Allied Nevada Announces Third Quarter 2013 Net Income of $5.0 Million or $0.05 Per Share

RENO, NEVADA--(Marketwired - Nov 5, 2013) - Allied Nevada Gold Corp. ("Allied Nevada", the "Company", "we', "our", or "us") (TSX:ANV)(NYSE MKT:ANV) provides financial and operating results for the three and nine months ended September 30, 2013. The results presented in this press release should be read in conjunction with the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed on SEDAR and EDGAR and posted on Allied Nevada's website at www.alliednevada.com. The financial results are based on United States GAAP (with the exception of the non-GAAP financial measure "adjusted cash costs per ounce") and are expressed in U.S. dollars.

Q3 2013 Highlights

• We are now producing gold and silver from the new 21,500 gallon per minute ("gpm") capacity Merrill-Crowe plant, which began processing in mid-October at a rate of 7,000 gpm and was fully commissioned by the end of October.
• Gold ounces sold in the third quarter of 2013 increased 51% to 52,713 ounces, compared to 34,851 ounces sold in the same period of 2012. The 52,713 gold ounces sold in the third quarter is an all-time quarterly record and represents an increase of 27%, or 11,201 gold ounces, from the second quarter of 2013.
• Hycroft produced 52,198 ounces of gold and 184,070 ounces of silver in the third quarter of 2013. Expected production and sales guidance for 2013 remains 175,000-200,000 ounces of gold and 0.9 to 1.1 million ounces of silver.
• Adjusted cash costs per ounce(1) of $905 in the third quarter of 2013 were higher than anticipated primarily resulting from lower silver ounces sold and additional external refining costs for metal on carbon. While mining production costs on a unit basis have decreased in the last couple of months, we expect that the effect of the reduction in workforce, and an increased silver to gold ounce production ratio with the operation of the new Merrill-Crowe refinery, will begin to benefit adjusted cash costs in the future.
• Net income decreased 64% to $5.0 million or $0.05 per share in the third quarter of 2013 compared with $13.4 million or $0.15 per share in the same quarter in 2012. Net income in 2013 benefitted from additional ounces sold, but was negatively impacted by increased production costs, and lower realized metal prices.
• Net cash provided by operating activities in the third quarter of 2013 totaled $6.5 million, net cash used in investing activities was $88.1 million and net cash used in financing activities was $10.9 million, resulting in a net cash decrease of $92.5 million in the third quarter and a cash balance of $154.5 million at September 30, 2013.

Hycroft Operations Update

Key operating statistics for the three and nine months ended September 30, 2013, compared with the same periods in 2012, are as follows:

The efforts of the operations team at Hycroft, combined with the increased ore under leach and additional processing capacity from our carbon columns have resulted in record gold sales and production for the third quarter of 2013. Silver ounces sold during the third quarter and first nine months of 2013 did not increase proportionate to the increase in gold ounces sold as approximately 62% and 44%, respectively, of gold ounces sold were recovered from solution processed through the carbon columns, which have low silver recoveries. Our average silver ounces to gold ounces sold ratios for the third quarter and first nine months of 2013 were approximately 3.5:1 and 4.2:1, respectively, which we expect to increase to over 6.0:1 during the fourth quarter when solution is primarily processed through the new Merrill-Crowe plant. The new Merrill-Crowe plant began processing approximately 7,000 gpm of solution in mid-October and by the end of October was fully commissioned and capable of processing solution at its nameplate capacity of 21,500 gpm.

Our total tons mined during the first nine months of 2013 increased approximately 57% from the 2012 period as a result of our expanded mobile mine equipment fleet. We were able to achieve our third quarter 2013 target mining rate through efficiencies gained with our mobile equipment dispatch system and increased loading capacity of the two 73 cubic-yard electric rope shovels, all while operating with an approximately 24% leaner mine-site workforce. During the third quarter of 2013 our average mining cost per ton and average processing cost per ore ton decreased by 22% and 14%, respectively, from second quarter 2013 per ton amounts. We expect such efficiencies in mining and processing costs to continue during the remainder of 2013 which we believe will positively impact our future production costs and adjusted cash costs per ounce⁽¹⁾.

As of September 30, 2013, we had approximately 11.4 million square feet under leach, an increase of approximately 4.3 million square feet from June 30, 2013. The North leach pad continued to perform well during its first five months of operations as our overall metal recoveries, and timing thereof, remained consistent with our expectations. During the third quarter of 2013 we continued our remediation efforts of the Lewis leach pad and received permits which allowed us to begin introducing solution into wells that have been drilled into dry areas of the pad. Test work is ongoing to determine the timing of solution penetration and the rate in which metal production is expected to occur.

Although our third quarter 2013 mining and processing unit costs improved from previous periods, our adjusted cash costs per ounce⁽¹⁾ were negatively impacted by lower silver ounces sold, increased production costs incurred during the first half of 2013, and additional external refining costs for carbon in-process inventories sold during the third quarter of 2013. Further, during the third quarter and first nine months of 2013 our average realized price per ounce of silver sold decreased by approximately $9 (30%) and $6 (19%), respectively, compared to the same periods of 2012, resulting in increases to our adjusted cash costs per ounce⁽¹⁾.

During the third quarter of 2013, we continued construction on the crushing system, including the primary, secondary, and tertiary crushers, which we expect to commission in the fourth quarter of 2013. Assuming there are no delays in commissioning the crushing system, we expect that the heap leach expansion project will be considered largely complete by the end of 2013.

Operations Outlook

In 2013, we expect to sell approximately 175,000 to 200,000 ounces of gold and 0.9 million to 1.1 million ounces of silver. We expect to move 76.3 million tons of material, including 41.0 million tons of ore at average grades of 0.012 oz/ton gold and 0.25 oz/ton silver. The overall strip ratio for 2013 is expected to be 0.6:1. Adjusted cash costs per ounce⁽¹⁾ for 2013 are expected to be in the range of $800 to $825 (with silver as a byproduct credit). We expect to continue to generate positive cash flow from operations in the fourth quarter of 2013. Remaining capital to be spent in 2013 is approximately $90 million.

Allied Nevada intends to focus its resources towards the Hycroft operations and expansion. At this time, no further exploration drilling is planned for 2013.

Conference Call Information

Allied Nevada will host a conference call to discuss third quarter results on November 6, 2013, at 8:00 am PT (11:00 am ET) followed by a question and answer session.

An audio recording of the call will be archived on our website at www.alliednevada.com.

Cautionary Statement Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (and the equivalent under Canadian securities laws) and the Private Securities Litigation Reform Act or in releases made by the U.S. Securities and Exchange Commission (the "SEC"), as all may be amended from time to time. All statements, other than statements of historical fact, included herein or incorporated by reference, that address activities, events or developments that we expect or anticipate will or may occur in the future, are forward-looking statements.
The words "estimate", "plan", "anticipate", "expect", "intend", "believe", "project", "target", "budget", "may", "can", "will", "would", "could", "should", "seeks", or "scheduled to", or other similar words, or negatives of these terms or other variations of these terms or comparable language or any discussion of strategy or intentions identify forward-looking statements. Such forward-looking statements include, without limitation, statements regarding delays in processing gold and silver; the potential for confirming, upgrading and expanding gold and silver mineralized material at Hycroft; reserve and resource estimates and the timing of the release of updated estimates; estimates of gold and silver grades; anticipated costs, anticipated sales, project economics, the realization of expansion and construction activities and the timing thereof; production estimates and other statements that are not historical facts. Forward-looking statements address activities, events or developments that Allied Nevada expects or anticipates will or may occur in the future, and are based on current expectations and assumptions. Although Allied Nevada management believes that its expectations are based on reasonable assumptions, it can give no assurance that these expectations will prove correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, among others, risks that Allied Nevada's exploration and property advancement efforts will not be successful; risks relating to fluctuations in the price of gold and silver; the inherently hazardous nature of mining-related activities; uncertainties concerning reserve and resource estimates; uncertainties relating to obtaining approvals and permits from governmental regulatory authorities; and availability and timing of capital for financing the Company's exploration and development activities, including the uncertainty of being able to raise capital on favorable terms or at all; as well as those factors discussed in Allied Nevada's filings with the SEC including Allied Nevada's latest Annual Report on Form 10-K and its other SEC filings (and Canadian filings) including, without limitation, its latest Quarterly Report on Form 10-Q (which may be secured from us, either directly or from our website at www.alliednevada.com or at the SEC website www.sec.gov). The Company does not intend to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

Non-GAAP Financial Measures

Adjusted cash costs per ounce is a non-GAAP financial measure, calculated on a per ounce of gold sold basis, and includes all direct and indirect operating cash costs related to the physical activities of producing gold, including mining, processing, third party refining expenses, on-site administrative and support costs, royalties, and mining production taxes, net of by-product revenue earned from silver sales. Adjusted cash costs per ounce provides management and investors with a further measure, in addition to conventional measures prepared in accordance with GAAP, to assess the performance of our mining operations and ability to generate cash flows over multiple periods. Non-GAAP financial measures do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other mining companies. Accordingly, the above measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

The table below presents a reconciliation between non-GAAP adjusted cash costs, which is the numerator used to calculated non-GAAP adjusted cash costs per ounce, to production costs (GAAP) for the three and nine months ended September 30, 2013 and 2012 (in thousands, except ounces sold):