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Hycroft Gold Mine

The Hycroft gold mine is located in the Sulfur Mining district, 54 miles west of Winnemucca and straddles Humboldt and Pershing Counties in Nevada. The mine encompasses approximately61,389 acres, including both patented and unpatented claims. While in production under previous owners (1987-1998), Hycroft produced over one million ounces of gold using an open pit heap leaching process. Since Allied Nevada restarted the mine in 2008, we have sold over 500,000 ounces of gold and 2.2 million ounces of silver.

Hycroft Production Profile (Allied Nevada operated)

Hycroft Production Profile (Allied Nevada operated)

Hycroft General Description
Hycroft operates twenty-four hours a day, seven days a week. Currently, open pit mining of heap leach mineralization is conducted by simple drill, blast and truck haulage of ore to the north heap leach pad complex. Lower grade ore is placed as run-of-mine ore and higher grade ore will be crushed using large three-stage crushing plant. Current performance of the heap leach pad shows run-of-mine recoveries of approximately 50% for gold and 12% for silver. Metallurgical testing suggests crushing higher grade ore could improve recovery by approximately 6-10% for gold and 10-15% for silver, though this may vary slightly depending on the type of material crushed. Solution from the heap leach pad is processed through the 21,5000 gpm capacity Merrill-Crowe plant. The metals are further processed in the refinery to create doré bars, which are sold.

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 CAT 7495 electric rope shovels.

We are now focused on the next stage of expansion at Hycroft, which would include a sulfide milling and oxidation plant to allow us to process the large sulfide reserve located below the oxide reserve currently being mined. We expect to complete a prefeasibility study by the end of the first quarter of 2014 and a feasibility study by the end of the third quarter of 2014.

The March 6, 2013 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.