Yukon-Nevada Gold Corp. recently confirmed that its Jerritt Canyon processing facility in Nevada has reached steady-state operation. After facing a series of challenges in reaching target gold production rates earlier this year following a planned shutdown in January, Jerritt Canyon has operated continuously over the last month processing an average of 4,112 tons per day.

During the first half of June, the plant processed an average of 4,200 tons per day, 7% higher than planned production of 3,933 tons per day. In the past month, including the first 15 days of June, gold recoveries were more than 12,000 oz recovered to the CIL circuit, 11,218 oz were shipped with the remainder still in plant inventory. At this level of production the company is generating positive cash flow from operations as well as covering the maintenance capital required to continue to operate the facility effectively going forward.

A further increase in crushing circuit availability will be achieved by the replacement of an inadequately manufactured bucket elevator supplied and installed during the recent shutdown, which was the cause of serious downtime in the first four months of this year. Construction required to replace this component with two conventional belt conveyors is expected to be completed during the next four weeks. A backup mobile crushing and screening plant has been installed and tested to ensure continued plant performance during the replacement phase.

“Our team at Jerritt Canyon has worked incredibly hard to bring the operation to commercial levels,” said Randy Reichert, COO, Yukon-Nevada. “We are now seeing the results of this effort and the operation is in excellent shape to meet our gold production target for 2012 of between 140,000 and 150,000 oz.”

In related news, Yukon-Nevada has entered into an arrangement with Allied Nevada to process Hycroft gold and silver laden carbon in the carbon plant at the Jerritt Canyon milling facility located in Elko County, Nevada.

“We will process this material under a tolling arrangement,” Reichert said. “Revenues from this arrangement will be credited against operating costs. Normal gold production from the Smith mine, SXX/Steer mine and from stockpiles will continue as usual at the Jerritt Canyon milling facility for the duration of this agreement.”

Hycroft expects shipped the first lot of carbon in early June. Under the terms of the arrangement, in the initial 90-120 days following signing of the agreement all of the carbon currently in inventory at Hycroft is expected to be processed. After this initial period, between 15 and 30 tons per month may be processed. Hycroft currently generates approximately 15 to 20 tons of carbon per month.