2013 Year End Results
Allied Nevada Reports 2013 Financial and Operating Results
RENO, NEVADA--(Marketwired - Feb. 24, 2014) - Allied Nevada Gold Corp. ("Allied Nevada" or the "Company") (TSX:ANV)(NYSE MKT:ANV) provides financial and operating results for the year ended December 31, 2013.
2013 Highlights:
Record gold and silver sales in 2013, up 59% and 23%, respectively, from the previous year
Fourth quarter 2013 sales represented 33% of total 2013 gold sales and 41% of total 2013 silver sales, benefiting from the heap leach expansion
Adjusted cash costs per ounce(1) (before write-down) of $802 for the full year 2013, was at the lower end of our guidance range
Lowered mining costs by approximately $0.45 per ton during 2013
Operating full complement of shovel and haul fleet to achieve an average of over 250,000 tons per day
Increased square footage under leach by 72%
Increased Merrill Crowe processing capacity with completion of the new 21,500 gallons per minute (gpm) plant, along with the existing 5,000 gpm plant, which we expect will allow us to eliminate carbon columns in 2014
Amended revolving credit agreement to remove covenants restricting us from using the facility and we now have $40 million in available borrowing capacity
Adjusted net income(2) of $17.2 million ($0.17 per share)
Advanced the onsite oxidation process testing through two phases with positive results leading to the decision to move forward with a pilot plant study to process sulfides
2013 Summary:
Operating results: We sold an annual record 181,941 ounces of gold and 858,073 ounces of silver, of which 60,460 (or 33%) gold ounces and 352,922 (or 41%) silver ounces were sold during the fourth quarter benefiting from our expanded heap leach operations.
We achieved our target annual mining rate and placed 45.6 million ore tons on the leach pads containing approximately 256,384 recoverable ounces of gold and approximately 1.5 million recoverable ounces of silver. During the second half of the year we maintained the nominal mining rate of over 250,000 tons per day while decreasing our per ton mining and processing costs from the first half of the year, all while operating in a leaner, more cost-efficient structure as a result of our mine-site and corporate workforce reductions mid-year.
Adjusted cash costs per ounce1: Adjusted cash costs per ounce1 for 2013 were $802, excluding a write-down at year end of previously incurred cash production costs of $9.7 million (or $53 per ounce), which increased the reported adjusted cash costs per ounce1 to $855.
Heap leach expansion projects: Our heap leach expansion projects were successfully completed in 2013. During the year we increased our mining rate and commissioned the North leach pad, two 73 cubic-yard electric rope shovels, and a 21,500 gallons per minute ("gpm") Merrill-Crowe plant. The crushing system was mechanically completed in 2013 and we expect to commission it during the first quarter of 2014.
Adjusted net income2: Adjusted net income2 in 2013 was $17.2 million (or $0.17 per share). Despite selling record gold and silver ounces in 2013, net income of $1.4 million (or $0.01 per share) was negatively impacted by a lower metal price environment, increased production costs, and significant charges for assets classified as held for sale ($11.7 million), mineral property dispositions ($1.4 million), separation and severance costs ($5.9 million), and a write-down of production inventories ($12.6 million).
Liquidity: We finished 2013 with $81.5 million of cash and cash equivalents. Capital spending in 2013 was less than anticipated due to the deferral of approximately $30.0 million of payments into 2014. Had these payments been made as expected, we would have ended the year near our previously stated cash position of approximately $50.0 million.
In the second quarter of 2013, we proactively improved our financial position and liquidity through the completion of a public offering of our common stock for net proceeds of $142.2 million. During the fourth quarter we amended our revolving credit agreement, eliminating certain financial ratio covenants which precluded us from being able to utilize the facility. This provides us with $40.0 million of borrowing capacity. We are working on expanding the facility in 2014 through an accordion feature that allows us to increase the lending limit to $75.0 million.
Hycroft mill expansion: In August 2013 we announced that we would defer construction of the mill to allow further investigation of encouraging preliminary oxidation results that would allow us to oxidize and process sulfide concentrate onsite at Hycroft. Since then, test work has progressed significantly and the results have provided the confidence to proceed with a pilot plant study of the Ambient Alkaline Oxidation process, which began in February 2014. The pilot plant is expected to be completed by the end of the first quarter of 2014. M3 Engineering & Technology ("M3") will use the results of the oxidation test work, capital and operating cost review and pilot plant program to develop an updated prefeasibility study.
Hycroft Operations Update
We remained committed to our core values, health and safety, and operated in an environmentally responsible manner. Regrettably, there was one lost time accident at our Hycroft Mine during the third quarter of 2013; however, we have taken measures to strengthen the overall health and safety culture at our Hycroft Mine through increased training, more frequent safety meetings, and increased communications.
Key operating statistics for the three months and year ended December 31, 2013, compared with the same periods in 2012, together with 2014 projections, are as follows:
(See weblink for full remainder of news release and outlook for 2014.)
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