Yukon-Nevada Gold Corp. Announces Second Quarter Results for 2011
VANCOUVER, Aug. 16, 2011 /CNW/ --
VANCOUVER, Aug. 16, 2011 /CNW/ - Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) (the 'Company') today announced its financial and operational results
for the second quarter ended June 30, 2011. This information should be
read in conjunction with the Company's condensed consolidated interim
financial statements, including the notes thereto, and Management's
Discussion and Analysis. All dollar amounts are expressed in United
States Dollars unless otherwise specified.
Transition to International Financial Reporting Standards (IFRS)
The condensed consolidated interim financial statements have been
prepared using accounting policies consistent with International
Financial Reporting Standards (IFRS) and in accordance with
International Accounting Standard 34 ('IAS 34') - Interim Financial
Reporting. The Company previously prepared its interim and annual
consolidated financial statements in accordance with Canadian generally
accepted accounting principles (Canadian GAAP). A reconciliation of the
previously disclosed comparative periods' financial statements prepared
in accordance with Canadian GAAP to IFRS is set out in Note 20 to the
condensed consolidated interim financial statements. The Company's 2010
comparative amounts have been presented in accordance with IFRS. As the
date of transition was January 1, 2010 the 2009 quarterly comparative
information has not been presented in accordance with IFRS.
Highlights for the three-month period ended June 30, 2011 include:
-- The Jerritt Canyon Mine produced 22,168 ounces from purchased
ore, stockpiles and mining operations in the three months ended
June 30, 2011, compared with 18,441 ounces in 2010, reflecting
a 20% increase in production despite continued shutdowns (both
scheduled and unscheduled) during the quarter primarily
resulting from a lack of spare parts. With the funding the
Company has raised, steps have been taken to increase the
supplies on hand to minimize unscheduled shutdowns that occur.
-- The Company continued acquiring the necessary mining equipment
for mining the SSX-Steer mine, commenced work on the upgrading
of various components of the process mill, including the
re-engineering of the current dryer circuit and the refinery
controls, and began work on the construction of the second
tailings facility, which will not only bring the Company into
compliance with current standards but also extend the life of
the property through increased storage capacity.
-- During the quarter the Company purchased 67,899 tons of ore
from Newmont USA Limited ('Newmont'), containing 16,375 ounces,
at an average cost per wet ton of $273 per dry ton.
-- Small Mine Development, LLC delivered 53,150 tons to the mill
containing 9,889 ounces from the Smith mine during the quarter,
lower than the previous quarter at the direction of mill
operations in order to align with the production levels at the
Jerritt Canyon mill.
-- The Company recorded net income of $22.9 million in the second
quarter of 2011 compared to net income of $4.5 million (under
International Financial Reporting Standards) in the second
quarter of 2010. The net income recorded for the three months
ended June 30, 2011 was the result of a $36.6 million gain in
the fair value of warrants recorded as derivative liabilities.
The gross margin was a loss of $1.9 million in 2011 against a
loss of $1.7 million in the three months ended June 30, 2010.
-- On May 31, 2011 the Company closed a non-brokered private
placement for a total of 33.5 million units with Deutsche Bank
AG at a price of C$0.43 per unit for proceeds of C$14.4
million. Each unit contains one common share and one warrant
with a 24 month term at an exercise price of C$0.55.
Jerritt Canyon Overview
During the second quarter the Company produced 22,168 ounces and sold
18,341 of these ounces at an average gold price of $1,541. Another
1,000 of these ounces were transferred to a third party in settlement
of a forward contract that became due on June 30. Production continued
to experience lower production levels as the processing mill
experienced extended shutdown periods resulting from low spare parts
inventory levels. With the financing raised late in the quarter the
Company began building up these inventory levels again and subsequent
results should show improvement in overall production levels.
Newmont continued to deliver ore at a regular rate to Jerritt Canyon,
focusing on higher grade ore throughout the quarter which resulted in a
slightly higher cost per ton.
The Jerritt Canyon NI 43-101 report was finalized on June 28, 2011. As
of January 1, 2011 the Proven and Probable reserves are estimated at
717,000 ounces of gold at an average grade of 0.164 ounces of gold per
ton (opt) or 5.62 grams of gold per tonne (gpt) as summarized in the NI
43-101 report. The new mineral resource now comprises a Measured
resource of 1.08 million ounces, an Indicated resource of 1.46 million
ounces, and an Inferred resource of 0.89 million ounces. The new robust
model used in determining these resources significantly increases the
potential of the property and has provided the Company additional areas
to explore and develop.
The Company continued underground exploration drilling during the second
quarter and has subsequently commenced surface exploration drilling in
the third quarter as the new bonding requirements were settled.
Exploration efforts are also focusing on historic mined pits in the
north end of the property which would extend the longevity of Jerritt
Canyon for several years.
The Company has made significant progress towards completing key items
under the terms of the Consent Decree. The Company is continuing work
on the construction of the second tailing facility, completing the
installation of a barge facility to support the operation of the
already installed evaporators, and commenced engineering and design
work on systems to reduce emissions from the ore dryer and refinery.
The Company will also be working on a number of engineering changes to
the mill, upgrading the mill process control technology and finishing
the winterization of the mill.
Ketza River Overview
Work at Ketza River focused on the acquisition and construction of a new
replacement camp, including water wells, septic systems and pipelines.
The other primary focus during the quarter was the review of documents
prepared by the third party engineering firm which will form the Yukon
Environmental and Socio-economic Assessment Board ('YESAB') project
proposal to be submitted in the third quarter of 2011.
The Ketza River NI 43-101 report was finalized on June 28, 2011 with an
effective date of January 25, 2010. The resources included in this
document include all of the 2008 drill holes. The report showed a total
Measured resource of 29,000 ounces at an average grade of 5.38 gpt and
a total Indicated resource of 388,700 ounces at an average grade of
5.46 gpt, along with an Inferred resource of 67,300 ounces at an
average grade of 4.62 gpt.
The updated resource estimate has been used to delineate the mining plan
for use in the Project Description Report being organized by the third
party engineering firm as part of the submission to YESAB in the third
quarter of 2011.
Robert Baldock, President and CEO, states, 'As we move forward fully
capitalized we aim to achieve our targeted production run rate of
150,000 ounces by the end of 2011 and return to the path of
profitability in 2012. With gold prices at their current levels and the
global economy in an upheaval, we are in a good growth position as we
continue to improve our milling facility and bring the SSX-Steer mine
into production.'
Details of the Company's financial results are described in the
unaudited consolidated financial statements, and management's
discussion and analysis, which will be available on the Company's
website, www.yukon-nevadagold.com/s/FinancialStatements.asp and SEDAR, www.sedar.com.
This news release was reviewed and approved by the Company's Vice
President of Exploration, Todd Johnson, M.Sc., the Qualified Person
under NI 43-101 for purposes of this release.
Yukon-Nevada Gold Corp. is a North American gold producer in the
business of discovering, developing and operating gold deposits. The
Company holds a diverse portfolio of gold, silver, zinc and copper
properties in the Yukon Territory and British Columbia in Canada and in
Nevada in the United States. The Company's focus has been on the
acquisition and development of late stage development and operating
properties with gold as the primary target. Continued growth will occur
by increasing or initiating production from the Company's existing
properties.
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adequacy or accuracy of this release.
WARNING: The Company relies upon litigation protection for
'forward-looking' statements.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the 'U.S. Securities Act')
or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
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Yukon-Nevada Gold Corp.
Richard Moritz
Senior Director, Institutional Investor Relations
Tel: (604) 688-9427
Email: rmoritz@yngc.ca
Nicole Sanches
Investor Relations Manager
Tel: (604) 688-9427 ext 224
Email: nicole@yngc.ca
www.yukon-nevadagold.com
CHF Investor Relations
Jeanny So
Director of Operations
Tel: (416) 868-1079 ext. 225
Email: jeanny@chfir.com
www.chfir.com
AXINO AG
Wolfgang Seybold
Chairman Tel: 49 711 25 35 92 40
Email: wolfgang.seybold@axino.de
www.axino.de/