Yukon-Nevada Gold Corp. - Focus on Resource Conversion Proves Successful at Jerritt Canyon, Nevada

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Yukon-Nevada Gold Corp.

Apr 23, 2012, 06:30 ET

VANCOUVER, April 23, 2012 /PRNewswire/ - Yukon-Nevada Gold Corp. (TSX: YNG) (Frankfurt Xetra Exchange: NG6) announces that proven and probable reserves at its 100% owned Jerritt Canyon operating gold mine in Elko County, Nevada, estimated at year-end 2011, have increased to 1,060,800 ounces of gold at a grade of 0.175 ounces of gold per ton (opt) or 6.00 grams of gold per tonne (gpt).  These reserves are within a newly estimated measured and indicated resource of 2,319,200 ounces of gold at a grade of 0.189 opt (6.48 gpt).  The inferred resource at Jerritt Canyon is an additional 748,400 ounces of Au at a grade of 0.182 opt (6.24 gpt).  The attached tables summarize the newly calculated reserves and resources by area.  A map showing the area locations can be seen on the Company's web site here: http://www.yukon-nevadagold.com/i/pdf/JCModelAreas2011.pdf. Jerritt Canyon is operated by Queenstake Resources USA Ltd., a wholly owned subsidiary of Yukon-Nevada Gold Corp. ("YNG" or the "Company").

Table 1.  Jerritt Canyon Mineral Reserves:  December 31, 2011

  Proven Probable Total Proven + Probable
Deposit/Mine K tons oz/st K oz K tons oz/st K oz K tons oz/st K oz
Underground                  
Murray 106.0 0.213 22.5 306.4 0.224 68.6 412.4 0.221 91.1
Saval 19.7 0.229 4.5 149.3 0.207 31.0 169.1 0.210 35.5
Smith 955.9 0.206 197.3 1,100.7 0.217 238.4 2,056.6 0.212 435.7
SSX 598.5 0.192 115.1 682.4 0.189 129.2 1,280.9 0.191 244.4
Starvation 6.0 0.271 1.6 337.4 0.265 89.3 343.4 0.265 90.9
W. Mahala 23.5 0.214 5.0 175.9 0.185 32.5 199.3 0.188 37.5
UG Reserve Subtotal 1,709.6 0.202 346.1 2,752.1 0.214 588.9 4,461.7 0.210 935.0
                   
Open Pit                  
Burns Basin 45.7 0.093 4.2 303.1 0.076 23.0 348.8 0.078 27.2
Mill Creek 3.2 0.089 0.3 182.9 0.090 16.5 186.0 0.090 16.8
Saval 36.9 0.172 6.3 108.1 0.065 7.0 144.9 0.092 13.4
Wright Window 4.9 0.175 0.9 108.0 0.093 10.0 112.9 0.096 10.9
Subtotal 90.6 0.129 11.7 702.0 0.080 56.5 792.6 0.086 68.2
                   
Stockpiles 180.0 0.094 17.0 622.6 0.065 40.7 802.6 0.072 57.7
                   
Total All Sources 1,980.2 0.189 374.8 4,076.7 0.168 686.0 6,056.9 0.175 1,060.8


Notes:
(1) the following parameters were used to determine the gold cutoff grade for each reserve area:  a US$1,275 per oz gold price which is equal to the 36-month trailing average; Grade dependent metallurgical gold recoveries ranging from 75% to 90%;
(2) all of the December 31, 2011 underground mineral reserves are presented using a 0.12 opt Au cutoff grade except for Starvation Canyon which used a 0.13 opt Au cutoff grade;
(3) the December 31, 2011 open pit mineral reserves used cutoff grades ranging from 0.044 to 0.047 opt Au;
(4) the December 31, 2011 reserves are contained entirely within designed underground or surface mine excavations;
(5) mineral reserves were determined by Mark Odell, P.E., Practical Mining LLC.

Jerritt Canyon's proven and probable reserves on January 1, 2011 were 717,000 ounces of gold.  These were depleted by approximately 55,270 ounces as a result of mining during 2011 which includes stockpile depletion.  The current proven and probable reserve as of December 31, 2011 therefore represents an addition of 399,100 ounces of gold.

Yukon-Nevada Gold Corp.'s Vice President of Exploration, Todd W. Johnson, commented, "A lot of excellent work has been done since 2009 by the Jerritt Technical team and the reserve increase may be attributed to the resource conversion drilling success by the on-site Geologic team, with some additions due to the remodeling of the deposits with updated mining costs and economics."

The 2011 year-end reserve estimate was calculated using a gold price of $1,275US per ounce.  The Murray Mine and Smith Mine exhibited the most significant increase in reserves compared to the previous year.

The updated mineral resource estimate incorporates a new property-wide Vulcan three-dimensional geological model which includes new surface and underground drilling results completed from January 1, 2011 to December 31, 2011.  Jerritt Canyon's measured and indicated mineral resource has decreased by 70,700 ounces of gold.  The decrease of resources is a result of using different modeling methods, and sterilization of gold mineralization adjacent to abandoned underground workings, partially offset by higher gold prices relative to the January 1, 2011 resource.  In addition, approximately 90% of the total drilling conducted at Jerritt Canyon in 2011 was resource conversion drilling with very little exploration.

Table 2.  Jerritt Canyon Measured and Indicated Mineral Resources, Including Reserves:  December 31, 2011

  Measured Indicated Total Measured + Indicated
Deposit/Mine K tons oz/st K oz K tons oz/st K oz K tons oz/st K oz
Underground                  
Calif. Mtn. - - - 4.5 0.184 0.8 4.5 0.184 0.8
Murray 163.0 0.207 33.7 427.2 0.216 92.2 590.2 0.213 125.9
Saval 55.9 0.237 13.2 277.7 0.222 61.5 333.6 0.224 74.8
Smith 2,098.1 0.224 470.2 2,133.4 0.215 458.6 4,231.5 0.220 928.8
SSX 2,248.2 0.211 474.0 1,451.1 0.205 298.2 3,699.2 0.209 772.2
Starvation 5.9 0.294 1.7 519.4 0.25 130.0 525.2 0.251 131.8
W. Mahala 25.3 0.196 5.0 363.5 0.190 68.9 388.7 0.190 73.9
Winters Ck. - - - 90.3 0.162 14.6 90.3 0.162 14.6
Subtotal 4,596.3 0.217 997.9 5,267.0 0.214 1,124.9 9,863.3 0.215 2,122.8
                   
Open Pit                  
Burns Basin 34.5 0.087 3.0 309.9 0.097 30.2 344.5 0.096 33.2
Mill Creek 3.2 0.091 0.3 272.9 0.094 25.8 276.2 0.094 26.1
Pie Creek - - - 205.4 0.087 17.9 205.4 0.087 17.9
Road Canyon - - - 17.5 0.069 1.2 17.5 0.069 1.2
Saval 84.8 0.135 11.4 569.5 0.065 37.2 654.3 0.074 48.6
Wright Window 7.9 0.142 1.1 117.8 0.090 10.6 125.8 0.094 11.8
Subtotal 130.4 0.121 15.8 1,493.1 0.082 122.9 1,623.6 0.085 138.7
                   
Stockpiles 180.0 0.094 17.0 622.6 0.065 40.7 802.6 0.072 57.7
                   
Total All Sources 4,906.8 0.210 1,030.7 7,382.7 0.175 1,288.5 12,289.5 0.189 2,319.2


Notes:
(1) the resource cutoff grades were calculated in a similar manner as the reserve cutoff grades except that a US$1,400 per oz gold price was used which is equal to a 24-month trailing average gold price;
(2) the December 31, 2011 underground mineral resources are presented using a 0.11 opt Au cutoff grade except for Starvation Canyon which was calculated using a 0.12 opt Au cutoff grade;
(3) the open pit resources used cutoff grades ranging from 0.039 to 0.043 opt Au and are constrained by a Lerch Grossman pit shell;
(4) the December 31, 2011 underground resources were only tabulated if the estimated blocks were inside the modeled Au grade shell and greater than 0.120 opt Au, are accessible from existing or planned excavations, and they were deemed recoverable with respect to their overall size and location relative to the existing workings by the qualified person.;
(5) mineral resources that are not mineral reserves do not have demonstrated economic viability; and
(6) mineral resources determined by Mark Odell, P.E., Practical Mining LLC.

Table 3.  Jerritt Canyon Inferred Mineral Resources:  December 31, 2011

  Inferred
Deposit/Mine K tons oz/st K oz
Underground      
California Mtn. 29.5 0.192 5.7
Murray 86.0 0.215 18.5
Smith 979.5 0.196 191.8
SSX 371.7 0.198 73.7
Saval 95.4 0.200 19.1
Starvation 255.4 0.253 64.6
West Mahala 1,854.6 0.175 324.0
Winters Creek 9.2 0.186 1.7
Underground Subtotal 3,681.2 0.190 699.1
       
Open Pit      
Burns Basin 14.0 0.079 1.1
Mill Creek 3.4 0.154 0.5
Pie Creek 4.9 0.090 0.4
Road Canyon 185.1 0.082 15.1
Saval 222.2 0.142 31.6
Wright Window 4.8 0.093 0.4
Open Pit Subtotal 434.5 0.113 49.3
       
Stockpiles - - -
       
Total Inferred Resources 4,115.7 0.182 748.4


Notes:
(1) Similar resource tabulation methodologies described for Table 2 above apply to the resources in Table 3;
(2) Mineral resources that are not mineral reserves do not have demonstrated economic viability; and
(3) mineral resources determined by Mark Odell, P.E., Practical Mining LLC.

The 2011 Jerritt Canyon mineral resources were estimated by Mark Odell, P.E. and Owner of Practical Mining LLC, who is the independent Qualified Person for the December 31, 2011 Mineral Resources and Reserves as defined by NI 43-101.  Practical Mining LLC is preparing an updated NI 43-101 Technical Report which will include these new resource and reserve results that will be separated by open pit and underground mining methods.

It is anticipated that this NI 43-101 Technical Report will be available and released on April 27, 2012.  Mark Odell has reviewed and approved the contents of this news release, and is the Qualified Person for this news release.

The mineral resources have been estimated in accordance with the standards adopted by the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Council in August 2000, as amended, and prescribed by the Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects.

Yukon-Nevada Gold Corp. is a North American gold producer in the business of discovering, developing, and operating gold deposits.  The Company holds a diverse portfolio of gold, silver, zinc and copper properties in the Yukon Territory and British Columbia in Canada and in Nevada in the United States.  The Company's focus has been on the acquisition and development of late stage development and operating properties with gold as the primary target.  Continued growth will occur by increasing or initiating production from the Company's existing properties.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

WARNING: The Company relies upon litigation protection for "forward-looking" statements.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Cautionary Note to U.S. Investors Regarding Estimates of Measured, Indicated and Inferred Resources:  This press release uses the terms "measured," "indicated and "inferred" "resources."  We advise U.S. investors that while these terms are recognized and required by Canadian regulations, the U.S. SEC does not recognize them.  "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an "inferred mineral resource" will ever be upgraded to a higher category.  Under Canadian rules, estimates of "inferred mineral resources" may not form the basis of a feasibility study or prefeasibility studies, or economic studies except for Preliminary Assessment as defined under NI 43-101.  The SEC normally only permits issuers to report mineralization that does not constitute "reserves" as in-place tonnage and grade without reference to unit measures.  U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred mineral inventory resource exists or is economically or legally mineable.

SOURCE Yukon-Nevada Gold Corp.

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