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Wednesday, December 1, 2021

A Good Look at Allied Nevada Gold Corp. (NYSEMKT:ANV)

Allied Nevada Gold Corp. (NYSEMKT:ANV) is highly volatile in recent days with the price of Gold. The stock has a large gap to fill from its previous trading range over $40 several years ago when GOLD was at its all-time highs.

Short selling and all out panic selling rained since Allied Nevada’s Q3 earnings release. Besides the $128 million in debt obligations 12 months out investors reason, if ANV can’t make money in the 3rd quarter when Gold was $100 an ounce higher than it is now, then how can they make money.

When there is blood in the streets there is opportunity and many bottom feeders are calling ANV a screaming buy here. The stock is clearly looking for a bottom to bounce off of and it might have found it at $0.85.

Allied Nevada Gold Corp. (NYSEMKT:ANV) is a US-based gold mining and exploration company that owns a number of early stage and advanced exploration properties located throughout the State of Nevada. ANV flagship, the wholly owned Hycroft gold mine is one of the largest gold and silver deposits in the state of Nevada.

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The Hycroft gold and silver mine is located in the Sulfur Mining district, 54 miles west of Winnemucca and straddles Humboldt and Pershing Counties, in Nevada. The mine is accessible year round via Nevada State Route 49 (Jungo Road). The mine encompasses approximately 72,000 acres, including both patented and unpatented claims. While in production under previous owners (1987-1998), Hycroft produced over one million ounces of gold using an open pit heap leaching process. Since Allied Nevada restarted the mine in 2008, we have sold approximately 700,000 ounces of gold and 3.6 million ounces of silver.

The Hycroft mine operates twenty-four hours a day, seven days a week. Currently, open pit mining of heap leach mineralization is conducted by simple drill, blast and truck haulage of ore to the north heap leach pad complex. Lower grade ore is placed on the heap leach pads as run-of-mine and higher grade ore is crushed using a large three-stage crushing system. Current performance of the heap leach pad shows run-of-mine recoveries of approximately 50% for gold and 12% for silver. Metallurgical testing suggests crushing higher grade ore could improve recovery by approximately 6-10% for gold and 10-15% for silver, though this may vary slightly depending on the type of material crushed. Solution from the heap leach pad is processed through the 21,500 gpm capacity Merrill-Crowe plant. The metals are further processed in the refinery to create gold and silver doré bars, which are sold.

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The project is current producing in access of 200,000 oz. of gold per year just a fraction of the estimated massive 18 million gold equivalent ounces in the ground.

Since 2011, Allied Nevada has been increasing its heap leaching capacity by adding larger capacity shovels and hauling equipment, adding a 21,500 gallon per minute capacity Merrill-Crowe plant and upgrading existing infrastructure. In early 2014, the mine commissioned a three-stage crushing system to be used in the heap leach operation until the mill is brought online, at which time it will be re-tasked as the primary crusher for the mill.

The Company is working towards the construction of a 120,000 ton per day capacity milling facility that would allow us to process the large sulfide resource at Hycroft.

Conclusion: ANV is making an explosive move up on accelerating volume after the stock hit a recent all-time low of $0.85 per share. Bottom feeders are accumulating suggesting the stock is grossly undervalued at current levels. Many would agree considering ANV currently trades at a market valuation of just over $100 million, significantly less than the Company currently has sitting on the leach pad in gold and silver.

It seems many investors forget that ANV has 18 million gold equivalent ounces in the ground last week. The $128 million in obligations 12 months out do not represents the end for this Company. ANV is way too valuable. Many suggest there is a huge deal in the works and they might be right; management was strangely calm during the last conference call considering the stock has completely collapsed. They must know something that we don’t. All things considered ANV could be setting up for a massive short squeeze here; things are about to get crazy!

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Disclosure: we hold no position in ANV either long or short and we have not been compensated for this article.

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