Hycroft Mining (ANV) 10-Q 2011 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-33119

ALLIED NEVADA GOLD CORP.

(Exact name of registrant as specified in its charter)

DELAWARE	20-5597115
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
9790 Gateway Drive, Suite 200 Reno, NV	89521
(Address of principal executive offices)	(Zip Code)

(775) 358-4455

(Registrant’s telephone no., including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,”“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

89,330,388 shares of Common Stock, $0.001 par value, outstanding at November 4, 2011

ALLIED NEVADA GOLD CORP.

FORM 10-Q

For the Quarter Ended September 30, 2011

INDEX

PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26
ITEM 4.	CONTROLS AND PROCEDURES	26
PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	28
ITEM 1A.	RISK FACTORS	28
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	28
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	28
ITEM 4.	MINE SAFETY DISCLOSURE	28
ITEM 5.	OTHER INFORMATION	29
ITEM 6.	EXHIBITS	29
	SIGNATURES	30

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALLIED NEVADA GOLD CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(US dollars in thousands, except shares)

	(Unaudited) September 30, 2011			December 31, 2010
Assets:
Cash and cash equivalents	$	297,722		$	337,829
Inventories - Note 3		16,526			9,978
Ore on leach pads - Note 4		67,481			49,357
Prepaids and other		6,723			7,405
Deferred tax asset, current		3,788			4,655
Current assets		392,240			409,224
Plant and equipment, net - Note 5		110,086			66,081
Mine development - Note 6		45,369			18,874
Restricted cash - Note 7		18,585			15,020
Other assets, non-current		3,278			2,292
Mineral properties - Note 8		35,486			35,522
Deferred tax asset, non-current		16,543			20,339
Total assets	$	621,587		$	567,352
Liabilities:
Accounts payable	$	28,052		$	14,931
Other liabilities, current - Note 9		4,773			1,732
Capital lease obligations, current - Note 10		6,478			3,215
Asset retirement obligation, current - Note 11		463			463
Current liabilities		39,766			20,341
Capital lease obligations, non-current - Note 10		20,104			11,104
Asset retirement obligation, non-current - Note 11		6,389			6,303
Other accrued liabilities, non-current - Note 12		9,995			6,850
Total liabilities		76,254			44,598
Commitments and Contingencies - Note 20
Shareholders’ Equity:
Common stock - Note 13 ($0.001 par value, 100,000,000 shares authorized, shares issued and outstanding: 89,330,388 at September 30, 2011 and 88,958,989 at December 31, 2010)		89			89
Additional paid-in-capital		587,444			583,354
Accumulated deficit		(42,200	)		(60,689	)
Total shareholders’ equity		545,333			522,754
Total liabilities and shareholders’ equity	$	621,587		$	567,352

The accompanying notes are an integral part of these statements.

1

ALLIED NEVADA GOLD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(US dollars in thousands, except shares and per share amounts)

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Revenue - Note 14	$	49,644		$	38,872		$	115,150		$	99,443
Operating expenses:
Production costs		17,127			19,067			42,635			41,795
Depreciation and amortization		2,185			2,228			5,301			5,233
Total cost of sales		19,312			21,295			47,936			47,028
Exploration and land holding costs		6,095			8,065			23,044			16,894
Accretion		114			109			337			331
Corporate general and administrative		4,516			5,702			18,691			13,955
Income from operations		19,607			3,701			25,142			21,235
Interest income		136			66			265			112
Interest expense		(72	)		(94	)		(376	)		(282	)
Net foreign exchange gain (loss)		(52	)		849			(10	)		3,020
Other income		1,167			—			1,171			271
Income before income taxes		20,786			4,522			26,192			24,356
Income tax (expense) benefit - Note 16		(6,114	)		(1,463	)		(7,703	)		3,147
Net income	$	14,672		$	3,059		$	18,489		$	27,503
Earnings per share:
Basic - Note 17	$	0.16		$	0.03		$	0.21		$	0.34
Diluted - Note 17	$	0.16		$	0.03		$	0.20		$	0.33

The accompanying notes are an integral part of these statements.

2

ALLIED NEVADA GOLD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(US dollars in thousands)

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Cash flows from operating activities:
Net income	$	14,672		$	3,059		$	18,489		$	27,503
Adjustments to reconcile net income for the period to net cash provided by operating activities:
Depreciation and amortization		2,185			2,228			5,301			5,233
Accretion		114			109			337			331
Stock-based compensation		1,119			2,880			6,294			6,975
Gain on sale of mineral properties		(1,097	)		—			(1,097	)		—
Gain on disposal of assets		(22	)		—			(10	)		—
Deferred taxes		3,702			1,311			4,663			(4,005	)
Gain on recognition of deferred income		—			—			—			(269	)
Change in operating assets and liabilities:
Inventories		(2,764	)		(583	)		(6,177	)		(3,011	)
Ore on leach pads		(2,520	)		932			(15,508	)		(8,932	)
Prepaids and other assets		(1,217	)		(546	)		1,094			(3,263	)
Accounts payable		(1,516	)		786			3,734			1,579
Asset retirement obligation		(90	)		(28	)		(251	)		(264	)
Accrued liabilities and other		2,884			1,317			3,108			2,030
Net cash provided by operating activities		15,450			11,465			19,977			23,907
Cash flows from investing activities:
Additions to plant and equipment		(8,923	)		(11,408	)		(26,676	)		(21,601	)
Additions to mine development		(13,183	)		(1,662	)		(26,505	)		(5,553	)
Additions to mineral properties		(13	)		—			(113	)		—
(Increase) decrease in restricted cash		357			(14	)		(3,565	)		(942	)
Proceeds from other investing activities		10			—			110			60
Net cash used in investing activities		(21,752	)		(13,084	)		(56,749	)		(28,036	)
Cash flows from financing activities:
Proceeds on issuance of common stock		183			3,813			794			279,231
Refund (payment) of share issuance costs		—			(54	)		15			(17,887	)
Payment of loan costs		—			—			(476	)		—
Repayments of principal on capital lease agreements		(1,422	)		(358	)		(3,668	)		(1,017	)
Net cash provided by (used in) financing activities		(1,239	)		3,401			(3,335	)		260,327
Net increase (decrease) in cash and cash equivalents		(7,541	)		1,782			(40,107	)		256,198
Cash and cash equivalents, beginning of period		305,263			345,997			337,829			91,581
Cash and cash equivalents, end of period	$	297,722		$	347,779		$	297,722		$	347,779
Supplemental cash flow disclosures:
Cash paid for interest	$	392		$	94		$	995		$	282
Cash paid for taxes		—			150			—			450
Non-cash financing and investing activities:
Mining equipment acquired by capital lease		3,595			1,372			15,931			1,372
Mining equipment acquired by accounts payable additions		9,387			—			9,387			—
Marketable equity securities received from a mineral property sale	$	1,097		$	—		$	1,097		$	—

The accompanying notes are an integral part of these statements.

3

ALLIED NEVADA GOLD CORP.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(US dollars in thousands, except share amounts)

	Common Stock				Additional Paid-in Capital			Accumulated Deficit			Total Shareholders’ Equity
	Shares		Amount
Balance, January 1, 2010		73,837,267	$	74	$	317,923		$	(94,817	)	$	223,180
Shares issued in public offering		13,500,000		14		272,174			—			272,188
Share issuance costs paid		—		—		(17,887	)		—			(17,887	)
Shares issued under stock option plans		1,415,623		1		7,042			—			7,043
Stock-based compensation and RSU plan share issuances		131,766		—		3,204			—			3,204
Net income		—		—		—			27,503			27,503
Balance, September 30, 2010		88,884,656	$	89	$	582,456		$	(67,314	)	$	515,231
Balance, January 1, 2011		88,958,989	$	89	$	583,354		$	(60,689	)	$	522,754
Shares issued under stock option plans		172,941		—		794			—			794
Stock-based compensation and RSU plan share issuances		198,458		—		3,281			—			3,281
Share issuance costs refunded		—		—		15			—			15
Net income		—		—		—			18,489			18,489
Balance, September 30, 2011		89,330,388	$	89	$	587,444		$	(42,200	)	$	545,333

The accompanying notes are an integral part of these statements.

4

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all of the normal and recurring adjustments necessary to fairly present the interim financial information set forth herein have been included. The results of operations for interim periods are not necessarily indicative of the operating results of a full year or of future years.

The preparation of the Company’s Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to estimates of recoverable gold in leach pad inventories; net realizable value of ore on leach pads; the valuation allowances for deferred tax assets; mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units of production amortization calculations; environmental, reclamation and closure obligations; and estimates of fair value for asset impairments. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

These interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States and, with the exception of the new accounting pronouncements described in Note 2, follow the same accounting policies and methods of their application as the most recent annual financial statements. These interim financial statements should be read in conjunction with the financial statements and related footnotes included in the Annual Report on Form 10-K/A of Allied Nevada for the year ended December 31, 2010.

Reclassifications

Certain reclassifications have been made to the prior period consolidated statements of income to conform to the current period presentation. These reclassifications had no effect on previously reported cash flows or net income, but did change the presentation of cost of goods sold to include production costs and depreciation and amortization.

2. New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”).” This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and changes the disclosure requirements to include quantitative information about unobservable inputs used for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011 (early adoption is prohibited). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (early adoption is permitted). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.

5

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

3. Inventories

The following table provides the components of inventories (in thousands):

	September 30, 2011		December 31, 2010
In-process inventory	$	9,472	$	6,159
Precious metals inventory		187		310
Materials and supplies inventory		6,867		3,509
	$	16,526	$	9,978

In-process inventory and precious metals are carried at the lower of average cost or market. Cost includes mining and process costs including mine site overhead, production phase stripping, and depreciation and amortization relating to mining and process operations.

Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.

4. Ore on Leach Pads

The following table summarizes ore on leach pads and estimated recoverable gold ounces:

	September 30, 2011		December 31, 2010
Ore on leach pads (in thousands)	$	67,481		$	49,357
Estimated recoverable gold ounces		94,337			77,265

Ore on leach pads is carried at the lower of average cost or market. Cost includes mining and process costs including mine site overhead, production phase stripping costs, and depreciation and amortization relating to mining and process operations. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per estimated recoverable ounce of gold on the leach pad.

5. Plant and Equipment, Net

The following table provides the components of plant and equipment (in thousands):

	Depreciable life or method	September 30, 2011			December 31, 2010
Mine equipment	3 -10 years	$	92,452		$	59,965
Buildings and leasehold improvements	3 - 10 years		6,123			4,410
Leach pads	Units of Production		20,430			19,094
Furniture, fixtures, and office equipment	2 - 3 years		1,445			1,049
Vehicles	3 - 5 years		1,831			1,447
Construction in progress and other			20,111			3,981
			142,392			89,946
Less: accumulated depreciation and amortization			(32,306	)		(23,865	)
		$	110,086		$	66,081

Construction in progress consists of capital items which are not yet completed and placed in service, which as of September 30, 2011, consisted primarily of $7.4 million in expenditures for a maintenance building, $6.7 million in expenditures for leach pad expansion, $2.2 million in expenditures for process improvements, $1.6 million in expenditures for power and electrical equipment, $0.9 million in expenditures for mobile mine equipment, and $1.3 million in expenditures for other capital items.

6

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

Allied Nevada primarily depreciates its assets using a straight-line method over the useful lives of the assets ranging from two to ten years. The leach pads are depreciated on a units-of-production method based upon estimated recoverable gold ounces from proven and probable reserves.

6. Mine Development

The following table reflects the changes in mine development costs (in thousands):

	Nine months ended September 30,
	2011			2010
Balance, beginning of year	$	18,874		$	10,389
Additions:
Reserve verification drilling and assaying		6,555			4,034
Condemnation drilling and assaying		5,619			—
Pre-production stripping costs		13,309			—
EIS and engineering costs		2,057			1,519
Amortization		(1,045	)		(1,169	)
Balance, end of period	$	45,369		$	14,773

Mine development costs that benefit an entire ore body are amortized using the units-of-production method based upon estimated recoverable gold ounces from proven and probable reserves of the ore body. Estimated recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recovery associated with those reserves. When multiple pits exist at a mining complex utilizing common processing facilities, mine development costs are capitalized for each pit and amortized using the units-of-production method based upon estimated recoverable gold ounces from proven and probable reserves at each pit.

7. Restricted Cash

Allied Nevada has collateralized obligations related to its reclamation liabilities. Restricted cash balances and changes during the periods are summarized below (in thousands):

	Nine months ended September 30,
	2011			2010
Balance, beginning of year	$	15,020		$	14,066
Additions		4,009			909
Reimbursements		(462	)		—
Interest		18			34
Balance, end of period	$	18,585		$	15,009

In February 2011, we received a notification from the Bureau of Land Management (“BLM”) of a revised total reclamation cost estimate to expand mining operations and address exploration disturbances at the Hycroft Mine. This notification resulted in the Company increasing its surety bond for the benefit of the BLM by $3.9 million, which is collateralized by restricted cash in the same amount. In August 2011, the Company increased its statewide surety bond for the benefit of the BLM by $0.1 million to expand exploration activities outside of the Hycroft Mine, which is collateralized by restricted cash in the same amount. In September 2011, the Company received a reimbursement of $0.5 million related to reclamation costs paid by the Company.

7

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

8. Mineral Properties

The following table summarizes the Company’s mineral properties and changes during the periods (in thousands):

	Nine months ended September 30,
	2011			2010
Balance, beginning of year	$	35,522		$	35,845
Additions		113			—
Amortization - royalty rights		(149	)		(293	)
Balance, end of period	$	35,486		$	35,552

The recoverability of the carrying values of the Company’s mineral properties is dependent upon commercial production from, or sale, or lease of, these properties and upon economic reserves being discovered or developed on the properties. The Company believes that the fair value of its mineral properties exceeds the carrying value; however, events and circumstances beyond the control of management may mean that a write-down in the carrying values of the Company’s properties may be required in the future as a result of evaluation of gold mineralized material and application of a ceiling test which is based on estimates of gold mineralized material, exploration land values, future advanced minimum royalty payments and gold prices. Royalty rights with a historical total cost of $3.5 million are amortized using the units-of-production method based upon estimated recoverable gold ounces from proven and probable reserves at the Hycroft Mine. During the three and nine months ended September 30, 2011, the Company recorded a $1.1 million gain on the sale of a mineral property with no carrying value, which was sold for shares of International Enexco Limited. The Company did not sell any of its mineral properties during the three and nine months ended September 30, 2010.

9. Other Liabilities, Current

The following table summarizes the components of other current liabilities (in thousands):

	September 30, 2011		December 31, 2010
Accrued liabilities and other
Federal income taxes payable	$	2,239	$	—
Accrued compensation		1,464		1,016
Contractor holdbacks		404		239
Employment taxes payable		569		395
Other		97		82
Total accrued liabilities and other	$	4,773	$	1,732

10. Revolving Credit Facility and Capital Lease Obligations

Revolving Credit Facility

In May 2011, the Company entered into a three-year $30.0 million revolving credit agreement that matures in May 2014. The revolving credit facility is collateralized by substantially all the assets of the Company. The interest rate on drawdowns is at either an applicable rate plus a base rate or an applicable rate plus LIBOR with the applicable rate determined by financial ratios of the Company. The Company has the ability to repay any borrowings under the facility in part or entirety at any time without penalty. The Company is required to pay a standby fee, dependent on financial ratios, on undrawn amounts under the revolving credit facility. The credit agreement contains various covenants related to net worth, interest coverage and leverage ratios, and contains limitations on dividends. The Company was in compliance with all covenants as of September 30, 2011.

The Company incurred loan origination fees of $0.5 million during the origination of the revolving credit facility, which are being amortized to interest expense using the straight-line method over the term of the loan. At September 30, 2011, no amount was outstanding on the revolving credit facility.

8

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

Capital Lease Obligations

During the nine months ended September 30, 2011, the Company entered into six capital leases for the purchase of mining equipment and now has a total of sixteen capital leases, most of which have 60-month terms. The weighted average implicit interest rate for these capital leases is approximately six percent.

Assets under capital leases are included in Plant and Equipment (Note 5) and are summarized in the table below (in thousands):

	September 30, 2011			December 31, 2010
Mine equipment	$	34,142		$	17,212
Less: accumulated depreciation		(5,493	)		(2,471	)
Net assets under capital leases	$	28,649		$	14,741

During the nine months ended September 30, 2011, the Company capitalized $0.7 million of interest expense from capital leases.

The following is a summary of the future minimum lease payments under capital leases, together with the present value of the net minimum lease payments as of September 30, 2011 (in thousands):

Fiscal Year	Minimum Lease Payment
2011	$	2,031
2012		7,793
2013		7,458
2014		6,609
2015		5,161
2016		810
Less: interest		(3,280	)
Net minimum lease payments under capital leases		26,582
Less: current portion		(6,478	)
Non-current portion of net minimum lease payments	$	20,104

11. Asset Retirement Obligation

Changes to the Company’s asset retirement obligation are summarized below (in thousands):

	Nine months ended September 30,
	2011			2010
Balance, beginning of year	$	6,766		$	6,643
Accretion		337			331
Reclamation expenditures		(251	)		(262	)
Balance, end of period		6,852			6,712
Less: current portion		(463	)		(476	)
Non-current portion	$	6,389		$	6,236

Reclamation obligations are secured by surety bonds or irrevocable standby letters of credit in amounts determined by applicable federal and state regulatory agencies. These surety bonds and irrevocable standby letters of credit are in turn secured by cash collateral. See Note 7 “Restricted Cash”.

12. Other Accrued Liabilities, Non-Current

As of September 30, 2011, other accrued liabilities totaled $10.0 million, of which $9.3 million was for the Company’s Deferred Phantom Unit Plan (the “DPU Plan”).

9

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

The DPU Plan was adopted by the Board of Directors in April 2009. Under the DPU Plan, non-executive directors receive a portion of their annual compensation in DPUs quarterly. Each DPU has the same value as one Allied Nevada common share. DPUs must be retained until the director leaves the Board, at which time the value of the DPU will be paid out in cash. In the event dividends are declared and paid, additional DPUs would be credited to reflect dividends paid on Allied Nevada’s common shares.

The following table summarizes the number of the Company’s DPUs and changes during the periods:

	Nine months ended September 30,
	2011		2010
Outstanding, beginning of year		238,000		131,250
Granted		21,000		85,750
Outstanding, end of period		259,000		217,000

DPUs are recorded at fair value on the quarterly award date and are adjusted for changes in fair value. The fair value of amounts granted each period, together with the change in fair value, is expensed. DPU expense recognized during the three and nine month periods ended September 30, 2011 totaled $0.1 and $3.0 million, respectively. DPU expense recognized during the three and nine month periods ended September 30, 2010 totaled $1.9 million and $3.8 million, respectively. The aggregate fair value of the 259,000 DPUs outstanding at September 30, 2011 totaled $9.3 million.

13. Shareholders’ Equity

Allied Nevada 2007 Stock Option Plan

The table below is a summary of changes to the 2007 Stock Option Plan for the periods indicated:

	Nine months ended September 30,
	2011							2010
	Number of Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Number of Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)
Outstanding on January 1,		931,930		$	4.71				2,358,143		$	4.80
Canceled/expired		(2,000	)		2.43				—
Exercised		(149,554	)		4.49				(1,426,213	)		4.86
Outstanding, end of period		780,376			4.78		4.7		931,930			4.71		5.5
Exercisable, end of period		772,376		$	4.81		4.8		860,929		$	4.71		6.2

During the nine months ended September 30, 2011 and 2010, a total of 51,001 and 864,340 options vested, respectively. During the nine months ended September 30, 2011 and 2010, the Company recognized stock-based compensation expense of $40,100 and $1.5 million, respectively, for options granted pursuant to the 2007 Stock Option Plan. At September 30, 2011 and 2010, there was approximately $2,700 and $0.1 million, respectively, of unrecognized stock-based compensation cost relating to outstanding unvested options. No options were granted in either of the nine months ended September 30, 2011 or 2010.

10

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

Restricted Share Plan

The table below is a summary of changes to the Restricted Share Plan for the periods indicated:

	Nine months ended September 30,
	2011					2010
	Number of RSUs			Weighted Average Remaining Restricted Period (years)		Number of RSUs			Weighted Average Remaining Restricted Period (years)
Outstanding on January 1,		957,901					827,500
Granted		245,962					383,400
Vested/issued		(198,458	)				(131,766	)
Canceled/expired		(17,100	)				(93,733	)
Outstanding, end of period		988,305			2.0		985,401			2.2
Vested, end of period		350,000			—		300,000			—

The RSU values are based upon the fair value of the Company’s stock on the date of grant, less estimated forfeitures. The restricted share units are expensed over the requisite service periods. The total stock-based compensation expense recognized under the RSU Plan during the nine month periods ended September 30, 2011 and 2010, was $3.2 million and $1.7 million, respectively. At September 30, 2011 and 2010, there was approximately $10.9 million and $7.7 million, respectively, of unrecognized stock-based compensation cost relating to outstanding restricted share units.

RSUs

Restricted share units vest annually over three years, until fully vested on the third anniversary of the grant date. 49,700 RSUs were granted during the nine months ended September 30, 2011.

Performance RSUs

Performance restricted share units generally vest over three years and are subject to performance based vesting criteria determined in advance for each year by the Compensation Committee of the Board of Directors. 196,262 performance RSUs were granted during the nine months ended September 30, 2011.

Special Stock Option Plan

The table below is a summary of changes in the Special Stock Option Plan for the periods indicated:

	Nine months ended September 30,
	2011							2010
	Number of Special Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Number of Special Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)
Outstanding on January 1,		26,728		$	5.28				60,138		$	4.41
Canceled		(3,341	)		5.70				—			—
Exercised		(23,387	)		3.51				(33,410	)		3.86
Outstanding, end of period		—			—		—		26,728			5.16		0.8
Exercisable, end of period		—		$	—		—		26,728		$	5.16		0.8

Common Stock

The authorized share capital of Allied Nevada consists of 100,000,000 shares of common stock with a par value of $0.001 per share. As of September 30, 2011, there were 89,330,388 shares of common stock issued and outstanding.

11

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

Preferred Stock

The authorized share capital of Allied Nevada includes 10,000,000 shares of undesignated preferred stock with a par value of $0.001 per share. As of September 30, 2011, no shares of preferred stock have been issued.

14. Revenue

The Company recognizes revenue on gold and silver sales when persuasive evidence of an arrangement exists, the price is fixed or determinable, the metal is delivered, the title has transferred to the customer, and collectability is reasonably assured.

The table below is a summary of the Company’s gold and silver sales for the three and nine months ended September 30, 2011 and 2010 (in thousands).

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Gold Sales	$	45,398	$	37,538	$	105,824	$	96,078
Silver Sales		4,246		1,334		9,326		3,365
Total	$	49,644	$	38,872	$	115,150	$	99,443

15. Related Party Transactions

Provision of Legal Services

Cameron Mingay, an Allied Nevada director who was appointed as an Allied Nevada Director in March 2007, is a partner at Cassels Brock & Blackwell LLP (“Cassels Brock”) of Toronto, Ontario, Canada, which since June 2007 has served as outside counsel to Allied Nevada in connection with Canadian corporate and securities law matters. Allied Nevada has paid Cassels Brock an aggregate of approximately $0.5 million and $0.1 million for legal services rendered during the nine months ended September 30, 2011 and 2010, respectively. In addition, accounts payable included approximately $0.1 million and $0.2 million due to Cassels Brock at September 30, 2011 and 2010, respectively.

Director Air Travel

From time to time, Allied Nevada Gold Corp.’s Chairman of the Board of Directors, Robert Buchan, uses a private aircraft owned by Angus Aviation LP. The Company’s use of the aircraft is reimbursed based upon invoices submitted to the Company whereby the Company pays an hourly rate and certain additional charges including landing fees. Mr. Buchan has an ownership interest in Angus Aviation LP and benefits to the extent of his interest in Angus Aviation. For the three months ended September 30, 2011, the Company incurred expenses of approximately $95,000 CDN of which approximately $45,000 US was unpaid as of September 30, 2011.

16. Income Tax Expense

Allied Nevada accounts for interim income taxes in accordance with ASC 740. For the nine months ended September 30, 2011, Allied Nevada recorded an estimated tax expense of approximately $7.7 million, based on an effective rate of 29.4%. Estimated tax benefit during the same period of 2010 was $3.1 million, which included estimated tax expense of $8.4 million based on an effective tax rate of 34.2% and a benefit of $11.5 million due to the release of a valuation allowance relating to a change in its estimate of then future taxable income. The effective tax rate for 2011 is different than the United States statutory rate of 35% primarily due to permanent differences between income tax and financial reporting treatment of certain transactions. The effective tax rate for 2010 is different than the United States statutory rate of 35% primarily due to permanent differences between income tax and financial reporting treatment of certain transactions and a decrease in the valuation allowance on Alternative Minimum Tax (AMT) credits generated during the period.

12

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

17. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Net income available to common shareholders	$	14,672	$	3,059	$	18,489	$	27,503
Basic:
Weighted average number of shares outstanding		89,664		88,892		89,507		80,622
Earnings per share		0.16		0.03		0.21		0.34
Diluted:
Weighted average number of shares outstanding		90,989		90,327		90,840		82,132
Earnings per share		0.16		0.03		0.20		0.33

The computation of the basic earnings per share includes within the weighted average number of shares outstanding 350,000 and 300,000 vested restricted share units that were not issued as of September 30, 2011 and 2010, respectively.

At September 30, 2011, there were 780,376 options granted under the Allied Nevada Stock Option Plan outstanding and 638,305 unvested restricted share units outstanding that were included in the diluted earnings per share for the nine months ended September 30, 2011.

At September 30, 2010, there were 931,930 options granted under the Allied Nevada Stock Option Plan outstanding, 26,728 options granted under the Allied Nevada Special Stock Option plan outstanding, and 685,401 unvested restricted share units outstanding that were included in the diluted earnings per share for the nine months ended September 30, 2010.

18. Segment Information

Allied Nevada is currently engaged in the operation of the Hycroft Mine and the evaluation, acquisition, exploration, and advancement of gold exploration and development projects in Nevada. The Company identifies its reportable segments as those consolidated mining operations or functional groups that represent more than 10% of the combined revenue, profit or loss or total assets of all reported operating segments. Consolidated mining operations or functional groups not meeting this threshold are aggregated at the corporate level for segment reporting purposes. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. Segment information as of and for the three and nine months ended September 30, 2011 and 2010 is as follows (in thousands):

As of and for the three months ended September 30,	Hycroft Mine			Exploration			Corporate and Other			Total
2011
Sales	$	49,644		$	—		$	—		$	49,644
Income (loss) from operations		30,280			(6,094	)		(4,579	)		19,607
Interest income		5			—			131			136
Interest expense		(33	)		—			(39	)		(72	)
Loss on foreign exchange		—			—			(52	)		(52	)
Other income		—			1,097			70			1,167
Income (loss) before taxes		30,252			(4,997	)		(4,469	)		20,786
Total assets		291,137			35,064			295,386			621,587
Capital expenditures		34,983			6			99			35,088
2010
Sales	$	38,872		$	—		$	—		$	38,872
Income (loss) from operations		17,511			(8,064	)		(5,746	)		3,701
Interest income		15			—			51			66
Interest expense		(94	)		—			—			(94	)
Gain on foreign exchange		—			—			849			849
Income (loss) before taxes		17,432			(8,064	)		(4,846	)		4,522
Total assets		157,632			34,191			360,249			552,072
Capital expenditures		14,284			91			67			14,442

13

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

As of and for the nine months ended September 30,	Hycroft Mine			Exploration			Corporate and Other			Total
2011
Sales	$	115,150		$	—		$	—		$	115,150
Income (loss) from operations		67,048			(23,044	)		(18,862	)		25,142
Interest income		18			—			247			265
Interest expense		(282	)		—			(94	)		(376	)
Loss on foreign exchange		—			—			(10	)		(10	)
Other income		5			1,097			69			1,171
Income (loss) before taxes		66,789			(21,947	)		(18,650	)		26,192
Total assets		291,137			35,064			295,386			621,587
Capital expenditures		78,182			62			255			78,499
2010
Sales	$	99,443			—			—		$	99,443
Income (loss) from operations		52,200			(16,893	)		(14,072	)		21,235
Interest income		34			—			78			112
Interest expense		(282	)		—			—			(282	)
Gain on foreign exchange		—			—			3,020			3,020
Other income		—			269			2			271
Income (loss) before taxes		51,952			(16,624	)		(10,972	)		24,356
Total assets		157,632			34,191			360,249			552,072
Capital expenditures		28,112			186			228			28,526

19. Fair Value Measurements

The Company’s financial instruments, including cash and cash equivalents and accounts payable are carried at cost, which approximates fair value due to the short-term maturity of these instruments.

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3 –Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands).

	Fair value at September 30, 2011
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Marketable equity securities	$	1,161	$	—	$	—	$	1,161
Balance, end of period	$	1,161	$	—	$	—	$	1,161

The Company’s marketable equity securities are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted price of the marketable equity security multiplied by the quantity of shares held by the Company. The Company has elected to account for its available-for-sale securities using the fair value option in accordance with ASC 825Financial Instruments. Available-for-sale equity securities are classified as “other assets, non-current” in the consolidated balance sheet with related changes in the fair value included in current period earnings.

14

ALLIED NEVADA GOLD CORP.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company did not have any assets or liabilities measured under the fair value hierarchy at September 30, 2010.

20. Commitments and Contingencies

The Company is from time to time involved in various legal proceedings related to its business. Management does not believe that adverse decisions are likely in any pending or threatened proceeding, or that amounts that may be required to be paid by reason thereof will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

21. Subsequent Events

At the Company’s annual meeting of stockholders on Wednesday, October 19, 2011, the Company’s stockholders approved an amendment to and restatement of the Company’s certificate of incorporation to increase the number of authorized shares of the Company’s common stock from 100,000,000 to 200,000,000. The stockholders also approved an amendment to the Deferred Phantom Unit (“DPU”) Plan allowing 300,000 shares of the Company’s common stock to be available for grant under the DPU Plan and approved the Deferred Share Unit (“DSU”) Plan allowing 500,000 shares of the Company’s common stock to be available for grant under the DSU Plan.

15

ITEM 2. MANAGEMENT’S DISCUSSIONAND ANALYSISOF FINANCIAL CONDITIONAND RESULTSOF OPERATIONS

The following management’s discussion and analysis of the consolidated operating results and financial condition of Allied Nevada Gold Corp. (“Allied Nevada”) for the three and nine month periods ended September 30, 2011 has been prepared based on information available to us as of November 4, 2011. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herewith and the audited Consolidated Financial Statements of the Company for the year ended December 31, 2010 and the related notes thereto filed with the Company’s annual report on Form 10-K/A, which have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States. All amounts stated herein are in U.S. dollars, unless otherwise noted.

Operations

Key operating statistics for the three and nine months ended September 30, 2011, compared with the same periods in 2010, are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Total material mined (thousands of tons)		8,231		6,020		23,906		17,268
Ore grade - gold (oz/ton)		0.012		0.016		0.013		0.022
Ore grade - silver (oz/ton)		0.256		0.206		0.293		0.293
Ounces produced - gold		26,339		29,563		69,840		83,686
Ounces produced - silver		121,264		75,552		276,236		191,051
Ounces sold - gold		26,971		30,585		68,605		80,584
Ounces sold - silver		112,856		69,365		257,514		184,161
Average realized price - gold ($/oz)	$	1,684	$	1,227	$	1,543	$	1,194
Average realized price - silver ($/oz)	$	38	$	19	$	36	$	18
Average spot price - gold ($/oz)	$	1,702	$	1,227	$	1,534	$	1,178
Average spot price - silver ($/oz)	$	39	$	19	$	36	$	18

Gold production in the third quarter of 2011 of 26,339 ounces was below expectation, while silver production of 121,264 ounces for the third quarter continued to exceed expectations. Gold production in the third quarter was impacted by delays in receipt of additional equipment to increase the pumping capacity of solution to upper lifts of the leach pad. This eight-week delay has resulted in the mine being approximately 15,000 ounces behind schedule on gold production. Similarly, year-to-date gold production is below expectation. The mine reported no safety or environmental incidents in the first nine months of 2011 and, as of October, 2011, the mine has surpassed two full years without a lost time accident.

Hycroft production increased in the third quarter with 8.2 million tons of material mined, including 4.7 million tons of ore at average grades of 0.012 opt gold and 0.256 opt silver. The mining rate steadily increased in the quarter with the addition of the new larger capacity shovels and more efficient production drilling equipment. The strip ratio in the third quarter increased 43% from June to September as the mine moved more waste material from the Cut-5 pit. Average gold grades mined in the third quarter of 2011 were as expected, but lower when compared with the third quarter of 2010 as mining activities continue in a lower grade phase of the Brimstone pit. Average silver grades were significantly better than expected and higher when compared with the same period in 2010. Historical drilling, which makes up a large component of the Brimstone deposit database, had limited silver assay data and thus the model continues to underestimate silver grades. The mine placed approximately 160,478 contained ounces of gold (recoverable – 90,830 ounces) and 3,582,422 ounces of silver (recoverable – 358,242 ounces) on the leach pads in the nine months ended September 30, 2011.

Implementation of the accelerated heap leach mining expansion plan is progressing well. Expansion of the Merrill-Crowe plant to increase solution processing capacity from 3,500 gpm to 5,000 gpm is completed. Completion of the pumping station to increase solution flow up to the higher lifts of the leach pad is expected to be completed in October. The Lewis leach pad construction is nearing completion and it is expected that the mine will begin placing ore by early Q1 2012. Construction of the new truck shop capable of servicing the larger mining equipment is on track to be completed in the fourth quarter of 2011. The mine placed into operation two additional 320-ton haul trucks, bringing the total to seven 320-ton trucks and seven 200-ton trucks currently in operation. The mine also placed the first of three Hitachi EX5500 large capacity shovels into operation in the third quarter of 2011, adding to the two Hitachi EX3500 shovels currently in operation.

16

Unit costs are trending down with the introduction of the new mining equipment which provides additional operating efficiencies. Mining and processing costs decreased approximately 20% and 8% respectively from June to September, 2011, reflecting the addition of larger, more efficient shovels and trucks.

Exploration

At Hycroft, the Company completed 20,783 feet of drilling in 76 holes in the third quarter of 2011. The primary focus for the third quarter drill program was to continue infill and engineering drilling in support of detailed engineering for the mill expansion project. Results of the third quarter drill program continue to include long intervals of mineralization at or above average resource grade mineralization. Drilling for the remainder of 2011 will continue to be focused on infill drilling and condemnation drilling related to the mill expansion project with limited step-out drilling to test geophysical anomalies.

At Hasbrouck, the Company drilled 26 holes in the third quarter of 2011 totaling 22,600 feet. Drilling in the third quarter focused on understanding the extent of the mineralization in the high-grade Saddle Zone and following up on suspected higher grade targets. This drilling was successful in expanding the Saddle Zone along strike, while the zone remains open along a northeast-southwest trend and at depth. New higher grade zones of mineralization were also identified through drilling in the second quarter, including the discovery of the Franco Zone to the east, as were announced in the July 19, 2011, press release. Follow-up drilling has also extended these zones along strike and at depth. Drilling for the remainder of the year will focus on further definition of these zones.

Results of Operations

Three Months Ended September 30, 2011 Compared with Three Months Ended September 30, 2010

Allied Nevada had net income during the three months ended September 30, 2011 of $14.7 million compared to $3.1 million during the same period in 2010. The increase in net income of $11.6 million is largely due to an increase of $10.8 million from the sale of gold and silver, a decrease of $2.0 million in exploration and land holding costs, a decrease of $2.0 million in cost of sales, and a decrease of $1.2 million in corporate general and administrative costs compared to the same period in 2010, which was offset by an increase of $4.6 million in income tax expense compared to the same period in 2010.

Revenue

Revenue for the three months ended September 30, 2011 increased $10.7 million to $49.6 million compared to $38.9 million in the same period of 2010. The increase was attributable to a $7.9 million increase in gold sales due to a $456 increase in the average realized price for gold to $1,684 per ounce compared to $1,228 per ounce in 2010, which was offset by a 3,614 ounce decrease in gold ounces sold compared to the same period of 2010. Additionally, the Company experienced a $2.9 million increase in silver sales due to a 43,491 ounce increase in silver ounces sold compared to the 2010 period and a $19 increase in the average realized price for silver to $38 per ounce compared to $19 per ounce in the same period of 2010.

Cost of sales

Cost of sales consists of production costs and both depreciation and amortization. Cost of sales decreased $2.0 million in the three month period ending September 30, 2011 to $19.3 million compared to $21.3 million in the same period of 2010.

Production costs decreased $2.0 million to $17.1 million in three month period ended September 30, 2011 compared to $19.1 million in the same period of 2010. The decrease in production costs was attributable to a 3,614 decrease in gold ounces sold offset by a $12 per ounce increase in the average production costs per ounce of gold sold in the three months ended September 30, 2011 compared to the same period in 2010.

Depreciation and amortization totaled $2.2 million in each of the three month periods ended September 30, 2011 and 2010. Depreciation and amortization was comparable to the 2010 period due to a 3,614 decrease in gold ounces sold in the three months ended September 30, 2011 compared to the same period in 2010, which was offset by an approximate $8 per ounce increase in average depreciation and amortization per ounce of gold sold in 2011 compared to the same period of 2010.

Exploration and land holding costs

Exploration and land holding costs decreased $2.0 million to $6.1 million compared to $8.1 million during the same period of 2010. The decrease is primarily due to increased condemnation and reserve verification drilling at Hycroft which was offset by exploration and drilling programs at Hasbrouck, which is an advanced exploration property. Hycroft drilling and exploration program

17

costs totaled $7.2 million in each of the three months ended September 30, 2011 and 2010, respectively, of which $5.7 million was capitalized for condemnation drilling and reserve verification in 2011 compared to $0.7 million that was capitalized in the same period of 2010, resulting in a $5.0 million decrease in exploration expenses in the 2011 period. Hasbrouck drilling and exploration programs in the 2011 period consisted of approximately 26 drill holes (22,600 feet drilled) at a cost of $3.4 million compared to the 2010 period which consisted of 1 drill hole (420 feet drilled) at a cost of $0.4 million, an increase of $3.0 million compared to the same period of 2010.

Accretion

Allied Nevada recorded accretion expenses of $0.1 million during each of the three months ended September 30, 2011 and 2010. Accretion expense in the three months ended September 30, 2011 was based upon a credit adjusted risk-free rate of 6.8%.

Corporate general and administrative costs

Corporate general and administrative costs decreased $1.2 million to $4.5 million compared to $5.7 million for the same period of 2010. The decrease is primarily attributable to a $1.8 million decrease in stock-based compensation for directors which was partially offset by an additional $0.3 million of compensation and benefit costs for employees associated with increased staffing levels at the corporate office compared to the same period of 2010.

Interest income

Interest income from both our liquid savings and restricted cash accounts increased $70,000 to $136,000 compared to $66,000 during the same period of 2010, due to increased interest rates earned in the 2011 period on our cash equivalent deposits.

Interest expense

Allied Nevada recorded interest expense of $0.1 million in each of the three month periods ended September 30, 2011 and 2010. Interest expense in both periods was primarily attributable to amounts that did not qualify for capitalization related to capital lease obligations and the payment of standby fees associated with the line of credit entered into in May of 2011.

Net foreign exchange (loss) gain

For the three months ended September 30, 2011, the Company recognized a foreign exchange loss of $0.1 compared to a foreign exchange gain of $0.8 million in the same period of 2010, a decrease of $0.9 million. Foreign exchange losses in the 2011 period are a result of an unfavorable change in exchange rates between the Canadian dollar and U.S. dollar. Foreign exchange gains in the 2010 period were attributable to converting net proceeds received from the June 2010 offering of approximately CDN $265.6 million to U.S. dollars due to the average Canadian dollar to U.S. dollar exchange rate on conversions being approximately 1% higher than the exchange rate on the date the offering proceeds were received.

Other income

The Company recognized $1.2 million of other income during the three months ended September 30, 2011 and no other income in the same period of 2010. Other income for the three months ended September 30, 2011 is primarily the result of a $1.1 million gain on the sale of a mineral property in exchange for shares of common stock of International Enexco Limited and a $0.1 million unrealized holding gain to record the change in fair value of the shares received in the aforementioned exchange transaction.

Income tax expense

Income tax expense increased $4.6 million to $6.1 million compared to a $1.5 million benefit in the same period of 2010. In the 2011 period, $3.7 million of tax expense represents a non-cash charge relating to a reduction of deferred tax assets, $2.2 million represents the increase of an income tax payable liability, and $0.2 million represents the reduction of a prepaid tax asset. In the 2010 period, $1.3 million of tax expense represents a non-cash charge relating to a reduction of deferred tax assets for Allied Nevada’s net operating loss carryforwards and $0.2 million of tax expense represents an increase in the Company’s valuation allowance for Alternative Minimum Tax.

Net income

For the reasons described above, we reported net income of $14.7 million for the three months ended September 30, 2011 compared to $3.1 million for the same period of 2010.

18

Nine months Ended September 30, 2011 Compared with Nine months Ended September 30, 2010

Allied Nevada had net income during the nine months ended September 30, 2011 of $18.5 million compared to $27.5 million during the same period in 2010. The decrease in net income of $9.0 million is largely due to an increase of $10.8 million in income tax expense, an increase of $6.1 million in exploration and land holding costs, an increase of $4.7 million in corporate general and administrative costs, and a decrease of $3.0 million in net foreign exchange gains compared to the same period in 2010, which was partially offset by an increase of $15.8 million in revenue from the sale of gold and silver compared to the same period in 2010.

Revenue

Revenue for the nine months ended September 30, 2011 increased $15.8 million to $115.2 million compared to $99.4 million in the same period of 2010. $9.8 million of the increase was attributable to a $349 increase in the average realized price for gold to $1,543 per ounce compared to $1,194 per ounce in 2010, which was offset by an 11,979 ounce decrease in gold ounces sold. Additionally, $6.0 million of the increase was attributable to a 73,353 ounce increase in silver sales and an $18 increase in the average realized price for silver to $36 per ounce compared to $18 per ounce in the same period of 2010.

Cost of sales

Cost of sales consists of production costs and both depreciation and amortization. Cost of sales increased $0.9 million in the nine month period ending September 30, 2011 to $47.9 million compared to $47.0 million in the same period of 2010.

Production costs increased $0.8 million to $42.6 million in the nine month period ended September 30, 2011 compared to $41.8 million in the same period of 2010. The increase in production costs was attributable to a $99 per ounce increase in the average production costs per ounce of gold sold offset by an 11,979 decrease in gold ounces sold in the nine months ended September 30, 2011 compared to the same period in 2010.

Depreciation and amortization increased $0.1 million to $5.3 million in the nine month period ended September 30, 2011 compared to $5.2 million in the same period of 2010. The increase in depreciation and amortization was attributable to an approximate $12 increase in average depreciation and amortization costs per ounce of gold sold offset by an 11,979 decrease in gold ounces sold in the nine months ended September 30, 2011 compared to the same period in 2010.

Exploration and land holding costs

Exploration and land holding costs increased $6.1 million to $23.0 million compared to $16.9 million during the same period of 2010. The increase is primarily due to activity for exploration and drilling programs at Hasbrouck, which is an advanced exploration property, offset by increased condemnation and reserve verification drilling at Hycroft. Hasbrouck drilling and exploration programs in the 2011 period consisted of approximately 100 drill holes (74,100 feet drilled) at a cost of $10.7 million compared to the 2010 period which consisted of 4 drill holes (2,400 feet drilled) at a cost of $0.9 million, an increase of $9.8 million compared to the same period of 2010. Hycroft drilling and exploration programs in the 2011 period consisted of $21.8 million in total drilling costs, of which $12.1 million was capitalized for condemnation and reserve verification drilling and $9.7 was expensed, compared to the same period of 2010 in which Hycroft drilling costs totaled $17.4 million, of which $4.0 million was capitalized and $13.4 million was expensed resulting in a $3.7 million decrease in exploration expenses for the nine months ended September 30, 2011 compared to the same period of 2010.

Accretion

Allied Nevada recorded accretion expense of $0.3 million during each of the nine months ended September 30, 2011 and 2010. Accretion expense in the nine months ended September 30, 2011 was based upon a credit adjusted risk-free rate of 6.8%.

Corporate general and administrative costs

Corporate general and administrative costs increased $4.7 million to $18.7 million compared to $14.0 million for the same period of 2010. The increase was largely due to an additional $2.7 million of consulting fees for engineering, environmental, and metallurgical services, an additional $1.5 million of compensation and benefit costs for employees associated with increased staffing levels at the corporate office, and an additional $1.0 million for professional services fees, which was offset by a decrease of $0.8 million of stock-based compensation costs for employees and directors compared to the same period of 2010.

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Interest income

Allied Nevada earned $0.3 million in interest income from both our liquid savings and restricted cash accounts during the nine months ended September 30, 2011 compared to $0.1 million in interest income in 2010, an increase of $0.2 million compared to the 2010 period due to increased interest rates earned in the 2011 period on our cash equivalent deposits.

Interest expense

Interest expense increased $0.1 million to $0.4 million compared to $0.3 million during the same period in 2010. Interest expense in both periods was primarily attributable to amounts that did not qualify for capitalization related to capital lease obligations with additional interest expense recorded in the 2011 period from additional capital leases the Company had entered into compared to the 2010 period and the payment of standby fees associated with the line of credit entered into in May of 2011.

Net foreign exchange (loss) gain

For the nine months ended September 30, 2011, the Company recognized a foreign exchange loss of $10,000 compared to a foreign exchange gain of $3.1 million in the same period of 2010, a decrease of $3.1 million. Foreign exchange losses in the 2011 period are a result of an unfavorable change in exchange rates between the Canadian dollar and U.S. dollar. Foreign exchange gains in the 2010 period were attributable to converting net proceeds received from the June 2010 offering of approximately CDN $265.6 million to U.S. dollars due to the average Canadian dollar to U.S. dollar exchange rate on conversions being approximately 1% higher than the exchange rate on the date the offering proceeds were received.

Other income

The Company recognized $1.2 million of other income during the nine months ended September 30, 2011, compared to $0.3 million for the same period of 2010, an increase of $0.9 million. Other income for the nine months ended September 30, 2011 is primarily the result of a $1.1 million gain on the sale of a mineral property in exchange for shares of common stock in International Enexco Limited and a $0.1 million unrealized holding gain to record the change in fair value of the shares received in the aforementioned exchange transaction. Other income for the nine months ended September 30, 2010 is attributable to $0.3 million of gains from the recognition of advanced minimum royalties after exploration rights were returned to the Company by joint venture partners.

Income tax (expense) benefit

Income tax expense increased $10.8 million to $7.7 million compared to a $3.1 million expense in the same period of 2010. In the 2011 period, $4.7 million of tax expense represents a non-cash charge relating to a reduction of deferred tax assets, $2.2 million represents the increase of an income tax payable liability, and $0.8 million represents the reduction of a prepaid tax asset. In the 2010 period, the Company recorded an $8.4 million provision for income taxes which was offset by an $11.5 million reduction in the Company’s valuation allowance for deferred tax assets.

Net income

For the reasons described above, we reported net income of $18.5 million for the nine months ended September 30, 2011 compared to $27.5 million for the same period of 2010.

Financial Position, Liquidity and Capital Resources

Cash provided by operating activities

Cash provided by operating activities during the nine months ended September 30, 2011, was $20.0 million compared to $23.9 million during the same period in 2010. The net decrease of $3.9 million of cash provided by operating activities was primarily attributable to the following:

• The Company had $18.5 million in net income compared to $27.5 million in the same period of 2010. This resulted in a decrease in cash provided by operating activities of $9.0 million for reasons described in Results of Operations above.

• The Company recorded a $4.7 million non-cash reduction to deferred tax assets compared a net $4.0 million non-cash increase to deferred tax assets in the same period of 2010, resulting in an $8.7 million increase in cash provided by operating activities.

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• The change in ore on leachpads resulted in a $15.5 million use of cash in 2011 compared to an $8.9 million use of cash in the same period of 2010, resulting in a $6.6 million decrease in cash provided by operating activities. The $6.6 million increase in cash used was attributable to a 13,000 ounce increase of total ounces on the leachpad at September 30, 2011 compared to the same period of 2010, which were placed at a higher average cost than ounces placed in the same period of 2010.

• The change in prepaids and other resulted in a $1.1 million source of cash compared to a $3.3 million use of cash in the same period of 2010, resulting in a $4.4 million increase in cash provided by operating activities.

• The change in inventories resulted in a $6.2 million use of cash in 2011 compared to a $3.0 million use of cash in the same period of 2010, resulting in a $3.2 million increase in cash used in operating activities.

• The change in accounts payable resulted in a $3.7 million source of cash in 2011 compared to a $1.6 million source of cash in the same period of 2010, resulting in a $2.1 million increase in cash provided by operating activities.

• The change in accrued liabilities and other resulted in a $3.1 million source of cash in 2011 compared to a $2.0 million source of cash in the same period of 2010, resulting in a $1.1 million increase in cash provided by operating activities.

• The Company recorded a $6.3 million non-cash expense for stock-based compensation in 2011 compared to $7.0 million for the same period of 2010, resulting in a $0.7 million decrease in cash provided by operating activities.

Cash used in investing activities

Cash used in investing activities during the nine months ended September 30, 2011, was $56.7 million compared to $28.0 million during the same period in 2010. The net increase of $28.7 million of cash used in investing activities is largely due to the following:

• Additions to plant and equipment in 2011 totaled $26.7 million compared to $21.6 million during the same period in 2010, resulting in an increase in cash used in investing activities of $5.1 million. In the nine months ended September 30, 2011 the Company had cash purchases of $7.1 million for truck shop construction, $6.7 million for leach pad expansions, $6.6 million for mobile mine equipment, $2.1 million for the mill construction, $2.3 million for process improvements, and $1.9 million of other plant and equipment additions.

• Additions to mine development costs in 2011 totaled $26.5 million compared to $5.6 million during the same period in 2010, resulting in an increase in cash used in investing activities of $21.0 million. In the nine months ended September 30, 2011 the Company had cash mine development additions of $12.5 million for pre-production stripping costs, $6.5 million for reserve verification drilling and assaying, $5.6 million for condemnation drilling and assaying, and $1.9 million for environmental impact statements for major permitting actions associated with Hycroft.

• The Company increased its restricted cash collateral account by $3.6 million in 2011 to support additional surety bonds for the benefit of the Bureau of Land Management (BLM) compared to $0.9 million of additional collateral established during the same period of 2010, resulting in an increase in cash used in investing activities of $2.6 million.

Cash provided by (used in) financing activities

Cash used in financing activities during the nine months ended September 30, 2011, was $3.3 million compared to cash provided by financing activities of $260.3 million during the same period in 2010. The $263.7 million decrease in cash provided by financing activities is largely due to the following:

• The Company did not issue stock in a public offering in 2011 compared to 13,500,000 shares issued for gross proceeds of approximately $272.2 million in the same period of 2010. The Company incurred approximately $17.8 million of costs in connection with the June 2010 offering, resulting in net proceeds of $254.4 million, which resulted in a net decrease in cash provided by financing activities of $254.4 million compared to the same period of 2010.

• The Company received $0.8 million in proceeds from the exercise of options compared to $7.0 million in the same period of 2010, resulting in a decrease of $6.2 million in cash provided by financing activities.

• The Company made capital lease principal payments of $3.7 million on capital leases in 2011 compared to $1.0 million on capital leases in the same period of 2010, resulting in a $2.7 million increase in cash used by financing activities.

Liquidity and capital resources

Based upon our current operational assumptions and mine plans, we believe our cash on hand, anticipated operating cash flow from the Hycroft Mine, equipment leasing opportunities, and amounts available under the $30.0 million Revolving Credit Agreement will be adequate to meet our liquidity needs and fund the planned capital expenditures for the next year.

In May 2011, we entered into a three-year $30.0 million Revolving Credit Agreement that matures on May 17, 2014. At September 30, 2011, we had no outstanding borrowings under the credit agreement.

We estimate our capital expenditures in 2011 will total approximately $110 million largely related to the expansion of the mobile mine equipment fleet, support building improvements, increased processing plant capacity modifications, ongoing leach pad

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expansion at Hycroft, capitalized stripping and drilling activities, and other capitalized spending. As of September 30, 2011 the Company has spent approximately $49.0 million of the estimated 2011 capital expenditures, inclusive of mining equipment acquired through capital leases and additions to accounts payable.

At September 30, 2011, our total assets were $621.6 million compared to $567.4 million at December 31, 2010. The increase in total assets is attributable to $18.5 million of net income and $15.9 million of plant and equipment purchased through capital lease financing, and $9.4 million of equipment purchased through additions to accounts payable.

At September 30, 2011, working capital was $352.5 million compared to $388.9 million at December 31, 2010. The decrease in working capital is attributable to a $40.1 million decrease in cash and equivalents described above, a $13.1 million increase in accounts payable, a $3.3 million increase in the current portion of capital lease obligations, and a $3.0 million increase in accrued liabilities, which were offset by increases of $18.1 million to ore on leachpads and $6.5 million to inventories.

At September 30, 2011, we had cash and cash equivalents totaling $297.7 million. All cash equivalents were invested in high quality short-term money market instruments, including government securities, bankers’ acceptances, bank notes, certificates of deposit, commercial paper and repurchase agreements of domestic and foreign issuers. At September 30, 2011, we had no funds invested in asset-backed commercial paper.

Off-balance sheet arrangements

Allied Nevada has no off-balance sheet arrangements.

Outlook

Hycroft Operations

In 2011, we expect Hycroft to mine approximately 35.0 million tons of material, including 19.0 million tons of ore at average grades of 0.013 opt gold. The average grades in 2011 are expected to be lower than those mined in 2010 as the mine moves through a lower grade phase of mining of the Brimstone pit.

Delays in receiving mining equipment has negatively impacted production at Hycroft. The first Hitachi shovel went into operation six months behind schedule and the second shovel is expected to be in operation in December of 2011, four months behind schedule. Delays in the delivery of critical pumping equipment required to increase the solution flow to higher lifts of the leach pad have resulted in the mine being approximately 15,000 ounces behind schedule on gold production. Two haul trucks were one month behind schedule due to issues experienced upon commissioning. Reflecting the impact of the delayed equipment delivery, Allied Nevada is revising full year 2011 production guidance to approximately 100,000 ounces.

Production is increasing steadily with the addition of the first large Hitachi EX5500 shovel and is expected to continue increasing through the remainder of the year. Production costs per ounce is expected to be higher in 2011 as compared to 2010 due to higher commodity price expectations, a lower grade mining phase and an increased waste mining rate as the mine continues to ramp up the oxide expansion.

Major Capital Programs

Capital additions in 2011 are expected to total approximately $110 million. Significant capital projects include the following: expansion of the mobile equipment fleet at Hycroft with additional 320-ton haul trucks and larger capacity shovels ($53 million); support building improvements, increased process plant capacity modifications and ongoing leach pad expansion at Hycroft ($22 million); capitalized stripping and drilling ($9 million); and other capitalized spending of $26 million. As announced in October, 2011, a significant portion of the mobile equipment has been financed through capital leases. As of September 30, 2011, approximately $49.0 million of the 2011 capital program associated with the Hycroft accelerated heap leach project has been spent or committed, inclusive of the capital leases for mobile mining equipment and equipment purchased through accounts payable additions.

The Company continues to implement near and long-term opportunities to increase production, reduce costs, and extend the life of the Hycroft mine. These initiatives include:

1. Continued implementation of the Hycroft Accelerated Heap Leach Project: The mine has been successful in initiating the accelerated oxide heap leach plan with the addition of a crushing circuit, completion of the 2010 leach pad expansion and integration of the larger scale mining equipment. The operating plan will be to continue increasing the mining rate as new equipment is delivered throughout 2011. The goal for 2011 is to increase the mining rate to 35 million tons (from 26.5 million in 2010) and ultimately to 81 million tons by 2012. By tripling the mining rate, we expect the mine to increase annual gold production to average over 260,000 ounces by 2012.

2. Hycroft Milling Project: The Company completed and announced the results of a positive feasibility study in September 2011 and the Board of Directors has approved the funding to move directly into detailed engineering and ordering of long-lead items. The Company has begun both of these efforts, most recently announcing the ordering of the major mining equipment and critical components of the gyratory crushing system. The decision was made to accelerate the construction of the gyratory crusher by one year to allow for crushing of 100% of the heap leach material, before the system is transition to be used in the milling operation.

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3. Hasbrouck Development:The Company is in the process of completing a preliminary economic assessment for the Hasbrouck Project, located near Tonopah, Nevada. The goal for the project is to announce the results of the PEA along with an updated Resource estimate in the first quarter of 2012.

4. Develop exploration properties: A greater emphasis is being placed on regional exploration targets and advancing potential development properties in 2011. Exploration programs have been designed for a number of the Company’s other exploration properties in 2011 to follow up on opportunities identified during the 2010 field program.

Critical Accounting Policies and Estimates

These interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States and follow the same accounting policies and methods of their application as the most recent annual financial statements. See Management’s Discussion and Analysis and the financial statements and related footnotes included in our Annual Report on Form 10-K/A for the year ended December 31, 2010 for a description of our critical accounting policies and estimates.

Ore on leach pads, in-process inventory and precious metals inventory

The recovery of gold from the Hycroft Mine’s oxide ore is accomplished through a heap leaching process that utilizes a Merrill-Crowe and a Carbon in column process method to recover precious metals from the leach pad’s pregnant solution. The Company maintains four categories of metals inventories: ore on leach pads; in-process inventory for the Merrill-Crowe plant; in-process inventory for the Carbon in column process; and precious metals inventory. Because the value of our crusher stockpiles are immaterial, these values are included in ore on leach pads. The Company does not currently maintain separate stockpiles of low grade, mineralized material. The recovery of precious metals using the Merrill-Crowe method is completed at the Hycroft mine and the end product is a doré containing precious metals. The recovery of precious metals utilizing the Carbon in column process method is accomplished through on-site carbon columns and the shipping of loaded carbon offsite to be processed, resulting in the production of doré containing precious metals. The doré from both process methods is classified as precious metals inventory until sold.

Ore on leach pads

The recovery of gold from the Hycroft Mine’s oxide ore is accomplished through the heap leaching process. Under this method, oxide ore is placed on leach pads where it is treated with a chemical solution throughout the production phase of the mine, which dissolves the gold contained in the ore over time. The heap leach process ends with the production of a “pregnant” solution which contains the dissolved precious metals. The pregnant solution is further processed through conventional methods, including the Merrill-Crowe and Carbon in column process methods, which are treated as separate stages of work-in-process inventories. Costs are added to ore on leach pads based on current mining and processing costs, including applicable depreciation, depletion and amortization relating to mining and processing operations. Costs are transferred from ore on leach pads to subsequent stages of work-in-process inventories as the pregnant solution is treated by the conventional processing methods.

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As described below, costs that are incurred in or benefit the production process are accumulated as ore on leach pads. Ore on leach pads are carried at the lower of average cost or market. Accounting for ore on leach pads represents a critical accounting estimate because of the inherent difficulty in estimating the amount of the gold placed, the amount that will be recovered and the timing of that recovery. The Company employs standard industry estimating methodologies in the determination of the amount and timing of gold production. The recoverable gold that is placed on the leach pad requires the estimate of the quantity of contained gold in the ore mined, and the ultimate expected recovery for that ore. The quantity of contained gold ounces in the ore is based upon surveyed volumes of mined material, daily production records, calculated densities of the ore, and assaying of blast-hole cuttings to determine the estimated gold grade contained in the ore. Expected gold recovery rates for ore placed on leach pads are developed based upon standard industry practices using small-scale laboratory tests, small to large scale column testing (which simulates the production scale processing), historical trends and other factors, including mineralogy of the ore and ore size (e.g., run of mine or crushed ore).

For distinct mining areas, the ultimate recovery of gold contained in ore on leach pad can vary significantly from 30% to more than 70% depending upon ore particle size, ore mineralogy and ore grades. Ore particle size is most commonly affected by the rock type, blasting methods, and whether a crusher is used to reduce the particle size. During each accounting period, the amount of recoverable gold for each discreet mining area is used to determine the estimated aggregate quantity of recoverable gold that was placed.

During normal operating conditions as much as 85% of the estimated recoverable gold on an active leach pad may be extracted during the first year and the remaining gold may be extracted over a 3 year period. The timing of gold recovery is affected by the stacking sequence on the leach pad, the time to achieve solution saturation of the leach pad material, the solution flow rate through the placed ore, the volume of solution placed on the leach pad, and the processing capacity of the Merrill-Crowe and Carbon in Column circuits.

Based on current life of mine production plans, residual heap leach activities are expected to continue through 2020. Accordingly, the ultimate gold recovery will not be known until leaching operations cease. Should the Company’s estimate of ultimate recovery require adjustment, the impact upon its income statement would depend upon whether the change involved a negative or positive change in gold recovery. If the Company determined the gold recovery decreased by 1 or 2 percent at September 30, 2011, its estimate of recoverable ounces would decrease by approximately 5,600 and 11,200 ounces, respectively, which would have resulted in a write-down of approximately $4.0 million and $8.0 million, respectively. Whereas if the Company determined the gold recovery increased by 1 or 2 percent at September 30, 2011, its estimate of recoverable ounces would have increased by 5,600 and 11,200 ounces, respectively, and would result in a decrease to the weighted average cost per ounce in inventory to approximately $675 and $639 per ounce, respectively. This decrease in the weighted average cost would be recognized prospectively through cost of sales as a change in estimate.

In-process Inventory

In-process inventories represent materials that are currently in the process of being converted to a saleable product. Conversion processes currently being used by the Company include a Merrill-Crowe zinc-precipitation process (“Merrill-Crowe process”) and a Carbon in column solution recovery process (“CIC process”). In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective plants. In-process inventories are valued at the average cost of the material fed into the process attributable to the source material coming from the leach pads plus the in-process conversion costs, including applicable depreciation relating to the process facilities incurred to that point in the process.

Precious Metals Inventory

Precious metals inventories include doré and both gold and silver bullion. Precious metals that result from the Company’s mining and processing activities are valued at the average cost of the respective in-process inventories incurred prior to the refining process.

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Revenue

All doré produced to date from the Hycroft Mine has been transported to independent refineries. The doré and contained precious metals remain the property of the Company until it is sold to a buyer. The sales process commences when a sales order is placed with a buyer pursuant to a written agreement. Physical transfer of doré to the independent refiner precedes the transfer of title and risk of loss, which is accomplished by an irrevocable pledge of the precious metals to the buyer. Historically cash for the sale of precious metals has been received in the same accounting period as revenue is recognized assuring collectability of the amount of the underlying sales agreement. The Company recognizes revenue on gold and silver sales when persuasive evidence of an arrangement exists, the price is fixed or determinable, the metal is delivered, the title has transferred to the customer, and collectability is reasonably assured.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”).” This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and changes the disclosure requirements to include quantitative information about unobservable inputs used for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011 (early adoption prohibited). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.

Note Regarding Forward-Looking Statements

In addition to historical information, this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein or incorporated by reference, that address activities, events or developments that we expect or anticipate will or may occur in the future, are forward-looking statements, including but not limited to such things as:

• our future business strategy, plans and goals;

• our estimated capital expenditures;

• our expansion expectations, including with respect to the Hycroft mine and Hasbrouck property;

• our expectations regarding the growth of our business, our estimates of reserves and other mineralized material;

• the economic potential of the sulfide mineralization and milling project at the Hycroft property;

• the preliminary economic assessment at the Hasbrouck property;

• the anticipated results of the exploration drilling programs at our properties;

• future gold and silver prices;

• our production estimates;

• our expectations regarding gold and silver recovery;

• our estimated future sales and cost of sales;

• the availability of outside contractors;

• our anticipated cash flows and cash operating costs; and

• the availability of additional capital.

The words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe”, “target”, “budget”, “may”, “schedule” and similar words or expressions identify forward-looking statements. These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any

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results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on current expectations. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to:

• volatile market prices of gold and silver;

• risks related to the heap leaching process at the Hycroft Mine, including but not limited to gold recovery rates, gold extraction rates, and the grades of ore placed on our leach pads;

• uncertainties concerning estimates of mineral reserves, other mineralized material, and grading;

• cost of compliance with current and future government regulations, including those related to environmental protection, mining, health and safety, corporate governance and public disclosure;

• uncertainties relating to obtaining or retaining approvals and permits from governmental regulatory authorities;

• our ability to achieve our estimated production rates and stay within our estimated operating costs;

• the commercial success of our exploration and development activities;

• an increase in the cost or timing of new projects;

• our current intention not to use forward sale arrangements;

• the inherently hazardous nature of mining activities, including operational, geotechnical and environmental risks;

• our ability to raise additional capital on favorable terms or at all;

• intense competition within the mining industry;

• uncertainties related to our ability to find and acquire new mineral properties;

• potential operational and financial effects of current and proposed federal and state regulations related to environmental protection and mining, and the exposure to potential liability created by such regulations;

• availability of equipment or supplies;

• our ability to attract and retain personnel;

• our ability to manage our growth;

• potential challenges to title in our mineral properties;

• risks associated with the expansion of our operations, including those associated with any future acquisitions or joint ventures;

• potential conflicts of interests that may arise though some of our directors’ involvement with other natural resources companies;

• the market price and future sales of our common stock; and

• our decision not to pay dividends.

For a more detailed discussion of such risks and other important factors that could cause actual results to differ materially from those in such forward-looking statements, please see those factors discussed in Part II, Item 1A of this Form 10-Q and in our other filings with the SEC. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in the statements. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in the market risks discussed in Item 7A of Allied Nevada’s Form 10-K/A for the fiscal year ended December 31, 2010.

ITEM 4. CONTROLS AND PROCEDURES

Allied Nevada management, with the participation of the principal executive officer and principal financial officer have evaluated the effectiveness of Allied Nevada’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2011. Based on the evaluation, the principal executive officer and principal financial officer concluded that the disclosure controls and procedures in place are effective to ensure that information

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required to be disclosed by Allied Nevada, including consolidated subsidiaries, in reports that Allied Nevada files or submits under the Exchange Act, is recorded, processed, summarized and reported on a timely basis in accordance with applicable time periods specified by the Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There have been no changes in Allied Nevada’s internal control over financial reporting during the three months ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, Allied Nevada’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is a party to routine litigation and proceedings that are considered part of the ordinary course of its business. The Company is not aware of any material current, pending, or threatened litigation.

ITEM 1A. RISK FACTORS

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in I, Item 1A. Risk Factors, in our Annual Report on Form 10-K/A for the year ended December 31, 2010, which could materially affect our business, financial condition or future results. There have been no material changes to the risk factors disclosed in that report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Allied Nevada considers health, safety and environmental stewardship to be a core value for the Company and received a “Sentinels of Safety” award at Hycroft for the 2008 year in 2009. Allied Nevada has a mandatory safety and health program including employee training, risk management, workplace inspection, emergency response, accident investigation and program auditing. The Company considers this program to be essential at all levels to ensure that employees and the Company conduct themselves in an environment of exemplary health, safety and environmental governance.

Our operations and exploration properties are subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued has also generally increased in recent years.

The following disclosures are provided pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) entered into law in July 2010, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Mine Act. Under the Act, the SEC is authorized to issue rules and regulations to carry out the purposes of these provisions. While we believe the following disclosures meet the requirements of the Act, it is possible that any rule-making by the SEC will require disclosures to be presented in a form that differs from this presentation.

Mine Safety Information.

Whenever MSHA believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the operator (e.g. our subsidiary, Hycroft Resources & Development Inc.) must abate the alleged violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected. When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay. Citations and orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed. The following table reflects citations and orders issued to us by MSHA during the nine months ended September 30, 2011 and pending legal actions before the Federal Mine Safety and Health Review Commission (the “Commission”) as of September 30, 2011. The proposed assessments for the nine months ended September 30, 2011 were taken from the MSHA data retrieval system as of September 30, 2011.

Additional information about the Act and MSHA references used in the table follows.

• Section 104 Citations: Citations received from MSHA under section 104 of the Mine Act, which includes citations for health or safety standards that could significantly and substantially contribute to a serious injury if left unabated.

• Section 104(b) Orders: Orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

• Section 104(d) Citations and Orders: Citations and orders issued by MSHA under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

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• Section 110(b)(2) Violations: Flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.

• Section 107(a) Orders: Orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an “imminent danger” (as defined by MSHA) existed.

• Pending Legal Actions: Pending legal actions before the Commission as required to be reported by Section 1503(a) (3) of the Act. The Commission is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. These cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA or complaints of discrimination by miners under Section 105 of the Mine Act. The following is a brief description of the types of legal actions that may be brought before the Commission.

• Contests of Citations and Orders — A contest proceeding may be filed with the Commission by operators, miners or miners’ representatives to challenge the issuance of a citation or order issued by MSHA.

• Contests of Proposed Penalties (Petitions for Assessment of Penalties) — A contest of a proposed penalty is an administrative proceeding before the Commission challenging a civil penalty that MSHA has proposed for the alleged violation contained in a citation or order. The validity of the citation may also be challenged in this proceeding as well.

Mine1	Section 104 Citations		Sections 104(b) Orders		Section 104(d) Citations and Orders		Section 110(b)(2) Violations		Section 107(a) Orders		Proposed MSHA Assessments (US$)2		Mining Related Fatalities		Pending Legal Actions
Hycroft		43		—		—		—		—	$	10,300		—		—

Pattern or Potential Pattern of Violations

During the nine months ended September 30, 2011, Hycroft did not receive written notice from MSHA of (a) a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under section 104(e) of the Mine Act or (b) the potential to have such a pattern.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit Number	Description of Document
3.1	First Amended and Restated Certificate of Incorporation of Allied Nevada Gold Corp.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials are filed herewith: (i) XBRL Instance, (ii) XBRL Taxonomy Extension Schema, (iii) XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing.

¹  The table above reflects citations and orders issued to us by MSHA during the nine months ended September 30, 2011, and the pending legal actions before the Commission as of September 30, 2011. The definition of “mine” under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and minerals preparation facilities.

²  Represents the total dollar value of the proposed assessment from MSHA under the Mine Act pursuant to the citations and or orders preceding such dollar value in the corresponding row.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALLIED NEVADA GOLD CORP. (Registrant)
Date: November 4, 2011	By:	/s/    Scott A. Caldwell
		Scott A. Caldwell President and Chief Executive Officer
Date: November 4, 2011	By:	/s/    Hal D. Kirby
		Hal D. Kirby Executive Vice President and Chief Financial Officer

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