Klondex Mines Realizes Income From First Sales of Precious Metals

Klondex Mines Ltd. (TSX:KDX,OTCQX:KLNDF) has filed its unaudited consolidated financial results for the three months ended March 31, 2014. For the first quarter of 2014, Klondex realized revenue from sales of precious metals through its income statement for the first time in its history.

As quoted in the press release:

For the three months ended March 31, 2014, the Company received payment of $3.3 million (US$3.0 million) from the sale of 2,439 ounces of gold delivered to the Midas mill in 2013. This amount was reported as sale of mineralized material and credited to the carrying value of Fire Creek mineral properties. The Company also sold 930 ounces of gold and 58,053 ounces of silver from Midas that were recorded as revenue. At March 31, 2014, the Company had finished goods and work-in-process inventory of 11,765 gold equivalent ounces which we anticipate will generate approximately $15 million in cash flow for use in operations. Subsequent to the quarter, in early April, the Company recorded revenue and received payment of US$8.7 million for 6,620 ounces of gold sold under Fire Creek’s gold supply agreement for its March refined gold production.

Klondex CEO, Paul Huet, said:

In the first quarter, we made significant progress with our strategy to build Klondex into a leading integrated precious metals producer. In February, we acquired and successfully integrated the Midas mine and mill into Klondex’s operations, providing a strong platform for growth and creating value for our shareholders. We are pleased with the acquisition of the Midas mine and mill and remain on track to achieve free cash flows this year, and to process 43,500 AuEq ounces from Fire Creek in 2014, as set out in our recently announced independent preliminary economic assessment, in addition to production from the Midas mine.

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