VANCOUVER, April 1 /CNW/ - Yukon-Nevada Gold Corp. (the "Company") (TSX: YNG) (Frankfurt Xetra
Exchange: NG6) today announced the financial and operating results for the fourth
quarter ended December 31, 2010. This information should be read in
conjunction with the Company's quarterly and annual financial
statements, notes to the financial statements and Management's
Discussion and Analysis. All dollar amounts are expressed in United
States Dollars unless otherwise specified.
Highlights for the three-month period ended December 31, 2010 include:
The Jerritt Canyon Mine processed 18,770 ounces from stockpiles,
purchased ore and mining operations, despite the early onset of colder
than normal weather conditions.
The Company successfully negotiated a trial three month contract with
Newmont for the delivery of 2,000 tons of gold bearing ore per day
commencing October 30, 2010. During the quarter the Company purchased
86,257 tons of ore from Newmont USA Limited ("Newmont") under this
contract containing 16,905 ounces, at an average cost of $198.53 per
wet ton. Due to the success of this initial contract, Newmont is
continuing to deliver at a rate of 1,000 tons per day in 2011 while
finalizing a longer term contract with an increased daily tonnage.
The gross margin from mining operations at the Jerritt Canyon Mine was a
loss of $8.4 million in the three months ended December 31, 2010, a
significant reduction from the third quarter results as the Jerritt
Canyon operations dealt with extreme weather conditions.
Small Mine Developers ("SMD") delivered 71,173 tons to the mill
containing 14,919 ounces from the Smith mine during the quarter,
showing continued improvement but also reflecting a slowdown in the
month of November to complete backfill and development work.
The Company had a loss of $21.7 million in the fourth quarter of 2010
compared to $18.1 million in the fourth quarter of 2009. This loss
largely arose from the loss from mining operations noted above as well
as the interest costs on the $25 million loan and derivative losses of
During the fourth quarter the Company focused on recovering the missing
ounces identified in the third quarter and processing primarily Smith
ore and ore purchased from Newmont while conserving lower cost
The Company has now recovered the missing ounces and this has led to a
full analysis of the mill circuit and further steps are being taken to
improve the controls and enhance the throughput. In late February the
Company retained the services of an Australian specialist consulting
firm to review the security and metallurgical procedures and they are
in the process of providing a full report to bring the Company in line
with Gold Security Standards.
As the Company is able to increase the daily production amounts and mix
in a larger portion of lower cost stockpiles a significant improvement
in margins will be realized, however as a result of processing
primarily Smith and Newmont ores and the low throughput experienced in
the quarter, the cost per ton increased from an average quarterly cost,
including mining and milling, of $95/per ton to approximately $231/per
ton in the fourth quarter as a result of this change.
The lower throughput in the fourth quarter is primarily a result of
delayed work that the Company had originally identified in their
2009/2010 capital budget. Much of this work was focused on
winterization and improvements to the milling facility. The delay in
these capital investments impacted the milling operations of the
Company and the corresponding financial results for the fourth quarter.
With regards to the Consent Decree the Nevada Division of Environmental
Protection has acknowledged the positive approach and efforts taken by
the Company and continues to provide support and assistance, despite
the Company not being able to complete certain items within the time
constraints as imposed by the Consent Decree. Regular meetings in
Carson City, site inspections and other initiatives all assist the
Company's progress in working toward finalizing the Consent Decree
During 2010, a total of 86 exploration diamond drill holes were
completed at the Ketza River Project in the Yukon Territory, Canada.
Several inlying claims located within the large Ketza River property
were purchased in the summer of 2010 and helped consolidate the
ownership into one contiguous block owned or leased by Ketza River
Holdings. The Company is pursuing other opportunities to extend the
claim block at Ketza River.
Significant work on the Ketza drill hole database was conducted in 2010
to help support an updated resource estimate. Drill hole assay data
were reviewed, database software was upgraded, and assay importing
routines were optimized during 2010. An extensive update process was
completed as well to integrate all assays for historical drill holes
(assays from 1985 to 1997 were digitally compiled from the paper drill
hole files). Primary lab assay data for these early drill hole years
were selected and methodically entered into the drill hole database and
used for the revised 2010 resource model calculation. An updated
resource calculation for the Ketza River project is currently in
progress and targeted for completion in 2011 which will incorporate all
of the previous year's drilling information and will include a summary
of the metallurgy testing program conducted in 2008. This resource
estimate will form the basis of the mine design for the Project
Proposal that has a targeted submission date to the Yukon Environmental
and Socio-economic Assessment Board of August 2011.
During the first six months of 2010, the Company issued 22.7 million
shares for net proceeds of $4.8 million and 34.6 million flow-through
shares for proceeds of $9.2 million. The Company intends to spend the
latter funds on continued exploration at the Company's Ketza River
Property in the Yukon.
In August 2010, the Company issued $25.0 million in Senior Secured Notes
and 25.0 million common share purchase warrants, raising gross proceeds
of $25 million. The share purchase warrants entitle the holder to
purchase common shares of the Company for C$0.40 for a period of three
On November 25, 2010, the Company entered into a gold sales contract
which specifies that 6,255 troy ounces of refined gold will be sold to
the Purchaser by May 30, 2011. In return, the Company received an
upfront payment of $7.0 million cash.
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 SED-AR, www.sedar.com.
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
Arizona and 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 in addition to the planned acquisitions mentioned
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WARNING: The Company relies upon litigation protection for
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.
SOURCE Yukon-Nevada Gold Corp.
For further information:
Yukon-Nevada Gold Corp.
Senior Director, Institutional Investor Relations
Tel: (604) 688-9427
Investor Relations Manager
Tel: (604) 688-9427 ext 224
CHF Investor Relations
Director of Operations
Tel: (416) 868-1079 ext. 225
President and CEO
Tel: +49 711 25 35 92 40