Allied Nevada Achieves Record Production At Hycroft

RENO, NV - Allied Nevada Gold Corp. reported preliminary operating results for the fourth quarter of 2012 and guidance for 2013.

Highlights: Record average quarterly mining rate of 210,000 tons per day achieved in the fourth quarter of 2012; Gold production up 55% quarter over quarter to approximately 46,900 ounces in the fourth quarter of 2012; Gold production in 2013 expected to more than double to 225,000 to 250,000 ounces; and Gyratory crushing system, new 20,000 gpm Merrill-Crowe plant and north leach pad expected to become operational in 2013.

"Our most impressive accomplishments in 2012 have been in advancing our permitting ahead of expectation which has cleared the path for construction and operation of the gyratory crusher and commencement of construction of the mill," commented Scott Caldwell, President and CEO of Allied Nevada. "We are confident that the challenges we have encountered with the heap leach operation are short term in nature and we are pleased to see the operation is moving in the right direction."

In the fourth quarter of 2012, we mined a record amount of material totaling 19.3 million tons, including 2.7 million tons of waste, 1.8 million tons of stockpiled mill material and 14.8 million tons of ore placed on the leach pads at average grades of 0.012 ounces per ton (opt) gold and 0.11 opt silver. Ounces placed on the leach pads in the fourth quarter totaled approximately 175,900 ounces of gold and 1.6 million ounces of silver. In 2012, tons mined totaled 60.7 million tons, including 27.1 million tons of waste, 3.3 million tons of stockpiled mill material and 30.3 million tons of ore placed on the leach pads at average grades of 0.012 opt gold and 0.21 opt silver. Total ounces placed on the leach pads in 2012 were approximately 371,000 ounces of gold and 6.5 million ounces of silver.

Production at Hycroft in the fourth quarter of 2012 was approximately 46,900 ounces of gold and 238,800 ounces of silver and sales were 41,745 ounces of gold and 214,902 ounces of silver. Caldwell said, We achieved record production and sales in the fourth quarter, however we did not meet stated guidance primarily due to slower than anticipated leach kinetics from Bay pit material placed on the leach pads in the third and fourth quarter and extremely cold and wet weather conditions in December. We continue to expect ultimate recovery of 51% for gold and 11% for silver for Bay pit material.

Allied has accomplished a number of significant milestones in advancing the expansion project in 2012, which include: receipt of a positive record of decision for the Heap Leach Expansion Environmental Impact Statement and permits to construct and operate the gyratory crusher and to begin construction of the mill, all ahead of expectations; completion of the 3.0 million square foot Lewis leach pad; completion of excavation of the gyratory pit and construction commencement of the crushing system; increasing the retort capacity of the currently operating Merrill-Crowe plant; construction and operation of the carbon strip plant; 15 new 320-ton Komatsu haul trucks, two 350-ton Caterpillar haul trucks, one EX5500 hydraulic shovel and four high capacity production drills; commencement of construction of the north and south leach pads and the new 20,000 gallon per minute capacity Merrill-Crowe plant; and secured delivery of the wire rope shovels to be delivered approximately one year earlier than planned.

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. We expect to move 94.1 million tons of material, including 46.5 million tons of ore at average grades of 0.012 opt gold and 0.25 opt silver. With the operation of the two wire rope shovels in the latter half of the year, the mining rate for the first half is expected to average 200,000 tons per day and will increase to average 290,000 tons per day in the second half. The overall strip ratio for 2013 is expected to be 0.6:1. 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), Caldwell said.

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 haul trucks, seven production drills and the first two wire rope shovels, which are expected to become operational in the third quarter and fourth quarter, respectively.

Allied expects 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.