Vancouver – Yukon-Nevada Gold (YNG-T) has added roughly 429,000 oz. gold to the resource at its Jerritt Canyon project in Nevada with a resource update.
The update, which incorporates a new 3-D geological model and drilling between January 2008 and 2011, represents a 21% increase from the 2007 year-end level. The underground resource, spread over several deposits, now stands at roughly 8.1 million measured and indicated tonnes grading 7.99 grams gold per tonne for 2.07 million contained oz. gold. Inferred resources, again contained in several deposits, add 3.5 million tonnes grading 6.65 grams gold for 751,000 oz. gold.
Reserves stand at 1.3 million proven tonnes grading 6.62 grams gold for 271,000 oz. gold, and 2.7 million probable tonnes grading 5.18 grams gold for 446,000 oz. gold.
While the overall contained gold went up, the Burns Basin open pit resource went down after the company discovered non-documented backfill from previous mining. There, the company lost over a million tonnes of measured and indicated resources, resulting in a loss of 635,100 contained oz. gold.
The company states that gold in the Jerritt Canyon ore deposits occurs as free particles of intergranular, native gold, on or within pyrite, or in association with sedimentary carbonaceous material. Because of the sulfide and carbonaceous affinities, most of the gold deposits at Jerritt Canyon require fine grinding and oxidation to permit the gold particles to be liberated by standard, carbon-in-leach cyanidation.
In December the Federal Mine Safety and Health Administration sent a letter to Yukon-Nevada informing the company that its Jerritt Canyon mill had a potential pattern of violations. Yukon-Nevada has contested most of the alleged violations as invalid, but is working with the administration to resolve the issue.
In the quarter ending September 30, Yukon-Nevada lost US$18 million, compared with a loss of US$103.8 million in the third quarter of 2010.
Yukon-Nevada is working to complete a US$150-million mill winterization and refurbishment that includes a new ore dryer and crushing circuit and a new tailings storage facility. To pay for the investment the company closed a US$120-million forward gold purchase agreement with Deutsche Bank for the delivery of 173,880 oz. gold over four years. Deutsche Bank also owns roughly 11% of Yukon-Nevada.
The company produced roughly 21,300 oz. gold in the quarter, compared with 17,200 oz. gold in the same quarter in 2010. While production was up, it was also hampered by rolling shutdowns from both planned and unplanned work.
Yukon-Nevada’s mill has an engineered capacity of 6,000 tons per day, but is only permitted to 4,320 tonnes per day. The company’s roaster is one of only three in the region and the only one with spare capacity. The company states that the replacement value for its roaster is in excess of a billion dollars.
The company also owns the Ketza River historic mine in Yukon, with permitting in progress to restart the mine and mill. The project hosts 2.4 million tonnes grading 5.46 grams gold per tonne for 418,000 contained oz. gold.
Yukon-Nevada’s share price closed up half-a-cent at 26.5¢ on the resource update. The company’s share price traded at a 52-week high of 83¢ in February and hit a 52-week low of 24¢ in December. The company has 930.6 million shares outstanding, or 1.08 billion fully diluted.
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