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Klondex Mines Ltd. (TSX:KDX,OTCQX:KLNDF) announced its first quarter 2015 financial results, which showed a net income of $10.1 million or $0.08 per share.
As quoted in the press release:
Revenue during the quarters ended March 31, 2015 and 2014 were $47.3 million and $2.6 million, respectively. In the quarter ended March 31, 2015, the Company sold 27,135 gold ounces and 304,557 silver ounces, compared to the sale of 930 gold ounces and 58,053 silver ounces in the quarter ended March 31, 2014. In the quarter ended March 31, 2015, the average gold price was $1,504 (US$1,212) and the average silver price was $21.14 (US$17.03). In the quarter ended March 31, 2014, the average gold price was $1,453 (US$1,311) and the average silver price was $21.97 (US$19.82).
Production costs in the quarters ended March 31, 2015 and 2014 were $26.9 million and $1.7 million respectively. In the quarter ended March 31, 2015, production costs per GEO sold were $842 (US$678), production costs per gold ounce sold on a by-product basis were $745 (US$600), and AISC were $978 (US$788) compared to production costs per GEO sold of $906 (US$818), production costs per gold ounce sold on a by-product basis of $429 (US$387) in the first quarter of 2014.
Highlights from the financial results:
- Revenue was $47.3 million
- The Company recovered 32,542 gold equivalent ounces (“GEO”) comprised of 27,225 gold ounces and 354,455 silver ounces
- The Company sold 31,703 GEO, comprised of 27,135 gold ounces and 304,557 silver ounces
- Production costs (See “Non-IFRS Measures”):
- Production costs per GEO sold were $842 (US$678)
- Production costs per gold ounce sold on a by-product basis were $745 (US$600)
- All-in sustaining costs per gold ounce sold (“AISC”) were $978 (US$788)
- Net income was $10.1 million, $0.08 per basic share
- Cash balance was $54.9 million, and working capital was $56.2 million at the end of the quarter
- Cash provided by operating activities before changes in non-cash working capital was $10.2 million
- Cash payments in the first quarter include annual payments for which the costs will be amortized over one year including State of Nevada net proceeds tax
Paul Huet, president and CEO of Klondex Mines, commented:
I’m very pleased to report that Klondex had yet another strong quarter. Our net income was $10.1 million. Our company wide all-in sustaining costs are better than guidance, at $978 (US$788) in the first quarter, which helps position us to achieve our guidance for 2015 AISC of $1,000-$1,063 (US$800-$850). While we continue to work on reducing costs, we intend to review and update our 2015 cost guidance later in the year. We have plans to reduce spending over the next three quarters to finish the year with another solid performance generating free cash flow. We made substantial progress on a number of projects during the quarter, including accelerated development to access new levels at Fire Creek and new zones at Midas. Our ultimate goal is to have two years waste development ahead of ourselves providing us with additional ore working faces. The team is well on its way with six to twelve months currently ahead of ourselves. As a result, our expensed development is front-end loaded in 2015.
One of our biggest accomplishments in the first quarter was issuing Preliminary Feasibility Studies on our Fire Creek and Midas projects, using a gold price of US$1,000/oz. for our mineral reserve estimates. These studies help demonstrate our ability to generate free cash flow from operations in a weaker gold environment. As shareholders ourselves, we believe in being proactive and managing operational risks that will contribute to increased value for our company.
Click here to read the Klondex Mines Ltd. (TSX:KDX,OTCQX:KLNDF) press release
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