VANCOUVER (miningweekly.com) – Gold and silver producer Klondex Mines has forecast a 36% year-on-year increase in output for 2017, after producing a record 151 007 gold equivalent ounces (GEOs) from its Nevada operations last year, exceeding the high end of management's guidance range.
"We expect to produce between 210 000 and 225 000 GEOs in 2017, an increase of approximately 36% from the prior year,” CEO Paul Huet said on Thursday, noting that the company's near-term strategy is focused on organic growth.
TSX- and NYSE-listed Klondex attributed the expected rise in output to bulk sampling extraction at the Hollister mine, in Nevada, as well as higher output from the True North mine, in Manitoba, Canada, as the ramp-up progresses.
Production from the cornerstone Fire Creek and Midas mines, also in Nevada, is expected to be in line with 2016.
Expected cash costs will be higher at $680/oz to $710/oz of gold equivalent sold.
Capital expenditure (capex) is forecast to be between $57-million and $62-million, with a further $3-million to $5-million to be spent on exploration. The majority of capex will be spent at Fire Creek as the company continues underground expansion in the form of primary access development and advancement of a second portal.
The company also expects to spend $7-million to $9-million at the company's newly acquired Hollister mine, in Nevada, as it commences a bulk sampling mining programme and underground definition drilling in the Gloria zone.
For 2016, Klondex sold a record 159 118 GEOs, up 19.4% year-on-year and comprising 138 516 oz gold and 1.47-million ounces silver.
Cash costs per GEO sold were $637, and within the expected range of between $600/GEO and $650/GEO.
Full-year 2016 revenue reached $198.2-million from improved average realised prices per gold and silver ounce of $1 245 and $17.44, respectively.
The net loss for the year was $1.7-million, or $0.01 a share.