James West: Okay. And when did Fire Creek come on stream, Paul?
Paul Huet: So Fire Creek has been operating under small scale permit in 2014 and ’15. It wasn’t until early 2016 till it’s actually the EA was approved, which was a major milestone for us. It was in February of 2016, and it’s worth mentioning that that EA is on record to be the quickest metal/non-metal EA ever done in the state of Nevada. And that just demonstrates the relationship we have with the regulators, and how good of a job the regulators have done, and how permitting is done in Nevada. I’m extremely proud of the team that have assembled this EA. It was a very, very good document, a sound document, and we owe it to our team as well as the BLM who’ve worked extremely hard alongside us to produce this document in a six month time frame. It is, like I said, James, the fastest EA for a metal/non-metal mine in the history of Nevada.
So effectively since February, Fire Creek is commercial production. So this will be the first year that we operate Fire Creek under the EA. So we’re targeting an aggressive year for Fire Creek at about 100,000 ounces coming from Fire Creek, and that’s as we continue to develop and grow it. Fire Creek, we’ve only touched the tip of the iceberg at Fire Creek. It’s similar to Midas in the case that it doesn’t have a long resource or reserve ahead of itself, but every time we step out and drill, we find new gold. We’ve only explored on 7 per cent of our land package. We have 93 per cent of our land package that’s untested, and to date, in areas that are outside of the resource, we are hitting stuff that’s multi-ounce – more than 10 ounce per tonne. So Fire Creek…
This is just an excerpt of the interview called - Podcast: Klondex Mines Ltd CEO Paul Huet on expanding gold production into Canada...but the first part of interview is about Fire Creek + Midas.
Next part of the interview discusses True North acquisition:
In 2013, that took us about eight months to do that work at Fire Creek. We anticipate it’ll take us a similar time frame to do that here in Canada. So in about eight months we’re going to make a production decision whether or not we’re going to move forward or not move forward. We’ve already done some outlining work; if the decision was that we wouldn’t move forward, we have enough equipment and assets there that we could sell and we would be further ahead by about $10 million to $15 million from our purchase price. But let’s face it, we’re gold miners, and we’re not car salesmen. We don’t want to flip and sell all that equipment; we have 220 pieces of equipment that we got as part of the acquisition. We’re going to be transporting some of the equipment to Nevada to save ourselves some costs; we’re saving over $7 million in 2016 by transferring some of that equipment from Canada to Nevada.
So our hope and our intent is that once all our detailed technical work is done, that we can turn this thing on and we can be between 65,000 to 80,000 ounces per year for more than 10 years. It’s an extremely exciting jurisdiction; it has a great resource ahead of itself. We’ve got almost 1.7 million ounces of resource identified, with 450,000 ounces of reserve identified. And we’ve got a mill that is on our doorstep.
Looking back they sure as he*l should have just flipped the equipment. 65 K - 80 K lol a year they did 27,900 oz. I have never seen such a disaster in a span of 4 months. This is beyond horrific with no feedback from the company. The issue though how in April 2016, Huet says Fire Creek remains unexplored for 93 % of land package and returning assays of 10 opt. Then in November 2017 one of the assays was 8.25 opt causing 10 % share price spike just a few months ago. If 93 % of land is undeveloped as of April 2016 and there were very strong intercepts the past one year +, how in the world did Practical Mining LLC only give 229 K of actual Au reserves DOWN from 294 K of reserves? And huge drop in grade. You rarely ever see miners have such a reserve + grade drop on their flagship asset and appear so blase and "matter of fact"
Something doesn't add up & why was the resource rushed out so quick especially after already very bad news a few days prior??? This is very disturbing. Everyone should demand an explanation.
JIN