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Klondex Mines hails record second quarter operating results

Last updated: 15:05 19 Jul 2017 EDT, First published: 04:56 19 Jul 2017 EDT

A mine worker
The group produced 66,629 gold equivalent ounces (GEO) - up 94% compared to the first quarter this year

Precious metals miner Klondex Mines Ltd (TSE:KDX, NYSE:KLDX) revealed operating results for its second quarter were the best in its history.

The group produced 66,629 gold equivalent ounces (GEO) - up 94% compared to the first quarter this year and sold 107% more  - at 69,522 GEOs.

The company has the Fire Creek mine and the Midas mine and ore milling facility, both of which are in Nevada, USA and the True North gold mine and mill in Manitoba, Canada.

It has also recently  acquired the Hollister mine and the Aurora mine and ore milling facility - both in Nevada.

Klondex highlighted that it had processed all of the ore that was stockpiled at the Midas mill at the end of the first quarter, and in the year to date, output has been 101,019 gold equivalent ounces from Midas, Fire Creek and True North.

It produced 6,911 gold equivalent ounces at True North, up 82% from the first quarter and added that it remains on track to meet its annual production guidance of 210,000 to 225,000 gold equivalent ounces, up 36% from 2016.

"As expected, the operating results for the second quarter were the best in the company's history," said Paul Huet, Klondx chief executive.

"We processed all of the ore that was stockpiled at the Midas mill at the end of the first quarter. Plus, we continued to execute our mine plans, mining an additional 53,248 gold equivalent ounces in the second quarter.

"We continue to make solid progress ramping up True North and Hollister, both of which are expected to make significant contributions to our production in the second half of the year.

"We are well positioned to meet our annual companywide production guidance of 210,000 to 225,000 gold equivalent ounces."

Klondex will report its financial results for the second quarter of 2017 after market close on August 9 this year.

Broker Rodman & Renshaw repeated a 'buy' on the shares and $6.25 per share price target.

The large quarter-on-quarter increase was mainly due to a significant increase of production from Fire Creek, which the broker attributes primarily from the processing of stockpiled ore.

"We note that annualized production from 1H17 would fall below current management guidance of 210,000-225,000 gold equivalent ounces. However, the company plans on processing Hollister ore through the Midas mill in 2H17, and therefore remains on track to meet 2017 guidance.

"We highlight that our model estimates 2017 production to reach 219,000 gold equivalent ounces, in-line with management's 2017 production guidance."

Shares added 2.15% to C$4.28 in Toronto.

An 'aggressive' 2017 for Klondex Mines as they take two of their projects...

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on 08/01/2017