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On back of strong Q3 output growth, Klondex lifts full-year outlook

20th October 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Nevada-focused gold producer Klondex Mines on Monday reported a 73% quarter-on-quarter rise in precious metals produced during the three months ended September 30, as production benefitted from increased mill throughput and higher gold grades.

The company, which this year transformed from a development company into a producer, was increasingly realising synergies between its flagship Fire Creek exploration deposit and its Midas mine and mill, which it bought for $83-million from Newmont in February.

Klondex had total gold-equivalent output – calculated at a ratio of 69.9 oz of silver to 1 oz of gold – of 38 552 oz for the third quarter, an increase compared with the 22 239 oz it reported in the second quarter and the 16 052 oz in the first.

Gold output was 33 339 oz, almost double the 17 093 oz produced in the second quarter, and silver output rose 12% sequentially to 364 404 oz, compared with 325 018 oz.

Klondex reported that gold equivalent sales rose 10% quarter-on-quarter to 28 337 oz.

“This past year has been one with important milestones for Klondex as we transform from a development company into a producer. The realised synergies in Nevada are demonstrated in the production results,” Klondex president and CEO Paul Huet commented.

During the third quarter, the company sold a total of 28 337 oz of gold equivalent, up from 25 724 oz in the preceding quarter. Mill throughput remained consistent, averaging about 600 t/d, with gold and silver recoveries of 94.7% and 95.8%, respectively.

Huet added that the last quarter’s results prompted the company to expect full-year output of 95 000 oz of gold equivalent, up from the previous guidance of between 75 000 oz and 85 000 oz.

“With our strong third quarter and our expected finish to the year, Klondex [foresees] that we can monetise an aggregate of about 85 000 oz for the 2014 year,” he stated.

The company’s TSX-listed stock rose 4.71% on Monday to C$2 apiece.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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