U.S. Global Investors CEO believes his top gold stock pick will likely be acquired
SmallCapPower | November 11, 2016: Gold stocks may have cooled over the past few months but U.S. Global Investors CEO Frank Holmes’ top gold stock pick from six months ago has remained hot. In an interview with SmallCapPower at the end of April, Mr. Holmes considered one gold junior in particular to be a likely takeover candidate.
Klondex Mines Ltd. (TSE:KDX) owns the Fire Creek and Midas mines in Nevada, and the True North Gold Mine and mill in Manitoba, which it placed in production during the third quarter of this year. The Company expects initial annual production of 45,000 to 65,000 gold ounces at True North at average All-in Sustaining Costs of C$950 to C$1,050 per ounce.
The Company also recently closed its acquisition of the Hollister and Aurora projects, also located in Nevada. Klondex called Hollister a high-grade, fully permitted (EIS in hand) underground gold mine approximately 19 miles from its Midas mill. The Company expects many synergies with the acquisition of these two projects that are located so close to its existing Nevada operations.
Klondex increased its gold equivalent production by 21% in 2015 to 127,527 ounces, at All-in Sustaining Costs of US$786 per gold ounce sold.
In his interview, Frank Holmes asserted that Klondex Mines has grades of 12 gram per tonne (g/t) gold, as compared with the global average of 1 g/t, and a high free cash flow compound annual growth rate. He thought Klondex could be acquired at price of C$6 to $9 per share.
On November 3, 2016, Klondex reported record third-quarter revenue of $53.0 million and net income of $7.2 million. The Company also had $131.1 million in cash on its books.
The Content contained on this page (including any facts, views, opinions, recommendations, description of, or references to, products or securities) made available by SmallCapPower/Ubika Research is for information purposes only and is not tailored to the needs or circumstances of any particular person. Any mention of a particular security is merely a general discussion of the merits and risks associated there with and is not to be used or construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of any entity or security by SmallCapPower/Ubika Research. The Reader should apply his/her own judgment in making any use of any Content, including, without limitation, the use of any information contained therein as the basis for any conclusions. The Reader bears responsibility for his/her own investment research and decisions. Before making any investment decision, it is strongly recommended that you seek outside advice from a qualified investment advisor. SmallCapPower/Ubika Research does not provide or guarantee any financial, legal, tax, or accounting advice or advice regarding the suitability, profitability, or potential value of any particular investment, security, or information source. Ubika and/or its affiliates and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities and/or commodities and/or commodity futures contracts in certain underlying companies mentioned in this site and which may also be clients of Ubika’s affiliates. In such instances, Ubika and/or its affiliates and/or their respective officers, directors or employees will use all reasonable efforts to avoid engaging in activities that would lead to conflicts of interest and Ubika and/or its affiliates will use all reasonable efforts to comply with conflicts of interest disclosures and regulations to minimize the conflict.
Klondex Mines Ltd. (TSE:KDX) owns the Fire Creek and Midas mines in Nevada, and the True North Gold Mine and mill in Manitoba, which it placed in production during the third quarter of this year. The Company expects initial annual production of 45,000 to 65,000 gold ounces at True North at average All-in Sustaining Costs of C$950 to C$1,050 per ounce.
