By Peter @Newton Bell, 15 November 2016

I recently had an opportunity to talk with Dustin Angelo, the President and CEO of Anaconda Mining (TSXV:ANX), and asked him about every aspect of the company that I could think of. Our conversation followed the company's presentation deck and we covered a lot ground but, in the closing minutes, I noticed that they have 47 targets on just one of their four projects and realized that there was still a lot for me to learn about the company. I hope you find the transcript of our interview below to be as exciting as I did and look forward to bringing you more info on the company.


D: Anaconda Mining is a gold producer in Newfoundland. It is currently the only gold producer in all of Atlantic Canada. Our producing project is called the Point Rousse project on the Baie Verte Peninsula. It produces roughly 16,000 ounces per year. We have an operating mill and produce a dore bar onsite. We do about 1,300+ tonnes per day at the mill with all the infrastructure in place. We have 15+ years of tailings capacity ahead of us. We just opened up a port facility where we are shipping out our waste rock, which is construction-grade aggregate. We've got three legs of the stool here in terms of infrastructure: a strong mill; tailings capacity; and now water access.

D: The current operation at Point Rousse currently has 6,000+ hectares of property within 8 kilometers of the mill. There are areas where we are developing and still exploring on that peninsula. Back in February of 2016, we picked up another project called the Viking Project, which is on the northern peninsula. It's about 70KM as the crow flies. There's an established resource called the Thor Deposit, which is over 100,000 ounces and we are looking to develop that as well as doing exploration around the deposit. Most recently we have picked up two new properties. One that we call the Great Northern Project, which is a combination of an option deal and staking. It's roughly the same size as Viking in terms of property size. We picked up the Tilt Cove from Metals Creek as well, which is on the Baie Verte Peninsula about 60KM east of our Pine Cove mill.

D: We are focused on growth. We have plans for production increases. We produce about 16,000 ounces of gold per year right now but, with all these projects together, we are working on a five-year plan where we will be producing between forty to fifty thousand, maybe sixty thousand ounces of gold per year. We will deliver it through the Pine Cove Mill, which is a central point in the infrastructure for a "hub and spoke" system around these projects since they are fairly close in terms of geography.

D: We're focused on internal growth, organic growth in our existing assets. We're also doing local acquisitions. And we're looking for a transformational acquisition, which would be further afield in Atlantic Canada. We are looking for another project, a larger project, where we can add to our portfolio. Maybe something where we can leverage our water access -- we're exporting right now, but maybe we can do some modifications and import ore in the future. We think there is an advantage to find other projects that may be economical for us, but maybe weren't for others -- particularly because of the fact that we can take ore or concentrate by water.

D: We're focused on the growth. We're well-positioned in Atlantic Canada with this infrastructure already in place. We have tremendous leverage in terms of our feed-grade. Right now, we are currently mining our open pit mine, the Pine Cove pit. Historically, it has been a 1.5 gram per tonne material that we have put through the mill from there. But, because of the fixed cost infrastructure that is already in place there, if we can find ore in our immediate area that is higher grade, say 3 grams per tonne, then we can double production at our current through-put rates. There is a lot of leverage to our production profile in terms of the feed-grade going into the mill.

D: We are expanding resources and we now have four projects, about 20,000 hectares that is highly prospective. It sits on major fault systems, that are splays of the major fault system that runs north-south through Newfoundland. We are certainly in the right geology, as well. The opportunity to find more ounces, put them on the books, and ultimately mine them is good from our perspective.

D: The management team has been together for nearly six years now. Between the top five, there is collectively 100 years of experience in mining -- gold mining. That is experience mining specifically in the region. We understand the geology, the experience on the ground, the relationship with the government, all that stuff is pretty well in hand. We have a strong team. Obviously, Newfoundland is a pretty safe jurisdiction. We're operating in the right jurisdiction from that standpoint.

D: All in all, we have a gold producer with very good infrastructure, high prospectivity to add ounces on the books, and ultimately grow larger from a production and land-position standpoint. That's the crux of Anaconda right now.

P: The whole thing in five minutes! Good work. (Applause)

D: Well, I've told it a lot.

P: Do you road-show a lot?

D: Yes, we are on the road all the time.

P: So, I have heard the name 'Anaconda' a few times, but it is not one that I am familiar with.

D: The road shows are mostly Toronto, New York -- we've been to Vancouver a handful of times in six years. Not a lot. Once or twice to Calgary.

P: Does that have something to do with targeting institutional investors?

D: We tried that but, during the down-time especially, there wasn't a lot of return on investment for doing a lot of investor relations and shows. Things got limited and we stuck to Toronto, mostly because that is where our corporate headquarters is based. We started going to New York as well because of the family office community. The population between the retail and institutional investors was a good fit for us as we are too small for most institutional investors, but we also want to find people who want to take a larger position and back the stock more. Family offices seemed to be the place to go and we spent some good time there.

P: And the family offices have, a lot of the time, open mandates to do what they want. And the sophistication.

D: Yes, the sophistication and deeper pockets is a good combination for our size as a junior miner.

P: And you are a miner! You have junior exploration activities going on, but you're also in production at a relatively small scale.

D: We are slowly becoming more of a development play because we are adding projects but are already in production. The nature of Atlantic Canada is such that, because we are the only the pure-play gold company in production, any project that we acquire is not going to be in production.

D: What we have now is the full pipeline of projects. We have pure exploration, exploration and development, and development and production projects. We are growing this pipeline centered around this milling infrastructure, the port facility, and the tailings capacity that we have at the site. The three legs of the stool.

D: We are trying to build the asset value. Once we find more ounces, it will be easier to monetize them because we already have the infrastructure in place. We have the people. We have the systems to be an operator. As opposed to going the other way, which most developers have to do, where they switch from being explorers to developers. Sometimes that can prove a difficult thing to do. We've done it already and we can do it again. We've got everything in place.

P: And it's all geographically concentrated, too. I haven't heard you say the word "district" yet.

D: Well, it is somewhat a subjective word to use. You could say that what we have amassed -- now that we have two projects on the Northern Peninsula that are within 20KM of each other, those two projects are within 70KM of the Pine Cove mill. Then you've got the Tilt Cove project 60KM on the other side. You could say that is a district play that we are working on there.

P: And the fact that they are all on water! The transportations and logistics become easier than a district on land there. I suspect that moving things around on water could be significantly less.

D: It gives us an opportunity. It makes thing, potentially, more economic. At the end of the day, we have to do the homework to determine if it will work. But the pieces of the puzzle are there to demonstrate the options and opportunities.

P: A lot of interesting stuff going on there. I like the pipeline a lot. That's a big deal.

D: It's an essential part of our business strategy. We raised two million dollars in July with a flow-through financing and we've used that for a 17,000M drilling program. We are currently in the middle of that.  

D: The drilling was focused on the Point Rousse and Viking Projects because those were the two projects we had when we raised that capital. We added the last two projects more recently.

P: Were those recent acquisitions share-based?

D: Well, they are options. So they have a combination of shares, cash, and an NSR on the back end.

D: We've been drilling. We put out some results on two of our properties in the Point Rousse project, which is an important property for us. It contains our operating gold mine that is located about 1KM from our mill at Pine Cove, but it also contains a bunch of different exploration targets. 

D: One of the targets on the Point Rousse project is called the Argyle prospect. We drilled 22 holes there and hit mineralization in 17 of them. We had some pretty good intersections in terms of grade and width. We are excited about that maybe being the next deposit that we can feed into the mill.

D: The interesting thing about finding more ounces at Argyle in the Point Rousse project, near our mill, is that the economic thresholds are a lot lower. You can have lower grade, the strip grade can be different, or you don’t need as many ounces because you don’t need to rebuild all of the infrastructure. If you found 100,000 or 200,000 more ounces, the incremental cost to monetize them is just the incremental mining and minimal transportation. The mill is not going to change dramatically. We are not going to have to put in an entirely new mill for millions of dollars. More goes to the bottom line, with the potential for higher returns, or the threshold for what is economic is lower, with the potential to extend mine life. It's a pretty good situation.

D: We don’t need to justify a million ounces at Point Rousse. If we find 100,000 or 200,000 ounces then we can mine those almost immediately.

P: Wow, that is good to hear. And the Viking project has a known resource…

D: That will need more ounces.

P: Because of the distance?

D: Yes, because of the distance and the logistics.

D: We will still use the Pine Cove mill, but we will probably concentrate at the front end there. That will reduce the amount of material that needs to be moved and the trucking or shipping costs. Then we will finish the processing at the mill to produce the dore bar, leveraging the people and infrastructure in place. It is an automated mill with a control room that can control mills at other places, which can help limit the costs and resources that you have at satellite areas.

P: High-tech, eh?

D: Being the size of producer that we are, we have to be at the leading edge of innovation. We do a lot at the mine with grade control using blast-movement technology, GPS on our shovels, a lot of things like that. The mill automation now -- we finished a million-dollar project that we announced back in August. It took about a year to do. It all centered around trying to be more innovative and leveraging the technology because of the size we are at. We need to do that more so than the bigger producers -- we have less room for error.

P: Any more comments on the mill there? Was it a new mill that you got?

D: It's the old ball mill from the Cariboo Mine in New Brunswick. Pretty much everything we have acquired is second-hand because this company has been bootstrapped since the beginning, even prior to when I came on.

D: I joined the company -- I joined the Board in November 2009. I assumed the role of President/CEO in September 2010. They bootstrapped before I came on and it's been the same since.

P: So, the flow sheet…

D: We crush and grind with the ball mill. We do a floatation concentrate, then a cyanide leach using drum filters. And then we use Merrill–Crowe process to recover the gold in solution, then refine it on site to produce dore.

P: And recoveries?

D: Recoveries are in the 85% range, which is pretty good for what we've been doing. We started off with 80% and got up to 85%. The ball mill throughput has increased tremendously. When I first came on, we were doing 700 tonnes per day. Now we're pushing over 1,300. That was not with major capital expenditures, it was all about learning how to manage and use the mill better. Operational tweaks and efficiencies.

P: So, you are running 24 hours?

D: "24/7, 365." Yup -- the mill doesn’t go down unless we don’t want it to. There's a tremendous amount of capacity there.

P: Even still? Even with having doubled throughput, there is still excess capacity in the mill?

D: Well, there is probably marginal capacity with the ore at the ball mill stage. But there is more capacity at the back end of the mill.

P: Oh, wow -- that's interesting…

D: When we talked about trying to increase production and source material from different areas, we would introduce the ore in different parts of the mill. If we bring in higher-grade ore, we could do whole-ore crushing and grinding and introduce right into the cyanide leach. There are different ways to play with the capacity that we've got.

D: At the front end of the mill, generally speaking, we're not going to get a lot more in terms of through-put. But you can certainly add ounces in terms of by having higher-grade ore go through the front of the mill, as well.

D: Our goal in the exploration program is to identify specific areas that have higher grade gold. For instance, the Thor Deposit in the Viking Project -- 60% of its indicated resource is three grams or more. It's an average 2-gram deposit right now, but it has high-grade zones. We are looking for areas across the Point Rousse and across Viking with high-grade mineralization. We did a test-case at Stog'er-Tight, which is another 43-101 Resource we have with 25,000 ounces of indicated and 25,000 of inferred. It's about 3.5KM from our mill. We put out that resource estimate at the end of the year in 2015.

P: What a tough time for that…

D: We established a resource on it and we continue to develop it -- it's permitted. We did additional development in May-June 2016 and actually discovered an area where there was a high-grade pod at surface that was 3 gram per tonne gold. So, we took 10,000 tonnes in a bulk sample, brought it over to the mill, processed it in about a week's time, and produced more than two-times our gold production. Same cost structure, everything is the same except the feed-grade. If we can do that at a larger scale, which we think is possible from what we are seeing around the Point Rousse project, then that produces a lot of leverage. That is the leverage to feed-grade I was talking about earlier as a way of increasing our returns.

D: If we're doing three grams, as opposed to one and a half, nearly all of that goes to the bottom line. That’s one of our major goals -- to find high-grade zones and mine them.

P: Sorry, did you say you got the throughput up to 3,000 tonnes per day?

D: No, we're still doing the same through-put but we doubled the grade. By doing that, we double our gold production. It was only a week's time period, but it was a short-term example of what we are trying to do on a larger scale.

P: Thanks, got it. Those pilot projects are great.

D: Well, if we find three, four, or five of those a year then the amount of extra cash that comes to the bottom line is tremendous, given our size.

P: Obvious question for you here -- is it possible to go back to the place where you found the material for this first pilot?

D: We have gone back there and found a little bit more, but it is not as large as the 10,000 tonne run. Stog’er-tight is like that, there's a lot of high grade but there's a lot of low grade. There's a lot of variability. There's a lot of variability in our Pine Cove pit, as well. It's the nature of the ore in the area.

P: Well, your comments about the pipeline in the company and the benefits of the vertical integration -- your crusher may be at capacity, but if you are crushing somewhere else and shipping concentrate. That really speaks to me.

D: That's the point -- if we have a concentrator at Viking then we are not using the capacity of the ball mill at Pine Cove. We would use the capacity at the back end of the mill. If you do 1,500 tonnes at Viking, as an example and your mass pull is 3% then you're producing 45 tonnes of concentrate per day. That's one truck load full. You can put that in the back of the mill and it's not very big. That's where you get the leverage.

D: You obviously have the capital cost of the concentrator, but it's less than putting in a full-scale mill. You need less people…

P: And you're optimizing existing assets.

D: Yes, exactly. That's generally what we are trying to achieve.

P: So, it seems like you're still flying under a lot of people's radar for some reason.

D: Yeah, I would say so. In the last year, we have embarked on more of a public awareness campaign. We hired a public relations person out of St. John's. We focused on first and foremost on Newfoundland, we want people to be aware of what we are doing in Newfoundland and then have it emanate out from there. We have a combination of investor relations and public relations initiatives -- slowly, but surely we are making our way. Certainly, more people know about us in Newfoundland and we are working to get the word out beyond there now.

P: The buy-in from the locals is very important.


D: We have a lot of support locally because it is an historic mining area. They want to see more jobs, they understand it. Some of these people have backgrounds -- they know what it is like. They want jobs. And the new liberal Newfoundland Government has been in power for about a year now -- they ran on a platform of diversification outside of oil and gas. They are looking for other industries that they can back. We are a good story for them because we have got a lot of jobs in an area that doesn’t have a lot of employment. With our new aggregates project, where we are shipping the waste rock, that’s a fourteen-month contract. With that, there's another fifty people on-site that are part of that project. We have close to 150 people at the Point Rousse project working on the mining, milling, and shipping the aggregate.

P: That is a significant number in this region!

D: Yes. It's a bright star, a bright area for the government. They are positive and want to help us continue that.

P: And it's not a flash in the pan, either.

D: We've been producing gold for about six years and the company began the project about ten years ago. We've got all of this infrastructure in place, we've got employees who have been trained and well-versed in what we are doing. We have a lot of potential ahead of us with all of our projects, all of which are prospective. We've already got 43-101 compliant resources and we are trying to add to them. The platform for growth is in place. Now our focus is adding prospective properties, converting that property into ounces, and converting those ounces into cash.

P: Are there many private, smaller companies with staked claims in the area?

D: There are prospectors, small companies out there on the front end of it -- finding gold occurrences and potential projects.

P: I gather it is a somewhat controversial area, historically, for gold. Geologists saying that there shouldn’t be any gold there, and then prospectors going out and finding gold.

D: Historically, it just wasn’t focused on but then geological models from other places in the world were overlaid on this area and it led to discoveries. There are a couple companies in Newfoundland that are publicly traded that have been getting some attention. That is feeding on itself. There is more attention coming into Newfoundland. There was actually a staking rush in the south-central part of Newfoundland.

P: Really! This year?

D: Yes, this year. In the last couple months. Right around Marathon Gold and their Valentine Lake project. There is some notoriety and it is creating more of an interest in the area. It's great for every company in the area -- more jobs, more prospecting in the area, more exploration work, more development work, and ultimately production. It's good for everybody.

P: I hear a lot of talk of Newfoundland here, is there talk of going further afield in the near future?

D: Our backyard is Newfoundland. There are a lot of reasons to be there, as we said -- the infrastructure, the relationship with the government, the local communities. All of those things have built a platform and we have a lot of stakeholders in the area, but there are limited opportunities in Newfoundland. We are looking more broadly at Atlantic Canada. In order to leverage our infrastructure as much as possible -- when we look at other opportunities in Atlantic Canada, we look at it through the lens of "can we bring it back to the mill?" Is it possible to leverage our infrastructure? If it is, then those projects become more interesting to us. If you can't, they still may be interesting but then you have to evaluate them on a stand-alone basis.

D: We are looking to grow -- organically and through M&A -- and we have got the building blocks in place for that. The infrastructure, the management, and the track record. Atlantic Canada, on a broad basis, is our focus.

P: Good, stick to your knitting. And your office is in Toronto.

D: Yes, we have a corporate office with about a half-dozen people there. Everyone else is on site, except for the exploration team at St. John's. We have up to 70 employees at site. Another 20 that are with the contract miner. And the aggregates project has another 40-50 people.

P: Safety records looking good?

D: Yes, we are clean. We actually just won "Miner of the Year" from CIM Newfoundland. 

P: Great! Congratulations.

D: We are in line with all safety and environmental standards. Another thing that makes us unique is that we are not a fly-in, fly-out situation. The people that work at site live about five minutes to an hour from site. From an environmental perspective, they don’t want to ruin their backyard. There's a particular interest in doing everything by the book because that's where they live. It's not like a third-party coming from thousands of miles away that doesn’t really care about the local community. Not only that, but they are stakeholders that have been behind us since the beginning and we have their interests in mind.

P: And this aggregate project that you mentioned, it sounds interesting.

D: From an environmental perspective, it's phenomenal. We're taking waste-rock, which is essentially an environmental issue, and shipping it offsite. Not only leaving our site, it's going to another country. We're moving 3.5 million tonnes. It's an environmentally friendly project and it helps with our mining costs. The movement of the waste rock that comes out of the pit is a shorter distance than for our standard waste dumps, so we lower our costs. We're getting 60 cents per tonne, so it offsets our mining costs as well. It appears on the P&L statement. And if we reverse-engineer it, then we could import ore as well.

P: Well, it will give you some experience operating that port. It's not a hypothetical idea now. Millions of tonnes, did you say?

D: Yes, three and a half million tonnes right now. We probably have upwards of five millions tonnes of waste rock coming. We have the potential to do other similar projects, they are on a project-project basis. We are in a loose consortium of three other companies and one of the other companies is the marketing arm. We essentially provide the rock and get paid for the rock. Like I said, it's environmentally friendly, it's generating revenue for us, it's offsetting mining costs, and it opened up the third leg of the stool, which is creating water access.

P: Any comments on the reclamation of the pit?

D: Our requirement is to put in final-pit walls so that the pit can stay open, as it is. We will have to put back organics on the waste-piles, if they exist. If the waste piles are all gone, then that's a different story.

P: And any comment on where that consortium came from? Directors, or others?

D: The idea was sourced locally by the project. It was with another local aggregates company in Newfoundland. The whole idea came out of the project level. Again, it is the innovation side. Being a small-scale operator, we have to be innovative to lower costs, generate revenue, and maximize the resources that we have. This is a good example of that. It all emanated out of our local people.

P: Good for you for listening to them! Good ideas come out of the project sometimes, but that doesn’t mean that management will listen to them.

D: Well, we give a lot of latitude and encourage innovation.

P: Exciting. Let's talk stock here for a bit. Any comments on market cap and other financials.

D: Market cap is around fifteen-million dollars. We have around 209M shares outstanding. The 52-week high is 11 cents, 3.5 cents on the low side. It's an affordable stock right now.

P: Absolutely. There is still some value out there in the junior markets.

D: We have all the infrastructure, we are generating our own cash flow. On an operating basis, we are cash flow positive. Until July, we hadn't done an equity capital raise in five years. For the previous five years, we funded all of our exploration and capital expenditures all through cash-flow from the operation.

P: Really!

D: In the first year or two, we did fund a little through a sale of a non-core asset, but the lion's share of all our investment has come through cash flow at the operating level. We’ve produced $35M in operating-level EBITDA out of the Point Rousse project in the last five years.

P: And you're trading at a discount to that, of course. Any analyst coverage?

D: No particular analyst coverage just yet. We're still working on that.

P: Well, I think it must be hard for some analysts to justify the effort it takes to wrap their head around all of the things you guys have going on, let alone how to value the potential synergies there. With all the good things you have going on, it makes me wonder why you don’t get more attention.

D: Our biggest challenge is the fact that we don’t have the ounces in a 43-101 format. We have over 100,000 ounces of resources at Viking. Roughly 50,000 -- 25,000 each indicated and inferred -- at Stog'er Tight, which is the second deposit we have been developing. We have roughly 30,000 ounces of reserves at the Pine Cove pit we are currently mining. It is a very good base, but the market wants to see more. That's why we did the capital raise, we need to accelerate the pace of exploration. We can't go at the pace of our cash flow. We have to go a bit faster and demonstrate the potential of the region.

P: What about "the tortoise and the hare", though?

D: Well, the issue is that you want enough mine life to put more ounces on the book. You don’t want to get too close to edge of the end of mine. We have what we think is 3-5 years ahead of us based on what we know, what is on the books, and how we can manage it. But we strive to have ten-plus years on the books and then find those pockets of high-grade and increase production.

D: There is work to be done. If we can continue to demonstrate the potential for that through this drill program and subsequent drill programs, and adding more projects, then I am optimistic the market will recognize that we are growing our resource base and have the infrastructure in place to mine it and process it.

P: And then you show them some numbers. If you come through and say "by the way, we found some more high-grade and put that through, so here is our quarterly." Then you could blow everybody's socks off.

D: Well, we have to get our unit costs down even more. The way to do it is getting more ounces through the mill. Our way of doing that, right now, is trying to feed it with relatively higher grade. And it doesn’t take that much of a higher grade -- we don’t need to go to 5 grams per tonne.

P: Any comments on margins at this point?

D: Our cash costs per ounce at the Point Rousse project has been around $1,100 per ounce -- Canadian, everything I quote is in Canadian dollars. We're trading right now around $1,650 per ounce of gold, so there is a pretty good operating margin. Even when gold was at $1,400, we still had a good buffer.

D: The all-in sustaining cash cost for the last two years has been about what the gold price is. Just because of what I said before, we are trying to grow and we used our cash as we had it available. Everything we generated, we used. Our all-in sustaining is pushing against our revenue per ounce because of that.

D: Ultimately, as we delineate more ounces we expect that sustaining cash cost to come down and be more in-line with what you expect. If we can also increase ounces through the mill and leverage the infrastructure, then we can certainly bring down the operating costs to under $1,000 per ounce. Maybe $900 or $800 range. That's the long-term goal, the five-year horizon.

P: Yeah, that makes sense. Thanks for the detail on those numbers, that is some important 'inside baseball' type commentary on your financials there.

D: Our company is predicated on the exploration. If the ounces are there, then we have the track record to show we can convert those ounces to cash. Economically.

P: Is there any debt on the books?

D: We have about a million dollars of debt and it's government money. There is $400,000 from a Provincial loan at 3%, $500,000 in a federal loan at 0%. We have a $1M revolving credit facility with RBC. We have little more liquidity to work with, other than just our cash.

P: That's great. Great to see that you've gotten so far without incurring more debt. And also good to see that you have that credit relationship with a bank there. What is cash on hand right now?

D: At end of our first quarter, which is August 31st, we had $400,000 cash plus we had $1M on the revolving credit. In liquidity, we had about $1.4M.

P: Do those Government loans show up as short term liabilities?

D: There are monthly payments and the next twelve months are recorded as short term, but our working capital is positive.

P: I wonder -- have you had any welcome or unwelcome suitors who might be interested in buying a producing mine?

D: Well, I would like to say that we have people knocking on our door all the time, but I think people are taking notice of us more now. Just like the general market, any sort of acquirers are looking to see how successful we are with the exploration. We are confident about it. We are in an area, a geology along fault systems that have all the right characteristics for having gold deposits. You look at Marathon Gold, which is along a different fault system in Newfoundland but has the same characteristics of the fault systems that we are in. They have a million-plus ounces, I believe. There is no reason to say that we can't find a lot of gold around where we are. We are trying to exploit the same kind of characteristics as they are.

D: A lot of the gold that we are looking for is nearby these thrust faults. Pine Cove, Stog'er Tight, the Argyle Prospect -- they are all along these thrust faults.

P: Great, how are for timing here now? It's been 40 minutes.

D: Good -- I think I've told you a lot. If I've missed anything, then it's not very material.

P: Well, let me flip through the deck and have look at things… These photos!

D: Yes, that one is just off a phone camera. But a lot of these photos are done by a professional photographer. Our website uses professional photos, too.

P: That's what it takes these days! The website has got to be pretty good.

D: Yeah, I think our website is good now. It was tough going for a while.

P: Wait -- forty-seven exploration targets at Point Rousse? … Sorry, I didn’t realize it was that many. I'm afraid we have barely even scratched the surface!

D: Yeah, we really haven't.

P: (laughs) Good lord! Any comments on assays pending right now?

D: We are going to have a news release out soon on the Viking Project. We drilled the Goldenville area here -- that has high-grade potential. It is similar to Nugget Pond Mine, which is an iron stone. Nugget Pond was 11 gpt gold when they mined there. Elephant hunting for grade, but it is very hard to hit.

P: Just very veiny or what?

D: Yes, we're talking a meter or two meter stuff. It's hard.

D: What's interesting though is that we're doing a lot of finger-printing of the deposit areas so that we really understand where to drill better.  

D: So, this is Viking. This is the known deposit area, where 60% of the indicated resource is 3 grams or more. That's right there. This is the entire Viking Project area -- it's 5.6KM of strike length. This is a soil anomaly map. There's an area called the Viking Trend, there's Thor's Cross, there's the Kramer area, and the North and South of the Thor Deposit.

D: One of the things we've done is step back and figure out the signature. We've accumulated all the geochemical and geophysical information and our next phase of drilling will be more focused, knowing that. We've learned a lot about what we're seeing there.


D: This Viking Trend area, it's alteration zones were 40-80M wide. We haven't hit the mother lode there yet. We've found a lot of places where we will get 10-20M of 0.5 g.p.t. approximately, but there could be 10-20M of 4-5 g.p.t. because the alteration is so intense. Our geologists haven't seen anything like this in the area.

P: Well, what did you say -- 40 meters wide? And 5KM long?

D: Well, yes but it's not along the whole strike.

P: OK -- sorry, it's only 3KM long, excuse me. But, still!

D: Yes, there is a lot of potential. We have just scratched the surface here as well.

P: And this other picture of Viking Trend is a cross-section, showing high-grade at surface. The surface showings are great, but then I believe it is dipping down based on what my interpretation of this picture here.

D: Right, that's all at surface. If you put a pit-shell around that, then you could have two years of mining on this. We need to do more work to justify that, but the geology there is compelling -- particularly in relation to our existing infrastructure.

P: And that dipping section -- any comment there?

D: Well, it hasn’t been tested to depth everywhere.

P: OK, well I am keen to hear more about that. That's very exciting.

D: We've started the development work on this. It will take about 2.5 years, but we will have the permits on the main deposit area and can expand them with an amendment and get going. If we can get a bigger deposit area, then we could be in production in 2.5 years, which is pretty fast. And it's open pit at surface.

P: The synergies with the rest of the company just sings on that project.

D: We would use our contract miner. We already have basic numbers on a concentrator, we're not talking about tens of millions of dollars there.

P: So, results coming soon from Goldenville and Viking?

D: Yes, phase two drilling on Argyle and Viking coming soon after that. Then resource estimates.

P: Wow, for everything? Well, that could certainly draw some attention.

D: If the numbers are good!

P: Oh, that's a great slide at the end with the photos of everyone there.

D: Well, we do that because it's the people that make it work. Without the people we've got nothing.

P: Great. Well, I am keen to do a follow-up call where we go in detail on some of these maps and diagrams. Get linked up with one of your geologists and I will try to ask the simple questions to help get your story out there. Thanks very much for providing all the detail on your company here. It's been great to learn more about you.

D: You're welcome. My pleasure. 


This transcript follows a short editorial piece that I wrote about the company here.  I enjoyed learning about the company and look forward to bringing you further information about Anaconda Mining as they execute on their amibitious and exciting plans.