YNG_Edison_07_12_2012

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12/10 71.4 (85.3) (12.9) 0.0 N/A N/A

12/11 105.1 (70.2) (7.2) 0.0 N/A N/A

12/12e 232.2 80.1 8.1 0.0 3.8 N/A

12/13e 327.2 102.9 10.0 0.0 3.0 N/A

Note: *PBT and EPS are normalised, excluding intangible amortisation and exceptional items.

It is easier to repair and modernise existing mine plant infrastructure in the US than

tackle the protracted and bureaucratic process of permitting new infrastructure. This

has special relevance to Jerritts processing plant, which received little major

re-investment and maintenance capex (other than for installing new roasters in 1989)

since it opened in 1981 until the January 2011 planned plant shutdown.

To maintain plant efficiency and current process cost levels at Jerritt Canyon it will be

important for YNG to secure sufficient ore feed to the mill (currently permitted at

5,280tpd, maximum engineered capacity of 6,000tpd). YNG has two paths to explore:

the traditional replenishment of depleting reserves by exploration (via the Mahala Basin

and Starvation Canyon discoveries); and securing third-party ore through

appropriately priced toll treatment agreements.

Our base case uses production guidance stated in YNGs May 2012 Corporate

presentation, its December 2011 Jerritt Canyon NI43-101 and its June 2011 Ketza

River Technical Report. Based on the production and cost data in these documents

(see pages 6-8), we estimate the companys discounted (theoretical) dividend flow is

worth US$0.56 (at gold prices of US$1,600/oz 2012, US$1,600/oz 2013,US$1,350/oz thereafter). Considering the mines near-continuous operation since it

opened in 1981, Jerritts official life of mine is likely to extend beyond the stated 4.5

years, which has been supported by a 46% increase in reserves (April 2012).

Jerritts potential now being realised

C$1.02/US$

Shares in issue 1,023.7m

Free float 70%

Code YNG

Primary exchange TSE

Other exchanges Frankfurt

% 1m 3m 12m

Abs 3.3 3.3 (31.1)

Rel (local) 2.1 7.7 (21.4)

52-week high/low C$0.52 C$0.23

Yukon-Nevada Gold operates its Jerritt

Canyon mine and processing plant in north

Nevada, US. It also explores for gold and

base metals in the Yukon Territory at its

Ketza River project. YNG is currently in the

process of re-permitting the Ketza River

process facility.

H112 results 15 August 2012

Tom Hayes +44(0)20 3077 5725

Charles Gibson +44(0)20 3077 5724

[email protected]

Edison profile page

Metals & mining
http://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-goldhttp://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-goldhttp://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-gold

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Yukon-Nevada Gold | 12 July 2012

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We have used YNGs revised NI43-101 dated 31 December 2011 to provide our base case valuation

model of Jerritt Canyon. The economic analysis within this report is based solely on mining proven and

probable gold reserves at Jerritt Canyon. This report also states a US$182.8m capex programme

running over the official 4.5-year life of mine. We also model YNGs second major asset, the Ketza

River project on information in its June 2011 technical report. Ketza River has a mothballed mine site

including almost all the infrastructure required to commence mining again. Considering the existing

infrastructure we assume a small capex requirement of US$25m over 2013-14 to restart gold

production in 2014 (pending all permitting requirements being completed with the Yukon authorities).

On the basis of these technical reports and assumptions, we value YNG at US$0.56 per share (using a

decreasing gold price scale, of US$1,600/oz (2012 and 2013) reducing to US$1,350/oz thereafter and

a 10% discount rate to reflect general equity risk).

We consider the companys cautious approach to announcing steady-state production rates at Jerritt

Canyon as an early sign of its optimism in achieving annual gold production of c 200koz. Coupled with

the considerable amount of capital raised, we believe Jerritt Canyon should now move from a project

focused on re-capitalisation and re-development of ageing infrastructure, to one of realistic ramp up

and improving operational performance. Qualitatively our base case valuation is most sensitive to the

gold price, where a move from US$1,500/oz to US$1,700/oz long-term (from 2014 onwards) would

result in a c 17% increase in our valuation.

In August 2011 and February 2012 YNG announced two forward gold purchase agreements with

Deutsche Bank totalling US$140m. They have allowed YNG to settle US$25m in senior loan notes and

contribute significantly towards completing an extensive programme of capital expenditure over the

course of Jerritt Canyons official 4.5-year life of mine (which officially total US$182.8m). Further

financing from a warrant exercise of US$44.9m and private equity placements totalling US$37.3m

have been completed, including a US$6.9m negotiated settlement on current accounts with site

contractors. Based on the available data within the technical report for Jerritt Canyon, we foresee no

further near-term funding requirement.

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One major challenge to YNGs plans at Jerritt Canyon was the significant amount of investment

needed to renovate existing mine and process plant (including tailings storage) infrastructure and to

replace ageing mine equipment. Much of the plant had no worthwhile maintenance performed on it

after it was constructed in the early 1980s. This contributed to a steady decline in gold production,

most notably after 2003, as did an order by the Nevada Division of Environmental Protection (NDEP) in

2008 to stop processing due to excess mercury emissions escaping into the atmosphere. This order

has now been lifted after YNG fitted a brand new Calomel mercury emissions system. To implement

this extensive capital expenditure programme, over the last 12 months YNG completed c US$140m of

forward gold purchase agreements (see page 9) and a warrant exercise of US$44.9m, both with

Deutsche Bank. A further two private equity placements totalling US$22.9m were announced in May

2012. These funds (totalling US$207.8m) have been largely spent. The US$183m capex programme

detailed for the next 4.5 years, the timeframe of the newly revised Jerritt Canyon mine plan, will come

from cashflow.

YNGs two assets are split between its flagship producing gold mines on its Jerritt Canyon lease area

in Elko County, Nevada, US and its Ketza River project in the Yukon Territory in Canada. Both projects

are 100% owned by YNG or its wholly owned subsidiaries (ie Queenstake Resources at Jerritt

Canyon).

Exploration and definition drilling at Jerritt Canyon will concentrate on delineating new gold resourcesand reserves to replenish depleted stocks. YNG currently has a five-year life of mine plan at Jerritt

Canyon. While a greater reserve base is more favourable and would reassure the investor, such

complex and podiform gold deposits rarely allow for mine reserves to be delineated more than three to

four years ahead of actual mining, due to the irregular nature of ore distribution and the amount of

drilling required to produce NI 43-101 compliant resource estimates. To accommodate this, YNG has

employed a policy of continual production drilling to define further pods of ore. This is accomplished

using the companys underground reverse circulation drill rig, while contracting external drilling

companies to identify resources at surface.

Mining through sedimentary horizons can be problematic due to their weak strength, which increases

the cost of mining as greater amounts of ground support are required. The main mining method used

at the Smith and SSX mines, is that of underhand drift and fill. The process requires that all stoped-out

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areas are backfilled with concrete to maintain stability in the rock mass during mining. The SSX mine

however, is increasingly being mined using the lower-cost long-hole stoping method where thickness

or ore permits.

Because mines on the long-established Carlin Trend have become deeper, the ore has become more

refractory (as oxidised gold ore near surface gets mined out first). So, when considering gold mining

ventures in Nevada, the amount of available refractory processing capacity is key. Also, processing

plants capable of treating refractory ores create harmful emissions that must be tightly controlled, so it

can be very hard to get planning permission for these facilities in Nevada. However, YNG has a fully

operational, environmentally-compliant mill, complete with industry leading scrubbing technology

(used to bring mercury emissions below the US environmental threshold) and that can process both

oxide and refractory ore types.

Current ore production at Jerritt Canyon comes from two mines, the SSX/Steer/Saval complex

(operated by YNG) and Smith (operated by a third-party contractor). By June 2012 Jerritt Canyon had

reached a 150,000oz per year annualised production rate, with 140,000-150,000oz of gold production

forecast for calendar year 2012, ramping up to a 200,000oz per annum production rate by end 2012.

Currently 800tpd (ramping up to 1,200tpd by end 2012) is mined from the SSX/Steer/Sava complex

and 1,200tpd from the Smith mine, which together will use only 55% of the permitted roaster capacity

(5,280tpd) with further stockpiled material bringing average daily processing rates up to 4,112 tonnes.

While detailed information is not yet available to show how YNG intends to ramp-up production at

Jerritt Canyon and fully use its 6,000tpd mill (c 332koz contained gold per year at the life of mine

average head grade of 6.22g/t and assuming 90% mill availability), we believe the company has three

options:

1. To pursue toll-treating agreements with third-party miners/developers. Such an agreement wouldneed to be on terms that would protect YNGs cash costs at the sub US$500/oz level as this was

not the case with the now expired (in December 2011) Newmont ore purchase agreement. Such

agreements are being investigated with a number of domestic (see Hycroft agreement with Allied

Nevada Gold on page 9) and foreign candidates, with management stating that C1 cash costs at

Jerritt Canyon could potentially come down to below the US$400/oz level.

2.

To organically grow production on site through continuing its aggressive exploration programmeand consequently expanding reserves, either within close proximity to existing site infrastructure

(

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To maintain a steady annual gold production rate at Jerritt Canyon above 200koz long term, YNG will

continue with aggressive exploration on its property. At present, exploration activities are focused oneliminating all potential ore targets around existing mine infrastructure so that pre-development costs

of extracting ore are kept to a minimum. This also allows the company to use its extensive and robust

historical drill hole database that contains over 25,000 drill holes, many of which were drilled from

surface to only shallow depths (when the mine was focused on delineating open pit resources pre-

2003).

The podiform and geologically complex nature to gold mineralisation on the Jerritt Canyon lease block

means that un-tested areas between previous mining blocks are the most obvious place to probe for

further economic gold deposits. YNGs technical team identified a clear opportunity between the pre-

existing Smith and SSX/Steer mines, named the Mahala Basin. Drilling undertaken as part of the 2011

exploration campaign in this area has resulted in numerous high-grade gold intercepts close to existing

mine development, an important point as it will allow a quicker and cheaper route to mining West

Mahala. The location of the West Mahala deposit is shown in Exhibit 1:

Source: Yukon-Nevada Gold

The Ketza River project enjoyed a brief period of mining between July 1988 and November 1990,

producing 100,030oz gold at an average head grade of 11.6g/t Au at cash costs ranging from

US$395/oz (1989) to US$433/oz (1988). It consists of a number of prospective zones, including the

Manto, Peel, Hoodoo and Shamrock Zones. Ketza River has a mothballed milling facility with unused

tailings dam capacity and is 42km off the Campbell highway in the south-east of the Yukon Territory.

The site also includes a mine camp, exploration camp, office buildings, workshop and water treatment

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works. We see the presence of this serviceable infrastructure as a key reason to assume Yukon-

Nevada will re-develop the Ketza River mine site in the near term (see valuation section on page 6).

Yukon-Nevadas current NI43-101 compliant resources for its Jerritt Canyon property are:

Tons (kt) Grade(oz/st)

Gold(koz)


Gold(koz)


Gold(koz)

4,906.8 0.210 1,030.7 7,382.7 0.175 1,288.5 4,115.6 0.182 748.4

Tonnes (kt) Grade (g/t) Gold(koz)

Tonnes(kt)

Grade (g/t) Gold(koz)


4,451.4 7.20 1,030.7 6,697.5 6.00 1,288.5 3,733.6 6.24 748.4

Source: Yukon-Nevada Gold May 2012 Corporate Presentation

Yukon-Nevadas current NI43-101 compliant reserves for its Jerritt Canyon lease area:


Gold(koz)

Tons(kt)

Grade(oz/st)

Gold(koz)


Gold(koz)

1,980.2 0.189 374.8 4,076.7 0.168 686 6,056.9 0.175 1,060.8


Tonnes(kt)

Grade (g/t) Gold(koz)


1,796.4 6.49 374.8 3,698.3 5.77 686 5,494.8 6.00 1,060.8


The companys current NI43-101 compliant resources for its Ketza River project are:

Measured 167.8 5.38 29.0

Indicated 2,212.3 5.46 389.0

Inferred 453.7 4.62 67.0Total 2,833.8 5.32 485.0


We have used YNGs revised NI43-101 dated 31 December 2011 (for operating costs and capital

expenditure schedules) and production guidance as given on page 12 of its May 2012 corporate

presentation to provide our base case valuation model of Jerritt Canyon. The economic analysis in this

report is based solely on mining probable and proven gold reserves at Jerritt Canyon. These reserves

are spread across five underground deposits due to be extracted by underground mining methods.

Alongside mining these ore sources, YNG will blend in ore that it stockpiled (c 800,000st) when no

processing took place (specifically during closure of the process plant in 2009).

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We also model YNGs second major asset, the Ketza River project due to the existence of site

infrastructure (see page 6). The following exhibit details forecast gold production based on production

guidance outlined in Yukon-Nevadas May 2012 corporate presentation and the June 2011 Ketza

River technical report (equivalent to a scoping study level of confidence).

Source: Edison Investment Research and Yukon-Nevada Technical Reports for Jerritt Canyon and Ketza River

The operating parameters we have used to derive our base case valuation for Jerritt Canyon and

Ketza River are given in the following exhibit:

Jerritt Canyon gold recovery factor % 89.1 Ketza River gold recovery factor % 77.0

Total ore tonnes Mt 6.05 Total ore tonnes Mt 3.71

Gold grade g/t 6.22 Gold grade g/t 6.00

Total ounces produced over LOM koz 946 Total ounces produced koz 552

Mining cost (underground) US$/st 29.24 Mining cost US$/t 2.82

Processing cost US$/st 31.03 Processing cost US$/t 12.00

Ore haulage US$/st 4.52 Surface facilities US$/t 5.00

Site administration US$/st 9.30 Site administration US$/t 3.00

Capex programme over LOM US$m 182.8 Assumed initial capex US$m 25.00

Sustaining capex per annum* US$m N/A Assumed sustaining capex perannum

US$m 5.00

Official mine life years 2012-16 Estimated period of mine life years 2014-20

Note: * Sustaining capex is assumed to be contained within the overall capex budget of US$182.8m.

Source: Yukon-Nevada Gold Technical Reports on Jerritt Canyon (December 2011) and Ketza River (June 2011)

Assuming YNG pays out all its spare cash in the form of dividends, we estimate the dividend stream to

investors from 2012 to 2020 will be worth US$0.56 per share in current money terms (at a discount

rate of 10% to reflect general equity risk). Of note is that dividends are depressed between 2012 and

2016 due to the impact of the two forward gold purchase agreements with Deutsche Bank (see

financials section on page 9 for further details). Our forecast shows production at Jerritt Canyon

finishing in 2016 and only Ketza River producing gold from then on, as shown in Exhibit 5.

050,000

100,000150,000200,000250,000300,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Goldproduction(ozs)

YearForecast Jerritt Canyon gold production (ozs) Ketza River gold production

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Source: Edison Investment Research

Based on the above data from YNGs technical reports and assuming Ketza River is brought into

production 2014 (still pending a positive investment decision by the company) and gold production

occurring at Jerritt Canyon as detailed in Exhibit 5, and using the cost data given in Exhibit 6, we value

the company at US$0.56 (split US$0.36 for Jerritt Canyon and US$0.23 for Ketza River) per share (at

10% discount rate to reflect general equity risk). This valuation uses a decreasing gold price scale,

reducing from US$1,600/oz (2012 and 2013) to US$1,350/oz thereafter.

YNG is exposed to the usual geological, geotechnical, engineering, processing, socio-economic and

macroeconomic (commodity) risks associated with producer-stage mining companies. In addition, we

have identified the following specific quantitative risks for YNGs projects and operations:

NPV (US$) 0.35 0.47 0.56 0.66 0.77 0.91


NPV (US$) 0.68 0.62 0.56 0.41 0.31 0.25


NPV (US$) 0.61 0.59 0.56 0.54 0.52 0.48


One factor that could impact our sensitivity to percentage change in the cost of producing an ounce of

gold is that YNG is considering moving the Smith mine at Jerritt Canyon from one being operated on a

contractor basis (whereby the cost of mining and processing a tonne of ore is US$140.56) to being

owner-operated. YNG believes that doing so would reduce operating costs per tonne to US$85.

Adjusting our Jerritt Canyon production model for this owner-operator cost of US$85/t would equateto US$0.04 being added to our base case valuation.

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

0.00

0.20

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

DDF(US$)

US$

EPS Dil EPS DPS DDF (RHS)

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To use excess processing capacity, on 11 June 2012 YNG announced it had entered into an

agreement with Allied Nevada Gold (TSX:ANV) to process 162 tons of carbon (used in the processingof gold ore) containing c 13,300oz gold and 39,600ozs silver. YNG and Allied Nevada expect this

tonnage to be processed within the initial 90-120 day term of the agreement. After all of the 162 tons

has been processed the agreement will allow for a further 15 to 30 tons to be processed per month.

The Hycroft operation (owned by Allied Nevada Gold) currently generates 15 to 20 tons of loaded

carbon per month. Yukon-Nevada has stated that revenues generated from this agreement will be

credited against operating costs. Due to the small tonnages involved and lack of detail relating to

costs and revenues generated, we have not factored this agreement into our model.

Yukon-Nevadas management envisages that it could realistically toll treat an additional 2,000tpd of

third-party ore through its mill. To provide an illustrative view of how such an agreement may

materialise we provide an example in Exhibit 11. We run this type of toll treatment structure from 2013

to 2016 to keep in line with our assumptions on Jerritt Canyons annual mine production and use the

net annual cashflow figure to offset Yukon-Nevadas operating costs. As a result the main effect of this

agreement would be to reduce overall C1 cash costs. We estimate these could drop c 57% to

US$305/oz from average C1 cash costs across the period 2014-16 of US$717/oz. Based on these

first-pass indications of how such a toll treatment agreement would work, we estimate that a further

US$0.23 could be added to our US$0.56 base case valuation.

Annual ore contract kt 700 Revenue from holdback US$m 5.8

Toll treatment charge US$/t 115 Treatment gross margin US$m 77.0

Variable processing cost US$/t -8 Gross profit US$m 82.8

Margin per ton processed 107 Capex US$m -0.5

YNG holdback oz 4,292 Net annual cash flow US$m 82.3

Long term gold price assumption US$/oz 1,350

Source: Yukon-Nevada management

In August 2011 and February 2012 YNG announced two forward gold purchase agreements with

Deutsche Bank. These will allow YNG to complete an extensive programme of capital expenditureacross its mines and process plant and tailings storage facility over Jerritt Canyons official 4.5-year life

of mine (which officially totals US$182.8m).

The first agreement, announced 3 August 2011, is for delivery of 173,380ozs of gold over a 48-month

term, in return for an upfront pre-payment of US$120m (equivalent to YNG selling each ounce for

US$690). In return, Deutsche Bank will receive scheduled monthly deliveries of gold at a base rate of

US$850/oz for gross proceeds of US$147.37m or an equivalent 5.79% interest over the initial

US$120m payment (exclusive of costs). After the receipt of the US$120m, the rest of the purchase

price of the gold will be paid to YNGs wholly-owned subsidiary, Queenstake Resources, oncompletion of the monthly gold deliveries to Deutsche Bank. This will equal the amount the gold price

exceeds US$850/oz up to a maximum price of US$1,950/oz. For the purposes of our valuation we

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have used the same gold price profile as our base case valuation. The second agreement, announced

8 February 2012, is for delivery of 27,950 ounces of gold over a 43-month term for 650 ounces per

month, starting 31 March 2012 (equivalent to YNG selling each ounce for US$716) in return for an

upfront payment of US$20m. After the receipt of the US$20m, the rest of the golds purchase price will

be paid to YNGs wholly owned subsidiary, Queenstake Resources, on completion of the monthly gold

deliveries to Deutsche Bank. It will equal the amount that the gold price exceeds US$850/oz, up to a

maximum price of US$1,750/oz. For the purposes of our valuation we have used the same gold price

profile as per our base case valuation.

The above forward gold purchase agreements and warrant exercise for US$44.9m (as stated in our

August 2011Outlook note) mean YNG has sourced a total of over US$200m without any new dilution

for the investor. This money is sufficient for YNG to complete the large majority of its recapitalisation

projects at Jerritt Canyon (for example, amongst others; ramping up mine production at the

SSX/Steer/Saval mines and start the development process for Starvation Canyon), which currently

total US$182.8m over the current 4.5-year life of mine plan.

Further to YNG securing its Deutsche Bank financing agreements, it has also previously undertaken

three non-brokered private equity placements totalling US$37.3m. The first, announced 24 May 2011,

was a US$14.4m private placement to sell to Deutsche Bank 33.5m units at a price of $0.43 per unit.

The second, announced 14 May 2012, was for US$7m (30.4m units, each consisting one ordinary

share and one share purchase warrant exercisable at US$0.40). The third placement, announced 17

May 2012, was for 39.1m units at US$0.23 each for total proceeds of US$9.0m. A further US$6.9m

makes up the balance, and was a negotiated settlement on current accounts payable by the issuance

of 22.8m shares at US$0.30 each. We understand this US$6.9m was made payable to sitecontractors, who may be considered knowledgeable as to the potential of Jerritt Canyon and therefore

confident that YNG will now start to unlock the true value of the mine.

On 15 June 2012 Yukon-Nevada completed a private placement offering C$6.0m principal amount of

unsecured convertible debentures to Whitebox Advisors. Yukon-Nevada states these funds will go

towards development of the Starvation Canyon and to expand production at the SSX/Steer mine and

to aid in the clean-up of historic rock disposal areas, one of the last items to be completed under the

Consent Decree. The convertible debenture bears an annual interest rate of 11%, maturing in 42

months from the closing date. Subject to meeting certain requirements, Yukon-Nevada also has the

option to require Whitebox Advisors to subscribe for an additional C$4m in convertible debentures, on

the same relative terms as the first, four weeks after the closing date. Whitebox Advisors will also have

the option, exercisable at any time prior to the date that is four months from the closing date, to

acquire up to C$2m principal amount of additional convertible debentures, at the same relative terms

as the first. Upon the maturity date, the debentures and all interest accrued thereon may, at the

Company's discretion, be paid in cash, shares (up to a maximum of 75%) or any combination of cash

and shares (up to a maximum of 75%). For the purposes of our valuation we assume only the initial

C$6m debenture is issued by Whitebox and is repaid solely in cash by Yukon-Nevada upon maturity in

2014. For illustrative purposes only, if the debenture were to convert into equity at a share price of

C$0.32, then c 39m shares would be issued by Yukon-Nevada in 2014.
http://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-goldhttp://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-goldhttp://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-goldhttp://www.edisoninvestmentresearch.co.uk/research/company/yukon-nevada-gold

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Year end 31 December IFRS IFRS IFRS IFRS

Cost of Sales (82,943) (130,975) (111,298) (143,478)Gross Profit (11,573) (25,859) 120,932 183,721

Intangible Amortisation 0 0 0 0Exceptionals (745) 0 0 0Other (963) (781) (781) (781)

Net Interest 251 137 0 0Other finanical items (62,089) (29,676) 0 0Exceptionals (105,024) 97,203 0 0

Tax 1,630 192 0 0

Average Number of Shares Outstanding (m) 646.7 976.5 987.2 1,023.7EPS - normalised (c) (12.9) (7.2) 8.1 10.0EPS - normalised and fully diluted (c) (8.7) (5.4) 6.2 7.7EPS - (IFRS) (c) (29.4) 2.7 8.0 10.0Dividend per share (c) 0.0 0.0 0.0 0.0

Gross Margin (%) (16.2) (24.6) 52.1 56.1

Operating Margin (before GW and except.) (%) (32.9) (38.7) 34.5 31.4

Intangible Assets 0 0 0 0Tangible Assets 828 736 736 736Mineral Properties 157,936 231,040 267,506 316,921Restricted funds/other 34,693 70,591 65,810 65,810

Stocks 21,280 14,476 17,394 23,813Debtors 4,504 8,542 19,087 26,893Cash 0 2,261 176,319 218,186Other 0 0 0 0

Creditors (68,524) (78,001) (31,612) (34,257)Short term borrowings (8,926) 0 0 0Other (19,543) (37,467) (22,464) (22,464)

Long term borrowings (15,030) 0 0 (647)Derivatives (139,943) (1,785) 0 0Other long term liabilities (57,635) (160,710) (160,710) (160,710)

Net Interest 251 137 0 0Tax 0 0 0 0Capex (16,292) (100,621) (45,661) (80,678)

Acquisitions/disposals 0 2,137 0 0Financing 35,217 39,191 168,457 (647)

Forward gold purchase repayment 0 0 0Dividends 0 0 0 0Equity portion of debt/derivatives/other (32) 0 (0) 0Net Cash Flow (96) 2,292 174,058 41,220

HP finance leases initiated 0 0 0 0Other (89) (31) 0 0

Source: Yukon-Nevada company accounts and Edison Investment Research

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900-688 West Hastings StreetVancouver BC V6B 1P1Canada

+1604.688.9427www.yukon-nevadagold.com

EPS CAGR 2009-13 N/A

EPS CAGR 2011-13 N/A

EBITDA CAGR 2009-13 N/A

EBITDA CAGR 2011-13 N/A

Sales CAGR 2009-13 140%

Sales CAGR 2011-13 76%

ROCE 2012e 61%

Avg ROCE 2009-13 N/A

ROE 2012e 45%

Gross margin 2012e 52%

Operating margin 2012e 35%

Gross mgn/Op mgn 1.5

Gearing 2012e N/A

Interest cover 2012e N/A

CA/CL 2012e 1.2

Stock turn 2012e 27

Debtor days 2012e 30

Creditor days 2012e 14

Litigation/regulatory

Pensions

Currency

Stock overhang

Interest rates

Oil/commodity prices

Mr Reichert has 23 years experience from his international work atvarious operating mines and process facilities. Most recently he waspresident and COO for Colossus Minerals responsible for thedevelopment of the Serra Pelada project in Brazil. Before this hewas COO of Oriel Resources and Orsu Metals Corp.

Mr Heinrichs has been with the company since 2008 as CFO. Hehas over 15 years of financial accounting experience, beginning withseven years of public practice experience with Ernst & Young wherehe was lead assurance or advisory manager on several large USand Canadian plcs. He has also recently joined YNGs board.

Mr Johnson has over 17 years of experience in the precious andbase metal resource industry and four years of geotechnicalengineering experience. Mr Johnson is a qualified person as defined

by the Canadian NI43-101 guidelines, and a recognised expert inthe assessment of base and precious metal systems.

Mr Scott combines 28 years as a resource and corporate financelawyer with eight years of practical experience as an explorationgeologist to give clients expert, balanced advice on all resource-

related matters. He represents many Canadian public companieslisted on the TSX and TSX Venture Exchanges.

Orifer 20.5

Sprott 12.8

Deutsche Bank AG 12.2

Marland, Francois 8.8

Chafee, Robert E 1.1

Schmeidler A R & Co. 0.8

Anglo American, Allied Nevada Gold, Deutsche Bank

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