In Management's Discussion and Analysis of Financial Condition and Results of Operations, "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 February 25, 2013, provides information that management believes 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"). All amounts herein are in U.S. dollars, unless otherwise noted.

Our discussion and analysis consists of the following subsections:

• Introduction to the Company which provides a brief discussion about our history, location, operations, and future expansion plans;

• Executive Summary which lists and discusses significant matters related to our performance, operations, expansion projects, financing, and permitting;

• Critical Accounting Estimates which provides a discussion of accounting estimates that we believe are critical in understanding and evaluating our reported financial results because they affect reported amounts and require significant management judgment and assumptions about highly uncertain matters;

• Hycroft Mine which provides a detailed discussion of our operations, expansion projects, and 2013 outlook;

• Results of Operations which provides a discussion and analysis of operating results for the last three years;

• Liquidity and Capital Resources which provides a discussion of our cash flows (last three years), liquidity, available sources of liquidity, capital requirements, and debt covenants; and

• Non-GAAP Financial Measures which includes a description of our non-GAAP financial measure "adjusted cash costs", the reasons for using such a measure, and a three year reconciliation to total cost of sales.

Introduction to the Company

We are a U.S.-based gold and silver producer focused on mining, development, and exploration properties in the state of Nevada. Our operating mine, the Hycroft Mine, was restarted in 2008 and is undergoing expansion projects to implement oxide and sulfide mineralization processing capabilities which will provide staged production increases through 2015. Upon completion of the expansion, the Hycroft Mine is projected to produce, on average, 552,000 ounces of gold and 25.5 million ounces of silver per year from 2015 to 2024. At December 31, 2012 we had proven and probable mineral reserves of 11.9 million ounces of gold and 509.6 million ounces of silver.

Our Hycroft Mine is currently an open pit, run-of-mine and crushed ore heap leach gold mine that also produces silver as a byproduct of the gold recovery process. We are in the process of implementing a two-stage expansion project; the first stage involves increasing the mining and heap leaching rate of oxide and transitional material utilizing larger capacity mining equipment and expanding the processing facilities. In 2013, construction of a gyratory crusher, which will initially crush leach pad ore, is expected to be completed and is expected to improve our recoveries of gold and silver. The second stage of the expansion project involves constructing a mill and flotation plant to further improve metal recoveries from oxide and transitional ores and allow for processing of sulfide ore. Upon completion of the mill and flotation plant, the crushing facility will crush ore that will be fed through the mill.

In addition to the Hycroft Mine, we own or control leasehold interests in 100% of the Hasbrouck, Three Hills, Mountain View, Wildcat, and the Pony Creek/Elliot Dome Advanced Exploration Properties and have a joint venture with Silver Standard Resources Inc. with respect to the Maverick Springs Advanced Exploration Property. We also have the exploration rights to approximately 90 Other Exploration Properties.

Executive Summary

Our 2012 highlights included the following, which are discussed in further detail throughout the following sections of this Management's Discussion and Analysis of Financial Condition and Results of Operations:

Net income: Our 2012 net income was $47.7 million ($0.53 per share), an increase of 30% over 2011 net income of $36.7 million ($0.41 per share).

Ounces sold: Gold ounces sold in 2012 increased 30% to 114,705 ounces, compared to 88,191 ounces sold in 2011. Silver ounces sold in 2012 increased 87% to 696,144 ounces, compared to 372,000 ounces sold in 2011.

Hycroft mining: A record number of tons were mined at the Hycroft Mine in 2012. Total tons mined were 60.7 million tons, an increase of 78% from the 26.7 million tons mined in 2011. We achieved an average fourth quarter 2012 mining rate of 210,000 tons per day.

Hycroft Mine expansion projects:Construction, engineering and design, and equipment deliveries remain on time and as budgeted. In 2012, we completed the gyratory crusher pit excavation and construction of the Lewis leach pad, commenced construction of the gyratory crushing system, 21,500 gpm Merrill-Crowe plant, and North and South leach pads, and received and commissioned equipment to increase our mining rate.

Permitting: In 2012, we received a positive record of decision from the Bureau of Land Management ("BLM") for the Heap Leach Expansion Environmental Impact Statement and approval from the Nevada Department of Environmental Protection Agency ("NDEP") to begin construction of the mill.

Financing: In May 2012, we issued CDN $400 million of 8.75% senior unsecured notes (swapped to $400.4 million at 8.375% through a cross currency swap agreement), to finance a portion of our ongoing expansion projects. In October 2012, we amended and restated our revolving credit agreement, increasing the availability from $30.0 million to $120.0 million and extending the maturity from May 2014 to April 2016.

Exploration: We ramped up the first pass exploration campaign at Wildcat and continued exploration work at Hasbrouck/Three Hills, focusing on identifying and further defining high grade zones.

Critical Accounting Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations is based on our Consolidated Financial Statements, which have been prepared in accordance with generally accepted accounting

principles ("GAAP") 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. We base our assumptions, estimates, and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial Statements are prepared. On a regular basis, we review our accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ, and such differences could be material.

We consider an accounting estimate to be critical if it requires significant management judgments and assumptions about matters that are highly uncertain at the time the estimate is made and if changes in the estimate that are reasonably possible could materially impact our financial statements. Although other estimates are used in preparing our financial statements, we believe that the following accounting estimates are the most critical to understanding and evaluating our reported financial results. For information on all of our significant accounting policies, see Note 2 Summary of Significant Accounting Policies to our Consolidated Financial Statements.

Ore on Leach Pads and Stockpiles

Estimate Required:

The recovery of gold at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits our ability to precisely determine the recoverable gold ounces in ore on leach pads and stockpiles. We estimate the quantity of recoverable gold ounces in stockpiles and ore on leachpads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, and estimated recovery rates based on ore type and domain. The quantity of recoverable gold ounces and recovery rates varies based on ore mineralogy, ore grade, and ore particle sizes. The estimated recoverable gold ounces stockpiled or placed on the leach pads and recovery rates are periodically reconciled by comparing the related ore to the actual gold ounces recovered (metallurgical balancing). The ultimate recoverable gold ounces or life of mine recovery rate is unknown until mining operations cease. A change in the recovery rate or the quantity of recoverable gold ounces in our stockpiles or ore on leach pads could materially impact our financial statements.

Impact of Change in Estimate:

Changes in recovery rate estimates or estimated recoverable gold ounces that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, stockpiles and ore on leach pads would be adjusted to market values before prospectively accounting for the remaining costs and revised estimated recoverable gold ounces. The Company has not incurred any write-downs or significant changes in recovery rates or estimated recoverable gold ounces.

At December 31, 2012, if our weighted average recovery rate estimate decreased by 1% or 2%, our estimate of recoverable gold ounces in stockpiles and ore on leach pads would decrease by 1,750 ounces or 3,500 ounces, respectively, neither of which would require a write-down. On a prospective basis, our weighted average cost per ounce would increase by approximately $8 or $15. A 1% or 2% increase in our estimate of recoverable gold ounces in stockpiles and ore on leach pads would increase estimated recoverable ounces by the aforementioned amounts and reduce our weighted average cost per ounce by approximately $7 per ounce or $15 per ounce, respectively.

Proven and Probable Ore Reserves

Estimate Required:

Proven and probable ore reserves are the part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. Estimated recoverable gold ounces in our proven

and probable reserves at the Hycroft Mine are used in units-of-production amortization calculations and are the basis for future cash flow estimates utilized in impairment calculations. When determining proven and probable reserves, we must make assumptions and estimates of future commodity prices and demand, the mining methods we use and intend to use in the future, and the related costs incurred to develop, mine, and process our reserves. Our estimates of recoverable gold ounces in proven and probable reserves are prepared by and are the responsibility of our employees, a majority of which are reviewed by independent experts in mining, geology and reserve determination. Any change in estimate or assumption used to determine our proven and probable ore reserves could change our estimated recoverable gold ounces in such reserves, which may have a material impact on our financial statements.

Impact of Change in Estimate:

Our proven and probable ore reserves are periodically updated, usually on an annual basis. Resulting changes in estimates of recoverable gold ounces are used in our units-of-production calculations and impairment calculations on a prospective basis.

Estimated recoverable gold ounces used in our units-of-production amortization and impairment calculations are based on proven and probable ore reserves that were determined using gold and silver selling prices of $800 per ounce and $14 per ounce, respectively. If our proven and probable ore reserves were determined using gold and silver selling prices of $600 per ounce and $11 per ounce, respectively, our estimated recoverable gold ounces would decrease, resulting in an approximate increase in amortization of $1.5 million for 2012. The decrease in estimated recoverable gold ounces from decreased metal prices would not have resulted in an impairment write-down to any of our long-lived assets as of December 31, 2012.

Hycroft Mine



Operations



Key operating statistics for the years ended December 31, 2012, 2011, and 2010
are as follows:



                                                       Years ended December 31,
                                                   2012          2011          2010
   Ore mined (000's tons)                           30,299        16,638         9,923
   Ore mined and stockpiled (000's tons)             3,346           -             -
   Waste mined (000's tons)                         22,088        11,393        16,611

                                                    55,733        28,031        26,534

   Excavation and pre-strip mined (000's tons)       4,945         5,976           -

   Ore grade-gold (oz/ton)                           0.012         0.013         0.020
   Ore grade-silver (oz/ton)                         0.211         0.340         0.246
   Ounces produced-gold                            136,930       104,002       103,721
   Ounces produced-silver                          794,097       479,440       233,974
   Ounces sold-gold                                114,705        88,191       102,483
   Ounces sold-silver                              696,144       372,000       238,242
   Average realized price-gold ($/oz)            $   1,681     $   1,577     $   1,230
   Average realized price-silver ($/oz)          $      31     $      35     $      20
   Average spot price-gold ($/oz)                $   1,669     $   1,572     $   1,225
   Average spot price-silver ($/oz)              $      31     $      35     $      20
   Total adjusted cash costs1 (thousands)        $  73,186     $  43,062     $  52,871
   Adjusted cash costs per ounce1                $     638     $     488     $     516

1 The term "adjusted cash costs" is a non-GAAP financial measure. See the section on "Non-GAAP Financial Measures" in this MD&A.

Production tons mined at the Hycroft Mine in 2012 nearly doubled as we received and commissioned additional mining equipment during the year. The excavation and pre-stripping tons mined related to the crushing facility and mill site excavations and pre-stripping in the Bay pit. The average gold and silver grades of ore mined in 2012 were less than 2011 grades, but consistent with the mine plan. Ounces produced and ounces sold did not increase proportionate to the 82% increase in ore mined and placed on the leach pads because 72% of the total ore mined and placed on the leach pads occurred in the second half of 2012. A significant portion of the recoverable gold and silver placed on the leach pads during the second half of 2012 had yet to be recovered as of year-end. Additionally, in 2012 solution stacking occurred throughout the year to increase solution grades while maximizing the efficiency of the Merrill-Crowe plant's processing capacity. As discussed in the Expansion Projects and 2013 Outlook sections below, we expect our 2013 sales to more than double as a result of increasing the mining rate and commissioning critical production-related projects. For additional discussion on gold and silver ounces sold in 2012, see the following Results of Operations Revenue section.

Our adjusted cash costs1 increased 31% in 2012 and were negatively impacted by increased production costs in the first half of 2012, selling costs associated with in-process inventories, and an increase in the average cost per ounce in beginning of the year 2012 inventory compared to 2011. In the first half of 2012, our strip ratio was 1.4:1, increasing our production costs and average cost per ounce sold for 2012. Due to retort capacity and carbon processing limitations we sold 33,200 gold ounces from our in-process carbon and precipitate inventories and incurred $4.7 million in selling costs.
Additionally, the average cost per gold ounce on the leach pads in the beginning of 2012 was $825/oz, an increase of $186/oz compared to the beginning of the year of 2011. The aforementioned increases in adjusted cash costs1 were partially offset by the silver ounce to gold ounce ratio increasing to 6.1:1 in 2012 compared to 4.2:1 in 2011. As discussed in the 2013 Outlook section below, we expect our adjusted cash costs1 to be in the range of $565 to $585 per ounce (with silver as a byproduct credit).

Expansion Projects

We are undergoing expansion projects to implement oxide and sulfide mineralization processing capabilities which will provide staged production increases through 2015. Upon completion of the expansion, the Hycroft Mine is projected to produce, on average, 552,000 ounces of gold and 25.5 million ounces of silver per year from 2015 to 2024. Ongoing expansion projects at Hycroft include 1) increasing the mining rate through larger capacity haul trucks, shovels, and production drills, 2) expanding leach pad operations through increased pad size, additional solution processing capacity, and the addition of a gyratory crusher to enhance the exposure of ore to the leach process, 3) constructing a mill to process transitional and sulfide mineralization, and 4) upgrading infrastructure items to handle the milling demands, including power transmission and distribution and the construction of a railroad spur and an employee housing project.

Permitting actions for the expansion projects remains ahead of schedule. In August 2012, we received a positive record of decision from the BLM which approved expanding mining areas at Brimstone, Cut-5, Bay, and Central, the operation of the north and south leach pads, and infrastructure upgrades, including expanding the existing Merrill-Crowe plant and construction of additional Merrill-Crowe plants. In addition, the air quality permit to install the crushing components, as well as operate them when complete, was received. In December 2012, we received the mill construction approval from the NDEP ahead of the expected early 2013 approval date.

The capital cost estimate for the expansion project is expected to be $1.24 billion. As of December 31, 2012, we had spent or committed $612.1 million, which was in-line with the feasibility estimate and represents approximately 49% of the total capital estimate. Included in the $612.1 million spent or committed at December 31, 2012, are purchase obligations totaling $341.6 million, a portion of which are expected to be financed through capital leases. We estimate that 2013 capital expenditures at the Hycroft Mine for the expansion projects will total approximately $371.7 million. For additional discussion about the Hycroft Mine expansion

1 The term "adjusted cash costs" is a non-GAAP financial measure. See the section on "Non-GAAP Financial Measures" in this MD&A.

spending see the Liquidity and Capital Resources section below. The following sections provide additional detail on the Hycroft expansion projects.

Increasing the Mining Rate

The mining equipment required for the expansion projects has been arriving at site since late 2010 and will continue to be delivered through 2014. The expansion requires us to increase the annual mining rate to 94 million tons by the end of 2013 and ultimately to more than 190 million tons per year in 2014 and beyond. As of December 31, 2012, a significant portion of the larger mobile mining fleet was in operation. During the year, we received and commissioned 15 320-ton Komatsu haul trucks, two 345-ton Caterpillar haul trucks, one EX5500 hydraulic shovel, four high-capacity production drills, and other support equipment. Major additions to mobile equipment in 2013 are expected to include nine haul trucks, seven production drills and the first two (of three) wire rope shovels, which are expected to become operational in the third quarter and fourth quarter, respectively.

Expanding Leach Pad Operations

To accommodate the increased mining rate and higher grade oxide ore that will be processed using the mill, our leach pad processing capabilities are being expanded. In 2012, our leaching capacity was increased with the addition of the 3.0 million square foot Lewis leach pad expansion, which brought our total leach pad capacity to 12.0 million square feet. During 2012, we commenced construction on the North and South leach pad expansions and the new 21,500 gallon per minute Merrill-Crowe Processing facility. The gyratory crushing plant excavation was completed in 2012 and construction began on the crusher foundations. Concrete work commenced at the reclaim area, primary crusher foundation, and secondary and tertiary crusher foundations. We expect to begin stacking ore on the new North leach pad by the end of the second quarter of 2013. In addition, the gyratory crushing system and 21,500 gallon per minute Merrill-Crowe facility are expected to be commissioned in the third quarter of 2013.

Mill Construction

The mill will be used to process the higher grade oxide and transitional ores, and the sulfide ore. We currently expect the mill to have a design capacity allowing for the processing of 130,000 tons of ore per day through a crush-grind-float-leach flowsheet. In 2012 we began excavation of the facility location and construction of the building foundation is expected to begin in 2013. The Company has ordered long-lead time items critical to the construction schedule, which are currently expected to arrive as scheduled. To date, the major long-lead components that have been ordered include SAG mills, ball mills, a regrind mill, flotation cells, and thickeners. We expect to have the detailed engineering of the mill completed in the second half of 2013.

Infrastructure Upgrades

Our expansion plans require that we upgrade the infrastructure at the Hycroft Mine, including the power transmission and distribution system to handle demands of the mill and electric wire rope shovels and construction of a rail spur. Additionally, we are building a housing development in Winnemucca, NV for our current and future workforce, which we plan to rent and/or sell to our employees.

2013 Outlook

Gold and silver sales at the Hycroft Mine are expected to increase in 2013 to approximately 225,000 to 250,000 ounces of gold and 1.5 million to 1.8 million ounces of silver. Sales in the first half of the year are expected to be approximately 90,000 to 100,000 ounces of gold, increasing in the second half of the year. We expect to move 94.1 million tons of material, including 46.5 million tons of ore at average grades of 0.012 opt

gold and 0.25 opt silver. With the operation of the two wire rope shovels in the latter half of the year, the mining rate for the first half is expected to average 200,000 tons per day and will increase to average 290,000 tons per day in the second half. The overall strip ratio for 2013 is expected to be 0.6:1. A number of critical projects must be completed to achieve the higher end of the stated guidance range of metal sales. The stated guidance assumes that there will be no material delays in the start-up of the North leach pad, new Merrill-Crowe facility or operation of additional mobile equipment. Adjusted cash costs1 for 2013 are expected to be in the range of $565 to $585 per ounce (with silver as a byproduct credit).

Capital expenditures in 2013 are expected to total approximately $399.2 million, of which $130.8 million are expected to be financed with capital leases. Of the $399.2 million in capital expenditures expected in 2013, $27.5 million is for sustaining capital and the remainder is to advance the Hycroft Mine expansion project and includes equipment, infrastructure, engineering, permitting, and support programs. Major additions to mobile equipment in 2013 include nine haul trucks, seven production drills and the first two wire rope shovels, which are expected to become operational in the third quarter and fourth quarter, respectively.

We expect to begin stacking ore on the new North leach pad by the end of the second quarter of 2013. In addition, the gyratory crushing system and 21,500 gallon per minute Merrill-Crowe facility are expected to come online in the third quarter of 2013.

Company-wide exploration expense is projected to be $7.5 million in 2013 and does not include capitalized drilling. In addition to corporate office expense and annual land holding costs of approximately $3.2 million, we expect exploration spending in 2013 to be directed towards follow-up drilling of the encouraging results encountered in the Three Hills area of the Hasbrouck/Three Hills project and to test Hycroft regional targets identified in the southern region of the Hycroft property claim block.

Results of Operations

Revenue



Gold Revenue



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



                                                            Years ended December 31,
Gold revenue                                       2012                 2011               2010
Total gold revenue (thousands)                $       192,847      $       139,046       $ 126,088
Gold ounces sold                                      114,705               88,191         102,483
Average realized price (per ounce)            $         1,681      $         1,577       $   1,230

The change in gold revenue is attributable
to (thousands):
                                               2012 vs. 2011        2011 vs. 2010
Increase (decrease) in ounces sold            $        41,803      $       (17,584 )
Increase in average realized price                      9,225               35,492
Effect of average realized price increase
on ounces sold increase (decrease)                      2,773               (4,950 )

                                              $        53,801      $        12,958

1 The term "adjusted cash costs" is a non-GAAP financial measure. See the section on "Non-GAAP Financial Measures" in this MD&A.

Gold revenue increased by approximately 39% in 2012, primarily due an increase of 26,514 ounces sold over that of 2011. In 2012, due to our expanded mine equipment fleet, we mined 30.3 million tons of heap leach ore, nearly doubling the heap leach ore tons mined in 2011. However, the number of gold ounces sold did not proportionally increase as 72% of the ore tons were mined in the second half of 2012 and a significant portion of the related gold had yet to be recovered from the leach pads at year-end. We experienced slower than anticipated leach kinetics from Bay pit material placed on the leach pads in the third and fourth quarter and extremely cold and wet weather conditions in December slowed the recovery of our gold from the leach pads. We were able to maximize the efficiency of the Merrill-Crowe plant's processing capacity by . . .