High gold prices provide boost to reopened Winnemucca mine

When executives of Reno-based Allied Nevada Gold Corp. did the math to figure if it made sense to bring the Hycroft Mine back into production, they didn't project that gold prices would be above $900 an ounce.

But as prices of the precious metal have stayed well above $900 this year, publicly held Allied Nevada reaps the benefits.

The company brought the mine 54 miles west of Winnemucca back into production last year.

It's projected to produce 80,000 to 87,000 ounces of gold this year at a cost between $460 and $480 an ounce.

At that rate, and with prices remaining high, Allied Nevada said in a filing with the Securities and Exchange Commission, "Revenue is anticipated to be significantly higher than originally expected."

As the company continues to bring the Hycroft Mine online, it reported a loss of $6.9 million on gold and silver sales of $3.8 million in the second quarter. A year earlier, when it had no revenues, the company reported a loss of $9.9 million.

To boost production from the surface mine, Allied Nevada said it purchased a new 200-ton haul truck during the second quarter, paying $2.8 million for the gargantuan vehicle.

The company also said it hired an outside mining contractor, a step that is likely to boost annual production of the Hycroft Mine by about 30 percent.

The company held $12.8 million in cash on June 30, and executives said they don't think they'll need to tap the equity or debt markets in the next year.


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