Yukon-Nevada Reports Progress At Jerritt Canyon

 

VANCOUVER, BC - Yukon-Nevada Gold Corp. reported that during the quarter Jerritt Canyon in Nevada, shipped 13,163 ounces of gold from stockpiles and mining operations, compared with 13,180 ounces of gold shipped in the first quarter of 2011. Total ounces shipped remained comparable despite a lengthy scheduled shutdown from January 6, 2012 to February 3, 2012 to complete a winterization and refurbishment program designed to improve the overall throughput and reliability of the mill.

On January 6, 2012 Jerritt Canyon commenced an extended, scheduled shut down to perform significant maintenance and overhaul of key areas on the mill. This included completing construction of a new drying facility, reconfiguring the conveying system in fine crushing, and installation of a new Distributed Control System ("DCS") for the entire plant. Commissioning of the new components commenced on January 23, 2012 and continued through February 1, 2012 with the first day of production with both roasters operating on February 3, 2012.

Subsequent to the February 2012 re-start, production from the mill was less than expected for the remainder of the first quarter, averaging 1,400 tons per day which resulted in total production of 11,659 ounces during February and March 2012. The underperformance was a result of problems encountered during commissioning of the new DCS system and calibration of instrumentation, dryer bag-house, and the dryer burner. Troubleshooting and instrument calibration took approximately six weeks to complete. Additional issues were encountered with the new bag-house fans and pukers which were rectified by mid-February and have operated properly since.

In early March, additional issues with the new ore dryer and bucket elevator were identified. The Company is currently working with the ore dryer manufacturer and has put in procedures to mitigate the impact of the ore dryer issues until a permanent solution can be put in place.  With the identification and rectification of these issues, the newly commissioned equipment is operational and is expected to achieve targeted average production of over 3,600 tons per day in the second quarter of 2012.

During the quarter Small Mine Development, LLC ("SMD") delivered 91,265 tons to the mill, containing an estimated 9,096 ounces, from the Smith mine during the three months ended March 31, 2012. The deliveries in the quarter averaged 960 tons a day as SMD continues towards a production of 1,200 tons per day targeted for the second quarter of 2012.

At the Company operated SSX-Steer underground mining complex, the Company continued to ramp up the production rates delivering 26,305 tons containing an estimated 2,988 ounces during the three months ended March 31, 2012; an increase from the previous quarter's delivery of 9,051 containing an estimated 1,117 ounces. Delivery of additional key equipment at SSX-Steer included three underground trucks and two drill jumbo's. In the second quarter of 2012, delivery is expected for one new drill jumbo, one new bolter, and four new haul trucks equipped with boxes especially designed for hauling backfill. After receipt of this equipment the operation will be fully outfitted and ore production is expected to be at 1,200 tons per day.

A total of 11 underground diamond drill holes totaling 10,332 feet were completed in Zone 4 at Smith Mine in the first Quarter of 2012. Assays are in progress.

In achieving the targeted production rate of 150,000 ounces of gold under steady state operations, the Company is focusing on ramping up production from the SSX-Steer mine which will be complete towards the end of the second quarter with the delivery of the remaining underground trucks and other equipment. As well, the Company will continue to process available stockpiles and receive ore from the Smith mine at an increasing rate. Longer term the Company is looking at profitable opportunities to acquire mineable assets in the area and process third party ore under a toll milling arrangement. The Company will also continue building the necessary infrastructure and making equipment purchases in order to open a third mine on the property, Starvation Canyon, located on the south end of Jerritt Canyon.

The surface exploration program in 2011 has identified a number of areas of interest and proven the viability of the East and West Mahala resources which lie between the Smith and the SSX-Steer mine. Additional survey work in the Starvation area has identified further areas of interest that will need to be explored in the 2012 drill program as well.

The company's address is 688 West Hastings Street, Vancouver, BC V6B 1P1, (604) 688-9427, fax: (604) 688-9426.