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Tuesday, 25 June 2013
Klondex Mines CEO picks up more shares ahead of initial production
Klondex Mines (TSE:KDX) is in the midst of a crucial year as the gold development company transitions to initial production, with CEO Paul Huet showing every confidence that it will accomplish its goals. The chief just picked up an additional 18,000 shares in the company at prices ranging from $1.09 to $1.10 apiece, for a total of nearly $20,000 in addition to the 1.4 per cent interest he already owned, according to filings on Monday.
The company is working hard at having the next new producing asset in Nevada, with Klondex having the advantage of grade on its side, according to Huet, who made the assurance to investors at the company's annual general meeting last week.
The gold development company is developing its Fire Creek project in Nevada, situated at the intersection of the Battle Mountain trend and Northern Nevada Rift, which also hosts the Midas and Hollister narrow-vein epithermal gold deposits. The company is planning to start initial production from bulk sampling later this year, with an updated resource from drilling due this summer, to be followed by a new and comprehensive mine plan.
"The Fire Creek project is an amazing asset. We have the advantage of grade. It's a high class, simple asset that demonstrates some of the best grades you're going to see in the world," said Huet, who came on board at Klondex late last year, making his appearance at the meeting his first presentation to investors.
The CEO also boasted at the meeting about the company's three different mine plans -- at gold prices of $700, $1,000 and $1,300 per ounce -- giving Klondex the ability to react quickly to the changing metal prices amid a volatile climate for the commodity, which witnessed a sharp decline in April that took many gold producers by surprise.
"The advantage is that the deposit is not homogenous, and in the case where gold is declining, we have the opportunity to increase the gold cutoff grade. Costs remain the same but we can get a lot more from the revenue end, giving us the opportunity to survive at different metal prices," assured the chief.
He explained that the nature of the deposit allows the mining of selective areas, but more importantly, 75 per cent of the indicated ounces at the deposit remain at a higher cut off grade, something Huet says is an advantage from any operator's standpoint, and one Klondex "will make sure to capitalize on".
Aside from being surrounded by major producers, the property is as expected also proximate to power, transportation, infrastructure and a milling facility in the heart of the U.S. state’s gold trend. Apart from the Rapid Infiltration Basin permit, which has been submitted and is on track for the third quarter, most other major permitting is in place.
Huet conceded at the meeting that though the company's share price is not yet where he wants it to be, it is doing well compared to the industry in a difficult time for gold. "Our share price has been holding up incredibly well," he said, with the latest share purchase by Huet illustrating his confidence that the company will become the next gold producer in Nevada later this year, and that its profile and credibility will pick up after the next resource is announced.