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Wednesday, November 08, 2017 Derek Macpherson

ANX Recovers 92% from Argyle Sample


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Anaconda Mining Inc. (TSX:ANX) reported the results of metallurgical testing on a 25kg sample of blended core samples with an average grade of 2.7 g/t Au from the Argyle discovery. The sample was able to achieve a flotation recovery of 97.3% and a leach recovery of 94.5% for a combined recovery of 91.9%. The company’s objective was to determine the metallurgical characteristics of the Argyle mineralization and the company was successful in verifying its compatibility with the circuit at the Pine Cove Mill and confirms that the mill will not have to be modified in order to process Argyle ore. Based on our preliminary estimates, we believe that at its current market cap (C$24.8 million), investors are either paying for Point Rousse (~value of C$30-50 million based on our preliminary DCF) or Goldboro (~ value of C$41.5 million based on C$50/oz) suggesting good value at current levels. In our view, the upcoming PEA for Goldboro, is likely to be an important catalyst for Anaconda as it should allow investors to better understand the potential of this asset. Following that, operations later in F2018 (year-end May 31) should see production and cash flow increases as mining at Point Rousse moves to the higher-grade Stog’er Tight deposit. In our view, both these catalysts have the ability to cause the market to ascribe a fair value to both projects.



Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
Alex Pitcher | Associate
 
Red Cloud Klondike Strike Inc.
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Anaconda Mining Inc. - TSX:ANX - 1,2,3,4

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