Yukon-Nevada Gold Corp. Announces
Second Quarter Results for 2012
Yukon-Nevada Gold Corp.
(TSX: YNG)(OTCBB: YNGFF)(Frankfurt Xetra Exchange: NG6) (the
"Company") today announced its financial and operational results for
the second quarter ended June 30, 2012. 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.
Highlights for the three-month period ended June 30, 2012 include:
� During the quarter the Jerritt Canyon Mill produced 25,249 payable ounces of gold
from mining operations, compared with 19,407 ounces of gold produced in the
second quarter of 2011. Total ounces produced increased from the second
quarter of 2011 as the Company processed higher grade ore from both the Smith
and SSX mine compared with primarily lower grade stockpile and ore purchased
from Newmont in the previous year. With the replacement of the chain on
the bucket elevator in early May, the milling operations were also able to
operate consistently at 4,000 tons per day and from mid-May to mid-June
averaged 4,112 tons per day.
� For the three months ended
June 30, 2012 the Company produced 154,893 tons from mining operations at Jerritt Canyon, a significant increase from the 74,534 tons
produced in the first quarter of 2012. The majority of this increase was
from the Smith mine as Small Mine Development (�SMD�) ramped up to 1,127 tons
delivered per day and delivered 27,959 tons more than the first quarter of
2012. Operations at SSX-Steer also increased significantly during the
quarter as the Company completed necessary electrical cabling work and took
delivery of additional underground equipment (second quarter mining production
was 28,151 tons higher than the first quarter of 2012). June production
for the Smith mine averaged 1,250 tons per day while the SSX-Steer mine
averaged 705 tons per day (however the latter increased to almost 1,000 tons
per day in the last half of June with the delivery of additional underground
trucks). This trend has continued in the third quarter as the Smith mine
continues to average over 1,200 tons per day and the SSX-Steer mine increased
to over 800 tons per day in July and August, with many days in excess of 1,000
tons per day.
� During the months of April
and May, the milling operations experienced significant downtime, approximately
eight days in April and ten days in May, in the fine crushing circuit due to
repeated chain failures with the bucket elevator that was installed in the
January shutdown. The Company commenced work on replacing the bucket
elevator with two conventional belt conveyors in mid-June and completed the
work on July 11, 2012, resulting in significantly increased reliability and
performance in the fine crushing circuit as well as better recoveries as the
operations can now optimize the ore grind in the crushing circuit. The
crushing circuit is now operating at well over 300 tons per hour allowing for
consistent operation of the roasting and CIL circuits at over 4,000 tons per
day.
� The Company recorded a loss
of $8.3 million in the second quarter of 2012 compared to net income of $22.9
million in the second quarter of 2011. The 2011 second quarter net income
resulted from a $36.6 million gain in the fair value of warrants recorded as
derivative liabilities, where the amount in the second quarter of 2012 was a
$1.4 million loss. The gross loss in the second quarter of 2012 was $3.1 million
compared to a loss of $1.9 million in the three months ended June 30, 2011.
Jerritt Canyon
SMD delivered 102,583 tons to the mill, containing an estimated 16,397 ounces,
from the Smith mine during the three months ended June 30, 2012, higher than the
previous quarter of 74,624 tons containing an estimated 12,652 ounces.
The deliveries in the second quarter of 2012 averaged 1,127 tons a day, 94% of
the production target of 1,200 tons per day.
At the Company operated SSX-Steer mining complex, the Company continued to ramp
up the production rates delivering 52,310 tons containing an estimated 6,681
ounces during the three months ended June 30, 2012; an increase from the
previous quarter�s delivery of 24,159 tons containing an estimated 3,895 ounces.
During the quarter the Company took delivery of additional key equipment
including two underground trucks, a drill jumbo, and a bolter. As well, major
work was carried out on the mine electrical system and as a result of this new
electrical infrastructure the Company is seeing increased productivity from the
three drill jumbo�s in place which is increasing the
rate of development at the SSX-Steer. Subsequent to quarter-end SSX-Steer
received two additional underground trucks to complete the full complement of
mining equipment required to achieve full production levels. Production is
expected to reach the target of 1,200 tons per day during the third quarter.
For the second quarter of 2012 the mill processed 282,803 tons through the
roaster containing 30,425 ounces of gold. This compares to 74,534 tons
processed during Q1 2012 containing 8,198 ounces of gold.
The process facility experienced problems during the quarter with the bucket
elevator installed during the January 2012 shut down. This piece of equipment
experienced persistent mechanical failure and as a result caused numerous
shutdowns. The bucket elevator has subsequently been replaced by two standard
conveyors that have been operating consistently since July 11, 2012 as noted in
a news release issued on August 9, 2012.
During the three months ended June 30, 2012 a total of 359 cubex
drill holes were completed at the Smith and SSX-Steer underground mines. The
goal of the 2012 underground Diamond drilling program is to add resources and
reserves that are not included in the current Life of Mine plan.
Ketza River
Final assays from the 2011 Ketza River drilling
program have been received and will be reviewed over the third quarter.
During the quarter, the Company conducted the following work:
� Refined the planned drilling
program;
� Continued writing the 2011 Land
Assessment reports for both Silver Valley and Ketza
River;
� Completed a reclamation plan to
review with the Yukon governing agencies; and,
� Updated the acQuire
drill hole database.
Yukon Environmental and
Socio-economic Assessment Board
As part of the adequacy review, questions are being
addressed regarding the Yukon Environmental and Socio-economic Assessment
Application (�YESAA�) that was submitted in late September of 2011. This
report assessed the environmental and socio-economic effects of activities
integrating scientific information, traditional knowledge and other local
knowledge. The review of this application is expected to take between 12
and 18 months from the date of the original submission.
Ongoing baseline data activities continue at the site including monthly water
reporting. A new large capacity arsenic treatment plant became
operational late in the quarter in order to assist in the treatment of tailings
water.
Outlook
In achieving the targeted production rate of 150,000 ounces of gold under
steady state operations, the Company is focusing on ramping up production from
the SSX-Steer mine which will be complete towards the end of the third quarter
with the delivery of the remaining underground trucks and other equipment now
completed. As well, the Company will continue to process available
stockpiles and receive ore from the Smith mine. Longer term the Company
is prioritizing negotiations for profitable third party ore processing
opportunities. Revenues from these arrangements would offset production costs,
resulting in a cash cost advantage. The Company will also consider accretive
acquisitions of strategically located ore, either as an outright acquisition or
an ore purchase. The Company will also continue building the necessary
infrastructure and making equipment purchases in order to open a third mine on
the property, Starvation Canyon, located on the south end of Jerritt Canyon.
The Company has continued to pass all independent stack tests for mercury and
other emissions and is currently able to operate at 110 tons of ore per hour
through each roaster circuit based on current emissions and will be seeking to
increase this in the near future based on Q2 2012 emissions test results.
As part of the January 2012 shutdown the Company was able to install the second
quench tank and the necessary emissions control equipment (additional bag house
to filter dust, sulfur dioxide scrubber) on the new ore dryer as well as all
other remaining items on the CD except for the cleanup of rock dump sites from
historic mining activity. The Company has also substantially completed
the second tailings facility and water storage reservoirs, although lining and
commissioning will take place in the third quarter of 2012. This
investment is not a component of the CD itself; however this investment will
extend the life of the mill and bring it in line with current standards.
The surface exploration program at Jerritt Canyon in
2011 has identified a number of areas of interest and proven the viability of
the East and West Mahala resources which lie between
the Smith and the SSX-Steer mine. Additional survey work in the
Starvation area has identified further areas of interest that will need to be
explored in the 2012 drill program as well. These results have largely
been incorporated into a new reserve up date that the Company released on April
27, 2012.
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.
Yukon-Nevada Gold Corp. is a growing mid-tier North American gold producer in
the business of developing and operating gold mines in geo-politically stable
jurisdictions. The Company�s primary asset is the permitted and operating Jerritt Canyon gold mine located 50 miles north of Elko,
Nevada, USA. The Company also holds a diverse portfolio of precious metals
properties in British Columbia and the Yukon Territory, Canada, including the
former producing Ketza River mine. The Company's
focus has been on the re-development of the Jerritt
Canyon mining and milling facility