The company is facing the music and some irate shareholders at the BMO Metals & Mining conference in Florida. The focus for 2018 is on:
Operations
- Deliver on 2018 operational guidance; focus on cash generation
- Complete optimization of Hollister ore recoveries from Midas Mill
- Complete Midas tailings storage facility expansion
- Implement efficiency and cost reduction initiatives
Exploration
- Pursue prospective targets near Fire Creek operations – Zeus
- Northwest underground drilling and development at Fire Creek
- Continue Hatter Graben surface drilling at Hollister
- Drilling on Trinity zone at Midas
Project Development
- Continue studies on Fire Creek open pit opportunity
- Report Hatter Graben mineral resource
The company must focus on operation and make sure they deliver on production and grade. It will take several quarters and the company continues to warn that production is not a straight line for 2018 and it will vary Q/Q.
The slide deck has several slides on the Fire Creek Open Pit deposit and it speaks to the size and potential of this deposit. Klondex maintains that they will seek a partner to develop and permit the Open Pit and there is a very strong possibility a land package of this quality which consolidates the Northern rift will be of interest to the majors who have operations in Nevada or even those that do not but are looking for something of significance. I expect some news on this development in the Q2 or more likely Q3.
In the meantime, Klondex must refocus on the Nevada operations and make the necessary changes to ensure there is no repeat of what took place in 2017. I expect the stock to drift lower until the release of the 2017 financials in mid -March or until they come up with a plan to address the issues and convince investors they actually have a plan and solution. They will remain in the penalty box until they start to deliver on the cash flow, earnings and production.