Allied Nevada Gold (TSE:ANV) rocketed by as much as 18% on Tuesday as the beaten down gold and silver miner found favour among investors looking for bargains in the precious metals sector.
By mid-afternoon the Reno-based miner was trading up a more modest 7.4% at $8.75 on the Toronto big board, following a midday spike when the biggest trade of the day went through at $9.38.
Volumes were twice the usual daily average and a huge number of call options were also placed on the stock Tuesday.
The $845 million counter was decimated following the gold and silver price crash in April. Even after today's rise, Allied Nevada stock is still a whopping 70% cheaper than at the start of the year.
Allied Nevada is aggressively expanding its Hycroft open-pit gold and silver heap leach mine located 84km west of Winnemucca, in north-west Nevada and last month raised $150 million at $10.75 a share.
The company expects sales of roughly 225,000 to 250,000 ounces of gold and 1.5 million to 1.8 million ounces of silver this year, up significantly from 2012 when it mined 137,000 ounces of gold and 794,000 ounces of silver.
Allied Nevada is a relatively low cost producer with cash costs for 2013 pegged to be in the range of $665 to $685 per ounce.
The company's Hasbrouck project also in Nevada boasting inferred mineral resources of 1.2 million ounces of contained gold and 29.3 million ounces of contained silver is in the preliminary economic assessment phase.