Issue 3 - Hitachi

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Hycroft: sleeping Even though over a million ounces of gold have already been mined, and there has been activity on the property off and on for over 100 years, Hycroft mine’s new owners are confdent this sleeping giant has yet to reach its full potential — thanks to the steady increase in the price of both gold and silver. And the same can easily be said for its six-year-old owner, Allied Nevada Gold Corp. The company currently owns one of the largest silver reserves in North America, along with sizeable gold reserves, all within the state of Nevada. The Hycroft mine is its frst operating mine. The company also owns more than 100 advanced and early-stage exploration properties in Nevada, some of which are multiple joint ventures. Hycroft is located 87 km (54 miles) west of Winnemucca, Nevada, in the Sulfur Mining district. The mine encompasses approximately 24 844 hectares (61,389 acres), including both patented and unpatented claims. While in production from 1987– 1998, Hycroft produced over one million ounces of gold using an open-pit heap-leaching process. RAmpING up To speed “The Hycroft mine was attractive to us because it already had permits and a fair amount of infrastructure, and we were able to obtain it for a relatively modest capital investment,” says Warren D. Woods, Vice President and General Manager, Hycroft Resources and Development, Inc., a subsidiary of Allied Nevada. “The only thing wrong with it was that, with the low prices of the mid ’90s, the cost of production was too high. Now, however, with the much higher metal prices, the cost equation is proftable. Plus we felt we could raise the capital needed to make the cost per ounce substantially less. “However, in 2008, when we wanted to start up, you couldn’t fnd equipment. Everyone was busy. Warren D. Woods, Vice President & General Manager, Hycroft Resources and Development, Inc. Ultimately, we found a copper mine that was closing. But we had to buy all of their equipment, which included 200-ton trucks, loaders, and dozers. But at least it got us going. “Based on past exploration, we fgured we had at least three years of mine life. But as we started to do our own exploration, and as the price for both silver and gold continued to go up, we extended the mine life to fve to seven years, then 10 to 20. We’ve found a lot more silver oxides, and the deeper ore started getting interesting.” expANsIoN plANs ANd bRIdGING The GAp Last year, the company’s board approved a $221- million expansion, so Hycroft started upsizing equipment and planning for a mill on-site. They’ve ordered the long lead-time items, and in the meantime, are in the permitting process to expand the pit while ramping up the pace of more equipment move-ins. “When we started to order new equipment, we chose the 320-ton-sized truck because we’d already ordered three electric rope shovels for 2014 delivery,” explains Woods. “The trucks are starting to arrive, and our thought process was to go with the best hydraulic shovel we could fnd to not only bridge the gap till 2014 but also provide continued fexibility to complement the rope shovels. So, we chose the Hitachi EX5500-6 and placed an order for three.”
awakes Woods is no stranger to Hitachi mining shovels. Prior to Hycroft, he was general manager of Nome Operations for NovaGold Resources—Alaska Gold. He has over 30 years of mining experience, with nearly 20 of those managing large-scale, open-pit mines and projects in North America including the Fort Knox mine in Alaska. Over the years, he’s been in a position to witness Hitachi productivity and quality for himself, and he knew he wanted it for Hycroft Mine. “Unfortunately, our frst 5500-6 shovel was literally on the dock in Japan ready to be shipped when the 2011 tsunami hit,” recalls Woods. “Although there cannot be enough said to describe the hardship the Japanese people went through as a result of that disaster, it had repercussions around the world. And, it certainly placed a real hardship on us. There was a lot of gnashing and grinding of teeth on our end as we tried to fgure what to do in the interim, because obviously our entire order and production plan had to be altered. “But we felt strongly enough about the product, and (our dealer) Arnold Machinery’s support of the product, that we decided to stick it out. We really like the Hitachi 5500s. They’re dependable and very productive. And now that they’re here, I’m glad we waited. In the interim, Arnold Machinery helped fnd and refurbish a couple of used EX3500s. We plan to keep them, and ultimately move them to another mine we’re just getting ready to open up. The EX5500-6 provides great production and is very dependable. “Our mine plan calls for us to reach over 400,000 tons a day, and it will take at least two of the three EX5500s along with the three rope shovels to maintain that rate. So it could be that one of the three EX5500s might eventually go to another property.” The EX5500-6 is a little small for the 320-ton truck, taking an average of six passes compared to three for the new model rope shovel the mine bought. But it will provide great fexibility for opening up new areas — and the 5500 is certainly more effcient and easier to move as opposed to the more elaborate steps required to move the electric rope shovel. And the 5500-6’s cost per ton of loaded material is quite competitive, so the two kinds of machines will actually complement each other. From yAwN To wow An awakening giant indeed! From a start-up of six 200-ton used trucks loaded by four-wheel loaders to a feet of 16 320-ton trucks, three EX5500s with 30.5-m 3 (40 cu. yd.) capacities, and three rope shovels with 61-m 3 (80 cu. yd.) capacities...an ultimate annual production that skyrockets from a 2008 start-up of zero to a projected annual production of 616,800 ounces of gold and 25.9-million ounces of silver by around 2015. Hycroft and Allied Nevada are now defnitely on the fast track to success. Hycroft Mine is serviced by Arnold Machinery Company, Elko, Nevada.
Page 1: THIRD ISSUE 2012 We’ve been build

Issue 3 - Hitachi

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