Allied Nevada Gold has suspended mining operations at Hycroft Mine located near Winnemucca in Nevada, US, to help increase cash-flow and reduce spending during the remaining period of the chapter 11 process.

Allied Nevada Gold president and CEO Randy Buffington said: "This was a very difficult decision to make with the understanding that it will impact our employees and the businesses and communities that depend on the Hycroft Mine.

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"However, the current metal price environment, cost pressures and workforce challenges we have encountered over the last few months have adversely impacted our ability to meet our operating goals."

"The current metal price environment, cost pressures and workforce challenges we have encountered over the last few months have adversely impacted our ability to meet our operating goals."

The company’s latest decision is expected to get it through the bankruptcy process.

Following the suspension, Allied Nevada plans to continue to process and produce gold and silver through the operation of the heap leach pads and Merrill – Crowe processing plants.

As of 30 June, inventory on the heap leach pads was approximately 260,000 recoverable ounces of gold that would be enough to maintain metal production for the next 12 to 18 months.

The company also proposes to complete construction of and operate a mill demonstration plant with a capacity of 10t a day for processing of sulphide ores.

Expected to start operations in September, the plant will have all phases of the mill process flow sheet, from grinding and flotation through AAO and precious metals recovery.

According to the US company, the demonstration plant aims to substantiate the conclusions of the feasibility study regarding the processing of sulfide ores and constructing a mill.

Allied Nevada did not specify on restarting of mining operations and is currently working with its primary creditor constituencies to emerge from chapter 11.