Vancouver, BC � August 16, 2011 � 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 orefrom 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.aspand 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.