TORONTO (miningweekly.com) – US miner Allied Nevada Gold has narrowed its third-quarter profit to $5-million, or $0.05 a share, which was 64% down from the $13.4-million, or $0.15 a share, the company reported in the same period of 2012.
Allied Nevada said late on Tuesday that despite its financial results for the quarter ended September 30, having benefited from more ounces sold, increased production costs and lower realised metals prices had impacted on its performance.
Its adjusted earnings of $0.05 a share beat analyst expectations of $0.02 a share.
Revenue increased 18% year-on-year to $76.74-million, compared with $64.82-million.
The Reno, Nevada-based company increased its gold sales by 51% to 52 713 oz, compared with 34 851 oz sold in the same period of 2012. The third-quarter sales were an all-time quarterly record for Allied Nevada and represented an improvement of 27%, or 11 201 oz, from the second quarter of this year.
The average realised gold price declined by 19% year-on-year to $1 378/oz, but still beat the average spot price during the quarter of $1 326/oz. The average realised silver price declined 29% in the past year, down to $22/oz from $31/oz.
Allied Nevada’s flagship Hycroft operation produced 52 198 oz of gold and 184 070 oz of silver, enabling the company to maintain its 2013 output guidance of 175 000 oz to 200 000 oz of gold and 0.9-million to 1.1-million ounces of silver.
The adjusted cash costs per ounce of $905 in the period were 24% higher than expected, mainly owing to the fewer silver ounces sold and more external refining costs for metal on carbon.
The company said that while mining production costs on a unit basis had decreased in the last couple of months, it expected that the reduced workforce, and an increased silver to gold output ratio as a result of the new Merrill-Crowe refinery, would begin to benefit adjusted cash costs in the future.
Adjusted cash costs for 2013 were expected to be in the range of $800/oz to $825/oz, including silver as a by-product credit.
During the quarter, Allied Nevada continued construction on the crushing system, including the primary, secondary and tertiary crushers, which it expected to commission in the current quarter. Assuming there were no delays in commissioning the crushing system, the heap leach expansion project would be largely complete by the end of the year.
The company said it planned to spend about $90-million in capital before the year was out.
Allied Nevada's Amex-listed stock rose 5.76% in premarket trading to $4.23 apiece.