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Klondex Mines Ltd.

Klondex Mines Ltd. is focusing on the exploration, development and production of its two high-quality gold and silver projects in the mining-friendly jurisdiction of north-central Nevada. The 1200 tpd milling facility is processing mineralized materials from the Midas mine and the Fire Creek project. Midas is fully permitted and has been in operation since 1998. Fire Creek is located ~100 miles south of Midas and is operating an ongoing bulk sampling program that began in 2013. All major infrastructure is in place at Fire Creek.

Expert Comments:

Philip Ker, PI Financial (2/24/15)
"Klondex Mines Ltd. announced its initial reserve estimates for Fire Creek and Midas. . .approximately 330,000 oz gold and 2.8 Moz silver, highlighted by excellent reserve gold grades of 1.285 oz/t and 0.378 oz/t for Fire Creek and Midas, respectively, using a $1,000/oz gold and $18.53/oz silver price. . .this initial reserve estimate confirms upside still exists. . .the high grades outlined in the reserve were a positive surprise. . .we are confident that the company's exploration and development efforts over 2015 will lead to further discoveries and conversion of resources to reserves. . .we are increasing our target price from $2.85 per share to $3.00 per share."

Derek Macpherson, M Partners (2/24/15)
"Klondex Mines Ltd. announced initial reserve estimates for both Fire Creek and Midas, which imply a 3.8-year reserve life at Fire Creek and a 2.8-year reserve life at Midas. . .considering the reserves represent only a portion of the Measured and Indicated resource ounces (57% for Fire Creek and 25% for Midas) and the overall resource ounces (31% for Fire Creek and 16% for Midas), we believe that reserves are likely to grow in subsequent updates. Conservative assumptions highlight the company's ability to generate positive cash flow at the current gold price, or lower if required."

"Klondex Mines Ltd. is one of my favorite near-term gold production stories; it is producing gold and silver from its Midas mine, and is ramping up gold production at Fire Creek. Both are in Nevada. . .Klondex is in one of the best jurisdictions for operating gold mines, and now it has two. It also has a mill. This company is in a position to become a consolidator. Nevada has a number of small mines that could benefit from a very capable management team and a milling operation with excess capacity. . .at some point, there might be a takeover offer [for Klondex]. I would hope it remains independent for at least a while. There is a lot of value-added potential yet for that management team and the potential for further consolidation." read more >

Sam Crittenden, RBC Capital Markets (2/23/15)
"We view the initial reserves for Klondex Mines Ltd.'s Fire Creek and Midas as positive as grades are higher than our modeled estimates and they demonstrate the ability to generate positive free cash flow at current gold prices. The reserves have short mine lives (3.8 years at Fire Creek and 2.8 years at Midas); however, represent only 34% of the total resource at Fire Creek and 16% at Midas, and we believe additional ounces can be converted to reserves through exploration and engineering."

Oliver Turner, GMP Securities (2/23/15)
"This morning, Klondex Mines Ltd. announced initial reserves at Fire Creek and Midas in Nevada. . .with higher grades than we had anticipated (and currently model). We note that the reserves are run at $1,000/oz gold price and $15.83/oz silver price, providing significant downside protection while only extracting approximately 31% and 16% of the global resource bases of 784 Koz Au eq at Fire Creek and 813 oz Au eq at Midas. . .these resource bases (which we continue to expect to grow) provide ounce feed well beyond the current 3.8- and 2.8-year reserve lives at the two operations."

Barry Allan, Mackie Research Capital (2/23/15)
"Klondex Mines Ltd. has released an initial reserve for both the Fire Creek and Midas mines. At Fire Creek, the reserve life now sits at 3.8 years, grading 1.3 oz/t gold equivalent (approximately 44.6 g/t), while at Midas the reserve life of 2.8 years grades 0.55 oz/t (approximately 18.8 g/t). . .the resource base at Fire Creek is likely substantially more than what the current reserve and resource suggests, given the conservative parameters applied and further exploration upside. . .Klondex remains our favorite junior producer, with solid cash-flow generation and ample exploration potential on both assets."

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Investing Highlights
 
Free Cash Flow From Operations
 
High Gold Grades
 
Low Cash Costs
Klondex Mines Ltd. Content