Yukon-Nevada Gold Corp.

There is more to Yukon Nevada Gold than just gold. The company also has properties that can yield silver, zinc and copper. Nevertheless, its focus has been on acquiring and developing late-stage development and operating properties that have gold as the primary target. This has been augmented by forming a joint venture with Northwest Non-Ferrous International Investment Co. Ltd. (NWI), a Chinese investment company.

The new Canadian company, Yukon-Shaanxi Mining Company Inc., will carry out early-stage exploration on new acquisitions. Yukon-Shaanxi will explore for and develop mineral resources in the Yukon Territory.

The company now has the ability to explore for molybdenum, titanium, aluminum, lead, zinc, gold, silver, uranium, copper and vanadium.

Yukon Nevada Gold will continue developing its existing 100-percent-owned properties in the Yukon and Nevada. Continued growth will occur by increasing or initiating production from the company’s existing properties and by further acquisitions.

In the Yukon Territory, Yukon-Nevada Gold Corp. is bringing its wholly owned Ketza River property back into production from the Manto gold zones. The Ketza River property includes the Ketza River mine, which from 1987 to 1990 produced approximately 3,110 kilograms of gold from 340,000 tons of ore. The company aims to further explore the highly potential Shamrock Zone and Silver Valley, both in the Yukon.

Environmental management and responsible environmental stewardship is a corporate priority and an integral part of the company’s business practices. “We integrate environmental factors into the decision-making process throughout the company,” Yukon-Nevada Gold maintains. “Sufficient resources have and will be devoted to environmental protection and remediation to ensure that environmental risks are minimized and that the environment and public welfare are protected during the company’s activities.”

renewing profitability
Located 50 miles from Elko in northern Nevada, Jerritt Canyon’s milling facility and emission control systems are being modernized so they can reach a point of renewed profitability accompanied by a significantly reduced environmental impact. Ongoing permitting at Starvation Canyon, Nev., will allow the company to increase gold production at Jerritt Canyon in the future.

Additional working capital for modernization at Jerritt Canyon is being financed by offering an incentive for the early exercise of eight series of unlisted outstanding share purchase warrants of Yukon-Nevada Gold. As an incentive to accept the proposal, warrant holders are being offered an 18 percent discount to the current exercise price. The discount will compensate warrant holders for loss of leverage in their investment, cost of financing the transaction and/or opportunity cost if other investments are liquidated to fund the transaction as well as any resulting tax consequences.

“We had record-breaking bad weather at Jerritt Canyon this winter that slowed and halted production at times,” President and CEO Robert Baldock said in a statement.

To solve the problem, the company plans to build an all-weather facility to house equipment that previously was left out in the elements. “Fortunately, we have enough spare capacity and stockpiled ore to make up the lost production now that the weather is improving, and we still intend to hit our previously stated gold production targets.”

The proposed transaction will assist in providing the capital required to fund the company’s capital budget for 2011. Exercise of the warrants will help clean up the company’s capital structure and provide much-needed capital towards the successful completion of the mine and mill refurbishment plans and gold production expansion at Jerritt Canyon.

The working capital will be used to:

  • Construct a new lined tailings storage facility and a secondary water storage facility to be completed before the winter of 2011-12;
  • Upgrade to a digital control facility monitoring system to improve plant operating efficiencies;
  • Install an additional quench tank during the two-week scheduled maintenance shutdown in May 2011;
  • Finish winterization of the plant including construction of a containment building and installation of new ore drying equipment that should be protected from climatic extremes;
  • Completion of remaining environmental obligations as outlined in the consent decree with the Nevada Division of Environmental Protection to keep the company’s current compliance in good standing; and
  • Obtain underground equipment to start operations at the SSX/Steer underground gold mine and continue development of the Starvation Canyon mine.

“It is essential that we complete the upgrading of our fully permitted and operating facility so we can take advantage of the vast supply of refractory ore available to us in this positive gold environment,” Baldock stated.

Additional Projects
Other projects besides Jerritt Canyon on which Yukon-Nevada Gold is working include the Ketza River, Silver Valley, Wolf and Money properties. The Ketza River property – which is located in the southeastern Yukon Territory – has a mothballed milling facility and a tailings facility with unused capacity.

The site infrastructure is in sound working condition, the company says, and road access is year-round. The property received the Robert E. Leckie Award for Outstanding Environmental Reclamation Practices in 2007 from the Yukon Geoscience Forum.

The Silver Valley property is located 8 kilometers to the east of the Ketza River mine site in the Yukon Territory. Extensive soil sampling was conducted in 1968, which yielded several anomalies that were quickly explored with a bulldozer. This work exposed the Key 18B vein, which assayed 55 opt silver and 49 percent lead over a width of 2.4 meters.

Yukon-Nevada Gold Corp. owns a 34.42 percent joint-venture interest in the Wolf property with Atna Resources owning the remaining 65.58-percent interest. The property consists of 36 mineral claims. Atna earned its interest by spending $1.5 million on exploration between 1995 and 1999. The property is located in the Pelly Mountains.

The Money property is wholly owned by Yukon-Nevada Gold and covers 1,030 hectares. The property is located five kilometers east of the Wolverine deposit. The Money claims were drilled in 1996 with five holes totaling 682 meters.