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Klondex Mines achieves strong Q3, lifts full year production guidance

NYSE and TSX-listed Klondex Mines has released its operational and financial results for the third quarter of 2015, revealing solid production that saw ...

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|Nov 13|magazine9 min read

NYSE and TSX-listed Klondex Mines has released its operational and financial results for the third quarter of 2015, revealing solid production that saw the miner lift its full year production guidance and strengthen its balance sheet while paying off debt.

“We had another strong quarter both operationally and financially,” said Klondex President and Chief Executive Officer Paul Huet. “Raising annual production guidance for the second consecutive quarter is a reflection of this performance and the tremendous efforts from the entire Klondex team.

• Related content: [INFOGRAPHIC] Overview: Klondex Mines

The gold mining company, which runs the Fire Creek project and Midas mine and ore milling facility in Nevada, increased its full year gold equivalent ounce guidance from 130,000 ounces to 135,000 ounce in the three months to end September. Production in the first half of the year was better than planned due to higher tons and grades from Midas while the second half is expected to benefit from higher tons mined and consistent grades at Fire Creek, the company said.

“Additionally, despite lower grades in the third quarter compared to the first half of the year, our year-to-date cash costs per GEO sold actually decreased from the second quarter as a result of managing our costs and becoming more efficient at our operations.”

Klondex increased its cash balance to $60.3 million, including generating $13.4 million in operating cash flows, used $9.7 million in investing activities, and raised $2.7 million in financing activities.

• Related content: World Gold Council: Gold demand rises 8 percent in Q3, hits two-year high

“We also continued to strengthen our balance sheet by increasing our cash balance by approximately $6 million during the quarter and completely repaying our Senior Notes,” said Huet.

For Fire Creek, measured and indicated gold increased by 13 percent net of mining depletion to 473,000 ounces, with inferred gold resources rising 22 percent to 441,500 ounces. Meanwhile, Midas measured and indicated resources net of depletion increased by seven percent to 561,600 ounces, with inferred gold ounces reduced eight percent to 267,500 ounces.

The gold miner is keeping its outlook for production costs at a low case of $750 for all in sustaining costs per ounce of gold sold.

WATCH: Interview with President and CEO Paul Huet of Klondex Mines Ltd.

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