TICKERS: KDX; KLDX

Klondex Ups Mineral Resource at True North

Source:

An updated mineral resource for Klondex's True North project that increases the Measured and Indicated resource by 32% and the Inferred by 45% caught the attention of several analysts.

Klondex Mines Ltd. (KDX:TSX; KLDX:NYSE.MKT) on March 29 released an updated mineral resource for its True North Gold mine located in Manitoba, Canada. Klondex acquired the mine in January 2016. The Measured and Indicated resource represents an increase of 32% in gold ounces over the September 2016 resource estimate and the Inferred resource increased 45%.

Paul Huet, president and CEO stated, "True North continues to evolve into an important asset in our portfolio. We believed our initial Mineral Resource Estimate was just the beginning and this update confirms that belief. Using the results from our own drilling program post acquisition, we continue to unlock the true potential of this asset by adding ounces at depth with additional tons at higher grades."

The resource estimate was well received by industry analysts. Jamie Spratt, an analyst with Clarus Securities, called the update positive and noted that "we are encouraged by the growth in the mineral inventory that further strengthens our view on the significant exploration upside available at True North from the multiple zones that remain open. We believe continued drilling should translate into mine life extension of the ~45 Koz/year production profile at True North."

Spratt also lauded the True North and Hollister acquisitions by noting, "we continue to believe that KDX is well positioned to deliver a compelling production growth profile by the addition of True North and Hollister mines that are expected to drive production toward 300 Koz by 2018."

Stuart McDougall, an analyst with M Partners, noted that Klondex "maintains a strong balance sheet, with year-end unrestricted cash of ~$48M, working capital of $33M and total debt of $30M. . .based on our revised estimates, KDX can fund its capital requirements from internal cash flow, even at current metal prices."

On March 26, prior to Klondex releasing True North's updated resource estimate, Jeff Killeen of CIBC noted, "2016 has been a transitional year for Klondex with the purchase of the True North and Hollister mines. 2017 is expected to see production ramp up at True North and first gold from a bulk sampling program at the Hollister mine." He added, "A mine plan and resource update for Hollister is scheduled for Q2/17 and could be the next catalyst for Klondex shares. Management has cemented a reputation as being experts in underground, narrow vein mining and points to the continued potential for resource expansion at Fire Creek from recent drill results."

Jamie Spratt of Clarus concluded, "Our thesis continues to be that KDX offers best-in-class production growth, low cost production and a solid management execution track record."

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Klondex Mines Ltd. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsors' fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.




Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe