Konica Minolta announces Workplace Hub, the world's most connected intelligent edge platform for the workplace of the future

MISSISSAUGA, ON—(Marketwired – March 23, 2017) – Konica Minolta, Inc. today introduced Workplace Hub, an innovative new IT solution that unifies all of an organization's technology via a single centralized platform. Designed to future–proof workplaces of every size as they work towards digital transformation, version one of Workplace Hub, available in autumn 2017, directly addresses growing IT complexity by providing more efficient and effective management of the disparate array of tools, services and devices used by modern organizations.

This new platform represents the next phase of Konica Minolta's long history in innovation, marking its position in the IT services market and perfectly placing the firm to meet the evolving needs of business customers. Acting as a central hub that simplifies IT for an organization, Workplace Hub drives efficiencies by reducing the overall costs of IT management and service provision, and providing real–time data–driven insights that help to improve business processes. By creating an ecosystem to manage and coordinate the entire IT infrastructure and services across existing and future IT systems, devices and services, Workplace Hub provides users with a central dashboard showing 360–degree visibility of IT usage patterns across the whole business, allowing for simple management and optimization of systems.

Moreover, the platform's product roadmap includes future integration of IoT, Artificial Intelligence, Intelligent Edge and Decision Support capabilities as they become more central to the business environment of tomorrow. Adding this cognitive layer of organizational insight unleashes an intuitive understanding of the world that empowers people to collaborate better and to make smarter, data–driven decisions more effectively and easily.

Global partnerships with Hewlett Packard Enterprise, Sophos and Microsoft deliver best in class hardware, security and IT solutions. Additional services from Canonical and BrainTribe bring the power of open source and advanced data management, helping to facilitate effective digital transformation for any business.

Dennis Curry, vice president and director of business innovation and R&D, Konica Minolta, said, “Workplace Hub will evolve to become the most comprehensive platform for the services and capabilities demanded by the workplace of the future. It means businesses can grow and manage their IT in tandem with changing business needs. It simplifies IT operations today and paves the way for exciting new integrations, such as AI and intelligent edge computing, to become a central part of the digital organization of the future.”

This strategic shift will allow Konica Minolta to deliver more comprehensive digital transformation solutions, while continuing its heritage of providing the very best products and services for the business market as a whole.

“The workplace is evolving at an unparalleled rate and digital transformation is becoming increasingly important to both survival and future prosperity,” said Shoei Yamana, CEO and President, Konica Minolta Inc. “Workplace Hub not only allows businesses of all sizes to achieve effective transformation, but future–proof themselves against the next wave of technology innovations already infiltrating the business environment.”

Workplace Hub version one will be available in autumn 2017 to organizations looking for enterprise quality managed services at an affordable price.

More information on the launch event, keynote speakers and panel discussions can be found at workplacehub.konicaminolta.com.

About Konica Minolta
Konica Minolta Business Solutions (Canada) Ltd. is a leader in information management focused on enterprise content, technology optimization and cloud services. We are reshaping the Workplace of the Future™ (www.reshapework.ca). Our portfolio of offerings deliver solutions to improve our customers' speed to market, manage technology costs, and facilitate the sharing of information to increase productivity. Konica Minolta's IT services division IT Weapons offers a range of IT strategy, support, project and cloud computing solutions across all verticals. The company has been recognized as the #1 Brand for Customer Loyalty in the MFP Office Copier Market by Brand Keys for ten consecutive years. Konica Minolta, Inc. has also been named to the Dow Jones Sustainability World Index for five years in a row. For more information, please visit: www.konicaminolta.ca and follow Konica Minolta on LinkedIn, YouTube, and Twitter @KonicaMinoltaCA.

Klondex Reports Fourth Quarter and Full Year 2016 Results; Achieves Record Quarterly and Annual Revenue

RENO, NV—(Marketwired – March 23, 2017) – Klondex Mines Ltd. (TSX: KDX) (NYSE MKT: KLDX) (“Klondex”, the “Company”, “we”, “our”, or “us”) is pleased to announce its operational and financial results for the fourth quarter and full year 2016. This press release should be read in conjunction with our 2016 Annual Report on Form 10–K, which includes our Consolidated Financial Statements and related Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), which are available on our website (www.klondexmines.com), on SEDAR (www.sedar.com), and on EDGAR (www.sec.gov). All dollar amounts included in this press release are expressed in thousands of United States dollars, unless otherwise noted, and are based on our MD&A and our Consolidated Financial Statements, which were prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). References to “Notes” refers to the notes contained in the full year 2016 Consolidated Financial Statements. “Nevada Operations” consists of the Fire Creek and Midas mines.

In this press release we use the non–GAAP performance measures “Production cash costs per gold equivalent ounce sold” and “All–in costs per gold ounce sold”, which should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. See the Non–GAAP performance measures section of this press release for detail.

Fourth Quarter 2016 Highlights

  • Health, safety, and environmental – No lost–time injuries at our properties and as of December 31, 2016, had operated 1,539 days (~4.0 years) at Fire Creek, 815 days (~2.0 years) at Midas, 344 days (~0.7 years) at True North, and 89 days (~0.3 years) at Hollister and Aurora, without a lost–time injury.
  • Hollister acquisition – On October 3, 2016, completed the acquisition of the Hollister and Aurora projects, creating synergies with our Nevada Operations and providing significant future operational and exploration potential.
  • Ounces sold and financial results – Sold a quarterly record 47,745 gold equivalent ounces (“GEOs”), consisting of 42,405 gold ounces and 374,902 silver ounces for revenue of $56.1 million, a quarterly high. Average quarterly selling prices per gold and silver ounce were $1,175 and $16.73, respectively. Net income was $2.2 million (or $0.02 per share – basic).
  • Nevada performance – Produced a record 51,923 GEOs, as GEO grade and tons milled continued to increase from the prior quarter and first half of the year. Average key operating metrics for our Nevada Operations were: 886 ore tons milled per day, 0.50 oz/ton gold mill head grade, 5.46 oz/ton silver mill head grade, 0.58 oz/ton GEO mill head grade. Production cash costs per gold equivalent ounce sold at Nevada was $644.
  • True North – Produced 8,445 GEOs, an increase from the prior quarter as stockpiled ore processing began.

Full Year 2016 Highlights

  • Growth transformation – Completed acquisitions of True North and Hollister, positioned to continue increasing future production while diversifying operations profile into Canada. Financial strength to execute organic and bolt–on growth opportunities.
  • Financial position and liquidity – Maintained strong financial position and liquidity through completion of a CDN$129.5 million “bought deal” private placement and obtained first revolving credit facility (initially $25.0 million and increased to $35.0 million).
  • Ounces sold and financial results – Sold a record 159,118 GEOs, an increase of 19.4% from the prior year, consisting of 138,516 gold ounces and 1,470,992 silver ounces. Revenue was an all–time high totaling $198.2 million from average selling prices per gold and silver ounce of $1,245 and $17.44, respectively. Net loss was $1.7 million (or $0.01 per share – basic).
  • Cash flows – Ending cash balance of $47.6 million after $45.3 million of operating cash flows, $159.7 million used in investing activities, and $104.6 million provided by financing activities. Ending working capital of $33.2 million (ratio of 1.80:1).
  • Operating performance – Produced a record 151,007 GEOs from Nevada Operations, exceeding the high end of management's expectations, and 10,199 GEOs from True North for full year production of 161,289 GEOs, an increase of 26.3% from the prior year. Nevada Operations production cash costs per gold equivalent ounce sold at was $637 and within our 2016 expected range of $600 to $650.
  • Spending – Capital, exploration, and development spending totaled $32.5 million at Fire Creek, $27.8 million at Midas, $16.8 million at True North, $4.2 million at Hollister, $0.6 million Aurora, and $1.4 million at corporate for total capital spending of $83.4 million.

Mr. Paul Huet, President and CEO commented, “As previously announced, we had record quarterly and annual production in the fourth quarter and for the full year in 2016. Additionally, we are pleased that we once again achieved our production and cost guidance for the year.” Mr. Huet continued, “Looking ahead, our near term strategy is focused on organic growth. We expect to produce between 210,000 and 225,000 gold equivalent ounces in 2017, an increase of approximately 36% from the prior year.”

2017 full year outlook

We expect to produce between 210,000 and 225,000 gold equivalent ounces during 2017 at an expected production cash cost per GEO sold of $680 to $710 per GEO sold. This represents an increase in GEOs produced of approximately 36% from the prior year as we benefit from bulk sampling extraction at Hollister in Nevada as well as higher production from True North mine in Canada as ramp–up continues. Fire Creek and Midas' 2017 production is expected to be in line with the prior year.

We also expect our 2017 capital expenditures to be between $57 – $62 million with an additional $3 – $5 million to be spent on exploration. The majority of capital is expected to be spent at Fire Creek as we continue underground expansion in the form of primary access development and advancement of a second portal. We also expect to spend $7 – $9 million at our newly acquired Hollister mine in Nevada as it commences a bulk sampling mining program and underground definition drilling in the Gloria zone.

Below are tables summarizing key 2017 operating guidance.

             
    Gold Equivalent
Ounces Produced
(1)
  Production Cash Costs per Gold Equivalent Ounce Sold(1)   Capital Expenditures (thousands)
2017 full year outlook   Low   High   Low   High   Low   High
Midas     42,000     45,000   $ 925   $ 950   $ 11,000   $ 12,000
Midas Mill                     4,000     5,000
Fire Creek     97,000     100,000     475     500     27,000     29,000
Hollister(2)     30,000     35,000     935     960        
  Nevada Total     169,000     180,000     670     700     42,000     46,000
True North(3)     41,000     45,000     725     750     15,000     16,000
      210,000     225,000   $ 680   $ 710   $ 57,000   $ 62,000
                                     
      Low     High                        
Corporate general and administrative (thousands)   $ 15,000   $ 17,000                        
Hollister development and project costs (thousands)   $ 7,000   $ 9,000                        
Regional exploration (thousands)   $ 3,000   $ 5,000                        
All–in costs per gold ounce sold(1)   $ 1,070   $ 1,130                        
(1) This is a non–GAAP measure; refer to the Non–GAAP Performance Measures section of this Press Release for additional detail.
(2) Hollister is an exploration stage mineral property and as such, production refers to the estimated quantities resulting from the process of extracting mineralized materials from the earth and treating that material in a mill.
(3) Based on an estimated CDN:US dollar exchange rate of 0.75:1.
 

Klondex has not reconciled forward–looking 2017 full year non–GAAP performance measures contained in this press release to their most directly comparable GAAP measures, as permitted by Item 10(e)(1)(i)(B) of Regulation S–K. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to future production costs, realized sales prices and the timing of such sales, timing and amounts of capital expenditures, metal recoveries, and corporate general and administrative amounts and timing, or others that may arise during the year. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non–GAAP counterparts.

Consolidated Financial Results of Operations

             
    Three months ended
December 31,
2016
    Year ended
December 31,
2016
 
Revenues   $ 56,100     $ 198,175  
Cost of sales                
  Production costs     35,708       106,389  
  Depreciation and depletion     9,128       28,242  
  Write–down of production inventories     2,869       2,869  
      8,395       60,675  
Other operating expenses                
  General and administrative     4,368       15,804  
  Exploration     4,502       12,765  
  Development and projects costs     3,423       8,953  
  Asset retirement and accretion     1,898       2,653  
  Business acquisition costs     383       2,253  
  Provision for legal settlement     751       3,000  
  Loss on equipment disposal     17       126  
Income from operations     (6,947 )     15,121  
Other income (expense)                
  (Loss) gain on derivatives, net     7,932       (7,646 )
  Interest expense, net     (1,390 )     (5,339 )
  Foreign currency gain, net     2,873       651  
  Loss on debt extinguishment     (519 )     (519 )
  Interest income and other, net     (301 )     (244 )
Income before tax     1,648       2,024  
  Income tax (expense)/benefit     530       (3,724 )
Net (loss) income   $ 2,178     $ (1,700 )
                 
Net (loss) income per share                
  Basic   $ 0.02     $ (0.01 )
                   

Fourth quarter 2016

Fourth quarter Revenues reflect a quarterly high in terms of ounces sold, primarily due to higher tons mined at Fire Creek and Midas and commencing production at True North. Production costs and Depreciation and depletion also increased in the fourth quarter due to an increase in sales volumes. Write–down of production inventories in 2016 were recorded in the fourth quarter at Midas and True North due to lower period–end metal price levels and increases in production costs. Business acquisition costs were associated with the Hollister acquisition and Provision for legal settlement is related to litigation with a former employee.

Full year 2016

When compared to the prior year, 2016 Revenues increased as a result of increases in the number of gold ounces sold from higher tons mined at Fire Creek and Midas and commencing production at True North during the second half of 2016, the volumes of which were impacted by changes in average realized prices. Production costs and Depreciation and depletion increased from the prior period due primarily to an increase in sales volumes. General and administrative increased in 2016 due to increased staff levels at the corporate office, severance payments, and costs associated with our deferred share unit plan. Exploration spending was at Fire Creek and Midas while Development and projects costs were attributable to True North and Hollister.

Liquidity and Capital Resources

             
    Three months ended December 31, 2016     Year ended
December 31, 2016
 
Net (loss) income   $ 2,178     $ (1,700 )
Net non–cash adjustments     5,257       36,003  
Net change in non–cash working capital     7,202       10,967  
  Net cash provided by operating activities     14,637       45,270  
  Net cash used in investing activities     (98,061 )     (159,693 )
  Net cash provided by financing activities     2,182       104,608  
  Effect of foreign exchange on cash balances     (2,263 )     (1,646 )
    Net decrease in cash     (83,505 )     (11,461 )
    Cash, beginning of period     131,141       59,097  
    Cash, end of period   $ 47,636     $ 47,636  
                     

Fourth quarter 2016

Fourth quarter 2016 operating cash flows benefited from increases in ounce sales which were offset by lower average realized prices. The $98.1 million used in investing activities reflects the $80.0 million cash payment to complete the Hollister acquisition. Financing cash flows include the refinancing of the $12.0 million secured promissory note with a corresponding draw on the Revolver.

Full year 2016

During 2016 we generated $45.3 million of net operating cash flows which were positively impacted by higher production levels which increased the total cash margin from operations, offset by higher General and administrative, Exploration, and Development and projects costs. Cash used in investing activities included $100.0 million for acquisitions and $61.7 million for expenditures on mineral properties, plant and equipment. The issuance of share capital, which included a $95.7 million bought deal financing and option and warrant exercises, benefited our cash balances by $105.9 million and were slightly reduced for net debt borrowings and repayments.

Working capital and liquidity

We maintained our strong financial position and as of December 31, 2016, had total liquidity of $56.2 million, consisting of $33.2 million in working capital and $23.0 million of borrowing availability under our Revolver.

Fourth Quarter and Year To Date 2016 Summary Operational Results

       
    Three months ended December 31, 2016  
Mine operations   Fire Creek     Midas     Nevada Total(1)     True North         Total  
Ore tons milled     27,721       53,809       81,530       63,962           145,492  
Average gold equivalent mill head grade (oz/ton)(2)     1.07       0.32       0.58       0.14           0.38  
Average gold mill head grade (oz/ton)     1.06       0.21       0.50       0.14           0.34  
Average silver mill head grade (oz/ton)     0.80       7.87       5.46         (4)       3.06  
Average gold recovery rate (%)     93.8 %     93.5 %     93.7 %     93.4 %         93.6 %
Average silver recovery rate (%)     84.4 %     83.9 %     84.0 %     % (4)       84.0 %
Gold equivalent produced (oz)(2)     27,878       15,549       43,441       8,445           51,923  
Gold produced (oz)     27,613       10,537       38,150       8,433           46,583  
Silver produced (oz)     18,729       355,317       374,046       853           374,899  
Gold equivalent sold (oz)(2)(3)     27,347       13,318       40,680       7,028           47,745  
Gold sold (oz)     27,035       8,354       35,389       7,016           42,405  
Silver sold (oz)     22,103       351,946       374,049       853           374,902  
Revenues and realized prices                                            
Gold revenue (000s)   $ 31,933     $ 9,903     $ 41,836     $ 7,993         $ 49,829  
Silver revenue (000s)     369       5,888       6,257       14           6,271  
  Total revenues (000s)   $ 32,302     $ 15,791     $ 48,093     $ 8,007         $ 56,100  
Average realized gold price ($/oz)   $ 1,181     $ 1,185     $ 1,182     $ 1,139         $ 1,175  
Average realized silver price ($/oz)   $ 16.69     $ 16.73     $ 16.73     $ 16.41         $ 16.73  
Non–GAAP Measures                                            
Production cash costs per GEO sold(2)(3)   $ 474     $ 993     $ 644     $ 1,686         $ 797  
All–in costs per gold ounce sold(3)     n/a       n/a       n/a       n/a         $ 1,458  
(1) Nevada Total includes Fire Creek and Midas.
(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 and match the ratios used to determine the production cash costs per GEO sold. Refer to the Non–GAAP Performance Measures section of this Press Release for additional detail.
(3) This is a non–GAAP measure; refer to the Non–GAAP Performance Measures section of this Press Release for additional detail.
(4) The Company does not track this silver statistic at True North due to silver being immaterial to that operation.
 
       
    Year ended December 31, 2016  
Mine Operations   Fire Creek     Midas     Nevada Total(1)     True North         Total  
Ore tons milled     120,553       190,982       311,535       95,710           407,245  
Average gold equivalent mill head grade (oz/ton)(2)     0.91       0.28       0.52       0.11           0.43  
Average gold mill head grade (oz/ton)     0.90       0.17       0.45       0.11           0.37  
Average silver mill head grade (oz/ton)     0.77       8.13       5.28         (4)       4.04  
Average gold recovery rate (%)     93.6 %     93.9 %     93.7 %     92.7 %         93.6 %
Average silver recovery rate (%)     86.6 %     86.7 %     86.7 %     % (4)       86.7 %
Gold equivalent produced (oz)(2)     102,383       48,623       151,007       10,199           161,289  
Gold produced (oz)     101,286       29,824       131,110       10,187           141,297  
Silver produced (oz)     80,593       1,345,989       1,426,582       853           1,427,435  
Gold equivalent sold (oz)(2)(3)     100,022       50,977       151,004       8,028           159,118  
Gold sold (oz)     98,723       31,777       130,500       8,016           138,516  
Silver sold (oz)     95,454       1,374,685       1,470,139       853           1,470,992  
Revenues and realized prices                                            
Gold revenue (000s)   $ 123,403     $ 39,783     $ 163,186     $ 9,329         $ 172,515  
Silver revenue (000s)     1,623       24,023       25,646       14           25,660  
  Total revenues (000s)   $ 125,026     $ 63,806     $ 188,832     $ 9,343         $ 198,175  
Average realized gold price ($/oz)   $ 1,250     $ 1,252     $ 1,250     $ 1,164         $ 1,245  
Average realized silver price ($/oz)   $ 17.00     $ 17.48     $ 17.44     $ 16.41         $ 17.44  
Non–GAAP Measures                                            
Production cash costs per GEO sold(2)(3)   $ 462     $ 981     $ 637     $ 1,552         $ 683  
All–in costs per gold ounce sold(3)     n/a       n/a       n/a       n/a         $ 1,335  
(1) Nevada Total includes Fire Creek and Midas.
(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 and match the ratios used to determine the production cash costs per GEO sold. Refer to the Non–GAAP Performance Measures section of this Press Release for additional detail.
(3) This is a non–GAAP measure; refer to the Non–GAAP Performance Measures section of this Press Release for additional detail.
(4) The Company does not track this silver statistic at True North due to silver being immaterial to that operation.
 

Nevada operations

We achieved the full–year 2016 plan which entailed production growing from the first half to the second half of the year, as planned sequencing and ore development activities performed throughout the year contributed to quarter over quarter grade increases. As a result, consolidated gold equivalent mill head grades increased quarter over quarter in 2016 and were: 0.44 oz/ton in the first, 0.52 oz/ton in the second, 0.55 oz/ton in the third, and 0.57 oz/ton in the fourth. Production increased in 2016 to a record 151,007 GEOs. Full–year gold equivalent grades of 0.52 oz/ton in 2016 contributed to consistently low production cash costs per GEO of $637, resulting in a margin of $613 (or 49.0%) per ounce using average realized gold prices in 2016.

Canadian operations

We achieved True North's full–year 2016 plan which entailed production commencing in the third quarter from reprocessing tailings and increasing in the fourth quarter when stockpiled ore processing began. Actual production of 10,187 gold ounces was in the middle of our expected range of 8,000 – 12,000 gold ounces.

Webcast and Conference Call

Klondex will report its 2016 financial results after market close on Thursday, March 23, 2017. A conference call and webcast will be held the following morning on Friday, March 24, 2017 at 10:30 am ET/7:30 am PT. The conference call telephone numbers are listed below:

Canada & USA Toll Free Dial In: 1–800–319–4610
Toronto: +1 1–416–915–3239
International: +1–604–638–5340

Callers should dial in 5 to 10 minutes prior to the scheduled start time and ask to join the Klondex call. The presentation materials will be available on the Company's website and by webcast by clicking: http://services.choruscall.ca/links/klondex20170316.html.

About Klondex Mines Ltd. (www.klondexmines.com)

Klondex Mines Ltd. is a well–capitalized, junior–tier gold and silver mining company focused on mining, exploration, development, and production in a safe, environmentally responsible, and cost–effective manner. As of December 31, 2016, Klondex Mines Ltd. had 100% interests in three producing mines: (1) the Fire Creek mine and (2) the Midas mine and ore milling facility, both of which are located in the state of Nevada, USA, and (3) the True North gold mine and mill in Manitoba, Canada. The Company also has 100% interests in two recently acquired projects: (1) the Hollister mine and (2) the Aurora mine and ore milling facility, both of which are also located in Nevada, USA. During 2017 we expect our production to come from Fire Creek, Midas, and True North, and extracted from the Hollister Project under a bulk sampling program.

Cautionary Note Regarding Forward–looking Information

This news release contains certain information that may constitute forward–looking information or forward–looking statements under applicable Canadian and United States securities legislation (collectively, “forward–looking information”), including but not limited to the Company's achievement of the full–year projections for ounce production and production costs, the Company's ability to meet annual operations estimates, and the Company's capital addition expenditures. 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 estimates are reflective of actual mineral resources; the degree to which mineral reserve estimates are reflective of actual 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; 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 United States 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.

Non–GAAP performance measures

We have included the non–GAAP measures “Production cash costs per gold equivalent ounce sold” and “All–in costs per gold ounce sold” in this press release (collectively, the “Non–GAAP Measures”). These Non–GAAP Measures are used internally to assess our operating and economic performance and to provide key performance information to management. We believe that these Non–GAAP Measures, in addition to conventional measures prepared in accordance with GAAP, provide investors with an improved ability to evaluate our performance and ability to generate cash flows required to fund our business. These Non–GAAP Measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These Non–GAAP Measures do not have any standardized meaning prescribed under GAAP, and therefore may not be comparable to or consistent with measures used by other issuers or with amounts presented in our financial statements.

Our primary business is gold production and our future development and current operations primarily focus on maximizing returns from such gold production. As a result, our Non–GAAP Measures are calculated and disclosed on a per gold or gold equivalent ounce basis.

Production cash costs per gold equivalent ounce sold

Production cash costs per gold equivalent ounce sold presents our cash costs associated with the production of gold equivalent ounces and, as such, non–cash depreciation and depletion charges are excluded. Production cash costs per gold equivalent ounce sold is calculated on a per gold equivalent ounce sold basis, and includes all direct and indirect operating costs related to the physical activities of producing gold, including mining, processing, third–party refining expenses, on–site administrative and support costs, royalties, and cash portions of net realizable value write–downs on production–related inventories (State of Nevada net proceeds and other such taxes are excluded). We believe that converting the benefits from selling silver ounces into gold ounces is helpful to analysts and investors as it best represents the way we operate, which is to maximize returns from gold production. Gold equivalent ounces are computed as the number of silver ounces required to generate the revenue derived from the sale of one gold ounce, using average realized selling prices (in thousands, except ounces sold and per ounce amounts):

     
    Three months ended December 31, 2016
    Fire Creek   Midas   Nevada Total   True North   Total
Average realized price per gold ounce sold   $ 1,181   $ 1,185   $ 1,182   $ 1,139   $ 1,175
Average realized price per silver ounce sold   $ 16.69   $ 16.73   $ 16.73   $ 16.41   $ 16.73
  Silver ounces equivalent to revenue from one gold ounce     70.8     70.9     70.7     69.4     70.2
Silver ounces sold     22,103     351,946     374,049     853     374,902
  GEOs from silver ounces sold     312     4,964     5,291     12     5,340
Gold ounces sold     27,035     8,354     35,389     7,016     42,405
  Gold equivalent ounces     27,347     13,318     40,680     7,028     47,745
Production costs   $ 12,961   $ 12,815   $ 25,776   $ 9,932   $ 35,708
Add: Write–down of production inventories (cash portion)         405     405     1,918     2,323
    $ 12,961   $ 13,220   $ 26,181   $ 11,850   $ 38,031
  Production cash costs per GEO sold   $ 474   $ 993   $ 644   $ 1,686   $ 797
                               
      Year ended December 31, 2016
      Fire Creek     Midas     Nevada Total(1)     True North     Total
Average realized price per gold ounce sold   $ 1,250   $ 1,252   $ 1,250   $ 1,164   $ 1,245
Average realized price per silver ounce sold   $ 17.00   $ 17.48   $ 17.44   $ 16.41   $ 17.44
  Silver ounces equivalent to revenue from one gold ounce     73.5     71.6     71.7     70.9     71.4
Silver ounces sold     95,454     1,374,685     1,470,139     853     1,470,992
  GEOs from silver ounces sold     1,299     19,200     20,504     12     20,602
Gold ounces sold     98,723     31,777     130,500     8,016     138,516
  Gold equivalent ounces     100,022     50,977     151,004     8,028     159,118
Production costs   $ 46,246   $ 49,599   $ 95,845   $ 10,544   $ 106,389
Add: Write–down of production inventories (cash portion)         405     405     1,918     2,323
    $ 46,246   $ 50,004   $ 96,250   $ 12,462   $ 108,712
  Production cash costs per GEO sold   $ 462   $ 981   $ 637   $ 1,552   $ 683
(1) Nevada Total includes Fire Creek and Midas.
 

All–in costs per gold ounce sold

Our calculation of all–in costs per gold ounce sold is consistent with the June 2013 guidance released by the World Gold Council, a non–regulatory, non–profit market development organization for the gold industry. All–in costs per gold ounce sold reflect the varying costs of producing gold over the life–cycle of a mine or project, including costs required to discover and develop new sources of production; therefore, capital amounts related to expansion and growth projects are included.

All–in costs per gold ounce sold includes all: (1) direct and indirect operating cash costs related to the physical activities of producing gold, including mining, processing, third–party refining expenses, on–site administrative and support costs, royalties, and cash portions of net realizable value write–downs on production–related inventories (2) general and administrative expenses, (3) asset retirement and accretion expenses, and (4) capital expenditures, the total of which is reduced for revenues earned from silver sales. Certain cash expenditures, including State of Nevada net proceeds and other related taxes, federal tax payments, and financing costs are excluded (in thousands, except ounces sold and per ounce amounts):

     
    Three months ended December 31, 2016
    Nevada
Total
(1)
  True North   Hollister,
Aurora, and
Corporate
  Total
Production costs   $ 25,776   $ 9,932   $   $ 35,708
Add: Write–down of production inventories (cash portion)     405     1,918         2,323
      26,181     11,850         38,031
General and administrative                       4,368
Exploration                       4,502
Development and projects costs                       3,423
Asset retirement and accretion                       1,898
Expenditures on mineral properties, plant and equipment                       15,874
Less: silver revenue                       (6,271)
  All–in costs                       61,825
Gold ounces sold     35,389     7,016         42,405
  All–in costs per gold ounce sold                     $ 1,458
(1) Nevada Total includes Fire Creek and Midas.
                         
      Year ended December 31, 2016
      Nevada
Total
(1)
    True North     Hollister,
Aurora, and
Corporate
    Total
Production costs   $ 95,845   $ 10,544   $   $ 106,389
Add: Write–down of production inventories (cash portion)     405     1,918         2,323
      96,250     12,462         108,712
General and administrative                       15,804
Exploration                       12,765
Development and projects costs                       8,953
Asset retirement and accretion                       2,653
Expenditures on mineral properties, plant and equipment                       61,716
Less: silver revenue                       (25,660)
  All–in costs                       184,943
Gold ounces sold     130,500     8,016         138,516
  All–in costs per gold ounce sold                     $ 1,335
(1) Nevada Total includes Fire Creek and Midas.