After two years of drama, Yukon-Nevada Gold Corp has finally achieved steady-state production and positive cash flow. This is a major milestone and the question is whether anybody is left to celebrate because the majority of people have abandoned the ship a long time ago and I doubt they are paying any attention.
June 18, 2012
Yukon-Nevada Gold Corp. Jerritt Canyon Operation Achieves Steady-State Production and Positive Cash Flow
Vancouver, BC — June 18, 2012 — Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) is pleased to announce that its wholly-owned Jerritt Canyon processing facility in Nevada has reached steady-state operation. After facing a series of challenges in reaching target gold production rates earlier this year following a planned shutdown in January, Jerritt Canyon has operated continuously over the last month processing an average of 4,112 tons per day. Jerritt Canyon is operated by Queenstake Resources USA Ltd., (“Queenstake”) a wholly-owned subsidiary of Yukon-Nevada Gold Corp. (“YNG” or the “Company”).
In the first half of June the plant has processed an average of 4,200 tons per day, 7% higher than planned production of 3,933 tons per day. In the past month including the first fifteen days of June, gold recoveries were over 12,000 ounces recovered to the CIL circuit, 11,218 ounces were shipped with the remainder still in plant inventory. At this level of production the Company is generating positive cash flow from operations as well as covering the maintenance capital required to continue to operate the facility effectively going forward.
A further increase in crushing circuit availability will be achieved by the replacement of an inadequately manufactured bucket elevator supplied and installed during the recent shutdown, which was the cause of serious downtime in the first four months of this year. Construction required to replace this component with two conventional belt conveyors is expected to be completed during the next four weeks. A backup mobile crushing and screening plant has been installed and tested in order to ensure continued plant performance during the replacement phase.
On April 25 the Company received an order allowing it to operate both roasters at 110 tons per hour per roaster, an increase of 22%. This was an important step in the operation ramping production up to 4,600 tons per day by the end of 2012 and 4,800 tons per day in Q1 2013. The Company will be pursuing further increases in the allowed operating rate as the year progresses and the emissions technology installed is shown to be effective.
Randy Reichert, Chief Operating Officer commented, “Our team at Jerritt Canyon has worked incredibly hard to bring the operation to commercial levels. We are now seeing the results of this effort and the operation is in excellent shape to meet our gold production target for 2012 of between 140,000 and 150,000 ounces.”
This news release was reviewed and approved by the Company’s Chief Operating Officer, Randy Reichert, M.Sc. P.Eng., 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.
Disclosure: Long Yukon-Nevada Gold Corp
Very lame reaction to such a major event. YNG is clearly flying below the radar.
I agree with you but I am not surprised. The management can only blame themselves for it because through their promises they worn out pretty everybody. Consequently investors are afraid to jump in because they have been burned too many times and the ones that are selling at today’s prices just want to be done with this company. I would not be surprised if the stock goes below $0.30 again because those who did not get a big enough pop will finally say forget it.
I’m still here Mariusz so I’ll high five you! (with a bit of “bout damn time” underneath my breath)
hahah
good news, now they just need to keep at this and not drop the ball again for awhile!
Don’t forget, the market hates the whole sector right now.
yea I’m still in it too. In fact, I didn’t even know that the stock went up because I deleted my entire portfolio tracking by accident and don’t mind it at all
Still counting my timeframe is years not days or week.s
I find that the best way to monitor my portfolio is to not look at all. Just follow the companies and let everything else to follow.
What I think will happen with Yukon’s stock is this.
Last time they announced steady-state the stock price went up significantly. However, it did not do it on its own. Richard Moritz marketed the hell out of the company and enough interest pushed the stock price higher. Then we know what happened next. For the last 1.5 years, he was marketing the company but he wasn’t getting much traction. Actually I attended one of his presentations and no one in the room had any interest in the company. They all came for a free meal. Now Richard has a story to sell. All he needs is a few hedges to start buying. They will need to fight over one another to get their shares pushing prices higher and higher.
Mariusz,
I must say that this is a good find. I bought in January and then right after they had announced the mill was winterized in February, just to watch the stock pull back. I have to admit I was a bit never wracked for a while though, but I could not see anything that was fundamentally different then what I had been reading since I started investigating the company back about 6-8 months ago. Management just continually over-promised and under-delivered.
I am still learning alot about the industry, but I would be putting a ball park figure in my mind of between $1.00-$1.50 in the near term so long as they don’t do anything stupid. (which can not be discounted with this company) The fact that they are actually cash flow positive is huge. They are hopefully going to start making more and more money and not just burning through it. You mentioned in a previous post that you thought the company was worth some where between 0.75-0.90. What do you use to measure the strength of the overall market?
Thanks,
Rocky
I agree with your $1.00 to $1.50 valuation, but I don’t think they will get this much. A year ago, this would have been possible, but now no one wants to be in the mining sector. So if Yukon wants to sell itself, they are unlikely to get a top dollar for it. They could obviously wait but I don’t know if they will because it appears to me that they want to sell.
I don’t really measure the strength of the overall market.
So it is more of your opinion that they want to sell the company and since the overall market is out of play for the miners right now, they are going to have to probably sell at a discount to what they could sell if they were willing to wait for a turnaround in market sentiment towards miners in general. If they decide that they are willing to wait it out for the investors then maybe they might get more of valuation in line with where it could or should be as the case may be.
Anyways, I really appreciate your blogging and if I were if the USof A I would probably send some more for you to manage but since I am not I will just have to continue to follow your research. Keep up the great product.
http://www.yukon-nevadagold.com/s/NewsReleases.asp?ReportID=532117&_Type=&_Title=Yukon-Nevada-Gold-Corp.-Announces-Corporate-Management-Changes
I was kinda expecting resignation from Baldock but not so soon. Mariusz, any thoughts about this? I remember you saying that the reason you were originally interested in YNG was Baldock, so does this change anything in your view?
TIA
What do you make of the CEO resignation, Mariusz?
Baldock resigned today. Any views on this? I am quite surprised.