Allied Nevada Gold Corp. (ANV)
Q1 2010 Earnings Call Transcript
May 11, 2010 11:00 am ET
Tracey Thom – VP, IR
Scott Caldwell – President, CEO and Director
Hal Kirby – EVP & CFO
Dave Flint – VP, Exploration
Brian Christie – Desjardins Securities
Mike Kozak – Cormark Securities
» APAC Customer Services, Inc. Q1 2010 Earnings Call Transcript
» Allied Nevada Gold Corp. Q1 2010 Earnings Call Transcript
I will now turn the conference over to Ms. Tracey Thom, Vice President, Investor Relations. Please go ahead.
Good morning, everyone and thank you for joining us today for Allied's first quarter update conference call. Before we begin this call, I would ask listeners to go to our website at www.alliednevada.com, click on the button on the left-hand side of the homepage titled Q1 2010 Earnings and Conference Calls and download a presentation which will accompany today's discussion.
On the call, Scott Caldwell, President and CEO; Hal Kirby, Executive Vice President and CFO; and Dave Flint, Vice President, Exploration will discuss the results of the first quarter press release issued May 10th and explain recent events at Allied Nevada, which have been discussed in previous press releases in the last few weeks and in the company's most recently filed NI 43-101 Technical Report dated April 1st and filed with CEDAR and located on our website. All of these documents can be accessed on our website at alliednevada.com and have been filed with CEDAR.
Following the presentation, we will open up the call for any questions. Please note that certain statements we may make during this call may contain forward-looking information. For additional information, I refer listeners to the cautionary statements regarding forward-looking information contained in our press release dated May 10th and on slide two of the presentation given today.
I'll now turn the call over to Scott Caldwell.
Thanks, Tracey. I'm going to spend a few minutes talking about the first quarter on the production side of things. Basically, we had a pretty good quarter, very happy with the performance, the credit to the General Manager out there, Warren and his team and the men and women in the field. Slightly exceeded our expectations on gold production and silver production for the quarter, producing about 23,000 ounces and selling a little over 20,000 ounces of gold.
Some interesting notes that are mentioned in our press release, but our gold grade continues to be higher than what we expected; the same with our silver grades. And that's not we are mining where we said we are going to mine, it's just that the function of the model appears to be understating both gold and silver grades, hence contained metal.
Silver, we are not really surprised, because silver, we only have assays on about 50% of the material we are mining right now, i.e., the entire resource proven and probable. So the grade has been a pleasant surprise and we expect that trend to continue for the rest of the year.
On to slide five, probably the most important thing and the thing that we watch is how is the pad performing, how are our solution grades behaving, and our solution grades are averaging a little bit better than what we thought, about 5% higher than what we thought for year-to-date; that means more gold. So the pad is performing the way we thought, recovery looks like it's going to be right around 56.6% for gold and something north of 10% for silver.
Silver leach curve takes twice as long, so almost two years to get the ultimate silver recovery and we've only been leaching for about a year now on a commercial production basis. So silver is going to be a while before we really know how it's behaving, but it's certainly going to be about 10% or greater.
Cost per ounce, $387. Can't say how pleased we are with that number, a function of short hauls, et cetera, better efficiencies than we planned. I mentioned the gold and silver grades are a little higher than what we thought, which is great. Lean pumping system, essentially that's allowing us to start stacking solutions. We have enough surface area under leach now. Stack solutions, you improve your solution grades; higher solution grades means more metal.
A result of a continuous improvement effort out there at site was a minor modification to the Merrill Crowe plant. Basically, installing a larger vacuum pump allowed us to increase the throughput rate of the plant from 2,900 to 3,400 gallons per minute. We are hoping that that will help us draw down inventories, i.e., produce more metal.
Leach pad is on expansion. The first – the leach pad expansion is on schedule and budget, should be completed, and we should be stacking ore on it, we hope in June, somewhere near the end of June. The mobile crushing unit, the first of three, perhaps four, arrives in early June and will begin crushing ore sometime later in the month of June.
Well, summary, really good quarter on the operating side, no safety incidents, no environmental incidents, so a real credit to the men and women out there. Things are starting to fire on all cylinders.