UPDATE 1-Anaconda Mining posts Q1 loss

Mon Oct 18, 2010 8:42am EDT

* Q1 loss/shr C$0.04 vs EPS C$0.01 yr ago

* Revenue down 84 pct

* evaluating strategic alternatives for Chilean assets

Oct 18 (Reuters) - Canada's Anaconda Mining (ANX.TO) posted a quarterly loss on higher expenses, and said it was exploring strategic alternatives for its iron ore assets in Chile.

For the first quarter, the Toronto-based gold explorer posted a net loss of C$4.3 million, or 4 Canadian cents a share, compared with a profit of C$405,981, or 1 Canadian cent a share, a year ago.

Revenue dropped 84 percent to C$496,961. The company said results were hurt partly by higher costs of goods sold and administrative expenses, and loss on the sale of 50 percent of its interest in the San Gabriel project.

Anaconda said it produced limited gold of about 380 ounces, which were sold at an average price of C$1,300 per ounce.

The mineral explorer, which has operations in Canada and Chile, said as at Aug.31, it had a working capital deficiency of about C$2.5 million.

Anaconda, whose only source of revenue is from its production of gold and silver from the expanded Pine Cove mill, said it has utilized the proceeds from its first-quarter sales and a new loan to fund operations and discharge some of its obligations.

Late August, Anaconda had struck a deal with gold explorer New Island Resources NIS.V to acquire its interest in Pine Cove mine. [ID:nSGE67T0K2]

The company said it was evaluating strategic alternatives for its Chilean iron ore assets, and said it was uncertain of its ability to raise funds for the development of these properties, in a discussion of its first-quarter results on its website.

Anaconda shares, which have remained relatively flat since the New Island deal on Aug.30, closed at 24.5 Canadian cents Friday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Jarshad Kakkrakandy)

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