July 08, 2010 08:40 ET

Anaconda Mining Inc. Denies Access at Pine Cove, Nl Mine/Mill to Majority Owner and Joint Venturer; New Island Resources Inc. Unable to Evaluate Progress of Mine Development Project

ST. JOHN'S, NEWFOUNDLAND and LABRADOR--(Marketwire - July 8, 2010) - Anaconda Mining Inc. ("Anaconda") (TSX:ANX) continues to refuse all requests from New Island Resources Inc. ("New Island") (TSX VENTURE:NIS) to have access to New Island's gold property at Pine Cove, Newfoundland and Labrador.

Under the terms of an Option and Joint Venture Agreement signed between New Island and Anaconda dated November 26, 2003, Anaconda could earn a 30% interest and operator status in New Island's Pine Cove property by completing a feasibility study and making a production decision to bring the property into commercial production. The feasibility study was based on a 1000 ton per day mill and a production decision was made on January 21, 2005. Following several years of delays, Anaconda finally constructed a 500 ton per day mill and commenced operation at Pine Cove in May 5, 2008. Due to faulty design, the mill did not operate to commercial standards, achieving roughly 100 tons per day. As a result, the mill had to undergo significant modifications and based on various public announcements by Anaconda, the modified mill would be commissioned in June 2010.

New Island presently has a 70% undivided interest in the Pine Cove property, with Anaconda having previously acquired 30% from New Island through the Option and Joint Venture Agreement. Anaconda may acquire an additional 30% of the property from New Island upon the attainment of agreed commercial production milestones, which at the moment has not been achieved.

New Island has made two requests to have access to the Pine Cove site, specifically to review the status of the mill redevelopment project. Both of these requests have been refused by Anaconda, notwithstanding New Island's clear right under the Option and Joint Venture Agreement to have reasonable access to the Pine Cove site and to technical records and other engineering data relating to the property, including the mill.

In its most recent refusal to allow New Island access to the Pine Cove site dated July 2, 2010, Anaconda confirmed that the mill commissioning process has been delayed and is apparently not yet underway. No further date has been announced by Anaconda with respect to when the commissioning of the upgraded milling facility will be completed; nor has Anaconda issued any statements since the end of June as to the work remaining to be performed before the commissioning will be complete.

In addition to Anaconda refusing New island access to the Pine Cove property, Anaconda has refused to provide New Island with their mining and milling plans, cash flows, pro-forma's status of the current modifications and other pertinent information required by New island and its advisors to properly assess the viability and profitability of the Pine Cove operations.

On June 11, 2010, Anaconda formally commenced an unsolicited share exchange take-over bid (the "Bid") to acquire all of the issued and outstanding common shares of New Island as set out in the take-over bid circular filed by Anaconda with Canadian securities regulators. Under the terms of the Bid, shareholders of New Island will have until August 3, 2010 to decide whether to accept the Anaconda offer.

Under Canadian securities laws governing the Bid, the directors of New Island must evaluate the terms of the Bid and they have an obligation to communicate the results of their evaluation to the shareholders of New Island. It is imperative that the directors of New Island know the status of the project, and in particular the expansion and upgrading of the mill, in order to be able to discharge their duties to the shareholders of New Island in connection with evaluating the Bid.

The Board of Directors of New Island issued an initial directors' circular on June 29, 2010 and will issue an updated opinion on the Bid on or before July 26, 2010. In the interim, the Board strongly recommends that shareholders refrain from making a final decision.

About New Island Resources Inc.

New Island is a diversified junior exploration company holding gold and base metal properties in the Province of Newfoundland and Labrador. Additional information concerning New Island may be obtained on New Island's website at: or from the System for Electronic Document Analysis and Retrieval (SEDAR) website at: under New Island's profile.


s/ "Harold Wareham"
President and CEO

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