Allied Nevada Gold earnings: $20.1 million
The reopened Hycroft Mine in Humboldt County produced a strong stream of second-quarter profits for Reno’s Allied Nevada Gold Corp.
The company said last week it earned $20.1 million during the quarter as gold and silver sales from the mine 54 miles west of Winnemucca rose to $37.1 million.
The mine produced 31,400 ounces of gold and 62,000 ounces of silver during the second quarter.
A year earlier, when Allied Nevada Gold was bringing the mine back into production, the publicly held company reported a loss of $6.9 million on sales of $3.8 million.
The company said it’s on track to sell about 100,000 ounces of gold and 300,000 ounces of silver from the Hycroft Mine this year.
The costs of producing the gold will run in the range of $400 to $450 an ounce, executives said, and the company sold its production at an average price of $1,216 an ounce during the second quarter.
The production costs are likely to rise through the remainder of this year, the company said, because it plans to mine lower-grade but still profitable ores.
It’s also concerned about higher fuel costs. A $10 move in the price of oil translates into a $1 million-a-year increase in operating costs at the Hycroft Mine.
Allied Nevada Gold also reported last week that it has boosted its estimate of resources on the Hycroft property to 8 million ounces of gold. That’s 13 percent higher than the previous estimate, and the company boosted the number studying results of a 250-hole drilling program.
The company expects to spend a total of $16 million on exploration at the Hycroft property and other properties it holds near Gerlach, Tonopah, Ely and Winnemucca. Initial drilling results on the Tonopah property have been encouraging, the company has said.
The Hycroft Mine produced more than a million ounces of gold when it was operated by Vista Gold from 1987 through 1998, when it was closed because of low gold prices.
The company’s stock, which reached a 52-week high of $22.92 this summer, was trading on the American Stock Exchange at just over $18 a share last week.
The cuts would come as a direct result of reduced tax collections caused by business closures across the Silver State due to the COVID-19 pandemic.