Allied Nevada Reactivates the Hycroft Mine

With mining now under way at the restarted Hycroft gold-silver mine in central Nevada, owner Allied
Nevada is targeting a production rate of about 90,000 oz/y of gold by July 2009.
(Photo courtesy of Allied Nevada Gold Corp.)
Allied Nevada Gold Corp. announced on January 6, 2009, that it has initiated production of gold-silver doré at its reactivated Hycroft heap-leach mine near Winnemucca, Nevada. Production during December 2008 totaled about 1,000 oz of gold and 3,000 oz of silver. A new refinery at the property will process the doré into gold and silver bullion. Allied Nevada is targeting a production rate of about 90,000 oz/y of gold by July 2009. Capital expenditures to start of production were estimated at $57.4 million.

Allied Nevada was formed by Vista Gold in May 2007 through the spin-off of Vista’s Nevada properties, including the Hycroft mine. Allied Nevada has since significantly expanded Hycroft’s resource inventory and reactivated the project’s Brimstone open-pit, which was mined between 1994 and 1998. Gold resources currently total 1.14 million oz proven and probable, 841,849 oz measured and indicated, and 6 million oz inferred. The Brimstone pit is expected to produce approximately 647,000 oz of gold and 3 million oz of silver over the next seven years.

Gold and silver are being produced by a run-of-mine heap-leach process and a Merrill Crowe gold recovery plant. Based upon historic gold recovery from Brimstone ores, gold recovery is expected to average 56.6%. Average cost of sales per ounce of gold for the life of the mine is estimated at $340.

In March 2008, Allied Nevada purchased used Komatsu equipment for mining in the Brimstone pit for $13.9 million. The fleet consists of five 200-ton haul trucks, two 28-yard wheel loaders, two blasthole drills, and various pieces of support equipment. Mining and leaching activities began in mid-year 2008.

As featured in Womp 09 Vol 01 -