RENO - According to a press release this week from Allied Nevada, parent company of Hycroft Mine, production and sales for the first half of 2013 have not met projections.
The company reports that the lower production is primarily due to a problem with the leaching process on the Lewis leach pad during the latter part of 2012 and the first part of 2013.
Earlier this month (July 8) Allied announced that Randy Buffington would take over as president and CEO of the company. Buffington, who was evaluating operations at the mine before being named president, said, "In the last five months I have uncovered a number of previous operating errors that have set the mine back in achieving targets."
The company determined that a significant portion of the ore placed on the Lewis leach pad in late 2012 and early 2013, when the mining rate was increasing significantly, had not been properly leached because not enough solution was applied to leach the ore properly.
A program is underway to remediate the Lewis leach pad. The first step was to identify dry areas in the ore through drilling and geophysics. Drilling and metallurgical data obtained is being used to design a program that will introduce process solutions directly into the dry areas identified, according to Allied.
The company expects to receive permits in August to allow them to increase solution flow to the pads. It is expected that the additional flow will bring incremental production increases from the Lewis leach pad in the fourth quarter of 2013.
Buffington continued, "While disappointing, these issues are not insurmountable and I am confident that the operating team we have in place and the steps they're taking to remedy the issues will turn things around, though not without impacting production and sales guidance for the year."
According to the new president and CEO, the company is also pursuing other initiatives to reduce costs, including eliminating all exploration activities and reviewing staffing requirements and corporate general and administrative costs.
The company announced that several other elements of the expansion project at Hycroft are proceeding as planned.
Loading of the North Leach pad began on May 7, with the first solution being introduced to the pad ahead of schedule on May 15.
It was reported that construction of the gyratory crusher has progressed well and should be commissioned in the third quarter as planned. Construction of the 21,500 gallon per minute ("gpm") Merrill-Crowe plant has also progressed well and the company expects the first 6,000 gpm to be available in the third quarter, as planned.
The company reports preliminary production of 39,195 ounces of gold and 132,841 ounces of silver in the second quarter of 2013.
Sales in the second quarter totaled 41,512 ounces of gold and 146,303 ounces of silver. For the first half of 2013, Hycroft produced 77,214 ounces of gold and 320,841 ounces of silver and sold 68,768 ounces of gold and 321,069 ounces of silver.
The news release said production and sales in the first half of 2013 did not meet guidance primarily as a result of metals not being released from the Lewis leach pad as expected.
Allied expects full year production and sales at Hycroft to be in the range of 175,000 to 200,000 ounces of gold and 0.9 to 1.1 million ounces of silver, given the issues discussed above. The company said its next update will be on Aug. 5.
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