Earnings CallIt will be very important for Huet to disclose exactly where Hollister recovery is tommorow. Below 90% is a problem and everyone knows that (huge white elephant in the room). Also are they continuing to deplete Fire Creek ? Last time they mentioned LOM down to 3.1yrs I believe (they have been high grading). They need to reverse the trend and start adding ounces very quickly.
Since the average pog was about 1270 Q4 the gold hedging will not metastasize until Q1. So I dont expect the forward contracts to be a big issue.. yet. .. Q1 will be another story.
If they reveal new 10m+ capex spending to improve Hollister recovery and the metallurgical problem I expect a final rinse cycle that flushes the share price down to 1.00 usd. At that point I am a buyer although obviously we don't know if capex is above concensus yet and the timing of the disclosure is not known. Klondex certainly does not a reputation for publicly announcing balance sheet impacts and write downs early.
At the end of the day I hold the CEO accountable for the situation the miner has gotten itself into. A greater sense of urgency and "strategic review" (BOD and management replacements) are imperative. With no changes they will slowly bleed to death just like Primero (great asset, terrible management) which dropped from 8.00 down to 9 cents before the take out offer. I see Klondex behaving no differently assuming its current operational trajectory. There is very little interest in 3yr gold mines, and time is on the buyers side. Why pay 2.50CAD for a company you can get a 60% discount on 12mo later ?
Traders best of luck.. Upside exists if they are willing to finally "take their medicine" tommorow. Should be exciting price action Thur and Friday !