Allied Nevada Achieves 2014 Production Expectations
RENO, NV - Allied Nevada Gold Corp. President Randy Buffington said, We achieved our second quarter 2014 production expectations with gold production of 56,864 ounces and silver production of 481,151 ounces, increases of 45% and 262%, respectively, compared with the second quarter of 2013. Gold sales of 57,050 ounces and silver sales of 474,832 ounces in the second quarter of 2014 representing a 37% and 225% increase over the same 2013 period sales, respectively. We maintain our original 2014 projections for full year production and sales of 230,000 to 250,000 ounces of gold and 1.7 to 2.0 million ounces of silver. Adjusted cash costs per ounce (1) of $806 in the second quarter of 2014 were as expected and below our annual guidance range. Adjusted cash costs per ounce1 are expected to increase to between $825 and $850 for the second half primarily due to a higher anticipated strip ratio as we remove waste to open new areas of ore for 2015. Net income during the second quarter of 2014 was $4.4 million, or $0.04 per share, which is similar to net income of $4.2 million, or $0.04 per share, in the second quarter of 2013.
In April, we completed the sale of a 75% controlling interest in the Hasbrouck and Three Hills properties to West Kirkland Mining for $20.0 million (including the US$0.5 million non-refundable deposit received in the first quarter of 2014) pursuant to the Letter Agreement signed by the companies in January 2014.
In May, we completed the Hycroft mill expansion prefeasibility study and filed a National Instrument 43-101 Technical Report in Canada with those results. The prefeasibility study estimated an internal rate of return(2) of 26.5% and a net present value2 of $1.7 billion and included a flow sheet that allowed us to create dora on site.
Gold production and sales were 51% and 69% higher in the first half of 2014 when compared with the same period in 2013. The 57,050 gold ounces sold during the second quarter of 2014 represented the fourth consecutive quarter the company has met, or exceeded, the gold ounces sold targets as Hycroft continues to operate at its steady-state heap leach capacity. During the first six months of 2014, the number of silver ounces sold more than doubled from the same period of 2013 as a result of increased silver ore grades and decreased use of the carbon columns to process solution. During the first six months of 2014, approximately 85% of the gold ounces sold was from solution processed through our Merrill-Crowe plants which yield higher silver concentrations and recoveries than solution processed through the carbon columns, resulting in a silver to gold ounces sold ratio of 7.6:1.0, compared to 4.7:1.0 for the same period of 2013.
Buffington said, During the second quarter and first six months of 2014, our total tons mined slightly exceeded our planned tons and we crushed our first production ore tons. In mid-June, the temporary repairs were completed to the crushing system and it was placed back in operation at a capacity sufficient to support our heap leach operations. During the second half of 2014, we plan to selectively crush high-grade ore with the crushing system to improve metal recoveries.
We continue to expect our 2014 full year metal sales will approximate 230,000 to 250,000 ounces of gold and 1.7 million to 2.0 million ounces of silver. Average adjusted cash costs per ounce(4) for first six months of 2014 were $807, and we expect an increase to within the guidance range of $825 to $850 per ounce for the second half of 2014, primarily due to increased stripping expected in the second half of the year to allow access to more ore in 2015.