zurich gold show april 2015 - the denver gold group, inc. · 2015. 4. 12. · zurich gold show...
TRANSCRIPT
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM1
ZURICH GOLD SHOW
APRIL 2015
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM2
FORWARD-LOOKING INFORMATION
Qualified Person
Mark Odell, P.E., Principal Engineer, Practical Mining LLC, a "qualified person" as defined by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects ("NI 43-101"), reviewed and is responsible for the technical information contained in this presentation.
Cautionary Note Regarding Technical Information and Forward-looking Information
A production decision at the Fire Creek Project has not been made by Klondex, as it is still in the bulk sampling phase. Although a production
decision at the Fire Creek Project has not been made, the mineralized material extracted from the Fire Creek Project under the bulk sample
permit is processed through the Midas mill.
A production decision at the Midas Mine was made by previous operators of the mine, prior to the completion of the acquisition of the Midas
mine by Klondex and Klondex made a decision to continue production subsequent to the acquisition. This decision by Klondex to continue
production and, to the knowledge of Klondex, the prior production decision were not based on a feasibility study of mineral reserves
demonstrating economic and technical viability prepared in accordance with NI 43-101. Readers are cautioned that there is increased uncertainty
and higher risk of economic and technical failure associated with such production decisions.
This presentation contains certain information that may constitute forward-looking information under applicable Canadian securities legislation,
including but not limited to information about current expectations on the timing, extent and success of exploration, development and
metallurgical sampling activities, the timing and success of mining operations, the timing and completion of updated mineral resource estimates
in respect of the Midas Project and Fire Creek Project, the timing and completion of an economic analysis in respect of the Fire Creek Project, the
Company's intention and ability to monetize mineralized material, the successful execution of the bulk sampling program at the Fire Creek
Project, project development and related permitting. This forward-looking information entails various risks and uncertainties that are based on
current expectations, and actual results may differ materially from those contained in such information. These uncertainties and risks include, but
are not limited to, the strength of the global economy; the price of gold; operational, funding and liquidity risks; the degree to which mineral
resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially
viable are present; the risks and hazards associated with underground operations; and the ability of Klondex to fund its substantial capital
requirements and operations. Risks and uncertainties about the Company’s business are more fully discussed in the Company’s disclosure
materials filed with the securities regulatory authorities in Canada and available at www.sedar.com. Readers are urged to read these materials.
Klondex assumes no obligation to update any forward-looking information or to update the reasons why actual results could differ from such
information unless required by law.
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM3
OUR FOCUS
PEOPLE – PROPERTIES – PROFITABILITY
People : Experienced, Efficient and Invested
Properties : Growing Production
• Fire Creek and Midas, Nevada
• Issued reserves early 2015
Properties : Investing in growth
• $33 M 2015 growth and sustaining capital
Profitability : 2014 Actual 108k GEO Recovered
• Production Costs $679 (US$585)/ GEO
• Net income of $18.3 million or $0.16 per share
• Working capital of $57 million
• Cash balance of $53 million
2015 Profitability Target : 120-125k GEO
• Production costs: $688-750 (US$550- $600) per GEO
• All-in sustaining costs: $1,000-1,063 (US$800 - $850) per GEO
Fire Creek operating under a bulk sample permit.
2014 GEO ratio 63.15:1; 2015 GEO ratio 66.67:1.
BEAT 2014 PRODUCTION GUIDANCE BY 25%
0
20
40
60
80
100
120
140
2014A 2015E
AuEq Ounces Recovered
Actual
Guidance
Range
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM4
PEOPLE – PROPERTIES – PROFITABILITY
OWNERSHIP
Sentry Investments 19.8
Sun Valley Gold 14.3
K2 Principal Fund 12.1
US Global Investors 11.8
Glenn Pountney 6.5
OFI Global Asset Mgmt 5.4
Van Eck 5.1
RBC Global Asset Mgt 1.8
Investors Group 1.5
BMO Asset Management 1.2
Dynamic Funds 1.0
Clarus Securities, Jamie Spratt
Dundee Capital, Josh Wolfson
GMP Securities, Oliver Turner
Haywood Securities, Tara Hassan
Mackie Research Capital, Barry Allan
MPartners, Derek Macpherson
PI Financial, Phil Ker
RBC Capital Markets, Sam Crittenden
Sell Side Research
KDX Ownership
Mgmt/Insiders
Institutional
Other
Major Holders (M’s of shares) Share Price (KDX:TSX; KLNDF:OTCQX) $2.74
52 Week High/Low C$2.80 - C$1.68
Average Daily Volume (3 mos) 384 k
Shares Outstanding 128 M
Fully Diluted Shares Outstanding 149 M
Market Capitalization C$351 M
Enterprise Value C$322 M
Cash (Dec 31, 2014) C$53 M
Inventories (Dec 31, 2014) C$25 M
Debt @ 11% C$25 M
FNV Gold Purchase Agmt (31,500 oz as at 12/31) 18% repaid
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
THE UNDERGROUND GOLD COMPANY
PEOPLE
PROPERTIES
PROFITABILITY
EXPERIENCED
EFFICIENTINVESTED
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
A STRONG LEADERSHIP AND OPERATIONS TEAM
ACHIEVING RESULTS AND FOCUSED ON SAFETY
Paul Huet, A.Sc.T. – President, CEO and Director
• 27 yrs of mining experience within North America,
focused on underground narrow vein gold and silver
mining. Operated both the Midas and Hollister Mines
in the 2000’s.
Barry Dahl – Chief Financial Officer
• 26 yrs of accounting experience in mining,
construction and manufacturing. Previously CFO of
Argonaut Gold during its growth to a 100,000+ ounce/
yr producer.
Brent Kristof – Chief Operating Officer
• 33 yrs operations u/g and open pit experience with
major mining companies in North America, PNG and
Australia
Mike Doolin – VP Business Development
• 27 yrs with extensive experience in metallurgy, design
and permitting of narrow vein and open pit mining
projects
Brian Morris – VP Exploration
• 25 yrs experience providing exploration and geological
support to major producing assets in Nevada,
including Midas and Hollister.
Alison Dwoskin – Manager, Investor Relations
• 10 yrs experience designing and managing IR
programs for public mining companies
DI
RE
CT
OR
S
MA
NA
GE
ME
NT
6
Richard J. Hall, Chairman
• Seasoned mining executive, involved in building and acquiring precious
metals companies in the America’s and Australia; Served as CEO of
Northgate Minerals, Grayd Resource and Metallica Resources, as well as
Chairman of a number of other precious metals companies.
Blair Schultz, Executive Director
• Former Klondex Chairman (2012-2014). Over 13 yrs of experience
evaluating M&A transactions in the mining space; was most recently
Vice President and Head of Special Situation Analytics, Portfolio
Management & Trading at K2 & Associates Investment Management
Inc. in Toronto
Renaud Adams
• Currently, the President of Richmont Mines. Over 20 years of mining
experience, and most recently served as President and COO at Primero
Mining Corp. Prior to this, Mr. Adams served at IAMGOLD Corporation
and held various senior positions with Cambior Inc. and Breakwater
Resources Ltd.
Rodney Cooper
• Currently the President and Chief Operating Officer at Labrador Iron
Mines with 30 years in mining; broad experience in technical services,
operations, project management, investment evaluation and finance
Jamie Haggarty
• Financial and operational executive with over 20 years of experience
ranging from strategic planning to M&A transactions to managing
diverse businesses day-to-day
William Matlack
• Specializes in metals and mining investment banking with Scarsdale
Equities LLC; has 15 years prior experience in metals and mining equities
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM7
PEOPLE
IMPROVING OPERATIONAL EFFICIENCIES AT MIDAS
220
110
0
50
100
150
200
250
NEM KDX
Approximate Total
Headcount at Midas
25% Less Equipment Doubled Head Grade
EFFICIENTEXPERIENCED
340%
140%
0%
50%
100%
150%
200%
250%
300%
350%
400%
NEM KDX
Dilution at Midas
(0.15 opt AuEq vs. YTD ore grade
0.31 opt AuEq)
Shipped for use at Fire Creek
-20
0
20
40
60
80
100
Breakdown of Midas Acquisition
DELIVERING
Midas Acquisition Value
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
THE UNDERGROUND GOLD COMPANY
HIGH GRADE
POWERFUL UPSIDELOW RISK
PEOPLE
PROPERTIES
PROFITABILITYFIRE CREEK PROJECT
MIDAS MINE AND MILL
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM9
KLONDEX APPROACH AT MIDAS
DISCIPLINED MINING AND EXPANSION
• Operating since 1998 (2.2 M oz Au; 27 M oz Ag)
• High grade, ramp access, grid power
• Dedicated continued exploration on the district
• Advance, Develop, Discover
• Permitting tails facility for 5 yrs capacity
• Significant management experience operating
Midas
Reserve Cash Flow Sensitivity
$33.1 million @ $1000/oz Au; $15.83/oz Ag
$49.6 million @ $1200/oz Au; $19/oz Ag
$66.0 million @ $1400/oz Au; $22.16/oz Ag
Cash flow sensitivities use the same mine plan and only reflect a change in
metals sales.
Location
Mine Type
Ownership
Elko County, Nevada
Underground, gold and silver
100%
Proven and Probable Reserves
AuEq
132.6k oz
0.55 opt (18.8 g/T) - 242.1 k tons
M&I Mineral Resources
AuEq (inclusive of reserves)
526k oz
0.47 opt (16.2 g/T) - 1,117 k tons
Inferred Mineral Resources
AuEq
287k oz
0.33 opt (11.5 g/T) - 858 k tons
Mining Method Cut and Fill, Long Hole, Shrinkage
Mining rate 400-450 tpd
Processing Merrill Crowe (gravity and cyanide)
1200 tpd capacity
Recoveries 94% Au; 95% Ag (actuals)
Operating Cost $315/t
Total costs $932/oz AuEq
$485/oz net Ag by product
Reserve Life 2.8 yrs
Reserve Cash Flow
@$1000/oz Au
$33.1 Million
Royalty 2.5% (on the mine) to FNV starting
in 2019See last slide for footnotes.
Reserves use US$ cost assumptions
Plan view of all exploration
2-yr Mine Plan
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM10
PROPERTIES
POWERFUL UPSIDE – RECENT INTERCEPTS
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM11
PROPERTIES: LONG SECTIONS
NEW INTERCEPTS EXPANDING MINABLE MINERALIZATION
705 Vein
Looking West
505 Vein
905 Vein
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM12
MIDAS NEAR-TERM MINING UPSIDE NOT IN RESERVES
12
905 Vein – Spiral 9
• 1500 ft x 200 ft footprint – follows structural periodicity
• Numerous well supported >1opt intercepts
505 Vein (Discovery)
• High-grade ore shoot was missed and discovered 100 ft off main development while drilling 905 vein
south Vein contains VG and naumannite bands
• 200 ft x 500 ft ore shoot
705 Vein (Colorado Sur)
• Zone of >1.0 opt Au intercepts approximately 300 ft west of the 3-haulage
• Currently 300 ft x 400 ft footprint
105 Vein (Colorado Grande)
• Drilling 705 vein intercepted the 105 vein in an area to offer additional mining opportunity while
developing to the 705 vein 200 ft to the west
Midas Trend (201)
• 1000 ft x 500 ft with 2 >1opt intercepts adjacent to one another, numerous lower grades in old
drilling
• Some core photos recently found show almost 2 ft vein (0.73opt Au, 7.4opt Ag) near highest grade
intercepts of the ore shoot
• Grant Jackson and Rico veins on the way to Midas Trend
Queen Vein (1605)
• 750’ x 500’ footprint with numerous well supported >1opt intercepts
• Southern development will locate us 200 ft from the ore zone on this vein
• Opportunities for more ounces along strike to the south and at depth
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM13
PROPERTIES – POWERFUL UPSIDE
MIDAS
13
2015: EXCAVATE MINE WORKINGS TO DEVELOP HIGH PRIORITY RICO AND SOUTH ZONES
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM14
• Bulk sampling began in 2014
• High-grade 1.17 opt Au FY 2014 grade
• Ramp access, grid power
• Disciplined mining approach
• Begin testing long hole mining in 2015
• Aggressive exploration
• Five main veins open in all directions (along
strike, up/down dip)
• Several other high-priority targets
FIRE CREEK PROJECT
EA PERMITTING EXPECTED IN H2 2015
Isometric view : 2015
development and production
Location
Mine Type
Ownership
Lander County, Nevada
Underground, gold and silver
100%
Proven and Probable Reserves
AuEq
241.4k oz
1.3 opt (44.6 g/T) – 185.8 k tons
M&I Mineral Resources
AuEq (inclusive of reserves)
421k oz
1.1 opt (37.7 g/T) - 377 k tons
Inferred Mineral Resources
AuEq
363k oz
0.43 opt (14.7 g/T) – 840 k tons
Mining Method Cut and Fill, Long Hole, Shrinkage
Mining rate 125 - 200 tpd
Processing Midas Mill - $34/t shipping
Recoveries 94% Au; 95% Ag (actuals)
Operating Cost $460/t
Total costs $503/oz AuEq
$492/oz net Ag by product
Reserve Life 3.8 yrs
Reserve Cash Flow
@$1000/oz Au
$83.6 Million
Royalty 2.5% to FNV starting in 2019
See last slide for resource and reserve footnotes.Reserves use US$ cost assumptions
Reserve Cash Flow Sensitivity
$83.6 million @ $1000/oz Au; $15.83/oz Ag
$115.9 million @ $1200/oz Au; $19/oz Ag
$146.0 million @ $1400/oz Au; $22.16/oz Ag
Reserve cash flow sensitivities use the same mine plan and only reflect a change in metals sales.
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM15
PROPERTIES – POWERFUL UPSIDE
FIRE CREEK
Minimal historic drilling gives strong upside for near term mining and resource
expansion
• Karen vein was not identified
from historic drilling. There is
opportunity to discover new
structures of similar nature
that are not evident in current
drilling
• Significant vein extension
along strike and up/down dip
Joyce
Vonnie
Karen
Honeyrunner
• Potential to add resources on
subsidiary veins and new vein
discoveries
2015 OBJECTIVE: EXCAVATE MINE WORKINGS TO DRILL
TEST VERTICAL EXTENTS AND VEIN EXTENTIONS
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM16
PROPERTIES – POWERFUL UPSIDE
MILLING CAPACITY
Capacity: 1,200tpd, Recovery: 94% Au, 95% Ag
Operate Midas mill @ 600-650 tpd in 2015
Klondex Mill feed from:
Fire Creek and Midas
Toll milling Washington Mine (concentrates)
Toll milling Golden Wonder (monthly shipments)
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM17
PROPERTIES
LOW RISK
17
NEVADA
Mining-friendly jurisdiction
Low permitting risk
MIDAS
Fully-permitted
Tails expansion in progress (expected 3Q2015)
FIRE CREEK
~90% permitted
Water pollution control permit (submitted 1Q2015)
Environmental assessment (expected 2H2015)
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM18
PROPERTY – HIGH GRADE
INCREASING MINERAL RESOURCES; INCREASING M&I
428 363
287 420
FC 2014 FC 2015 ($1200/OZ A U)
Inf M&I
75
287
384
526
MID A S 2013 MID A S 2014 ($1200/OZ A U)
Inf M&I
FIR
E C
REEK
MID
AS 0.47 opt
AuEq
1.11 opt
AuEq
0.43 opt
AuEq
0.33 opt
AuEq
+46% M&IFIRE CREEK MINERAL RESOURCE
+37% M&IMIDAS MINERAL RESOURCE
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM19
PROPERTIES - HIGH GRADE
ONE OF THE HIGHEST GRADE GOLD OPERATORS IN THE WORLD
Source: M Partners and company reports on February 12, 2015, using resource grades.
PROJECT OPERATOR GRADE (g/T) COUNTRY
Fire Creek Project Klondex Mines 38.10 USA
Valley of the Kings* Pretium Resources 17.98 Canada
Midas Mine Klondex Mines 16.20 USA
TauTona AngloGold Ashanti 16.01 South Africa
Main Break + SMC Kirkland Lake Gold 15.74 Canada
Buriticá Project* Continental Gold 15.12 Colombia
Moab Khotsong
AngloGold Ashanti
Limited 14.05 South Africa
Gosowong Newcrest Mining 13.00 Indonesia
Red Lake Goldcorp 12.27 Canada
Curraghinalt Dalradian Resources 10.41 Ireland
Kupol Project Kinross Gold 8.89 Russia
Phoenix Gold Project Rubicon Minerals 8.1 Canada
Island Gold Mine Richmont Mines 6.36 Canada
Turquoise Ridge Barrick Gold 5.12 USA
Timmins West Mine Lake Shore Gold 5.09 Canada
Fire Creek
Project
Valley of the
KingsMidas Mine TauTona
Main Break
+ SMC
Buriticá
Project
Moab
KhotsongGosowong Red Lake Curraghinalt
Kupol
Project
Phoenix
Project
Island Gold
Mine
Turquoise
Ridge
Timmins
West Mine
Grade (g/T) 38.1 18.0 16.2 16.0 15.7 15.1 14.1 13.0 12.3 10.4 8.9 8.1 6.4 5.1 5.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Global M&I Gold Equivalent Grade (g/T)
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
THE UNDERGROUND GOLD COMPANY
PEOPLE
PROPERTIES
PROFITABILITY
POSITIVE CASH FLOW
LOW COST
SELF FUNDED
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM21
PROFITABILITY – POSITIVE CASH FLOW
15% PROFIT MARGIN IN FY 2014
FY 2014 financials will be released March 24, 2015
(1) Au Equivalent ounces used a 63.15:1 silver to gold ratio; 1 ounces per short ton equals 34.2857 grams per tonne
1Q 2Q 3Q 4QTotal 2014/
YTD
Gold Equiv Grade (opt) 0.66 0.50 0.79 0.65 0.64
Gold Equiv Grade (g/T) 22.7 17.1 27.2 22.1 22.0
Au Equivalent Ounces
Recovered(1) 16,052 22,239 39,109 30,460 107,860
Au Equivalent Ounces Sold(1) 4,288 25,725 28,162 32,617 90,791
Revenue (in C$) $2.6 M $36.4 M $38.0 M $44.6 M $121.7 M
Net Income (in C$) $(2.4) M $4.4 $7.2 M $9.0 M $18.3 M
Earnings Per Share $(0.02) $0.04 $0.06 $0.07 $0.18
Production Cost/GEO (C$) $906 $730 $613 $685 $679
Production Cost w/Ag by-
product (C$)n/a n/a $478 $553 $526
Capital Expenditures (C$) $4.3 M $7.1 M $7.8 M $10.5 M $30.8 M
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
FCF Yield '15E
KDX VALUATION
10.9% 10.5% 10.0%
5.9%
4.4% 4.2% 3.1%
(1.5%) (1.8%)
(3.5%)(4.2%)
(17.8%)
Peer
Average:
0.9%
2015E-’17E AVERAGE EBITDA MARGIN (%)
51.7%
43.2% 42.9% 42.0%
38.7%
34.6% 34.0% 32.8% 32.6%
30.1% 27.7% 27.6%
Peer
Average:
35.1%
Source: FactSet, Bloomberg. Prepared by GMP Capital, February 5, 2015.
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM23
PROFITABILITY AND PERFORMANCE
29%21%
-61%
-23%
-80%
-60%
-40%
-20%
0%
20%
40%
Perc
en
t A
nn
ual P
rice
Ch
an
ge
Year
KDX and GDXJ Annual Price
Change
KDX GDXJ
20142013
$155,976
$30,223
$0
$50,000
$100,000
$150,000
$200,000
KDX GDXJ
Invest
men
t W
ort
h in
$ U
SD
$100,000 in KDX vs. GDXJ
(End of Year - 2012 to EO
2014) $232,000
$(58,824) $(100,000)
$(50,000)
$-
$50,000
$100,000
$150,000
$200,000
$250,000
KDX GDXJ
Value of 2012's $100,000 YTD in 2015
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM24
PROFITABILITY - RAPIDLY REPAYING DEBT
ATTRACTIVE LIQUIDITY MEASURES
• Financings associated with Midas acquisition
• In 2019, a 2.5% royalty to Franco-Nevada will begin, paid on Fire Creek and Midas ore
2014 2015 2016 2017 2018
Paid 6750 7500 8000 8000 8000
Owing 31500 24000 16000 8000 0
05000
10000150002000025000300003500040000
Franco-Nevada Au oz Payments
2014 2015 2016 2017
Paid $- $4.0 $4.0 $17.0
Owing $25.0 $21.0 $17.0 $-
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$25M Senior Debt @ 11%
FY2014 CASH @ $53 MILLION; WORKING CAPITAL @ $56 MILLION
in Millions $
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
The Underground Gold Company
PEOPLE
PROPERTIES
PROFITABILITY
FREE CASH FLOW.
15% PROFIT MARGIN FY14.
LOW AISC.
120-125K OZ
PRODUCTION.
LOWERING PERMITTING
RISKS.
RESERVE STATEMENTS on
MIDAS AND FIRE CREEK.
DEDICATED TO
EXPLORATION AND
DEVELOPMENT.
ALIGNED WITH
SHAREHOLDERS.
LEVERAGING EXPERTISE.
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
FOR M ORE INFORM ATION
ALISON DWOSKIN
647-233-4348; 775 -299-1049
ADWOSKIN@KLONDEXM INES.COM
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM
297
363
195
287
399 420 430
526
0
100
200
300
400
500
600
Fire Creek 2015 Fire Creek 2015 Midas 2014 Midas 2014
Inf
M&I
MINERAL RESOURCE ESTIMATE VARIATION TO THE GOLD PRICE
OU
NC
ES (
000’s
)
0.47 opt
AuEq
1.11 opt
AuEq
0.43 opt
AuEq
0.33 opt
AuEq
27
PROPERTIES – HIGH GRADE
LOW RISK TO GOLD PRICE DOWNSIDE
Global Mineral Resources
M&I: 946k oz AuEq
Inf: 650k oz AuEq
0.60 opt
AuEq
0.46 opt
AuEq
1 opt = 34.2857 g/T
1.34 opt
AuEq
0.54 opt
AuEq
$800/oz Au vs $1200/oz Au $800/oz Au vs $1200/oz Au
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM28
GLOBAL RESERVES AND RESOURCES
Mineral Resources
Category Au opt (g/t)Ag opt
(g/t)
AuEq opt
(g/t)
Au Ounces
(000’s)
Ag Ounces
(000’s)
AuEq Ounces
(000’s)
Tons
(000’s)
Fire CreekM&I Au 1.10 (37.7) 0.86 (29.5) 1.11 (38.1) 415.5 324.2 420.5 377.4
Inf. Au 0.43 (14.7) 0.38 (13.0) 0.43 (14.7) 358.3 320.8 363.3 840.0
MidasM&I Au 0.38 (12.9) 6.05 (207.7) 0.47 (16.2) 421 6,765 526 1,117
Inf. Au 0.28 (9.6) 3.48 (119.3) 0.33 (11.5) 241 2,988 287 858
TOTAL M&I : 946 k oz AuEq
TOTAL INF: 650 k oz AuEq
Mineral Reserves
Category Au opt Ag opt Au Eq optAu Ounces
(000's)
Ag Ounces
(000's)
AuEq Ounces
(000's)
Tons
(000's)
Fire Creek Proven Reserves 1.462 1.108 1.479 118.2 89.6 119.6 80.9
Probable Reserves 1.149 0.787 1.161 120.5 82.6 121.8 104.9
Proven + Probable 1.285 0.927 1.300 238.7 172.2 241.4 185.8
MidasProven Reserves 0.381 13.349 0.588 51.1 1,790.5 78.8 134.1
Probable Reserves 0.376 7.918 0.498 40.6 855.2 53.8 108.0
Proven + Probable 0.378 10.926 0.548 91.6 2,645.6 132.6 242.1
TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM29
FOOTNOTES
Price assumptions in mineral reserves and resources use US dollars unless otherwise stated.
All Midas and Fire Creek mineral resources and reserves are prepared by Practical Mining LLC.
Mineral resources and mineral reserve estimates have been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s (CIM) “CIM Definition Standards – For
Mineral Resources and Mineral Reserves” adopted by the CIM Council on May 10, 2014. Proven and probable mineral reserves are the economically minable portions of the measured and
indicated Mineral Resources after the application of appropriate Modifying Factors.
Notes to the Mineral Resources
Fire Creek mineral resource update has an effective date of December 31, 2014 (press released January 30, 2015)
Midas mineral resource update has an effective date of June 30, 2014 (press released September 30, 2014)
1. Mineral resources have been estimated at a gold price of $1,200 per ounce and a silver price of $19.00 per ounce, and, $800 per ounce gold and $12.67 per ounce silver;
2. Gold and silver recoveries are 94% and 92%, respectively;
3. Mineral resources include dilution to achieve mining widths of four feet or the vein width plus two feet whichever is greater;
4. Mineral resources include allowances for 5% mining losses and an additional 10% unplanned dilution;
5. Cutoff grade thicknesses are calculated using mining, processing and administrative costs of $249 per ton of mineralization and a minimum mining width of four feet;
6. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental,
permitting, legal, title socio-political, marketing or other relevant issues;
7. The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred mineral
resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.
Ore Reserves
1. Reserves have been estimated with a gold price of $1000/ounce and a silver price of $15.83/ounce
2. Metallurgical recoveries for gold and silver are 94% and 92% respectively;
3. Mining losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine excavations.
4. Fire Creek Mineral reserve uses an effective date of December 31, 2014.
4. Mineral reserve uses an effective date of August 31, 2014.