Allied Nevada Gold Corporation had an Investor Day in Toronto a few days ago. According to a research report by RBC Capital Markets, this is what was said:

“ANV [Allied Nevada] continues to negotiate with several parties to place the sulphide concentrate at Hycroft and management reiterated their view that adequate processing capacity exists within the Western U.S. so an autoclave would not be required.”

Here is the link to the report:

https://rbcnew.bluematrix.com/docs/p...5fa43ffba4.pdf

This could be significant to you if you are a shareholder of Yukon-Nevada. Here is why. Allied Nevada was telling their investors that they were going to build an autoclave to process their sulphide concentrate (another way of processing it is through a roaster). Now, they are saying that they will not be building an autoclave because adequate processing capacity exists within the Western U.S. The only adequate processing capacity that they would be referring to that I can think of would be Yukon-Nevada’s roaster. The other players, such as Newmont and Barrick, are running at full capacity.
Could this possibly mean that Allied Nevada is about to acquire Yukon-Nevada? Allied Nevada has obviously been in discussions with Yukon-Nevada because they just struck a deal to process loaded carbon as indicated in the following press release:

http://www.yukon-nevadagold.com/s/Ne...s-Hycro…

I think there is a good chance of Allied Nevada wanting to acquire Yukon-Nevada, but not yet. Yukon-Nevada’s stock price is too low ($0.30 per share). At this point, Allied Nevada could get away with offering $0.45 per share for Yukon-Nevada, but large shareholders of Yukon-Nevada would probably not agree because they know that the company is worth much more. However, if Yukon-Nevada managed to get the stock price to around $0.60 per share, for instance, then Allied Nevada could offer $0.90 per share and get the 50 percent premium approved by their board of directors.

Now, the question is whether the company will be able to get the stock price higher. On June 3, 2012, Christopher Ecclestone said this:

“Yet, it is good to report that the situation has turned around at YNG, just, even if the market does not see it that way. For two weeks the facility has been running at full pelt with production at 450 ounces per day.”

Today, it is June 15, which means that if Yukon-Nevada continued this kind of production, it gives them four weeks of 450-ounce-per-day production or a run rate of more than 150,000 ounces of gold per year. About two years ago when the company announced a steady state of 150,000 ounces of gold, the stock price tripled within weeks. While it is unlikely that the same scenario would play out again because there are too many investors who abandoned the ship, I would not be surprised to see the stock price appreciate aggressively after the company announces the steady state. When this happens, the sale of the company at an acceptable price for both parties becomes feasible.

If you want to read my previous report on Yukon-Nevada, you can download it here.

Disclosure: Long Yukon-Nevada Gold Corp

June 18, 2012
Yukon-Nevada Gold Corp. Jerritt Canyon Operation Achieves Steady-State Production and Positive Cash Flow

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Vancouver, BC -- June 18, 2012 -- Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) is pleased to announce that its wholly-owned Jerritt Canyon processing facility in Nevada has reached steady-state operation. After facing a series of challenges in reaching target gold production rates earlier this year following a planned shutdown in January, Jerritt Canyon has operated continuously over the last month processing an average of 4,112 tons per day. Jerritt Canyon is operated by Queenstake Resources USA Ltd., ("Queenstake") a wholly-owned subsidiary of Yukon-Nevada Gold Corp. ("YNG" or the "Company").

In the first half of June the plant has processed an average of 4,200 tons per day, 7% higher than planned production of 3,933 tons per day. In the past month including the first fifteen days of June, gold recoveries were over 12,000 ounces recovered to the CIL circuit, 11,218 ounces were shipped with the remainder still in plant inventory. At this level of production the Company is generating positive cash flow from operations as well as covering the maintenance capital required to continue to operate the facility effectively going forward.

A further increase in crushing circuit availability will be achieved by the replacement of an inadequately manufactured bucket elevator supplied and installed during the recent shutdown, which was the cause of serious downtime in the first four months of this year. Construction required to replace this component with two conventional belt conveyors is expected to be completed during the next four weeks. A backup mobile crushing and screening plant has been installed and tested in order to ensure continued plant performance during the replacement phase.

On April 25 the Company received an order allowing it to operate both roasters at 110 tons per hour per roaster, an increase of 22%. This was an important step in the operation ramping production up to 4,600 tons per day by the end of 2012 and 4,800 tons per day in Q1 2013. The Company will be pursuing further increases in the allowed operating rate as the year progresses and the emissions technology installed is shown to be effective.

Randy Reichert, Chief Operating Officer commented, "Our team at Jerritt Canyon has worked incredibly hard to bring the operation to commercial levels. We are now seeing the results of this effort and the operation is in excellent shape to meet our gold production target for 2012 of between 140,000 and 150,000 ounces."

This news release was reviewed and approved by the Company's Chief Operating Officer, Randy Reichert, M.Sc. P.Eng., the Qualified Person under NI 43-101 for purposes of this release.

Yukon-Nevada Gold Corp. is a North American gold producer in the business of discovering, developing and operating gold deposits. The Company holds a diverse portfolio of gold, silver, zinc and copper properties in the Yukon Territory and British Columbia in Canada and in Nevada in the United States. The Company's focus has been on the acquisition and development of late stage development and operating properties with gold as the primary target. Continued growth will occur by increasing or initiating production from the Company's existing properties.