An Introduction to Anaconda Mining
In my constant effort to introduce interesting and less known companies to all of you, today we get an introduction to Anaconda Mining (TSX:ANX & OTC:ANXGF). President and CEO Dustin Angelo joins me to outline the Company which is focused in Eastern Canada in Newfoundland and Nova Scotia. With a large land package over around 20,000 hectares and a property and mill in production there is a lot to take in.
As I mentioned please comment or email me with your thoughts on Anaconda and any follow up questions you have.
Click here to visit the Anaconda website for more information.
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Cool. Cory, I didn’t realize you were following Anaconda, but I’m a big fan and have been starting to build a position lately.
They had some good drill results out recently:
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Anaconda intersects 3.63 g/t gold over 12.0 metres at the Argyle discovery – expands zone of mineralization down-dip and to the northeast
July 13, 2017 /CNW/ – Anaconda Mining Inc. – (TSX:ANX)
Peter Newton Bell over at CEO has done a few interviews with them that got my interest piqued:
I had posted this on the KER when it came out, but since this post is focused on Anaconda, it seems worth noting a 2nd time:
(ANX) (ANXGF) Anaconda Mining Sells A Record 4,658 Ounces of Gold, Generating Over $7.72M In Gold Sales In the Fourth Quarter
TORONTO, ONTARIO – June 15, 2017
I really liked their acquisition of Orex Minerals (of Gary Cope fame…) and the market barely even noticed, so I liked it even more because all that value got scooped up and is now in the combined company.
This little Gold Producer and Explorer definitely has room to run….
To be clear Excelsior it was Orex Exploration (not Minerals) that they took over. Gary Cope runs Orex Minerals… I know a little too close with the names.
Great to hear you are following the Company. I always note when you are are following a stock 😉
Yes my bad. Orex Exploration not Orex Minerals. The names confused me, but I remember the news breaking about the merger and hardly anyone noticed it seems.
BTW – It may be nice to have Gary Cope on the show sometime with an update on Dolly Varden.
Ever Upward.
Anaconda Mining and Orex Exploration Execute Arrangement Agreement
March 3, 2017
“The Arrangement is intended to provide significant benefits for securityholders of both companies, including:”
> “Acceleration of development of Orex’s Goldboro Project by combining Orex’s mineral resources with Anaconda’s proven operating infrastructure at the Point Rousse Project and experienced management team;”
> “Potential for substantial capital cost reductions at the Goldboro Project through leveraging Anaconda’s existing port, mill and tailings facilities;”
> “Potential for gold producing operations in two mining friendly jurisdictions in
Atlantic Canada – Newfoundland & Labrador and Nova Scotia;”
> “Establishment of a strong position from which to participate in any future consolidation in the mining industry in Atlantic Canada;”
> “Greater market presence, enhanced liquidity and a broader capital markets profile.”
“Anaconda’s Point Rousse Project has been producing gold for nearly seven years and, in that time, Anaconda has incrementally improved its operating infrastructure, which includes a 1,300-tonne per day mill, tailings capacity for approximately 15 years (based on the current mill throughput rate) and a port facility. Both the Point Rousse Project and Goldboro Project are located on tidewater. With favourable logistics and existing infrastructure in place, Anaconda expects it will be able to accelerate the development of the Goldboro Project at a lower capital cost than if it were a stand-alone project.”
Anaconda Mining Commences Drilling and Initial Development Programs At The Goldboro Project
June 22, 2017
Anaconda investigates narrow-vein tech
PRESS RELEASE: 26 Jun 2017
“Anaconda Mining has announced the start of a research and development project to develop, prototype and optimize a new technology to mine steeply dipping narrow gold veins, which cannot be mined cost-effectively with existing technologies”
Their share structure does not look too good to me……..many shares , options, & warrents
Agreed Chris. However many of the warrants & options are older and won’t cause the immediate liquidity event several months later like so often happens after a capital raise, as their raise was a while ago at higher prices, so investors will be hanging on for a much higher share price before selling.
Here are some good comments from Peter Newton Bell over at ceo.ca in response to the share count, warrants, options from yesterday.
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@Newton – “Last question from KE Report is tough one about share count. 382M shares outstanding? Lots! Probably most important issue around that for me was history of share issuance. They survived for years without equity financing, bootstrapping exploration and acquisitions off production.
See my interview with Dustin from back in November for some color
@Newton/6500-words-with-dustin-angelo-ceo-of-anaconda-mining 1 about 10 hours ago
@Newton – “Five years with no equity financing” was a striking comment that I recall from first interview. Only equity financing was in Summer 2016 with Red Cloud KS for some FT shares. Shows commitment to using funds for exploration, fine by me. Recent acquisition of Goldboro was all shares — again, fine by me.”
1 about 10 hours ago
@Newton – “My thought was this: they may have a lot of shares out, but they are pretty old shares. No concern about the street hitting bids on 4 month date. Long-term shareholders could still be restless and hit the bids, but fairly high insider ownership at $ANX I believe. Maybe not huge ownership by management, but I believe there are some well-heeled people behind the scenes. As such, my experience was that it always seemed to be run like a $100M+ market cap company rather than a $10M market cap company. And that’s a good thing.”
Really on a fully diluted basis they have 461 M (382 outstanding shared + 29M options + 50M Warrant)
The warrants have a weighted average exercise price of $.08. (15.9M warrants are $.10 and expire on July 26, 2017).
Their current market cap based on $.06 share price x 382 outstanding = $22,920,000
I agree with this posters comments regarding the new Market Cap on the new entity.
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@Laurentf – “@Newton Mcap of C$11 million was before the merger. Now it’s closer to C$23 million.”
Personally, I’d rather seem them wait to roll back their shares until their share price is back up over $10-.$.12 , because that would be a nice move on a percentage basis. Rolling it back at these basement dwelling levels only hurts the longer term shareholders, and won’t attract large institutional investors yet that like share prices over $3.
It will be necessary down the road, but for now I don’t mind the larger share count and would rather see the price move up a few pennies at a time on good drill results. When they are closer to bringing Goldboro into production, THEN they can do the reverse split.
Basically, there is not a solid reason to do a rollback at this point in time IMO.
On further consideration, if the Gold prices rise in later 2017 and early 2018, then ANX will have better revenues and cash flows from their mining operations, so if they can keep feeding their mill in that environment, then this would be added rocket fuel to a thinly traded stock trading at just pennies. Their margins would improve and this could move the share price up to the $.12-$.15 level if combined with good drill results in tandem.
Again, those would be FANTASTIC moves in the share-price on a PERCENTAGE BASIS, so why not wait for that kind of move first, before rolling the back their shares in later 2018 or early 2019.
It isn’t like mining investors in at 400M shares will be radically different from ones interested at 100M shares when there are so many hundreds and hundreds of Jr miners to choose from.
Many investors incorrectly think that if the share count was a bit tighter that it will magically attract all kinds of new investors, and I have only very rarely seen that to be the case, and it is if it is to get listed on a different exchange.
Most times after a rollback, all the legacy investors are pissed, and the stocks is dead money for 3-6 months in limbo before a new batch of newsletter writers or investors get interested. However, if the sector is in full-steam ahead momentum, and the share price is rocking higher, then it makes sense to roll them back.
At this point the payoff for a consolidation would be negligible and it would be a sucker punch to all existing shareholders. Let’s let this climb up out of the abyss for a while first and get some legs on positive newsflow.
Good luck to the Anaconda Team!
Excelsior, there will be no rollback in the immediate future. Chairman of the board Jonathan Fitzgerald is a very successful money guy and will split at the optimum time. IMHO once the drill results from Goldboro start rolling out we can kiss these prices Goodbye !!! They should start coming soon as I know they have been active on the property.
The share structure is not the greatest. But for a producer with feeder properties it is in line with peers. That being said there will be a 4/1 reverse split at some point which will bring share count to under 130 M which is very tight for a producer. The company has the flexibility to announce split whenever they want and will surely wait for a time with favorable news. Not all splits are necessarily a bad thing in fact they will be a be boon when released at the right time. That being said what producer is out there at 6 cents. These are the dog days of summer and now is the time for investors to be positioning themselves. Thanks again Cory for bringing this unpolished gem into the limelight.
Nice one. Could be a complimentary holding to Marathon.
And they’re already generating cash.
Cash reserves in the bank, & Debts are two things to look at I guess….. Unless I missed that in the interview.
I agree Tad, I will follow up with Dustin regarding the cash in the bank and some other financial topics. We simply ran out of time in this interview.
Thanks for your comment.
Excelsior, Wow glad you are a follower and understand the value and potential of this company.You are a very savvy investor and I am excited that you are building a position as I know you do your due diligence !!! Cory, glad you are going to do a follow up interview as I feel the potential of the Goldboro property could be better explained by management.Osisko has spent millions drilling the property and follow up drilling by the Anaconda team should be able to exploit some very ripe targets.Many old time Geologists feel this is the “Crown Jewel” of the Maritime Provinces. Thanks again Cory for introducing this 6 cent Producing Mining Company to a new audience. This stock IMHO is the best kept secret investment out there !!!
Thanks Mickey Mantle. Yes, ANX looks like quite an interesting value proposition at these levels, with relatively little discussion about them on most precious metals investing forums.
They’ve put out a number of positive press releases over the last few months, so the management team has been executing their strategy well.
Mickey Mantle – I also wanted to thank you for the extra info you brought to investors attention when Peter Newton Bell brought up the extra revenues from the sale of the waste rock. Here is a snippet from that conversation:
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> @Newton – “Hmmm. My reading from last financials was: $ANX generated a further $0.9 million from the sale of waste rock as aggregate from its Point Rousse Operation. Also mined 890,120 tonnes waste rock in Q1 2017. Was thinking it is $1/tonne, which is slightly more than your number @stocklor.”
> @MickeyMantle – ” @Newton @Leni @Excelsior About that aggregate rock, I spoke to Allan Crann $ANX and he enlightened me where the rock is going. It is going to a Granite company in South Carolina and they want it because it a type of rock that is high quality high grade unique to Newfoundland and supposedly produces the best product. Also found out that they are producing non-acidic tailing ( maybe one of you brainiacs) can enlighten me on that but I guess it is much gentler on the environment and that is one of the things important to Anaconda and why the Government there has such good relations with the company. The more I dig the more I like:) “
Excelsior ,there are so many positive layers to this company it boggles my mind that they currently are 5.5 cents. Ridiculous !!! I feel that if Gold cooperates that 10-15 cents is easily obtainable after the summer doldrums are over. The Wild Card is the drill results from Goldboro, the initial results are out soon and then the ANX team can target some of the juicy ,high grade sweet spots in the coming months when interest in this sector really picks up. The only to make really big $$$ in this sector is to find undervalued companies that have a story to tell that might generate big market attention which I feel Ancaconda definitely fits the bill.
Copy of link to Northern Miner article on ANX
http://www.northernminer.com/news/anaconda-mining-grows-footprint-atlantic-canada/1003788205/
Thanks Cory , I love this company. Thanks for bringing attention to Anaconda. This IMHO is the most undervalued junior out there with the most upside. Once the drill results start flowing from Goldboro ,I think this stock is off to the races. It has never been drilled properly and Anaconda is going to feed off the High Grade Targets that Osisko drilled in 2010. Thanks Cory for your interviews , you are a cut way above anyone out there and bring great insight to investors !!!!