Anaconda Mining Inc report that it has received positive preliminary metallurgical test results from the San Gabriel Iron Project located in northern Chile. Anaconda holds a 50% interest in a large project area that includes the San Gabriel Project through Minera Hierro San Gabriel SA.

MHSG sent 326 kilograms of composite drill core material to SGA Laboratory a well known research centre for iron ore beneficiation and metallurgical testing located in Liebenburg-Othfresen, Germany for testing purposes. SGA (Studiengesellschaft fur Eisenerzaufbereitung) is a joint venture laboratory with the German steel industry and is recognized worldwide for its research facilities for iron ore beneficiation, pelletizing, sintering and metallurgical testing of iron ore.

The iron grades of the samples sent ranged between 22% to 43% total iron. The magnetite mineralization was classified into three types: massive, clast and matrix dominated mineralization. SGA was able to produce a high quality pellet feed concentrate from the composite sample provided. Further testing revealed that a sinter feed concentrate between 3 and 1 mm can be produced from a sample of the ore received.

Further, the preliminary test results indicate that an iron concentrate can be produced which will be low in deleterious elements; specifically phosphorous, sulphur and alumina. Further metallurgical testwork is now planned to determine the detailed parameters of such iron concentrate.

Mr Lew Lawrick president and CEO of Anaconda said that "This is a significant positive development as this preliminary testwork substantiates that San Gabriel magnetite ore can be processed into a high value product for the global steel industry. The potential to produce a fine ore sinter feed product from a portion of the deposit has significant positive implications for offtake opportunities and thus potential development initiatives."

As part of ongoing commercialization studies, a process flow sheet using a dry process including a high pressure grinding roll press and a regrind circuit to reduce the amount of mixed ores will be tested in due course to produce iron concentrate. If successful, a pilot plant test of 5 tons of magnetite mineralization will be necessary for feasibility study purposes.