Allied Nevada expects to double gold production this year; stock rises 8%

Allied Nevada Gold hit its 2011 production target despite operational delays, and is expecting to double output in 2012.

The Reno-based gold producer said it produced 104,000 ounces of gold and 479,400 ounces of silver from its Hycroft mine, at cash costs of $490 per ounce. A 3.2 million square foot heap leach expansion, which is nearing completion, is expected to boost gold production to between 180,000 and 220,000 ounces, and silver silver production to between 750-850,000 oz.

The news lifted the company's stock price by 8% in New York.

Allied Nevada (NYSEMEX:ANV) said the successful results at Hycroft came despite delays in the delivery of key pieces of mining and processing equipment as a result of the earthquake and tsunami in Japan last March. Delivery of the first shovel effected a 30% decrease in mining costs per ton in the fourth quarter, the company stated.

Capital expenditures this year are budgeted at about $226.5 million, and include drilling, permitting, fixed and mobile equipment, engineering for the mill and gyratory crushing projects, and infrastructure improvements.

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