DENVER, March 24, 2021 /PRNewswire/ — Hycroft Mining Holding Corporation (Nasdaq: HYMC) (“Hycroft” or the “Company”), a gold and silver producer operating the Hycroft Mine in the prolific mining region of Northern Nevada, today reported its operating and financial results for the year ended December 31, 2020.
Key Highlights – see more details below
- New executive management team and new technical leadership team at Hycroft.
- 2020 production of 27,392 ounces of gold and 178,836 ounces of silver, an almost three-fold increase over 2019.
- 50% reduction in total reportable incident frequency rate (“TRIFR”) for the trailing twelve months.
- Quarter-over-quarter increase in tons mined.
- Hycroft operated at a pre-commercial scale using the novel oxidization and leaching process. The associated low gold equivalent production and sales volumes and high relative operating costs resulted in a 2020 net loss and net operating cash outflows from operating activities.
- Planned 2021 run-of-mine production of 45,000 to 55,000 ounces of gold and 400,000 to 450,000 ounces of silver using conventional cyanide heap leach.
Diane R. Garrett, President & Chief Executive Officer, said, “2020 was an important year for Hycroft as the Company continued to focus on the restart of the Hycroft Mine. Throughout the year, we advanced work on the proprietary two-stage sulfide heap oxidation and leach process and made several important findings that will need to be addressed prior to our implementing the novel technology on a commercial scale. In 2021 we expect to mine predominantly oxide and transition material, which are more economic when treated using a conventional run-of-mine heap leaching method, which gives us the opportunity to continue to refine the operating parameters and flow sheet for the new heap leach pad and novel process. While the Company continued to make significant progress in better understanding this proprietary process and its application on a commercial scale, the past year also presented some operational challenges, including learning to navigate in a newly emerged COVID-19 world.
More importantly, 2020 was a year of change as a new senior executive team was brought in starting in early September and promptly established a new highly qualified technical leadership team at the mine possessing a broad range of experience and skills for implementing complex processing technologies. The new leadership team launched into an extensive and detailed review of the Hycroft Mine and took immediate steps to rectify operational shortcomings, significantly cut costs, and formed an operating team aligned with the Company’s long-term strategy to establish the Hycroft Mine as a long-life, low-cost gold and silver producer. To date, the team has made significant strides at Hycroft through elevating the safety performance, improving the culture at Hycroft, establishing operational improvements, reducing spend, and identifying several areas for continued enhancement. The 2020 actions were quickly implemented and, in the fourth quarter alone, we saw significant improvement in costs as we reassigned our workforce to reduce our reliance on contractors as well as improved safety performance with a more than 50% reduction in the TRIFR. Incident and near miss reporting increased as expected as the team initiated numerous campaigns to recognize, report, and eliminate hazards. We expect in 2021 to continue to see additional benefits from these 2020 actions.”
These last few months Hycroft has worked alongside its industry leading consultants to identify and investigate opportunities for improvements in operating parameters for the two-stage sulfide heap oxidization and leach process. The result of the work to date has identified several items that were not considered or included in the original plan and design but are critical to the success of this process. These findings included:
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adding a forced air injection system for the leach pad which is a key component of the oxidation process; |
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developing a system for segregating solution flows to and from the heap leach pad to avoid co-mingling of solutions among heap lifts and ore processing stages that negatively impact recoveries and conditions on the leach pads;
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identifying that the finer crushed material requires agglomeration in order to achieve optimal permeability and gold/silver recoveries; |
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understanding that higher soda ash, caustic soda, and cyanide consumption will be required which Hycroft experienced throughout the 2020 pre-commercial test pad programs and recently confirmed through the review of the test work; |
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determining that some transitional ores are more economically attractive when processed as direct leach, run-of-mine material; and |
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concluding that additional variability metallurgical and mineralogy studies will be required to better understand each of the geometallurgical domains in the ore body. While there was some variability work completed in the past, the recent test work has revealed that additional variability test work and compositing is necessary to fully understand the geometallurgy of each domain, and that additional sampling, including sampling below the water table where the predominance of the sulfide resources exist, is required given the complexity and variability of the large ore body. |
The additional variability test work will also include detailed minerology studies as it is important to understand the role other minerals may play in the overall oxidation process and to enhance Hycroft’s ability to measure oxidation rates accurately and consistently. The new team at Hycroft has developed an approximate $10 million program for drilling and additional metallurgical and mineralogical studies in 2021. This program of work has been approved by the Board of Directors of Hycroft and can be funded from existing cash and Hycroft’s current operating plans.
The Company’s 2021 plan is designed to enhance its understanding of gold and silver recoveries across the ore body as it sets the stage for the future ramp-up to full-scale mining and production at Hycroft. The 2021 mine plan was constructed to maximize cash flows by optimizing a conventional run-of-mine cyanide heap leaching operation to treat oxide and transitional ore using its existing leach pads while also efficiently sequencing pit development that positions the Company to access sulfide ore. This plan reflects an increase in gold and silver production and sales, funds the initiatives needed for better understanding the novel two-stage sulfide heap oxidation and leach process and provides the new team time to complete several important activities to ensure Hycroft is positioned for long-term, successful execution, while managing its cash and working capital to comply with its debt covenants.
Diane Garrett added, “2021 is a foundational year designed to advance the work necessary in preparation for larger scale sulfide operations. The team is working diligently to optimize current and future heap leach mine plans and to evaluate all opportunities for more profitable mine plans in the near and medium term. This work involves taking a “ground-up” approach working from the orebody out. The Company’s prior plan was developed using a $1,200 per ounce gold price pit shell which leaves profitable ore behind in the current gold and silver price environment. By running pit shells at recent gold and silver prices we have identified additional areas of oxide mineralization that can generate cash flows over the next several years and we have already begun to identify areas of higher-grade mineralization that will become important for mine sequencing and further improving cash flows prior to accessing sulfide material.”
As the Company considers life-of-mine development and planning for the Hycroft deposit, particularly in the current gold and silver price environment, Hycroft believes it is prudent to evaluate proven processing technologies for treating some ore types that may be more profitable than only utilizing the two-stage sulfide heap oxidation and leaching process. Gold and silver projects throughout Nevada can host a variety of ore types, much like Hycroft, as evidenced by many projects in Nevada that have multi-process operations in order to deliver the most economic return for each ore type. Potential opportunities being examined by the Company in 2021 include: (i) developing an understanding of the grade range distribution of the sulfide material; (ii) completing on-going work on the higher-grade areas of Hycroft; and (iii) following up on historical high-grade intercepts. In order to capitalize on these potential opportunities, which take advantage of the current commodity price environment, Hycroft believes that it should also evaluate the benefits of a multi-process operation. Long-term operating scenarios may include conventional run-of-mine cyanide heap leaching for the oxide and transitional material, sulfide heap oxidation and leaching using the novel process, and an appropriately sized milling and flotation plant for processing the higher-grade ranges of sulfide material. The Company believes that the plan it has put in place for 2021 will provide the new team the time to fully consider and evaluate these opportunities and make any necessary changes to improve the leach pads, process plants and process flowsheet, maintain and develop its workforce, and advance the project, in order to further enhance the value of the project. As the test work advances and alternative processes are considered, the Company expects to perform technical studies and trade-off evaluations which may result in an updated feasibility study.
Hycroft management continues to believe that the fundamentals for the Company remain solid. Hycroft is a world class gold deposit and ranks among the top 20 global primary gold mines and the second largest in…
Read More:Hycroft Provides Year End 2020 Results And 2021 Outlook
2021-03-24 11:20:11
