S&P: Allied Nevada notes B

Standard & Poor's said it assigned a preliminary B corporate credit rating to Allied Nevada Gold Corp., along with a preliminary B rating and a 3 recovery rating to its proposed C$400 million senior unsecured notes due 2019.

The 3 recovery rating indicates 50% to 70% expected recovery in a default.

The outlook is stable.

The proceeds will be used to fund a portion of the company's $1.2 billion mine expansion program.

The corporate credit rating on Allied Nevada reflects the company's business risk as vulnerable and its financial risk as aggressive, S&P said.

Weaknesses include the company's reliance on a single operating mine, exposure to volatile precious metals prices and high capital needs related to the company's aggressive mine expansion plans, the agency said.

Currently favorable prices for gold and silver, as well as Allied Nevada's significant proven and probable reserves somewhat offset these risks, S&P said.

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