Allied Nevada Optimizes Hycroft Expansion Capital
Allied Nevada achieved the estimated cost reduction for phase-one development by re-sequencing construction of infrastructure and certain project components that were previously scheduled to be built in the first phase, but that would not deliver significant cash flow until the second phase is fully operational.
Allied Nevada currently operates Hycroft as an open-pit, heap-leach operation. Solution from the heap-leach pad is processed through a Merrill-Crowe plant, and metals are further processed in a refinery to produce doré bars. As of early December, the company was forecasting 2014 full-year metal sales of 210,000 to 220,000 oz of gold and 1.8 million to 1.9 million oz of silver.
Subject to securing necessary financing, the phase-one mill line is planned to be operational in 2017. Combined annual average sales for the combined heap-leach operation and single-line mill during the first five years of mill operation are forecast at 340,000 oz of gold and 15.1 million oz of silver at adjusted cash costs of between $575 and $600/oz.
Allied Nevada President and CEO Randy Buffington said, “We reviewed the construction sequence as presented in the feasibility study and determined that, in this gold price environment, we needed to identify which components delivered the maximum cash flow, while spending the minimum up-front capital. We believe this plan achieves that goal and also provides flexibility in our financing efforts while still delivering growth at Hycroft.”