CORPORATE PRESENTATION JULY 2015 - Klondex Mines€¦ · CORPORATE PRESENTATION JULY 2015. TSX: ... Q1 Financials will be released in the week of May 11, ... Glenn Pountney 7.7 OFI

TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM1

CORPORATE PRESENTATION

JULY 2015


FORWARD-LOOKING INFORMATION

Qualified Person

Mark Odell, P.E., Principal Engineer, Practical Mining LLC, a "qualified person" as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"), reviewed and is responsible for the technical information contained in this presentation.

Cautionary Note Regarding Technical Information and Forward-looking Information

A production decision at the Fire Creek Project has not been made by Klondex, as it is still in the bulk sampling phase. Although a production decision at the Fire Creek Project has not been made, the mineralized material extracted from the Fire Creek Project under the bulk sample permit is processed through the Midas mill.

A production decision at the Midas Mine was made by previous operators of the mine, prior to the completion of the acquisition of the Midas mine by Klondex and Klondex made a decision to continue production subsequent to the acquisition. This decision by Klondex to continue production and, to the knowledge of Klondex, the prior production decision were not based on a feasibility study of mineral reserves demonstrating economic and technical viability prepared in accordance with NI 43-101. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with such production decisions.

This presentation contains certain information that may constitute forward-looking information under applicable Canadian securities legislation, including but not limited to information about current expectations on the timing, extent and success of exploration, development and metallurgical sampling activities, the timing and success of mining operations, the timing and completion of updated mineral resource estimates in respect of the Midas Project and Fire Creek Project, the timing and completion of an economic analysis in respect of the Fire Creek Project, the Company's intention and ability to monetize mineralized material, the successful execution of the bulk sampling program at the Fire Creek Project, project development and related permitting. Thisforward-looking information entails various risks and uncertainties that are based on current expectations, and actual results may differ materially from those contained in such information. These uncertainties and risks include, but are not limited to, the strength of the global economy; the price of gold; operational, funding and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations; and the ability of Klondex to fund its substantial capital requirements and operations. Risks and uncertainties about the Company’s business are more fully discussed in the Company’s disclosure materials filed with the securities regulatory authorities in Canada and available at www.sedar.com. Readers are urged to read these materials. Klondex assumes no obligation to update any forward-looking information or to update the reasons why actual results could differ from such information unless required by law.


PEOPLE – PROPERTIES – PROFITABILITY

OUR FOCUS

Experienced, Efficient and Invested Team

Gold and Silver Operations in Nevada

• Fire Creek and Midas, Nevada

• Issued reserves early 2015, using $1000/Au oz assumption

Investing in Growth

• US$33 million 2015 growth and sustaining capital

2014 Profitability Actual: 107,861 GEO Recovered

• Production Costs C$679 (US$585)/ GEO

• Net income of C$18.3 million or C$0.16 per share

• Working capital of C$56 million

• Cash balance of C$53 million

2015 Profitability Estimate: 125,000 - 130,000 GEO

• Production costs: C$688-750 (US$550- $600) per GEO

• All-in sustaining costs: C$1,000-1,063 (US$800 - $850) per gold ounce

OUTPERFORMED 2014 PRODUCTION

GUIDANCE BY 25%

0

20

40

60

80

100

120

140

2014A 2015E

Recovered GEOs

Actual

Guidance

Range

TSX: KDX OTCQX: KLNDF WWW.KLONDEXMINES.COM


A STRONG LEADERSHIP AND OPERATIONS TEAM

Paul Huet, A.Sc.T. – President, CEO and Director

• 28 yrs of mining experience within North America, focused on underground narrow vein gold and silver mining. Operated both the Midas and Hollister Mines in the 2000’s.

Barry Dahl – Chief Financial Officer

• 26 yrs of accounting experience in mining, construction and manufacturing. Previously CFO of Argonaut Gold during its growth to a 100,000+ ounce/ yr producer.

Brent Kristof – Chief Operating Officer

• 33 yrs operations u/g and open pit experience with major mining companies in North America, PNG and Australia

Mike Doolin – VP Business Development

• 27 yrs with extensive experience in metallurgy, design and permitting of narrow vein and open pit mining projects

Brian Morris – VP Exploration

• 26 yrs experience providing exploration and geological support to major producing assets in Nevada, including Midas and Hollister.

Alison Dwoskin – Manager, Investor Relations

• 10 yrs experience designing and managing IR programs for public mining companies

DI

RE

CT

OR

S

MA

NA

GE

ME

NT

4

Richard J. Hall, Chairman

• Seasoned mining executive, involved in building and acquiring precious

metals companies in the America’s and Australia; Served as CEO of

Northgate Minerals, Grayd Resource and Metallica Resources, as well as

Chairman of a number of other precious metals companies.

Blair Schultz, Executive Director

• Former Klondex Chairman (2012-2014). Over 13 yrs of experience

evaluating M&A transactions in the mining space; was most recently Vice

President and Head of Special Situation Analytics, Portfolio Management

& Trading at K2 & Associates Investment Management Inc. in Toronto

Renaud Adams

• President of Richmont Mines. Over 20 years of mining experience, and

most recently served as President and COO at Primero Mining Corp. Prior

to this, Mr. Adams served at IAMGOLD Corporation and held various

senior positions with Cambior Inc. and Breakwater Resources Ltd.

Rodney Cooper

• President and Chief Operating Officer at Labrador Iron Mines with 30

years in mining; broad experience in technical services, operations,

project management, investment evaluation and finance

Mark J. Daniel

• Economist and counsel for organizational design, executive recruitment

and development, compensation and performance improvements.

Current board member at AuRico Gold

Jamie Haggarty

• Financial and operational executive with over 20 years of experience

ranging from strategic planning to M&A transactions to managing diverse

businesses day-to-day

William Matlack

• Specializes in metals and mining investment banking with Scarsdale

Equities LLC; has 15 years prior experience in metals and mining equities

Charles Oliver, Special Advisor to the Board

• Most recently, award winning fund manager at Sprott AM. Brings 25 years

experience in capital markets, focused in the precious metals sector.


PEOPLE

IMPROVING OPERATIONAL EFFICIENCIES AT MIDAS

220

110

0

50

100

150

200

250

NEM KDX

Approximate Total

Headcount at Midas

25% Less Equipment Doubled Head Grade

EFFICIENTEXPERIENCED

340%

140%

0%

50%

100%

150%

200%

250%

300%

350%

400%

NEM KDX

Dilution at Midas

(0.15 opt AuEq vs. YTD ore grade 0.31 opt AuEq)

Shipped for use at Fire Creek


SECOND QUARTER RESULTS

RECORD QUARTERLY SALES

Three Months ended June 30 Six Months ended June 30

2015 2014%

Difference 2015 2014%

Difference

Underground Operations

Tons Mined 65,741 54,659 20% 120,932 77,029 57%

Processing

Tons Milled 63,059 46,047 37% 120,723 67,774 78%

Au Grade OPT 0.45 0.38 18% 0.47 0.43 9%

Ag Grade OPT 8.00 7.38 8% 7.42 7.49 -1%

Au Ounces Recovered 26,552 17,093 55% 53,777 30,638 76%

Ag Ounces Recovered 472,473 325,018 45% 826,928 483,390 71%

Au Ounces Sold 26,768 20,293 32% 53,903 23,662(2)128%

Ag Ounces Sold 543,251 343,025 58% 847,808 401,078 111%

GEOs Sold (1) 34,188 25,605 34%65,601 29,852(2) 120%

(1) Au Equivalent ratios of approximately 73.22:1 and 64.58:1 during the first quarters of 2015 and 2014, respectively; Au Equivalent ratios of approximately 72.56:1 and 64.67:1 during the first six months of 2015 and 2014, respectively. Au Equivalent ratios are based on average realized metal prices received by the Company.

(2) Includes 2,439 gold ounces reported as sale of mineralized material, and credited to the carrying value of Fire Creek Project.


PROFITABILITY – POSITIVE CASH FLOW

SIGNIFICANT GROWTH TO THE BALANCE SHEET

(1) Au Equivalent ratio of 66.67:1 in 2015; Au Equivalent ratio of 63.16:1 in 2014.

(2) 1 ounces per short ton equals 34.2857 grams per tonne

(3) Q1 Financials will be released in the week of May 11, 2015

2015 2014

1Q 1Q 2Q 3Q 4QTotal 2014/

YTD

Revenue (in C$) $47.3 $2.6 M $36.4 M $38.0 M $44.6 M $121.7 M

Net Income (in C$) $10.1 $(2.4) M $4.4 $7.2 M $9.0 M $18.3 M

Earnings Per Share (EPS) $0.10 $(0.02) $0.04 $0.06 $0.07 $0.16

Production Cost/GEO (C$) C$842 $906 $730 $613 $685 $679

Production Cost w/Ag by-product (C$)

C$745 n/a n/a $478 $553 $526

Capital Expenditures (C$) $4.2 M $4.3 M $7.1 M $7.8 M $10.5 M $30.8 M

Gold Equiv Grade (opt) 0.60 0.66 0.50 0.79 0.65 0.64

Au Equivalent Ounces Recovered(1) 32,542 16,052 22,239 39,109 30,460 107,860

Cash (03/15) C$54.9 M

Inventories (03/15) C$25 M

Debt @ 11% C$24 M

FNV Gold Purchase Agmt (29,625 oz as at

03/15)23% repaid


KLONDEX VALUATION

STRONG RESULTS TRANSLATED TO 52% GROWTH YTD

Klondex is in its second year of operations

Focused on growth and de-risking



OWNERSHIP

Sentry Investments 19.8

Sun Valley Gold 14.3

US Global Investors 11.5

K2 Principal Fund 10.5

Glenn Pountney 7.7

OFI Global Asset Mgmt 6.0

Van Eck 4.4

Goodman and Company 2.1

RBC Global Asset Mgmt 2.0

Sprott Asset Management 1.7

MD Private Investment 1.3

BMO Asset Management 1.3

Canaccord, Rahul Paul

Clarus Securities, Jamie Spratt

Dundee Capital, Josh Wolfson

GMP Securities, Oliver Turner

Haywood Securities, Tara Hassan

Mackie Research Capital, Barry Allan

MPartners, Derek Macpherson

PI Financial, Phil Ker

RBC Capital Markets, Sam Crittenden

Sell Side Research

KDX Ownership

Mgmt/Insiders

Institutional

Other

Major Holders (M’s of shares) Share Price (KDX:TSX; KLNDF:OTCQX) $3.01

52 Week High/Low C$3.50 - C$1.68

Average Daily Volume (3 mos) 473 k

Shares Outstanding 129 M

Fully Diluted Shares Outstanding 148 M

Market Capitalization C$400 M

Enterprise Value C$395 M

Cash (03/15) C$54 M

Inventories (03/15) C$25 M

Debt @ 11% C$24 M

FNV Gold Purchase Agmt (29,625 oz as at

03/15)23% repaid

80%

6%14%


KDX RELATIVE VALUATION

2015E-’17E AVERAGE EBITDA MARGIN (%)

Source: FactSet, Bloomberg. Prepared by GMP Capital, June 8, 2015.

2015E FREE CASH FLOW YIELD (%)

52.1%

45.2% 42.6% 42.4%

37.9% 36.6%

34.5%

31.6%

27.8% 27.3%

17.6%

Peer

Average 32.7%

11.5% 10.7%

8.9%

5.6%

1.6% 1.3% 1.0%

(1.4%)(1.9%)

(3.8%) (4.1%)

Peer

Average: 0.3%


PROPERTIES

LOW RISK

11

NEVADA

Mining-friendly jurisdiction

Low permitting risk

High grades

Low costs

MIDAS

Fully-permitted

FIRE CREEK

~95% permitted

Environmental assessment (expected 2H2015)


KLONDEX APPROACH AT MIDAS

DISCIPLINED MINING AND EXPANSION

• Operating since 1998 (2.2 M oz Au; 27 M oz

Ag)

• High grade, ramp access, grid power

• Dedicated continued exploration on the

district

• Advance, Develop, Discover

• Significant management experience

operating Midas

LocationMine TypeOwnership

Elko County, NevadaUnderground, gold and silver100%

Proven and ProbableReserves AuEq

132.6k oz0.55 opt (18.8 g/T) - 242.1 k tons

M&I Mineral Resources AuEq (inclusive of reserves)

526k oz0.47 opt (16.2 g/T) - 1,117 k tons

Inferred Mineral ResourcesAuEq

287k oz0.33 opt (11.5 g/T) - 858 k tons

Mining Method Cut and Fill, Long Hole, Shrinkage

Mining rate 400-450 tpd

Processing Merrill Crowe (gravity and cyanide)1200 tpd capacity

Recoveries 94% Au; 95% Ag (actuals)

Operating Cost*Reserve cost

$315/t

Total costs*Reserve cost

$932/oz AuEq$485/oz net Ag by product

Reserve Life 2.8 yrs

Royalty 2.5% (on the mine) to FNV starting in 2019

See last slide for footnotes.

Reserves use US$ cost assumptions

Plan view of all exploration

2-yr Mine Plan


MUC-027467.0 ft @ 1.2 opt AuEq

MIDAS DRILLING PROGRAM

RECENT INTERCEPTS ANNOUNCED APRIL 7, 2015

Within 100 ft of current mine workings (505 Vein)


MIDAS EXPLORATION TARGET Q3 2015

DRILLING PLANNED 75,000 FT

14

Follow-up drilling on previous discoveries


• High-grade 1.17 opt Au FY 2014 grade

• Ramp access, grid power

• Disciplined mining approach

• Began testing long hole mining in 2015

• Aggressive exploration

• Five main veins open in all directions

(along strike, up/down dip)

• Several other high-priority targets

FIRE CREEK PROJECTEA PERMITTING EXPECTED IN H2 2015

LocationMine TypeOwnership

Lander County, NevadaUnderground, gold and silver100%

Proven and ProbableReserves AuEq

241.4k oz1.3 opt (44.6 g/T) – 185.8 k tons

M&I Mineral Resources

AuEq (inclusive of reserves)

421k oz

1.1 opt (37.7 g/T) - 377 k tons

Inferred Mineral ResourcesAuEq

363k oz0.43 opt (14.7 g/T) – 840 k tons

Mining Method Cut and Fill, Long Hole, Shrinkage

Mining rate 125 - 200 tpd

Processing Midas Mill - $34/t shipping

Recoveries 94% Au; 95% Ag (actuals)

Operating Cost*Reserve cost

$460/t

Total costs*Reserve cost

$503/oz AuEq$492/oz net Ag by product

Reserve Life 3.8 yrs

Royalty 2.5% to FNV starting in 2019

See last slide for resource and reserve footnotes.

Reserves use US$ cost assumptions

Isometric View


FIRE CREEK DRILLING TARGETS FOR 2015

DRILLING PLANNED 120,000 FT

Systematically extend mine drifts and set up additional levels for bulk sampling and

exploration activities

2015 OBJECTIVE: EXCAVATE MINE WORKINGS TO DRILL

TEST VERTICAL EXTENTS AND VEIN EXTENTIONS

VEINS OPEN UP-DIP, DOWN-DIP AND ALONG STRIKE


FIRE CREEK PLAN VIEW

HUI WU DRILLING HIGHLIGHTS, MAY 21, 2015


MIDAS MINE AND MILL

SIMPLE PROCESSING

Capacity: 1,200tpd, Recovery: 94% Au, 95% Ag

Conventional leach technology and Merrill Crowe

precipitation, with gravity

Currently Operating Midas mill @ 600-650 tpd

Klondex Mill feed from:

Fire Creek and Midas

Toll milling Washington Mine (concentrates)

Toll milling Golden Wonder (monthly shipments)


ON TRACK TO MEET 2015 TARGETS

Production in 2015:

• 125,000-130,000 GEO

• Production costs:

• US$550- $600 (C$688-750) per GEO

• Low all-in sustaining costs:

• US$800 - $850 (C$1,000-1,063) per gold ounce

Exploration and Development:

• Complete Midas tailings expansion permit

• CAPEX Spend $33 million

Initial split of $9 million development and $6 million drilling at each of Fire

Creek and Midas

$3 million at the Midas mill

Corporate:

• Complete listing on NYSE MKT

• Begin conversion to reporting in USD

• Expected inclusion to Indices: GDXJ, S&P/TSX Global Gold


The Underground Gold Company

PEOPLE

PROPERTIES

PROFITABILITY

FREE CASH FLOW.

15% PROFIT MARGIN FY14.

LOW AISC.

LOWERING PERMITTING

RISKS.

RESERVE STATEMENTS on

MIDAS AND FIRE CREEK.

DEDICATED TO

EXPLORATION AND

DEVELOPMENT.

ALIGNED WITH

SHAREHOLDERS.

LEVERAGING EXPERTISE.


FOR M ORE INFORM ATION

ALISON DWOSKIN

647-233-4348; 775 -299-1049

ADWOSKIN@KLONDEXM INES.COM


GLOBAL RESERVES AND RESOURCES

Mineral Resources

Category

Au opt (g/t)

Ag opt(g/t)

AuEq opt(g/t)

Au Ounces(000’s)

Ag Ounces(000’s)

AuEqOunces (000’s)

Tons(000’s)

Fire CreekM&I Au 1.10 (37.7) 0.86 (29.5) 1.11 (38.1) 415.5 324.2 420.5 377.4

Inf. Au 0.43 (14.7) 0.38 (13.0) 0.43 (14.7) 358.3 320.8 363.3 840.0

MidasM&I Au 0.38 (12.9) 6.05 (207.7) 0.47 (16.2) 421 6,765 526 1,117

Inf. Au 0.28 (9.6) 3.48 (119.3) 0.33 (11.5) 241 2,988 287 858

TOTAL M&I : 946 k oz AuEq

TOTAL INF: 650 k oz AuEq

Mineral Reserves

Category Au opt Ag opt Au Eq optAu

Ounces (000's)

Ag Ounces (000's)

AuEqOunces (000's)

Tons (000's)

Fire Creek Proven Reserves 1.462 1.108 1.479 118.2 89.6 119.6 80.9

Probable Reserves 1.149 0.787 1.161 120.5 82.6 121.8 104.9

Proven + Probable 1.285 0.927 1.300 238.7 172.2 241.4 185.8

MidasProven Reserves 0.381 13.349 0.588 51.1 1,790.5 78.8 134.1

Probable Reserves 0.376 7.918 0.498 40.6 855.2 53.8 108.0

Proven + Probable 0.378 10.926 0.548 91.6 2,645.6 132.6 242.1


PROPERTY – HIGH GRADE

INCREASING MINERAL RESOURCES; INCREASING M&I

428 363

287 420

FC 2014 FC 2015 ($1200/OZ A U)

Inf M&I

75

287

384

526

MID A S 2013 MID A S 2014 ($1200/OZ A U)

Inf M&I

FIR

E C

REEK

MID

AS 0.47 opt

AuEq

1.11 opt

AuEq

0.43 opt

AuEq

0.33 opt

AuEq

+46% M&IFIRE CREEK MINERAL RESOURCE

+37% M&IMIDAS MINERAL RESOURCE


PROPERTIES - HIGH GRADE

ONE OF THE HIGHEST GRADE GOLD OPERATORS IN THE WORLD

Source: M Partners and company reports on February 12, 2015, using resource grades.

PROJECT OPERATOR GRADE (g/T) COUNTRY

Fire Creek Project Klondex Mines 38.10 USA

Valley of the

Kings* Pretium Resources 17.98 Canada

Midas Mine Klondex Mines 16.20 USA

TauTona AngloGold Ashanti 16.01 South Africa

Main Break + SMC Kirkland Lake Gold 15.74 Canada

Buriticá Project* Continental Gold 15.12 Colombia

Moab Khotsong

AngloGold Ashanti

Limited 14.05 South Africa

Gosowong Newcrest Mining 13.00 Indonesia

Red Lake Goldcorp 12.27 Canada

Curraghinalt

Dalradian

Resources 10.41 Ireland

Kupol Project Kinross Gold 8.89 Russia

Phoenix Gold

Project Rubicon Minerals 8.1 Canada

Island Gold Mine Richmont Mines 6.36 Canada

Turquoise Ridge Barrick Gold 5.12 USA

Timmins West Mine Lake Shore Gold 5.09 Canada

Fire Creek

Project

Valley of

the KingsMidas Mine TauTona

Main Break

+ SMC

Buriticá

Project

Moab

KhotsongGosowong Red Lake

Curraghina

lt

Kupol

Project

Phoenix

Project

Island Gold

Mine

Turquoise

Ridge

Timmins

West Mine

Grade (g/T) 38.1 18.0 16.2 16.0 15.7 15.1 14.1 13.0 12.3 10.4 8.9 8.1 6.4 5.1 5.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Global M&I Gold Equivalent Grade (g/T)


FOOTNOTES

Price assumptions in mineral reserves and resources use US dollars unless otherwise stated.

All Midas and Fire Creek mineral resources and reserves are prepared by Practical Mining LLC.

Mineral resources and mineral reserve estimates have been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s (CIM) “CIMDefinition Standards – For Mineral Resources and Mineral Reserves” adopted by the CIM Council on May 10, 2014. Proven and probable mineral reserves are theeconomically minable portions of the measured and indicated Mineral Resources after the application of appropriate Modifying Factors.

Notes to the Mineral Resources

Fire Creek mineral resource update has an effective date of December 31, 2014 (press released January 30, 2015)

Midas mineral resource update has an effective date of June 30, 2014 (press released September 30, 2014)

1. Mineral resources have been estimated at a gold price of $1,200 per ounce and a silver price of $19.00 per ounce, and, $800 per ounce gold and $12.67 per ounce silver;

2. Gold and silver recoveries are 94% and 92%, respectively;

3. Mineral resources include dilution to achieve mining widths of four feet or the vein width plus two feet whichever is greater;

4. Mineral resources include allowances for 5% mining losses and an additional 10% unplanned dilution;

5. Cutoff grade thicknesses are calculated using mining, processing and administrative costs of $249 per ton of mineralization and a minimum mining width of four feet;

6. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title socio-political, marketing or other relevant issues;

7. The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

Ore Reserves

1. Reserves have been estimated with a gold price of $1000/ounce and a silver price of $15.83/ounce

2. Metallurgical recoveries for gold and silver are 94% and 92% respectively;

3. Mining losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine excavations.

4. Fire Creek Mineral reserve uses an effective date of December 31, 2014.

4. Mineral reserve uses an effective date of August 31, 2014.

Documents

CORPORATE PRESENTATION JULY 2015 - Klondex Mines€¦ · CORPORATE PRESENTATION JULY 2015. TSX: ... Q1 Financials will be released in the week of May 11, ... Glenn Pountney 7.7 OFI