By Deborah Sterescu
Proactive Investors (UK)
Klondex Mines (TSE:KDX) has a “rare, high grade resource” at its Fire Creek project in Nevada that it is fast tracking to production, according to a recent research report by PI Financial analyst Philip Ker, who started his coverage of the stock with a buy rating and a price target of $2.65 — some 70% above the company’s current trading value.
The Nevada-focused gold developer — which is undertaking a bulk sampling program targeting the Joyce and Vonnie veins where underground samples have exceeded 20 ounces per ton — sends 1,000 ton lots at a time to Newmont Mining (NYSE:NEM) for processing as a way to monetize its high grades. This year so far, it has reported gold production of 8,000 ounces through August, almost surpassing the expectations for the entire year.
Ker highlights that the deposit has a measured and indicated resource grading 1.3 ounces per ton, with the “rare high grade and narrow vein structure” able to provide positive returns under the “right mining operation and managerial execution”.