Allied Nevada To Expand Hycroft Gold Production

The commissioning phase of the recently reopened Hycroft gold mine near Winnemucca, Nev., will be completed by the middle of the year and Allied Nevada Gold (ANV-T, ANV-N) says it expects the mine will produce about 90,000 oz. of gold this year.

By the end of last year, Hycroft was operating at planned production levels of 2.1 million tons of ore and waste mined per month. The ore release portion of the first phase of mining is expected to take place in the first quarter.

Allied Nevada says it believes the mine, on the western flank of the Kamma Mountains, will produce 20,000 oz. gold in the first half of 2009 and 70,000 oz. in the second half, and anticipates the average cost of sales per oz. of gold will be between US$460 and US$480 per oz. for the full year.

According to a technical report released in October 2008, Hycroft’s proven and probable reserves of 73 million tons grading 0.016 oz. gold per ton for total contained gold of 1.1 million oz., are economic at a three-year historical gold price average of US$720 per oz. Gold recovery by the run-of-mine, heap-leach process is estimated at 56.6% for both proven and probable reserves.

Based on current proven and probable reserves and an expected annual production rate of 90,000 oz. gold, Hycroft should produce gold for about seven years, Allied Nevada forecasts.

On March 31, Allied Nevada released an updated resource estimate based on 3,626 drill holes. The new estimate demonstrates that measured and indicated resources increased to 5.9 million oz. gold from 1.9 million oz. in September 2008.

The new estimate came in at 440.9 million tonnes grading 0.40 gram gold per tonne using a cutoff grade of 0.17 gram gold per tonne for oxide material and 0.45 gram gold for sulphide material.

The company reported that the bulk of the increase in oxide measured and indicated gold ounces was due to results from metallurgical test work on material contained in the oxide/sulphide boundary zone. Inferred gold resources declined as more inferred ounces were converted to the measured and indicated category.

Silver measured and indicated resources increased to 117.5 million oz. (104.6 million tonnes grading 34.39 grams silver per tonne) from 22 million oz. in September 2008. Inferred silver resources rose to 177.9 million oz. (114.9 million tonnes grading 48.17 grams silver) from 67.6 million oz.

The Hycroft development project involved reopening the Brimstone oxide open-pit mine, which had been on care and maintenance since 1998.

Historically, gold mineralization was thought to be limited to the oxide cap of a large sulphide gold and silver system there. But Allied Nevada discovered that a portion of the oxide cap has extensive sulphide gold and silver mineralization lying beneath it.

Allied Nevada reported a loss of US$79.6 million in 2008, up over its 2007 loss of US$11.3 million.

Management attributed the greater losses to a combination of: mineral property impairments (US$39 million); mine startup costs (US$12 million); an increase in exploration, property evaluation and holding costs (US$10.4 million); and general corporate and administrative costs (US$4.7 million).

The company ended the year with US$16.5 million in cash and equivalents.

Working capital as at Dec. 31, 2008, totalled US$12.9 million, down from US$19.7 million a year earlier.

At presstime in Toronto, Allied Nevada was trading at about $7.24 per share. It has a 52-week trading range of $2.06-8.19 per share and 57.4 million shares outstanding.

Print

Be the first to comment on "Allied Nevada To Expand Hycroft Gold Production"

Leave a comment

Your email address will not be published.


*


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.

Close