Klondex Mines Ltd, with its newly acquired Midas mine, is rapidly expanding its operations in Nevada. Looking forward to continued expansion and growth, Paul Andre Huet, Klondex’s President and CEO commented, “We enter 2015 with momentum, the right people, and the confidence to execute our exploration, development and production plans.” Given the optimism expressed by Huet, observers should expect a continuation of existing growth plans in the near future.
Midas is an underground gold and silver mine located in Elko County, and is expected to generate significant amounts of the precious metals in the future. The mine is currently significantly exceeding production levels reported by the site’s previous operators.
The milling operation servicing the site is capable of processing 1200 tons of ore per day generated by Klondex’s Midas mine and Fire Creek Project, although projections for the Fire Creek Project are still being established. With that said, the company is committed to increasing production and efficiencies at the Nevada sites.
The Klondex Management Team Contributes Experience and Energy
Led by Paul Andre Huet, the management team brings the experience and skill sets necessary to generate respect from industry experts and analysts. With over 25 years of mining experience, Huet’s background is heavily oriented toward narrow vein gold mining, which is exactly what Klondex needs for the Midas mine.
With the support of CFO Barry Dahl, COO Brent Kristof and others, the on-site operations of the Nevada efforts should meet the demands and expectations of the stakeholders. Each member of the management team brings specific expertise needed to contribute to the growth of Klondex.
Management Strategies to Improve Nevada Mine Performance
Huet discusses the sharing of resources between the Midas mine and the company’s Fire Creek Project. Because the sites are in close proximity, the company is able to share resources between the two sites, minimizing equipment investment and maintenance costs.
By allocating equipment to the site where it can be used most effectively, the overall cost of operation is significantly reduced. There is no need to duplicate the specific types of equipment which enhances profits while, at the same time, freeing capital for other investments.
What Does the Future Hold for the Nevada Operations?
The Midas mine is currently exceeding original output expectations. While the output for 2014 was expected to be between 70,000 and 85,000 ounces of gold, company records indicate the mine delivered nearly 108,000 ounces. For 2015, Paul Huet has announced the complex is expected to yield 120,000 to 125,000 ounces.
Klondex Vice President of Business Development, Mike Doolin, announced the company has received its Rapid Infiltration Basin (RIB) permit for the company’s Fire Creek Project. That permit is an essential step in upgrading the operations at the site. Doolin states, Klondex anticipates acquiring the environmental permits allowing the company to initiate full production schedules during the second half of 2015.
Is Further Expansion in the Region Anticipated in the Near Future?
Paul Huet recently announced the company is moving forward with their $33 million exploration and development programs at Midas and Fire Creek during 2015. In addition, the company is exploring expanding into other neighboring areas.
The portion of northern Nevada containing the Midas mine and mill, as well as the Fire Creek Project, is mining-friendly, and already includes the infrastructure necessary to supply the needs of expanded operations. In addition to its current operations, Klondex is quite interested in exploring the potential of the Hot Springs and Maggie Creek properties with an eye to developing those properties in the future.
How do Investors View Klondex?
In December of 2014, Seeking Alpha, stated Klondex is currently well funded and enjoys the unique position of producing gold at industry leading cost figures. That suggests Klondex would arguably show a profit even if the price of gold were to drop significantly.
Mr. Huet suggested that capital expenditures could be delayed if prices fell, allowing the company to continue operations even in the face of reduced revenues. For investors, that type of flexibility protects assets while allowing the company to readily expand operations when demand expands. However, industry experts are not anticipating any significant decline in precious metals in the near future.
Because of the very high yields of gold found at Klondex’s Fire Creek Project, investors will watch the project closely to see if production matches the projected yields. If Fire Creek does indeed produce large volumes of 85 oz.-per-ton gold, the profits for investors could be significant.
Mining Also Contributes to Nevada’s Overall Economy
According to industry statistics, mining directly employs approximately 11,000 people with the average yearly pay for mining employees twice the state’s average. Klondex is proud to be a part of that success, and its expansion plan offers opportunities for many more qualified workers.
The industry’s supply chain also enjoys growth as mining operations expand. Well over 2,000 suppliers work to provide products and services required to service companies like Klondex.
As mining expands, communities grow and thrive, creating even more jobs for residents. Infrastructure improvements needed to support mining are also shared with residents and encourage further development.
“Our number one priority, without doubt, no hesitation, will always be growing our assets in Nevada to fill our mills, because that makes the most sense to us.”
While no one can guarantee the future of mining, the general prognosis is good. Although economic downturns, like the recent recession, may create temporary issues, the predicted long-term trends for mining gold and other precious metals are steady.
With its strong management team and high-yielding projects, Klondex is poised not only to survive, but thrive in the future. The company is fully committed to making its Nevada holdings a strong part of the state’s mining community.
Paul Huet states “Our number one priority, without doubt, no hesitation, will always be growing our assets in Nevada to fill our mills, because that makes the most sense to us.” That optimism not only demonstrates Klondex’s commitment to the area, but to the people of the state and its employees as well.
Klondex Mines Ltd. (TSX: KDX; OTCQX: KLNDF) is on the path to building a leading integrated gold and silver producer focused in North Central Nevada. The company is producing from its Midas mine, and operating an ongoing bulk sampling program at its Fire Creek high-grade gold project. Midas, Klondex’s newly acquired operating mine and milling facility are located ~100 miles north of Fire Creek. Klondex’s secondary focus is acquiring, exploring and developing other gold and silver properties in Nevada. Currently Klondex has three other gold exploration properties, and it reviews and considers other projects for inclusion.
Klondex Mines HQ
360 Western Road, Suite 1
Reno, NV 89506
Phone +1 775-284-5757
Fax +1 775-284-5756
Website – https://www.klondexmines.com/[wpgmza id=”13″]