Hycroft Mine Mill Expansion Project

Since 2011, Allied Nevada has been increasing its heap leaching capacity by adding larger capacity shovels and hauling equipment, adding a 21,500 gallon per minute capacity Merrill-Crowe plant and upgrading existing infrastructure.  In early 2014, the mine commissioned a three-stage crushing system to be used in the heap leach operation until the mill is brought online, at which time it will be re-tasked as the primary crusher for the mill.

We are working towards the construction of a 120,000 ton per day capacity milling facility that would allow us to process the large sulfide resource at Hycroft.  

The following highlights the anticipated production for the periods specified once the mill is operational:

Mining initially will be conducted using the existing fleet of mining equipment at Hycroft. Between 2017 and 2025 the company expects to add two additional wire rope shovels and 19 haul trucks. The current crushing circuit will act as the primary crusher for the mill, with the secondary and tertiary crushers being used for pre-crushing and pebble crushing, respectively.

Process FlowsheetThe major components of the milling facility are crushing (existing), grinding, flotation, concentrate regrind, concentrate leach, oxidation, tailing leach and Merrill-Crowe (existing).  

The current mill design is expected to have
three stream capabilities, including:

 

  • Mill Stream 1 (Whole ore leach) – highly oxidized transitional ore is ground and leached in the tailing leach plant.
  • Mill Stream 2 (Sulfide processing) – sulfidic ore is ground and floated to create a concentrate.  The concentrate is oxidized through the AAO plant and leached to extract the gold and silver.
  • Mill Stream 3 (Partially oxidized transition processing) – transitional ore, a material that is partially oxidized is ground and floated to create a concentrate.  The concentrate is oxidized through the AAO circuit and leached, while the remaining material that does not float (the flotation tailing) is leached directly.

Based upon the prefeasibility study, construction of the full plant is designed and scheduled to be completed in two phases.

Phase 1 of the mill construction is expected to include: one grinding line, comprised of one semi-autogenous (“SAG”) mill and two ball mills and a regrind mill, capable of processing up to 60,000 tpd; sulfide flotation cells; tailing leach tanks; oxidation tanks; an oxygen plant; starter tailing impoundment capacity; and the associated infrastructure for these facilities.  In Phase 1, a rail spur and additional power requirements are expected to be constructed. The flow sheet will be designed to process three streams: (1) whole ore; (2) sulfide with the AAO circuit; or (3) transitional material with the AAO circuit and a tailing leach plant.  Construction of Phase 1 is planned to commence in the last quarter of 2014, subject to financing, and is scheduled to be completed within 24 months, which would result in commissioning in the last quarter of 2016.

Construction of Phase 2 will begin upon successful commissioning of Phase 1. Phase 2 is designed to increase the mill capacity to 120,000 tpd by adding a second grinding line, comprised of an additional SAG mill and two additional ball mills, additional flotation cells and additional tanks for the AAO circuit commensurate with the increased capacity of the grinding circuit. Under the prefeasibility study, Phase 2 is projected to begin commissioning in the last quarter of 2017.

The following reports summarize the metallurgical testing on Hycroft concentrate that led to our decision to proceed with Atmospheric Alkaline Oxidation in the process flowsheet. 

Phase 1 Oxidation Testing Update: January 14, 2014 (1.5 MB)
Phase 2 Oxidation Testing Update: August 14, 2013 (240 KB)

 

Initial Capital Cost Breakdown 

($millions) PHASE 1 PHASE 2 TOTAL
Direct $525.4 $276.2 $801.6
Indirect $262.9 $138.3 $401.2
Owners cost $111.8 $7.4 $119.2
Total $900.1 $421.9 $1,322.0

Life-of-mine Operating Costs/ton

Mining cost/ton mined $   1.40
Milling cost/ton of ore milled (includes all treatment costs) $   8.83
Heap leach cost/ton of heap leach ore  $   2.53
G&A cost/ton of ore processed $   0.35
Net Proceeds Tax and refining cost/ton of ore processed $   0.45
Total operating cost/ton of ore processed $ 11.68

Net Present Value and Internal Rate of Return Sensitivities

The base case economic analysis indicates that the project has an after-tax Internal Rate of Return (IRR) of 26.5% with a payback period of 6.2 years with an after-tax Net Present Value (NPV) of $1.7 billion at a 5% discount rate.   The economics incorporate updated metallurgical test work and operating costs and are based on long-term prices of $1,300 per ounce of gold and $21.67 per ounce of silver.

Metal Prices ($/oz) NPV @ 0% NPV @ 5% After-tax IRR
Au Ag $ billions $ billions %
$1,200 $20.00 $2.3 $1.1 17.5%
$1,300 $21.67 $3.2 $1.7 26.5%
$1,400 $23.33 $4.0 $2.2 36.8%