Klondex Mines: 6 Different Insiders Have Purchased Shares This Month

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 |  About: Klondex Mines Ltd. (KLDX), Includes: ANV, PZG
by: Markus Aarnio

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 (KLNDF) engages in acquisition, exploration, and development of mineral properties in Nevada.

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Insider buying during the last 30 days

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

Name Title Trade Date Shares Purchased Public Offering Current Ownership Increase In Shares
Renaud Adams Director Nov 20 21,900 Yes 21,900 shares from 0 to 21,900
Jorge Avelino Controller Nov 20 5,000 Yes 110,800 shares +4.7%
James Haggarty Director Nov 20 10,000 Yes 50,420 shares +24.7%
Paul Andre Huet CEO Nov 21 35,000 Yes 351,660 shares +11.1%
William Matlack Director Nov 20 60,000 Yes 1,271,982 shares +5.0%
Blair Schultz Chairman Nov 20 395,000 Yes 445,000 shares +790%
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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.

Month Insider buying / shares Insider selling / shares
November 2013 526,900 0
October 2013 2,216,400 1,000,000
September 2013 124,900 0
August 2013 6,600 0
July 2013 31,077 0
June 2013 269,900 0
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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
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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.
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Competition

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

Company KLNDF ANV PZG
Market Cap: 116.5M 324.30M 174.42M
Employees: N/A 469 20
Qtrly Rev Growth (yoy): N/A 0.18 N/A
Revenue: N/A 261.77M N/A
Gross Margin: N/A 0.45 N/A
EBITDA: -3.68M 91.81M -13.85M
Operating Margin: N/A 0.25 N/A
Net Income: -3.68M 34.13M -9.59M
EPS: -0.06 0.34 -0.06
P/E: N/A 9.10 N/A
PEG (5 yr expected): N/A N/A N/A
P/S: N/A 1.24 N/A
P/B: 1.24 0.41 2.62
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Only Allied Nevada has currently commercial production.

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

Company Insider buying / shares Insider selling / shares
ANV 10,000 0
PZG 42,000 25,000
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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.

Disclosure: I am long KLNDF, PZG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.