Anaconda Gold Corp.

Anaconda Gold Corp.

March 23, 2005 16:44 ET

Anaconda Gold-Clarification of Prior Feasibility Study and Update of Reserves at Pine Cove




MARCH 23, 2005 - 16:44 ET

Anaconda Gold-Clarification of Prior Feasibility Study
and Update of Reserves at Pine Cove

TORONTO, ONTARIO--(CCNMatthews - March 23, 2005) - At the request of the
Ontario Securities Commission, Anaconda Gold Corp. (TSX VENTURE:ANX)
issues the following clarification with respect to its press release
issued on March 2, 2005 and Feasibility Study filed on February 8, 2005,
and an update on its reserves at the Pine Cove project.

The Pine Cove gold project, located 6 km northeast of Baie Verte,
Newfoundland, was the subject of a Feasibility Study completed by A.C.A
Howe International Limited of Toronto in December 2004 and filed on
SEDAR on February 8, 2005 (the "Howe Study"). The Howe Study
incorporated an independent report on mineral resources and mineral
reserves prepared by P & E Mining Consultants Inc. of Brampton, Ontario.
This report also included inferred resources of 392,751 tonnes grading
2.49 grams gold per tonne.

The Howe Study included these inferred resources in their economic cash
flow model, which inadvertently contravened NI-43-101 section 2.3 (1)
(b) which does not allow the use of any inferred resources in the
completion of an economic analysis. The use of inferred resources are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized
as mineral reserves.

Investors should disregard and not rely on the Howe Study dated December
23, 2004 and filed on SEDAR on February 8, 2005. The Company has revised
the Howe Study based on the completion of additional drilling conducted
in January and February, 2005 and plans to file a revised Feasibility
Study on the Pine Cove project next week.

The additional drilling completed in 2005 at the Pine Cove gold project
has resulted in an upgrading of the inferred resources to probable
reserves and an improvement in project economics.

These updated mineral reserves and the economic analysis based on these
reserves, form part of a revised Feasibility Study now being completed
by A.C.A Howe International Limited for Anaconda Gold.

Anaconda completed 943 m of drilling in 12 holes which both in-filled
areas of the optimized open pit which contained inferred resources and
tested certain zones for extensions.

Revised mineral reserves at Pine Cove based on cut-off grade 0.95 grams
gold per tonne and using a 97% mining recovery factor are as follows:

Revised Pine Cove Reserve Estimate
March 18, 2005
Au Price CUT-OFF -------------------- WASTE TOTAL W/O
$400 0.95 2,091,148 3.08 12,081,290 14,172,438 5.78

Au Price CUT-OFF -------------------- WASTE TOTAL W/O
$400 0.95 2,332,676 2.76 11,839,762 14,172,438 5.08

The new drilling completed by Anaconda successfully converted most of
the inferred resources into probable reserves. A revised economic
analysis, based on the revised mineral reserves, has also been completed
and will form part of the revised Feasibility Study.

Highlights of the revised economic analysis are as follows:

2005 Revised
2004 Howe Study Analysis% Change (+/-)

LOM gold produced: 181,000 183,497 +1.4
Mine life: 6.0 6.7 +11.7
First year
production: 38,000 oz. 38,946 oz. +2.5
Capital: $11.39 million $11.39 million
IRR: 23.9% 24.5% +2.5
LOM Cash Cost/Oz: US$283 US$289.9 +2.4
First Year Cash
Cost/Oz: US$238 US$220 -7.6
Gold Price: US$400 US$400

Included in the waste tonnage of 11,839,762 tonnes, are 66,700 tonnes of
inferred resources grading 2.43 grams gold per tonne. Under NI 43-101
rules, inferred resources cannot be used in a feasibility study economic
analysis and as a result these inferred resources have been classified
as waste.

Anaconda also commissioned A.C.A Howe International to examine the
potential economic impact of mining and processing the 66,700 tonnes of
inferred resources grading 2.43 grams gold per tonne which are currently
designated as waste tonnage in the optimized open pit model. These
inferred resources represent 2.8% of mineral resources at Pine Cove.
This assessment represents additional potential at Pine Cove to the
revised base case scenario outlined above.

Highlights of the Potential Economic Scenario including Inferred
Resources are as follows:

LOM gold produced: 188,434 oz.

IRR: 25.8%

LOM cash cost/oz.: US$286

As a result of the inclusion of inferred resources and the preliminary
nature of the analysis, the potential quantities of gold in the inferred
resources which are included within the open pit cannot be referred to
as "ore" or as "mineral reserves". Due to the uncertainty which may
attach to inferred resources, there is no assurance that inferred
resources will be upgraded to measured and indicated resources or proven
and probable reserves, as a result of continued drilling. The economic
analysis contained herein is an assessment which is preliminary in
nature and is based partly upon inferred resources that are too
speculative geologically to have economic considerations applied to them
to enable them to be categorized as mineral reserves.

Anaconda Gold has a 30% interest in the 2,816-hectare Pine Cove project
and has the right to earn an additional 30% interest by arranging
project financing and bringing the property to commercial production.
New Island Resources Inc. (TSXV-NIS) is Anaconda's partner at Pine Cove.

The terms of the underlying agreement also provide Anaconda with 100% of
all project cash flow until capital payback is achieved, recovery of
certain sunk costs and project management fees for acting as project

Anaconda Gold made a formal production decision for the Pine Cove
project in late December 2004 (see press release dated January 21, 2005)
and is continuing with its permitting, provincial regulatory and mine
planning efforts. Anaconda filed an environmental registration and mine
plan document with the Newfoundland provincial government on March 7,
2005 as part of its operating permit application.

Pending receipt of governmental approvals and the completion of project
financing, Anaconda will commence mine construction in 2005.

Wayne Ewert, PhD, P.Geo., is the lead author of the revised Feasibility
Study and is the Qualified Person as defined by NI-43-101, and has
reviewed the content of this press release.

The statements made in this press release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual
events or results could differ materially from the Company's
expectations and projections. The TSX Venture Exchange has not reviewed
and does not accept responsibility for the adequacy or accuracy of this


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