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Anaconda Mining reaches deal with New Island Resources for Pine Cove Property

Published: 10:04 31 Aug 2010 AEST

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Anaconda Mining (TSX:ANX) has finally managed to come to an agreement with smaller mining outfit New Island Resources (TSX-V:NIS) which will see New Island sell its interest in the Pine Cover Property for equity.


Anaconda Mining had been attempting to acquire New Island Resources outright, but was met with a stiff defence from New Islands’ board of directors. Today the two companies confirmed that they had agreed instead on a transaction which will see Anaconda gain control of the Pine Cover Property, allowing New Island to remain as an independent public company.

The exact terms of the deal are still to be agreed, but Anaconda and New Island have confirmed that the transaction will see Anaconda issue approximately 22.6 million shares to New Island’s shareholders, with the exact exchange ration to be not less than 0.42 of an Anaconda share or great then 0.45 of an Anaconda share.  The agreement also allows New Island to issue up to $0.325 million in new shares before the transaction closes to pay down outstanding debt.


New Island will retain its Glover Island property in Eastern Canada.


The agreement also puts paid to a previous agreement between New Island Resources and Mountain Lake Resources to merge.


New Island President and CEO Harold Wareham commented, "The Revised Transaction represents the best alternative available to New Island shareholders in the circumstances. New Island shareholders will enjoy the opportunity of continued participation in the gold production at Pine Cove through their share ownership in Anaconda, while remaining shareholders of New Island. New Island is looking at strategies for the future, in particular with respect to the best utilization of what will be its core asset, which is the gold property at Glover Island, Newfoundland and Labrador."

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