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In this article, I will feature one mining company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10%.

Klondex Mines (OTCQX:KLNDF) engages in acquisition, exploration, and development of mineral properties in Nevada.

(click to enlarge)

Insider buying during the last 30 days

Here is a table of Klondex Mines' insider-trading activity during the last 30 days by insider.

NameTitleTrade DateShares PurchasedPublic OfferingCurrent OwnershipIncrease In Shares
Renaud AdamsDirectorNov 2021,900Yes21,900 sharesfrom 0 to 21,900
Jorge AvelinoControllerNov 205,000Yes110,800 shares+4.7%
James HaggartyDirectorNov 2010,000Yes50,420 shares+24.7%
Paul Andre HuetCEONov 2135,000Yes351,660 shares+11.1%
William MatlackDirectorNov 2060,000Yes1,271,982 shares+5.0%
Blair SchultzChairmanNov 20395,000Yes445,000 shares+790%

There have been 526,900 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Klondex Mines' insider-trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
November 2013526,9000
October 20132,216,4001,000,000
September 2013124,9000
August 20136,6000
July 201331,0770
June 2013269,9000

There have been 3,175,777 shares purchased and there have been 1,000,000 shares sold by insiders since June 2013.

Financials

Klondex reported the third-quarter financial results on November 13 with the following highlights:

Revenue$0
Net loss$2.9 million
Cash$1.0 million
Debt$10.7 million

On November 15, 2013, Klondex closed a $19.5 million financing.

Outlook

Klondex currently anticipates having sufficient working capital to meet its 2013 and 2014 exploration budget for the Fire Creek project. As at October 21, 2013, the company had a cash position of over $15 million. $14 million has been committed for expenditures in the Fire Creek project and the balance is discretionary expenditures and general working capital. Klondex also anticipates that the processing of its higher-grade mineralized material will generate sufficient cash to improve its working capital.

Upcoming milestones

Klondex' focus over the next two quarters will be to continue to advance the Fire Creek project, with the objective of completing the following items:

1. Prepare a Preliminary Economic Assessment (PEA) on the Fire Creek project based on the new mineral resource estimate and results from current metallurgical test work.
2. Continue in-fill drilling of the Main Zone on 75-foot centers. It is expected that this data will provide additional information to better define the mineralization, as well as the continuity of identified veins at the Fire Creek project.
3. Initiate exploration drilling on the Western Zone discovery with a second core drill.
4. Design and plan surface exploration drill program.
5. Complete vent raise hoist.
6. Continue to work on the Fire Creek Environmental Assessment [EA] permit, which would allow full-scale mining at the Fire Creek project.
7. Construct a RIB as part of Fire Creek's long-term water management plan.
8. The company intends to take a bulk sample upon completion of the vent raise. This will allow the company to test different mining methods and to assess the metallurgical characteristics of the Fire Creek material. The company is in the process of determining the extent of the proposed bulk sampling program.

Competition

Klondex' competitors in Nevada include Allied Nevada Gold (ANV), and Paramount Gold and Silver (PZG). Here is a table comparing these companies.

CompanyKLNDFANVPZG
Market Cap:116.5M324.30M174.42M
Employees:N/A46920
Qtrly Rev Growth (yoy):N/A0.18N/A
Revenue:N/A261.77MN/A
Gross Margin:N/A0.45N/A
EBITDA:-3.68M91.81M-13.85M
Operating Margin:N/A0.25N/A
Net Income:-3.68M34.13M-9.59M
EPS:-0.060.34-0.06
P/E:N/A9.10N/A
PEG (5 yr expected):N/AN/AN/A
P/S:N/A1.24N/A
P/B:1.240.412.62

Only Allied Nevada has currently commercial production.

Here is a table of these competitors' insider-trading activities during the last six months.

CompanyInsider buying / sharesInsider selling / shares
ANV10,0000
PZG42,00025,000

Only Klondex has seen intensive insider buying during the last 30 days.

Conclusion

There have been six different insiders buying Klondex and there have not been any insiders selling Klondex during the last 30 days. Four of these six insiders increased their holdings by more than 10%.

Klondex' current resource estimate consists of Measured and Indicated resources totaling 295,900 ounces of gold at 44.7 g/t Au and Inferred resources of 421,400 ounces of gold at 19.2 g/t Au at Fire Creek.

There are five analyst buy ratings, zero neutral ratings, and zero sell ratings with an average price target of $2.56. Klondex has a book value of $1.20 per share. I have a long position in the stock currently.

Source: Klondex Mines: 6 Different Insiders Have Purchased Shares This Month