10:25 AM EDT, 08/17/2017 (MT Newswires) -- Despite a good second quarter that featured record gold sales, Laurentian Bank Securities analyst Barry Allan lowered his target price for shares of Klondex Mines (KDX.TO), the Globe & Mail reported.
On Aug. 9, the Vancouver-based company reported sales of 69,511 gold equivalent ounces. Revenue was a quarterly record of US$86.8 million, up 74% year over year. Quarterly production of 53,300 ounces was in line with Allan's forecast of 54,900 ounces, while an average operating cost of $624 per ounce of gold sold exceeded his expectation of $690 per ounce. Allan believes the beat was due to gold held over from the first quarter and sold from inventory, as well as better ore grades at the Fire Creek mine.
"We have moderated our forecast in spite of increased production guidance," said Allan. "For the year, we have slightly reduced our forecast to reflect more underground development at the Fire Creek mine than we had originally judged, and we have not increased our estimated production for the Hollister or True North mines as guided by management, reflecting our more conservative start-up expectations for both of these mines."
With a buy rating, his target declined to $5.80 from $6.15 due largely to the strength of the Canadian dollar. Consensus is $6.38. KDX shares were off 0.7% Thursday morning at $4.20.