The company plans to use the proceeds from the purchase to fund capex at its Hycroft Mine near Winnemucca, Nevada, and for general corporate purposes. The mine is expected to produce 225,000 to 250,000 ounces of gold in 2013 and 1.5 million to 1.8 million ounces of silver. Production will be heavier in the second half of the year, and full-year cash costs are expected in the range of $565 to $585 per ounce of gold. Silver is produced on a byproduct basis.
Needless to say, existing shareholders were underwhelmed by the announcement. Allied Nevada’s shares closed at $11.83 last night, so today’s sale shaved about 10% off existing shareholders’ value.
Shares are trading at $10.37 in the late morning, down 12.3% in a 52-week range of $10.20 to $41.02.
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