Klondex Mines Ltd. (KLDX) on March 29 released an updated mineral resource for its True North Gold mine located in Manitoba, Canada. Klondex acquired the mine in January 2016. The Measured and Indicated resource represents an increase of 32% in gold ounces over the September 2016 resource estimate and the Inferred resource increased 45%.

Paul Huet, president and CEO stated, "True North continues to evolve into an important asset in our portfolio. We believed our initial Mineral Resource Estimate was just the beginning and this update confirms that belief. Using the results from our own drilling program post acquisition, we continue to unlock the true potential of this asset by adding ounces at depth with additional tons at higher grades."

The resource estimate was well received by industry analysts. Jamie Spratt, an analyst with Clarus Securities, called the update positive and noted that "we are encouraged by the growth in the mineral inventory that further strengthens our view on the significant exploration upside available at True North from the multiple zones that remain open. We believe continued drilling should translate into mine life extension of the ~45 Koz/year production profile at True North."

Spratt also lauded the True North and Hollister acquisitions by noting, "we continue to believe that KLDX is well positioned to deliver a compelling production growth profile by the addition of True North and Hollister mines that are expected to drive production toward 300 Koz by 2018."

Stuart McDougall, an analyst with M Partners, noted that Klondex "maintains a strong balance sheet, with year-end unrestricted cash of ~$48M, working capital of $33M and total debt of $30M. . .based on our revised estimates, KLDX can fund its capital requirements from internal cash flow, even at current metal prices."

On March 26, prior to Klondex releasing True North's updated resource estimate, Jeff Killeen of CIBC noted, "2016 has been a transitional year for Klondex with the purchase of the True North and Hollister mines. 2017 is expected to see production ramp up at True North and first gold from a bulk sampling program at the Hollister mine." He added, "A mine plan and resource update for Hollister is scheduled for Q2/17 and could be the next catalyst for Klondex shares. Management has cemented a reputation as being experts in underground, narrow vein mining and points to the continued potential for resource expansion at Fire Creek from recent drill results."

Jamie Spratt of Clarus concluded, "Our thesis continues to be that KLDX offers best-in-class production growth, low cost production and a solid management execution track record."