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 ~~March~~June 3130, 2015



o	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 o

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 o

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. (Check one):

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

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

On ~~May~~August 65, 2015, there were 126,193,336 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

ALLIED NEVADA GOLD CORP.

FORM 10-Q

For the Quarter Ended ~~March~~June 3130, 2015

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	2428
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3844
ITEM 4.	CONTROLS AND PROCEDURES	3844
PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	3944
ITEM 1A.	RISK FACTORS	3944
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3945
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	3945
ITEM 4.	MINE SAFETY DISCLOSURES	3945
ITEM 5.	OTHER INFORMATION	3945
ITEM 6.	EXHIBITS	4046
	SIGNATURES	4147

Table of Contents

PART I – FINANCIAL INFORMATION



ITEM 1.	FINANCIAL STATEMENTS

ALLIED NEVADA GOLD CORP.

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED BALANCE SHEETS

(US dollars in thousands)

	(Unaudited)
	March 31, 2015			December 31, 2014
	June 30,2015			December 31, 2014
Assets:
Cash and cash equivalents	$	418,~~646~~583		$	7,575
Accounts receivable	~~902~~2,159			3,755
Inventories - Note 4	16,~~868~~181			20,957
Ore on leachpads, current - Note 5	~~206~~193,~~068~~077			214,444
Prepaids and other - Note 6	76,~~227~~193			7,758
Assets held for sale - Note 7	613,~~858~~162			44,358
Current assets	~~334~~229,~~569~~355			298,847
Restricted cash - Note 8	38,154			48,147
Restricted cash - Note 9	55,647			48,147
Ore on leachpads, non-current - Note 5	8882,~~315~~748			91,904
Other assets, non-current - Note 6	~~2,052~~962			10,708
Plant, equipment, and mine development, net - Note 9	428,378			443,289
Plant, equipment, and mine development, net - Note 10	268,899			443,289
Mineral properties, net - Note 7	13,845			48,312
Mineral properties, net - Note 8	13,742			48,312
Deferred tax assets, non-current	25—			31
Total assets	$	~~905~~651,~~338~~353		$	941,238
Liabilities:
Accounts payable	$	1124,~~467~~914		$	35,608
Interest payable - Note 11	461			4,465
Interest payable - Note 12	801			4,465
Other liabilities, current - Note 10	88,082			12,009
Other liabilities, current - Note 11	88,608			12,009
Debt, current - Note 11	236,565			540,263
Debt, current - Note 12	122,249			540,263
Deferred tax liabilities, current	25—			31
Current liabilities	~~336~~236,~~600~~572			592,376
Other liabilities, non-current - Note 10	6,361			51,370
Other liabilities, non-current - Note 11	1,244			51,370
Asset retirement obligation, non-current	20,~~187~~440			19,934
Liabilities subject to compromise - Note 3	~~371~~479,~~361~~707			—
Total liabilities	~~734~~737,~~509~~963			663,680
Commitments and Contingencies - Note 21
Commitments and Contingencies - Note 22
Stockholders’ Equity:
Stockholders’ Equity (Deficit):
Common stock, $0.001 par value
Shares authorized: 200,000,000
Shares issued and outstanding: 126,193,336 at the end of both periods	126			126
Additional paid-in-capital	~~772~~773,~~950~~360			771,205
Accumulated deficit	(~~602~~860,~~247~~096		)	(493,773		)
Total stockholders’ equity	170,829			277,558
Total stockholders’ equity (deficit)	(86,610		)	277,558
Total liabilities and stockholders’ equity	$	905,338		$	941,238
Total liabilities and stockholders’ equity (deficit)	$	651,353		$	941,238

The accompanying notes are an integral part of these statements.

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ALLIED NEVADA GOLD CORP.

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE INCOME (Unaudited)

(US dollars in thousands, except per share amounts)

	Three months ended March 31,
	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Revenue - Note 12	$	55,245		$	85,525
Revenue - Note 13	$	39,984		$	83,123		$	95,229		$	168,648
Operating expenses:
Production costs	3928,~~333~~768			5655,~~359~~367			68,101			111,725
Depreciation and amortization	1110,~~109~~168			1317,~~631~~634			21,277			31,265
Write-down of production inventories - Note 5	3750,~~020~~663			—			87,683			—
Total cost of sales	8789,~~462~~599			6973,~~990~~001			177,061			142,990
Exploration, development, and land holding	~~619~~530			~~728~~665			1,149			1,394
Accretion	~~253~~254			~~273~~272			507			545
General and administrative	52,~~859~~622			65,~~225~~769			8,481			11,994
Loss on assets classified as held for sale and asset dispositions, net - Note 7	16,902			1,178
Write-down of long-lived assets - Note 10	179,575			—			179,575			—
(Loss) income from operations	(55,850		)	7,131
Gain on dispositions or sales of mineral properties - Note 8	—			(19,480		)	—			(19,480		)
Other income (expense):
Loss on assets classified as held for sale and asset dispositions, net - Note 7	11,744			4,801			28,646			5,979
Interest income	8			13
(Loss) income from operations	(244,340		)	18,095			(300,190		)	25,226
Interest expense - Note 11	(8,873		)	(5,787		)
Other income (expense):
Other, net - Note 13	48,915			14
Interest income	8			2			16			15
(Loss) income before reorganization items, net and income taxes	(15,800		)	1,371
Interest expense - Note 12	(4,368		)	(11,329		)	(13,241		)	(17,116		)
Reorganization items, net - Note 3	(92,674		)	—
Other, net - Note 14	1,142			(52		)	50,057			(38		)
(Loss) income before income taxes	(108,474		)	1,371
(Loss) income before reorganization items, net and income taxes	(247,558		)	6,716			(263,358		)	8,087
Income tax benefit (expense) - Note 14	—			(1,039		)
Reorganization items, net - Note 3	(10,291		)	—			(102,965		)	—
Net (loss) income	(108,474		)	332
(Loss) income before income taxes	(257,849		)	6,716			(366,323		)	8,087
Other comprehensive income (loss), net of tax
Income tax expense - Note 15	—			(2,340		)	—			(3,379		)
Change in fair value of effective portion of cash flow hedge instruments, net of tax - Note 19				2,099
Net (loss) income	(257,849		)	4,376			(366,323		)	4,708
Settlements of cash flow hedges, net of tax - Note 19				(9,598		)
Other comprehensive (loss) income, net of tax
Reclassifications into earnings, net of tax - Note 19				9,478
Change in fair value of effective portion of cash flow hedge instruments, net of tax - Note 20	—			(1,254		)	—			845
Other comprehensive income, net of tax				1,979
Settlements of cash flow hedges, net of tax - Note 20	—			8,253			—			(1,345		)
Comprehensive income				$	2,311
Reclassifications into earnings, net of tax - Note 20	—			(8,366		)	—			1,112
(Loss) income per share:
Other comprehensive (loss) income, net of tax	—			(1,367		)	—			612
Basic - Note 15	$	(0.86	)	$	—
Comprehensive (loss) income	$	(257,849	)	$	3,009		$	(366,323	)	$	5,320
Diluted - Note 15	$	(0.86	)	$	—
(Loss) income per share:
Basic - Note 16	$	(2.03	)	$	0.04		$	(2.89	)	$	0.04
Diluted - Note 16	$	(2.03	)	$	0.04		$	(2.89	)	$	0.04

The accompanying notes are an integral part of these statements.

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ALLIED NEVADA GOLD CORP.

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(US dollars in thousands)

	Three months ended March 31,
	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Cash flows from operating activities:
Net (loss) income	$	(~~108~~257,~~474~~849	)	$	~~332~~4,376		$	(366,323	)	$	4,708
Adjustments to reconcile net (loss) income for the period to net cash provided by (used in) operating activities:
Depreciation and amortization	1110,~~109~~168			1317,~~631~~634			21,277			31,265
Write-down of production inventories - Note 5	811,~~795~~279			—			20,074			—
Accretion	~~253~~254			~~273~~272			507			545
Stock-based compensation - Note 16	1,745			1,610
Stock-based compensation - Note 17	410			1,634			2,155			3,244
Loss on assets classified as held for sale and asset dispositions, net - Note 7	1611,~~871~~744			14,~~178~~801			28,646			5,979
Loss on change in fair value of cross currency and diesel swaps - Note 19	59,791			—
Foreign currency gain on notes - Note 14	—			—			(28,160		)	—
Foreign currency transaction gain on senior notes - Notes 11 and 13	(28,160		)	—
Change in fair value of swaps - Note 20	—			—			59,791			—
Gain on change in fair value of warrants - Notes 3 and 17	(4,644		)	—
Change in fair value of warrants - Notes 3 and 18	—			—			(4,644		)	—
Write-off of debt issuance costs - Note 3	8,041			—
Write-down of long-lived assets - Note 10	179,575			—			179,575			—
Deferred taxes	—			1,039
Gain on dispositions or sales of mineral properties - Note 8	—			(19,480		)	—			(19,480		)
Other non-cash items	111			—
Write-off of debt issuance costs - Note 3	834			—			8,875			—
Changes in operating assets and liabilities:
Deferred taxes	—			2,340			—			3,379
Accounts receivable	2,853			3,372
Other non-cash items	(753		)	—			(673		)	—
Materials and supplies inventories	2,745			902
Changes in operating assets and liabilities:
Production-related inventories	9,272			(16,063		)
Accounts receivable	(1,257		)	1,776			1,596			5,148
Prepaids and other	1,115			2,896
Materials and supplies inventories	(78		)	1,957			2,667			2,859
Accounts payable	978			888
Production-related inventories	11,037			(9,017		)	20,309			(25,080		)
Interest payable	5,132			8,376
Prepaids and other	451			2,424			1,566			5,320
Other liabilities	(3,679		)	1,759
Accounts payable	229			(6,334		)	1,207			(5,446		)
Assets held for sale	—			3,600
Interest payable	163			(8,153		)	5,295			435
Net cash (used in) provided by operating activities	(16,146		)	23,793
Other liabilities	(3		)	(1,909		)	(3,682		)	(362		)
Cash flows from investing activities:
Assets held for sale	17,500			807			17,500			4,407
Additions to plant, equipment, and mine development	(298		)	(43,424		)
Net cash (used in) provided by operating activities	(16,296		)	(6,872		)	(32,442		)	16,921
Increase in restricted cash - Note 8	—			1,282
Cash flows from investing activities:
Net cash used in investing activities	(298		)	(42,142		)
Additions to plant, equipment, and mine development	(3,340		)	(24,190		)	(3,638		)	(67,614		)
Cash flows from financing activities:
Proceeds from mineral property sale - Note 8	—			20,000			—			20,000
Repayments of principal on capital lease and term loan obligations	(9,985		)	(13,754		)
Increase in restricted cash - Note 9	—			(10,000		)	—			(8,718		)
Proceeds from revolving credit agreement borrowings	25,500			—
Proceeds from other investing activities	—			5			—			5
Proceeds from debtor-in-possession credit agreement borrowings	35,000			—
Net cash used in investing activities	(3,340		)	(14,185		)	(3,638		)	(56,327		)
Payments of debt issuance costs	—			(180		)
Cash flows from financing activities:
Net cash provided by (used in) financing activities	50,515			(13,934		)
Repayments of principal on capital lease and term loan obligations	(10,927		)	(13,838		)	(20,912		)	(27,592		)
Net increase (decrease) in cash and cash equivalents	34,071			(32,283		)
Proceeds from revolving credit agreement borrowings	—			—			25,500			—
Cash and cash equivalents, beginning of period	7,575			81,470
Proceeds from debtor-in-possession credit agreement borrowings	15,000			—			50,000			—
Cash and cash equivalents, end of period	$	41,646		$	49,187
Increase in restricted cash - Note 9	(17,500		)	—			(17,500		)	—
Supplemental cash flow disclosures:
Payments of debt issuance costs	—			(680		)	—			(860		)
Cash paid for interest	$	3,152		$	2,020
Net cash provided by (used in) financing activities	(13,427		)	(14,518		)	37,088			(28,452		)
Significant non-cash financing and investing activities:
Net increase (decrease) in cash and cash equivalents	(33,063		)	(35,575		)	1,008			(67,858		)
Reduction in outstanding revolving credit agreement borrowings through decrease in restricted cash - Note 8	10,000			—
Cash and cash equivalents, beginning of period	41,646			49,187			7,575			81,470
Letters of credit issued under revolving credit agreement and redeemed by currency swap counterparties - Note 19	18,450			—
Cash and cash equivalents, end of period	$	8,583		$	13,612		$	8,583		$	13,612
Increase in debtor-in-possession credit agreement borrowings from in-kind interest - Note 11	111			—

The accompanying notes are an integral part of these statements.

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Supplemental cash flow disclosures:
Cash paid for interest	$	3,437	$	19,672	$	6,589	$	21,692
Significant non-cash financing and investing activities:
Reduction in outstanding revolving credit agreement borrowings through decrease in restricted cash - Note 9	—		—		10,000		—
Letters of credit issued under revolving credit agreement and redeemed by currency swap counterparties - Note 20	—		—		18,450		—
Increase in debtor-in-possession credit agreement borrowings from in-kind interest - Note 12	594		—		705		—

The accompanying notes are an integral part of these statements.

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ALLIED NEVADA GOLD CORP.

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited)

(US dollars in thousands, except shares)

	Common Stock			AdditionalPaid-inCapital		Accumulated Deficit			TotalStockholders’Equity (Deficit)
	Shares	Amount
Balance, January 1, 2015	126,193,336	$	126	$	771,205	$	(493,773	)	$	277,558
Stock-based compensation under RSU Plan	—	—		1,~~504~~874		—			1,~~504~~874
Stock-based compensation under DSU Plan	—	—		200		—			200
Stock-based compensation under PIP Plan	—	—		4181		—			4181
Net loss	—	—		—		(~~108~~366,~~474~~323		)	(~~108~~366,~~474~~323		)
Balance, March 31, 2015	126,193,336	$	126	$	772,950	$	(602,247	)	$	170,829
Balance, June 30, 2015	126,193,336	$	126	$	773,360	$	(860,096	)	$	(86,610	)

The accompanying notes are an integral part of these statements.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Allied Nevada Gold Corp. and its consolidated subsidiaries (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations of the SEC. Therefore, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and related footnotes of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of management, all adjustments and disclosures necessary to fairly present the interim financial information set forth herein have been included. These interim financial statements, with the exception of any recently adopted accounting pronouncements described in Note 2 - Accounting Pronouncements, follow the same Significant Accounting Policies disclosed in the Company’s most recent Annual Report on Form 10-K.

The results reported in these Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year or for future years.

References to “$” refers to United States currency and “CDN $” refers to Canadian currency.

Going Concern

The Condensed Consolidated Financial Statements of the Company have been prepared on a “going concern” basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern because it is probable that the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. On March 10, 2015, the Company filed voluntary petitions for relief under chapter 11 of title 11 of the ~~federal~~United States Code (the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) which, if successful, are expected to recapitalize the Company’s balance sheet by reducing its debt balances while concurrently providing additional liquidity (~~See~~see Note 3 - Chapter 11 Bankruptcy Filing). The Company continues to operate and produce gold at its Hycroft Mine as a “debtor-in-possession” during the bankruptcy process. However, on July 8, 2015, the Company announced that it had suspended mining operations to maximize cash flow and minimize spending through the remainder of the chapter 11 process. The Company continues to process and produce gold and silver through the operation of the heap leach pads and Merrill-Crowe processing plants. Inventory on the heap leach pads at June 30, 2015 was 256,206 ounces (see Note 5 - Ore on Leach Pads).

The Company’s ability to continue as a going concern is contingent upon its ability to comply with the covenants contained in the DIP Credit Agreement (as discussed and defined in Note 3 - Chapter 11 Bankruptcy Filing), the ~~United States~~ Bankruptcy Court ~~for the District of Delaware~~’s ~~(the “Bankruptcy Court”)~~ confirmation of the Company’s Reorganization Plan (as discussed and defined in Note 3 - Chapter 11 Bankruptcy Filing), and the Company’s ability to successfully implement the Reorganization Plan, among other factors. In addition, both while the Company operates as a “debtor-in-possession” and following the Court’s confirmation of the Company’s Reorganization Plan (if such confirmation happens at all), the Company needs to achieve its sales, production, cost, and other operating targets to continue as a going concern.

The Company is committed to an orderly resolution of its liquidity situation and financial restructuring that will permit it to continue its operations and attempt to preserve the value of its assets and its overall enterprise value. However, there can be no assurance that the Company will be successful in doing so, and the Company is dependent on a financial restructuring to continue as a going concern. At this time, the Company does not have an expected time-frame for, or an expectation with respect to, the restart of mining operations, if at all.

Other than as discussed in Note 3 - Chapter 11 Bankruptcy Filing, these financial statements do not include any adjustments related to the recoverability and classification of recorded assets or any other adjustments that might be necessary should the Company be unable to continue as a going concern or be unable to successfully recapitalize its balance sheet through the Chapter 11 Cases (as defined in Note 3 - Chapter 11 Bankruptcy Filing). Impairments of the Company’s long-lived assets are only recorded in accordance with the Company’s Significant Accounting Policies disclosed in its most recent Annual Report on Form 10-K. As such, recorded amounts in these financial statements (including without limitation, stockholders’ equity) have been prepared in accordance with GAAP on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Company’s assets or management’s assessment of the Company’s overall enterprise or equity value.

2. Accounting Pronouncements

Recently Adopted

In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of a Component of an Entity.” ASU No. 2014-08 changes the criteria for reporting discontinued operations and requires new disclosures for discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. ASU 2014-08 is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2014, which for the Company meant the first quarter of the year ending December 31, 2015. Other than the additional presentation and disclosure requirements in Note 7 - Assets Held For Sale, the adoption of this guidance did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows. 6

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Recently Issued

In May 2014, the FASB and the International Accounting Standards Board issued new joint and converged guidance surrounding revenue recognition. ASU No. 2014-09, “Revenue from Contracts with Customers” will supersede nearly all existing revenue recognition guidance, including industry-specific guidance, and requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 does not permit early adoption and is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016, which for the Company means the first quarter of the year ending December 31, 2017. ASU No. 2014-09 allows for either a “full retrospective” adoption, meaning the new standard is applied to all periods presented, or a “modified retrospective” adoption, meaning the new standard is applied only to the most current period presented and any cumulative effect of adoption is recognized as an adjustment to the opening balance of retained earnings. The Company has evaluated its current revenue recognition policies and past and present sales contracts and does not currently believe it will be materially impacted by the requirements of ASU No. 2014-09. Historically, the Company’s sole revenue-related performance obligation has been the delivery of metal to customers, either physically or by account transfer, and has been satisfied at the same point in time the Company’s customers obtain control of the delivered metal. As such, the Company currently anticipates adopting ASU No. 2014-09 using the “modified retrospective” approach and, other than the additional presentation and disclosure requirements, does not expect such adoption will have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

In April 2015, the FASB and the International Accounting Standards Board issued guidance related to debt issuance costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on the Company’s consolidated financial position, results of operations, or cash flows.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 303): Simplifying the Measurement of Inventory.” ASU 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. It applies to entities that measure inventory using a method other than last-in, first-out or the retail inventory method. The update is effective in fiscal years, including interim periods, beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on the Company’s consolidated financial position, results of operations, or cash flows.

3. Chapter 11 Bankruptcy Filing

Commencement of Voluntary ~~“Pre-Arranged”~~ Bankruptcy

On March 10, 2015 (the “Petition Date”), the Company announced an agreement (the “Original Restructuring Support Agreement”) (discussed below) with (1) certain holders (the “Initial Consenting Noteholders”) collectively owning or controlling in excess of 67% of the aggregate outstanding principal amount of the CDN$400.0 million 8.75% senior unsecured notes due 2019 (the “Notes”), issued by the Company pursuant to that certain indenture dated as of May 25, 2012 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), by and between the Company and Computershare Trust Company of Canada, as trustee, and (2) the Company’s secured bank lenders as defined in the Original Restructuring Support Agreement (the “Secured Lenders” and, together with the Initial Consenting Noteholders and any additional holders of Notes that become party thereto, the “Restructuring Support Parties”) to effectuate athe Original Restructuring Transaction (as defined below) that would de-lever the Company’s balance sheet and enable the Company and certain of its domestic direct and indirect subsidiaries (together with the Company, the “Debtors”) to implement a financial restructuring. In order to implement the Restructuring Transaction, on the Petition Date, the Debtors filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the “Chapter 11 Cases”) are being jointly administered under Case No. 15-10503. The Debtors continue to operate their businesses as “debtors in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Pursuant to the proposed Restructuring Transaction, which requires Bankruptcy Court approval, the Debtors’ trade creditors and vendors are expected to be paid in full and the Debtors will continue to operate and produce gold at their Hycroft Mine as a “debtor in possession” during the bankruptcy process. During the pendency of the Chapter 11 Cases, all transactions outside the ordinary course of business will require the prior approval of the Bankruptcy Court.

ToIn ~~facilitate~~order ~~the~~to ~~administration~~implement of the ~~cases~~Original ~~and~~Restructuring ~~minimize disruption to the Debtors’ operations~~Transaction, on the Petition Date ~~and thereafter~~, the Debtors filed ~~certain~~voluntary ~~“first~~petitions ~~day”~~for ~~and~~relief ~~“second~~under ~~day” motions and applications with~~ the Bankruptcy ~~Court~~Code ~~seeking~~in ~~certain relief. Specifically,~~ the Debtors, among other things, sought authority to: (i) obtain secured postpetition financing (as discussed below); (ii) pay certain employee, insurance and tax obligations; (iii) pay claims of certain critical vendors, shippers, warehousemen, miscellaneous lien claimants and claimants who may assert claims arising under Bankruptcy ~~Code section 503(b)(9); (iv) provide adequate assurance of payment to certain utility providers; and (v) maintain their cash management system~~Court. In ~~addition,~~The ~~the~~ Debtors’ ~~sought~~chapter ~~(a)~~11 tocases ~~establish procedures for the sale of certain de minimis assets;~~ (~~b) approval to retain various professionals of~~ the ~~Debtors;~~“Chapter ~~(c)~~11 ~~to establish procedures for the retention of ordinary course professionals and compensation of various other professionals; and (d~~Cases”) ~~authority~~are to enter into a stalking horse purchase agreement for the sale of the Debtors’ 74 exploration properties and related assets and approval of bidding procedures in connection therewith (as discussed below). The Bankruptcy Court has entered various orders granting the relief requested in the various motions and applications, as applicable, in connection each of the foregoing.

~~Consequences of the Bankruptcy Filing~~7

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~The~~being ~~commencement~~jointly ofadministered ~~the~~under ~~chapter~~Case 11No. ~~filing~~15-10503. ~~constituted~~The anDebtors ~~event~~continue ~~of default with respect~~ to ~~each~~operate ~~and~~their ~~all~~business ofas ~~the~~“debtors ~~Company’s debt agreements described~~ in ~~Note~~possession” 11under ~~- Debt; however,~~ the ~~Company~~jurisdiction ~~believes that the ability~~ of the ~~lenders~~Bankruptcy toCourt ~~seek~~and ~~remedies~~in toaccordance ~~enforce~~with ~~their~~the ~~respective~~applicable ~~rights~~provisions ~~against~~of the ~~Company~~Bankruptcy ~~are~~Code ~~stayed~~ and ~~creditor’s~~the ~~rights~~orders of ~~enforcement against~~ the ~~Company~~Bankruptcy ~~are~~Court. ~~subject~~During to the ~~applicable~~pendency ~~provisions~~ of the ~~Bankruptcy~~Chapter ~~Code.~~11 ~~Additionally~~Cases, ~~certain~~all ~~Creditor~~transactions ~~Parties~~outside ~~(as~~the ~~defined~~ordinary ~~below)~~course ~~have~~of ~~agreed~~business torequire ~~support~~the prior approval of the ~~Restructuring~~Bankruptcy ~~Transaction~~Court.

~~The~~To ~~United~~facilitate ~~States~~the ~~Trustee~~administration ~~for~~of the ~~District~~cases ofand ~~Delaware~~minimize ~~(the~~disruption ~~“U.S.~~to ~~Trustee”)~~the ~~has~~Debtors’ ~~appointed~~operations, anon ~~official~~the ~~committee~~Petition ofDate ~~unsecured~~and ~~creditors~~thereafter, (the Debtors filed certain “~~Unsecured~~first ~~Creditors~~day” ~~Committee~~and “second day”) motions and aapplications ~~committee~~with ofthe ~~equity~~Bankruptcy ~~security~~Court ~~holders~~seeking (certain relief. Specifically, the ~~“Equity~~Debtors, ~~Committee”~~among other things, sought authority to: (i). ~~The~~obtain ~~Unsecured~~secured ~~Creditors~~postpetition ~~Committee~~financing (as discussed below); (ii) pay certain employee, insurance and ~~the~~tax ~~Equity~~obligations; ~~Committee~~(iii) pay claims of certain critical vendors, shippers, warehousemen, miscellaneous lien claimants and claimants who may assert claims arising under Bankruptcy Code section 503(b)(9); (iv) provide adequate assurance of payment to certain utility providers; and (v) maintain their ~~respective~~cash ~~legal~~management ~~representatives~~system. In addition, ~~have~~the aDebtors ~~right~~sought (a) to beestablish ~~heard~~procedures onfor the sale of certain ~~matters~~de ~~that~~minimis ~~come~~assets; ~~before~~(b) ~~the~~approval ~~Bankruptcy~~to ~~Court~~retain ~~affecting~~various professionals of the Debtors.; ~~There~~(c) ~~can~~to beestablish noprocedures ~~assurance~~for ~~that~~ the ~~Unsecured~~retention ~~Creditors~~of ~~Committee~~ordinary course professionals and~~/or~~ ~~the~~compensation ~~Equity~~of ~~Committee~~various ~~will~~other ~~support~~professionals; and (d) authority to enter into a stalking horse purchase agreement for the sale of the Debtors’ ~~position~~75 onexploration ~~matters~~properties toand berelated ~~presented~~assets toand ~~the~~approval of bidding procedures in connection therewith (as discussed below). The Bankruptcy Court inhas ~~the~~entered ~~future~~various ororders ~~with~~granting ~~respect~~the torelief requested in the ~~Reorganization~~various ~~Plan~~motions (and applications, as ~~defined~~applicable, ~~below)~~in connection with each of the foregoing.

Consequences of the Bankruptcy Filing

The commencement of the chapter 11 filing constituted an event of default with respect to each and all of the Company’s debt agreements described in Note 12 - Debt; however, the Company believes that the ability of the lenders to seek remedies to enforce their respective rights against the Company are stayed and creditor’s rights of enforcement against the Company are subject to the applicable provisions of the Bankruptcy Code. Additionally, certain Creditor Parties (as defined below) have agreed to support the Amended Restructuring Transaction (as defined below).

The United States Trustee for the District of Delaware (the “U.S. Trustee”) has appointed an official committee of unsecured creditors (the “Unsecured Creditors Committee”) and a committee of equity security holders (the “Equity Committee”). The Unsecured Creditors Committee and the Equity Committee, and their respective legal representatives, have a right to be heard on certain matters that come before the Bankruptcy Court affecting the Debtors. There can be no assurance that the Unsecured Creditors Committee and/or the Equity Committee will support the Debtors’ position on matters to be presented to the Bankruptcy Court in the future or with respect to the a plan of reorganization (as amended or modified from time to time, the “Reorganization Plan”).

Notice of Suspended Trading and Delisting from Stock Exchanges

On March 10, 2015, the Company received notice from the NYSE MKT LLC (the “NYSE MKT”) that the NYSE MKT had suspended the Company’s common stock from trading immediately and determined to commence proceedings to delist the Company’s common stock pursuant to Section 1003(c)(iii) of the NYSE MKT LLC Company Guide, which isoccurred ~~expected to occur~~ on May 12, 2015 ~~pursuant to the NYSE MKT’s May 1, 2015 filing with the SEC~~. The NYSE MKT’s determination was based on the filings in the Chapter 11 Cases, which contemplate that the Company’s common stock will be extinguished pursuant to ~~a pre-arranged plan of reorganization (as amended or modified from time to time,~~ the “Reorganization Plan”). The last day that the Company’s common stock traded on the NYSE MKT was March 9, 2015.

On March 10, 2015, the Toronto Stock Exchange (“TSX”) suspended the Company’s common stock from trading immediately while the TSX reviewed the Company’s continued eligibility for listing under the TSX’s Expedited Review Process. The suspension and ~~possible~~ delisting were based on the filing of the Chapter 11 Cases, the Company’s financial condition and/or operating results, and whether the Company had adequate working capital and appropriate capital structure. The Company did not take any further action to appeal the TSX’s decision. On March 17, 2015, the TSX determined to delist the Company’s common stock at the close of business on April 16, 2015. The last day that the Company’s common stock traded on the TSX was March 9, 2015.

On March 10, 2015, the Company’s common stock began being traded in the over-the-counter market under the symbol “ANVGQ”.

Fresh Start Accounting

As required by accounting Standards Codification (“ASC”) 852 “Reorganizations,” if the Company meets the applicable criteria, the Company may be required to adopt fresh start accounting upon emergence from chapter 11 under the Bankruptcy Code.

Original Restructuring Support Agreement and Amended and Restated Restructuring Support Agreement

The Restructuring Support Agreement and term sheet (the “Term Sheet”) attached thereto and incorporated therein, set forth, subject to certain conditions, the commitment to and obligations of, on the one hand, the Company, and on the other hand, the Restructuring Support Parties in connection with a restructuring of the Company’s debt and equity (including the Company’s common stock) (the “Restructuring Transaction”) pursuant to the Reorganization Plan.8

~~The~~Table ~~Restructuring Support Agreement and the Term Sheet contemplate that the Company will reorganize as a going concern. Specifically, the material terms~~ of the Reorganization Plan are expected to effect, among other things, and subject to certain conditions and as more particularly set forth in the Restructuring Support Agreement and the Term Sheet, upon the effective date of the Reorganization Plan, a substantial reduction in the Company’s funded debt obligations by, among other things:Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Original Restructuring Support Agreement and term sheet (the “Original Term Sheet”) attached thereto and incorporated therein, set forth, subject to certain conditions, the commitment to and obligations of, on the one hand, the Company, and on the other hand, the Restructuring Support Parties in connection with a restructuring of the Company’s debt and equity (including the Company’s common stock) (the “Original Restructuring Transaction”) pursuant to the Reorganization Plan.

Since the Petition Date, the Company has faced extraordinary challenges to its mining operations, including (i) employee attrition, (ii) a refusal by key vendors to contract with the Company on commercially reasonable terms, (iii) a materially slower than forecasted recovery rate of gold and silver ounces from its ore and (iv) continuing low gold prices.

Consequently, the Debtors could not comply with several of the covenants in the Original Restructuring Support Agreement, giving rise to the Restructuring Support Parties’ right to terminate the Original Restructuring Support Agreement. In order to preserve the Company’s ability to exit chapter 11 quickly and efficiently and to maximize recoveries for its creditors, the Company engaged in extensive negotiations with the Restructuring Support Parties regarding amendments to the Original Restructuring Support Agreement and Reorganization Plan necessitated by the change in the Company’s financial and operational circumstances. The Company and the Restructuring Support Parties successfully negotiated the terms of an amended and restated restructuring support agreement (the “Amended and Restated Restructuring Support Agreement”) with the Restructuring Support Parties, which was executed on July 23, 2015. The Amended and Restated Restructuring Support Agreement, the amended term sheet (the “Amended Term Sheet”) and the Amended Reorganization Plan (the “Amended Reorganization Plan “) attached thereto contemplate certain modifications to the Original Restructuring Transaction (the “Amended Restructuring Transaction”) pursuant to the Reorganization Plan.

The Amended and Restated Restructuring Support Agreement, the Amended Term Sheet and the Amended Reorganization Plan attached thereto contemplate that the Company will reorganize as a going concern. Specifically, the material terms of the Amended Reorganization Plan are expected to effect, among other things, and subject to certain conditions and as more particularly set forth in the Amended and Restated Restructuring Support Agreement, the Amended Term Sheet and Amended Reorganization Plan, upon the effective date of the Amended Reorganization Plan, a substantial reduction in the Company’s funded debt obligations by, among other things:


•	the issuance of a new first lien term loan credit facility in exchange for outstanding indebtedness and exposure under:

(1) the Third Amended and Restated Credit Agreement (the “Revolver”), which had approximately $75.04 million of borrowings, ~~and~~ issued letters of credit and accrued interest as of the Petition Date (see Note 1112 - Debt for additional information),; and

(2) the close-out amount of the Company’s cross currency swap liability and diesel swaps liability owed to the Bank of Nova Scotia, which approximated $86.3 million as of March 11, 2015 (see Note 1920 - Derivative Instruments for additional information).;

7• the issuance of a new second lien convertible term loan credit facility by the Exit Facility Lenders (as defined below, see Note 12 - Debt for additional information);


•	the issuance of new common stock to holders of unsecured claims; and


•	the satisfaction of claims under the DIP Facility (as hereinafter defined) in cash.

If the Amended Restructuring Transaction is consummated as contemplated by the Amended Restructuring Support Agreement, the Amended Term Sheet and the Amended Reorganization Plan, the Company’s common stock and warrants to purchase shares of the common stock will be extinguished. Holders of the Company’s common stock and holders of the Company’s outstanding warrants to purchase shares of the common stock will receive no recovery on account of these holdings.

The Amended and Restated Restructuring Support Agreement may be terminated upon the occurrence of certain events, including the failure to meet certain milestones related to confirmation and consummation of the Amended Reorganization Plan, among other items, and certain breaches by the parties under the Amended and Restated Restructuring Support Agreement.

On July 23, 2015, the Debtors obtained an exit facility commitment letter (the “Exit Facility Commitment Letter”) from certain affiliates or related funds of six institutions (collectively, the “Exit Facility Lenders”) to secure the financing necessary for the consummation of the Amended Restructuring Transaction contemplated under the Amended and Restated Restructuring Support Agreement and the Amended Plan. Pursuant to the Exit Facility Commitment Letter, and subject to the terms and conditions thereof, the Exit Facility Lenders have agreed to the purchase of new second lien convertible debt in the reorganized Company in an amount such that the initial aggregate principal amount of the new second lien convertible debt will not exceed $80 million (see Note 12 - Debt for additional information).

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

•On July 23, 2015, the ~~issuance~~Company filed with the Bankruptcy Court its Amended Disclosure Statement for the Debtors’ Amended Joint Chapter 11 Plan of aReorganization ~~new~~(the ~~second~~“Amended ~~lien~~Disclosure ~~convertible~~Statement”) ~~term~~whereby ~~loan~~it ~~credit~~outlines ~~facility~~the toproposed ~~holders~~settlement with each class of claims ~~under~~against and equity interests in the ~~DIP~~debtor. The ~~Facility~~proposed ~~(as~~settlement ~~defined~~is ~~and~~consistent ~~described~~with the Amended Reorganization Plan. On August 20, 2015, the Bankruptcy Court will hear a motion to approve the adequacy of information in ~~Note~~the 11Disclosure -Statement, ~~Debt);~~establish deadlines and procedures for voting on the Amended Reorganization Plan, approve solicitation and balloting procedures, establish procedures for tabulation of the votes, establish deadlines and procedures for filing objections to the proposed assumption of executory contracts and unexpired leases and proposed cure amounts associated therewith and schedule a confirmation hearing.

• the issuance of new common stock to holders of claims under the DIP Facility and claims under the Notes; and

• the issuance of warrants to holders of the Company’s common stock.

If the Reorganization Plan is consummated as contemplated by the Restructuring Support Agreement and the Term Sheet, the Company’s common stock and warrants to purchase shares of the common stock will be extinguished. Holders of the Company’s common stock will receive on a pro rata basis warrants (certain terms of which are set forth in the Term Sheet) for the right to purchase shares of common stock in the reorganized Company only if the class of holders of the common stock votes in favor of the Reorganization Plan. If holders of the common stock vote against the Reorganization Plan, then holders of common stock would receive no recovery on account of their common stock, and such common stock will be deemed settled, cancelled, released, compromised and extinguished as of the effective date of the Reorganization Plan. The holders of the Company’s outstanding warrants to purchase shares of the common stock will receive no recovery on account of these holdings.

The Restructuring Support Agreement may be terminated upon the occurrence of certain events, including the failure to meet certain milestones related to confirmation and consummation of the Reorganization Plan, among other items, and certain breaches by the parties under the Restructuring Support Agreement. There have been certain defaults with respect to the milestones and related matters in the Restructuring Support Agreement, and there can be no certainty as to whether the requisite parties will agree to any waiver with respect to such defaults or an amendment to the Restructuring Support Agreement.

On April 24, 2015, the Company filed with the Bankruptcy Court its Disclosure Statement for the Debtors’ Joint Chapter 11 Plan of Reorganization (the “Disclosure Statement”) whereby it outlines the proposed settlement with each class of claim against and equity interest in the debtor. The proposed settlement is consistent with the Reorganization Plan. On June 1, 2015, the Bankruptcy Court will hear a motion to approve the adequacy of information in the Disclosure Statement, establish deadlines and procedures for voting on the Reorganization Plan, approve solicitation and balloting procedures, establish procedures for tabulation of the votes on the Reorganization Plan, establish deadlines and procedures for filing objections to the proposed assumption of executory contracts and unexpired leases and proposed cure amounts associated therewith and schedule a confirmation hearing.

Termination of Diesel and Cross Currency Swaps

The filing of the Chapter 11 Cases constituted an event of default under each of the diesel and cross currency swap agreements. On March 10, 2015, the Company received a notice of early termination from each of the counterparties to these swaps, which notices have the effect of terminating each such swap and causing the close-out amount under each such swap to become due and payable immediately. As discussed in the above Restructuring Support Agreement section, the close-out amount of the Company’s cross currency swap liability and diesel swaps liability owed to the Bank of Nova Scotia approximated $86.3 million as of March 11, 2015. The close-out amount of the Company’s cross currency swap owed to National Bank of Canada approximated $12.6 million which was offset by their rights against letters of credit and cash collateral, and accordingly, as of March 10, 2015 the Company owed National Bank of Canada approximately $0.4 million after realization of the collateral. The close-out amount of the Company’s cross currency swap owed to Société Générale approximated $10.4 million which was offset by their rights against letters of credit and cash collateral and, accordingly, as of March 11, 2015, the Company owed Société Générale approximately $0.5 million after realization of the collateral.

363 Asset Sales

~~The~~On ~~Company~~June ~~agreed~~29, on2015, ~~terms~~the ~~with~~Company ~~Clover~~completed ~~Nevada~~the ~~LLC~~sale (~~“Clover Nevada”) to enter into an agreement (~~the “~~Stalking Horse Purchase Agreement~~Sale”) ~~related to the proposed sale~~ of certain of the Company’s exploration properties and related assets ~~for~~(excluding ~~$17.5~~the ~~million~~Hycroft ~~and~~operation) ~~an amount, not to exceed $65,000, that~~ (the ~~sellers~~“Acquired ~~have~~Assets”) ~~posted in respect of any security interest that is transferred~~ to Clover Nevada~~. On~~ ~~April~~LLC ~~24,~~(“Clover ~~2015~~Nevada”), ~~the~~a ~~Bankruptcy~~wholly-owned ~~Court~~subsidiary ~~entered~~of ~~the~~Waterton ~~order~~Precious ~~authorizing~~Metals ~~the~~Fund ~~entry~~II ~~into the Stalking Horse Purchase Agreement~~Cayman, ~~approved the bidding and auction procedures in connection with the sale of the assets and established the sale hearing date~~LP, which iswas scheduled for June 18, 2015. Upon the entry by the Bankruptcy Court of such order, the parties contemporaneously entered into the Stalking Horse Purchase Agreement. The Company, with the assistance of its financial advisors, will solicit additional qualified bids for these assets consistent with the bidding and auction procedures approved by the Bankruptcy Court~~. A~~ ~~qualified~~on ~~bid~~June ~~is one that is in excess of the $17.5 million~~18, ~~plus the amount not to exceed $65,000, offered by Clover Nevada, plus amounts equal to a break-up fee, expense reimbursement and a minimum of an incremental $250,000~~2015. ~~The break-up fee is $350,000 and the expense reimbursement is $100,000.~~

The Acquired Assets consist of 75 mineral exploration properties and assets encompassing approximately 165,000 acres of land in the State of Nevada. The Acquired Assets include all of Allied Nevada’s patented and unpatented mining claims and rights associated with properties other than Hycroft, including any royalties or similar interests.

The Sale was completed pursuant to that certain Asset Purchase Agreement, dated as of April 27, 2015, by and among the Company and certain of its wholly-owned subsidiaries and Clover Nevada, for an aggregate purchase price of $17.5 million.

Short-Term Incentive Program

On May 11, 2015, the Debtors filed with the Bankruptcy Court a motion (the “KEIP Motion”) seeking authority to implement a short-term incentive program (the “KEIP”) for 95 non-insider employees ~~that~~who have a significant impact on the Debtors’ short-term operational performance. The maximum aggregate payout under the KEIP for the second and third quarters of 2015 is approximately $1.4 million. The KEIP Motion and supporting declarations to such motion include important information about the Company and the Company’s work force (including factors relating to its work force that caused the Debtors to seek implementation of the KEIP). The motion was approved by the Bankruptcy Court on May 28, 2015.

In connection with the Company’s announcement of the suspension of mining operations (see Note 1 - Basis of Presentation), on July 8, 2015, the Debtors filed with the Bankruptcy Court a motion (the “Amended KEIP Motion”) seeking authority to supersede the KEIP Motion and implement a revised short-term incentive program (the “Insider KEIP”) for the four officers of the Company, a key employee retention plan (the “KERP”) for 51 non-insider employees all of whom have a significant impact on the Debtors’ short-term operational performance and a tier-based severance program for all of its remaining employees. The maximum payments under the Insider KEIP and the KERP are $0.54 million and $0.68 million, respectively. The plans are designed to stabilize the workforce and to incentivize the employees to remain with the Debtors through the effectiveness of the Amended Reorganization Plan. The Amended KEIP Motion and supporting declarations to such motion include important information about the Company and the Company’s work force (including factors relating to its work force that caused the Debtors to seek implementation of the Insider KEIP and the KERP).

DIP Credit Agreement

On March 12, 2015, in connection with the Chapter 11 Cases, the Company entered into a Secured Multiple Draw Debtor-in-Possession Credit Agreement (as amended by that certain Waiver and Amendment No. 1, dated as of May 7, 2015, and as further amended, waived or otherwise modified from time to time prior to the date hereof, the “DIP Credit Agreement”), among

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~Debtors’~~the ~~short-term~~Company, ~~operational~~as ~~performance. The~~borrower, ~~maximum aggregate payout under~~ the ~~KEIP~~direct ~~for the second~~ and ~~third~~indirect ~~quarters~~subsidiaries of ~~2015~~the isCompany ~~$1.396~~party ~~million. The~~thereto ~~KEIP~~from ~~Motion~~time ~~and~~to ~~supporting~~time, ~~declarations~~as toguarantors, ~~such~~Wilmington ~~motion~~Savings ~~include~~Funds ~~important~~Society, ~~information~~FSB, ~~about~~as ~~the~~administrative ~~Company~~agent and ~~the~~collateral ~~Company’s~~agent ~~work~~and ~~force~~the ~~(including~~lenders ~~factors~~from ~~relating~~time to ~~its~~time ~~work~~party ~~force that caused the debtors to seek implementation of the KEIP), and is available at: https://cases~~thereto.~~primeclerk.com/alliednevadagold/Home-DownloadPDF?id1=MTIzMTcw&id2=0.~~

The Company has obtained additional waivers from the majority DIP lenders, for certain defaults or anticipated defaults, in connection with, among other things, (1) the Company’s suspension of operation of the Hycroft Mine, (2) the non-payment of capital leases, (3) the failure to meet the milestones set forth in the DIP Credit Agreement so long as the Company is complying with the milestones set forth in the Amended and Restated Restructuring Support Agreement (subject to an extension of 30 days for each milestone), (4) the failure to comply with the “Total Ounces Gold Sold Covenant” and “Total Ounces Gold Equivalent Sold Covenant”, in each case, with respect to the 4 weeks periods ending through August 16, 2015, and (5) the failure to comply with the “Total Monthly Gold Produced Covenant” with respect to the monthly periods ended through July 31, 2015 (collectively, the “Current and Anticipated Waivers”). In addition, the majority DIP lenders have agreed to waive, but subject to the retraction, termination and/or withdrawal of such waiver upon notice by the majority DIP lenders, any prospective default, in connection with, among other things, the Company’s failure (x) to deliver any update to the approved budget solely as a result of the delayed approval by the majority DIP lenders of such update, and (y) to meet the “Total Ounces Gold Sold Covenant,” the “Total Ounces Gold Equivalent Sold Covenant” and “Total Monthly Gold Produced Covenant” with respect to the test periods beyond those covered by the Current and Anticipated Waivers.

Financial Reporting During Reorganization

Subsequent to the Petition Date, the Company’s financial statements continue to be prepared in accordance with GAAP, which requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from those that are associated with the ongoing operations of the business.

Reorganization Items, Net

Expenses, gains, and losses directly associated with reorganization efforts and the Chapter 11 Cases are reported as Reorganization items, net. The following table provides a listing of reorganization items (in thousands):

	Three months ended			Six months ended
	March 31, 2015
	June 30, 2015			June 30, 2015
Cross currency swap valuation adjustment - Note 19	$	82,175
Cross currency swap valuation adjustment - Note 20	$	—		$	82,175
Notes carrying value adjustment	8,041
Term loan obligation and Notes carrying value adjustment	834			8,875
Legal and professional fees	79,~~517~~457			16,974
Diesel swaps valuation adjustment - Note 19	(415		)
Diesel swaps valuation adjustment - Note 20	—			(415		)
Warrant liability valuation adjustment - Note 17	(4,644		)
Warrant liability valuation adjustment - Note 18	—			(4,644		)
	$	9210,~~674~~291		$	102,965

The $82.2 million cross currency swap valuation adjustment and the $(0.4) million diesel swaps valuation adjustment represent the increase (decrease) in the mark-to-market close-out amounts owed to the swap counterparties as a result of the Chapter 11 Cases over the respective fair value of these financial instruments prior to the filing of the Chapter 11 Cases. The $0.8 million and the $8.01 million Term loan obligation and Notes carrying value adjustment represents the write-down of unamortized debt issuance costs which adjusted the net carrying value of the term loan obligations and Notes, respectively, to the currently estimated allowed claim amount. The $(4.6) million warrant liability adjustment represents a decrease in fair value to these financial instruments as it is not expected that the warrants will be exercisable as a result of the Chapter 11 Cases.

Liabilities Subject To Compromise

Liabilities subject to compromise, which were incurred prior to the filing of the Chapter 11 Cases and represent unsecured (or under-secured) liabilities, are distinguished from fully secured liabilities not expected to be compromised and from post-petition liabilities incurred after the filing of the Chapter 11 Cases. Where there is uncertainty about whether a secured claim will be paid under the Chapter 11 Cases or if a secured claim may be under-secured, the Company has classified the entire amount of the claim as a liability subject to compromise. Liabilities subject to compromise are reported at claim amounts expected to be allowed by the Bankruptcy Court, even though they may settle in the future for lesser amounts. These claims remain subject to future adjustments, which may result from: negotiations; actions of the Bankruptcy Court; disputed claims; rejection of contracts and unexpired leases; the determination as to the value of any collateral securing claims; proofs of claims; the identification of new claims; or other events. Liabilities subject to compromise are reduced for payments made under the approval of the Bankruptcy Court.

The determination of how liabilities will ultimately be treated or settled cannot be made until the Bankruptcy Court confirms the Reorganization Plan and, accordingly, the ultimate amount or treatment of such liabilities is not determinable at this time. The following table provides a listing of the estimated pre-petition liabilities included in liabilities subject to compromise (in thousands):11

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

	March 31, 2015
Notes(1) - Note 11	$	316,640
Accounts payable	25,650
Term and Security Deposit loan - Note 11	17,974
Interest payable - Note 11	9,136
Cross currency swap derivative instrument - Note 19	891
Accrued compensation and benefits	1,070
	$	371,361
(1) Amount represents the CDN $400.0 million face amount of the issuance translated to U.S. dollars using the exchange rate on the Petition Date.

The determination of how liabilities will ultimately be treated or settled cannot be made until the Bankruptcy Court confirms the Amended Reorganization Plan and, accordingly, the ultimate amount or treatment of such liabilities is not determinable at this time. The following table provides a listing of the estimated pre-petition liabilities included in Liabilities subject to compromise (in thousands):



	June 30, 2015
Notes⁽¹⁾ - Note 12	$	316,640
Accounts payable	15,900
Capital lease and term loan obligations - Note 12	118,984
Term and Security Deposit Loan	17,974
Interest payable - Note 12	9,136
Cross currency swap derivative instrument - Note 20	891
Accrued compensation and benefits	182
	$	479,707
⁽¹⁾Amount represents the CDN $400.0 million face amount of the issuance translated to U.S. dollars using the exchange rate on the Petition Date.

Interest Expense

As discussed in Note 1112 - Debt, effective as of the Petition Date, the Company ceased recording interest expense on certain outstanding pre-petition debt classified within Liabilities subject to compromise as interest owed after the Petition Date on such obligations is not expected to be paid during the Chapter 11 Cases and is not expected to be an allowed claim.

The Company paid interest (and principal) on its capital lease and term loan obligations from the Petition Date to June 28, 2015. Beginning on June 29, 2015, the Company ceased making principal and interest payments on most of its capital lease and term loan obligations (the “Delinquent Capital Leases”) and does not expect to make further payments during the Chapter 11 Cases on the Delinquent Capital Leases. As there is uncertainty surrounding the value that a third-party may attribute to the underlying security on these Delinquent Capital Leases, they have been classified as Liabilities subject to compromise.

Condensed Combined Financial Statements

The Company’s non-Debtor entities, which are not included in the Chapter 11 Cases, include Allied Nevada Delaware Holdings Inc. and Allied Nevada (Cayman) Corp., both of which have no operations, assets, liabilities, or cash flows. Accordingly, the Condensed Consolidated Financial Statements presented herein represent the financial position, results of operations, and cash flows of the Debtor entities.

4. Inventories

The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces):

March 31, 2015

December 31, 2014

June 30, 2015

December 31, 2014

Amount

Gold ounces

Amount

Gold ounces

Materials and supplies

12,~~558~~480

15,303

Merrill-Crowe in-process

12,~~870~~617

12,~~497~~078

3,723

3,228

Carbon column in-process

~~1,275~~194

~~1,037~~159

312

269

Doré finished goods

~~1,165~~890

~~939~~710

1,619

1,402

16,~~868~~181

32,~~473~~947

20,957

4,899

As of ~~March~~June 3130, 2015 and December 31, 2014, production-related Inventories included $1.0.8 million and $1.3 million, respectively, of capitalized non-cash depreciation and amortization costs.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

5. Ore On Leach Pads

The following table summarizes ore on leach pads and the estimated recoverable gold ounces therein (in thousands, except ounces):

March 31, 2015

December 31, 2014

June 30, 2015

December 31, 2014

Amount

Gold ounces

Amount

Gold ounces

Ore on leach pads, current

~~206~~193,~~068~~077

~~177~~179,~~064~~344

214,444

183,615

Ore on leach pads, non-current

8882,~~315~~748

7576,~~885~~862

91,904

78,692

As of ~~March~~June 3130, 2015 and December 31, 2014, Ore on leach pads, current and non-current included $6962.90 million and $73.7 million, respectively, of capitalized non-cash depreciation and amortization costs.

The period-end market value of the Company’s production-related inventories is determined in part by using period-end London Bullion Market Association (“LBMA”) prices per gold and silver ounce and is highly sensitive to these inputs. Due to lower period-end metal price levels and increases in per gold ounce production costs, the Company’s application of its lower of cost or market accounting policy resulted in write-downs of Ore on leach pads. Write-downs resulted solely from the Company’s application of its lower of cost or market accounting policy and were unrelated to any metallurgical balancing analytics or changes to recovery rates. The following table provides information about the Company’s write-downs (in thousands, except per ounce amounts):

	Three months ended March 31,
	Three months ended June 30,				Six months ended June 30,
Type of previously incurred cost	2015		2014		2015		2014
Cash production costs	$	2839,~~225~~384	$	—	$	67,609	$	—
Allocated depreciation and amortization	811,~~795~~279		—		20,074		—
Write-down of production related inventories	$	3750,~~020~~663	$	—	$	87,683	$	—
Period-end LBMA metal prices used in write-down calculation
Price per gold ounce	$	1,~~187~~171.00	$	1,~~291~~315.7500	$	1,171.00	$	1,315.00
Price per silver ounce	$	1615.6070	$	1920.9787	$	15.70	$	20.87

10Further declines from June 30, 2015 metal price levels and/or future production costs per gold ounce greater than the June 30, 2015 carrying value per gold ounce included in Ore on leach pads could result in, or contribute to, additional future write-downs of production-related inventories.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Further declines from March 31, 2015 metal price levels and/or future production costs per gold ounce greater than the March 31, 2015 carrying value per gold ounce included in Ore on leach pads could result in, or contribute to, additional future write-downs of production-related inventories.

6. Prepaids and Other Assets

The following table provides the components of prepaids and other assets (in thousands):

	March 31, 2015		December 31, 2014
	June 30, 2015		December 31, 2014
Prepaids and other
Prepaids	$	64,~~065~~482	$	5,839
Deposits	1,073		1,224
Nevada net proceeds taxes receivable	1,415		972
Deposits	205		252
Federal income taxes receivable	—		605
Other	8991		90
	$	76,~~227~~193	$	7,758
Other assets, non-current
Debt issuance costs, net	$	~~1,726~~666	$	10,352
Reclamation policy premium, net	~~326~~296		356
	$	~~2,052~~962	$	10,708

As discussed in Note 3 - Chapter 11 Bankruptcy Filing, during the three and six months ended ~~March~~June 3130, 2015, unamortized debt issuance costs of approximately $8.01 million were reclassified to the net carrying value of the Company’s Notes and subsequently charged to Reorganization items, net. Additionally, during the three months ended June 30, 2015, $0.8 million in unamortized issuance costs related to term loan obligations were written off as payments are no longer being made on these obligations.

7. Assets Held For Sale

The following table provides the components of assets held for sale (in thousands):

Description	~~March~~June 3130, 2015			December 31, 2014
Mine equipment	$	423,~~083~~162	~~(1)~~	$	42,083	(1)
Mineral properties	17,500			—
Single family homes	—			2,275
Single family homes	2,275			2,275
	$	3,162		$	44,358
	$	61,858		$	44,358
(1) Unpaid debt on mine equipment held for sale totaled $28.2 million as of December 31, 2014. See Note 12 - Debt for additional detail.
(1) Unpaid debt on mine equipment held for sale totaled $27.4 million and $28.2 million as of March 31, 2015 and December 31, 2014, respectively. See Note 11 - Debt for additional detail.

Assets held for sale ~~include~~at ~~single~~June ~~family homes~~30, ~~new~~2015 ~~and~~was comprised of used ~~blasthole~~assets, ~~drills~~including $1.2 million for a mobile crusher, ~~used~~$0.9 million for haul trucks, ~~shovels~~$0.4 million for blasthole drills, ~~graders~~$0.3 million for wheel loaders, $0.3 million for excavators and ~~processing~~$0.06 million for other equipment. Assets held for sale at December 31, ~~the~~2014 included $24.5 million for shovels, $6.7 million for used haul trucks, $4.8 million for new ~~components~~and ~~required~~used blasthole drills, $3.7 million for ~~one~~a ~~electric~~mobile ~~wire~~crusher, ~~rope~~$2.3 ~~shovel~~million for single family homes, $1.6 million for a carbon strip plant and $0.7 million for other equipment. As the Company’s ~~portfolio~~has ceased making principal and interest payments on most of ~~exploration~~its ~~mineral~~capital ~~properties~~lease ~~which~~and ~~are~~terms ~~located~~obligations ~~throughout~~and the ~~state~~term ofand ~~Nevada~~security deposit loan (as noted in Note 3 - Chapter 11 Bankruptcy Filing and Note 12 - Debt) and plans to return the related equipment to the lessors/lender those assets previously shown as held for sale ($10.2 million in mine equipment and $18.0 million for an electric rope shovel) are now included in Plant, equipment, and mine development, net - Mine equipment. During the three months ended ~~March~~June 3130, 2015, the Company recorded a $1611.97 million loss included in Loss on assets classified as held for sale and asset dispositions, net ~~from~~as ~~classifying~~a ~~$34.4~~result ~~million~~of disposition of ~~mineral~~the ~~properties~~single family homes, related settlement of temporary housing facility rental payments and the adjustment to the fair value of the remaining equipment classified as held for sale.

During Asthe first three months of 2015, the Company recorded a loss of $16.9 million included in Loss on assets classified as held for sale and asset dispositions, net related to the $34.4 million of exploration properties and related assets that were sold to Clover Nevada for $17.5 million as discussed in Note 3 - Chapter 11 Bankruptcy Filing,. The transaction was approved by the Bankruptcy Court ~~entered~~on ~~the~~June ~~order~~18, ~~authorizing~~2015 and the ~~entry~~sale ~~into~~was completed June 29, 2015. The result of the ~~Stalking~~transaction ~~Horse~~was ~~Purchase~~to ~~Agreement~~reduce ~~(in~~Assets held for sale by the ~~amount~~carrying value of $17.5 million) and increase restricted cash by the same amount, ~~approved~~pursuant to the ~~bidding~~June ~~and~~18, ~~auction~~2015 ~~procedures~~Court inOrder ~~connection~~requiring ~~with~~that the ~~sale~~proceeds ofbe ~~the~~placed ~~mineral~~in ~~properties~~a ~~and~~segregated ~~established~~interest-bearing ~~the~~bank ~~sale~~account ~~hearing~~maintained ~~date~~by the Debtors, ~~which~~pending isagreement ~~scheduled~~amongst ~~for~~the ~~June~~Restructuring ~~18,~~Support ~~2015.~~Parties on the distribution of the funds.

118. Mineral Properties, Net

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

8.Sale ~~Restricted~~of ~~Cash~~Mineral Properties

On April 22, 2014, the Company entered into a Purchase and Sale Agreement and sold a 75% controlling interest in the Hasbrouck, Three Hills, and Esmeralda County exploration properties (the “Properties”) to West Kirkland Mining, Inc. (“WKM”) for $20.0 million. The carrying value of the Properties sold to WKM was $0.5 million, resulting in the recognition of a $19.5 million Gain on dispositions or sales of mineral properties during the three months ended June 30, 2014.

9. Restricted Cash

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

Obligation collateralized	~~March~~June 3130, 2015		December 31, 2014
Asset retirement obligation surety bonds	$	38,~~154~~147	$	38,147
Revolving credit agreement - Note 11	—		10,000
Revolving credit agreement - Note 12	—		10,000
	$	38,154	$	48,147
Security deposit from sale of properties	17,500		—
	$	55,647	$	48,147

As a result of the Chapter 11 Cases discussed in Note 3 - Chapter 11 Bankruptcy Filing, during the ~~three~~six months ended ~~March~~June 3130, 2015, the lenders to the Company’s Revolver redeemed the $10.0 million in restricted deposits which reduced the outstanding borrowings under the Revolver by the same amount. See Note 1112 - Debt for additional detail on the Revolver. During the three and six months ended June 30, 2015, security deposits increased by the $17.5 million proceeds from the sale of exploration properties and related assets, which is discussed in Note 7 - Assets Held For Sale and Note 3 - Chapter 11 Bankruptcy Filing.

910. Plant, Equipment, and Mine Development, Net

The following table provides the components of plant, equipment, and mine development, net (in thousands):

	Depreciable life or method	~~March~~June 3130, 2015			December 31, 2014
Mine equipment	5 - 7 years	$	~~280~~218,~~758~~601		$	280,833
Mine development	Units-of-production	97,450			96,964
Leach pads	Units-of-production	81,446			81,446
Process equipment	Units-of-production	7919,~~837~~948			79,551
Buildings and leasehold improvements	10 years	2616,~~091~~577			26,175
Furniture, fixtures, and office equipment	2 - 3 years	4,~~417~~289			4,417
Vehicles	3 - 5 years	2,~~943~~420			2,943
Construction in progress and other		80,154			79,938
Construction in progress and other(1)		53,928			79,938
		653,096			652,267
		494,659			652,267
Less: accumulated depreciation and amortization		(~~224~~225,~~718~~760		)	(208,978		)
		$	~~428~~268,~~378~~899		$	443,289
(1) Construction in progress at June 30, 2015 consisted primarily of mill components.

~~Construction~~As a result of declining metal prices and the Company’s decision to suspend mining operations, discussed in ~~progress~~Note at1 ~~March~~- Basis of Presentation, all long-lived assets have been further reviewed for impairment as of June 3130, 2015. In ~~consisted~~the ~~primarily~~absence of ~~items~~future ~~related~~cash toflows from new ore placed on the ~~mill~~leach ~~expansion~~pads, this analysis has resulted in a $179.6 million write-down to plant and equipment assets which are now carried at fair value.

10Mine development and leach pad construction costs were deemed a separate asset group for which the fair value was determined to exceed the carrying value based on the in situ value per gold-equivalent ounce reserve. As ~~Other~~a ~~Liabilities~~result, an impairment was not recorded for this asset group.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

11. Other Liabilities

The following table summarizes the components of other liabilities, current and non-current (in thousands):

	March 31, 2015		December 31, 2014
	June 30, 2015		December 31, 2014
Other liabilities, current
Derivative instruments - Note 19	$	86,307	$	8,628
Derivative instruments - Note 20	$	86,307	$	8,628
Accrued compensation	12,~~663~~185		3,253
Other	~~112~~116		128
	$	88,~~082~~608	$	12,009
Other liabilities, non-current
Accounts payable	$	51,188	$	5,188
Deferred royalty income	~~1,117~~—		1,109
Derivative instruments - Note 19	—		45,017
Derivative instruments - Note 20	—		45,017
Other	56		56
	$	61,~~361~~244	$	51,370

1112. Debt

Secured Multiple Draw Debtor in Possession Credit Agreement

In connection with the Chapter 11 Cases, on March 12, 2015, the Company entered into a Secured Multiple Draw Debtor in Possession Credit Agreement (the “DIP Credit Agreement”), among the Company, as borrower, the direct and indirect subsidiaries of the Company party thereto from time to time, as guarantors, Wilmington Savings Funds Society, FSB, as administrative agent, and collateral agent and the lenders from time to time party thereto. On April 17, 2015, the Bankruptcy Court entered an order (the “Final DIP Order”) authorizing the Debtors to borrow in an aggregate principal amount of up to $78.0 million (the “DIP Facility”) under the DIP Credit Agreement. As of June 30, 2015, $50.7 million was outstanding, which was funded pursuant to the Bankruptcy Court’s order on March 12, 2015 granting interim approval of the DIP Facility and subsequent order on April 17, 2015, granting final approval of the DIP Facility. The Company will pay interest on the principal outstanding balance under the DIP Facility on a monthly basis at a rate of 12.0% per annum, 6.0% to be paid in cash and 6.0% to be paid in kind. Upon occurrence of certain triggering events set forth in the Original Term Sheet, all interest under the DIP Facility will be paid in cash. Such triggering events occur if: (1) the loans under the DIP Facility are repaid in their entirety in cash or (2) the loans under the DIP Facility are repaid, or are required to be repaid, prior to the scheduled maturity date under the DIP Facility (including by voluntary prepayment, mandatory prepayment, upon acceleration or otherwise).

12The obligations under the DIP Credit Agreement are guaranteed by the Company’s subsidiaries and secured by a continuing security interest in all of Company’s property and assets (subject only to a carve-out, the liens existing on the Petition Date and adequate protection liens) in accordance with section 364(c)(2) of the Bankruptcy Code, including (i) a perfected first-priority security interest in the collateral that is not otherwise encumbered as of the Petition Date (subordinate only to adequate protection liens granted in respect of the secured bank debt), (ii) a perfected junior security interest in all collateral that are subject to valid and perfected liens in existence as of the Petition Date or to valid liens in existence as of the Petition Date and perfected subsequent to the Petition Date as permitted by subsection 546(b) of the Bankruptcy Code, and (iii) a perfected first-priority senior, priming, security interest in the collateral junior only to a carve-out, the permitted liens, the liens securing the secured bank debt and the adequate protection liens granted in respect of the secured bank debt. Except to the extent set forth in the DIP Credit Agreement and any Bankruptcy Court orders entered or to be entered in connection therewith, the liens securing the Company’s secured bank debt shall be senior in priority to the liens securing the Company’s obligations under the DIP Credit Agreement.

The Company anticipates using the proceeds of the DIP Facility primarily for (1) purposes permitted by orders of the Bankruptcy Court, including ongoing debtor-in-possession working capital purposes, (2) the payment of fees, costs and expenses, and (3) other general corporate purposes, in each case, only to the extent permitted under applicable law, under or as permitted by the DIP Credit Agreement, the orders of the Bankruptcy Court, and in accordance with the approved budget.

The DIP Credit Agreement contains certain customary and industry/Company-specific representations, covenants, indemnifications and events of default. Events of default include, but are not limited to, payment defaults, covenant defaults and certain bankruptcy-related defaults. The financial and non-financial covenants include, but are not limited to, the covenant testing the Reserve Tail (as defined in the DIP Credit Agreement), the prohibited variance covenant testing the “Total Operating Disbursements”, “Total Ounces of Gold Sold”, “Total Ounces of Gold Equivalent Sold” and “Total Monthly Ounces of Gold Produced” line items on the approved budget, and the covenant on the Hycroft Demonstration Plant (as defined in the DIP

Table of Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~subsidiaries~~Credit ofAgreement). ~~the~~The ~~Company~~Reserve ~~party~~Tail ~~thereto~~covenant ~~from~~requires ~~time to time, as guarantors, Wilmington Savings Funds Society, FSB, as administrative agent, and collateral agent and~~ the ~~lenders~~Company ~~from~~to ~~time~~maintain toa ~~time~~minimum ~~party~~Reserve ~~thereto.~~Tail Onof ~~April~~at ~~17,~~least ~~2015~~600,000 ~~the~~ounces ~~Bankruptcy~~of ~~Court~~gold ~~entered~~equivalent anon ~~order (~~the ~~“Final~~end ~~DIP Order”) authorizing the Debtors to borrow in an aggregate principal amount~~ of upeach toquarter ~~$78.0~~falling ~~million~~after (the ~~“DIP~~closing ~~Facility”)~~of ~~under~~ the DIP Credit Agreement. As ofThe ~~March~~Total ~~31,~~Operating ~~2015,~~Disbursements ~~$35.1~~covenant ~~million~~requires ~~was~~the ~~outstanding,~~Company ~~which was funded pursuant~~ to ~~the~~make ~~Bankruptcy~~disbursements ~~Court’s~~in ~~order~~accordance onwith ~~March~~a ~~12,~~budget ~~2015~~approved ~~granting~~by ~~interim approval of~~ the ~~DIP~~lenders ~~Facility. The Company will pay interest on the principal outstanding balance~~ under the DIP Facility ~~will~~(generally ~~pay~~subject ~~interest~~to on a ~~monthly~~10% ~~basis~~permitted atvariance aover ~~rate of 12~~budget).0% ~~per~~The ~~annum,~~Total ~~6.0%~~Ounces toof beGold ~~paid~~Sold, inTotal ~~cash~~Ounces ~~and~~of ~~6.0%~~Gold toEquivalent beSold ~~paid~~and inTotal ~~kind.~~Monthly ~~Upon~~Ounces ~~occurrence~~ of ~~certain~~Gold ~~triggering~~Produced ~~events~~covenants ~~set~~require ~~forth in~~ the ~~Term~~Company ~~Sheet,~~to ~~all~~sell ~~interest~~or ~~under~~produce ~~the~~minimum ~~DIP~~amounts ~~Facility~~of ~~will~~gold beor ~~paid~~equivalent inounces ~~cash. Such~~(generally ~~triggering~~subject ~~events~~to ~~occur~~a ~~if:~~10% ~~(1)~~permitted ~~the~~variance ~~loans~~ under ~~the~~budget). ~~DIP~~The ~~Facility~~Hycroft ~~are~~Demonstration ~~repaid~~Plant incovenant ~~their~~requires ~~entirety in cash or (2)~~ the ~~loans~~Company ~~under~~to ~~the~~construct ~~DIP~~and ~~Facility~~operate ~~are~~a ~~repaid,~~temporary ordemonstration ~~are~~plant ~~required~~related to ~~be repaid, prior to~~ the ~~scheduled~~sulfide ~~maturity~~mill ~~date~~expansion ~~under~~project at the ~~DIP~~Company’s ~~Facility~~Hycroft ~~(including by voluntary prepayment, mandatory prepayment, upon acceleration or otherwise)~~Mine.

~~The~~As ~~obligations~~discussed ~~under~~in ~~the~~Note ~~DIP~~3 ~~Credit~~- ~~Agreement~~Chapter ~~are~~11 ~~guaranteed~~Bankruptcy byFiling, the Company’s ~~subsidiaries~~was ~~and~~not ~~secured~~able ~~by a continuing security interest in all of Company’s property and assets (subject only~~ to acomply ~~carve-out, the liens existing on the Petition Date and adequate protection liens) in accordance~~ with ~~section~~several ~~364(c)(2)~~ of the ~~Bankruptcy~~covenants ~~Code, including (i) a perfected first-priority security interest~~ in the ~~collateral~~DIP ~~that~~Credit isAgreement. However, ~~not otherwise encumbered as of~~ the ~~Petition~~Company ~~Date~~has ~~(subordinate~~obtained ~~only~~waivers tofrom ~~adequate protection liens granted in respect of~~ the ~~secured~~majority ~~bank~~DIP ~~debt)~~lenders, ~~(ii)~~for acertain ~~perfected~~defaults ~~junior~~or ~~security~~anticipated ~~interest~~defaults, in ~~all~~connection ~~collateral~~with ~~that~~the ~~are~~Current ~~subject to valid~~ and ~~perfected~~Anticipated ~~liens~~Waivers in(the ~~existence~~“Retractable asWaivers”). In ofaddition, the ~~Petition~~majority ~~Date~~DIP orlenders tohave ~~valid~~agreed ~~liens~~to inwaive, ~~existence~~but assubject ofto the ~~Petition~~retraction, ~~Date~~termination and/or ~~perfected~~withdrawal ~~subsequent~~of tosuch ~~the~~waiver ~~Petition~~upon ~~Date~~notice ~~as permitted~~ by ~~subsection 546(b) of~~ the ~~Bankruptcy~~majority ~~Code~~DIP ~~and~~lenders, ~~(iii)~~any aprospective ~~perfected first-priority senior~~default, ~~priming, security interest~~ in ~~the~~connection ~~collateral junior only to a carve-out~~with, ~~the~~among ~~permitted~~other ~~liens~~things, the ~~liens~~Company’s ~~securing~~failure ~~the~~(x) ~~secured~~to ~~bank~~deliver ~~debt~~any ~~and~~update to the ~~adequate~~approved ~~protection~~budget ~~liens~~solely ~~granted~~as ina ~~respect~~result of the ~~secured~~delayed ~~bank~~approval ~~debt.~~by ~~Except to~~ the ~~extent~~majority ~~set~~DIP ~~forth~~lenders inof ~~the~~such ~~DIP~~update ~~Credit Agreement~~ and ~~any~~(y) ~~Bankruptcy~~to ~~Court~~meet ~~orders~~the ~~entered~~“Total orOunces toGold beSold ~~entered in connection therewith~~Covenant,” the ~~liens~~“Total ~~securing~~Ounces ~~the~~Gold ~~Company’s~~Equivalent ~~secured~~Sold ~~bank~~Covenant” ~~debt~~and ~~shall~~“Total beMonthly ~~senior~~Gold inProduced ~~priority~~Covenant” with respect to the ~~liens~~test ~~securing~~periods ~~the~~beyond ~~Company’s~~those ~~obligations~~covered ~~under~~by the ~~DIP~~Current ~~Credit~~and ~~Agreement~~Anticipated Waivers.

~~The~~If the Company ~~anticipates~~is ~~using~~unable ~~the~~to ~~proceeds~~comply ofwith, or obtain a waiver from the majority DIP ~~Facility~~lenders ~~primarily~~of, ~~for~~any ~~(1)~~of ~~purposes~~the ~~permitted~~other bycovenants ~~orders~~contained ofin the ~~Bankruptcy~~DIP ~~Court~~Credit Agreement, ~~including~~or ~~ongoing~~the ~~debtor~~majority inDIP ~~possession~~lenders ~~working~~retract ~~capital~~any ~~purposes~~of the Retractable Waivers, ~~(2)~~there could be a default under the ~~payment~~terms of ~~fees~~such agreement, ~~costs~~which ~~and~~could ~~expenses~~result in an acceleration of repayment and ~~(3)~~prevent ~~other~~the ~~general~~Company ~~corporate~~from ~~purposes,~~borrowing inadditional ~~each~~funds ~~case,~~under ~~only~~the DIP Credit Agreement. The Company is dependent on a financial restructuring to have any possibility to continue as a going concern. If the ~~extent~~Company ~~permitted~~is ~~under~~unable ~~applicable~~to ~~law,~~maintain ~~under~~compliance with the covenants (or asobtain ~~permitted~~waivers byfor non-compliance) contained in the DIP Credit Agreement, the ~~orders~~Company’s ofability ~~the~~to ~~Bankruptcy~~successfully ~~Court,~~recapitalize its balance sheet and inemerge ~~accordance~~from ~~with~~bankruptcy ~~the~~significantly ~~approved~~decreases ~~budget~~and may not be possible.

The ~~DIP~~Initial ~~Credit~~Consenting ~~Agreement~~Noteholders, ~~contains certain customary~~ and ~~industry~~/~~Company-specific~~or ~~representations,~~certain ~~covenants~~affiliates, ~~indemnifications~~ and/or ~~events~~related offunds ~~default,~~or ~~all~~vehicles of ~~which~~ the ~~Company~~Initial ~~was~~Consenting inNoteholders ~~compliance~~have ~~with~~agreed ~~as of March 31, 2015. Events of default include, but are not limited~~ to, ~~payment~~provide ~~defaults,~~a ~~covenant~~backstop ~~defaults and certain bankruptcy-related defaults. The financial and non-financial covenants include, but are not limited~~ to, the ~~covenant~~commitments ~~testing~~in ~~the~~respect ~~Reserve~~of ~~Tail (as defined in~~ the DIP ~~Credit~~Facility ~~Agreement),~~to the ~~prohibited~~extent ~~variance~~there ~~covenant~~is ~~testing~~a ~~the~~shortfall ~~“Total~~(in ~~Operating~~such ~~Disbursements”~~capacity, ~~“Total Ounces of Gold Sold”~~collectively, ~~“Total~~the ~~Ounces of Gold Equivalent Sold” and~~ “~~Total~~Backstop ~~Monthly~~DIP ~~Ounces of Gold Produced~~Lenders”) ~~line~~in ~~items~~exchange onfor the ~~approved~~put ~~budget,~~option ~~and~~payments ~~the~~described ~~covenant~~below onand ~~the Hycroft Demonstration Plant (as defined~~ in the ~~DIP~~Original ~~Credit~~Term ~~Agreement)~~Sheet. ~~The~~Each ~~Reserve~~of ~~Tail covenant requires~~ the ~~Company~~Backstop toDIP ~~maintain~~Lenders ashall ~~minimum~~receive ~~Reserve~~its ~~Tail~~pro ofrata atportion ~~least 600,000 ounces~~ of ~~gold~~a ~~equivalent~~non-refundable onbackstop ~~the~~put ~~end~~option payment of ~~each~~$2.34 ~~quarter~~million ~~falling~~(3.0% ~~after the closing~~ of the ~~DIP Credit Agreement~~$78.0 ~~The~~million ~~Total~~commitment ~~Operating Disbursements covenant requires the Company to make disbursements in accordance with a budget approved by the lenders~~ under the DIP Facility ~~(generally subject to a 10% permitted variance over budget~~). ~~The~~payable ~~Total~~in ~~Ounces~~the ofform ~~Gold Sold, Total Ounces~~ of ~~Gold~~the ~~Equivalent~~new ~~Sold~~second ~~and~~lien ~~Total~~convertible ~~Monthly~~term ~~Ounces~~loan ofcredit ~~Gold~~facility ~~Produced~~described ~~covenants~~above ~~require the Company to sell~~ or, ~~produce minimum amounts of gold or equivalent ounces (generally~~ subject to ~~a 10% permitted variance under budget). The Hycroft Demonstration Plant covenant requires~~ the ~~Company~~conditions toset ~~construct~~forth ~~and~~in ~~operate a temporary demonstration plant related to~~ the ~~sulfide~~Original ~~mill~~Term ~~expansion~~Sheet, ~~project~~in ~~at the Company’s Hycroft Mine~~cash.

~~Although~~In addition, the Company ~~was~~paid into ~~compliance with~~ the ~~covenants~~lenders ~~contained~~under in the DIP ~~Credit~~Facility ~~Agreement~~a ~~on the date that these financial statements were issued, the Company anticipates near~~non-~~term~~refundable ~~difficulties~~upfront ~~maintaining~~cash ~~compliance~~put ~~with~~option ~~certain~~payment ~~of such covenants (some of which are tested~~ on a ~~weekly~~pro rata basis), ~~specifically~~in ~~as it relates to~~ the ~~Company’s~~aggregate ~~ability~~amount toof ~~comply~~$0.78 ~~with~~million ~~the~~(1.0% ~~minimum permitted variance~~ of the ~~“Total~~$78.0 ~~Ounces~~million ofcommitment ~~Gold~~under ~~Sold” and~~ the ~~“Total~~DIP ~~Ounces~~Facility) ofupon ~~Gold Equivalent Sold”, line items on~~ the ~~approved~~initial ~~budget~~funding inof the DIP ~~Credit~~Facility ~~Agreement. In addition,~~ on ~~May~~March 1112, 2015~~, the Company is required to report its Total Monthly Ounces of Gold Produced for the month of April 2015 and anticipates difficulty complying with the minimum permitted variance thereof~~. AsThe ~~the~~ Company ~~does~~shall ~~not~~also ~~expect~~pay to belenders ~~able~~under ~~to comply with~~ the ~~minimum permitted variance required with respect to the approved budget to be in effect, the Company obtained a waiver from the majority~~ DIP ~~lenders,~~Facility ~~providing that it shall not constitute~~ a ~~default~~non-refundable orupfront ~~event~~put ofoption ~~default~~payment ifpayable ~~the~~in ~~Company fails to comply with~~ the ~~covenants~~aggregate ~~relating~~amount ~~to (1) the “Total Ounces~~ of ~~Gold~~$3.12 ~~Sold”~~million ~~and “Total Ounces of Gold Equivalent Sold”, in each case, with respect to the four-week periods ended May 10, 2015 and May 17, 2015 and~~ (2)4.0% ~~the “Total Monthly Ounces~~ of ~~Gold Produced” with respect to~~ the ~~monthly period ended April 30, 2015~~$78.0 ~~Furthermore,~~million ~~the~~commitment ~~Company~~under ~~was required to provide~~ the DIP ~~Credit~~Facility) ~~Agreement~~in ~~lenders with an update to~~ the ~~approved~~form ~~budget~~of ~~on May 7, 2015. Pursuant to~~ the ~~waiver~~new ~~obtained~~second ~~from~~lien ~~the~~convertible ~~lenders~~term onloans ~~May 7~~or, ~~2015,~~subject ~~the requirement for the delivery of the updated budget has been extended~~ to ~~the~~certain ~~earlier~~conditions ofset ~~(a)~~forth ~~May~~in ~~21, 2015 and (b)~~ the ~~date~~Original ofTerm ~~delivery of an update to the approved budget~~Sheet, ~~which~~in ~~update~~cash. ~~to the approved budget shall be reasonably satisfactory to the~~

13The maturity date of the DIP Credit Agreement is March 12, 2016, one year from the March 12, 2015, execution of the DIP Credit Agreement. The DIP Credit Agreement and DIP Facility shall terminate upon the earlier to occur of (a) the date of acceleration of the term loans under the DIP Credit Agreement and the termination of the commitment available under the DIP Facility upon an event of default, (b) the date of consummation of any sale of all or substantially all of the assets of the Company pursuant to Bankruptcy Code section 363, (c) the effective date of the Amended Reorganization Plan and (d) March 12, 2016.

As outlined in the Amended Disclosure Statement the DIP Facility, pursuant to the Amended and Restated Restructuring Support Agreement, is to be satisfied in cash upon the effective date of the Amended Reorganization Plan.

On July 23, 2015, the Debtors obtained an Exit Facility Commitment Letter from the Exit Facility Lenders to secure the financing necessary for the consummation of the Amended Restructuring Transaction contemplated under the Amended and Restated Restructuring Support Agreement and the Amended Reorganization Plan. Pursuant to the Exit Facility Commitment Letter, and subject to the terms and conditions thereof, the Exit Facility Lenders have agreed to the purchase of new second lien convertible debt (the “New Second Lien Convertible Notes”) in the reorganized Company in an amount such that the initial principal amount of the New Second Lien Convertible Notes will not exceed $80 million.

In consideration for the Company’s right to call the commitments of the Exit Facility Lenders to purchase the New Second Lien Convertible Notes, the Company shall be required to make a non-refundable put option payment to the Exit Facility Lenders equal to $5 million (the “Exit Facility Put Option Payment”). The Debtors shall satisfy their obligation to pay

Table of Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~majority DIP lenders. If~~ the ~~Company~~Exit isFacility ~~unable~~Put toOption ~~comply~~Payment ~~with,~~on ~~or obtain a waiver from~~ the ~~majority~~effective ~~DIP~~date ~~lenders~~ of, ~~any of~~ the ~~other~~Amended ~~covenants~~Reorganization ~~contained~~Plan inthrough the ~~DIP~~issuance ~~Credit Agreement, there could be a default under the terms~~ of ~~such~~New ~~agreement,~~Second ~~which~~Lien ~~could~~Convertible ~~result in an acceleration of repayment and prevent the Company from borrowing additional funds under the DIP Credit Agreement~~Notes. The Company is dependent on a financial restructuring to have any possibility to continue as a going concern. If the Company is unable to maintain compliance with the covenants (or obtain waivers for non-compliance) contained in the DIP Credit Agreement the Company’s ability to successfully recapitalize its balance sheet and emerge from bankruptcy significantly decreases and may not be possible.

The ~~Initial~~New ~~Consenting~~Second ~~Noteholders,~~Lien ~~and/or~~Convertible ~~certain~~Notes ~~affiliates,~~will ~~and/or~~mature ~~related~~on ~~funds or vehicles of~~ the ~~Initial~~date ~~Consenting~~that ~~Noteholders~~is ~~have~~5 ~~agreed~~years toafter ~~provide a backstop to~~ the ~~commitments~~effective indate ~~respect~~ of the ~~DIP~~Amended ~~Facility~~Reorganization toPlan ~~the extent there is a shortfall (in such capacity, collectively, the “Backstop DIP Lenders”) in exchange for the put option payments described below~~ and inbear ~~the~~interest ~~Term~~at ~~Sheet. Each of the Backstop DIP Lenders shall receive its pro rata portion of~~ a ~~non-refundable~~rate ~~backstop put option payment~~ of ~~$2.34 million (3.0~~15% ofper ~~the~~annum, ~~$78.0 million commitment under the DIP Facility)~~ payable in ~~the~~kind ~~form~~on ofa ~~the~~quarterly ~~new second lien convertible term loan credit facility described above or, subject to the conditions set forth in the Term Sheet, in cash~~basis.

InThe ~~addition,~~New ~~the~~Second ~~Company~~Lien ~~paid~~Convertible toNotes ~~the~~(including ~~lenders~~all ~~under~~principal ~~the~~(including ~~DIP~~all ~~Facility~~interest athat ~~non-refundable~~has ~~upfront~~been ~~cash~~added ~~put~~to ~~option payment on a pro rata basis in~~ the ~~aggregate~~principal ~~amount~~ of ~~$780,000 (1.0% of~~ the ~~$78.0~~New ~~million~~Second ~~commitment~~Lien ~~under~~Convertible ~~the DIP Facility~~Notes) ~~upon~~and ~~the~~all ~~initial~~accrued ~~funding~~and ofunpaid ~~the~~interest) ~~DIP~~shall ~~Facility~~be onconvertible ~~March~~at ~~12,~~an ~~2015.~~initial ~~The~~conversion ~~Company~~price ~~shall~~that ~~also~~is ~~pay~~equal to ~~lenders under~~ the ~~DIP~~equity ~~Facility~~value of a ~~non-refundable~~share ~~upfront~~of ~~put~~new ~~option~~common ~~payment~~stock ~~payable~~as inof the ~~aggregate~~effective ~~amount~~date of ~~$3.12 million (4.0% of~~ the ~~$78.0~~Amended ~~million~~Reorganization ~~commitment~~Plan, ~~under~~as ~~the~~determined ~~DIP~~by ~~Facility) in~~ the ~~form~~Company ofand the ~~new~~Exit ~~second~~Facility ~~lien convertible term loans or~~Lenders, subject to ~~certain~~anti-dilution ~~conditions set forth in the Term Sheet, in cash~~protection.

~~The~~At ~~maturity~~any ~~date~~time ofand ~~the~~from ~~DIP~~time ~~Credit~~to ~~Agreement~~time, iseach ~~March~~holder ~~12,~~of ~~2016,~~New ~~one~~Second ~~year~~Lien ~~from~~Convertible Notes shall have the ~~March~~right ~~12,~~to ~~2016,~~convert ~~execution~~all or any portion of the ~~DIP~~New ~~Credit~~Second ~~Agreement.~~Lien ~~The~~Convertible ~~DIP~~Notes ~~Credit~~(including ~~Agreement~~all ~~and~~principal ~~DIP~~(including ~~Facility~~all ~~shall~~interest ~~terminate~~that ~~upon~~has ~~the~~been ~~earlier~~added to ~~occur~~the principal of ~~(a)~~ the ~~date~~New ofSecond ~~acceleration~~Lien ofConvertible ~~the~~Notes) ~~term~~and ~~loans~~all ~~under~~accrued ~~the~~and ~~DIP~~unpaid ~~Credit~~interest) ~~Agreement~~at ~~and~~such ~~the~~holder’s ~~termination~~option ofinto ~~the~~a ~~commitment~~number ~~available~~of ~~under~~shares ~~the~~of ~~DIP~~new ~~Facility~~common ~~upon~~stock anequal ~~event~~to the amount of ~~default,~~New ~~(b)~~Second ~~the~~Lien ~~date~~Convertible ofNotes ~~consummation~~being ofconverted ~~any~~by ~~sale~~such ofholder (including all orprincipal ~~substantially~~(including all ofinterest that has been added to the ~~assets~~principal of the ~~Company~~New ~~pursuant~~Second toLien ~~Bankruptcy~~Convertible ~~Code~~Notes) ~~section~~and ~~363,~~all ~~(c)~~accrued ~~the~~and ~~effective~~unpaid ~~date~~interest ofbeing ~~the~~converted), ~~Reorganization~~divided ~~Plan~~by ~~and~~the ~~(d)~~conversion ~~March~~price ~~12,~~then ~~2016~~in effect.

AsIf ~~outlined~~(a) inany ~~the~~Debtor ~~Disclosure~~enters ~~Statement, the DIP Facility will convert~~ into ~~exit~~an ~~financing~~agreement on(including, ~~the~~without ~~effective~~limitation, ~~date~~any ofagreement ~~the~~in ~~Reorganization~~principle, ~~Plan~~letter ~~through an exchange~~ of ~~the~~intent, ~~amount~~memorandum of ~~claims~~understanding ~~under~~or ~~the~~definitive ~~DIP~~agreement) ~~Facility~~with inrespect ~~excess~~to ofany ~~$25.0~~alternative ~~million~~transaction, ~~plus~~(b) the ~~amount~~Bankruptcy byCourt ~~which~~approves ~~the~~or ~~$25.0~~authorizes ~~million~~any ~~exceeds~~alternative ~~the~~transaction ~~deemed~~with ~~value~~respect ofto ~~25%~~any of the ~~new~~Debtors ~~common~~or ~~stock~~(c) ~~issued~~any ~~and~~Debtor ~~outstanding~~consummates onany ~~the~~alternative ~~effective~~transaction, ~~date~~in ofany ~~the~~such ~~Reorganization~~case ~~Plan~~described asin ~~per~~clause ~~the~~(a), ~~terms~~clause of(b) ~~the~~or ~~Reorganization~~clause ~~Plan~~ (~~the~~c) ~~“Excess~~of ~~DIP~~this ~~Facility~~paragraph, ~~Claim~~at ~~Amount”)~~any totime ~~post-emergence~~(x) ~~indebtedness.~~prior ~~Specifically,~~to on the ~~effective~~termination ~~date~~ of the ~~Reorganization~~Exit ~~Plan,~~Facility ~~the~~Commitment ~~Company~~Letter ~~will~~in ~~enter~~accordance ~~into~~with the ~~new~~terms ~~second~~thereof ~~lien~~or ~~convertible~~(y) ~~term~~within ~~loan~~twelve ~~credit~~(12) ~~facility~~months ~~pursuant~~following ~~to which~~ the ~~new~~termination ~~second~~of ~~lien~~the ~~convertible~~Exit ~~term~~Facility ~~loans~~Commitment ~~will~~Letter, bethen ~~incurred~~the inDebtors anwill ~~original~~pay ~~aggregate principal amount equal~~ to the ~~Excess~~Exit ~~DIP~~ Facility ~~Claim~~Lenders ~~Amount. The~~liquidated ~~remaining~~damages ~~$25.0~~in ~~million~~cash in ~~DIP Facility Claims will be converted into 25% of new common stock to be issued on~~ the ~~effective~~aggregate ~~date~~amount of ~~the~~$3 ~~Reorganization Plan~~million.

The Exit Facility Commitment Letter may be terminated upon the occurrence of certain events and certain breaches by the parties under the Exit Facility Commitment Letter.

Debt Covenants

In addition to those which are contained in the DIP Credit Agreement (discussed above), the Company’s ~~remaining~~ debt agreements entered into prior to the Petition Date (collectively the “Pre-Petition Debt Agreements”) contain representations and warranties, events of default, and covenants that are customary for agreements of such types. ~~Excluding~~The ~~the DIP Credit Agreement, the~~ Company’s ~~remaining~~Pre-Petition ~~debt~~Debt ~~agreements~~Agreements contain cross-default and cross-acceleration clauses, which ~~means~~mean that an event of default or covenant violation under any of the Company’s debt agreements may result in the acceleration of substantially all of its outstanding debt. The commencement of the Chapter 11 Cases discussed in Note 3 - Chapter 11 Bankruptcy Filing constituted an event of default under the Company’s ~~debt~~Pre-Petition ~~agreements~~Debt ~~(excluding~~Agreements ~~the DIP Credit Agreement)~~ and, accordingly, as of ~~March~~June 3130, 2015 and December 31, 2014, the Company ~~had~~has classified its debt balances within Debt, current and Liabilities subject to compromise.

14Debt Balances

The following table summarizes the components of debt (in thousands):



Description	Stated Maturity	June 30, 2015			December 31, 2014
Debt, current:
Capital lease and term loan obligations	2015 to December 2020	$	6,593		$	146,489	⁽¹⁾
Revolving Credit Agreement	April 2016	64,950			31,000
DIP Credit Agreement	Variable - See terms above	50,706			—
8.75% Senior Notes⁽²⁾	June 2019	—			344,800
Term and Security Deposit loan	2015 to March 2022	—			17,974		⁽³⁾
		$	122,249		$	540,263
Liabilities subject to compromise:
8.75% Senior Notes⁽²⁾	June 2019	$	316,640		$	—
Capital lease and term loan obligations	2015 to March 2022	118,984			—
Term and Security Deposit Loan	2015 to March 2022	17,974		⁽³⁾	—
		$	453,598		$	—
⁽¹⁾ Includes borrowings of $10.2 million as of December 31, 2014 for mine equipment included in Assets held for sale.
⁽²⁾ Prior to the event of default, effective interest rate of 8.375% after cross currency swap. See Note 20 - Derivative Instruments for additional detail.
⁽³⁾ Entire borrowing is attributable to the third rope shovel.

Table of Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Debt Balances

The following table summarizes the components of debt (in thousands):

Description	Stated Maturity	March 31, 2015			December 31, 2014
Debt, current:
Capital lease and term loan obligations	2015 to December 2020	$	136,504	(1)	$	146,489	(1)
Revolving Credit Agreement	April 2016	64,950			31,000
DIP Credit Agreement	Variable - See terms above	35,111			—
8.75% Senior Notes (3)	June 2019	—			344,800
Term and Security Deposit loan	2015 to March 2022	—			17,974		(2)
		$	236,565		$	540,263
Liabilities subject to compromise:
8.75% Senior Notes (3)	June 2019	$	316,640		$	—
Term and Security Deposit loan	2015 to March 2022	17,974		(2)	—
		$	334,614		$	—
(1) Includes borrowings of $9.4 million and $10.2 million as of March 31, 2015 and December 31, 2014, respectively, for mine equipment included in Assets held for sale.
(2) Entire borrowing is attributable to the third rope shovel which is included in Assets held for sale.
(3) Prior to the event of default, effective interest rate of 8.375% after cross currency swap. See Note 19 - Derivative Instruments for additional detail.

Debt, Current

Revolving Credit Agreement

In May 2014, the Company entered into the Revolver which amended and restated the December 2013 Second Amended and Restated Credit Agreement (the “Previous Revolver”). The Revolver was collateralized by substantially all of the Company’s assets and, as such, this balance is excluded from Liabilities subject to compromise. Prior amounts available to the Company under the Revolver were determined by a Borrowing Base (as defined in the Revolver) that made up to $75.0 million available to the Company depending upon 80% of the net realizable value of the gold and silver in the Company’s ore on leach pads, in-process, and finished goods inventories less estimated remaining processing and selling costs. As of ~~March~~June 3130, 2015, the Revolver balance was $65.0 million, which resulted from the full $75.0 million of capacity being drawn or committed through letters of credit as of the Petition Date and subsequently reduced by the $10.0 million in restricted cash collateral held (and realized) by the lenders to the Revolver (as discussed in Note 89 - Restricted Cash).

Borrowings under the Revolver bear interest per annum at either LIBOR plus 4.5% or at an Alternate Base Rate, as defined in the Revolver, plus 3.5%. Financial letters of credit and non-financial letters of credit bear interest per annum at 4.50% and 2.70%, respectively.

In December 2013, when the Company entered into the Previous Revolver, which amended and restated the October 2012 Amended and Restated Credit Agreement (the “2012 Revolver”), two lenders under the 2012 Revolver exited the credit facility. These two lenders were holders of a portion of the Notes cross currency swap which, in December 2013, ceased being collateralized by the security they held as lenders to the 2012 Revolver. As a result, the Company was required to fully collateralize any mark-to-market liability position for 22% of the cross currency swap, which was the portion held by these two lenders, with cash, letters of credit, or a combination of the two. As of the Petition Date, the Company had remitted $3.6 million of cash and issued $18.5 million of financial letters of credit to collateralize the mark-to-market liability position of 22% of the cross currency swap which was realized by counterparties as discussed in Note 3 - Chapter 11 Bankruptcy Filing and Note 1920 - Derivative Instruments.

15Debt Subject to Compromise

Capital Lease and Term Loan Obligations

The Company’s capital lease and term loan obligations are for the purchase of mining equipment, bear interest at rates between 4% - 7% per annum, and primarily carry 60 - 84-month terms.

As discussed in Note 3 - Chapter 11 Bankruptcy Filing, the Company ceased paying principal and interest on the Delinquent Capital Leases after June 28, 2015 and does not expect to make further payments during the Chapter 11 Cases on these obligations. As there is uncertainty surrounding the value that a third-party may attribute to the underlying security on these Delinquent Capital Leases, they have been classified as Liabilities subject to compromise. The Company continues to make payments on a few of the capital lease obligations, including three dozers, two graders, and an excavator (the “Current Lease Obligations”) and intends to continue to do so. The Current Lease Obligations are classified as Debt - current. The following is a summary of the stated scheduled future minimum payments under both the Delinquent Capital Leases and the Current Lease Obligations as of June 30, 2015 (in thousands):



	Minimum Lease Payments
Fiscal Year	Current Lease Obligations			Delinquent Capital Leases
2015	$	2,334		$	31,724
2016	3,453			40,404
2017	1,147			31,844
2018	—			11,898
2019	—			8,578
Thereafter	—			6,673
Less: interest	(341		)	(12,137		)
Net minimum capital lease payments	6,593			118,984

Senior Notes

Table of Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

the interest rate at 8.375% prior to the event of default and early termination of the cross currency swap described in Note 20 - Derivative Instruments. The Notes balance was $316.6 million based upon the U.S. dollar to Canadian dollar exchange rate on the Petition Date, decreasing from the December ~~Capital~~31, ~~Lease~~2014 balance of $344.8 million which resulted in a $28.2 million gain (included in Other, net) during the six months ended June 30, 2015. The Notes, which are unsecured, are guaranteed by most of the Company’s currently wholly-owned subsidiaries, including Hycroft Resources & Development Inc., which owns the Hycroft Mine and ~~Term~~produces ~~Loan~~gold ~~Obligations~~and silver, and are included within Liabilities subject to compromise.

The Company’s capital lease and term loan obligations are for the purchase of mining equipment, bear interest at rates between 4% - 7% per annum, and primarily carry 60 - 84-month terms. Capital lease and term loan obligations are secured by the underlying financed equipment and are not expected to be compromised and, as such, are excluded from Liabilities subject to compromise. The following is a summary of the stated scheduled future minimum payments under the Company’s capital lease and term loan obligations as of March 31, 2015 (in thousands):

Fiscal Year	Minimum LeasePayments
2015	$	44,985		(1)
2016	43,857
2017	32,991
2018	11,898
2019	8,578
Thereafter	6,673
Less: interest	(12,478		)
Net minimum capital lease payments	136,504
(1) Includes principal of $9.4 million for mine equipment included in Assets held for sale.

Debt Subject to Compromise

Senior Notes

In May 2012, the Company issued CDN $400.0 million of uncollateralized Notes which pay interest semi-annually at the rate of 8.75% per annum. Concurrent with the issuance of the Notes, the Company entered into a cross currency swap agreement based upon a notional amount of $400.4 million (the gross proceeds to the Company from the issuance) which fixed the interest rate at 8.375% prior to the event of default and early termination of the cross currency swap described in Note 19 - Derivative Instruments. The Notes balance was $316.6 million based upon the U.S. dollar to Canadian dollar exchange rate on the Petition Date, decreasing from the December 31, 2014 balance of $344.8 million which resulted in a $28.2 million gain (included in Other, net) during the three months ended March 31, 2015. The Notes, which are unsecured, are guaranteed by most of the Company’s currently wholly-owned subsidiaries, including Hycroft Resources & Development Inc., which owns the Hycroft Mine and conducts mining operations, and are included within Liabilities subject to compromise.

Term and Security Deposit Loan Agreement

In March 2013, the Company entered into a Term and Security Deposit Loan Agreement (the “Loan Agreement”) related to the purchase of three electric rope shovels. Under the Loan Agreement, the Company was made available up to $60.0 million ($20.0 million for each shovel) for scheduled advance security deposit payments pursuant to purchase agreements for the electric rope shovels and up to $90.0 million ($30.0 million for each shovel) in term loan financing to fund the purchase of the electric rope shovels once commissioned at the Hycroft Mine. Under the Loan Agreement, as electric rope shovels were commissioned, amounts previously advanced to the Company for security deposits, together with the remaining purchase price of each electric rope shovel, were converted to term loan obligations. During 2013, the Company commissioned two (of the three) electric rope shovels and, as such, amounts borrowed for these two shovels are included in capital lease and term loan obligations. Advances for security deposits under the Loan Agreement bear an interest rate determined by an applicable rate plus the three month LIBOR, which approximated 4.7% at ~~March~~June 3130, 2015, although the Company ceased recording interest on this obligation on the Petition Date, as noted below. The two executed term loan obligations for the commissioned shovels carry seven year terms and bear interest at a fixed rate of approximately 5.7%.

The $18.0 million of outstanding principal for the Loan Agreement relates to advances for the purchase of the third electric rope shovel (which is included in ~~Assets~~Plant, ~~held~~Equipment, ~~for~~and ~~sale~~Mine Development, Net). Although borrowings under the Loan Agreement are secured by the third electric rope shovel, the Company (1) believes the value ofattributable by a third-party to the third electric rope shovel may be less than the outstanding principal and accrued interest of $1.6 million (which indicates this liability is under-secured) and (2) expects to compromise on this agreement during the bankruptcy process and, accordingly, this obligation is included within Liabilities subject to compromise.

Interest Expense and Interest Payable

Effective as of the Petition Date, the Company ceased recording interest expense on certain outstanding pre-petition debt classified within Liabilities subject to compromise as interest owed after the Petition Date on such obligations is not expected to be paid during the Chapter 11 Cases and is not expected to be an allowed claim. During each of the three and six months ended ~~March~~June 3130, 2015, contractual interest expense which would have been accrued absent the Chapter 11 Cases, but has not been recorded in these Condensed Consolidated Financial Statements, totaled approximately $8.4 million and $10.5 million for the Notes and $0.3 million and $0.4 million for the Loan Agreement (for the third electric rope shovel), respectively. The following table summarizes the components of recorded interest expense (in thousands):



	Three months ended June 30,					Six months ended June 30,
	2015		2014			2015		2014
8.75% Senior Notes⁽¹⁾	$	—	$	8,360		$	4,667	$	16,629
Capital lease and term loan obligations	1,644		2,275			3,290		3,819
DIP Credit Agreement interest and issuance costs	1,190		—			2,242		—
Revolver interest and standby fees	728		313			1,425		516
Amortization of debt issuance costs	226		675			815		1,308
Term and Security Deposit loan	—		224			177		445
Other interest expense	580		123			625		282
Capitalized interest	—		(641		)	—		(5,883		)
	$	4,368	$	11,329		$	13,241	$	17,116
⁽¹⁾Prior to the event of default, effective interest rate of 8.375% after cross currency swap. See Note 20 - Derivative Instruments for additional detail.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

these Condensed Consolidated Financial Statements, totaled approximately $2.1 million for the Notes and $0.1 million for the Loan Agreement (for the third electric rope shovel). The following table summarizes the components of recorded interest expense (in thousands):

	Three months ended March 31,
	2015		2014
8.75% Senior Notes(1)	$	4,667	$	8,268
Capital lease and term loan obligations	1,646		1,544
DIP Credit Agreement interest and issuance costs	1,052		—
Revolver interest and standby fees	697		204
Amortization of debt issuance costs	589		632
Term and Security Deposit loan	177		221
Other interest expense	45		160
Capitalized interest	—		(5,242		)
	$	8,873	$	5,787
(1) Prior to the event of default, effective interest rate of 8.375% after cross currency swap. See Note 19 - Derivative Instruments for additional detail.

The following table summarizes the components of interest payable (in thousands):

Description	~~March~~June 3130, 2015
Interest payable:
Revolving Credit Agreement	$	~~461~~801
Liabilities subject to compromise:
8.75% Senior Notes	$	7,515
Term and Security Deposit loan	1,621
	$	9,136

1213. Revenue

The table below is a summary of the Company’s gold and silver revenue (in thousands, except ounces sold):

	Three months ended March 31,
	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
	Amount		Ounces sold	Amount		Ounces sold	Amount		Ounces sold	Amount		Ounces sold
Gold revenue	$	5036,~~826~~437	4130,~~843~~714	$	7773,~~234~~713	5957,~~470~~050	$	87,263	72,557	$	150,946	116,520
Silver revenue	43,~~419~~547		~~265~~218,~~881~~169	89,~~291~~410		~~406~~474,~~234~~832	7,966		484,050	17,702		881,066
	$	5539,~~245~~984		$	8583,~~525~~123		$	95,229		$	168,648

1314. Other, Net

The table below is a summary of the Company’s other income and expense (in thousands):

	Three months ended March 31,
	Three months ended June 30,							Six months ended June 30,
	2015				2014			2015				2014
Foreign currency transaction gain on Notes - Note 11	$	28,160			$	14,200
Foreign currency transaction gain (loss) on Notes - Note 12	$	—			$	(12,800	)	$	28,160			1,400
Reclassification of loss into earnings from Accumulated other comprehensive income for cross currency swap - Note 19	—				(14,200		)
Reclassification of gain (loss) into earnings from Accumulated other comprehensive income for cross currency swap - Note 20	—				12,800			—				(1,400		)
Change in fair value of cross currency swap through the Petition Date - Note 19	21,969				—
Change in fair value of cross currency swap through the Petition Date - Note 20	—				—			21,969				—
Loss on diesel swap settlements	~~(1,137~~—		)		—			(1,137		)		—
Other	~~(77~~1,142		)	(1)	14(52		)	1,065			(1)	(38		)
	$	481,~~915~~142			$	14(52	)	$	50,057			$	(38	)
(1) Includes deferred revenue from advanced minimum royalties, which was recognized as income upon sale of properties.

1715. Income Taxes

For the six months ended June 30, 2015, the Company recorded income tax benefit of nil which was the result of applying an estimated annual effective tax rate of approximately 0.0% to $257.8 million Loss before income taxes. The estimated annual effective tax rate varied from the United States statutory rate of 35% primarily as a result of an expected increase to the Company’s full valuation allowance related to current year results.

For the six months ended June 30, 2014, the Company recorded income tax expense of approximately $3.4 million which included $2.8 million of income tax expense from income taxed at the estimated annual effective rate of approximately 33.9% and $0.6 million of additional income tax expense for discrete items related to stock-based compensation that were recognized as incurred.

Historically, the Company has not been subject to state or foreign income taxes as all of the Company’s operations and properties are located within Nevada, which does not impose a state income tax. As necessary, the Company provides a reserve against the benefits of uncertain tax positions taken in its tax filings that are not more likely than not to be sustained upon examination. Based on the weight of available evidence, the Company does not believe it has taken any uncertain tax positions that require the establishment of a reserve. The Company has not recorded any interest or penalties related to income tax liabilities as of June 30, 2015.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

1416. (Loss) Income ~~Taxes~~Per Share

For the three months ended March 31, 2015, the Company recorded income tax benefit of nil which was the result of applying an estimated annual effective tax rate of approximately 0.0% to $108.5 million Loss before income taxes. The estimated annual effective tax rate varied from the United States statutory rate of 35% primarily as a result of an expected increase to the Company’s full valuation allowance related to current year results.

For the three months ended March 31, 2014, the Company recorded income tax expense of approximately $1.0 million which included $0.5 million of income tax expense from income taxed at the estimated annual effective rate of approximately 34.7% and $0.5 million of additional income tax expense for discrete items related to stock-based compensation that were recognized as incurred.

15. (Loss) Income Per Share

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

	Three months ended March 31,
	Three months ended June 30,					Six months ended June 30,
	2015			2014		2015			2014
Net (loss) income available to common stockholders:	$	(~~108~~257,~~474~~849	)	$	~~332~~4,376	$	(366,323	)	$	4,708
Weighted average common shares:
Basic	~~126~~127,~~709~~168			104,~~563~~765		126,939			104,665
Effect of shares granted under the:
Restricted Share Unit Plan	—			1,~~540~~480		—			1,661
Deferred Phantom Unit Plan	—			248		—			248
Deferred Share Unit Plan	—			~~134~~299		—			217
2007 Stock Option Plan	—			66—		—			—
Diluted	126,709			106,551
Performance and Incentive Pay Plan	—			236		—			118
(Loss) income per share:
Diluted	127,168			107,028		126,939			106,909
Basic	$	(0.86	)	$	—
(Loss) income per share:
Diluted	$	(0.86	)	$	—
Basic	$	(2.03	)	$	0.04	$	(2.89	)	$	0.04
Diluted	$	(2.03	)	$	0.04	$	(2.89	)	$	0.04

During the three and six months ended ~~March~~June 3130, 2015, the Company’s basic average common shares and diluted average common shares were the same because the ~~effects~~effect of potential shares of common stock was anti-dilutive due to the Company’s net loss. Had the Company generated net income, during the three and six months ended ~~March~~June 3130, 2015, the effects from 10,875,000 warrants, 1863,~~083,421~~552 restricted share units, 380,560 deferred share units, and 248,136 deferred phantom units would have been included in the diluted average common shares calculation.

1617. Stock-Based Compensation

As of ~~March~~June 3130, 2015, the Company was permitted to grant awards under the Deferred Phantom Unit Plan, the Deferred Share Unit Plan, and the Performance and Incentive Pay Plan. The Company is no longer permitted to grant awards under the Restricted Share Unit Plan or the 2007 Stock Option Plan.

The following tables summarize the Company’s stock-based compensation cost and unrecognized stock-based compensation cost by plan (in thousands):



	Three months ended June 30,				Six months ended June 30,
Stock-based compensation cost by plan	2015		2014		2015		2014
Restricted Share Unit	$	370	$	1,369	$	1,874	$	2,717
Performance and Incentive Pay	40		65		81		65
Deferred Share Unit	—		200		200		462
	$	410	$	1,634	$	2,155	$	3,244

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	June 30,
Unrecognized stock-based compensation cost by plan	2015		2014
Restricted Share Unit	$	4,389	$	10,675
Performance and Incentive Pay	448		1,084
Deferred Share Unit	—		600
	$	4,837	$	12,359

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Three months ended March 31,
Stock-based compensation cost by plan	2015		2014
Restricted Share Unit	$	1,504	$	1,348
Performance and Incentive Pay	41		—
Deferred Share Unit	200		262
	$	1,745	$	1,610

	March 31,
Unrecognized stock-based compensation cost by plan	2015		2014
Restricted Share Unit	$	4,759	$	12,163
Performance and Incentive Pay	488		—
	$	5,247	$	12,163

The following table summarizes activity of the Company’s stock-based compensation plans:

	Three months ended March 31, 2015
	RestrictedShare Unit		Performance and Incentive Pay		DeferredShare Unit	2007 StockOption	DeferredPhantom Unit
Outstanding on January 1,	2,021,081		302,871		380,560	500,000	248,136
Canceled/forfeited	(236,776	)	(64,654	)	—	—	—
Outstanding, end of period	1,784,305		238,217		380,560	500,000	248,136
Vested and unissued/exercisable, end of period	852,157		86,944		380,560	500,000	248,136

17. Warrants

In December 2014, the Company completed a public offering which included the sale of 10,875,000 warrants to purchase shares of common stock. The warrants contain a “down-round” provision, which means that any new issuances of common stock (or securities convertible into common stock) at a price, exercise price, or conversion price below the then current exercise price of the warrants ($1.10 per share at March 31, 2015) will result in the exercise price of the warrants being reduced to match the price, exercise price or conversion price of such new issuance of common stock (or securities convertible into common stock). The down-round provision precludes the warrants from being considered indexed to the Company’s own stock; thus, the warrants do not qualify for a scope exception from derivative accounting. Accordingly, the Company’s outstanding warrants are accounted for as derivative instruments and recorded as assets or liabilities at fair value with periodic changes in fair value included in Other, net.

As a result of the Company’s filing of the Chapter 11 Cases (discussed in Note 3 - Chapter 11 Bankruptcy Filing), it is not expected that the warrants will be exercisable which resulted in their value being reduced to zero. The following table summarizes activity of the Company’s warrant liability and warrants (in thousands, except warrants):

	Three months ended March 31, 2015
	Amount			Warrants
Balance, beginning of year	$	4,644		10,875,000
Change in fair value included in Reorganization items, net - Note 3	(4,644		)	—
Balance, end of year	$	—		10,875,000

Refer to Note 18 - Fair Value Measurements for additional information on the Company’s warrants.

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

18. Fair Value Measurements



	Six months ended June 30, 2015
	Restricted Share Unit		Performance and Incentive Pay		Deferred Share Unit	2007 Stock Option	Deferred Phantom Unit
Outstanding on January 1,	2,021,081		302,871		380,560	500,000	248,136
Canceled/forfeited	(293,203	)	(130,596	)	—	—	—
Outstanding, end of period	1,727,878		172,275		380,560	500,000	248,136
Vested and unissued/exercisable, end of period	949,657		86,944		380,560	500,000	248,136

18. Warrants

In December 2014, the Company completed a public offering which included the sale of 10,875,000 warrants to purchase shares of common stock. The warrants contain a “down-round” provision, which means that any new issuances of common stock (or securities convertible into common stock) at a price, exercise price, or conversion price below the then current exercise price of the warrants ($1.10 per share at June 30, 2015) will result in the exercise price of the warrants being reduced to match the price, exercise price or conversion price of such new issuance of common stock (or securities convertible into common stock). The down-round provision precludes the warrants from being considered indexed to the Company’s own stock; thus, the warrants do not qualify for a scope exception from derivative accounting. Accordingly, the Company’s outstanding warrants are accounted for as derivative instruments and recorded as assets or liabilities at fair value with periodic changes in fair value included in Other, net.



	Six months ended June 30, 2015
	Amount			Warrants
Balance, beginning of year	$	4,644		10,875,000
Change in fair value included in Reorganization items, net - Note 3	(4,644		)	—
Balance, end of year	$	—		10,875,000

Refer to Note 19 - Fair Value Measurements for additional information on the Company’s warrants.

19. Fair Value Measurements

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. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis;

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; and

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).

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including cash and equivalents, accounts receivable, prepaids and other, accounts payable, and other liabilities, are carried at cost, which approximates fair value due to the short-term nature of these instruments. There were no changes to the Company’s valuation techniques ~~and no transfers in or out of Levels 2 or 3~~ during the three and six months ended ~~March~~June 3130, 2015.

Table of Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

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).

Assets	~~March~~June 3130, 2015		December 31, 2014		Input HierarchyLevel
Assets held for sale:
Mine equipment - Note 7	$	423,~~083~~162	$	42,083	Level 2
Single family homes - Note 7	~~2,275~~—		2,275		Level 2
Mineral properties - Note 7	17,500		—		Level 3
	$	3,162	$	44,358
	$	61,858	$	44,358
Liabilities
Derivative instruments:
Cross currency swap - Note 19	$	—	$	43,389	Level 2
Cross currency swap - Note 20	$	—	$	43,389	Level 2
Diesel swaps - Note 19	—		4,644		Level 2
Diesel swaps - Note 20	—		4,644		Level 2
Warrant liability - Notes 17 and 19	—		5,612		Level 2
Warrant liability - Notes 18 and 20	—		5,612		Level 2
	$	—	$	53,645

Assets Held For Sale

The Company’s mine equipment and single family homes are valued using a market approach for each asset held for sale. Inputs include quoted market prices for identical or similar assets in markets that are not active and, as such, mine equipment and single family homes held for sale are classified within Level 2 of the fair value hierarchy. The Company’s mineral properties are valued based upon on the Stalking Horse Purchase Agreement discussed in Note 3 - Chapter 11 Bankruptcy Filing, which is a significant and unobservable input (and the sole input) in determining the estimated fair value of the mineral properties and is specific to the actual characteristics of the mineral properties held by the Company. Accordingly, mineral properties are classified within Level 3 of the fair value hierarchy. Since the Company’s mineral properties were initially classified as held for sale during the three months ended March 31, 2015, there are no changes to the mineral properties fair value from the initial estimate. Periodic changes in fair value (less costs to sell) to assets held for sale are included in Loss on assets classified as held for sale and asset dispositions, net.

Derivative Instruments

As discussed in Note 1920 - Derivative Instruments, the Company’s cross currency swap and diesel swaps are no longer carried at fair value and are included in Other liabilities, current and Liabilities subject to compromise at the remaining close-out amounts due. As discussed in Note 1718 - Warrants, as a result of the Company’s filing of the Chapter 11 Cases (discussed in Note 3 - Chapter 11 Bankruptcy Filing), it is not expected that the warrants will be exercisable which resulted in their value being reduced to zero. Prior to the filing of the Chapter 11 Cases, as of December 31, 2014, the fair value of the Company’s warrant liability was determined using a Monte Carlo simulation-based valuation model, which incorporated the down-round provision.

20. Derivative Instruments

The Company had previously entered into diesel swaps to fix a portion of its diesel consumption and a cross currency swap concurrent with the issuance of the Notes. The notional value of the cross currency swap was $400.4 million and the interest rate was fixed at 8.375% prior to the event of default (compared to the underlying hedged transaction of CDN $400.0 million of debt at 8.75%).

Derivative Instruments Carrying Values and Fair Values

The following table is a summary of the carrying values (as of June 30, 2015) and fair values (as of December 31, 2014) of the Company’s derivative instruments and the location in which they are recorded (in thousands):



	June 30, 2015						December 31, 2014
	Other liabilities, current		Liabilities subject to compromise		Total		Other liabilities, current		Other liabilities, non-current		Total
Cross currency swap	$	80,624	$	891	$	81,515	$	3,016	$	40,373	$	43,389
Diesel swaps	5,683		—		5,683		5,612		—		5,612
Warrant liability - Note 18	—		—		—		—		4,644		4,644
	$	86,307	$	891	$	87,198	$	8,628	$	45,017	$	53,645

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~being~~The ~~reduced~~filing toof ~~zero. Prior~~the toChapter ~~the~~11 ~~filing~~Cases ofdiscussed ~~the~~in Note 3 - Chapter 11 ~~Cases,~~Bankruptcy Filing constituted an event of default under each of the diesel and cross currency swap agreements. The amounts shown as of ~~December 31,~~June ~~2014~~30, 2015 represent the remaining close-out amounts due for these pre-petition financial instruments determined as of the Petition Date as such financial instruments will no longer be adjusted to fair value ofat the ~~Company’s~~end ~~warrant~~of ~~liability~~each ~~was~~reporting ~~determined~~period. The ~~using~~$86.3 million included in Other liabilities, current is owed to a ~~Monte~~secured ~~Carlo~~counterparty ~~simulation-based~~whereas ~~valuation~~the ~~model,~~$0.9 million included in Liabilities subject to compromise is the remaining amount owed to unsecured counterparties following their redemption of $18.5 million of letters of credit and $3.6 million of cash held by them which ~~incorporated~~collateralized a portion of the ~~down~~Company’s cross currency swap liability position (as further discussed in Note 12 -~~round~~ ~~provision~~Debt).

19. Derivative Instruments

Derivative Instruments Carrying Values and Fair Values

The following table is a summary of the carrying values (as of March 31, 2015) and fair values (as of December 31, 2014) of the Company’s derivative instruments and the location in which they are recorded (in thousands):

	March 31, 2015						December 31, 2014
	Other liabilities,current		Liabilities subject to compromise		Total		Other liabilities,current		Other liabilities,non-current		Total
Cross currency swap	$	80,624	$	891	$	81,515	$	3,016	$	40,373	$	43,389
Diesel swaps	5,683		—		5,683		5,612		—		5,612
Warrant liability - Note 17	—		—		—		—		4,644		4,644
	$	86,307	$	891	$	87,198	$	8,628	$	45,017	$	53,645

The filing of the Chapter 11 Cases discussed in Note 3 - Chapter 11 Bankruptcy Filing constituted an event of default under each of the diesel and cross currency swap agreements. The amounts shown as of March 31, 2015 represent the remaining close-out amounts due for these pre-petition financial instruments determined as of the Petition Date as such financial instruments will no longer be adjusted to fair value at the end of each reporting period. The $86.3 million included in Other liabilities, current is owed to a secured counterparty whereas the $0.9 million included in Liabilities subject to compromise is the remaining amount owed to unsecured counterparties following their redemption of$18.5 million of letters of credit and $3.6 million of cash held by them which collateralized a portion of the Company’s cross currency swap liability position (as further discussed in Note 11 - Debt).

The roll forward below provides additional detail for the Company’s cross currency swap and diesel swap liabilities, including the location in which changes in fair value and losses were recorded to (in thousands):

	Three months ended March 31, 2015
	Six months ended June 30, 2015
	Cross CurrencySwap			Diesel SwapAgreements			Total
Balance, beginning of period	$	43,389		$	5,612		$	49,001
Change in fair value through the Petition Date included in Other, net	(21,969		)	—			(21,969		)
Change in fair value resulting from the filing of the Chapter 11 Cases included in Reorganization items, net	82,175			(415		)	81,760
Unpaid losses on diesel swap settlements included in Other, net	—			486			486
Collateral redeemed by unsecured counterparties	(22,080		)	—			(22,080		)
Balance, end of period	$	81,515		$	5,683		$	87,198

During the ~~three~~six months ended ~~March~~June 3130, 2015, the $22.0 million gain from the change in fair value of the cross currency swap resulted from an increase in the credit default swap input used to value this financial instrument (which more than offset the decrease in the CDN$:US$ exchange rate).

Derivative Instruments No Longer Designated as Cash Flow Hedges

Due to the Chapter 11 Cases discussed in Note 3 - Chapter 11 Bankruptcy Filing, as of December 31, 2014, the Company determined it was improbable that the hedged forecasted transactions underlying its existing diesel swaps and cross currency swap would occur and discontinued hedge accounting for its derivative instruments previously designated as cash flow hedges. Accordingly, as of December 31, 2014, no amounts remained deferred in Accumulated other comprehensive income (loss).

21The following table sets forth changes in Accumulated other comprehensive income (loss) and the impacts that the previously designated cash flow hedges had on the Company’s earnings during the six months ended June 30, 2014 (in thousands):



	Six months ended June 30, 2014
	Cross Currency Swap			Diesel Swap Agreements			Tax Effects			Total
Balance, beginning of period	$	1,920		$	653		$	(899	)	$	1,674
Change in fair value of effective portion of unsettled cash flow hedge instruments	1,300			—			(455		)	845
Settlements of cash flow hedges	(2,070		)	—			725			(1,345		)
Reclassifications into earnings when underlying hedged transactions impacted earnings:
Reclassified to Interest expense	670			—			(235		)	435
Reclassified to Other, net	1,400			—			(490		)	910
Reclassified to Production costs	—			(359		)	126			(233		)
Balance, end of period	$	3,220		$	294		$	(1,228	)	$	2,286

Table of Contents

ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

~~The~~21. ~~following~~Segment table sets forth changes in Accumulated other comprehensive income (loss) and the impacts that the previously designated cash flow hedges had on the Company’s earnings during the three months ended March 31, 2014 (in thousands): Information

	Three months ended March 31, 2014
	Cross CurrencySwap			Diesel SwapAgreements			TaxEffects			Total
Balance, beginning of period	$	1,920		$	653		$	(899	)	$	1,674
Change in fair value of effective portion of unsettled cash flow hedge instruments	3,230			—			(1,131		)	2,099
Settlements of cash flow hedges	(14,766		)	—			5,168			(9,598		)
Reclassifications into earnings when underlying hedged transactions impacted earnings:
Reclassified to Interest expense	566			—			(198		)	368
Reclassified to Other, net	14,200			—			(4,970		)	9,230
Reclassified to Production costs	—			(185		)	65			(120		)
Balance, end of period	$	5,150		$	468		$	(1,965	)	$	3,653

The Company is engaged in the operation of the Hycroft Mine and the evaluation, exploration, and advancement of gold exploration and development projects in Nevada. Segments are defined as components of the Company for which separate financial information is available that is evaluated regularly by the executive decision-making group in assessing performance, establishing operating plans and budgets, and deciding how to allocate resources. Segment information as of and for the three and six months ended June 30, 2015 and 2014 is as follows (in thousands):

20. Segment Information



Three months ended June 30,	Hycroft Mine			Exploration			Corporate and Other			Total
2015
Revenue - Note 13	$	39,984		$	—		$	—		$	39,984
Depreciation and amortization	9,940			—			228			10,168
Write-down of production inventories - Note 5	50,663			—			—			50,663
Loss from operations	(241,602		)	(530		)	(2,208		)	(244,340		)
Interest income	—			—			8			8
Interest expense - Note 12	(1,691		)	—			(2,677		)	(4,368		)
Other, net - Note 14	17			1,124			1			1,142
Reorganization items, net - Note 3	—			—			(10,291		)	(10,291		)
Loss before income taxes	(243,276		)	594			(15,167		)	(257,849		)
Total assets	625,768			—			25,585			651,353
Capital expenditures	$	3,340		$	—		$	—		$	3,340
2014
Revenue - Note 13	$	83,123		$	—		$	—		$	83,123
Depreciation and amortization	17,386			—			248			17,634
Income (loss) from operations	5,298			18,814			(6,017		)	18,095
Interest income	—			—			2			2
Interest expense - Note 12	(2,622		)	—			(8,707		)	(11,329		)
Other, net - Note 14	26			—			(78		)	(52		)
Income (loss) before income taxes	2,702			18,814			(14,800		)	6,716
Total assets	1,378,491			37,348			44,660			1,460,499
Capital expenditures	$	24,190		$	—		$	—		$	24,190

The Company is engaged in the operation of the Hycroft Mine and the evaluation, exploration, and advancement of gold exploration and development projects in Nevada. Segments are defined as components of the Company for which separate financial information is available that is evaluated regularly by the executive decision-making group in assessing performance, establishing operating plans and budgets, and deciding how to allocate resources. Segment information as of and for the three months ended March 31, 2015 and 2014 is as follows (in thousands):26

Three months ended March 31,	HycroftMine			Exploration			Corporateand Other			Total
2015
Revenue - Note 12	$	55,245		$	—		$	—		$	55,245
Depreciation and amortization	10,868			—			241			11,109
Write-down of production inventories - Note 5	37,020			—			—			37,020
Loss from operations	(32,264		)	(17,490		)	(6,096		)	(55,850		)
Interest income	7			—			1			8
Interest expense - Note 11	(1,869		)	—			(7,004		)	(8,873		)
Other, net - Note 13	(60		)	—			48,975			48,915
Reorganization items, net - Note 3	—			—			(92,674		)	(92,674		)
Loss before income taxes	(34,186		)	(17,490		)	(56,798		)	(108,474		)
Total assets	850,564			18,004			36,770			905,338
Capital expenditures	$	298		$	—		$	—		$	298
2014
Revenue - Note 12	$	85,525		$	—		$	—		$	85,525
Depreciation and amortization	13,369			—			262			13,631
Income (loss) from operations	14,346			(728		)	(6,487		)	7,131
Interest income	5			—			8			13
Interest expense - Note 11	(1,924		)	—			(3,863		)	(5,787		)
Other, net - Note 13	10			—			4			14
Income (loss) before income taxes	12,437			(728		)	(10,338		)	1,371
Total assets	1,401,941			38,106			40,234			1,480,281
Capital expenditures	$	43,424		$	—		$	—		$	43,424

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ALLIED NEVADA GOLD CORP.

(Debtor-In-Possession)

Notes to Condensed Consolidated Financial Statements (Unaudited)

21. Commitments and Contingencies



Six months ended June 30,	Hycroft Mine			Exploration			Corporate and Other			Total
2015
Revenue - Note 13	$	95,229		$	—		$	—		$	95,229
Depreciation and amortization	20,808			—			469			21,277
Write-down of production inventories - Note 5	87,683			—			—			87,683
Loss from operations	(273,866		)	(18,020		)	(8,304		)	(300,190		)
Interest income	7			—			9			16
Interest expense - Note 12	(3,560		)	—			(9,681		)	(13,241		)
Other, net - Note 14	(43		)	1,124			48,976			50,057
Reorganization items, net - Note 3	—			—			(102,965		)	(102,965		)
Loss before income taxes	(277,462		)	(16,896		)	(71,965		)	(366,323		)
Total assets	625,768			—			25,585			651,353
Capital expenditures	$	3,638		$	—		$	—		$	3,638
2014
Revenue - Note 13	$	168,648		$	—		$	—		$	168,648
Depreciation and amortization	30,755			—			510			31,265
Income (loss) from operations	19,644			18,086			(12,504		)	25,226
Interest income	5			—			10			15
Interest expense - Note 12	(4,546		)	—			(12,570		)	(17,116		)
Other, net - Note 14	36			—			(74		)	(38		)
Income (loss) before income taxes	15,139			18,086			(25,138		)	8,087
Total assets	1,378,491			37,348			44,660			1,460,499
Capital expenditures	$	67,614		$	—		$	—		$	67,614

22. Commitments and Contingencies

The Company is from time to time involved in various legal actions related to its business, some of which are class actions lawsuits. Management does not believe, based on currently available information, that contingencies related to any pending or threatened legal matter will have a material adverse effect on the Company’s financial statements, although a contingency could be material to the Company’s results of operations or cash flows for a particular period depending on the results of operations and cash flows for such period. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

Financial Commitments Not Recorded in the Condensed Consolidated Financial Statements

Purchase Obligations

At ~~March~~June 3130, 2015, the Company had purchase obligations totaling $4.7 million for the purchase of mill components and capital items associated with the expansion projects of the Hycroft Mine. The Company expects purchase obligations to be satisfied through cash payments.

Temporary Housing Space Rental and Service Agreement

The Company leases a temporary housing complex in Winnemucca, NV to provide lodging for employees, contractors, and consultants. The temporary housing complex is leased from a third party who maintains the property and grounds. The Company estimates the remaining payments due under the temporary housing space rental and service agreement will approximate $2.7 million in 2015 and $0.2 million in 2016.

Net Profit Royalty

A portion of the Hycroft Mine is subject to a mining lease that requires a 4% net profit royalty be paid to the owner of certain patented and unpatented mining claims. The mining lease also requires an annual advance payment of $120,000 every year mining occurs on the leased claims. All advance annual payments are credited against the future payments due under the 4% net profit royalty. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid approximately $2.2 million through ~~March~~June 3130, 2015. ~~The~~As ~~Company currently estimates the remaining payments due under the~~ mining ~~lease~~activities ~~will~~have ~~approximate~~been ~~$0.1~~suspended, ~~million~~no inannual ~~2015~~payments ~~and~~are ~~$0.2~~due ~~million~~until insuch ~~each~~time ~~year~~that ~~from~~mining ~~2016~~activities ~~to 2021~~resume.

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ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), “we”, “us”, “our”, the “Company”, and “Allied Nevada” refer to Allied Nevada Gold Corp. and its subsidiaries. The following discussion, which has been prepared based on information available to us as of ~~May~~August 127, 2015, provides information that we believe is relevant to an assessment and understanding of our consolidated operating results and financial condition. The following discussion should be read in conjunction with our other reports filed with the U.S. Securities and Exchange Commission (the “SEC”) as well as our interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2014. References to “$” refers to United States currency and “CDN $” to Canadian currency.

Introduction to the Company

We are a U.S.-based primary gold producer ~~focused on mining, developing, and exploring properties~~ in the state of Nevada ~~in a safe, environmentally responsible, and cost-effective manner~~. Gold and silver sales represent 100% of our revenues and the market prices of gold and silver significantly impact our financial position, operating results, and cash flows.

Our sole operating mine, the Hycroft Mine (“Hycroft”), is an open-pit heap leach operation and during the year ended December 31, 2014 we sold 216,937 ounces of gold and 1,841,737 ounces of silver produced at Hycroft. As of December 31, 2014, Hycroft had proven and probable mineral reserves of 10.6 million ounces of gold and 465.3 million ounces of silver, which are contained in heap leach and mill ores. We currently recover metals contained in oxide ores through our heap leach operations. ~~In October 2014~~However, M3on ~~Engineering~~July ~~and~~8, ~~Technology Corp. (“M3”)~~2015, inthe ~~association~~Company ~~with~~announced ~~us,~~that ~~completed~~it ahad ~~feasibility~~suspended ~~study~~mining ~~for~~operations ato ~~mill~~maximize ~~expansion~~cash ~~which~~flow ~~confirmed~~and ~~the~~minimize ~~results~~spending ofthrough the ~~April~~remainder ~~2014~~of ~~prefeasibility study and improved on~~ the ~~overall~~chapter ~~economics~~11 ofprocess a(as ~~mill~~discussed ~~expansion~~below). AsThe ofCompany ~~December 31,~~continues ~~2014,~~to ~~our~~process ~~mill ores comprised approximately 87%~~ and ~~92%~~produce ~~of our proven and probable~~ gold and silver ~~mineral~~through ~~reserves, respectively, which is why our long term goal is~~ the ~~construction~~operation of athe ~~mill~~heap atleach ~~Hycroft~~pads ~~to enable us to recover metals contained in mill ores~~ and ~~extend~~Merrill-Crowe ~~the~~processing ~~operating life of the mine~~plants.

~~Although~~In ~~our~~October ~~past~~2014, ~~mill~~M3 ~~expansion~~Engineering ~~project~~and ~~efforts~~Technology ~~included~~Corp. ~~ordering~~(“M3”), ~~the~~in ~~mills~~association ~~themselves~~with us, ~~motors~~completed ~~and~~a ~~mill~~feasibility ~~drives,~~study ~~foundation~~for ~~preparation,~~a mill~~-related~~ ~~engineering,~~expansion ~~and~~which ~~obtaining~~confirmed the ~~required~~results ~~permits~~of tothe ~~begin~~April ~~construction,~~2014 ~~for~~prefeasibility ~~the~~study ~~reasons~~and ~~discussed~~improved ~~below~~on wethe dooverall ~~not~~economics ~~believe~~of ~~any~~a ~~further~~mill ~~progress~~expansion. As ~~will~~of ~~occur~~December 31, on2014, aour mill ~~expansion~~ores ~~project~~comprised ~~until~~approximately we87% ~~emerge~~and ~~from~~92% ~~bankruptcy~~of our proven and ~~receive~~probable ~~the~~gold ~~Court’s~~and ~~(as~~silver ~~defined~~mineral ~~below)~~reserves, ~~confirmation~~respectively, ofwhich ~~our~~is ~~Reorganization~~why ~~Plan~~our ~~(as~~long ~~defined~~term ~~below)~~goal ~~(if~~is ~~such~~the ~~emergence~~construction orof ~~confirmation~~a ~~happens~~mill at ~~all).~~Hycroft to enable us to recover metals contained in mill ores and extend the operating life of the mine.

Although our past mill expansion project efforts included ordering the mills themselves, motors and mill drives, foundation preparation, mill-related engineering, and obtaining the required permits to begin construction, for the reasons discussed below we do not believe any further progress will occur on a mill expansion project until we emerge from bankruptcy and receive the Bankruptcy Court’s (as defined below) confirmation of our Amended Reorganization Plan (as defined below) (if such emergence or confirmation happens at all).

Voluntary Reorganization Under Chapter 11

As discussed in Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements, on March 10, 2015 (the “Petition Date”), Allied Nevada Gold Corp. and certain of its domestic direct and indirect subsidiaries (together with Allied Nevada Gold Corp., the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors’ chapter 11 cases (the “Chapter 11 Cases”) are being jointly administered under Case No. 15-10503. We will continue to operate our business as a “debtor in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.

On the Petition Date, we entered into an agreement (the “Original Restructuring Support Agreement”) with certain holders (the “Initial Consenting Noteholders”) collectively owning or controlling in excess of 67% of our May 2012 senior notes (the “Notes”) and our secured bank lenders (the “Secured Lenders” and together with the Initial Consenting Noteholders and any additional holders of Notes that become party thereto, the “Restructuring Support Parties”) to effectuate a restructuring of our debt and equity (the “Original Restructuring Transaction”) pursuant to a ~~pre-arranged~~ plan of reorganization (the “Reorganization Plan”). On March 12, 2015, we entered into a Secured Multiple Draw Debtor In Possession Credit Agreement (the “DIP Credit Agreement”) which iswas intended to provide us with sufficient liquidity during the time period required to develop, implement, and receive Court confirmation of ~~the~~a ~~Reorganization~~reorganization ~~Plan~~plan.

The ~~material~~Original ~~terms~~Restructuring ofSupport ~~the~~Agreement ~~Reorganization~~and ~~Plan,~~term ~~all~~sheet of(the ~~which~~“Original ~~are~~Term ~~subject~~Sheet”) toattached ~~Bankruptcy~~thereto ~~Court~~and ~~confirmation~~incorporated therein, ~~are~~set ~~expected~~forth, subject to ~~effect~~certain conditions, ~~upon~~ the ~~effective~~commitment ~~date~~to and obligations of, on the ~~Reorganization~~one ~~Plan~~hand, ~~among other things~~us, and ~~subject~~on tothe ~~certain~~other ~~conditions~~hand, ~~and~~the asRestructuring ~~more~~Support ~~particularly~~Parties ~~set forth~~ in ~~the~~connection ~~Restructuring~~with ~~Support~~a ~~Agreement~~restructuring ~~and~~of ~~its~~our ~~related~~debt ~~term~~and ~~sheet,~~equity a(including ~~substantial~~our ~~reduction~~common instock) ~~our~~(the ~~funded~~“Original ~~debt~~Restructuring ~~obligations~~Transaction”) ~~by,~~pursuant ~~among~~to ~~other~~the ~~things:~~Reorganization Plan.

•Since the ~~issuance~~Petition ofDate, we have faced extraordinary challenges to its mining operations, including (i) employee attrition, (ii) a ~~new~~refusal ~~first~~by ~~lien~~key ~~term~~vendors ~~loan~~to ~~credit~~contract ~~facility~~with inus ~~exchange~~on ~~for~~commercially ~~outstanding~~reasonable ~~indebtedness~~terms, (iii) a materially slower than forecasted recovery rate of gold and ~~exposure~~silver ~~under:~~ounces from its ore and (iv) continuing low gold prices.

(1) the Third Amended and Restated Credit Agreement (the “Revolver”), which had approximately $75.0 million of borrowings and issued letters of credit as of the Petition Date (see Note 11 - Debt to the Notes to Condensed Consolidated Financial Statements for additional information), and28

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~~(2)~~ Consequently, the ~~close-out~~Debtors ~~amount~~could not comply with several of the ~~Company~~covenants in the Original Restructuring Support Agreement, giving rise to the Restructuring Support Parties’s ~~cross~~right ~~currency~~to ~~swap~~terminate ~~liability~~the Original Restructuring Support Agreement. In order to preserve our ability to exit chapter 11 quickly and ~~diesel~~efficiently ~~swaps~~and ~~liability~~to ~~owed~~maximize recoveries for its creditors, we engaged in extensive negotiations with the Restructuring Support Parties regarding amendments to the ~~Bank~~Original Restructuring Support Agreement and Reorganization Plan necessitated by the change in our financial and operational circumstances. The Company and the Restructuring Support Parties successfully negotiated the terms of ~~Nova~~an ~~Scotia~~amended and restated restructuring support agreement (the “Amended and Restated Restructuring Support Agreement”) with the Restructuring Support Parties, which ~~approximated~~was ~~$86~~executed on July 23, 2015.3 The ~~million~~Amended asand ofRestated ~~March~~Restructuring 11Support Agreement, ~~2015~~the amended term sheet (~~see~~the ~~Note~~“Amended 19Term -Sheet”) ~~Derivative~~and ~~Instruments~~the toamended Reorganization Plan (the ~~Notes~~“Amended Reorganization Plan”) attached thereto contemplate certain modifications to ~~Condensed~~the ~~Consolidated~~Original ~~Financial~~Restructuring ~~Statements~~Transaction ~~for~~(the ~~additional~~“Amended ~~information~~Restructuring Transaction”);.

•The Amended and Restated Restructuring Support Agreement, the ~~issuance~~Amended ofTerm Sheet and the Amended Reorganization Plan attached thereto contemplate that we will reorganize as a ~~new~~going ~~second~~concern. ~~lien~~Specifically, ~~convertible~~the ~~term~~material ~~loan~~terms ~~credit~~of ~~facility~~the Amended Reorganization Plan are expected to ~~holders~~effect, ofamong ~~claims~~other ~~under~~things, and subject to certain conditions and as more particularly set forth in the ~~DIP~~Amended ~~Credit~~and Restated Restructuring Support Agreement, ~~(see~~the ~~Note~~Amended 11Term -Sheet ~~Debt~~and toAmended Reorganization Plan, upon the ~~Notes~~effective todate ~~Condensed~~of ~~Consolidated~~the ~~Financial~~Amended ~~Statements~~Reorganization ~~for~~Plan, ~~additional~~a ~~information);~~substantial reduction in our funded debt obligations by, among other things:

• the issuance of a new ~~common~~first ~~stock~~lien toterm ~~holders~~loan ofcredit ~~claims~~facility ~~under~~in ~~the~~exchange ~~DIP~~for ~~Credit~~outstanding ~~Agreement~~indebtedness and ~~claims~~exposure under ~~the Notes; and~~:

•(1) the Third Amended and Restated Credit Agreement (the ~~issuance~~“Revolver”), which had approximately $75.4 million of ~~warrants~~borrowings, toissued ~~holders~~letters of ~~our~~credit ~~existing~~and ~~common~~accrued ~~stock.~~interest as of the Petition Date (see Note 12 - Debt to the Notes to Condensed Consolidated Financial Statements for additional information); and

~~Amounts~~(2) the ~~owed~~close-out toamount of our ~~trade~~cross ~~creditors~~currency swap liability and ~~vendors~~diesel ~~are~~swaps ~~expected~~liability owed to bethe ~~paid~~Bank inof ~~full~~Nova Scotia, which approximated $86.3 million as of March 11, 2015 (see Note 20 - Derivative Instruments to the Notes to Condensed Consolidated Financial Statementsfor additional information);

If• the ~~Reorganization~~issuance ~~Plan is consummated as contemplated by the Restructuring Agreement and the related term sheet, our existing common stock and outstanding warrants to purchase shares~~ of ~~our common stock will be extinguished. Holders of our common stock will receive on~~ a ~~pro~~new ~~rata~~second ~~basis~~lien ~~warrants~~convertible ~~for~~term ~~the~~loan ~~right~~credit tofacility ~~purchase~~by ~~shares of common stock in~~ the ~~reorganized~~Exit ~~Company~~Facility ~~only~~Lenders if(as ~~the~~defined holders of our existing common stock vote in favor of the Reorganization Plan. If the holders of our existing common stock vote against the Reorganization Plan then holders of our existing common stock will receive no recovery on account of their common stock and such common stock will be deemed settledbelow, ~~cancelled,~~see ~~released,~~Note ~~compromised~~12 ~~and~~- ~~extinguished~~Debt asto of the ~~effective~~Notes ~~date of the Reorganization Plan. The holders of our outstanding warrants~~ to ~~purchase~~Condensed ~~shares~~Consolidated ofFinancial ~~common~~Statements ~~stock~~for ~~will~~additional ~~receive no recovery on account of these holdings.~~ information);

~~The~~• ~~following discussion in this MD&A regarding~~ the ~~bankruptcy~~issuance ~~filing~~of ~~and~~new ~~our~~common ~~reorganization~~stock ~~efforts primarily relates~~ to ~~the~~holders impacts such items have had to date on our liquidity and financial position since, due to us continuing to operate our business as a debtor in possession (although with an overall leaner workforce), our mining operations have not been materially affected. As discussed in the Liquidity and Capital Resources section of ~~this~~unsecured ~~MD&A,~~claims; ~~borrowings under the DIP Credit Agreement increased our March 31, 2015 cash~~ and cash equivalents balance and improved our near-term liquidity. As discussed in the Results of Operations section of this MD&A, we incurred $92.7 million of reorganization items, net during the first quarter of 2015 for expenses, gains, and losses directly associated with our reorganization efforts and the Chapter 11 Cases.


•	the satisfaction of claims under the DIP Facility (as defined herein) in cash.

If the Amended Restructuring Transaction is consummated as contemplated by the Amended and Restated Restructuring Support Agreement, the Amended Term Sheet and the Amended Reorganization Plan, our common stock and warrants to purchase shares of our common stock will be extinguished. Holders of our common stock and holders of our outstanding warrants to purchase shares of our common stock will receive no recovery on account of these holdings.

On July 23, 2015, the Debtors obtained an exit facility commitment letter (the “Exit Facility Commitment Letter”) from certain affiliates or related funds of six institutions (collectively, the “Exit Facility Lenders”) to secure the financing necessary for the consummation of the Amended Restructuring Transaction contemplated under the Amended and Restated Restructuring Support Agreement and the Amended Reorganization Plan. Pursuant to the Exit Facility Commitment Letter, and subject to the terms and conditions thereof, the Exit Facility Lenders have agreed to the purchase of new second lien convertible debt in the reorganized Company in an amount such that the initial principal amount of the new second lien convertible term debt will not exceed $80 million (see Note 12 - Debt to the Notes to Condensed Consolidated Financial Statements for additional information).

As discussed in the Liquidity and Capital Resources section of this MD&A, borrowings under the DIP Credit Agreement increased our June 30, 2015 cash and cash equivalents balance and improved our near-term liquidity. As discussed in the Results of Operations section of this MD&A, during the second quarter and first six months of 2015 we incurred $10.3 million and $103.0 million, respectively, of reorganization items, net for expenses, gains, and losses directly associated with our reorganization efforts and the Chapter 11 Cases.

For a more detailed discussion of the Chapter 11 Cases and the impacts (both financial and non-financial) the bankruptcy filings had on us, see Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements.

Going Concern

As discussed in Note 1 - Basis of Presentation to the Notes to Condensed Consolidated Financial Statements, events and conditions exist that, when considered in the aggregate, raise substantial doubt about our ability to continue as a going concern because it is probable that we will be unable to meet our obligations as they become due within one year after the date that these financial statements were issued. We ~~Our ability to~~ continue ~~as a going concern is contingent upon our ability~~ to ~~comply~~operate ~~with~~and ~~the~~produce ~~covenants~~gold ~~contained~~at ~~in the DIP Credit Agreement, the Bankruptcy Court’s confirmation of~~ our ~~Reorganization~~Hycroft ~~Plan,~~Mine ~~and our ability to successfully implement the Reorganization Plan, among other factors. In addition, both while we operate~~ as a “debtor-in-possession” ~~and~~during ~~following~~ the ~~Court’s~~bankruptcy ~~confirmation~~process. However, ofon ~~our~~July ~~Reorganization~~8, ~~Plan~~2015, ~~(if~~we ~~such~~announced ~~confirmation~~that ~~happens~~we athad ~~all),~~suspended wemining ~~will~~operations ~~need~~ to ~~achieve~~maximize ~~our~~cash ~~sales,~~flow ~~production, cost,~~ and ~~other~~minimize ~~operating~~spending ~~targets~~through tothe ~~continue~~remainder asof athe ~~going~~chapter ~~concern~~11 process. We continue to process and

We are committed to an orderly resolution of our liquidity situation and financial restructuring that will permit us to continue our operations and attempt to preserve the value of our assets and overall enterprise value. However, there can be no assurance that we will be successful in doing so, and we are dependent on a financial restructuring to have any possibility to continue as a going concern.29

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produce gold and silver through the operation of the heap leach pads and Merrill-Crowe processing plants. Inventory on the heap leach pads at June 30, 2015 was 256,206 gold ounces (see Note 5 - Ore on Leach Pads to the Notes to Condensed Consolidated Financial Statements for additional information).

Our ability to continue as a going concern is contingent upon our ability to comply with the covenants contained in the DIP Credit Agreement, the Bankruptcy Court’s confirmation of our Amended Reorganization Plan, and our ability to successfully implement the Amended Reorganization Plan, among other factors. In addition, both while we operate as a “debtor-in-possession” and following the Bankruptcy Court’s confirmation of our Amended Reorganization Plan (if such confirmation happens at all), we will need to achieve our sales, production, cost, and other operating targets to continue as a going concern.

Executive Summary

Our ~~first~~second quarter 2015 highlights and significant developments included the following, which are discussed in further detail throughout this MD&A:

Health and safety: We ~~remained~~remain committed to our core values, health and safety, and operated in a safety-conscious and environmentally responsible manner. Regrettably, we had ~~one~~a ~~lost-time~~fatality ~~incident~~ at our Hycroft Mine during the quarter. We continued to implement programs designed to increase our employees’ knowledge and awareness of mine-site health and safety and environmental responsibility.

Chapter 11 Cases: As discussed above and in Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements, on March 10, 2015, we filed the Chapter 11 Cases with the Bankruptcy Court which, if successful, are expected to recapitalize our balance sheet by reducing our debt balances while concurrently providing additional liquidity.

25Ounces sold: Gold ounces sold totaled 30,714 ounces and silver ounces sold totaled 218,169 ounces, as during the latter half of 2014 and early 2015 we mined increased waste to open up new mining areas for the remaining 2015 mine plan and experienced slower than expected leaching of the acid leach material which was placed on the leach pads during the fourth quarter of 2014.

Net loss: Our net loss was $(257.8) million as we incurred significant charges and losses from a write-down of production inventories, a write-down on long-lived assets, losses on assets classified as held for sale and asset dispositions, and reorganization items.

Hycroft operations: We mined a total of 18.9 million tons, which included 8.8 million ore tons placed on the leach pads containing approximately 33,445 recoverable ounces of gold.

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Ounces sold: Gold ounces sold totaled 41,843 ounces and silver ounces sold totaled 265,881 ounces, as during the latter half of 2014 we mined increased waste to open up new mining areas for the remaining 2015 mine plan and experienced slower than expected leaching of the acid leach material which was placed on the leach pads during the fourth quarter of 2014.

Net loss: Our net loss was $(108.5) million as we incurred significant charges and losses from a write-down of production inventories, assets classified as held for sale, and reorganization items, which were offset by gains from foreign currency and derivative valuation adjustments.

Hycroft operations: We achieved our targeted mining rate by mining a total of 22.8 million tons, which included 6.9 million ore tons placed on the leach pads containing approximately 31,060 recoverable ounces of gold.

Hycroft Mine

Operations

Key operating statistics for the three and six months ended ~~March~~June 3130, 2015 and 2014 ~~are~~were as follows:

	Three months ended March 31,
	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Ore mined (000’s tons)	68,~~902~~837		10,~~784~~911		15,739		21,695
Ore mined and crushed (000’s tons)	—		2,162
Ore mined and stockpiled (000’s tons)	—		156		—		2,318
Waste mined (000’s tons)	1510,~~906~~042		1214,~~052~~471		25,948		26,523
	22,808		24,998
	18,879		25,538		41,687		50,536
Ore mined grade - gold (oz/ton)	0.~~009~~008		0.010		0.009		0.010
Ore mined grade - silver (oz/ton)	0.~~443~~207		0.~~304~~418		0.310		0.361
Ounces produced - gold	4030,~~417~~188		6056,~~114~~864		70,605		116,978
Ounces produced - silver	~~249~~214,~~475~~873		~~412~~481,~~506~~151		464,348		893,657
Ounces sold - gold	4130,~~843~~714		5957,~~470~~050		72,557		116,520
Ounces sold - silver	~~265~~218,~~881~~169		~~406~~474,~~234~~832		484,050		881,066
Average realized price - gold ($/oz)	$	1,~~215~~186	$	1,~~299~~292	$	1,203	$	1,295
Average realized price - silver ($/oz)	$	1716	$	20	$	16	$	20
Adjusted cash costs per ounce, excluding write-down1	$	~~834~~821	$	~~808~~806	$	829	$	807
Adjusted cash costs per ounce1	$	12,~~509~~103	$	~~808~~806	$	1,761	$	807

WeDuring ~~achieved~~the ~~our~~second ~~targeted~~quarter ~~mining~~and ~~rate~~first bysix ~~mining~~months of 2015, we mined a total of 2218.89 million tons, ~~which~~and ~~included 6~~41.97 million tons, respectively, which included ore tons placed on the leach pads totaling 8.8 million and 15.7 million, respectively. ~~Our~~We ~~first~~continued to mine through waste early in the second quarter to gain access to ore. Overall, the second quarter 2015 waste to ore strip ratio ~~increased~~decreased ~~by approximately 106%~~ to 21.31:1.0, compared to 12.13:1.0 ~~for~~in the ~~first~~prior quarter ofand ~~2014,~~1.3:1.0 asfor wethe ~~continued~~same toperiod ~~mine~~of ~~through waste to gain access to ore to be mined later in 2015~~2014.

The lower gold ounce sales ~~was~~during both the three and six months ended June 30, 2015 were primarily the result of (1) the decision made to focus on moving additional waste in the latter half of 2014 toand ~~focus~~early on2015 ~~moving additional waste~~ to open up mining areas for the remainder of 2015, thereby lowering the number of ore tons and recoverable ounces placed on the leach pads ~~during~~in ~~the~~those ~~second~~periods, ~~half of 2014~~ and (2) slower than expected leaching of the acid leach material which was placed on the leach pads during the fourth quarter of 2014.

Our adjusted cash costs per ounce¹ (excluding write-down)during the second quarter of 2015 were slightly higher (approximately $15) compared to the same period of 2014 as our average carrying value per gold ounce included in inventories was comparable during each period due in part to write-downs of production inventories during the fourth quarter of 2014 and first quarter of 2015. The average cost per gold ounce included in the beginning balance of each quarter’s Ore on leachpads was $1,164 and $1,257 as of March 31, 2015 and 2014, respectively. During both the second quarter and first six months of 2015, our adjusted cash costs per ounce¹ were negatively impacted by a $4 decrease in the average realized silver price compared to the same periods of 2014. As discussed in Note 5 - Ore On Leach Pads to our Notes to Condensed Consolidated Financial Statements, we recorded a $50.7 million write-down of ore on leach pads during the second quarter of 2015. This write-down negatively impacted our adjusted cash costs per ounce¹by $1,282 and $932 during the second quarter and first six months of 2015, respectively.




¹		The term “adjusted cash costs per ounce” is a non-GAAP financial measure. Non-GAAP financial measures do not have any standardized meaning prescribed by GAAP and, therefore, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. See the section on “Non-GAAP Financial Measures” in this MD&A for additional information.

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Results of Operations

Revenue

Gold revenue

The table below summarizes changes in gold revenue, ounces sold, and average realized prices for the following periods:

	Three months ended March 31,
	Three months ended June 30,					Six months ended June 30,
	2015			2014		2015			2014
Total gold revenue (thousands)	$	5036,~~826~~437		$	7773,~~234~~713	$	87,263		$	150,946
Gold ounces sold	4130,~~843~~714			5957,~~470~~050		72,557			116,520
Average realized price (per ounce)	$	1,~~215~~186		$	1,~~299~~292	$	1,203		$	1,295
	2015 vs. 2014					2015 vs. 2014
The change in gold revenue was attributable to (thousands):
Decrease in ounces sold	$	(2234,~~892~~028	)			$	(56,952	)
Decrease in average realized price	(46,~~997~~033		)			(10,809		)
Effect of average realized price decrease on ounces sold decrease	12,~~481~~785					4,078
	$	(2637,~~408~~276	)			$	(63,683	)

During the ~~first~~second quarter and first six months of 2015 our gold revenue decreased by approximately 3451% and 42%, respectively, from the same ~~period~~periods of 2014, primarily due to adecreases 30of 46% (or -1726,~~627~~336 ounces) ~~decrease~~and 38% (or -43,963 ounces), respectively, in the number of gold ounces sold. The lower gold ounce sales were primarily the result of (1) the decision made in the latter half of 2014 to focus on moving additional waste to open up mining areas for 2015, thereby lowering the number of ore tons placed on the leach pads during the second half of 2014 and early 2015, and (2) slower than expected leaching of the acid leach material which was placed on the leach pads during the fourth quarter of 2014. Additionally, during the ~~first~~second quarter and first six months of 2015, our gold revenue was negatively impacted by adecreases ~~decrease~~ of $84106 (or -68%) and $92 (or -7%), respectively, in the average realized price per ounce compared to the same ~~period~~periods of 2014.

Silver revenue

The table below summarizes changes in silver revenue, ounces sold, and average realized prices for the following periods:

	Three months ended March 31,
	Three months ended June 30,					Six months ended June 30,
	2015			2014		2015			2014
Total silver revenue (thousands)	$	43,~~419~~547		$	89,~~291~~410	$	7,966		$	17,702
Silver ounces sold	~~265~~218,~~881~~169			~~406~~474,~~234~~832		484,050			881,066
Average realized price (per ounce)	$	1716		$	20	$	16		$	20
	2015 vs. 2014					2015 vs. 2014
The change in silver revenue was attributable to (thousands):
Decrease in ounces sold	$	(25,~~865~~087	)			$	(7,977	)
Decrease in average realized price	(1,~~539~~690		)			(3,202		)
Effect of average realized price decrease on ounces sold decrease	~~532~~914					1,443
	$	(35,~~872~~863	)			$	(9,736	)

For the reasons discussed in the above Gold revenue section, during the ~~first~~second quarter and first six months of 2015 our silver revenue decreased by approximately 4762% and 55% from the same ~~period~~periods of 2014 primarily due to adecreases 35of 54% (or -~~140~~256,~~353~~663 ~~ounce~~ounces) ~~decrease~~and 45% (or -397,016 ounces), respectively, in the number of silver ounces sold. Our silver to gold ounces sold ratio for the first ~~three~~six months of 2015 was 6.47:1.0, compared to 67.86:1.0 for the same period of 2014, as in each period, the majority of gold ounces sold was from solution processed through our Merrill-Crowe plants which yield higher silver concentrations and recoveries than solution processed through our carbon columns. When compared to the 2014 ~~period~~periods, silver revenue for both the second quarter and first ~~three~~six months of 2015 was negatively impacted by a decrease of $34 (or -1918%) ~~decrease~~ in the average realized price per ounce.

Total cost of sales

Total cost of sales consists of production costs, depreciation and amortization, and write-downs of production inventories. The table below summarizes changes in total cost of sales for the following periods (in thousands):32

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	Three months ended March 31,
	2015			2014
Production costs	$	39,333		$	56,359
Depreciation and amortization	11,109			13,631
Write-down of production inventories	37,020			—
Total cost of sales	$	87,462		$	69,990
	2015 vs. 2014
The change in cost of sales was attributable to:
Decrease in gold ounces sold	$	(20,745	)
Increase in average cost of sales per ounce	1,701
Effect of average cost per ounce increase on ounces sold decrease	(504		)
	(19,548		)
Write-down of production inventories	37,020
	$	17,472

As discussed above in the Gold Revenue section, during the first three months of 2015 we sold 30% (or -17,627 ounces)fewer gold ounces than the same period of 2014 which lowered our total cost of sales (excluding write-down), but was more than offset by a $37.0 million write-down of production inventories (see below).



	Three months ended June 30,					Six months ended June 30,
	2015			2014		2015			2014
Production costs	$	28,768		$	55,367	$	68,101		$	111,725
Depreciation and amortization	10,168			17,634		21,277			31,265
Write-down of production inventories	50,663			—		87,683			—
Total cost of sales	$	89,599		$	73,001	$	177,061		$	142,990

	2015 vs. 2014					2015 vs. 2014
The change in cost of sales was attributable to:
Decrease in gold ounces sold	$	(33,699	)			$	(53,950	)
(Decrease) increase in average cost of sales per ounce	(679		)			543
Effect of average cost per ounce increase (decrease) on ounces sold decrease	313					(205		)
	(34,065		)			(53,612		)
Write-down of production inventories	50,663					87,683
	$	16,598				$	34,071

As discussed above in the Gold Revenue section, during the second quarter and first six months of 2015 we sold 46% (or -26,336 ounces) and 38% (or -43,963 ounces), respectively, fewer gold ounces than the same periods of 2014 which lowered our total cost of sales (excluding write-down), but was more than offset by write-downs of $50.7 million and $87.7 million, respectively, to production inventories (see below).

Production costs

Production costs per gold ounce sold during the second quarter and first ~~three~~six months of 2015 ~~and 2014~~ totaled $~~940~~937 and $~~948~~939, respectively, ascompared ~~our~~to the 2014 periods totaling $970 and $959, respectively. Our average carrying value per gold ounce included in inventories was ~~comparable~~lower ~~during~~in ~~each~~the ~~period~~2015 periods due in part to ~~a $70.7 million~~ write-~~down~~downs of production inventories during the third quarter of 2014 and first quarter of 2015. ~~During~~Early in the ~~first~~second ~~three~~quarter ~~months~~ of 2015 we continued to mine through waste to gain access to ore to be mined later in 2015. Our ~~first quarter 2015~~ waste to ore strip ratio ~~increased~~during bythe ~~approximately~~second ~~106%~~quarter toand 2first six months of 2015 was 1.31:1.0 ~~compared~~and to 1.16:1.0, ~~for~~respectively, compared to the ~~first~~2014 ~~quarter~~periods of ~~2014~~1.3:1.0 and 1.2:1.0, respectively. The increased cost of mining this additional waste during the first quarter and early in the second quarter increased our average cash production costs per gold ounce placed on the leach pads, and was a significant contributing factor to the write-down of production inventories (see below).

Depreciation and amortization

Depreciation and amortization per gold ounce sold for the three and six months ended ~~March~~June 3130, 2015 ~~and 2014~~ was $~~265~~331 and $~~229~~293, respectively, ascompared to the ~~amount~~same periods of ~~plant,~~2014 ~~equipment,~~totaling $309 and ~~mine~~$268, ~~development~~respectively. These ~~in-service~~variances ~~during~~are ~~each~~largely ~~period~~due ~~was~~to ~~comparable. As~~the ofreduction ~~March 31,~~in ~~2015~~gold ~~and~~ounces ~~2014,~~sold as the amount of plant, equipment, and mine development in -service ~~totaled~~during ~~$572.9~~each ~~million~~period ~~and~~was ~~$599~~comparable.1 ~~million, respectively.~~

Write-down of production inventories

Due to metal price levels atdecreasing ~~quarter~~during ~~end~~the ~~(which~~quarter ~~decreased from December 31, 2014)~~ and increased production costs, as of ~~March~~June 3130, 2015, the carrying value of our ore on leach pads (current and non-current) was adjusted to its estimated market value calculated in accordance with our lower of cost or market accounting policy. Further declines from ~~March~~June 3130, 2015 metal price levels ($1,~~187~~171.00 per gold ounce and $1615.6070 per silver ounce) and/or future production costs per gold ounce greater than the ~~March~~June 3130, 2015 carrying value per gold ounce included in ore on leach pads could result in, or contribute to, additional future write-downs of production-related inventories. Write-downs have not been related to any metallurgical balancing analytics or changes to recovery rates. See Note 5 - Ore On Leach Pads to the Notes to Condensed Consolidated Financial Statements for additional information.

Exploration, development, and land holding

Exploration, development, and land holding totaled $0.6 million and $0.7 million during the first quarters of 2015 and 2014, respectively, consisting of compensation and benefit costs for our exploration employees and land holding and claim maintenance fees. We have no plans for exploration activities at any of our non-Hycroft properties for 2015 and have not employed a statewide exploration workforce since the third quarter of 2013. As further discussed in Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements, we entered into an agreement (the “Stalking Horse Agreement”) related to the proposed sale of our exploration properties and related assets for $17.5 million and an amount, not to exceed $65,000, that the sellers have posted in respect of any security interest that is to be transferred to the purchaser. 33

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Exploration, development, and land holding totaled $0.5 million and $1.1 million during the second quarter and first six months of 2015, respectively, compared to the same periods of 2014 totaling $0.7 million and $1.4 million, respectively. These consist primarily of compensation and benefit costs for our exploration employees and land holding and claim maintenance fees. We do not expect any exploration activities during the remainder of 2015. As further discussed in Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements, on June 29, 2015, we completed the sale of our non-Hycroft exploration properties and related assets for $17.5 million, following approval by the Bankruptcy Court on June 18, 2015.

General and administrative

During the second quarter and first six months of 2015, General and administrative totaled $52.96 million and $68.25 million, ~~during~~respectively, compared to the ~~first~~same ~~quarters~~periods of ~~2015~~2014 which totaled $5.8 million and ~~2014~~$12.0 million, respectively. During the ~~first~~2015 ~~quarter~~periods, ofthere ~~2015,~~were significant decreases in compensation and benefit costs (from reduced staff levels at our corporate office) ~~and~~as well as external consulting costs ~~more than offset a $0~~.~~1 million increase in stock-based compensation costs.~~

Write-down of long-lived assets

Write-down of long-lived assets totaled $179.6 million during both the second quarter and first six months of 2015, due to impairments recorded as of June 30, 2015. As a result of continued low metal prices and the Company’s decision to suspend mining operations, discussed in Note 1 - Basis of Presentation to the Notes to Condensed Consolidated Financial Statements, all long-lived assets have been further reviewed for impairment as of June 30, 2015. In the absence of future cash flows from new ore placed on the leach pads, this analysis has resulted in a $179.6 million write-down to plant and equipment assets which are now carried at fair value. Mine development and leach pad construction costs were deemed a separate asset group for which the fair value was determined to exceed the carrying value based on the in situ value per gold-equivalent ounce reserve. As a result, an impairment was not recorded for this asset group. There were no comparable transactions during the same periods of 2014.

Gain on dispositions or sales of mineral properties, net

We recorded a $19.5 million gain during the second quarter and first six months of 2014 for the sale of a 75% controlling interest in our Hasbrouck, Three Hills, and Esmeralda County exploration properties. We received $20.0 million of gross proceeds from the sale and the carrying value of the exploration properties sold totaled $0.5 million. For additional detail on this sale, see Note 8 - Mineral Properties, Net to our Notes to Condensed Consolidated Financial Statements.

Loss on assets classified as held for sale and asset dispositions, net

During the second quarter and first ~~quarters~~six months of 2015 ~~and 2014~~, we recorded losses of $1611.97 million and $128.26 million, respectively, on assets classified as held for sale and asset dispositions. During the ~~first~~second quarter of 2015, wethe ~~recorded a~~ $1611.97 million loss ~~from~~was ~~classifying~~largely ~~our~~related ~~portfolio~~to ofthe ~~exploration~~disposition ~~mineral~~of ~~properties~~single asfamily ~~held~~homes ~~for~~and ~~sale~~related assettlement ~~a result~~ of ~~the~~temporary ~~entry~~housing ~~into~~facility ~~the~~rental ~~Stalking~~payments ~~Horse~~($9.5 ~~Agreement~~million) ~~discussed above~~ and ~~further~~the ~~discussed~~adjustment into ~~Note~~the 3fair -value ~~Chapter~~of 11the ~~Bankruptcy~~remaining ~~Filing~~equipment toclassified ~~the~~as ~~Notes~~held tofor ~~Condensed~~sale ~~Consolidated~~($2.2 ~~Financial Statements~~million). ~~During~~The ~~the~~six ~~first~~months ~~quarter~~ended ofJune ~~2014~~30, ~~the~~2015 included an additional $116.29 million loss ~~resulted~~largely from classifying ~~four~~our ~~used~~portfolio ~~haul~~of ~~trucks~~exploration mineral properties as held for sale~~. For~~ ~~additional~~discussed ~~information~~in ~~see~~ Note 7 - Assets Held For Sale to ~~our~~the Notes to Condensed Consolidated Financial Statements.

During the second quarter and first six months of 2014, we recorded losses of $4.8 million and $6.0 million, respectively, on assets classified as held for sale and asset dispositions, which primarily resulted from classifying four used haul trucks as held for sale and adjusting such assets to fair value.

Interest expense

Interest expense was $84.94 million and $513.82 million during the second quarter and first ~~quarters~~six months of 2015 ~~and 2014~~, respectively~~. Interest~~, ~~expense~~compared ~~increased~~to ~~during~~ the ~~first~~same ~~quarter~~periods of ~~2015~~2014, aswhich wetotaled ~~(1)~~$11.3 ~~did~~million ~~not record any capitalized interest~~ and ~~(2) incurred~~ $117.1 million ~~of interest and issuance costs from borrowings under the DIP Credit Agreement~~, ~~the amounts of which were partially offset by a $3~~respectively.6 Interest ~~million~~expense ~~reduction~~decreased induring ~~interest~~the ~~recorded~~2015 ~~for~~periods ~~the~~as ~~Notes. We~~we ceased recording interest expense on certain outstanding pre-petition debt (including our Notes) classified within Liabilities subject to compromise, as interest owed after the Petition Date on such obligations is not expected to be paid during the Chapter 11 Cases and is not expected to be an allowed claim. Additionally, the U.S. dollar equivalent of recorded interest expense on the Notes in 2015 was lower than that recorded in 2014 due to the weakened Canadian dollar and the elimination of hedge accounting treatment as of December 31, 2014. Interest recorded during the 2014 periods was primarily related to interest on our Notes and capital lease and term loan obligations, reduced for amounts capitalized to project expenditures. For additional detail on our recorded interest expense, including amounts capitalized and amounts not recorded, see Note 1112 - Debt to our Notes to Condensed Consolidated Financial Statements.

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Other, net

Other, net ~~was~~included a $481.91 million gain and $50.1 million gain during the ~~first~~second quarter and first six months of 2015, respectively, compared to a nominal ~~amount~~amounts during the ~~first~~same ~~quarter~~periods of 2014. During the ~~first~~second quarter of 2015 ~~other,~~we ~~net~~recognized ~~included~~ a $281.21 million ~~foreign currency transaction~~ gain onfrom ~~our~~advance ~~Notes,~~minimum aroyalty ~~$22.0~~payments ~~million~~following ~~gain on~~ the ~~change~~sale inof ~~fair~~our ~~value~~non-Hycroft ofexploration properties. During the ~~cross~~first ~~currency~~six ~~swap~~months ~~through~~of ~~the~~2015, ~~Petition Date~~Other, ~~and~~net awas ~~loss~~largely comprised of a $128.12 million ~~from~~foreign ~~diesel~~currency ~~swap~~transaction ~~settlements. During~~gain ~~the~~on ~~first~~our ~~quarter~~Notes ofand ~~2014 other, net included~~ a ~~foreign~~$22.0 ~~currency~~million ~~transaction~~ gain on the ~~Notes~~change ~~which~~in ~~was~~fair ~~offset~~value byof ~~a corresponding amount from~~ the cross currency swap. through the Petition Date. For additional detail on our other income and expense, see Note 1314 - Other, Net to our Notes to Condensed Consolidated Financial Statements.

Reorganization items, net

Reorganization items, net totaled $9210.73 million and $103.0 million during the ~~first~~second quarter and first six months of 2015, respectively, and consisted of expenses, gains, and losses directly associated with our reorganization efforts and the Chapter 11 Cases, including valuation adjustments to our derivative instruments, Notes and ~~Notes~~term loan obligations and legal and professional fees. For a listing and discussion of reorganization items, net recorded during the ~~first quarter of~~ 2015 periods, see Note 3 - Chapter 11 Bankruptcy Filing to our Notes to Condensed Consolidated Financial Statements. There were no comparable transactions during the same periods of 2014.

Income taxes

We recorded no income tax expense during the ~~first~~second quarter or first six months of 2015 compared to a$2.3 ~~benefit~~million ofand $13.04 million, respectively, during the ~~first~~same ~~quarter~~periods of 2014. During the first ~~quarter~~six months of 2015, no income tax expense was recorded as a result of applying our estimated annual effective tax rate of 0.0% to our loss before income taxes. Our 2015 estimated annual effective tax rate varies from the United States statutory rate of 35.0% as we expect to continue to provide a full valuation allowance against all deferred tax assets. ~~During~~Our ~~the~~ first ~~quarter~~six months of 2014 ~~we recorded~~ income tax expense ofincluded ~~approximately~~ $12.08 million ~~which~~for ~~included $0.5 million of~~ income ~~tax expense from income~~ taxed at ~~the~~our estimated annual effective rate of approximately 34 33.79% and $0.56 million of ~~additional income tax expense~~ for discrete items primarily related to stock-based compensation that were recognized as incurred in the current quarter. For additional detail on our recorded income tax benefit, see Note 1415 - Income Taxes to our Notes to Condensed Consolidated Financial Statements.

Net (loss) income

For the reasons described above, we reported a net loss of $~~(108~~257.5)8 million and ~~net income of~~ $0366.3 million during the second quarter and first ~~quarters~~six months of 2015, respectively, compared to net income of $4.4 million and ~~2014~~$4.7 million, respectively, during the same periods of 2014.

29Other comprehensive (loss) income, net of tax

~~Table~~We discontinued hedge accounting for our derivative instruments previously designated as cash flow hedges as of ~~Contents~~December 31, 2014. Accordingly, as of December 31, 2014, no amounts remained in Accumulated other comprehensive income (loss).

~~Other~~During the second quarter and first six months of 2014, other comprehensive (loss) income, net of tax totaled $(1.4) million and $0.6 million, respectively. These included fair value adjustments to our cash flow hedge instruments, settlements of such hedges, and reclassifications into earnings. For additional detail, see Note 20 - Derivative Instruments to our Notes to Condensed Consolidated Financial Statements.

During the first quarter of 2014, other comprehensive income, net of tax totaled $2.0 million and included fair value adjustments to our cash flow hedge instruments, settlements of such hedges, and reclassifications into earnings. For additional detail, see Note 19 - Derivative Instruments to our Notes to Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

General

Our most important near-term operating strategy and goal is to maintain, at all times, sufficient liquid assets and access to capital resources using a disciplined approach that enables us to respond to changes in our business environment to the best of our ability, such as decreases in metal prices or lower than planned metal production, and changes in other factors beyond our control. To accomplish this, we closely and actively manage our liquidity and capital resources by, among other things, (1) monitoring metal prices and the impacts (near-term and future) they have on our business; (2) working to achieve our projected ounces sold volumes and per ounce cost metrics; (3) managing our working capital; and (4) managing discretionary general and administrative and exploration related spending.

When our projected future liquidity needs are expected to exceed our current available liquidity we consider strategies and options in which we may be able to obtain additional cash or access to liquidity which are attainable on favorable and reasonable terms and are permissible under our existing debt agreements, including the DIP Credit Agreement.

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Liquidity Effects from the Chapter 11 Bankruptcy Filing

The following provides a discussion on the specific impacts the bankruptcy filing has had to date on our liquidity and financial position. Based on the following and as further discussed in this MD&A, if we are able to achieve our internal production, sales, and costs targets while at the same time complying with the covenants contained in the DIP Credit Agreement, we believe we will be able to fund our obligations as they become due during the bankruptcy process.

Deferred Payment of Certain Obligations and Liabilities

Our near-term liquidity temporarily improved as a result of the bankruptcy filing as the payments required, and/or those which became due and payable as a result of events of default from the bankruptcy filing, for the liabilities and obligations listed below have been temporarily deferred (other than for certain payments to vendors and employees which are paid pursuant to Bankruptcy Court approval). As discussed in Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements, the Amended Reorganization Plan, which is subject to Bankruptcy Court confirmation, contemplates the recapitalization or refinancing through new debt agreements, certain obligations listed below, including the Notes, the Revolver, the capital lease and term loan obligations, the Term and Security Deposit loan, the DIP Credit Agreement, interest payable, and the cross currency and diesel swaps derivative instruments. ~~Amounts~~ ~~owed to our trade creditors, vendors, and employees are expected to be paid in full.~~

The following table provides a summary of our obligations and liabilities currently expected to be recapitalized or refinanced under the Amended Reorganization Plan, subject to the Bankruptcy’s Court’s confirmation and the proposed treatment thereunder. There can be no assurance that we will be successful in implementing our Amended Reorganization Plan or emerge from bankruptcy, and we are dependent on such to continue as a going concern. There can also be no assurance that any of the below contemplated exchanges will occur as outlined below (in thousands):



Description	Contemplated exchange under Amended Reorganization Plan	June 30, 2015
Liabilities subject to compromise:
Notes⁽¹⁾ - Note 12	Exchanged for equity in the recapitalized Company.	$	316,640
Capital lease and term loan obligations - Note 12	Related security exchanged for satisfaction of indebtedness and accrued interest. Any deficiency which exists will be satisfied with equity in the recapitalized Company.	118,984
Term and Security Deposit Loan - Note 12	Related security exchanged for satisfaction of indebtedness and accrued interest. Any deficiency which exists will be satisfied with equity in the recapitalized Company.	17,974
Accounts payable	Exchanged for equity in the recapitalized Company.	15,900
Interest payable - Note 12	Interest payable on the Notes will be exchanged for equity in the recapitalized Company. Interest payable on the Term and Security Deposit Loan will be exchanged as outline above.	9,136
Cross currency swap derivative instrument - Note 20	Exchanged for equity in the recapitalized Company.	891
Accrued compensation and benefits	Satisfied with cash and cash equivalents.	182
Debt, current:
Revolving Credit Agreement⁽²⁾ - Note 12	Exchanged for first lien term loan (refinanced with new debt) following any cash reduction from asset sales.⁽³⁾	64,950
DIP Credit Agreement⁽²⁾ - Note 12	Satisfied with cash and cash equivalents with the proceeds from the issuance of New Second Lien Convertible Notes.⁽⁴⁾	50,706
Other liabilities, current:
Cross currency and diesel swaps derivative instruments - Note 20	Exchanged for first lien term loan (refinanced with new debt) following any cash reduction from asset sales.⁽³⁾	86,307
		$	681,670
⁽¹⁾Amount represents the CDN $400.0 million face amount of the issuance translated to U.S. dollars using the exchange rate on the Petition Date.
⁽²⁾ Interest charges will be paid on outstanding borrowings during the bankruptcy process.
⁽³⁾ The Amended and Restated Restructuring Support Agreement term sheet requires a mandatory $25.0 million incremental cash reduction to the combined outstanding indebtedness under the Revolver and the cross currency and diesel swap derivative instruments prior to refinancing.
⁽⁴⁾ On July 23, 2015, we entered into the Exit Facility Commitment Letter with certain affiliates and related funds of six institutions to secure the financing necessary for the consummation of the Amended Restructuring Transaction, whereby the Exit Facility Lenders have agreed to the purchase of up to $80 million of New Second Lien Convertible Notes.

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Description	Contemplated exchange under current Reorganization Plan	March 31, 2015
Liabilities subject to compromise:
Notes(1) - Note 11	Exchanged for equity in the recapitalized Company.	$	316,640
Accounts payable	Satisfied with cash and cash equivalents.	25,650
Term and Security Deposit Loan - Note 11	Under negotiation to return shovel in exchange for satisfaction of indebtedness and accrued interest. Any deficiency which exists will be satisfied with cash and cash equivalents.	17,974
Interest payable - Note 11	Interest payable on the Notes will be exchanged for equity in the recapitalized Company. Interest payable on the Term and Security Deposit Loan will be exchanged as outline above.	9,136
Cross currency swap derivative instrument - Note 19	Satisfied with cash and cash equivalents.	891
Accrued compensation and benefits	Satisfied with cash and cash equivalents.	1,070
Debt, current:
Revolving Credit Agreement(2) - Note 11	Exchanged for first lien term loan (refinanced with new debt) following any cash reduction from asset sales.(3)	64,950
DIP Credit Agreement(2) - Note 11	Exchanged for $25.0 million of equity in the recapitalized Company with the remainder exchanged for a second lien convertible term loan (refinanced with new debt).	35,111
Other liabilities, current:
Cross currency and diesel swaps derivative instruments - Note 19	Exchanged for first lien term loan (refinanced with new debt) following any cash reduction from asset sales.(3)	86,307
		$	557,729
(1) Amount represents the CDN $400.0 million face amount of the issuance translated to U.S. dollars using the exchange rate on the Petition Date.
(2) Interest charges will be paid on outstanding borrowings during the bankruptcy process.
(3) The Restructuring Support Agreement term sheet requires a mandatory $25.0 million incremental cash reduction to the combined outstanding indebtedness under the Revolver and the cross currency and diesel swap derivative instruments prior to refinancing.

DIP Credit Agreement

As discussed in Note 1112 - Debt to the Notes to Condensed Consolidated Financial Statements, on March 12, 2015, we entered into the DIP Credit Agreement which improved our near-term liquidity by providing us access to up to $78.0 million in principal amount of additional liquidity, approximately $35.0 million of which was funded as of March 31, 2015. We anticipate using the proceeds of the DIP Credit Agreement primarily for (1) purposes permitted by orders of the Bankruptcy Court, including ongoing debtor in possession working capital purposes, (2) the payment of fees, costs and expenses and (3) other general corporate purposes, in each case, only to the extent permitted under applicable law, under or as permitted by the DIP Credit Agreement, the orders of the Bankruptcy Court, and in accordance with the approved budget in the DIP Credit Agreement.

As discussed in the Debt covenants section below, our access to the remaining $43.0 million of availability is, among other things, dependent upon our ability to comply with the covenants contained in the DIP Agreement. 36

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initial principal amount of additional liquidity, approximately $50.0 million (outstanding balance of $50.7 million including payment-in-kind interest) of which was funded as of June 30, 2015. We anticipate using the proceeds of the DIP Credit Agreement primarily for (1) purposes permitted by orders of the Bankruptcy Court, including ongoing debtor-in-possession working capital purposes, (2) the payment of fees, costs and expenses and (3) other general corporate purposes, in each case, only to the extent permitted under applicable law, under or as permitted by the DIP Credit Agreement, the orders of the Bankruptcy Court, and in accordance with the approved budget in the DIP Credit Agreement.

As discussed in the Debt covenants section below, our access to the remaining $28.0 million of availability is, among other things, dependent upon our ability to comply with the covenants contained in the DIP Credit Agreement.

Legal and Professional Fees

~~During~~Legal ~~the~~and ~~first~~professional ~~quarter~~fees ofrelated ~~2015~~to wethe ~~incurred~~bankruptcy totaled $79.5 million ofand ~~legal~~$17.0 million during the second quarter and ~~professional~~first ~~fees~~six ~~related~~months toof ~~the~~2015, ~~bankruptcy~~respectively. We expect to continue to incur significant legal and professional fees in the future as a result of the bankruptcy process which may negatively impact our liquidity.

Cash and cash equivalents and liquid assets

We have placed substantially all of our cash and cash equivalents in operating accounts with a high-quality financial institution, thereby ensuring balances remain readily available. As of ~~March~~June 3130, 2015, we had existing cash and cash equivalents of $418.6 million, which increased from the December 31, 2014 balance of $7.6 million due primarily to ~~the~~proceeds ~~$50.5~~received ~~million~~from ofthe ~~net~~DIP ~~cash~~Credit ~~provided~~Agreement byand ~~financing activities exceeding~~ the ~~$16.1~~Revolver, ~~million~~offset ofby net cash used in operating activities. For detail on our cash and cash equivalents activity, see the Sources and uses of cash for the first ~~three~~six months of 2015 and 2014 section below.

31Due to the nature of our operations and the composition of our current assets, our cash and cash equivalents, accounts receivable, and metal inventories balances represent substantially all of our liquid assets on hand. In addition to our liquid assets on hand, we currently have access to additional liquidity under our $78.0 million DIP Credit Agreement which was entered into in March 2015, the terms of which are discussed in Note 12 - Debt to our Notes to Condensed Consolidated Financial Statements. As of June 30, 2015, $50.7 million was outstanding (including $0.7 million of payment in-kind interest) under the DIP Credit Agreement. As discussed in the Debt covenants section below, our access to the remaining $28.0 million of availability is, among other things, dependent upon our ability to comply with the covenants contained in the DIP Credit Agreement.

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Due to the nature of our operations and the composition of our current assets, our cash and cash equivalents, accounts receivable, and metal inventories balances represent substantially all of our liquid assets on hand. In addition to our liquid assets on hand, we currently have access to additional liquidity under our $78.0 million DIP Credit Agreement which was entered into in March 2015, the terms of which are discussed in Note 11 - Debt to our Notes to Condensed Consolidated Financial Statements. As of March 31, 2015, $35.1 million was outstanding (including $0.1 million of payment in-kind interest) under the DIP Credit Agreement. As discussed in the Debt covenants section below, our access to the remaining $43.0 million of availability is, among other things, dependent upon our ability to comply with the covenants contained in the DIP Credit Agreement.

Available sources of liquidity

The following table summarizes our available sources of liquidity (in thousands):

Description	~~March~~June 3130, 2015
Cash and cash equivalents	$	418,~~646~~583
DIP Credit Agreement	4328,000
Accounts receivable(1)	~~902~~2,159
Inventories(2)	43,~~122~~451
	$	8942,~~670~~193
(1) Entire Accounts receivable balance is expected to be collected during the next 12 months.
(2) Inventories contained approximately 3,473 ounces of gold which are expected to be sold within the next 12 months. Assuming a gold selling price of $1,187.00 per ounce (the March 31, 2015 P.M. fix) and excluding any proceeds from silver sales, the sale of all gold ounces estimated to be recovered from our Inventories would provide us with $4.1 million of revenue during the next 12 months.
(2) Inventories contained approximately 2,947 ounces of gold which are expected to be sold within the next 12 months. Assuming a gold selling price of $1,171.00 per ounce (the June 30, 2015 P.M. fix) and excluding any proceeds from silver sales, the sale of all gold ounces estimated to be recovered from our Inventories would provide us with $3.5 million of revenue.

As discussed in Note 7 - Assets Held For Sale to our Notes to Condensed Consolidated Financial Statements, we currently have $613.92 million of assets held for sale ~~which includes our portfolio of exploration mineral properties located throughout the state of Nevada valued at $17~~.5 ~~million.~~ Pursuant to the Amended Reorganization Plan, proceeds from assets sales, ~~including the exploration mineral properties and related assets, net of any related capital lease and term loan principal payments,~~ are to be paid to ~~our~~the ~~secured~~Secured ~~bank lenders~~Lenders, reducing our outstanding debt.

~~Sources and uses of cash for the first three months of 2015 and 2014 (in thousands)~~37

	Three months ended March 31,						Increase (decrease)
	2015			2014			2015 vs. 2014
Net (loss) income	$	(108,474	)	$	332		$	(108,806	)
Net non-cash adjustments	73,912			17,731			56,181
Net change in operating assets and liabilities	18,416			5,730			12,686
Net cash (used in) provided by operating activities	(16,146		)	23,793			(39,939		)
Net cash used in investing activities	(298		)	(42,142		)	41,844
Net cash provided by (used in) financing activities	50,515			(13,934		)	64,449
Net increase (decrease) in cash and cash equivalents	34,071			(32,283		)	$	66,354
Cash and cash equivalents, beginning of period	7,575			81,470
Cash and cash equivalents, end of period	$	41,646		$	49,187

Cash (used in) provided by operating activities

Our operating cash flows vary with prices realized from metal sales, sales volumes, production costs, mine plans, working capital changes, and non-cash amounts included in net (loss) income. Our operating cash flows are largely impacted by increases in production-related inventories as we have increased our mining rate and expanded our plant and equipment used in our heap leach operations. The following table and related narrative provides an analysis of significant factors impacting our net cash (used in) provided by operating activities which, during the first quarters of 2015 and 2014 totaled $(16.1) million and $23.8 million, respectively:

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	Three months ended March 31,
Operating margins from gold sales	2015			2014
Gold ounces sold	41,843			59,470
Average realized price per gold ounce sold	$	1,215		$	1,299
Production costs per gold ounce sold	(940		)	(948		)
Average operating margin per gold ounce sold(1)	$	275		$	351
Gross cash used in increase of production inventories
Cash used to increase production-related inventories	$	(18,953	)	$	(16,063	)
Cash portion of Write-down of production inventories - Note 5	28,225			—
Change in Production-related inventories	$	9,272		$	(16,063	)
(1) Excludes write-downs of production inventories, non-cash depreciation and amortization, and silver revenues.

Sources and uses of cash for the first six months of 2015 and 2014 (in thousands)

As shown in the table above, our average operating margin per gold ounce sold decreased due to lower average realized gold prices. Our cash production costs per gold ounce sold (discussed above in the Results of Operations - Total cost of sales section) remained comparable due to prior-year write-downs of production inventories which reduced the carrying values of our metal inventories in the 2015 period. Additionally shown in the table above, during the first quarters of 2015 and 2014, we used $19.0 million (prior to the write-down) and $16.1 million, respectively, of cash to increase our production-related inventories (included in net change in operating assets and liabilities) as the cost per ounce placed on the leach pads in both quarters exceeded the average cost per recoverable ounce on the leach pads at the beginning of the quarter. As discussed above, the carrying value of production-related inventories was reduced by a $28.2 million cash write-down during the first quarter of 2015. Net non-cash adjustments increased during the first quarter of 2015 as a result of the significant Reorganization items, net charged to earnings related to the bankruptcy filing.



	Six months ended June 30,						Increase (decrease)
	2015			2014			2015 vs. 2014
Net (loss) income	$	(366,323	)	$	4,708		$	(371,031	)
Net non-cash adjustments	287,423			24,932			262,491
Net change in operating assets and liabilities	46,458			(12,719		)	59,177
Net cash (used in) provided by operating activities	(32,442		)	16,921			(49,363		)
Net cash used in investing activities	(3,638		)	(56,327		)	52,689
Net cash provided by (used in) financing activities	37,088			(28,452		)	65,540
Net increase (decrease) in cash and cash equivalents	1,008			(67,858		)	$	68,866
Cash and cash equivalents, beginning of period	7,575			81,470
Cash and cash equivalents, end of period	$	8,583		$	13,612

Cash (used in) provided by operating activities

Our operating cash flows vary with prices realized from metal sales, sales volumes, production costs, mine plans, working capital changes, and non-cash amounts included in net (loss) income. Our operating cash flows are largely impacted by increases in production-related inventories as we had increased our mining rate and expanded our plant and equipment used in our heap leach operations during the second quarter of 2015. The following table and related narrative provides an analysis of significant factors impacting our net cash (used in) provided by operating activities which, during the first six months of 2015 and 2014 totaled $(32.4) million and $16.9 million, respectively:



	Six months ended June 30,
Operating margins from gold sales	2015			2014
Gold ounces sold	72,557			116,520
Average realized price per gold ounce sold	$	1,203		$	1,295
Production costs per gold ounce sold	(939		)	(959		)
Average operating margin per gold ounce sold⁽¹⁾	$	264		$	336

Gross cash used in increase of production inventories
Cash used to increase production-related inventories	$	(47,300	)	$	(25,080	)
Cash portion of write-down of production inventories - Note 5	67,609			—
Change in production-related inventories	$	20,309		$	(25,080	)
⁽¹⁾Excludes write-downs of production inventories, non-cash depreciation and amortization, and silver revenues.

As shown in the table above, our average operating margin per gold ounce sold decreased due to lower average realized gold prices. Our cash production costs per gold ounce sold (discussed above in the Results of Operations - Total cost of sales section) remained comparable due to prior-year write-downs of production inventories which reduced the carrying values of our metal inventories in the 2015 period. Additionally shown in the table above, during the first six months of 2015 and 2014, we used $47.3 million (prior to the write-down) and $25.1 million, respectively, of cash to increase our production-related inventories (included in net change in operating assets and liabilities) as the cost per ounce placed on the leach pads in both quarters exceeded the average cost per recoverable ounce on the leach pads at the beginning of the quarter. As discussed above, the carrying value of production-related inventories was reduced by a $67.6 million cash write-down during the first six months of 2015. Net non-cash adjustments increased during the first six months of 2015 as a result of the significant Reorganization items, net charged to earnings related to the bankruptcy filing, the Write-down of long-lived assets and the Loss on assets classified as held for sale and asset dispositions, net.

Cash used in investing activities

The amount of cash used in investing activities significantly decreased during the first ~~quarter~~six months of 2015 compared to the same period of 2014 as no expansion projects were ongoing at Hycroft during 2015. During the first ~~quarter~~six months of 2015 cash additions to plant, equipment, and mine development totaled $0.3.6 million and primarily consisted of ~~additions~~leach topad ~~mine~~and ~~development~~demonstration plant expenditures. During the first ~~quarter~~six months of 2014, cash additions to plant, equipment, and mine development totaled $4367.46 million and included $1131.09 million for mill components, $19.1 million for the crushing facility, $2410.0 million for ~~mill~~Merrill-Crowe ~~components~~additions, and $86.46 million for other additions. We received $20.0 million of gross proceeds from the second quarter 2014 sale of a 75% controlling interest in our Hasbrouck, Three Hills, and Esmeralda County exploration properties which was offset by an $8.7 million net increase to our restricted cash balances as our Revolver required us to maintain $10.0 million in restricted deposit accounts with the Revolver lenders.

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Cash provided by (used in) financing activities

During the first ~~quarters~~six months of 2015 and 2014, our principal repayments on capital lease and term loan obligations totaled $1020.09 million and $1327.86 million, respectively. During the first ~~quarter~~six months of 2015 we borrowed $25.5 million from the Revolver and an additional $3550.0 million from our DIP Credit Agreement to fund our working capital and liquidity needs during our reorganization process.

During the second quarter of 2015, cash used in financing activities included a $17.5 million increase to restricted cash as a result of the sale of exploration properties and related assets, discussed in Note 3 - Chapter 11 Bankruptcy Filing to our Notes to Condensed Consolidated Financial Statements. This transaction reduced Assets held for sale by the carrying value of $17.5 million and increase restricted cash by the same amount, pursuant to the June 18, 2015 Court Order requiring that the proceeds be placed in a segregated interest-bearing bank account maintained by the Debtors, pending agreement amongst the Restructuring Support Parties on the distribution of the funds. During July, 2015, all of the funds were distributed to the Secured Lenders.

Future capital and cash requirements

If we are able to achieve our internal production, sales, and costs targets while at the same time complying with the covenants contained in the DIP Credit Agreement, we believe we will be able to fund our obligations as they become due during the bankruptcy process.

The following table provides our gross contractual cash obligations as of ~~March~~June 3130, 2015, which are grouped in the same manner as they are classified in the Condensed Consolidated Statements of Cash Flows in order to provide a better understanding of the nature of the obligations and to provide a basis for comparison to historical information. Since the ability of the lenders and swap counterparties to seek remedies to enforce their respective rights against us are stayed and creditor’s rights of enforcement against us are subject to the applicable provisions of the Bankruptcy Code, we have excluded from the table below contractual obligations included in Liabilities subject to compromise and/or otherwise expected to be recapitalized or refinanced pursuant to the Amended Reorganization Plan (discussed above in the Liquidity Effects from the Chapter 11 Bankruptcy Filing section to the Notes to Condensed Consolidated Financial Statements). We believe the following provides the most meaningful presentation of our near-term obligations expected to be satisfied using our current and available sources of liquidity (in thousands):



	Total		Payments Due by Period
			Less than		1 – 3		3 – 5		More than
Contractual obligations			1 Year		Years		Years		5 Years
Operating activities:
Interest related to debt ⁽¹⁾	$	12,909	$	7,464	$	5,445	$	—	$	—
Remediation and reclamation expenditures ⁽²⁾	36,727		—		—		25		36,702
Investing activities:
Purchase obligations for plant and equipment⁽³⁾	4,721		4,721		—		—		—
Financing activities:
Repayments of principal on debt⁽⁴⁾	6,934		4,060		2,300		574		—
	$	61,291	$	16,245	$	7,745	$	599	$	36,702

⁽¹⁾

Interest related to debt includes cash payments required to service our Revolver, swap obligations and DIP Credit Agreement and does not include amortization of debt issuance costs, standby fees, or in-kind interest. Interest payments for amounts outstanding under the Revolver, the swap obligations and DIP Credit Agreement are calculated through October 31, 2015 (a date which we believe may approximate our emergence from bankruptcy if such emergence is to happen at all). Thereafter, interest payments on the swap obligations and Revolver were calculated in accordance with the terms of the Amended Term Sheet (maturity date of March 31, 2017). Interest payments on the amounts outstanding under the DIP Credit Agreement were calculated pursuant to the terms of the Exit Facility Commitment Letter; payment thereunder is in-kind and thus no interest is included for the amount outstanding under the DIP Credit Agreement after October 31, 2015. For additional information on our debt agreements see Note 12 - Debt to our Notes to Condensed Consolidated Financial Statements.


⁽²⁾	Mining operations are subject to extensive environmental regulations in the jurisdictions in which they are conducted and we are required, upon cessation of operations, to reclaim and remediate the lands that our operations have disturbed. The estimated undiscounted cash outflows of these remediation and reclamation obligations are reflected here.


⁽³⁾	Purchase obligations represents obligations which we cannot cancel and are not recorded in our financial statements. For additional information see Note 22 - Commitments and Contingencies to our Notes to Condensed Consolidated Financial Statements.


⁽⁴⁾	Repayments of debt include amounts due under certain capital lease and term obligations, which are currently the only debt obligations not expected to be recapitalized or refinanced during our reorganization.

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	Total		Payments Due by Period
			Less than		1 – 3		3 – 5		More than
Contractual obligations			1 Year		Years		Years		5 Years
Operating activities:
Interest related to debt (1)	$	14,213	$	6,162	$	6,183	$	1,715	$	153
Property and claim maintenance fees (2)	1,560		120		480		480		480
Remediation and reclamation expenditures (3)	36,727		—		—		25		36,702
Temporary housing and space rental costs(4)	2,856		2,702		154		—		—
Investing activities:
Purchase obligations for plant and equipment(5)	4,721		4,721		—		—		—
Financing activities:
Repayments of principal on debt(6)	136,504		45,829		69,013		17,204		4,458
	$	196,581	$	59,534	$	75,830	$	19,424	$	41,793

(1) Interest related to debt includes cash payments required to service our capital lease and term loan obligations, Revolver, and DIP Credit Agreement and does not include amortization of debt issuance costs, standby fees, or in-kind interest. Interest payments for amounts outstanding under the Revolver and DIP Credit Agreement are calculated through September 30, 2015 (a date which we believe may approximate our emergence from bankruptcy if such emergence is to happen at all). For additional information on our debt agreements see Note 11 - Debt to our Notes to Condensed Consolidated Financial Statements.

(2) Includes estimated payments required by the net profits royalty on Crofoot claims at the Hycroft Mine. For additional information see Note 21 - Commitments and Contingencies to our Notes to Condensed Consolidated Financial Statements.

(3) Mining operations are subject to extensive environmental regulations in the jurisdictions in which they are conducted and we are required, upon cessation of operations, to reclaim and remediate the lands that our operations have disturbed. The estimated undiscounted cash outflows of these remediation and reclamation obligations are reflected here.

(4) Temporary housing and space rental costs are related to lodging for employees, contractors, and consultants. For additional information see Note 21 - Commitments and Contingencies to our Notes to Condensed Consolidated Financial Statements.

(5) Purchase obligations represents obligations which we cannot cancel and are not recorded in our financial statements. For additional information see Note 21 - Commitments and Contingencies to our Notes to Condensed Consolidated Financial Statements.

(6) Repayments of debt include amounts due under our capital lease and term obligations, which are currently the only debt obligations not expected to be recapitalized or refinanced during our reorganization.

Debt covenants

~~Our~~In addition to those which are contained in the DIP Credit Agreement (discussed above), our remaining debt agreements contain representations and warranties, events of default, and covenants that are customary for agreements of such types. Excluding the DIP Credit Agreement, our remaining debt agreements contain cross-default and cross-acceleration clauses, which means that an event of default or covenant violation under any of our debt agreements may result in the acceleration of substantially all of its outstanding debt. The commencement of the Chapter 11 Cases discussed in Note 3 - Chapter 11 Bankruptcy Filing ~~to the Notes to Condensed Consolidated Financial Statements~~ constituted an event of default under our debt agreements (excluding the DIP Credit Agreement) and, accordingly, as of ~~March~~June 3130, 2015 and December 31, 2014, we had classified our debt balances within Debt, current asand Liabilities subject to compromise.

We believe that the ability of the lenders to seek remedies to enforce their respective rights against us are stayed and creditor’s rights of enforcement against us are subject to the applicable provisions of the Bankruptcy Code. Additionally, certain lenders have agreed to support the Amended Restructuring Transaction and the Amended Reorganization Plan.

DIP Credit Agreement

The DIP Credit Agreement contains certain customary and industry/Company-specific representations, covenants, indemnifications and events of default~~, all of which we were in compliance with as of March 31, 2015~~. Events of default include, but are not limited to, payment defaults, covenant defaults and certain bankruptcy-related defaults. The financial and non-financial covenants include, but are not limited to, the covenant testing the Reserve Tail (as defined in the DIP Credit Agreement), the prohibited variance covenant testing the “Total Operating Disbursements”, “Total Ounces of Gold Sold”, “Total Ounces of Gold Equivalent Sold” and “Total Monthly Ounces of Gold Produced” line items on the approved budget, and the covenant on the Hycroft Demonstration Plant (as defined in the DIP Credit Agreement). The Reserve Tail covenant requires us to maintain a minimum Reserve Tail of at least 600,000 ounces of gold equivalent on the end of each quarter falling after the closing of the DIP Credit Agreement. The Total Operating Disbursements covenant requires us to make disbursements in accordance with a budget approved by the lenders under the DIP Facility (generally subject to a 10% permitted variance over budget). The Total Ounces of Gold Sold, Total Ounces of Gold Equivalent Sold and Total Monthly Ounces of Gold Produced covenants require us to sell or produce minimum amounts of gold or equivalent ounces (generally subject to a 10% permitted variance under budget). The Hycroft Demonstration Plant covenant requires us to construct and operate a temporary demonstration plant related to the sulfide mill expansion project at our Hycroft Mine.

34As discussed in Note 3 - Chapter 11 Bankruptcy Filing, we were not able to comply with several of the covenants in the DIP Credit Agreement. However, we have obtained the Retractable Waivers from the majority DIP lenders, for certain defaults or anticipated defaults, in connection with, among other things, (1) our suspension of operation of the Hycroft Mine, (2) the non-payment of capital leases, (3) the failure to meet the milestones set forth in the DIP Credit Agreement so long as we are complying with the milestones set forth in the Amended and Restated Restructuring Support Agreement (subject to an extension of 30 days for each milestone), (4) the failure to comply with the “Total Ounces Gold Sold Covenant” and “Total Ounces Gold Equivalent Sold Covenant”, in each case, with respect to the four-week periods ending through August 16, 2015, and (5) the failure to comply with the “Total Monthly Gold Produced Covenant” with respect to the monthly periods ended through July 31, 2015 (collectively, the “Current and Anticipated Waivers”). In addition, the majority DIP lenders have agreed to waive, but subject to the retraction, termination and/or withdrawal of such waiver upon notice by the majority DIP lenders, any prospective default, in connection with, among other things, our failure (x) to deliver any update to the approved budget solely as a result of the delayed approval by the majority DIP lenders of such update and (y) to meet the “Total Ounces Gold Sold Covenant,” the “Total Ounces Gold Equivalent Sold Covenant” and “Total Monthly Gold Produced Covenant” with respect to the test periods beyond those covered by the Current and Anticipated Waivers.

~~Table~~If we are unable to comply with, or obtain a waiver from the majority DIP lenders of, ~~Contents~~ any of the other covenants contained in the DIP Credit Agreement, or the majority DIP lenders retract any of the Retractable Waivers, there could be a default under the terms of such agreement, which could result in an acceleration of repayment and prevent us from borrowing additional funds under the DIP Credit Agreement. We are dependent on a financial restructuring to have any possibility to continue as a going concern. If we are unable to maintain compliance with the covenants (or obtain waivers for non-compliance) contained in the DIP Credit Agreement, our ability to successfully recapitalize our balance sheet and emerge from bankruptcy significantly decreases and may not be possible.

Although we were in compliance with the covenants contained in the DIP Credit Agreement on the date that these financial statements were issued, we anticipate near-term difficulties maintaining compliance with certain of such covenants (some of which are tested on a weekly basis), specifically as it relates to our ability to comply with the minimum permitted variance of the “Total Ounces of Gold Sold” and the “Total Ounces of Gold Equivalent Sold”, line items on the approved budget in the DIP Credit Agreement. In addition, on May 11, 2015, we are required to report our Total Monthly Ounces of Gold Produced for the month of April 2015 and anticipate difficulty complying with the minimum permitted variance thereof. As we do not expect to be able to comply with the minimum permitted variance required with respect to the approved budget to be in effect, we obtained a waiver from the majority DIP lenders, providing that it shall not constitute a default or event of default if we fail to comply with the covenants relating to (1) the “Total Ounces of Gold Sold” and “Total Ounces of Gold Equivalent Sold”, in each case, with respect to the four-week periods ended May 10, 2015 and May 17, 2015 and (2) the “Total Monthly Ounces of Gold Produced” with respect to the monthly period ended April 30, 2015. Furthermore, we were required to provide the DIP Credit Agreement lenders with an update to the approved budget on May 7, 2015. Pursuant to the waiver obtained from the lenders on May 7, 2015, the requirement for the delivery of the updated budget has been extended to the earlier of (a) May 21, 2015 and (b) the date of delivery of an update to the approved budget, which update to the approved budget shall be reasonably satisfactory to the majority DIP lenders. If we are unable to comply with, or obtain a waiver from the majority DIP lenders of, any of the other covenants contained in the DIP Credit Agreement, there could be a default under the terms of such agreement, which could result in an acceleration of repayment and prevent us from borrowing additional funds under the DIP Credit Agreement. We are dependent on a financial restructuring to have any possibility to continue as a going concern. If we are unable to maintain compliance with the covenants (or obtain waivers for non-compliance) contained in the DIP Credit Agreement our ability to successfully recapitalize our balance sheet and emerge from bankruptcy significantly decreases and may not be possible.

Non-GAAP Financial Measures

Adjusted Cash Costs per Ounce

Adjusted cash costs per ounce is a non-GAAP financial measure, calculated on a per ounce of gold sold basis, and includes all direct and indirect operating cash costs related to the physical activities of producing gold, including mining, processing, cash portions of production costs written-down, the effective portion of any cash flow hedges, third party refining expenses, on-site administrative and support costs, royalties, and mining production taxes, net of revenue earned from silver sales. Because we are a primary gold producer and our operations focus on maximizing profits and cash flows from the extraction and sale of gold, we believe that silver revenue is peripheral and not material to our key performance measures or our Hycroft Mine operating segment and, as such, adjusted cash costs per ounce is reduced by the benefit received from silver sales.

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extraction and sale of gold, we believe that silver revenue is peripheral and not material to our key performance measures or our Hycroft Mine operating segment and, as such, adjusted cash costs per ounce is reduced by the benefit received from silver sales.

Adjusted cash costs per ounce provides management and investors with a further measure, in addition to conventional measures prepared in accordance with GAAP, to assess the performance of our mining operations and ability to generate cash flows over multiple periods from the sale of gold. Non-GAAP financial measures do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other mining companies. Accordingly, the above measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

The table below presents a reconciliation between non-GAAP adjusted cash costs (excluding write-down), which is the numerator used to calculate non-GAAP adjusted cash costs per ounce (excluding write-down), to Production costs (GAAP) for the three and six months ended ~~March~~June 3130, 2015 and 2014 (in thousands, except ounces sold):

	Three months ended March 31,
	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Production costs	$	3928,~~333~~768		$	5655,~~359~~367		$	68,101		$	111,725
Less: Silver revenues - Note 12	(4,419		)	(8,291		)
Less: Silver revenues - Note 13	(3,547		)	(9,410		)	(7,966		)	(17,702		)
Adjusted cash costs, excluding write-down	$	3425,~~914~~221		$	4845,~~068~~957		$	60,135		$	94,023
Gold ounces sold - Note 12	41,843			59,470
Gold ounces sold - Note 13	30,714			57,050			72,557			116,520
Adjusted cash costs per ounce, excluding write-down	$	~~834~~821		$	~~808~~806		$	829		$	807
Write-down of production inventories per ounce - Note 5(1)	~~675~~1,282			—			932			—
Adjusted cash costs per ounce	$	12,~~509~~103		$	~~808~~806		$	1,761		$	807
(1) During the three months ended March 31, 2015, we recorded a $37.0 million write-down to ore on leach pads, consisting of $28.2 million of previously incurred cash production costs and $8.8 million of allocated depreciation and amortization. The $28.2 million cash portion of our write-down impacted our adjusted cash costs per ounce by $675 for the three months ended March 31, 2015, respectively. See Note 5 - Ore On Leach Pads to our Notes to Condensed Consolidated Financial Statements for additional detail.
(1) During the three and six months ended June 30, 2015, we recorded write-downs to ore on leach pads, consisting of cash production costs and allocated depreciation and amortization. The cash portion of our write-downs impacted our adjusted cash costs per ounce by $1,282 and $932 for the three and six months ended June 30, 2015, respectively. See Note 5 - Ore On Leach Pads to our Notes to Condensed Consolidated Financial Statements for additional detail.

Off-balance sheet arrangements

35As of June 30, 2015, our off-balance sheet arrangements consisted of operating lease agreements, purchase obligations, and royalty agreements. For additional detail see the Capital requirements section above and Note 22 - Commitments and Contingencies to our Notes to Condensed Consolidated Financial Statements.

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As of March 31, 2015, our off-balance sheet arrangements consisted of operating lease agreements, purchase obligations, and royalty agreements. For additional detail see the Capital requirements section above and Note 21 - Commitments and Contingencies to our Notes to Condensed Consolidated Financial Statements.

Accounting Developments

For a discussion of any recently issued and/or recently adopted accounting pronouncements, see Note 1 - Basis of Presentation and Note 2 - Accounting Pronouncements to our Notes to Condensed Consolidated Financial Statements.

Critical Accounting Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these statements requires us to make assumptions, estimates, and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. For information on our most critical accounting estimates, see the Critical Accounting Estimates section included in Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2014.

Cautionary Statement 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 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the SEC, all as may be amended from time to time. 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 ability to emerge from bankruptcy


•	our ability to continue to comply with the DIP Facility and other convenants


•	our future business strategy, plans and goals;


•	future gold and silver prices;


•	our estimated future capital expenditures, construction, and other cash needs and expectations as to the funding or timing thereof;

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•	our anticipated liquidity, cash flows, cash operating costs and adjusted cash costs;


•	the availability, terms and costs related to future borrowing, debt repayment, equity funding, and other financing issues;


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


•	the timing and economic potential of the transitional and sulfide mineralization and milling project at the Hycroft Mine;


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


•	the projected amounts of our future costs and expenses;


•	our expectations regarding gold and silver recovery;


•	our estimated future production, cost of production, sales, and cost of sales;


•	our plans and expectations regarding the use of the crushing system, the crushing system’s impact on our operations, and permanent and temporary corrections and modifications of the crushing system;

• our plans and expectations regarding the development of our properties, including with respect to the Hycroft Mine; ~~and~~

• our plans and expectations regarding the sale of certain assets, including with respect to mineral properties and certain assets held for sale.; and


•	our plans and expectations regarding the restart of mining operations at the Hycroft Mine.

The words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe”, “project”, “target”, “budget”, “may”, “can”, “will”, “would”, “could”, “should”, “seeks”, or “scheduled to”, or other similar words, or negatives of these terms or other variations of these terms or comparable language or any discussion of strategy or intentions identify forward-looking statements. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefit of the “safe harbor” provisions of such laws. These statements involve known and unknown risks, uncertainties, assumptions and other factors which may cause our actual results, performance or achievements to be materially different from any 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, performance or achievements to differ materially from those in the forward-looking statements include, but are not limited to:

• our plans and expectations related to the confirmation of our Amended Reorganization Plan and the recapitalization of the Company or restructuring of any or all of its debt;


•	our plans and expectations related to our ability to obtain financing to emerge from federal bankruptcy proceedings and continue as a going concern;


•	our expectations related to our compliance with the terms of the DIP Credit Agreement;

36• our expectations that, during the bankruptcy process, our trade creditors and vendors will be paid in full and we will continue to produce gold at our Hycroft Mine;

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• our expectations that, during the bankruptcy process, our trade creditors and vendors will be paid in full and we will continue to operate and produce gold at our Hycroft Mine;


•	the potential adverse effect of the filing of the Chapter 11 Cases on our business, financial condition and results of operations, including our ability to maintain contracts and other business relationships that are critical to our business and the actions and decisions of our creditors and other third parties with interests in the Chapter 11 Cases;


•	our ability to maintain adequate liquidity to fund our operations during the Chapter 11 Cases and to fund a plan of reorganization and thereafter;


•	risks related to whether the holders of our liabilities and/or securities will receive any value for their interests;


•	our ability to obtain approval of the Bankruptcy Court with respect to motions in the Chapter 11 Cases prosecuted from time to time and to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 Cases and to consummate all of the transactions contemplated by one or more such plans or upon which consummation of such plans may be conditioned;


•	our need to raise additional capital, which may not be available on favorable terms or at all;


•	our ability to restructure our substantial level of indebtedness in federal bankruptcy proceedings in order to emerge from bankruptcy and continue as a going concern;


•	risks related to the debtor-in-possession financing;


•	risks related to our liquidity, financial position, and ability to continue as a going concern.


•	volatile market prices of gold and silver;


•	risks related to the potential write-down of our long-lived assets;


•	our current intention or future decisions whether or not to use forward-sale arrangements;


•	risk associated with our current and future use of derivative financial instruments;

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


•	uncertainties concerning estimates of mineral reserves and mineralized materials, and grades;

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


•	availability and cost of equipment or supplies;


•	uncertainties and risks related to our reliance on contractors and consultants;


•	the commercial success of, and risks relating to, our exploration and development activities;


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


•	risks related to slope stability;


•	uncertainties related to our ability to replace and expand our ore reserves;


•	insurance may not be adequate to cover all risks associated with our business;

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


•	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;


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


•	potential challenges to title in our mineral properties;


•	risks associated with proposed legislation in Nevada that could significantly increase the costs of our operations;


•	changes to the climate and regulations and pending legislation regarding climate change could increase the costs of our operations;


•	risks related to trading in our securities during the term of the Chapter 11 Cases;


•	risks related to our common stock no longer being traded on the NYSE MKT and the TSX;


•	risks associated with the inability to retain or attract key personnel necessary to our operations;


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


•	risks associated with joint ventures;


•	risks related to current and future legal proceedings; and


•	risks related to security breaches.


•	our anticipated liquidity, cash flows, cash operating costs and adjusted cash costs per ounce;


•	the availability, terms and costs related to future borrowing, debt repayment, and equity funding;


•	our expectations and plans related to the recapitalization of the Company or restructuring of any or all of its debt;

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•	our plans and expectations related to our ability to obtain financing to emerge from federal bankruptcy proceedings and continue as a going concern;


•	our efforts to restructure our operations to continue as a going concern and preserve value;

• our expectations that, during the bankruptcy process, our trade creditors and vendors will be paid in full and we will continue to operate and produce gold at our Hycroft Mine;


•	our future business strategy, plans and goals;


•	our estimated future capital expenditures, construction, and other cash needs and expectations as to the funding or timing thereof;


•	the availability, terms and impacts of financing strategies and options;


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


•	our expectations regarding gold and silver recovery;


•	our estimated future production, sales, cost of production, cost of sales, costs, and expenses;


•	our plans and expectations regarding the development of our properties, including with respect to Hycroft; and

• our plans and expectations regarding the sale of certain assets, including with respect to certain assets held for sale ~~and mineral properties~~.

For a more detailed discussion of such risks and other important factors that could cause actual results, performance or achievements to differ materially from those in forward-looking statements, please see the risk factors discussed in Part I—Item 1A. Risk Factors in our Annual Report on Form 10-K 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. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results, performance or achievements may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. In addition, even if our results, performance or achievements are consistent with the forward-looking statements contained in this Form 10-Q, those results, performance or achievements may not be indicative of results, performance or achievements in subsequent periods.

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Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make in this Form 10-Q speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.



ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risks during the three and six months ended ~~March~~June 3130, 2015. For additional information on our market risks, see Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk in of our Annual Report on Form 10-K for the year ended December 31, 2014.



ITEM 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Allied Nevada management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of Allied Nevada’s disclosure controls and procedures, as required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act as of ~~March~~June 3130, 2015. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us, including our consolidated subsidiaries, in reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure and is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission’s rules and forms.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~March~~June 3130, 2015 to provide such reasonable assurance.

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Our management, including our Chief Executive Officer and Chief Financial Officer, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. While the design of any system of controls is to provide reasonable assurance of the effectiveness of disclosure controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and may not be prevented or detected.

Changes in Internal Control Over Financial Reporting

There has not been any change in Allied Nevada’s internal control over financial reporting during the ~~three~~six months ended ~~March 31~~June 30, 2015 that has materially affected, or is reasonably likely to materially affect, Allied Nevada’s internal control over financial reporting.

PART II - OTHER INFORMATION



ITEM 1.	LEGAL PROCEEDINGS

From time to time we are involved in various legal actions related to our business, some of which are class action lawsuits. We do not believe, based on currently available information, that contingencies related to any pending or threatened legal matter will have a material adverse effect on our financial statements, although a contingency could be material to our results of operations or cash flows for a particular period depending on our results of operations and cash flows for such period. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

As discussed in Note 3 - Chapter 11 Bankruptcy Filing to the Notes to Condensed Consolidated Financial Statements, on March 10, 2015, the Debtors filed the Chapter 11 Cases with the Bankruptcy Court. The Debtors will continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.



ITEM 1A.	RISK FACTORS

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There have been no material changes to our risk factors discussed in Part I – Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2014.



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

None.



ITEM 3.	DEFAULTS UPON SENIOR SECURITIES

None.



ITEM 4.	MINE SAFETY DISCLOSURES

Safety and health is our highest priority, which is why we have a mandatory mine safety and health program that includes employee and contractor training, risk management, workplace inspection, emergency response, accident investigation and program auditing. We consider this program to be essential at all levels to ensure that our employees, contractors, and visitors are always in an environment that is safe and healthy.

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.



ITEM 5.	OTHER INFORMATION

39None.

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As previously disclosed by the Company in a Current Report on Form 8-K filed with the SEC on March 16, 2015, the Company had received a notice from the NYSE MKT (the “Exchange”) on March 10, 2015 that the Exchange had suspended the Company’s common stock from trading immediately and had determined to commence proceedings to delist the Company’s common stock due to the Company’s bankruptcy proceedings. The Company also stated it would not appeal the Exchange’s decision and expected the common stock to be delisted when the Exchange’s proceedings were completed.

On May 1, 2015, the Exchange filed an application on Form 25 with the SEC in accordance with Rule 12d2-2 promulgated under the Securities Exchange Act of 1934, as amended, to notify the SEC of the Exchange’s intention to remove the entire class of common stock of the Company from listing and registration on the Exchange at the opening of business on May 12, 2015, pursuant to the provisions of Rule 12d2-2(b) because, in the opinion of the Exchange, the Company’s common stock is no longer suitable for continued listing and trading on the Exchange.



ITEM 6.	EXHIBITS

(a) Exhibits

ExhibitNumber		Description of Document
Material Contracts.
10.1†		~~Restructuring~~Waiver ~~Support Agreement, dated as of March 10, 2015, among Allied Nevada Gold Corp~~No., ~~Allied~~2 ~~Nevada~~to ~~Gold~~Secured ~~Holdings~~Multiple ~~LLC,~~Draw ~~Allied~~Debtor-in-Possession ~~VGH~~Credit ~~Inc.~~Agreement, ~~Allied~~dated ~~VNC~~as ~~Inc.,~~of ~~ANG~~June ~~Central LLC~~8, ~~ANG~~2015 Cortez LLC, ANG Eureka LLC, ANG North LLC, ANG Northeast LLC, ANG Pony LLC, Hasbrouck Production Company LLC, Hycroft Resources & Development, Inc., Victory Exploration Inc., Victory Gold Inc., the Initial Consenting Noteholders (~~as defined therein) and the Initial Secured Lenders (as defined therein) (~~incorporated herein by reference to Exhibit 10.1 of Allied Nevada Gold Corp.’s Current Report on Form 8-K dated ~~March~~June 108, 2015 filed with the SEC on ~~March~~June 1012, 2015).
10.2†		~~Form~~Asset Purchase Agreement, dated as of ~~Secured~~April ~~Debtor~~27, in2015, ~~Possession~~by ~~Multiple~~and ~~Draw~~among ~~Credit~~Allied ~~Agreement~~Nevada Gold Corp. and certain of its wholly-owned subsidiaries and Clover Nevada LLC (incorporated herein by reference to Exhibit 10.1 of Allied Nevada Gold Corp.’s Current Report on Form 8-K dated ~~March~~June 1018, 2015 filed with the SEC on ~~March~~June 1023, 2015).
10.3		Waiver and Amendment No. 1 to Secured Debtor In Possession Multiple Draw Credit Agreement (dated May 7, 2015).
10.3†		Amended and Restated Restructuring Support Agreement, dated as of July 23, 2015, among Allied Nevada Gold Corp., Allied Nevada Gold Holdings LLC, Allied VGH Inc., Allied VNC Inc., ANG Central LLC, ANG Cortez LLC, ANG Eureka LLC, ANG North LLC, ANG Northeast LLC, ANG Pony LLC, Hasbrouck Production Company LLC, Hycroft Resources & Development, Inc., Victory Exploration Inc., Victory Gold Inc., the Initial Consenting Noteholders (as defined therein) and the Initial Secured Lenders (as defined therein) (incorporated herein by reference to Exhibit 10.1 of Allied Nevada Gold Corp.’s Current Report on Form 8-K dated July 23, 2015 filed with the SEC on July 29, 2015).
10.4†		Exit Facility Commitment Letter, dated as of July 23, 2015, between Allied Nevada Gold Corp. and the Commitment Parties (as defined therein) (incorporated herein by reference to Exhibit 10.2 of Allied Nevada Gold Corp.’s Current Report on Form 8-K dated July 23, 2015 filed with the SEC on July 29, 2015).
Rule 13a-14(a)/15d-14(a) Certifications.
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
Section 1350 Certifications.
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
Mine Safety Disclosure Exhibits.
95.1		Mine Safety Disclosures
Interactive Data File.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document





†		Not filed herewith, but incorporated herein by reference.

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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:	~~May~~August 127, 2015	By:	/s/ Randy E. Buffington
			Randy E. BuffingtonPresident and Chief Executive Officer
Date:	~~May~~August 127, 2015	By:	/s/ Stephen M. Jones
			Stephen M. JonesExecutive Vice President and Chief Financial Officer

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