RE:2018 cap spendAll very good points.
Still unclear as to why not takeover material at this valuation...people say lack of reserves..however Klondex operates
as they build out their mine plan expanding resource year by year. The entire area is clearly not incorporated into a full resource statement. Just look at Fire Creek for example and how they keep discovering grade intercepts that are NOT part of the official reserves.
True North they increased reserves substantially in May 2017 after re-doing the Resource statement.
I don't think reserves are an issue at all. I think the sector as a whole for M&A is dead.
Anyways, the best slide is from the Scotia Bank presentation on page 7. For Q4, there is ZERO spend on Hollister Development, and TOTAL SPEND between CAPEX and Exploration =
$ 11.9 million...
last quarter was $ 25.8 million with lower production!! $ 22 million in Q2 and $ 21 million in Q1.
Not only is spending far lower, but production has to be over 80,000 GOEs, let's say they can get 78,000 oz. of this sold + with spot gold trading over $ 1280.00 for most of the quarter, this should be Klondex's strongest quarter in history in terms of production and profit. (if they can pull off the 80,000 GOEs production metric) The company clearly lays it out in the latest presentation and very basic # crunching to get to this conclusion.
JIN
goldminer01 wrote: Note that Fire Creek was largest factor in the high 2017 cap spend, and as noted they are 85 %
complete with 2018 development. Hollister and TN should be lower.
2017 development costs were mostly EXPENSED, not capitalized, so there will be much lower
cap spend percent to revenue in 2018 vs 2017. Significantly lower, and they started this trend in Q4. It will contine throughout next year.
While they trashed EPS metric this year, in 2018 it will go the other way. Still have issue of how to get more mill capacity in Nevada. No talk about it.
I think, ultimately, they will build a new 1500 tpd mill at Fire Creek and use Midas mill for Hollister and Midas. This assumes real new finds at Midas and Hollister HG come through with the expected resources.
They can forget Canada and sell TN/Bison and get their investment back at any time. SSRM would definitely be interested as they already are in Manitoba, too.