Anaconda Mining Inc. announces extension of Series III Debentures and proposed extension and reduction of strike price of certain common share purchase warrants

TORONTO, Aug. 15, 2011 /CNW/ --
TORONTO, Aug. 15, 2011 /CNW/ - Anaconda Mining Inc. (TSX: ANX)
('Anaconda' or the 'Company') is pleased to announce that it has
reached an agreement with the holders of Cdn $842,574 face amount of
12.5% Series III Secured Debentures to extend the maturity date from
July 20, 2011 to April 20, 2012, subject to a principal payment of
$150,000 on October 20, 2011.  Interest at 12.50% shall continue to be
payable quarterly.

As part of such agreement the Company has agreed to reduce the exercise
price of 258,227 unlisted common share purchase warrants (the 'Series
III Warrants') originally issued to such Debentureholders to $0.08 per
common share as well as extend the exercise date by one year until
March 20, 2013 (with respect to 236,000) and April 22, 2013 (with
respect to 22,227). The original Series III Warrants entitled the
holders thereof to purchase an aggregate of 258,227 common shares of
Anaconda at an exercise price of $0.30 per common share until 5:00 p.m.
(Toronto time) on March 20, 2012 (with respect to 236,000) and April
22, 2012 (with respect to 22,227), as applicable.  The only proposed
amendments are to the exercise price and expiry date with all other
terms remaining unchanged.

President and CEO, Dustin Angelo, stated, 'We are pleased that the
Series III holders agreed to extend the maturity of the Series III
Debentures. Although the Pine Cove operations have shown improvement
over the last few months, Anaconda did not have enough funds in its
treasury to repay the entire principal amount of $842,574 by July 20,
2011. The extension will give Anaconda the time to generate the cash
necessary to pay off the Series III Debentures. At the same time,
Anaconda will be able to better manage its cash to service other debts
and allocate financial resources to critical areas of the mine and mill
to make further enhancements to production. In the coming weeks, an
overall update of the recent operational performance of Pine Cove will
be forthcoming.'

The proposed amendment to the exercise price of the Series III Warrants
is subject to the approval of The Toronto Stock Exchange.

ABOUT ANACONDA

Headquartered in Toronto, Canada, Anaconda is a mining and exploration
company focused on operating the Pine Cove gold mine located on the
Baie Verte Peninsula in Newfoundland, Canada and advancing the
exploration and development of its iron ore portfolio in Chile with its
joint venture partner, Inversiones SBX Limitada.

FORWARD LOOKING STATEMENTS

This document contains or refers to forward-looking information. Such
forward-looking information includes, among other things, statements
regarding targets, estimates and/or assumptions in respect of future
production, mine development costs, unit costs, capital costs, timing
of commencement of operations and future economic, market and other
conditions, and is based on current expectations that involve a number
of business risks and uncertainties. Factors that could cause actual
results to differ materially from any forward-looking statement
include, but are not limited to: the final approval of the private
placement by the Toronto Stock Exchange; the grade and recovery of ore
which is mined varying from estimates; capital and operating costs
varying significantly from estimates; inflation; changes in exchange
rates; fluctuations in commodity prices; delays in the development of
the any project caused by unavailability of equipment, labour or
supplies, climatic conditions or otherwise; termination or revision of
any debt financing; failure to raise additional funds required to
finance the completion of a project; and other factors. Additionally,
forward-looking statements look into the future and provide an opinion
as to the effect of certain events and trends on the business.
Forward-looking statements may include words such as 'plans,' 'may,'
'estimates,' 'expects,' 'indicates,' 'targeting,' 'potential' and
similar expressions. These forward-looking statements, including
statements regarding Anaconda's beliefs in the potential
mineralization, are based on current expectations and entail various
risks and uncertainties. Forward-looking statements are subject to
significant risks and uncertainties and other factors that could cause
actual results to differ materially from expected results. Readers
should not place undue reliance on forward-looking statements. These
forward-looking statements are made as of the date hereof and we assume
no responsibility to update them or revise them to reflect new events
or circumstances, except as required by law.

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/15/c3677.html

Company website: www.anacondamining.com