Allied Nevada Gold has released the results of a positive milling feasibility study for its Hycroft mine near Winnemucca, Nevada. The company's board has approved capital spending to secure long-lead items and to complete detailed engineering for the project. Upon completion of detailed engineering and receipt of required permits, expected in January 2013, the company intends to move directly into the construction phase of the mill project.

The mill project at Hycroft is separate from and in addition to an expansion of heap leach operations is currently in progress. The heap leach expansion includes increasing the mining rate by implementing a larger-scale mining fleet, additional leach pad capacity, and crushing of 30% of the ore using semi-mobile crushing plants.

The mill feasibility study estimates average annual combined milling and heap leach production at Hycroft of 616,800 oz of gold and 25.9 million oz of silver for the years that the mill is operating, 2015 to 2024. Life-of-mine adjusted gold cash cost, with silver as a byproduct credit, is estimated at $277/oz. Initial mill capital cost is estimated at $985 million. Combined capital costs for the mill project and the heap leach expansion are estimated at about $1.2 billion.

The mill feasibility study is based on recently announced proven and probable mineral reserves of 10.2 million oz of gold and 388.6 million oz of silver. Economics were estimated using average gold and silver selling prices of $1,000/oz and $18/oz, respectively.

The mill study assumes processing an average of 130,000 st/d through the mill and 87,000 st/d via crushing and heap leaching beginning in 2015. Mining will be conducted by conventional drill, blast and truck haulage. The fleet will consist mainly of three 55-yd3-capacity rope shovels, 320-st-class haul trucks and other support equipment.

The mill flowsheet includes a crushing system that will feed two separate lines, each comprised of a 36-ft semi-autogenous grinding mill, two 25-ft ball mills, rougher and cleaner flotation cells, and leach facilities.

Heap leach ore will be crushed to 80% passing 3/8 in. and stacked on the leach pads via overland conveyors.

The heap leach expansion is being funded through existing cash balances, capital leases and operating cash flow. Allied Nevada is currently developing a financing plan that addresses funding of capital requirements for the milling project.