Yukon-Nevada Gold Corp said the U.S. federal mine regulator put its Jerritt Canyon mill on safety watch list for alleged violations.

The company said it received a letter from the Federal Mine Safety and Health Administration (MSHA) saying it had found the mill, located 50 miles north of Elko, Nevada, to be in violation of the Federal Mine Safety and Health Act, 1977.

The regulator's pattern of violatons program requires companies shut down areas affected by violations until the mine receives a clean MSHA inspection.

Yukon-Nevada said in most cases, such closures affect mine areas not critical to production or which can be corrected within a short time.

MSHA's initial finding is based mostly on alleged violations that have been contested by Jerritt Canyon as invalid. Most of the alleged violations have not yet been reviewed and adjudicated and, therefore, are not final, the company said in a statement.

Jerritt Canyon is operated by Queenstake Resources USA, a subsidiary of Yukon-Nevada that owns gold, silver, zinc and copper assets in Canada's Yukon territory and British Columbia and Nevada in the U.S.

Although we disagree with MSHA's assessment, we intend to work with MSHA to reach a full and efficient resolution of this matter, Yukon's chief executive Robert Baldock said.

In May, the company had said it plans to invest $12 million to further explore the Smith Underground mine -- the active mine at Jerritt Canyon, producing about 1,000 ore tons per day.

Shares of Yukon, which have lost nearly 60 percent of their value in the past year, closed at 36 Canadian cents on Thursday on the Toronto Stock Exchange.

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