TORONTO (miningweekly.com) – The Toronto-listed stock of Allied Nevada, which operates the Hycroft silver/gold mine near Winnemucca in north-west Nevada, on Tuesday spiked by more than 30%, after it released preliminary operational results for the first quarter ended March 31.

The company produced 38 019 oz of gold in the quarter, which was 19% lower than the record quarterly production of 46 900 oz produced in the fourth quarter. Silver production was 21% lower quarter-on-quarter at 188 000 oz, compared with 238 800 oz in the fourth quarter.

Gold sales totalled 27 256 oz of gold, which was 14 489 oz less than in the previous quarter. Silver production also declined by 40 136 oz quarter-on-quarter to 174 766 oz.

However, the company expected to sell about 7 200 oz of gold and 43 200 oz of silver in the second quarter, which remained in precipitate at the end of the first quarter owing to retort capacity limitations. With the successful commissioning of a second retort during the first quarter, the company expected to be able to process all of the precipitate generated from its Merrill-Crowe plant.

Allied Nevada said it had placed 9.6-million tons of ore on the leach pads at average grades of 0.01 oz/t of gold and 0.14 oz/t of silver, containing about 106 473 oz of gold and about 1.36-million ounces of silver.

Mined grades were planned to increase into the second half of the year.

The company said flow rates through the leach pads were expected to continue to improve, and more ore deliveries were expected, which led it to believe it was on track to meet its six-month production guidance of 90 000 oz to 100 000 oz of gold.

The company expected to produce between 225 000 oz and 250 000 oz of gold this year. In 2012, the company produced 136 930 oz of gold.

Allied Nevada founder, executive chairperson and recently appointed CEO Bob Buchan lambasted the outgoing management under Scott Caldwell, whom he replaced in March, saying: "Clearly Allied Nevada has underperformed and this unacceptable performance is the result of unsatisfactory execution of the mine plan under previous leadership,” he said.

“This lack of acceptable execution does not imply that the orebody has deficiencies nor does it suggest that our overall business plan is flawed. The mine is starting to perform as it should and we currently believe that it will continue to do so.”

He reiterated the company’s commitment to complete the $1.24-billion expansion of the Hycroft mine, which now was about 58% compete, on time and on budget.

“Allied currently has an excellent team in place to meet production expectations and is positioned to build one of the largest mining operations in the state of Nevada. While I believe that it will take some time for these improvements to rebuild investor confidence, I am optimistic that they will," he said.

Allied Nevada had also strengthened its operating team at Hycroft with the appointments of Carl Waggoner as operations manager and Darren Tinney as the process manager, who would work alongside executive VP and COO Randy Buffington to expand current operations and construct and operate the milling complex.

Net income for 2012 increased by 30% to $47.7-million or 53c a share, compared with $36.7-million or 41c a share in 2011.

The company’s stock gained C$3.71 on Tuesday to trade at C$15.68 apiece on the TSX.