Analyst interpretation of expansionYUKON-NEVADA GOLD CORP.
($1.22; YNG: TSX)
Recommendation: Speculative Buy (No Change)
Target Prices: 1-Year: $3.30 (No Change)
3-Year: $5.90 (No Change)
RECENT DEVELOPMENT: EXPANSION PLAN
Jerritt Canyon
Yukon-Nevada Gold Corp. will increase the rate of gold production from mines at Jerritt Canyon in Nevada to over
200,000 ounces per year by the end of 2010, up 66% from 2007.
The increase will be a result of (i) improving infrastructure, (ii) accessing a larger percentage of the current reserve,
and (iii) near-mine exploration.
Ketza River
Plans for commencement of production from open-pit mining at Ketza River, Yukon Territory are on schedule. Drill
results reported recently from Ketza River showed that there is excellent potential to expand open-pit resources
in the Manto and Shamrock zones (see eResearch Bulletin of June 12, 2008). Diamond drilling is ongoing at the
property on numerous targets.
Yukon-Nevada’s mine expansion, mine start-ups, and plant and equipment upgrade programs will be mainly funded
from internal cash fl ow. Excess required will be funded by debt, which should be manageable given the cash fl ow
expectations.
COMMENT: An expected production increase of 66% at Jerritt Canyon is clearly a positive development.
Long-term investors should not be concerned by the lower-than-forecast production levels for the current year.
The aggressive exploration at Ketza River and the potential to expand open-pit resources are expected to provide
further upside potential for investors.
THE COMPANY
Yukon-Nevada Gold Corp. is a gold producer involved in the exploration, development and operating of gold
deposits. The Company has a diverse portfolio of properties and commodities.
RECOMMENDATION
We are maintaining our Target Prices of $3.30 (1-year) and $5.90 (3-year). The stock continues to be rated as a
Speculative Buy, suitable for risk-tolerant investors. Given the Company’s strong growth prospects, the stock offers
excellent value at current prices.