Yukon-Nevada Gold Corp. Announces First Quarter Results for 2011
VANCOUVER, May 25, 2011 /CNW/ --
VANCOUVER, May 25, 2011 /CNW/ - Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) (the 'Company') today announced its financial and operational results
for the first quarter ended March 31, 2011. This information should be
read in conjunction with the Company's annual financial statements,
notes to the financial statements 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 interim condensed consolidated 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
accounting principles (Canadian GAAP). A reconciliation of the
previously disclosed comparative periods' financial statements prepared
in accordance with Canadian generally accepted accounting principles to
IFRS is set out in Note 20 to the condensed financial statements The
Company's 2010 comparatives have been presented in accordance with
IFRS. As the date of transition was January 1, 2010 the 2009 quarterly
comparative information has not been restated.
Highlights for the three-month period ended March 31, 2011 include:
-- The Jerritt Canyon Mine produced 14,477 ounces from purchased
ore, stockpiles and mining operations in the three months ended
March 31, 2011. The operations underperformed in the first
quarter as a result of the ongoing severe winter conditions and
resulting shut downs that arose due to these conditions and a
materials and supplies shortage.
-- During the quarter the Company purchased 66,108 tons of ore
from Newmont USA Limited ('Newmont'), containing 7,718 ounces,
at an average cost per wet ton of $104.67 per dry ton.
-- Small Mine Development, LLC delivered 56,321 tons to the mill
containing 12,035 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 a profit of $28.9 million in the first
quarter of 2011 compared to a loss of $41.9 million in the
first quarter of 2010. The profit recorded was a result of a
$51.0 million gain in the fair value of warrants recorded as
derivative liabilities. The operating margin was a loss of
$13.9 million in 2011 against a loss of $3.3 million in the
three months ended March 31, 2010. The loss for the quarter was
primarily driven by the low production levels resulting from
excessive down time as the Company worked to overcome weather
conditions and a lack of readily available spare parts. The
capital investment the Company is now making will ensure that
these operational issues are overcome going forward and the
mill reaches targeted production levels.
-- On March 2, 2011 the Company announced it had closed a
non-brokered private placement for a total of 8.3 million
common shares at a price of $0.85 per share for proceeds of
$7.2 million.
Jerritt Canyon Overview
The Company has continued to pass all independent stack tests for
mercury and other emissions and is currently able to operate over 100
tons of ore per hour through each roaster circuit based on current
emissions.
With the warmer weather and the extensive maintenance carried out in the
last several months, the milling rate is returning to normal production
levels and the voluntary reduction in mining activity taken to match
the lower milling rates in the first quarter has been lifted. The
Company began a weekly shutdown shift in February in order to carry out
significant repairs that can only be done when the roasters are
offline. The work performed during this time is intended to prevent
further major equipment failures in the future and enables the Company
to defer a longer scheduled shutdown until later in the year, currently
scheduled for September. With the recent financing announced yesterday
the Company expects to carry out essential capital investments in 2011
which will substantially improve the operations and corresponding
financial results.
Newmont continued to deliver ore to the Jerritt Canyon facility at a
rate of approximately 5,000 tons per week. The Company will be
accepting Newmont ore on a regular basis for the rest of 2011 at this
rate.
Ongoing exploration at the Smith Mine is progressing quite well as per
the announcement of the increase in the resource on May 3, 2011.
Efforts in future exploration will focus on the Smith Mine, SSX/Steer,
Starvation Canyon, historic mined pits and the discovery of new gold
mines.
Ketza River Overview
Work at Ketza River concentrated on importing drill hole data and soil
geochemical data to finalize the 2011 exploration plan. The Company
also attended working group meetings in Whitehorse to help advance the
Yukon Environmental and Socio-economic Assessment Board project
proposal and various other studies, targeting a third quarter
submission for the application.
Resource updates for both properties are in progress and will be updated
later on this year.
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 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.
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The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
WARNING: The Company relies upon litigation protection for
'forward-looking' statements.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The
securities have not been and will not be registered under the United
States Securities Act of 1933, as amended (the 'U.S. Securities Act')
or any state securities laws and may not be offered or sold within the
United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
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Yukon-Nevada Gold Corp.
Richard Moritz
Senior Director, Institutional Investor Relations
Tel: (604) 688-9427
Email: rmoritz@yngc.ca
Nicole Sanches
Investor Relations Manager
Tel: (604) 688-9427 ext 224
Email: nicole@yngc.ca
www.yukon-nevadagold.com
CHF Investor Relations
Jeanny So
Director of Operations
Tel: (416) 868-1079 ext. 225
Email: jeanny@chfir.com
www.chfir.com
Axino AG
Wolfgang Seybold
President and CEO
Tel: 49 711 25 35 92 40
Email: wolfgang.seybold@axino.de
www.axino.de/