Allied Nevada has announced an updated mine plan and economics for its Hycroft open-pit mine expansion project located near Winnemucca, Nevada. The revised mine plan supports a 19-year operating life and exploits current proven and probable mineral reserves of 11.9 million oz of gold and 509.6 million oz of silver in 1.1 billion mt grading 0.011 oz/mt gold and 0.46 oz/mt silver.
Allied Nevada currently produces from heap leach operations at Hycroft, which are being expanded, and is constructing a milling operation that is scheduled to come into production in 2015. The mine produced 136,705 oz of gold and 696,144 oz of silver in 2012. When the mill is up and running, the company expects to produce an average of 552,000 oz/y of gold and 25.5 million oz/y of silver (1 million oz/y gold equivalent) from combined heap leach and milling operations for 10 years through 2024.
The following operating metrics are presented for the 10-year horizon that spans the projected start of milling operations to the last full year of mining in 2024.
- Life of mine strip ratio reduced to 1.15:1 from a previously anticipated 1.26:1.
- Annual mining rate reduced to 190 million mt/y beginning in 2014 from a previously planned 235 million mt/y due to a successful 2012 infill drill program that allowed optimization of the mine plan.
- Average adjusted cash cost of $146/oz of gold, with silver as a byproduct credit, from 2015 to 2024.
- Initial capital of $1.24 billion is unchanged. Commitments to date through purchases or fixed contracts total $634.7 million (51% of total), which is 5% below estimate. The 5% difference has been allocated to contingency.
- After-tax internal rate of return of 77.4% for the life of mine.
- Net present value of $2.7 billion at a 6% discount.
No significant changes have been made to the 130,000-mt/d mill and flotation plant.
The 2012 drill program at Hycroft was primarily targeted toward engineering support for the expansion project and included some infill drilling within the reserve pit. The successful infill program resulted in a reduced life-of-mine reserve strip ratio of 1.15:1 waste-to-ore metric tons from 1.26:1 in the December 31, 2011, reserve.
Allied Nevada has raised the reserve cut-off grade from 0.004 gold equivalent oz/mt to 0.005 oz/mt. The higher cut-off grade, along with mining depletion in 2012, resulted in proven and probable mineral reserves of 11.9 million oz of gold and 509.6 million oz of silver as of October 31, 2012. Measured and indicated mineral resources exclusive of reserves as of October 31, 2012, totaled 12.4 million oz of gold and 360.1 million oz of silver.
The infill program conducted in 2012 was successful in converting inferred resources to measured and indicated. Proven and probable mineral reserves were calculated using an $800/oz gold price and $14/oz silver price. Measured and indicated mineral resources were calculated using a $1,200/oz price for gold and $21/oz price for silver.
