|
Company Profile
Allied Nevada is a US-based gold mining and
exploration company, which operates its wholly
owned Hycroft gold mine located near Winnemucca,
Nevada. The Company also owns more than 100
advanced and early stage exploration properties
located throughout the State of Nevada. The
Company's focus is on internal growth
strategies, including the development of the
Hycroft mine from a run-of-mine heap leach
operation to a world-class, large-scale heap
leach a milling operation. This will be
accomplished through a logically staged growth
plan involving the acceleration of the current
mining rate for the heap leach operation, which
is currently underway, construction of a
gyratory crushing system expected to be
completed mid-2013 and construction of a milling
facility to treat sulfide material.
Gold production is expected to increase from
225,000-250,000 ounces in 2013 to average over
550,000 ounces for the ten-year period beginning
in 2015. Silver production during those same
periods is expected to increase from
approximately one million ounces in 2015 to
average over 25 million ounces starting in 2015.
Beyond Hycroft, the Company has developed
exploration programs at a number of its advanced
exploration properties. The Company has
completed several drill programs at the
Hasbrouck Project, located near Tonopah, Nevada.
Drilling in 2012 provided encouraging results at
the nearby Three Hills, located five miles north
of the main Hasbrouck deposit, and have
indicated a number of targets which will be the
focus of drilling in 2013. A PEA developed in
2012 has determined that a heap leach operation
could be built with robust economic returns.
Additional drilling is necessary to continue to
improve the life of the mine and that will be
the focus for the next year as we initiate the
permitting process.
Hycroft Operations
Operations at Hycroft currently involve open pit
mining and run-of-mine heap leaching of oxide
ore from the Brimstone and Bay pits. The Company
has been increasing the mining rate over the
last two years with the addition of larger scale
mining equipment including Komatsu 320-ton haul
trucks and Hitachi EX5500 shovels. In 2013, we
expect the first two wire rope shovels brought
into operation, one of which has double the
capacity of an EX5500. Additionally, the
gyratory crushing system and 20,000 gallon per
minute Merrill-Crowe facility are expected to
come online mid-year 2013 and are expected to
improve overall heap leach recoveries and
processing time for pregnant leach solution.
Gold and silver sales at Hycroft are expected to
increase in 2013 to approximately 225,000 to
250,000 ounces of gold and 1.5 million to 1.8
million ounces of silver. Sales in the first
half of the year are expected to be
approximately 90,000 to 100,000 ounces of gold,
increasing in the second half of the year. A
number of critical projects must be completed to
achieve the higher end of the stated guidance
range of metal sales. The stated guidance
assumes that there will be no material delays in
the start-up of the North Leach Pad, new
Merrill-Crowe facility or operation of
additional mobile equipment. Adjusted cash cost*
for 2013 is expected to be in the range of $565
to $585 per ounce (with silver as a byproduct
credit).
Capital expenditures in 2013 are expected to
total approximately $374.0 million, of which
$130.8 million is expected to be financed with
capital leases. Of the $374.0 million in capital
expenditures expected in 2013, $21.7 million is
for sustaining capital and the remainder is to
advance the Hycroft expansion project and
includes equipment, infrastructure, engineering,
permitting, and support programs. Major
additions to mobile equipment in 2013 include
nine additional 320-ton haul trucks, seven
additional production drills and the first two
wire rope shovels, which are expected to become
operational in the third quarter and fourth
quarter, respectively.
We expect to begin stacking ore on the new leach
pad expansion, the north leach pad, by the end
of the second quarter of 2013. In addition, the
gyratory crushing system and 20,000 gallon per
minute Merrill- Crowe facility are expected to
come online in the third quarter of 2013.
Company-wide exploration expense is projected to
be $7.5 million in 2013 and does not include
capitalized drilling. In addition to corporate
office expense and annual land holding costs of
approximately $3.2 million, we expect
exploration dollars in 2013 to be directed
towards follow-up drilling of the encouraging
results encountered in the Three Hills area of
the Hasbrouck project and to test Hycroft
regional targets identified in the southern
region of the Hycroft property claim block.
The April 4, 2012 NI 43-101 compliant technical
report contains further information regarding
the oxide expansion and can be accessed in the
Hycroft operations section on this website or at
www.SEDAR.com.
* Adjusted cash costs is a
non-GAAP financial measure, calculated on a per
ounce of gold sold basis, and includes all
direct and indirect operating cash costs related
to the physical activities of producing gold,
including mining, processing, third party
refining expenses, on-site administrative and
support costs, royalties, and mining production
taxes, net of by-product revenue earned from
silver sales. Adjusted cash costs provides
management and investors with a further measure,
in addition to conventional measures prepared in
accordance with GAAP, to assess the Company’s
performance of the mining operations and ability
to generate cash flows over multiple periods.
Non-GAAP financial measures do not have any
standardized meaning prescribed by GAAP and,
therefore, may not be comparable to similar
measures presented by other companies.
Accordingly, the above measures are intended to
provide additional information and should not be
considered in isolation or as a substitute for
measures of performance prepared in accordance
with GAAP.
|
|