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. Hycroft is in the process of expanding its mining operations to incorporate its proprietary sulfide oxidation and heap leach process. This will require the construction of a new leach pad capable of supporting the 34-year resource life at Hycroft. Construction began on the first stage of the leach pad in late 2019.
In 2019, the Hycroft Mine commenced production from sulfide ores. In August, the Company, in association with M3 Engineering and SRK Consulting, completed updated resources and a feasibility study for the sulfide oxidation and heap leach process plan. Projects NPV for the project is $2.1 billion with a 30+ year mine life. Highlights of the restart plan and feasibility study are as follows:
- Life of Mine Plan based on a robust third-party Feasibility Study completed by M3 Engineering and the Company, incorporating resources modeled by SRK Consulting (Reno, NV) (the “Feasibility Study”), for the Company’s proprietary sulfide oxidation and heap leach process resulting in a projected life-of-mine (“LOM”) net present value (“NPV”) of $2.1 billion (at a 5% discount rate), a LOM after-tax internal rate of return (“IRR”) of 147.5%, and a payback period of 2.6 years;
- Active mining operations commenced at the Hycroft Mine in the second quarter of 2019 with a focus on preparing the mine for the sulfide oxidation and heap leach process;
- Existing crushing facility, Merrill-Crowe plant, refinery, and mobile mine fleet rebuilt, commissioned, and operating;
- Hycroft’s current workforce totals 120 people and continues to grow, supported by contractors and temporary labor;
- Company is in discussions with respect to a complete financial recapitalization plan to better position the Company for the successful ramp-up of the Hycroft mine and future growth, including the recent execution of a $110 million senior secured credit facility and an agreement for the purchase of a 1.5% net smelter royalty for $30 million arranged by Sprott Resource Lending Corp., conditioned upon agreement and completion of the full recapitalization plan; and
- Company has all permits required for restart of the Hycroft Mine and recently received the Federal Record of Decision for the Phase II Environmental Impact Statement supporting the LOM pit development, and allowing for continued ramp-up and commencement of key growth projects necessary to achieve Feasibility Study production levels.