Shares in small cap gold mining company Allied Nevada Gold Corporation (ANV) leapt over 25 percent on Monday after an earnings report that showed records hauls from its Hycroft mine. The company’s good news is timely as Allied Nevada is suffering through a bleak 2013 that had its stock off nearly 90 percent since the start of January.
Record Gold and Silver Returns Drive Price Jump
The 52,198 ounces of gold and 184,070 ounces of silver pulled from the Hycroft mine during Q3 2013 represent a record, as does the 52,713 ounces of gold and 184,082 ounces of silver that the company sold over the same period. On the whole, it puts the company on track for total 2013 production of 175,000-200,000 ounces of gold and 0.9 million to 1.1 million ounces of silver.
"I am very pleased with the progress being made at site by the new operating team. While I fully expected them to turn the operation around, I am impressed with the speed and efficiency with which they have been able to improve production," said President and CEO Randy Buffington. He continued, "This is a first-rate team with the systems, discipline and determination that give us the confidence that we can continue to move forward with building a world-class operation."
The company also reported increased processing capacity at Hycroft, with pumping capacity and fresh water availability increased and total solution flows to the leach pads reaching an average of 22,000 gallons per minute. This represents a 36 percent improvement from the beginning of Q3.
Heavily Shorted Stock
Monday’s boost in gold and silver prices may have helped some of Allied’s gains, but the rough year for gold prices has hurt the stock. The massive sell-off for Allied stock in 2013 is likely connected to the fact that gold prices are off over 20 percent since the start of the year. As a result, Allied Nevada has become a popular stock to short, with over 17 percent of shares held by individuals with a short interest.