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Klondex Mines expects to lift output by 36% in 2017

Friday, March 24, 2017 8:09
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(Before It's News)

Gold and silver producer Klondex Mines Ltd (TSE:KDX, NYSE:KLDX) expects to lift total output for 2017 by around 36% from the previous year.

The miner produced a record 151,007 gold equivalent ounces from its Nevada operations last year, exceeding the high end of management’s expectations.

Cash costs per gold equivalent ounce sold were $637, and within the expected range of between $600 and $650 per ounce.

Irons in a few fires

Klondex owns 100% of two assets – the Fire Creek mine and, around 100 miles away,  the Midas Mine and ore milling facility, both in Nevada, USA. It also owns the True North mining complex (previously Rice Lake in Manitoba, Canada).

In 2016, it sold a record 159,118 gold equivalent ounces – 19.4% higher than the previous year, consisting of 138,516 gold ounces and 1,470,992 silver ounces.

Revenue was a record at $198.2mln from average selling prices per gold and silver ounce of $1,245 and $17.44, respectively. The net loss for the year was $1.7mln.

Focused on organic growth

Paul Huet, chief executive, told investors today: “Looking ahead, our near-term strategy is focused on organic growth.

“We expect to produce between 210,000 and 225,000 gold equivalent ounces in 2017, an increase of approximately 36 per cent from the prior year.”

Expected cash costs will be a little higher at $680 to $710 per gold equivalent ounce sold.

The higher output in 2017 is put down to bulk sampling extraction at the Hollister mine in Nevada, as well as higher production from True North mine in Canada, as ramp-up continues.

Fire Creek and Midas’s 2017 production is expected to be in line with the prior year.

Capex is expected to be between $57-million to $62-million with an additional $3-million to $5-million to be spent on exploration.

Most of the cash is expected to be spent at Fire Creek as the company continues underground expansion in the form of primary access development and advancement of a second portal.

“The company also expects to spend $7-million to $9-million at the company’s newly acquired Hollister mine in Nevada as it commences a bulk sampling mining program and underground definition drilling in the Gloria zone.

Story by ProactiveInvestors


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