TORONTO (miningweekly.com) – TSX-listed Anaconda Mining, the only pure play gold miner east of Quebec, has set itself the goal of roughly doubling its current gold output through aggressive organic growth and a loftier target of adding about 100 000 oz/y to its portfolio through mergers and acquisitions (M&As).
Speaking at an investor presentation in Toronto, president and CEO Dustin Angelo said the company had built a record of success over the last four years, operating the Pine Cove openpit mine and mill and growing output to about 15 000 oz/y of gold.
“The company has created a platform for growth. The main strategy is to open satellite deposits and truck the ore in to the mill at Pine Cove, located within the Point Rousse project,” he explained.
Anaconda had consolidated control over about 6 346 ha on the Ming’s Bight Peninsula, in the Baie Verte mining district, in Newfoundland, where three main prospective gold trends occurred, with about 20 km of cumulative strike length. The Baie Verte mining district was situated between two regional faults, from which secondary faults spread that were important hosts to gold deposits.
Anaconda had already identified four deposits, with several other untested zones, prospects and showings. Importantly, all these deposits were within a maximum of 8 km from the Pine Cove mill.
As a gold producer, Anaconda was leveraged to higher gold prices, benefiting from the immediate upside for every dollar that the gold price rose and from having its expenses expressed in the weaker Canadian dollar currency, while revenue was recorded in the surging US dollar.
The cornerstone Pine Cove deposit comprised about 1.4-million tonnes, grading 1.8 g/t for 46 500 oz of gold in reserves. The mine had a 5:1 strip ratio, with contract mining and blasting being employed.
Anaconda had reported a record year for most of the operation’s operating metrics, with Angelo noting that continuous improvement at the Pine Cove mill had had a positive impact on its availability, recovery and throughput.
The Pine Cove mill comprised a ball mill, flotation, leaching, filtration and a Merrill Crowe circuit. Angelo expected the mill to ramp up throughput to about 1 150 t/d by 2016.
He noted that the company might decide to try to improve the mill throughput to between 1 500 t/d and 1 600 t/d, but instead of spending more capital on an expansion, would rather opt to look for higher grades within its prospective land package.
Rambler Metals & Mining’s Ming copper/gold mine was located nearby Anaconda's Pine Cove play, as well as Marathon Gold’s Valentine Lake project, where it had booked about one-million ounces in resources.
“We feel that there is potential for another one-million ounces within the Point Rousse project,” Angelo affirmed.
Angelo, who owned about half of the public company’s outstanding shares and warrants, emphasised that collectively, Anaconda’s management team had about a century of experience, adding to its chances of finding new gold deposits.
“The immediate priority is to expand the Point Rousse project life beyond ten years through base-load production,” Angelo said, advising that only about three years of mining remained at the Pine Cove pit, which would be supplemented by five to six more years of production from the nearby Stog’er Tight deposit.
However, the company planned to explore and extend the Pine Cove pit to operate for another six years at 15 000 oz/y of base-load production coming from a north-west pit extension and the Pine Cove pond extension.
The openpit Stog’er Tight deposit was the company’s next development project, with two bulk samples planned for September and November, which would help to calculate a resource. The deposit had a historical resource of about 40 000 oz.
Anaconda might get better grades of 2 g/t plus from Stog’er Tight, compared with Pine Cove, while the geology remained basically the same. The company intended to use the exhausted Pine Cove openpit as tailings storage for the Stog’er Tight openpit.
Meanwhile, in the long term, Anaconda was looking for higher grades ranging between 5 g/t and 10 g/t towards the north, at its other exploration properties within the Scrape trend. After Stog’er Tight, the company was looking at the Romeo & Juliet deposit, from which ore would eventually be used for high-grade layering with Stog’er Tight’s base-load production. The company planned to advance exploration and development of Romeo & Juliet, targeting at least 15 000 oz/y of production for five years.
Currently, Anaconda was currently outlining about 195 000 oz of gold to be mined on the Pine Cove, Stog’er Tight and Romeo & Juliet deposits.
Further out at the Goldenville trend, also on the Ming's Bight Peninsula, where the ironstone mineralisation was well understood, had the most prospectivity when compared with the most northerly Deer Cove trend. On the Goldenville trend, Anaconda was looking at the Corkscrew deposit, its most recently optioned property, as well as the Goldenville high-grade discovery, where it hoped to find about 250 000 oz of gold.
At Deer Cove, Anaconda planned to determine the potential scale of the main high-grade zone during the 2016 fiscal year.
Anaconda was looking to strike M&As within the next six months to three years, preferably in Atlantic Canada, but also within North America, with the aim of adding about 100 000 oz/y to its portfolio.
The company was interested in preproduction-stage projects with compliant resources, which would require minimal capital to exploit, had scalability and where there existed significant exploration upside. Anaconda believed it had a better chance of success when acquiring preproduction-stage properties, or noncore assets from majors.
“We are finding ourselves in a unique market where it is cheaper to buy ounces in the ground than to drill for it. It makes sense to look for M&A at the local level. The key is to [enter into] methodical, clever deals,” he assured investors.