Allied Nevada Reports Increases to Proven & Probable Mineral Reserves to 12.7 Million Ounces of Gold and 481.9 Million Ounces of Silver
24.02.2012 | Marketwire
Measured & Indicated Mineral Resources Increase to 8.2 Million Ounces of Gold and 236.9 Million Ounces of SilverRENO, NEVADA -- (Marketwire) -- 02/23/12 -- Allied Nevada Gold Corp. ('Allied Nevada' or the 'Company') (TSX: ANV)(NYSE Amex: ANV) is pleased that its infill program at Hycroft, along with additional engineering studies, successfully upgraded 2.5 million ounces of gold and 93.3 million ounces of silver to the proven and probable mineral reserve categories. Total proven and probable mineral reserves on December 31, 2011 were 12.7 million ounces of gold and 481.9 million ounces of silver, representing a 24% increase to both gold and silver contained ounces compared with the June 30, 2011(1) reserve estimate.
'We have successfully extended the mine life by continuing to focus our efforts on upgrading the resources at Hycroft,' comments Scott Caldwell, President and CEO. 'In 2012, drilling at Hycroft will be directed towards continuing to develop the current resource area as well as step out targets on the greater Hycroft property. We believe Hycroft is a world-class deposit that will sustain a long-life, low cost production profile with significant regional potential.'
Measured and indicated mineral resources (exclusive of reserve) at year end 2011 were 8.2 million ounces of gold and 236.9 million ounces of silver, an increase of 21% and 16%, respectively, compared with the June 30, 2011 resource estimate.
The metals prices used in estimating resources at December 31, 2011 of $800 per ounce for gold and $14 per ounce for silver did not change from resource estimates in 2010. Gold equivalent cut-off grades have decreased slightly to 0.004 ounces per ton ('opt') for heap leach material and 0.010 opt for mill material reflecting increases in recoveries used in the model compared with the previous resource estimate. This cut-off grade strategy has been applied to both mineral reserve and resource estimates. The Company completed a metal price sensitivity analysis estimating ounces mined using Whittle cones, hypothetical mining pits created using the block model and applying metallurgical recoveries and basic economics such as metal prices and costs. The results of this analysis are as follows:
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Total Contained Ounces
Metal Prices Total Tons Waste Tons (000s)
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Au Ag (000s) (000s) Au Ag
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$ 400 $ 7 129,260 58,345 1,160 64,405
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$ 600 $ 11 1,600,978 951,999 8,073 351,988
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$ 800 $ 14 2,561,305 1,426,636 12,651 481,881
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$ 1,000 $ 18 4,072,112 1,974,611 20,490 721,335
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$ 1,100 $ 19 4,316,917 2,012,218 21,731 757,375
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$ 1,200 $ 21 4,497,023 2,007,042 22,673 786,313
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$ 1,400 $ 25 4,874,219 2,066,819 24,064 834,987
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$ 1,600 $ 28 5,104,468 2,043,782 24,935 867,701
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$ 1,800 $ 32 5,304,724 2,011,334 25,568 896,850
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$ 2,000 $ 35 5,696,406 2,122,481 26,362 930,344
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This sensitivity analysis assumes a constant silver to gold price ratio of 57.14:1. The $800 per ounce of gold and $14 per ounce of silver line (bold and highlighted) reflects our current reserve estimate. The $1,200 per ounce gold price line (highlighted) hypothetically represents potentially mineable material, assuming a trailing 3-year average gold price of $1,256 per ounce.
December 31, 2011 - Summary Mineral Reserve & Resource Estimate
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Proven & Probable Mineral Reserves
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Tons Grades Contained Ounces (000s)
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(000s) Au Ag AuEq Au Ag AuEq
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Proven Heap Leach 249,214 0.008 0.24 0.012 1,903 60,138 2,955
Probable Heap Leach 89,450 0.006 0.25 0.011 578 22,155 966
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Total Proven &
Probable Heap Leach 338,664 0.007 0.24 0.012 2,481 82,293 3,921
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Proven Mill
- Transitional 174,947 0.015 0.51 0.024 2,607 89,187 4,168
- Sulfide 472,036 0.012 0.53 0.021 5,719 248,931 10,076
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Total Proven Mill 646,983 0.013 0.52 0.022 8,326 338,118 14,244
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Probable Mill
- Transitional 33,977 0.012 0.54 0.022 413 18,357 735
- Sulfide 115,046 0.012 0.37 0.019 1,431 43,112 2,185
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Total Probable Mill 149,023 0.012 0.41 0.020 1,844 61,469 2,920
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Total Proven &
Probable Mill 796,006 0.013 0.50 0.022 10,170 399,587 17,164
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TOTAL PROVEN &
PROBABLE MINERAL
RESERVES 1,134,669 0.011 0.42 0.019 12,651 481,881 21,084
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Waste 1,426,636
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Total Tons 2,561,305
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Strip Ratio 1.26
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Measured & Indicated Mineral Resources (exclusive of Mineral Reserves)
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Tons Grades Contained Ounces (000s)
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(000s) Au Ag AuEq Au Ag AuEq
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Measured Heap Leach 169,392 0.005 0.17 0.008 819 29,343 1,332
Indicated Heap Leach 170,681 0.004 0.17 0.007 711 29,857 1,234
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Total Measured &
Indicated Heap Leach 340,073 0.004 0.017 0.007 1,530 59,200 2,566
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Measured Mill
- Transitional 38,273 0.011 0.52 0.020 403 19,924 752
- Sulfide 271,617 0.011 0.31 0.016 3,005 83,752 4,471
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Total Measured Mill 309,890 0.011 0.33 0.017 3,408 103,676 5,223
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Indicated Mill
- Transitional 26,119 0.009 0.52 0.018 243 13,632 481
- Sulfide 263,537 0.011 0.23 0.015 2,989 60,344 4,045
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Total Indicated Mill 289,656 0.011 0.26 0.016 3,232 73,975 4,526
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Total Measured &
Indicated Mill 599,546 0.011 0.30 0.016 6,640 177,651 9,749
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TOTAL MEASURED &
INDICATED MINERAL
RESOURCES 939,619 0.009 0.25 0.013 8,170 236,851 12,315
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Inferred Mineral Resources
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Tons Grades
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(000s) Au Ag AuEq
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Inferred Resource - In Reserve Pit
- Heap Leach 28,226 0.006 0.26 0.011
- Mill 68,066 0.013 0.40 0.020
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Total inferred in reserve pit 96,292 0.011 0.36 0.017
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Inferred Resource - Outside Reserve Pit
- Heap Leach 34,425 0.005 0.442 0.012
- Mill 404,221 0.010 0.215 0.014
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Total inferred outside reserve pit 438,646 0.010 0.23 0.014
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TOTAL INFERRED MINERAL RESOURCES 534,938 0.010 0.253 0.0145
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NOTES TO THE DECEMBER 31, 2011, MINERAL RESERVE AND RESOURCE ESTIMATE
1. Scott Wilson of Scott E. Wilson Consulting, Inc. is a Certified
Professional Geologist and member of the American Institute of
Professional Geologists in Denver, Colorado, and is a Qualified Person
as defined by NI 43-101. Mr. Wilson is the independent resource estimate
consultant for Allied Nevada Gold Corp. and has supervised the
preparation of the technical information contained in this press
release.
2. Scott E. Wilson Consulting, Inc. has recommended an ordinary kriging
estimate as the preferred method of determining the Mineral Resource
estimate. Inferred Mineral Resource calculations are based on 25 foot
drill hole composites of 5 foot sample intervals. All estimates are
based on a block dimension of 50 feet long x 50 feet wide x 25 feet tall
with the estimation parameters determined by variography.
3. Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability. The estimate of Mineral Resources may also be
materially affected by the inability to obtain required environmental
and other regulatory approval or operating permits. The estimate may
also be materially affected by global economic conditions such as the
price of gold and silver, the price of oil and other commodities
utilized in the production of gold and silver. Unknown geologic or
hydrologic conditions or other unknown factors may materially affect the
resource estimates.
4. A processing method and plant, different from that currently operating
at the Hycroft Mine, and all associated regulatory approvals, are
required to recover gold and silver from sulfide mineralization.
5. Gold equivalent cutoff grades were calculated using a gold price of $800
per ounce and a silver price of $14.00 per ounce for a gold to silver
ratio of 57.14:1.
6. Estimates of Mineral Reserves and Resources may be materially affected
by environmental permitting, legal and other relevant issues.
Cautionary Statement Regarding Forward Looking Information
This press release contains forward-looking statements within the meaning of the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934 (and the equivalent under Canadian securities laws), that are intended to be covered by the safe harbor created by such sections. Such forward-looking statements include, without limitation, statements regarding the Company's expectation of the projected timing and outcome of engineering studies; the potential for confirming, upgrading and expanding gold and silver mineralized material at Hycroft; mineral reserve and resource estimates; estimates of gold and silver grades; 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 relating to risks that Allied Nevada's acquisition, 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; availability of outside contractors in connection with Hycroft and other activities; 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 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 U.S. Securities and Exchange Commission (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. 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.
Cautionary Note to U.S. Investors Regarding Estimates of Measured, Indicated and Inferred Mineral Resources
This press release uses the terms 'measured', 'indicated' and 'inferred' 'mineral resources.' We advise U.S. investors that while these terms are recognized and required by Canadian regulations, the SEC does not recognize them. 'Inferred mineral resources' have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an 'inferred mineral resource' will ever be upgraded to a higher category. Under Canadian rules, estimates of 'inferred mineral resources' may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute 'reserves' as in-place tonnage and grade without reference to unit measures. The term 'contained gold ounces' used in this press release is not permitted under the rules of the SEC. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists or is economically or legally mineable.
Mr. Scott E. Wilson, AIPG Certified Professional Geologist #10965, is Allied Nevada's Independent Qualified Person as defined under National Instrument 43-101 (NI 43-101). He has supervised the preparation of the technical information and has reviewed and approved the contents of this news release. Allied Nevada will file on www.sedar.com a NI 43-101 compliant technical report within the time required by NI 43-101 guidelines encompassing the mineral reserve and resource discussed herein.
(1)See press release dated August 23, 2011 on www.alliednevada.com for more information regarding the June 30, 2011 resource estimate.
Contacts:
Allied Nevada Gold Corp.
Scott Caldwell, President & CEO
(775) 358-4455
Allied Nevada Gold Corp.
Tracey Thom
Vice President, Investor Relations
(775) 789-01197
www.alliednevada.com