T S X K D X N Y S E A M E R I C A N K L D X 2017 THIRD QUARTER RESULTS N O V E M B E R 1 0 , 2 0 1 7 T S X K D X N Y S E Am e r i c a n : K L D X T S X K D X N Y S E Am e r i c a n : K L D X
CAUTIONARY NOTES Cautionary Note Regarding Forward-Looking Information This presentation contains certain information that may constitute forward-looking information under applicable Canadian and U.S. securities legislation, including but not limited to information about results of exploration, development, mining, evaluation activities, results of reclamation activities, the estimation or realization of mineral resources and mineral reserves, the timing and amount of estimated future production, the making of future production decisions, expectations regarding realization of synergies relating to Klondex's projects, the timing and receipt of required permits and approvals, capital expenditures, costs and timing of the development of new mineral deposits, requirements for additional capital, the sufficiency of working capital and liquidity, and the future prices of precious and base metals. This forward-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 and mineral reserve estimates are reflective of actual mineral resources and mineral reserves; the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations; the ability to integrate acquisitions; 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 annual report on Form 10-K and periodic disclosure materials filed with the securities regulatory authorities in Canada and the U.S. and available at www.sedar.com and www.SEC.gov, respectively. 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. U.S. Cautionary Note Regarding the Use of Mining Terms This presentation has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. All resource and reserve estimates included in this presentation have been prepared in accordance with NI 43-101. NI 43- 101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the mineral reserve disclosure requirements of the U.S. Securities and Exchange Commission (the “ SEC ” ) set out in industry guide 7. In particular, the SEC ’ s industry guide 7 applies different standards in order to classify mineralization as a reserve. As a result, the definitions of proven and probable reserves used in NI 43-101 differ from the definitions in SEC industry guide 7. Under SEC standards, mineralization may not be classified as a “ reserve ” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. However, Klondex ’ s estimated proven and probable reserves previously reported under NI 43-101 for Fire Creek, Midas, Hollister and True North are equivalent to those determined under SEC Industry Guide 7. This presentation also uses the terms “ resources ” , “ measured resources ” , “ indicated resources ” and “ inferred resources ” . United states investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Mineral resources that are not mineral reserves do not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category, and it is uncertain if further exploration will result in upgrading them to an indicated or measured resource category. Disclosure of “ contained ounces ” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “ reserves ” by SEC standards as in- place tonnage and grade without reference to unit measures. Consequently, resource information contained in this presentation is not comparable to similar information that would generally be disclosed by U.S. companies in accordance with the rules of the SEC. Qualified Person Brian Morris, Senior Vice President, Exploration of Klondex Mines is a "qualified person" as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) and has reviewed and is responsible for the technical information contained in this presentation. T S X K D X N Y S E Am e r i c a n : K L D X T S X K D X N Y S E Am e r i c a n : K L D X 2
PAUL ANDRÉ HUET A.Sc.T., Acc.Dir. PRESIDENT, CEO AND DIRECTOR 30 years of mining experience within North America, focused on underground narrow vein gold and silver mining T S X K D X N Y S E Am e r i c a n : K L D X T S X K D X N Y S E Am e r i c a n : K L D X 3 3
COMPELLING VALUE PROPOSITION Q3 OPERATIONAL AND FINANCIAL PERFORMANCE Three Flagship Assets in Nevada Servicing Reiterated 2017 One Central Mill – Hollister Production Now Processing Ore at the Growing Our Guidance of 213,000 Midas Mill Mineral Resources & – 230,000 GEOs, Gaining Scale in Canada – Extending Mine Life; Initial at Cash Costs Per GEO True North Gaining Momentum Reserve/Resource at Hollister Sold of $675 – $700 * and Continuation of High Q3 Mined 54,172 oz., Grade Systems at Fire Creek Production of 40,819 and Midas GEOs Deliver on Our Commitments Safety First! No LTA’s at any of Our Operations Significant Significant Liquidity, Experience Minimal in Narrow Debt Vein Underground Mining *See “ Non-GAAP Performance Measures at the end of the presentation. *See press release dated November 10, 2017 T S X K D X N Y S E Am e r i c a n : K L D X 4
MIKE DOOLIN Acc.Dir. CHIEF OPERATING OFFICER 30 years with extensive experience in metallurgy, design, and permitting of narrow vein and open pit mining projects T S X K D X N Y S E Am e r i c a n : K L D X T S X K D X N Y S E Am e r i c a n : K L D X 5
Q3 OPERATIONAL HIGHLIGHTS ON TRACK TO MEET ANNUAL OPERATING GUIDANCE CONSOLIDATED STATISTICS NEVADA CANADA CONSOLIDATED MINED (GEOS) 44,266 9,906 54,172 PRODUCTION (GEOS) 32,793 8,026 40,819 SALES (GEOS) (1)(2) 32,402 5,610 38,012 CASH COSTS (PER GEO SOLD) (1) $696 $1,461 $809 MINING COST PER TON $270 $113 $201 TONS PER DAY MILLED 848 1,202 2,050 • Mined 54,172 GEOs, in-line with expectations • Ended Q3 with stockpiles of ~43,000 tons in Nevada and ~11,000 tons at True North • Year-to-date cash cost per GEO sold of $727 (1) This is a non-GAAP measure; refer to the Non-GAAP Performance Measures section of this Press Release for additional detail. (2) Gold equivalent measures are the gold measure plus the silver measure divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by us in the respective period. Refer to the Non-GAAP Performance Measures section of this Press Release for additional detail. T S X K D X N Y S E Am e r i c a n : K L D X T S X K D X N Y S E Am e r i c a n : K L D X 6
Q3 OPERATIONAL HIGHLIGHTS - NEVADA ON TRACK TO MEET ANNUAL OPERATING GUIDANCE CONSOLIDATED STATISTICS FIRE CREEK MIDAS HOLLISTER NEVADA TOTAL MINED (GEOS) 25,918 11,062 7,286 44,266 PRODUCTION (GEOS) 21,983 9,351 1,459 32,793 SALES (GEOS) (1)(2) 23,128 8,746 529 32,402 CASH COSTS (PER GEO SOLD) (1) $509 $1,160 $1,197 $696 MINING COST PER TON $277 $237 $285 $270 TONS PER DAY MILLED 336 422 85 848 • Fire Creek operations ahead of expectations • Achieved a milestone as processing Hollister ore at the Midas mill began - Expect to complete optimization of new CIL during Q4 • Total Company production guidance unchanged – increased annual production guidance at Fire Creek and reduced Hollister (1) This is a non-GAAP measure; refer to the Non-GAAP Performance Measures section of this Press Release for additional detail. (2) Gold equivalent measures are the gold measure plus the silver measure divided by a GEO ratio. GEO ratios are computed by dividing the average realized gold price per ounce by the average realized silver price per ounce received by us in the respective period. Refer to the Non-GAAP Performance Measures section of this Press Release for additional detail. T S X K D X N Y S E Am e r i c a n : K L D X T S X K D X N Y S E Am e r i c a n : K L D X 7
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