Mr. Mike Beckstead reports
KLONDEX REPORTS FIRST QUARTER 2018 OPERATING RESULTS
Klondex Mines Ltd. has released its preliminary operating results for the first quarter of 2018.
First quarter 2018 highlights:
Announced proposed acquisition of Klondex by Hecla Mining Co. for $462-million (U.S.);Mined 49,873 gold equivalent ounces (GEOs);Produced 43,525 GEOs;Mining and production results in line with company expectations;Sold 42,541 GEOs.
Proposed transaction with Hecla
On March 19, 2018, the company announced that Hecla will acquire all of the outstanding shares of Klondex through a plan of arrangement. Hecla will acquire Klondex for consideration of $462-million (U.S.) comprising cash and shares of Hecla common stock. Klondex shareholders will receive $2.47 (U.S.) per share in cash or shares of Hecla, which represents a 59-per-cent premium to Klondex's 30-day volume-weighted average price at March 16, 2018, and a premium of approximately 72 per cent based on the closing price on March 16, 2018. Klondex's Canadian assets will be spun out to its existing shareholders. Klondex shareholders will receive, for each Klondex share, 0.125 of a common share of a newly formed company which will own Klondex's Canadian assets. The closing of the transaction is subject to certain conditions including shareholder and regulatory approvals. Additional details regarding the transaction will be available in the preliminary proxy statement that is expected to be filed with regulatory agencies in May. Pending receipt of all required approvals, the company anticipates that the transaction will be completed in the second quarter of 2018.
Nevada operations
The company mined and produced a total of 47,499 GEOs and 41,415 GEOs, respectively, at its Nevada operations during the first quarter of 2018. Total GEOs produced for the first quarter included approximately 3,700 ounces from the Hollister ore stockpile that were sold to and processed by a third party.
Canada operations
The company mined and produced a total of 2,374 GEOs and 2,111 GEOs, respectively, at its Canadian operations during the first quarter of 2018. These ounces were mined from areas that were developed prior to the company's decision to place the True North operation on care and maintenance in early January,2018. Consistent with management plans, no ounces were processed from tailings at True North during the first quarter of 2018.
FIRST QUARTER 2018 OPERATING RESULTSThree months ended March 31, 2018Consolidated Nevada totalCanada total Total Ore tons mined 92,30319,301 111,604Gold equivalent grade mined (oz/t) (1) 0.510.120.45Gold equivalent ounces mined (1)47,499 2,37449,873Ore tons milled89,77219,390 109,162Gold equivalent grade milled (oz/t) (1)0.540.120.40Gold equivalent ounces produced (1) 41,415 2,11143,525Gold equivalent ounces sold (1) 37,370 5,17142,541GEO ratio (1)80.479.680.4(1) Gold equivalent ounces and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the company in the respective period. Preliminary GEO ratios are incorporated in the table.
Three months ended March 31, 2018NevadaFire Creek Midas HollisterAurora (2) Nevada totalOre tons mined30,40923,76127,28210,851 92,303Gold equivalent grade mined (oz/t) (1)0.800.430.430.09 0.51Gold equivalent ounces mined (1) 24,45310,17411,864 1,016 47,499Ore tons milled 30,69926,97321,24910,851 89,772Gold equivalent grade milled (oz/t) (1) 0.790.420.510.10 0.54Average gold recovery rate91.9% 89.1% 84.4% 55%88.9%Average silver recovery rate79.4% 77.6% 42.7% 45.1%65.3%Gold equivalent ounces produced (1)22,305 9,878 8,701 540 41,415Gold equivalent ounces sold (1)15,24110,56510,081 1,492 37,370GEO ratio (1) 80.98079.980.1 80.4(1) Gold equivalent ounces and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividingthe average realized gold price per ounce by the average realized silver price per ounce received by the company in the respective period. Preliminary GEO ratios are incorporated in the table. (2) Aurora activity is a result of processing historical Hollister tailings at the Aurora mill.
Three months ended March 31, 2018CanadaTrue North mine True North tailings Canada totalOre tons mined 19,301 - 19,301Gold equivalent grade mined (oz/t) (1) 0.12 - 0.12Gold equivalent ounces mined (1) 2,374 -2,374Ore tons milled19,390 - 19,390Gold equivalent grade milled (oz/t) (1)0.12 - 0.12Average gold recovery rate 92.3%- 92.3%Gold equivalent ounces produced (1)2,111 -2,111Gold equivalent ounces sold (1)5,171 -5,171GEO ratio (1)79.6 - 79.6(1) Gold equivalent ounces and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the company in the respective period. Preliminary GEO ratios are incorporated in the table.
About Klondex Mines Ltd.
Klondex is a junior-tier gold and silver mining company focused on exploration, development and production in a safe, environmentally responsible and cost-effective manner. Klondex has 100-per-cent interests in three producing mineral properties: the Fire Creek mine, the Midas mine and ore milling facility, and the Hollister mine, all of which are located in the state of Nevada. Klondex also has a 100-per-cent interest in the True North mine and mill in Manitoba, Canada, and the Aurora mine and ore milling facility, located in Nevada.
We seek Safe Harbor.
© 2018 Canjex Publishing Ltd. All rights reserved.