ELKO — Yukon-Nevada Gold Corp. today reported a net loss of $7.8 million for the first quarter, compared with net income of $28.9 million in the first quarter of last year.
The company said the 2011 income was mainly due to a $51 million gain from a decline in the fair value of warrant liabilities, while the 2012 quarter had only a $3.9 million comparable gain.
Without the fair-value accounting, the gross loss was $800,000 in the quarter, compared with a loss of $13.9 million last year.
The Vancouver-based company also reported its Jerritt Canyon Mine north of Elko shipped 13,163 ounces of gold from stockpiles and mining operations in the 2012 quarter, compared with 13,180 ounces shipped in the 2011 quarter.
Yukon-Nevada said the shipments in the first quarter of this year were comparable to last year despite a mill shutdown from Jan. 6 to Feb. 3 to complete the winterization project and refurbishing of the mill.
During the quarter, Small Mine Development LLC delivered 91,265 tons to the mill, containing an estimated 9,096 ounces, from the Smith underground mine during the three months ended March 31. SMD is contractor miner for Smith.
The deliveries in the quarter averaged 960 tons a day as SMD continues towards a production of 1,200 tons per day targeted for the second quarter of 2012, according to Yukon-Nevada.
At the company-operated SSX-Steer underground mining complex, Jerritt Canyon continued to ramp up the production rates in the first quarter, delivering 26,305 tons containing an estimated 2,988 ounces. This was up from 1,117 ounces in the prior quarter.
Yukon-Nevada reported the delivery of additional key equipment at SSX-Steer included three underground trucks and two jumbo drills, and delivery is expected in the current quarter for one new jumbo drill, one new bolter and four new haul trucks equipped with boxes especially designed for hauling backfill.
The company said once all this equipment is in operation, SSX will be fully equipped for full production, and ore production is expected to be at 1,200 tons per day.
Yukon-Nevada also reported 11 underground diamond drill holes totaling 10,332 feet were completed in Zone 4 at the Smith Mine in the first quarter and assays are in progress.
Problems with the mill improvements caused snags in the first quarter, but Yukon-Nevada said that identification and rectification of issues, the newly commissioned equipment is operational and is expected to achieve targeted average production of more 3,600 tons per day in the second quarter.
In achieving the targeted production rate of 150,000 ounces of gold under steady state operations, the company said in its earnings report it is focusing on ramping up production from the SSX-Steer Mine and will continue to process available stockpiles and receive ore from the Smith Mine at an increasing rate.
Longer term, the company is looking at profitable opportunities to acquire mineable assets in the area and process third-party ore under a toll milling arrangement, according to the earnings announcement.
Yukon-Nevada stated it will also continue building the necessary infrastructure and making equipment purchases in order to open a third mine on the property, Starvation Canyon, located on the south end of Jerritt Canyon.