VANCOUVER (miningweekly.com) – The TSX-listed stock of gold producer Klondex Mines on Monday morning jumped more than 8% after it announced a positive production decision on the True North (formerly Rice Lake) project, in Manitoba.
While the Vancouver-based miner expects to produce between 8 000 oz and 12 000 oz of gold from the project this year, as it conducted test stope mining and a tailings reprocessing project, True North is expected to add between 45 000 oz/y and 65 000 oz/y of gold to the Klondex production profile.
The project will have an estimated average all-in sustaining cost (AISC) of C$950/oz to C$1 050/oz, the company advised.
Mill throughput is expected to range between 600 t/d and 1 000 t/d.
The production decision has been made on the back of a resource update, calculating True North’s compliant proven and probable mineral reserve at 85 500 oz of gold, at a grade of 0.24 oz/t, contained within 352 000 t.
The deposit also has a measured and indicated mineral resource of 294 000 oz of gold, at a grade of 0.21 oz/t, contained within 1.39-million tons.
Klondex, which also has a 100% interest in two Nevada-based producing gold mines – the Fire Creek mine and the Midas mine and mill, advised that True North’s reserves and resources excluded the pending results of 35 of the 50 initial drill holes completed in the second quarter. The company planned to publish a year-end resource update for the project in the first quarter of 2017.
Klondex expects to produce between 145 000 oz and 150 000 oz of gold in 2016, at an AISC of between $850/oz and $900/oz. If the company chose not to proceed with True North production, the AISC would have ranged between $1 025/oz and $1 075/oz.
Klondex’s TSX-listed stock rose 8.2% Monday morning to C$7.54 apiece.