Market Overview

Klondex Reports First Quarter 2018 Operating Results

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VANCOUVER, British Columbia, April 25, 2018 (GLOBE NEWSWIRE) -- Klondex Mines Ltd. (TSX:KDX) (NYSE:KLDX) ("Klondex" or the "Company") reported today its preliminary operating results for the first quarter of 2018.

First Quarter 2018 Highlights:

  • Announced proposed acquisition of Klondex by Hecla Mining Company (Hecla) for US$462 million
  • Mined 49,873 gold equivalent ounces ("GEOs")
  • Produced 43,525 GEOs
  • Mined and production results in-line with Company expectations
  • Sold 42,541 GEOs

Proposed Transaction with Hecla:

On March 19, 2018, the Company announced that Hecla will acquire all of the outstanding shares of Klondex through a plan of arrangement. Hecla will acquire Klondex for consideration of US$462 million comprised of cash and shares of Hecla common stock. Klondex shareholders will receive US$2.47 per share in cash or shares of Hecla which represents a 59% premium to Klondex's 30-day volume-weighted average price at March 16, 2018 and a premium of approximately 72% based on the closing price on March 16, 2018. Klondex's Canadian assets will be spun out to its existing shareholders. Klondex shareholders will receive, for each Klondex share, 0.125 of a common share of a newly formed company which will own Klondex's Canadian assets.

The closing of the transaction is subject to certain conditions including shareholder and regulatory approvals. Additional details regarding the transaction will be available in the preliminary proxy statement that is expected to be filed with regulatory agencies in May. Pending receipt of all required approvals, the Company anticipates that the transaction will be completed in the second quarter of 2018.

Nevada Operations:

The Company mined and produced a total of 47,499 and 41,415 GEOs, respectively, at its Nevada operations during the first quarter of 2018. Total GEOs produced for the first quarter included approximately 3,700 ounces from the Hollister ore stockpile that were sold to and processed by a third party.

Canada Operations:

The Company mined and produced a total of 2,374 and 2,111 GEOs, respectively, at its Canada operations during the first quarter of 2018. These ounces were mined from areas that were developed prior to the Company's decision to place the True North operation on care and maintenance in early January of 2018. Consistent with management plans, no ounces were processed from tailings at True North during the first quarter of 2018.

First Quarter 2018 Operating Results:

     
    Three months ended March 31, 2018
Consolidated   Nevada Total   Canada Total   Total
Ore tons mined   92,303     19,301     111,604  
Gold equivalent grade mined (opt)(1)   0.51     0.12     0.45  
Gold equivalent ounces mined(1)   47,499     2,374     49,873  
Ore tons milled   89,772     19,390     109,162  
Gold equivalent grade milled (opt)(1)   0.54     0.12     0.40  
Gold equivalent ounces produced(1)   41,415     2,111     43,525  
Gold equivalent ounces sold(1)   37,370     5,171     42,541  
GEO Ratio(1)   80.4     79.6     80.4  
(1) Gold equivalent ounces ("GEO") and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the Company in the respective period. Preliminary GEO ratios are listed above.
 


     
    Three months ended March 31, 2018
Nevada   Fire Creek   Midas   Hollister   Aurora(2)   Nevada Total
Ore tons mined   30,409     23,761     27,282     10,851     92,303  
Gold equivalent grade mined (opt)(1)   0.80     0.43     0.43     0.09     0.51  
Gold equivalent ounces mined(1)   24,453     10,174     11,864     1,016     47,499  
Ore tons milled   30,699     26,973     21,249     10,851     89,772  
Gold equivalent grade milled (opt)(1)   0.79     0.42     0.51     0.10     0.54  
Average gold recovery rate (%)   91.9 %   89.1 %   84.4 %   55 %   88.9 %
Average silver recovery rate (%)   79.4 %   77.6 %   42.7 %   45.1 %   65.3 %
Gold equivalent ounces produced(1)   22,305     9,878     8,701     540     41,415  
Gold equivalent ounces sold(1)   15,241     10,565     10,081     1,492     37,370  
GEO Ratio(1)   80.9     80     79.9     80.1     80.4  
(1) Gold equivalent ounces ("GEO") and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the Company in the respective period. Preliminary GEO ratios are listed above.
(2) Aurora activity is a result of processing historical Hollister tailings at the Aurora mill.
 


     
    Three months ended March 31, 2018
Canada   True North Mine   True North Tailings   Canada Total
Ore tons mined   19,301         19,301  
Gold equivalent grade mined (opt)(1)   0.12         0.12  
Gold equivalent ounces mined(1)   2,374         2,374  
Ore tons milled   19,390         19,390  
Gold equivalent grade milled (opt)(1)   0.12         0.12  
Average gold recovery rate (%)   92.3 %   %   92.3 %
Gold equivalent ounces produced(1)   2,111         2,111  
Gold equivalent ounces sold(1)   5,171         5,171  
GEO Ratio(1)   79.6         79.6  
(1) Gold equivalent ounces ("GEO") and grades are computed as the applicable gold ounces/grade plus the silver ounces/grade divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by the Company in the respective period. Preliminary GEO ratios are listed above.
 

Contact:

Mike Beckstead
Director, Investor Relations
O: 775-391-8142
M: 406-290-4165
mbeckstead@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 three producing mineral properties: the Fire Creek Mine, the Midas Mine and ore milling facility, and the Hollister Mine, all of which are located in the state of Nevada, USA. The Company also has a 100% interest in the True North Mine and mill in Manitoba, Canada and the Aurora Mine and ore milling facility, located in Nevada, USA.

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 timing of the transaction with Hecla, and the future exploration, development and production plans of Klondex. 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

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