CBJ - February 9 - Yukon-Nevada Gold Corp. has announced that it has restarted production following commissioning of a new ore dryer, fine-crushing conveying system and distributed control system at its wholly-owned Jerritt Canyon gold operation in Nevada.

Jerritt Canyon is operated by Queenstake Resources USA Ltd., a wholly-owned subsidiary of Yukon-Nevada Gold Corp.

A shutdown of production was initiated on January 6 in order to complete a winterization and refurbishment program which included constructing a new drying facility and reconfiguring the conveying system in fine crushing. During the shutdown, the old ore dryer was replaced with a new ore dryer closer to the front end of the circuit. In addition, a new distributed control system was installed for the entire plant. Commissioning of the new ore dryer, fine-crushing conveying and the distributed control system commenced on January 23.

Testing of the new crushing and drying installations continued from January 23 through February 1, with the first day of production with both roasters operating on February 3. Gold production resumed January 25 and the first shipment was on January 31.

The forecast for February plant production is an average of 3,300 tonnes per day and production of 9,000 ounces of gold. March production is forecasted to average 3,900 tonnes per day with gold production of about 12,500 ounces (annualized run rate of 150,000 gold ounces).

The milling facility is currently permitted to run at 90 tonnes per hour per roaster (4,320 tonnes per day for 24 hours operation) and recent testing has shown that air emissions are within limits at 110 tonnes per hour, so permission has been sought to increase roaster throughput to this level. If permission is obtained, the plan is to gradually ramp up the daily production to 4,600 tonnes per day by Q4 2012.

Randy Reichert, COO, Yukon-Nevada Gold Corp., said, “After much hard work to achieve steady state production this represents the end of a significant capital expenditure phase and a major milestone for the company and with the new installations running well, it will lead to more consistent operations and sustained production growth at Jerritt Canyon.”