Anaconda Mining Inc. and New Island Resources Inc. Announce Signing of Arrangement Agreement

Anaconda Mining Inc. and New Island Resources Inc. are pleased to announce they have entered into an arrangement agreement (the “Arrangement Agreement”) in connection with their previously announced transaction, whereby Anaconda will acquire New Island’s interest in the Pine Cove Mine and Mill.

The Transaction will be structured as a Plan of Arrangement under the Business Corporations Act (Alberta) between Anaconda and New Island.

Highlights of the Transaction

The Arrangement will result, through a series of transactions, in New Island selling to Anaconda all of its interest in the Pine Cove Mine and Mill in exchange for common shares in Anaconda (each, an “Anaconda Share”) on the basis of a share exchange ratio of 0.45 of an Anaconda Share for each one common share of New Island (each, a “New Island Shares”). New Island will then immediately distribute the Anaconda Shares to its shareholders (other than Anaconda) by way of a return of capital. Former shareholders of New Island (the “Tendered New Island Shareholders”) who tendered their shares in New Island (the “Tendered New Island Shares”) to Anaconda pursuant to Anaconda’s takeover bid offer in the summer of 2010 (the “Offer”) and received 0.42 of an Anaconda Share for each one New Island Share they tendered, will have issued to them by Anaconda an additional 0.03 of an Anaconda Share for each one New Island Share they tendered. In addition, pursuant to the Arrangement, Anaconda will return to the Tendered New Island Shareholders the New Island Shares it acquired from them pursuant to the Offer.

Board Recommendation

The Arrangement has been unanimously approved by the boards of directors of both Anaconda and New Island and will be subject to customary conditions, including a favourable vote of 66 2/3% of the New Island common shares voted at a special meeting of shareholders called to approve the transaction and the receipt of court and necessary regulatory approvals. In addition, the Arrangement resolution must be approved by a simple majority of the votes cast by the minority shareholders of New Island. The board of directors of New Island unanimously recommends that holders of New Island Shares vote in favour of the transaction.

The Arrangement Agreement includes a commitment by New Island not to solicit or initiate discussions concerning alternative transactions, including the acquisition or sale of material assets or subsidiaries of New Island. Anaconda and New Island have each agreed to pay to the other a break fee of C$300,000 in certain circumstances. New Island has also granted Anaconda the right to match competing offers.

In addition to the approximate 49.97% ownership of New Island acquired by Anaconda pursuant to the Offer, holders of approximately 12.82% of the outstanding New Island shares, which includes all directors and officers of New Island, have agreed to vote in favour of the Arrangement.

Advisors and Fairness Opinions

Salman Partners Inc. were engaged by New Island as a financial advisor to provide financial advice to the New Island board of directors and its opinion as to the fairness, from a financial point of view, of the consideration to be received by the New Island Shareholders pursuant to the Arrangement. The fairness opinion delivered by Salman Partners states that, as of the date of their opinion and subject to and based on the various considerations referred to in their opinion, the consideration to be received by New Island Shareholders pursuant to the Arrangement is fair, from a financial point of view, to New Island Shareholders.

Cassels Brock & Blackwell LLP is acting as external legal counsel to Anaconda and Cox & Palmer is acting as external legal counsel to New Island.

Closing

The Arrangement is subject to New Island obtaining the required shareholder approval at a special meeting of its shareholders and to the receipt of court and all necessary regulatory approvals.

An management information circular for the special shareholders meeting of New Island is expected to be mailed by December 21, 2010 and New Island will hold the special meeting to approve the Arrangement on January 11, 2011. The Arrangement is scheduled to close shortly thereafter. The record date for the special meeting has been fixed as December 17, 2010.