Magna Terra Minerals Inc. press release

Anaconda Mining Delivers Positive Preliminary Economic Assessment for the Goldboro Gold Project

2021-06-23

TSXV - TSX Venture Exchange · Gold · Copper · Cobalt · Silver · Lead · Molybdenum · Arsenic · Antimony · Rare Earth Elements · Zinc · Canada · Technical Studies

Pre-tax Net Present Value 5% of $805M with a pre-tax IRR of 29.0%

After-tax Net Present Value 5% of $547M with an after-tax IRR of 24.4%

TORONTO, ON / ACCESSWIRE / June 23, 2021 / Anaconda Mining Inc. ("Anaconda" or the "Company") (TSX:ANX) (OTCQX:ANXGF) is pleased to report the results of the Preliminary Economic Assessment ("PEA") prepared in accordance with National Instrument 43-101 ("NI 43-101") for its 100% owned Goldboro Gold Project in Nova Scotia, Canada ("Goldboro", or the "Project"). All currency is presented in Canadian dollars (C$) and referenced as "C$" or "$", unless otherwise stated.

Based on the significantly expanded Mineral Resource Estimate ("Mineral Resource") with an effective date of February 7, 2021, the PEA demonstrates the potential for strong economics from both open pit ("OP") and underground ("UG") mine operations over an estimated 17.6-year life of mine ("LOM"), with continued opportunity for growth as the Goldboro Deposit remains open in all directions. The PEA is supported with advanced metallurgical testing, refined mine and mill designs reflecting the expanded Mineral Resource, and updated operating and capital cost estimates.

Highlights of the Goldboro Gold Project PEA

After-tax Net Present Value at a 5% discount rate ("NPV 5%") of $547 million and an after-tax Internal Rate of Return ("IRR") of 24.4%, with an after-tax payback of 3.2 years based on a gold price of $2,000 per ounce (US$1,550 at an exchange rate of 1.29 C$:US$); Pre-tax NPV 5% of $805 million and a pre-tax IRR of 29.0%, with a pre-tax payback period of 2.9 years; Total gold recovered of over 1,950,000 ounces over a 17.6-year life of mine, based on 15.0 Mt at 2.09 grams per tonne ("g/t") gold from surface mining, 6.0 Mt at 4.89 g/t gold from underground mining, and 3.2 Mt at 0.63 g/t gold from a low-grade stockpile; Goldboro could generate an estimated $3.9 billion of gross revenue, approximately $ 1.6 billion in undiscounted pre-tax net cash flow, and over $481 million in federal and provincial tax payments; Initial capital cost ("Capex") of $286 million resulting in an after-tax NPV 5% to Capex ratio of 1.9; Average gold production of over 89,500 ounces per year over the first 7 years of production from surface mining, increasing to average annual production of over 120,000 ounces in years 8 through 18; Life-of-Mine Operating Cash Costs of $862 (US$668) per ounce sold and All-In Sustaining Costs ("AISC") of $1,031 (US$799) per ounce sold; Mill capacity of 4,000 tonnes per day ("tpd") based on combined gravity and leaching circuit, demonstrating an average gold recovery of 96.4%; and At a gold price of $2,200 (US$1,705), Goldboro could generate cumulative after-tax net cash flows of approximately $1.4 billion, an after-tax NPV 5% of over $700 million and an after-tax IRR of 29.2%.

1Refer to Non-IFRS Financial Measures below.

Cautionary statement NI 43-101: The PEA was prepared in accordance with NI 43-101. Readers are cautioned that the PEA is preliminary in nature. It includes inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral Resources that are not mineral reserves do not have demonstrated economic viability._

"Anaconda Mining is extremely pleased to announce its Preliminary Economic Assessment for the Goldboro Gold Project. The PEA was initiated following the announcement of a significantly expanded Mineral Resource at Goldboro in February 2021, which represented a potential step change to the economic value of the Project. The PEA outlines the capacity for a long mine life with estimated average gold production of 112,000 ounces over more than 17 years, generating an after-tax NPV of $547 million and an after-tax IRR of 24.4% using a US$1,550 gold price. Based on the technical and financial merits demonstrated by the PEA, the Company is undertaking a phased development approach which will initially focus on the surface mining phase of the mine plan, which is subject to an ongoing Feasibility Study expected to be released in Q4 2021.

Importantly, the Goldboro Deposit is open in all directions and the Company is initiating exploration to the west of the deposit towards the past producing Dolliver Mountain gold mine. We believe Goldboro has potential to be a multi-generational gold mine, which can create significant value for our shareholders and Project stakeholders, including the community of Guysborough and the Mi'kmaq of Nova Scotia."

~ Kevin Bullock, President and CEO, Anaconda Mining Inc.

Next Steps - Towards the Development of Goldboro The results of the Goldboro PEA indicate that the Project has technical and financial merit using the base case assumptions and in many cases inputs from advanced studies being undertaken in anticipation of a Feasibility Study. The Company plans to execute the mine plan outlined in the PEA in phases, commencing initially with a Feasibility Study focused on the initial 10 years of surface mining, which is anticipated to be released in Q4 2021. An Environmental Assessment Registration Document will be filed shortly thereafter on that basis. Throughout 2021, the Company will continue with ongoing work to support the Feasibility Study, including geotechnical drilling, expanded surface water monitoring, comminution studies and infill drilling.

If a production decision is made, Anaconda will then commence the next phase of planning for underground mining, including infill and expansion drilling from drifts off benches in the open pit, allowing for more effective and less expensive diamond drilling. Pending those results, the Company would then consider a supplementary study that will focus on adding the underground mining phase to the Project.

The Company believes there is further potential to expand the Goldboro Deposit along strike, and at depth, and is planning a 50-line kilometre Induced Polarization ("IP") geophysical survey over the area west of the Goldboro Deposit for approximately one kilometre up to the past producing Dolliver Mountain gold mine. There is significant opportunity to further expand the Mineral Resource and the IP geophysical survey will assist in identifying strike continuity to the west as well as any potential parallel zones north and south of the currently known extents of the deposit.

The Goldboro Gold Project Preliminary Economic Assessment The PEA was completed by Nordmin Engineering Ltd. ("Nordmin") as Lead, Mining, and Geological Consultant. Knight Piésold Ltd. ("Knight Piésold") acted as Tailings Consultant, GHD Ltd. ("GHD") as Site Water Management and Environmental Consultant, Ausenco Engineering Canada Inc. ("Ausenco") as Metallurgical and Processing Consultant, Lorax Environmental Services Limited ("Lorax") as Geochemistry Consultant, and McCallum Environmental Ltd. ("McCallum") as Consultation and Permitting Consultant. The Goldboro Gold Project Mineral Resource Estimate, effective February 7, 2021, was prepared by Nordmin.

Table 1: Summary of Key Estimated Results and Assumptions in the Preliminary Economic Assessment

| Production Data | Values | Units | | Life of Mine | 17.6 | Years | | Processing Rate | 4,000 / 1.46 | tpd / Mtpa | | Recovered Gold | 1.95 | Moz | | Average Gold Recovery | 96.4% | | | Pre-production Mined Tonnage | 3.1 | Mt | | Total Mined Tonnage (including pre-production) from Open Pit Mining | 114.2 | Mt | | Total Milled Tonnage from Open Pit Mining | 15.0 | Mt | | Overall Strip Ratio | 6.6 | waste:ore | | Total Milled Tonnage from Underground Mining | 6.0 | Mt | | Total Milled Tonnage from Low-Grade Stockpile | 3.2 | Mt | | Total Milled Tonnage | 24.3 | Mt | | Average Annual Gold Production | 112 | koz | | Average Mill Feed Grade | 2.59 | g/t gold |

| Capital Costs | Values | Units | | Initial Capital, Direct Cost Estimate | $183.1 | C$M | | Initial Capital, Indirect Costs and Contingency | $97.4 | C$M | | Other Costs and Working Capital | $5.9 | C$M | | Total Initial Capital Costs | $286.3 | C$M | | LOM Sustaining Capital | $229.2 | C$M | | LOM Sustaining Capital, Indirect Costs and Contingency | $40.0 | C$M | | Total LOM Sustaining Capital | $269.2 | C$M | | Reclamation and Closure Costs | $57.7 | C$M | | Fisheries Offsetting and Wetland Compensation | $8.4 | C$M | | LOM Total Capital | $615.7 | C$M | | Capital Intensity (Initial Capital / Ounces Produced) | $147 | C$/oz |

| LOM Operating Costs | Values | Units | | Open Pit Mining (per tonne OP mined) | $4.86 | C$/t | | Underground Mining (per tonne UG mined) | $92.48 | C$/t | | Processing (per tonne milled) | $12.51 | C$/t | | Refining and Transport | $4.06 | C$/oz | | Water Management and Treatment (per tonne milled) | $0.95 | C$/t | | Site Support Costs (per tonne milled) | $10.14 | C$/t | | Total Operating Cost (per tonne milled) | $68.92 | C$/t | | Average Operating Cash Cost per Ounce Sold_1_ | C$862 (US$668) | $/oz | | Average All-In Sustaining Cost per Ounce Sold_1_ | C$1,031 (US$799) | $/oz |

| Financial Analysis | Values | Units | | Gold Price Assumption | $1,550 | US$/oz | | US$:C$ Exchange | 1:1.29 | | | Gold Price Assumption - C$ | $2,000 | C$/oz | | Pre-Tax NPV 5% | $805.0 | C$M | | Pre-Tax IRR | 29.0% | | | Pre-Tax Payback | 2.9 | years | | After-Tax NPV 5% | $547.0 | C$M | | After-Tax IRR | 24.4% | | | After-Tax Payback | 3.2 | years | | Pre-Tax Unlevered Free Cash Flow | $1,591.1 | C$M | | After-Tax Unlevered Free Cash Flow | $1,110.0 | C$M | | LOM Direct Income and Provincial Mining Taxes | $481.1 | C$M |

Notes:

1. See note below on "Non-IFRS Financial Measures".

Goldboro Gold Project - Mineral Resource Estimate The Mineral Resource, as announced on February 22, 2021 and presented in Table 2, was prepared by Independent Qualified Person Glen Kuntz, P. Geo. of Nordmin. The Mineral Resource is based on validated results of 635 surface and underground drill holes, for a total of 113,132.9 metres of diamond drilling, including 45,408.7 metres conducted by Anaconda, that was completed between 1984 and the effective date of February 7, 2021. Please refer to the technical report entitled "NI 43-101 Technical Report and Mineral Resource Estimate, Goldboro Gold Project, Eastern Goldfields district, Nova Scotia" dated February 22, 2021, which is available on the Company's SEDAR profile at www.sedar.com.

Table 2: Mineral Resource Statement for the Goldboro Gold Project

| Resource Type | Gold Cut-off

(g/t) | Category | Tonnes

('000) | Gold Grade

(g/t) | Troy Ounces | | Open Pit | 0.44 | Measured | 6,137 | 2.73 | 538,500 | | Indicated | 5,743 | 2.99 | 551,300 | | | | Measured + Indicated | 11,880 | 2.86 | 1,089,900 | | | | Inferred | 1,580 | 1.75 | 89,000 | | | | Underground | 2.60 | Measured | 1,384 | 7.36 | 327,700 | | Indicated | 2,772 | 5.93 | 528,600 | | | | Measured + Indicated | 4,156 | 6.41 | 856,200 | | | | Inferred | 3,726 | 5.92 | 709,100 | | | | Combined^ | 0.44/2.60 | Measured | 7,521 | 3.58 | 866,200 | | Indicated | 8,515 | 3.95 | 1,079,900 | | | | Measured + Indicated | 16,036 | 3.78 | 1,946,100 | | | | Inferred | 5,306 | 4.68 | 798,100 | | |

^ Combined Open Pit and Underground Mineral Resources; The Open Pit Mineral Resource is based on a 0.44 g/t gold cut-off grade, and the Underground Mineral Resource is based on 2.60 g/t gold cut-off grade.

Mineral Resource Estimate Notes

1. Mineral Resources were prepared in accordance with NI 43-101 and the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (2019). Mineral Resources that are not mineral reserves do not have demonstrated economic viability. This estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. 2. Open Pit Mineral Resources are reported at a cut-off grade of 0.44 g/t gold that is based on a gold price of C$2,000/oz (~US$1,550/oz) and a gold processing recovery factor of 96%. 3. Underground Mineral Resource is reported at a cut-off grade of 2.60 g/t gold that is based on a gold price of C$2,000/oz (~US$1,550/oz) and a gold processing recovery factor of 97%. 4. Assays were variably capped on a wireframe-by-wireframe basis. 5. Specific gravity was applied using weighted averages to each individual wireframe. 6. Mineral Resource effective date February 7, 2021. 7. All figures are rounded to reflect the relative accuracy of the estimates and totals may not add correctly. 8. Excludes unclassified mineralization located within mined out areas. 9. Reported from within a mineralization envelope accounting for mineral continuity.

Mining and Mine Design This PEA is preliminary in nature. In addition to the Measured and Indicated Mineral Resources, the mine plan presented includes Inferred Mineral Resources. Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that this PEA will be realized.

The Goldboro PEA utilizes the Mineral Resource with an effective date of February 7, 2021, that is conceptually mineable with both open pit and underground mining methods. Only portions of the Mineral Resource that fall within the constraints defined by the open pit and underground parameters of the PEA listed below are used to inform the PEA economics ("Mining Inventory").

Open Pit Economic limits for the Open Pit were determined using Geovia's Whittle™ 4.7 software that uses the Lerchs-Grossmann ("LG") algorithm. The LG algorithm progressively identifies economic blocks, taking into account waste stripping, that results in a highest possible total value mined within the open pit shell, subject to the specified pit slope constraints. The Pit Limit Analysis was evaluated on the West Goldbrook, Boston Richardson and East Goldbrook Gold Systems.

A 3D geological block model and other economic and operational variables were used as inputs into the LG program. These variables include overall pit slope angle, mining costs, processing costs, selling costs, metal prices, and other variables. The economic parameters used for the pit limit analysis are listed in Table 3.

Table 3: Pit Limit Analysis Parameters

| Parameter | Value | | Currency Used for Evaluation | C$ | | Reblocked / Regularized Block Size | 2 m x 2 m x 5 m | | Overall Slope Angle | Rock: Varied by Sector - Range 42o- 50o | | Overburden: 25o | | | Mining Cost | $3.50/tminedOverburden | | $5.00/tminedRock | | | + $0.02/t per 10 m for depths between 100 - 200 m | | | + $0.03/t per 10 m for depths +200 m | | | Process Cost, including milling, site support costs, tailings, rehabilitation | $24.50/tprocessed | | Selling Cost, including

transportation of doré and refining costs | $24.84/t.oz. | | % Payable | 99.95% | | Metal Price | US$1,550 per ounce of gold | | US$1 : C$1.29 | | | C$2,000 per ounce of gold | | | Process Recovery | Based on Grade - Recovery Curve | | (GRADE-(0.0262*LN(GRADE)+0.0712))/GRADE*100-0.083 | | | Mining Loss & Dilution | Regularized Block Model ~24% additional tonnes (dilution) ~7% reduction in Metal (loss) | | Resources Used for Pit Shell Generation | Measured + Indicated | | Pit Shell Selection | Revenue Factor RF 0.76 |

Three boundary constraints were used in the pit limit analysis for the Goldboro Deposit:

A 40 m (X-Y) offset from the Natural Gas pipeline easement, on the west side of the property; A 50 m (X-Y) offset from the edges of the Gold Brook Lake; and A 20 m (X-Y) offset from the centerline of Gold Brook.

The block models were created in Datamine using 2 m x 2 m x 2 m parent cell and variable sub-celling to 1 metre. For the open pit evaluation, the four block models (for West Goldbrook, East Goldbrook, Boston Richardson, Marker Horizon) were combined into one model. Default waste blocks and overburden blocks were added to the model. The model was reblocked and regularized using Geovia Surpac software. For the PEA analysis, the regularization was completed at a block size of 2 m x 2 m x 5 m. The envisioned selective mining excavator, at the onset of the analysis, would likely have a bucket width of ~ 2 m, the rock is planned to be mined on a 5 m operating bench height. An approximate 24% mining dilution factor and 7% mining loss factor were incorporated as a result of reblocking & regularizing the block model.

To classify the material contained within the open pit limits as material for processing or material for waste, the milling cut-off grade is used. This break-even cut-off grade is calculated to cover the costs of processing, general and administrative costs, and selling costs using the economic and technical parameters listed inTable 3. Mineral Resource material contained within the pit and above the cut-off grade is classified as potential mill feed ("PMF"), while resource material below the cut-off grade is classified as waste.

The cut-off grade has been estimated to be 0.44 g/t gold for the Open Pit. Table 4provides the Mining Inventory for the Open Pits by Mineral Resource category on a diluted basis.

Table 4: Planned OP Mining Inventory - Tonnage and Grade by Category

| Pit Area | Category | Diluted Tonnage (kt) | Diluted Grade (Au g/t) | Au Contained (koz) | | West Pit | Measured | 6,148 | 2.10 | 415 | | | Indicated | 3,208 | 2.03 | 210 | | | Total Measured & Indicated | 9,356 | 2.08 | 625 | | | Inferred | 563 | 1.37 | 25 | | | Waste Rock | 66,585 | | | | | Total Rock Mined | 76,504 | | | | East Pit | Measured | 1,707 | 2.37 | 130 | | | Indicated | 2,602 | 2.33 | 195 | | | Total Measured & Indicated | 4,309 | 2.34 | 324 | | | Inferred | 788 | 1.30 | 33 | | | Waste Rock | 32,612 | | | | | Total Rock Mined | 37,708 | | |

Underground The Goldboro underground Mining Inventory was determined using Deswik's Mineable Shape Optimizer ("MSO") software tool. The MSO tool uses the geological block model to generate shapes (e.g. - stopes, drifts, etc.) based on the economic and geometric parameters as listed in Table 5and Table 6. The underground Mining Inventory is a combination of the four separate zones: West Goldbrook, Boston Richardson, East Goldbrook and the Marker Horizon. The Mineral Resource spans along a strike length of 2,000 m to a depth of 480 m below surface.

The Goldboro underground mine plan was designed using a longitudinal retreat long-hole open stoping mining method with cemented paste backfill. Stope dimensions were designed on a 20 m level spacing and maximum 15 m length with an average mineralized width of 2.6 m. Stopes are designed to be accessed and excavated via overcut and undercut development drifts, which connect to central level accesses. Three main ramp systems connect levels and provide ventilation, mine access and secondary egress to four main portals to surface.

Table 5: Underground Design Parameters

| Parameter | Value | | Long-hole Open Stoping Size | | | Length (Maximum) | 15 m | | Height (Maximum) | 20 m (level spacing) | | Width (Average) | 2.6 m | | Average Stope Dip | 70.6o | | Development Drift Dimensions: | | | Ore Sill | 3.5 m (height) x 3.0 m (width) | | Operation Waste | 3.5 m (height) x 3.0 m (width) | | Level Access | 4.5 m x 4.5 m | | Ramp | 4.8 m x 4.8 m | | UG As Designed Mining Dilution & Recovery | UG Mining Dilution 19.3% UG Mining Recovery 91.3% | | Resources Used for MSO Generation and UG Design | Measured + Indicated + Inferred |

Table 6: Underground MSO Cut-off Grade Parameters

| Parameter | Value | | Currency Used for Evaluation | C$ | | Underground Mining Cost | $78.99/tprocessed | | includes assumptions for operating waste development, surface rehandle | | | Underground Support Cost | $20.54/tprocessed | | includes assumptions for indirect underground operating, technical services, infill diamond drilling | | | Process Cost | $17.80/tprocessed | | Site Support Costs | $14.82/tprocessed | | includes assumptions for general and administration, management, camp, and transportation | | | Operating Cost Marginal Allowance | $10.00/tprocessed | | 7% marginal allowance to cover a portion of capital costs | | | Selling Cost, including transportation of doré and refining costs | $24.84/t.oz. | | | | | UG MSO Cut-off Mining Dilution & Recovery Assumption | UG Mining Dilution 19.0% UG Mining Recovery 90.0% | | % Payable | 99.95% | | Metal Price | US$1,550 per ounce of gold | | | US$1 : C$1.29 | | | C$2,000 per ounce of gold | | Process Recovery | 96.75% | | Production Rate Assumption | 1,500 tonne per day | | Resulting MSO Cut-off Gold Grade | 3.0 g/t gold |