ~25-30k oz Au). We highlight that Argyle remains open in all directions, suggesting further resource growth is possible. We highlight that Argyle appears likely to extend Anaconda’s short production life at higher grades than currently being processed. While this exploration success is important for Anaconda to re-rate to typical producer valuations; improved operations and cash flow in H2 2017 (YE May 31st) is critical to allow exploration, particularly at Argyle, to continue.


Drill results continue to support resource growth potential. Today’s results were highlighted by a 6.0m interval that returned 9.31 g/t Au and identified a high grade zone at the target’s north side (AE-16-39), and 5.52 g/t Au over 15.0m, including 14.01 g/t Au over 4.0m, (AE-16-40) that was intersected in a new high-grade zone to the East. The Phase II drill program not only increased the grade and width of the mineralized zones, it expanded the deposit down-dip and along strike (Figure 1). Overall the drilling at Argyle has returned a weighted average grade of 2.57 g/t Au over 3.5m. This increased grade and foot print of the deposit causes our preliminary resource approximation on Argyle to increase to ~40-45k oz Au, compared to our previous approximation of ~25-30k oz Au. With the weighted average grade to-date coming in at 2.57 g/t Au, Argyle appears to be higher grade than the overall Point Rouse resource (1.98 g/t Au – all categories) and ~60% higher than the M&I+I grade of the Pine Cove Pit.



Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
 
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Anaconda Mining Inc. - TSX:ANX - 3,4

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