Allied Nevada Announces Hycroft Mill Expansion Prefeasibility Study
Results With 26.5% IRR(1) and $1.7 Billion NPV(1)
On-Site Oxidation and Staged Construction Schedule Reduce
Construction and Operating Risks
RENO, NEVADA--(Marketwired - Apr 22, 2014) - Allied Nevada Gold
Corp. ("Allied Nevada", "we', "us", "our" or the "Company")
(TSX:ANV)(NYSEMKT:ANV) is pleased to provide a summary of the
prefeasibility study results for the Hycroft mill expansion,
completed by M3 Engineering and Technology ("M3") in association
with the Company. M3 developed the process flow sheet, capital cost
estimate, operating cost estimate and financial model, while Allied
Nevada developed the mineral reserves and mine plan. The
prefeasibility study assumes a two-phase construction plan for the
mill expansion. With the successful completion and positive results
of the Ambient Alkaline Oxidation ("AAO") pilot plant, we have
incorporated the onsite oxidation of the sulfide concentrate into
the prefeasibility study, which should allow us to produce doré
on-site for sale (as compared with the previous plan of selling
concentrate).
Key Highlights of the Prefeasibility Study
Results of the prefeasibility study, based on a $1,300 per ounce
of gold price and a $21.67 per ounce of silver price, include the
following:
- Average annual production for the first five years of full
production (2018-2022) of approximately 450,000 ounces of gold and
21.0 million ounces of silver (approximately 800,000 ounces gold
equivalent(2))
- Average adjusted cash costs per ounce(3) for the first five
years of full production of $478 annually (with silver as a
byproduct credit)
- Mining and processing life of 20 years
- Two phase construction schedule reduces construction risk and
moderates capital spending program; 60,000 tons of ore per day
("tpd") capacity in Phase 1 and increasing to 120,000 tpd in Phase
2
- Addition of on-site AAO circuit to oxidize and process sulfide
concentrate to produce doré on-site
- Phase 1 capital of $900 million(1) to deliver annual production
of 550,000 ounces gold equivalent in 2017
- Phase 2 capital of $422 million to increase average annual
production to approximately 800,000 ounces gold equivalent
beginning in 2018
- Life-of-mine ("LOM") after tax internal rate of return
("IRR")(1) of 26.5%
- LOM net present value ("NPV")(1) of $1.7 billion (at a 5%
discount)
"I have stated repeatedly since joining Allied Nevada that I
believe that the Hycroft mill expansion is a project that needs to
be built," commented Randy Buffington, President and CEO. "There
aren't many large projects today located in politically stable
jurisdictions with complimentary infrastructure like this one. The
ability to produce doré on-site using the AAO process is a
significant step toward derisking the project. I believe this
prefeasibility study addresses many of the risks associated with
the previous plans, while maintaining robust financial
returns."
The following summarizes LOM assumptions for the mill expansion
project:
|
|
|
LOM (2014-2033) |
|
Total tons of ore processed (000s) |
|
934,020 |
|
Grade - Au (ounces per ton) |
|
0.011 |
|
Grade - Ag (ounces per ton) |
|
0.50 |
|
Total gold ounces sold (000s) |
|
7,366 |
|
Total silver ounces sold (000s) |
|
328,606 |
|
Total gold equivalent ounces sold (000s) |
|
12,843 |
|
Total revenue at $1,300/oz Au and $21.67/oz Ag (millions) |
|
$16,696 |
|
Revenue per ton processed |
|
$17.88 |
|
Mining cost per ton mined |
|
$1.40 |
|
Milling cost per ton of ore milled (includes all treatment
costs) |
|
$8.83 |
|
Heap leach cost per ton of ore heap leached (includes
crushing) |
|
$2.53 |
|
G&A cost per ton of ore processed |
|
$0.35 |
|
Nevada Net Proceeds Tax and refining cost per ton of ore
processed |
|
$0.45 |
Construction path
Based upon the prefeasibility study, construction of the full
plant is designed and scheduled to be completed in two phases.
Phase 1 of the mill construction is expected to include: one
grinding line, comprised of one semi-autogenous ("SAG") mill and
two ball mills and a regrind mill, capable of processing up to
60,000 tpd; sulfide flotation cells; tails leach tanks; oxidation
tanks; an oxygen plant; starter tails capacity; and the associated
infrastructure for these facilities. In Phase 1, the rail spur and
power requirements are expected to be constructed. Current
estimates assume that the oxygen plant will be constructed by a
third party vendor, which is accounted for in operating costs. The
flow sheet will be designed with three streams to process; (1)
whole ore; (2) sulfide with the AAO plant; or (3) transitional
material with the AAO circuit and a tails leach plant. Our
projections are based on construction of Phase 1 commencing in the
last quarter of 2014, which is dependent on our ability to secure
the necessary financing. Phase 1 is scheduled to be completed
within 24 months, which would result in commissioning in the last
quarter of 2016.
Upon successful commissioning of Phase 1 of the mill expansion,
we intend to begin construction of Phase 2. Phase 2 is designed to
increase the mill capacity to 120,000 tpd by adding a second
grinding line, comprised of an additional SAG mill and two
additional ball mills, additional flotation cells and additional
tanks for the AAO circuit commensurate with the increased capacity
of the grinding circuit. Under the prefeasibility study,
construction of Phase 2 is currently projected to begin
commissioning in the last quarter of 2017.
|
|
|
|
|
|
|
|
PHASE 1 |
|
PHASE 2 |
|
Expansion includes: |
- |
Mill infrastructure |
- |
1 x SAG mill |
|
|
- |
1 x SAG mill |
- |
2 x Ball mills |
|
|
- |
2 x Ball mills |
- |
Increased flotation capacity |
|
|
- |
Partial flotation circuit |
- |
Additional tanks for AAO and tails leach circuits |
|
|
- |
Partial AAO circuit |
|
|
|
|
- |
Oxygen plant (over the fence) |
|
|
|
|
- |
Tails leach plant |
|
|
|
|
- |
Rail spur and trona handling |
|
|
|
|
- |
Power line |
|
|
|
|
- |
Tails impoundment |
|
|
Flow Sheet Description and Significant Changes
Mining initially will be conducted using the existing fleet of
mining equipment at Hycroft. Between 2017 and 2025 we expect to add
two additional wire rope shovels and 19 haul trucks. The current
crushing circuit will act as the primary crusher for the mill, with
the secondary and tertiary crushers being used for pre-crushing and
pebble crushing, respectively.
The major components of the milling facility are crushing
(existing), grinding, flotation, oxidation, tails leach and
Merrill-Crowe (existing). Significant changes to the flow sheet
include the elimination of cleaner flotation and the autoclave
facility and the addition of a fourth ball mill, AAO circuit,
oxygen plant and tails leach plant. We anticipate adding a
high-grade filter press and additional refinery capacity to the
existing Merrill-Crowe plant to process the increase in production
from the sulfide mill.
The current mill design is expected to have three stream
capabilities, including:
- Mill Stream 1 (Whole ore leach) - highly oxidized transitional
ore is ground and leached in the tails leach plant.
- Mill Stream 2 (Sulfide processing) - sulfidic ore is ground and
floated to create a concentrate. The concentrate is oxidized
through the AAO plant and leached to extract the gold and
silver.
- Mill Stream 3 (Partially oxidized transition processing) -
transition material that is partially oxidized is ground and
floated to create a concentrate. The concentrate is oxidized and
leached, while the remaining material that does not float (the
flotation tails) is leached directly.
Average recovery rates vary depending on the process stream. LOM
average recoveries are projected to be as follows:
|
|
GOLD |
|
SILVER |
|
|
Contained Ounces |
|
Recovered Ounces |
|
Recovery (%) |
|
Contained Ounces |
|
Recovered Ounces |
|
Recovery (%) |
|
Heap Leach: |
|
|
|
|
|
|
|
|
|
|
|
|
- Run-of-mine |
1,695,600 |
|
929,373 |
|
54.8 |
|
61,559,646 |
|
8,681,552 |
|
14.1 |
|
- Crushed |
334,456 |
|
238,776 |
|
71.4 |
|
13,612,611 |
|
3,004,196 |
|
22.1 |
|
Mill stream 1 |
836,646 |
|
556,804 |
|
66.6 |
|
35,563,100 |
|
26,969,509 |
|
75.8 |
|
Mill stream 2 |
6,552,751 |
|
4,678,108 |
|
71.4 |
|
259,717,083 |
|
208,878,702 |
|
80.4 |
|
Mill stream 3 |
1,009,395 |
|
741,827 |
|
73.5 |
|
93,343,558 |
|
83,948,674 |
|
89.9 |
|
TOTAL |
10,428,847 |
|
7,144,887 |
|
68.5 |
|
463,795,999 |
|
331,482,633 |
|
71.5 |
Economic Analysis
As noted above, the results of the revised prefeasibility study
indicate an IRR projected to be 26.5% and a NPV projected to be
$1.7 billion at a discount rate of 5%, assuming gold and silver
prices of $1,300 per ounce and $21.67 per ounce, respectively and
based on additional assumptions set forth in the table titled
"Assumptions used in the prefeasibility study estimate" at the end
of this press release. The initial capital to construct the mill
and associated infrastructure is on a go-forward basis and does not
include capital spent to date on the mill expansion such as mills
and motors, crushing and excavation. The cash flow model considers
the current heap leach revenue and costs as part of the project.
The capital estimate to construct the mill in two phases is
presented in the following table.
|
|
|
|
|
|
|
|
PHASE 1 |
|
PHASE 2 |
|
Total |
|
|
millions |
|
millions |
|
millions |
|
Direct costs |
$525.4 |
|
$276.2 |
|
$801.6 |
|
Indirect costs (includes contingency) |
$262.9 |
|
$138.3 |
|
$401.1 |
|
Owners cost |
$111.8 |
|
$7.4 |
|
$119.2 |
|
Total capital |
$900.1 |
|
$421.9 |
|
$1,322.0 |
The Hycroft mill expansion is projected to generate a
significant amount of gold and silver at relatively low adjusted
cash costs per ounce(3). The project, however, is extremely
sensitive to metal prices. The following table illustrates the
sensitivity to changes to the calculated IRR and NPV(1) at 0% and
5% discount rates at various gold and silver prices and based on a
constant ratio of the silver price to the gold price of 60:1.
Additional sensitivity would result from changes to this ratio.
|
|
|
|
|
|
|
| Metal Prices |
|
After tax NPV (0%) |
|
After tax NPV (5%) |
|
After tax IRR |
|
Au |
|
Ag |
|
Billions |
|
Billions |
|
% |
|
$1,200 |
|
$20.00 |
|
$2.3 |
|
$1.1 |
|
17.5 |
|
$1,300 |
|
$21.67 |
|
$3.2 |
|
$1.7 |
|
26.5 |
|
$1,400 |
|
$23.33 |
|
$4.0 |
|
$2.2 |
|
36.8 |
Next Steps
The Board of Directors has reviewed the results of the
prefeasibility study and approved moving forward with completing
the feasibility study. M3 is expected to complete the feasibility
study by the end of the third quarter.
Financing
We have retained Credit Suisse Securities (USA) LLC and expect
to retain Scotia Capital Inc. to advise us and execute on financing
and/or investment options for the mill expansion capital
requirements.
Mineral Reserve and Resource Update
The revised prefeasibility study was based on the Proven and
Probable Mineral Reserves estimated at December 31, 2013, as
updated to reflect the new mine plan and for the economics of the
study, of 10.6 million ounces of gold and 467.1 million ounces of
silver. Proven and Probable Mineral Reserves were calculated using
a $1,200 per ounce gold price and a $20 per ounce silver price.
Conference Call Information
We will host a conference call and webcast on April 23, 2014, at
8:00 am PT, to discuss the revised prefeasibility study. The
listen-only webcast can be accessed from the home page of our
website at www.alliednevada.com. To dial-in to the conference call
and participate in the questions and answer session, please
dial:
North America toll‐free - 1‐866-782-8903
Outside of North America - 1‐647-426-1845
An audio recording of the call will be archived on our website
at www.alliednevada.com.
Assumptions used in the prefeasibility study
estimate:
|
Parameter |
|
Assumption |
|
Description |
|
Mining years |
|
17 years |
|
150 million tons per year ("mtpy") by 2017, 200 mtpy by 2025 |
|
Processing years |
|
20 years |
|
Last 3 years are from stockiles |
|
Inflation |
|
None - real basis |
|
All projected revenue and costs were assumed to be in January 1,
2014 real terms, with no inflation applied. |
|
Starting basis |
|
January 1, 2014 go-forward |
|
All economic analyses were done on a January 1, 2014, "go-forward"
basis. |
|
Capital structure |
|
Unlevered |
|
No debt financing or interest payments were assumed. |
|
Discount rate |
|
5% real |
|
All the NPVs shown in this report were calculated using a discount
rate of 5%. Sensitivity analysis has been completed for 0% and 10%
discount rates. |
|
Metal prices (base case) |
|
$1,300/oz Au, $21.67/oz Ag (60:1) |
|
Commodity prices were assumed to be constant over the DCF
timeframe. |
|
Refining charge |
|
$ 0.75 per Au and Ag oz |
|
Applied a refining charge of $ 0.50/oz and a deleterious elements
charge of $0.25/oz. |
|
Melt loss |
|
-0.5% Au and Ag |
|
Applied to account for melt losses during the refining
process. |
|
Payable metal |
|
99.9% Au and 99.0% Ag |
|
Assumptions to arrive at payable metal are based on the current
contract with Johnson Matthey. |
|
|
|
|
|
Summary of updated mine plan and assumed economics:
|
|
|
|
First 5 Years Average (2018-2022) |
|
Life of Project Average (2018-2029) |
|
LOM Totals (2014-2033) |
| Production
Information: |
|
|
|
|
|
|
|
|
| Total tons of ore processed - heap leach |
|
(000's) |
|
11,070 |
|
8,342 |
|
225,934 |
| Tons of ore processed - mill |
|
(000's) |
|
43,680 |
|
43,750 |
|
708,085 |
| Tons of waste mined |
|
(000's) |
|
88,938 |
|
98,100 |
|
1,454,192 |
| Total tons |
|
(000's) |
|
143,688 |
|
150,192 |
|
2,388,212 |
| Contained gold |
|
|
|
615,094 |
|
610,151 |
|
10,428,847 |
| Contained silver |
|
|
|
27,620,521 |
|
27,144,492 |
|
463,795,999 |
| Ounces sold - gold |
|
|
|
449,413 |
|
438,040 |
|
7,366,306 |
| Ounces sold - silver |
|
|
|
21,022,341 |
|
21,247,041 |
|
328,605,552 |
| Ounces sold - gold equivalent |
|
|
|
799,786 |
|
792,157 |
|
12,843,065 |
|
|
|
|
|
|
|
|
|
| Cash Flow
Information: |
|
|
|
|
|
|
|
|
| Cash inflows: |
|
|
|
|
|
|
|
|
| Revenue from metal sales |
|
($ 000's) |
|
1,039,722 |
|
1,029,805 |
|
16,695,985 |
| Cash outflows: |
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
($ 000's) |
|
670,241 |
|
637,105 |
|
11,173,832 |
|
Income taxes |
|
($ 000's) |
|
16,685 |
|
37,764 |
|
497,408 |
|
Inventory adjustments |
|
($ 000's) |
|
2,792 |
|
21,742 |
|
(263,593) |
|
Reclamation spending & salvage |
|
($ 000's) |
|
- |
|
- |
|
77,413 |
|
|
Capital spending |
|
($ 000's) |
|
45,965 |
|
37,841 |
|
2,029,305 |
| Total Cash Outflows |
|
($ 000's) |
|
735,683 |
|
734,451 |
|
13,514,364 |
|
|
Net Cash Flow |
|
($ 000's) |
|
304,038 |
|
295,353 |
|
3,181,620 |
| After-tax NPV @ 5% |
|
($ 000's) |
|
|
|
|
|
1,681,985 |
| After-tax NPV @ 10% |
|
($ 000's) |
|
|
|
|
|
887,850 |
| After-tax Internal Rate of Return |
|
% |
|
|
|
|
|
26.5 |
| Adjusted
cash costs(3) per gold ounce sold: |
|
|
|
|
|
|
|
|
|
With
silver as byproduct credit |
|
($ / Oz) |
|
478 |
|
404 |
|
550 |
|
|
Gold equivalent |
|
($ / Oz) |
|
838 |
|
804 |
|
870 |
| From a silver production and sales point of
view: |
|
|
|
|
|
|
|
|
|
Silver equivalent production (ounces Ag) |
|
|
|
47,987,121 |
|
47,529,441 |
|
40,774,889 |
|
|
Adjusted cash costs per ounce with gold as a byproduct credit
($/silver ounce sold) |
|
|
|
$2 |
|
$1 |
|
$3 |
|
|
|
|
|
|
|
|
|
|
Metal selling prices used in determining the economics for the
project were $1,300 per ounce of gold and $21.67 per ounce of
silver. Gold equivalent is calculated using a 60:1 silver to gold
ounce ratio.
No assurance or guarantee is provided that the calculated IRR or
NPV values will be achieved. Actual results may differ
materially.
Allied Nevada will file an NI 43-101 compliant Technical Report
within the regulatory timeframe. Once filed the report will be
available at www.alliednevada.com or under the Company's profile at
www.sedar.com.
|
| Proven & Probable Mineral Reserves - December 31,
2013 |
|
|
|
Tons |
|
Grades |
|
Contained Ounces (000s) |
|
|
|
(000s) |
|
Au |
|
Ag |
|
AuEq |
|
Au |
|
Ag |
|
AuEq |
|
Proven Heap Leach |
|
163,479 |
|
0.009 |
|
0.14 |
|
0.011 |
|
1,440 |
|
22,446 |
|
1,814 |
|
Probable Heap Leach |
|
45,561 |
|
0.008 |
|
0.72 |
|
0.020 |
|
342 |
|
32,924 |
|
891 |
|
Total Proven & Probable Heap Leach |
|
209,041 |
|
0.009 |
|
0.26 |
|
0.013 |
|
1,782 |
|
55,370 |
|
2,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven Mill |
|
593,559 |
|
0.012 |
|
0.57 |
|
0.022 |
|
7,144 |
|
340,823 |
|
12,825 |
|
Probable Mill |
|
148,402 |
|
0.011 |
|
0.48 |
|
0.019 |
|
1,630 |
|
70,953 |
|
2,812 |
|
Total Proven & Probable Mill |
|
741,960 |
|
0.012 |
|
0.55 |
|
0.021 |
|
8,774 |
|
411,776 |
|
15,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROVEN & PROBABLE MINERAL RESERVES |
|
951,001 |
|
0.011 |
|
0.49 |
|
0.019 |
|
10,556 |
|
467,146 |
|
18,342 |
|
Waste |
|
1,444,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Tons |
|
2,395,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strip Ratio |
|
1.52 |
|
|
|
|
|
|
|
|
|
|
|
|
For additional information on key assumptions, parameters and
methods used to estimate the mineral reserves, including quality
assurance measures and other technical information in respect of
the Hycroft Mine, please refer to our technical report entitled
"Technical Report - Allied Nevada Gold Corp. - Hycroft Mine,
Winnemucca, Nevada, USA" and dated March 6, 2013. Allied Nevada
expects to file an updated Technical Report within the regulatory
timeframe required by National Instrument 43-101 requirements.
Cautionary Statement Regarding Forward Looking Information
This press release contains forward-looking statements
within the meaning of Section 27A of the U.S. Securities Act of
1933, as amended (the "Securities Act"), Section 21E of the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(and the equivalent under Canadian securities laws) and the Private
Securities Litigation Reform Act (the "PSLRA") or in releases made
by the U.S. Securities and Exchange Commission (the "SEC"), all as
may be amended from time to time. This cautionary statement is
being made pursuant to the Securities Act, the Exchange Act and the
PSLRA with the intention of obtaining the benefit of the "safe
harbor" provisions of such laws. All statements, other than
statements of historical fact, included herein or incorporated by
reference, that address activities, events or developments that we
expect or anticipate will or may occur in the future, are
forward-looking statements. Generally, these forward-looking
statements can be identified by the use of forward-looking
terminology such as "estimate", "plan", "anticipate", "expect",
"intend", "believe", "project", "target", "budget", "may", "can",
"will", "would", "could", "should", "seeks", or "scheduled to", or
other similar words, or negatives of these terms or other
variations of these terms or comparable language or any discussion
of strategy or intentions. Such forward-looking statements include,
without limitation, statements regarding our future business
strategy, plans and goals; future gold and silver prices; the
timing of or expected results of the completed feasibility study;
delays in processing gold and silver; the potential for confirming,
upgrading and expanding gold and silver mineralized material at
Hycroft; reserve and resource estimates and the timing of the
release of updated estimates; estimates of gold and silver grades;
future prices for gold and silver; recovery rates for gold and
silver; anticipated operating, capital and construction costs,
anticipated sales, project economics, net present values and
expected rates of return; the realization of expansion and
construction activities and the costs and timing thereof;
availability and cost of financing; production estimates and other
statements that are not historical facts. Forward-looking
statements address activities, events or developments that Allied
Nevada expects or anticipates will or may occur in the future, and
are based on current expectations and assumptions. These statements
involve known and unknown risks, uncertainties, assumptions and
other factors which may cause our actual results, performance or
achievements to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. Important factors that could cause
actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others,
risks that Allied Nevada's exploration and property advancement
efforts will not be successful; risks relating to fluctuations in
the price of gold and silver; an increase in the cost or timing of
new projects; the inherently hazardous nature of mining-related
activities; uncertainties concerning reserve, resource and grade
estimates; uncertainties relating to obtaining approvals and
permits from governmental regulatory authorities; and availability
and timing of capital for financing the Company's exploration,
development and expansion activities, including the uncertainty of
being able to raise capital on favorable terms or at all; as well
as those factors discussed in Allied Nevada's filings with the SEC
including Allied Nevada's latest Annual Report on Form 10-K and its
other SEC filings (and Canadian filings) including, without
limitation, its latest Quarterly Report on Form 10-Q (which may be
secured from us, either directly or from our website at
www.alliednevada.com or at the SEC website www.sec.gov). Although
Allied Nevada has attempted to identify important factors that
could cause actual results, performance or achievements to differ
materially from those described in forward-looking statements,
there may be other factors that cause results, performance or
achievements not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate,
as actual results, performance and achievements and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. The Company does not intend to publicly
update any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required
under applicable securities laws. The technical contents of this
news release have been prepared under the supervision of Daniel
Roth, Project Manager at M3 Engineering and Technology, and Tony
Peterson, Corporate Mine Engineer at Allied Nevada Gold Corp., a
Registered Professional Engineer in the State of Colorado #43867
who are Qualified Persons as defined by National Instrument 43-101.
For further information regarding the quality assurance program and
the quality control measures applied, as well as other relevant
technical information, please see the Hycroft Technical Report
which will be filed within the regulatory timeframe on
www.sedar.com.
Cautionary Note to U.S. Investors - The United
States Securities and Exchange Commission permits U.S. mining
companies, in their filings with the SEC, to disclose only those
mineral deposits that a company can economically and legally
extract or produce. We use certain terms on this website (or press
release), such as "measured," "indicated," and "inferred"
"resources," which the SEC guidelines strictly prohibit U.S.
registered companies from including in their filings with the SEC.
U.S. Investors are urged to consider closely the disclosure in our
Form 10-K which may be secured from our website or the SEC website
at http://www.sec.gov/edgar.shtml.
Non-GAAP Measures - Adjusted cash costs per ounce is a
non-GAAP financial measure, calculated on a per ounce of gold sold
basis, and includes all direct and indirect operating cash costs
related to the physical activities of producing gold, including
mining, processing, cash portions of production costs written-down,
third party refining expenses, on-site administrative and support
costs, royalties, and mining production taxes, net of revenue
earned from silver sales. Because we are a primary gold producer
and our operations focus on maximizing profits and cash flows from
the extraction and sale of gold, we believe that silver revenue is
peripheral and not material to our key performance measures or our
Hycroft Mine operating segment and, as such, adjusted cash costs
per ounce is reduced by the benefit received from silver
sales.
Adjusted cash costs per ounce provides management and
investors with a further measure, in addition to conventional
measures prepared in accordance with GAAP, to assess the
performance of our mining operations and ability to generate cash
flows over multiple periods from the sale of gold. Non-GAAP
financial measures do not have any standardized meaning prescribed
by GAAP and, therefore, may not be comparable to similar measures
presented by other mining companies. Accordingly, the above
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP.
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(1) |
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All
costs are on a go-forward basis and consider capital spent to date
as sunk costs. Net Present Value ("NPV") and Internal Rate of
Return ("IRR") are calculated using $1,300 per gold ounce and
$21.67 per silver ounce and additional assumptions set forth in the
table titled "Assumptions used in the prefeasibility study
estimate" at the end of this press release. No assurance or
guarantee is provided that the calculated IRR or NPV values will be
achieved. Actual results may differ materially. |
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(2) |
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Gold
equivalent values are calculated using a 60:1 silver to gold
ratio. |
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(3) |
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The
term "adjusted cash costs per ounce" is a non-GAAP financial
measure. Non-GAAP financial measures do not have any standardized
meaning prescribed by GAAP and, therefore, should not be considered
in isolation or as a substitute for measures of performance
prepared in accordance with GAAP. See the section at the end of
this press release and in the most recently filed Annual Report on
Form 10-K titled "Non-GAAP Financial Measures" for further
information on adjusted cash costs per ounce. |
Allied Nevada Gold Corp.Randy BuffingtonPresident & CEO(775)
358-4455 Allied Nevada Gold Corp.Tracey ThomVice President,
Investor Relations(775) 789-0119www.alliednevada.com