First profit for Allied Nevada Gold

Allied Nevada Gold Corp. earned $5.1 million in the third quarter the first profit for the Reno company that brought Nevada's Hycroft Mine back into production.

The mine 54 miles west of Winnemucca, which had been closed since 1998, produced 20,620 ounces of gold during the third quarter. Hal Kirby, chief financial officer of publicly held Allied Nevada, said last week the gold was produced at an average cash cost of $364 an ounce and sold for an average of $955 an ounce.

Scott Caldwell, president and chief executive officer, said the company expects the Hycroft Mine will be producing 100,000 ounces of gold annually beginning next year. Allied Nevada resumed production at the facility in late 2008.

The mine also produces about one ounce of silver with each ounce of gold. The company expects silver production to increase, Caldwell said.

He said the company's efforts to bring the mine back into full production were slowed for about 90 days by regulatory delays.

In the meantime, the company has been exploring the Hycroft property to get a better sense of the gold deposits. Four rigs will drill 150 to 200 exploratory holes, Caldwell said.

Along with the Hycroft Mine, Allied Nevada holds about 100 potential mining prospects in the state. Caldwell said the company probably will explore 10 of the properties itself and is talking with a large number of companies interested in creating joint ventures or other deals to explore other properties.