Growth-Oriented Gold Producer in Newfoundland October 2015 THE PINE COVE MINE & MILL, CORNERSTONE OF The Point Rousse Project Baie Verte Mining District, Newfoundland.
Forward Looking Statements The statements made in this presentation which are not historical facts contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of the Company to which this presentation pertains. The actual results of the specific items described in this presentation, and the Company s operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the Company as of the date of this presentation, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the Company s dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the Company. The Company disclaims any obligation to update information contained in any forward-looking statement. 2
Management Biographies Dustin Angelo President, CEO and Director Errol Farr Chief Financial Officer Paul McNeill Vice President Exploration Allan Cramm General Manager Point Rousse Project CEO of Anaconda Mining since 2010, Director since 2009 CFO at Elgin Mining (formerly Phoenix Coal, Inc.) from 2005-2010 Principal at Waller Capital Corporation, a boutique investment bank with a focus on mergers & acquisitions, from 1997-2005 Certified Public Accountant, licensed in USA BSBA from Georgetown University; MBA from Columbia University CFO of Anaconda Mining since 2012 Former CEO and CFO of Adex Mining Inc., a tin, indium, zinc, tungsten and molybdenum development project at the Mount Pleasant mine site in New Brunswick, Canada Former CFO of MagIndustries Inc., a magnesium, hydro, potash development and forestry operation based in Pointe Noire, ROC Certified Management Accountant, licensed in Ontario Principal Geologist with Paladin Energy Ltd. from 2011 to 2013 VP Exploration for Aurora Energy Resources Ltd. from 2008 to 2011 Exploration Manager for Mega Uranium Ltd. from 2006 to 2008 Consulting Geologist for Rubicon Minerals, Monster Copper and other 2004 to 2006 Professional Geologist registered in the province of Newfoundland and Labrador Over 30 years of mining experience in Newfoundland BP Selco Site Supervisor at the Hope Brook mine Baie Quest Associates Partner, Engineering/Construction Services on Newfoundland Noveder Inc. Project Coordinator at Nugget Pond mine Richmont Mines Mine Superintendent/General Manager at Nugget Pond, Hammerdown mines Gordana Slepcev Manager of Technical Services Responsible for overseeing the mining and geology departments at the Point Rousse Project Senior Mining Engineer for Labrador Iron Mines, developing and planning the James and Hudson Deposits in the Labrador Trough, from 2011 to 2013 Senior Mining Engineer for Agrium at Kapuskasing mining operation from 2009 to 2011 More than 20 years experience in mining base metals, coal and gold Professional Engineer registered in Ontario and Newfoundland and Labrador 3
Director Biographies Tim Casgrain Chairman Lewis Lawrick Maruf Raza Michael Byron Glenn Dobby Involved with Skyservice Investments Inc. since 1997 EVP of Brookfield Asset Management from 1988 to 1995 2014 Order of Canada appointee Chartered Accountant from CICA and hold a Bachelor of Arts from McGill University Co-founder of Raven Hill Partners, a Toronto-based merchant bank Managing Partner of Thorsen-Fordyce Merchant Capital Inc. Former president of Colorado Mineral prior to merger with Anaconda Corp. in April 2007 Served as officer or director of several companies, including; Volta Resources, Brionor Resources, Franconia Minerals, etc. Partner, Public Markets at MNP LLP Former partner at Collins Barrow LLP Member of the Canadian Institute of Chartered Accountants IFRS Discussion Group Holds a Bachelor of Commerce from Ryerson University Chief Geologist and Director for Nighthawk Gold Corp. (TSXV:NHK) Former Vice President Exploration at Lake Shore Gold, responsible for exploration at the Timmins West Mine Former Vice President Exploration at Aurora Platinum Corp. More than 26 years domestic and international experience in research, field work and senior management Vice President and co-owner of Woodgrove Technologies Inc. Senior Vice President of MinnovEX Technologies Inc. from 1990 until its acquisition by SGS in 2005 Former Associate Professor in the University of Toronto s Department of Metallurgy and Minerals Services Hold PhD in Metallurgical Engineering from McGill University Kevin Bullock Former President & CEO of Volta Resources prior to sale to B2Gold in 2013 Founding President & CEO of Goldcrest (a Volta predecessor company) since its inception in 2002 Registered Professional Mining Engineer in the Province of Ontario Over 25 years experience at senior levels in mining exploration, mine development and mine operations 4
Anaconda Mining Inc. (ANX) TSX Venture Composite Corporate Overview Share Structure Historical Valuation $0.10 $0.09 $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $0.00 Anaconda Mining (ANX) TSX Venture Composite $1,200 $1,000 $800 $600 $400 $200 $0 000 s except per share data and ratios FY 12 FY 13 FY 14 FY 15 Cumulative Adj. Net Income (loss) 3 $3,902 $7,686 $2,086 ($403) $13,271 Adj. NI / FD Share $0.02 $0.04 $0.01 ($0.00) $0.07 Avg. Share Price $0.10 $0.10 $0.08 $0.05 $0.08 ROE 20.6% 41.3% 14.5% (4.4%) 86.9% Shares Outstanding 179.8M Options 14.2M Fully Diluted 194.0M Closing Price (09/28/15) $0.04 Market Capitalization Cash 1 Short/Long-Term Debt 1 $7.2M $1.4M <$0.1M Insider Ownership 11.1% Top 6 Shareholders Ownership 2 ~50% 1 As at May 31, 2015. 2 Estimated by the Company. All retail investors and includes certain insiders. P/E 4.9x 2.4x 6.9x N/A N/A 000 s except per share data and ratios FY 12 FY 13 FY 14 FY 15 Market Cap $18,974 $18,621 $14,390 $9,219 Enterprise Value $22,613 $18,417 $11,764 $7,844 EBITDA Multiple 3.6x 2.6x 3.5x 1.4x 3 - Adjusted net income excludes non-cash reclamation expense, forex gain/loss, unrealized gain/loss on forward sales contracts and any non-cash income or expense related to the Chile transaction. 5
Platform for Growth Proven record of success in last 4 years: Grown production to over 15,000 ounces annually Generated $28M in project-level operating cash flow (EBITDA) from FY 2012 through FY 2015 Paid off $9 million of debt; currently debt free Increased mill efficiency, throughput and recovery Point Rousse Project 100% owned Baie Verte Mining District Newfoundland, Canada Poised for steep growth trajectory: Looking to double production at the Point Rousse Project Primed to add resources to the project portfolio First mover advantage to exploit M&A opportunities in Atlantic Canada Leveraged to higher gold prices Current production means immediate upside for every $1 increase in gold price Canadian dollar expenses/us dollar revenue 1 1 All dollar amounts are denominated in Canadian dollars unless otherwise noted. 6
Platform for Growth (Continued) Substantial, highly-prospective land position Control 6,316 hectares on the Ming s Bight Peninsula 3 primary, prospective gold trends with approximately 20 kilometres of cumulative strike length 5 deposits; numerous zones, prospects and showings Goal is to locate 1,000,000 ounces All deposits are in close proximity to the mill; maximum of 8 kilometres Experienced senior management team (100 years, collectively) Mining-friendly jurisdiction Strong relationships with the provincial and local governments, university and colleges and various funding agencies 7
Business Strategy Point Rousse Project Extend Life of Project to 10+ Years [via baseload production] Expand Pine Cove Pit (3 years) Develop Stog er Tight Deposit into 5+ years of mine life Double Project Production to 30,000 oz [via high-grade layering] Expand and develop Romeo & Juliet Acquire other close, high-grade deposits Explore Goldenville Trend and Argyle Zone Romeo & Juliet 2 [high-grade layering] Exploration = $2,300,000 Development = $4,700,000 1.5 km 3.5 km Stog er Tight 1 [baseload production] Exploration = $1,600,000 Development = $1,600,000 Pine Cove 1 [baseload production] Exploration = $1,000,000 Development = $1,600,000 1 Anaconda assumes it mines Pine Cove and then Stog er Tight sequentially. The Pine Cove pit is converted into a tailings storage facility. 2 Anaconda assumes it puts Romeo & Juliet into production as its high-grade layering source at 5.25 g/t at 350 tonnes per day. NOTE: Exploration and development costs represent the total estimated cost to bring into production. 8
Business Strategy Mergers & Acquisitions Company-Wide Annual Production of 100,000 oz [via mergers and acquisitions] M&A primarily in Atlantic Canada and North America 2 3 targets Operating assets Non-core from larger operators 25,000 oz. to 40,000 oz. per year of production Pre-production stage with NI 43-101-compliant resources 300,000 oz. to 500,000 oz. 8-year mine life Potential to increase resources to 1M+ oz. Relatively low capex requirement for annual production of 25K oz. to 40K oz. Ability to scale and stage ramp-up of production as discover more resources Acquire technical talent at field level Timeline: 6 months to 3 years 9
Availability and Recovery Point Rousse Project Overview 100% 95% 90% 85% 80% 75% 70% 65% Mill Operating Improvements 1,200 1,152 1,150 92% 92% 1,100 88% 87% 86% 85% 1,050 84% 83% 83% 1,021 80% 1,000 946 950 925 900 890 850 FY '12 FY '13 FY '14 FY '15 FY '16B Availability Recovery Tonnes Per Operating Day Tonnes per Operating Day Project Information Number of Employees: ~65 Mining Pine Cove Deposit: Open pit ~1.4M tonnes of ore ~7.2M tonnes of waste 5 : 1 strip ratio Historical grade: ~1.8 g/t ~46,500 oz. of reserves (diluted) Working on extending pit life by 3 years Contract miner and blaster Stog er Tight Deposit: Open pit In development 2 bulk samples (October and December) 2010 historical resource of approx. 40,000 oz Mill 24/7, 365 days per year operation Ball mill / flotation / leaching / filtration / Merrill Crowe Tonnes per 24-hour day: ~1,150 Owned and operated by Anaconda Original cost of mill (per balance sheet) - $8.4M Continuous improvements at the Pine Cove Mill have had a great impact on availability, recovery and throughput. 10
Consolidated Financial Information 1,2 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- May 31 2012 May 31 2013 May 31 2014 May 31 2015 -$5,000,000 Revenue - Gold Sales EBITDA - Point Rousse Project EBITDA - Consolidated Free Cash Flow Over $86M in revenue generated in 4 fiscal years Strong historic cash flow generation at the project and corporate level Point Rousse has proven to be profitable in various gold price environments 1 Excludes the financial impact of the Chilean iron ore asset. 2 Free cash flow is defined as Consolidated EBITDA minus capital expenditures and exploration. 11
Unit Economics $1,800 $1,700 $1,600 $1,662 $1,625 $1,500 $1,400 $1,381 $1,384 $1,449 $1,405 $1,300 $1,323 $1,312 $1,200 $1,100 $1,144 $1,143 $1,151 $1,229 $1,100 $1,000 $900 $956 $987 $1,020 $800 FY 2012 FY 2013 FY 2014 FY 2015 Revenue per ounce Cash operating cost per ounce (Consolidated) All-in sustaining cash cost per ounce Cash operating cost per ounce (PRP level) Significant capital investment (Exploration and Development) during FY 2015 (approx. $3.5M) Point Rousse continues to implement strategies to reduce costs and increase productivity 12
The Point Rousse Project Pine Cove In-pit Resources (undiluted) as of May 31, 2015 Category Cut-Off (g/t) Tonnes Grade (g/t) Gold (oz) Probable 0.7 1,046,955 1.77 ~59,500 Stog'er Tight Historic Resources* Category Cut-Off (g/t) Tonnes Grade (g/t) Gold (oz) Indicated 1.9 154,500 6.19 1 32,100 Inferred 1.9 53,000 5.75 9,800 Three prospective gold trends, covering approximately 20 kilometres of strike Numerous gold deposits, prospects and showings all within 8 kilometres of the Pine Cove Mill Romeo & Juliet Pine Cove Mine/Mill Corkscrew Goldenville Argyle Stog er Tight Deer Cove * non 43-101 compliant Stog er Tight Historical Resource (2010) 1 weighted average of probably reserves and indicated resources 13
The Scrape Trend The Scrape Trend is characterized by a topographic lineament (fault) shown as a broad zone of conductivity (inverted 56k Resistivity shown) coincident with the alignment of six deposits and prospects. Key Exploration Tools Gold deposits are responsive to ground IP geophysics Well constrained structures host gold deposits Proven soil anomalies over known deposits and prospects Boots, hammer, shovel Romeo & Juliet Animal Pond Pine Cove Argyle Stog er Tight Anoroc 14
The Pine Cove Deposit FY2016 Goal: Extend Pine Cove Pit - 15,000 ounces per year of baseload production for 6 years Current 3-year mine life: 50,000 ounces of probable reserves Q2 FY 16: Percussion and diamond drilling - 1,000m at Pine Cove Pond Remainder of FY 16: 7,500m of infill drilling based on Q2 results Target: Outline 45,000 ounces of mineable resources to extend pit for 3 additional years Estimated exploration cost: ~$1.0 million North West Extension Pine Cove Pond Extension 15
Pine Cove Prospectivity The Pine Cove deposit remains open for expansion, particularly in the southern area of the current pit. Further, the Pine Cove geologic sequence continues to the southwest towards the Anoroc resulting in ~ 2 km of highly prospective rocks adjacent to the current mine infrastructure. Pine Cove Pit Under tested IP anomalies Pine Cove prospectivity map showing the extent of untested Pine Cove, gold-hosting, stratigraphy between the Pine Cove pit and the Anoroc prospect Untested Stratigraphy Pine Cove Pit Under tested IP anomalies Untested Stratigraphy Pine Cove Chargeability (IP) geophysical map showing anomalies adjacent to the current pit 16
The Stog er Tight Deposit FY2016 Goal: Develop Stog er Tight Deposit to extend baseload production (approximately 2+ g/t) for at least 5 years at 15,000 ounces per year Historical work: 187 holes drilled; 2 bulk samples (1996 and 2010) Previous ANX work: 2,475m of diamond drilling in 38 holes in FY2015 and FY2016 Resource calculation: In progress (October 2015) Q2 FY 16: 1,000m of trenching Remainder of FY 16: 10,500m of percussion, RC and diamond drilling Target: Outline 75,000 ounces of mineable resources Estimated exploration cost: ~$1.6 million Pine Cove Mine/Mill Stog er Tight 17
The Stog er Tight Deposit Characteristics of the deposit The deposit is located within a sequence of gabbro and mafic volcanic rocks The fractured gabbro provides a conduit that results in alteration and mineralization Gold is associated with similar alteration, geometry and structures found in the Pine Cove deposit Alteration and mineralization are easily recognisable on surface plan view map 100 m Stog er Tight characteristics are found in the immediate area (1.5km x 0.5km) and are documented in historical work indicating an opportunity to find more gold deposits in the Stog er Tight area. 20 m cross section 1300 18
Stog er Tight Prospectivity DDH Results: 4.23 g/t over 7.9 metres 10.10 g/t over 2.5 metres 5.2 g/t over 3.7 metres approx. deposit outline DDH Results: 5.7 g/t over 5.5 metres Pine Cove 3 km The area adjacent to the Stog er Tight deposit includes numerous gold-bearing, historical channel samples, which indicate the potential to host other deposits with similar grade and size to the Stog er Tight deposit or greater. Our immediate goal is to discovery another 100,000 ounces of gold in the Stog er Tight Area. 19
The Goldenville Trend The Goldenville trend is characterized by an ironstone, which is known to host gold deposits within the region (Nugget Pond - 166,000 oz at ~11 g/t). Gold occurs where faults cut the ironstone and are coincident with quartz veining and carbonate alteration as well as magnetite destruction. Similar environments and relationships exist throughout the trend but have yet to be tested in 25 years. Argyle 2 Key Characteristics Deposits are: Located adjacent to ironstone and transected faults Characterized by quartz veining, carbonate alteration and magnetite destruction 20
Maritec Area An Example of Goldenville Prospectivity Coincident ironstone, northerly dipping quartz-carbonate alteration zone and fault zones shown against a backdrop of Goldenville soil anomalies. These are excellent target that are of a suitable size and nature to host Nugget Pond type gold deposits Target Area Argyle Target Area Alteration Zone Target Area Soil sample.25 10 g/t.10.25 g/t 21
Romeo & Juliet FY2016 Goal: Advance exploration and development of Romeo & Juliet to be a high-grade layering deposit with at least 15,000 ounces per year of production for 5 years Historical work: 18 holes drilled; bulk sample in 1993 (3035kg processed with a head grade of 36.68 g/t Au) Previous ANX work: 2,305m of diamond drilling in 21 holes in 2013; 1,000-tonne bulk sample (5.71 g/t); Discovered Balcony zone Phase 1: mapping, reprocess historical IP data, 4,000m of percussion drilling Remaining phases: 10,000m of diamond drilling Target: Outline 75,000 ounces of mineable resources at 5+ g/t Estimated exploration cost: ~$2.3 million Fuelbog? Romeo & Juliet 1.6 km to mill 22
Other Deposits and Prospects Deer Cove Deer Cove: A High-Grade Gold Deposit FY2016 Goal: Determine potential scale of the main, high-grade zone. Can we bring historical resource into the mine plan? Romeo & Juliet Pine Cove Mine/Mill Stog er Tight Argyle ~3 km Corkscrew: High-Grade Gold FY2016: Newly-optioned property includes 3.5km of the Goldenville Trend Argyle Argyle: A New Discovery FY2016 / FY2017: Expect to outline a new deposit within 5km of Pine Cove mill. Argyle Discovery Trench 23
To download this presentation, please visit: www.anacondamining.com/investor-center-18-investor-presentation THE PINE COVE MINE & MILL, CORNERSTONE OF The Point Rousse Project Baie Verte Mining District, Newfoundland.