Klondex Mines (KDX.TO) has had a pretty decent quarter as it produced more gold and silver than the previous quarters. The gold production increased by 95% and the silver production by 12% due to the higher amount of milled ore and a much higher average grade for the gold. The recovery rate for both precious metals remained elevated at approximately 95%, and the mill was reaching its expected throughput of 600 tonnes per day.
As Klondex has now already produced more than 76,000 gold-equivalent ounces, it has already met the lower part of its production guidance. The company is now increasing the guidance to approximately 95,000 gold-equivalent ounces and we feel like Klondex will be able to beat its updated estimate once again, as we are aiming for a production of more than 19,000 gold-equivalent ounces in the fourth quarter of this year. Klondex Mines seems to have digested its transition from a developer to a producer quite well, and it’ll be interesting to see the company’s guidance for 2015. Klondex should have a lot of financial flexibility now as it raised $10M from warrants exercises and it will be generating additional revenue from a toll milling agreement whereby a third party will provide ore to Klondex’ mill.
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Disclosure: The author holds no position in Klondex Mines. Please see our disclaimer for current positions.
