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VANCOUVER — Klondex Mines Ltd. sustained a net loss of $8 million in the first quarter of 2018, according to the company’s operational and financial results released on May 3.

Net loss for the first quarter of 2018 was $8 million or $0.04 per share. The first quarter of 2018 included $3.6 million for costs related to the pending acquisition of Klondex by Hecla Mining Co. Excluding the net impact of these costs, the company’s adjusted net loss for the quarter was $5.1 million or $0.02 per share.

The company announced in March that Hecla will acquire all of the outstanding shares of Klondex through a plan of arrangement. Hecla will acquire Klondex for consideration of $462 million comprised of cash and shares of Hecla common stock.

The closing of the transaction is subject to certain conditions including shareholder and regulatory approvals. Pending receipt of all required approvals, the company anticipates that the transaction will be completed around the end of the second quarter of 2018.

Klondex mined a total of 49,873 gold equivalent ounces, with production of 43,525 GEOs. In Nevada, total GOEs mined were 47,499, with production of 41,415 GEOs. At the True North mine in Canada, the company mined and produced 2,374 and 2,111 GEOs respectively from underground operations. Klondex sold 42,541 GEOs, consisting of 40,572 gold ounces and 158,239 silver ounces.

Revenue was $56.8 million from average realized selling prices per gold and silver ounce of $1,334 and $16.61, respectively.

First quarter 2018 revenues increased compared to the first quarter of 2017 due to more ounces sold and a higher price per ounce of gold. Increases in production costs during the first quarter of 2018, as compared to the same period in 2017, were driven by the operations at Hollister and Aurora, which were not operating during first quarter 2017.

General and administrative costs for the first quarter of 2018 increased as compared to the prior year period primarily due to severance costs related to the restructuring of the True North operations in early January.

The company incurred a foreign currency gain of $3.2 million during the first quarter of 2018 compared to a foreign currency loss of $1 million for the first quarter of 2017.

Cash balance at the end of the first quarter of 2018 was $27.8 million after $8 million of operating cash inflows, $3.3 million used in investing activities, and $0.5 million used in financing activities. As of March 31, the company had total liquidity of $43.8 million, consisting of $38.8 million in working capital and $5 million revolver borrowing availability. The company held metal inventory valued at approximately $28.8 million at the end of the first quarter.

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