Klondex Mines (KLDX) to reduce underground mining operations

  

Klondex Mines to reduce underground mining operations and workforce at True North mine in Manitoba, Canada 

• Following an extensive review of recent operational performance at True North, the Company has decided to limit underground mining to areas already developed. Once these areas are depleted, underground mining will be suspended.
• The decision was largely based on the site's inability to achieve planned operating and cash flow metrics in 2017. Preliminary full-year 2017 gold ounce production from True North is estimated to be approximately 24,000 -- 27,000 ounces, which is less than the 35,000 -- 45,000 ounce range of the Company's guidance. The mine will be placed on care and maintenance status after the developed areas are mined to review strategic options and to provide optionality at higher metal prices.
• Going forward,Klondex projects annual site free cash flow of $2 to $4 million at current metal price levels assuming a processing rate of approximately 1,400 tpd from tailings grading 0.035 Au/opt (1.20 Au/gpt) from April through October, weather dependent. The average tailings grade processed in 2017 was approximately 0.05 Au/opt (1.71 Au/gpt). Additional information will be discussed at the February 7 Investor Day.