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8-K - FORM 8-K - KLONDEX MINES LTD | form8k.htm |
Klondex Increases Credit Facilities to $45
Million, Complimenting 2018
Cash Flow
Initiatives; Company Management to Participate in the BMO
Global Metals and Mining Conference
Vancouver, BC February 22, 2018 Klondex Mines Ltd. (TSX: KDX; NYSE American: KLDX) (Klondex or the Company) today announced the Company has increased the borrowing capacity of its credit facilities. The Company also announced its participation in the BMO Capital Markets 27th Global Metals and Mining Conference.
The Company has increased its revolving credit facilities by $10 million to $45 million. The increase includes an addition of $5 million in the revolving credit facility (the Revolver) to $40 million and an additional working capital tranche of $5 million. During the fourth quarter of 2017, Klondex utilized the Revolver to purchase 8,000 gold ounces at $1,269 per ounce and delivered them against its outstanding gold loan to Franco-Nevada, one year early. The gold loan is now paid in full. Klondex has delivered a total of 38,250 gold ounces to Franco-Nevada since February 2014. Repaying the gold loan improved working capital by replacing a current debt with a non-current debt and will improve 2018 quarterly cash flow as it frees up 2,000 gold ounces per quarter. Additionally, the Companys gold supply agreement with Waterton will expire on February 28, 2018. This agreement provides the option for Waterton to purchase gold produced from the Fire Creek Mine. Historically, the realized purchase price under this agreement has been at a discount to market price, which negatively impacted Klondexs cash flow.
Barry Dahl, the Companys Chief Financial Officer, said Its been a pleasure working with Investec Bank plc since 2016. Over the years, Investec has been flexible to structure the credit facilities to match the growth of the Company.
Paul Huet, President and Chief Executive Officer commented, These three financial items will all have a significant positive impact on our working capital flexibility for 2018. Historically, Klondexs focus has concentrated on growth and consolidating the mining district where we operate in Nevada. Our focus for 2018 is different. In 2018, we have refocused our efforts on generating cash. This emphasis was a contributing factor in the decision to place True North under care and maintenance, which should provide an opportunity for the Company to add cash to the balance sheet. As previously stated on December 21, 2017, Klondex will continue to utilize our core competencies and focus on narrow vein, high grade underground mining in Nevada. The Mars pit is a new discovery that we believe provides significant growth potential and future optionality for the Company.
BMO Conference
Paul Huet, the Companys President and Chief Executive Officer will participate in the BMO Capital Markets 27th Global Metals and Mining Conference in Hollywood, Florida on February 28, 2018. The presentation will begin at approximately 8:45am Eastern Standard Time. A live audio webcast of the presentation may be accessed through the Investor Relations section of the Companys website: www.klondexmines.com.
About Klondex Mines Ltd.
(www.klondexmines.com)
Klondex is a junior-tier
gold and silver mining company focused on exploration, development, and
production in a safe, environmentally responsible, and cost-effective manner.
The Company has 100% interests in four producing mineral properties: the Fire
Creek Mine, the Midas Mine and ore milling facility, the Hollister Mine, all of
which are located in the state of Nevada, USA, and the True North Mine and mill
in Manitoba, Canada. The Company also has a 100% interest in the Aurora mine and
ore milling facility, also located in Nevada, USA.
Contact:
Mike Beckstead
Director, Investor
Relations
O: 775-284-5757
M: 406-290-4165
mbeckstead@klondexmines.com
Cautionary Note Regarding Forward-looking Information
This news release contains certain information that may
constitute forward-looking information or forward-looking statements under
applicable Canadian and United States securities legislation (collectively,
forward-looking information), including but not limited to the financial items
mentioned having a significant positive impact to working capital, focusing on
profitability and generating cash, the opportunity for the Company to add cash
to the balance sheet, focusing on narrow vein high grade underground mining in
Nevada and the Mars pit providing significant growth potential and future
optionality for the Company. 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 mineral reserve estimates are reflective of
actual mineral reserves; 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 Companys
business are more fully discussed in the Companys disclosure materials filed
with the securities regulatory authorities in Canada and United States available
at www.sedar.com and www.sec.gov, respectively. 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.