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Lander County
Nevada
Updated: 02-Sep-10
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| |   Wed Nov 18, 2009
Klondex Drills 49.9 g/t Over 2.7 Meters (1.46 oz/ton over 12.5 feet) and Reviews Exploration and Permitting Progress at its Fire Creek Property in Nevada
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| | Vancouver, British Columbia -- November 18, 2009 - Klondex Mines Ltd. (TSX: KDX) ("Klondex" or "KDX") today announced results from the first five holes of its 2009 drill campaign and provided an exploration and permitting update on its 100%-owned Fire Creek high-grade underground gold deposit in Nevada. At Fire Creek Klondex has defined an Indicated Mineral Resource estimated to contain 1,639,822 ounces of gold equivalent and an Inferred Mineral Resource estimated to contain 508,799 ounces of gold equivalent.
2009 Exploration and Drilling Results
In 2009 KDX completed an additional geophysical survey over Fire Creek and is in the process of completing a 15-hole drill program. The first five drill holes encountered the following high-grade gold mineralization:
- FC0901 (17.3 grams per metric ton (g/t) gold over 2.1 meters true width)
- FC0903 (25.0 g/t gold over 6.3 meters true width)
- FC0904 (10.7g/t over 3.7 meters true width)
- FC0905 (18.0 g/t gold over 2.2 meters true width)
| Fire Creek Drill Results - November 2009 |
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|
True |
Gold |
Silver |
True |
Gold |
Silver |
|
Hole |
From |
To |
Interval |
Width |
Ounces/ |
Ounces/ |
Width |
Grams/ |
Grams/ |
Target |
Number |
(feet) |
(feet) |
(feet) |
(feet) |
Ton |
Ton |
(meters) |
Tonne |
Tonne |
Area |
FC0901 |
885 |
945 |
60 |
42.0 |
0.124 |
0.312 |
12.8 |
4.25 |
10.7 |
Main |
Including |
885 |
893 |
8 |
5.6 |
0.237 |
0.663 |
1.7 |
8.12 |
22.7 |
Main |
Including |
935 |
945 |
10 |
7.0 |
0.505 |
0.461 |
2.1 |
17.30 |
15.8 |
Main |
FC0902 |
1035 |
1055 |
20 |
14.0 |
0.055 |
0.091 |
4.3 |
1.90 |
3.1 |
Main |
FC0903 |
915 |
943.2 |
28.2 |
20.8 |
0.730 |
0.470 |
6.3 |
25.00 |
16.1 |
Main |
Including |
915 |
927.5 |
12.5 |
8.8 |
1.457 |
0.879 |
2.7 |
49.90 |
30.1 |
Main |
FC0904 |
727.8 |
745 |
17.2 |
12.0 |
0.312 |
0.572 |
3.7 |
10.70 |
19.6 |
Main |
|
810 |
815 |
5 |
3.5 |
0.295 |
0.149 |
1.1 |
10.10 |
5.1 |
Main |
FC0905 |
612.5 |
625 |
12.5 |
8.8 |
0.067 |
0.047 |
2.7 |
2.30 |
1.6 |
Main |
|
785 |
795 |
10 |
7.1 |
0.526 |
0.435 |
2.2 |
18.00 |
14.9 |
Main |
|
915 |
1001 |
86 |
60.2 |
0.050 |
0.199 |
18.3 |
1.70 |
6.8 |
Main |
The first five holes targeted untested areas within the Main Zone mineralization. Drill holes FC0906 through FC0915 are sited to test extensions of known mineralized zones and to test anomalies generated by the recent geophysical survey. Results for these holes will be reported when drilling is completed and all assays are received. An updated drill hole location map is available on the company website www.klondexmines.comUpcoming Work Program:
Over the next few months KDX plans to complete the following projects in order to expand the Fire Creek gold resource and to prepare for the upcoming underground program. Klondex also plans to initiate exploration activities at its Hot Springs Point property.
Interpretation of the advanced geophysical survey done in the summer of 2009 is complete. Reverse circulation drilling of the 15 targets generated by this survey has been initiated, with four holes planned for completion this year and the remainder next season. Drilling success in this program will be followed up by core drilling next year.
Preparation of interpretive geological cross sections of the resource to assist in three-dimensional vein modeling and detailed mine planning.
Comprehensive review of drill core for rock mechanics and mining stability issues.
Acquisition of additional staff and other assets required for the transition from exploration to development and production will be initiated.
Completion of the permitting process for underground development as expeditiously as the process allows. (See permitting update below.)
Metallurgical testing will be continued and milling options for the bulk sample ore will continue to be evaluated.
Continue land acquisition on ground peripheral to the Fire Creek resource and at Hot Springs Point (HSP), a second KDX gold property eight kilometers southeast of Fire Creek. KDX has located 43 claims (860 acres) that it plans to add to its existing 39 claim position at HSP. An initial work program on HSP, including mapping and geophysical studies, is expected to start in the spring of 2010.
Background on Fire Creek Underground Development Program:
In March 2007 KDX filed permit applications to amend Fire Creek's Plan of Operations to include about 3,000 meters of underground workings that would allow the Company to access the Main Zone on two levels. Underground levels would facilitate more productive and cost effective in-fill drilling of KDX's existing resource, thereby improving the base of knowledge on the location, grade and continuity of Main Zone veins.
As part of the process, KDX filed to seek designation as a "Small Scale Facility" as defined by Nevada Regulation NAC 445A.377, a designation that would allow KDX to extract and process up to 120,000 short tons of ore over a five-year period, with a limitation of no more than 36,500 short tons of ore on an annual basis. KDX plans to target its bulk sampling efforts on selected areas within the Main Zone that it believes contain one or more ounces of gold per ton. Given the high-grade, current gold prices and a relatively modest anticipated cost of production, KDX anticipates the bulk sampling program to generate substantial cash flows which could finance a full feasibility study and ultimately the initiation of full-scale mining.
Permitting Update:
Having slowed the progress of its permitting effort due to financing constraints as well as uncertainty caused by a hostile takeover attempt and its aftermath, KDX is now moving forward at full speed to secure the permits required to begin its underground program. The following are the primary steps that remain in the permitting process:
- The granting of the Bureau of Land Management (BLM) Environmental Assessment, Plan of Operations and Reclamation Permit is now pending "concurrence" from Nevada State regulators.
- Klondex has sufficient capital to post a reclamation bond, estimated to be $1.4 million, which must be posted within 60 days following the issuance of the BLM permit.
- A cultural archeological study must also be undertaken to collect, catalog and study artifacts from the Fire Creek site. The field work for the cultural study will commence on receipt of the Plan of Operations and Reclamation Permit and will take approximately six weeks.
- In order to initiate the bulk sampling program, KDX must secure a Water Pollution Control Permit (WPCP) from the Nevada Department of Environmental Protection (NDEP). KDX has been asked to submit a revised engineering plan for the design of its water containment ponds and expects that work will be completed and submitted to the NDEP by year-end. Assuming that timing, KDX would expect the permit to be granted by March or April 2010, at which time KDX could commence work on the decline.
As of September 30, 2009, KDX had 30,964,089 shares issued and outstanding and 34,879,089 shares on a fully diluted basis and cash of approximately CDN $4.4 million and working capital of CDN $3.8 million.
About Klondex Mines:
Klondex Mines Ltd. is a gold exploration company with four projects in North Central Nevada. The Company is focused on the development of its high-grade Fire Creek gold deposit where it has identified the following NI 43-101 compliant resource:
Fire Creek Project – Indicated and Inferred Resource *
NI 43-101 Dated March 30, 2009 |
Classification |
Metric |
Grams Gold Equivalent |
Total Ounces |
|
Tonnes |
Per Metric Tonne |
Gold Equivalent |
Indicated |
5,043,033 |
10.11 |
1,639,822 |
Inferred |
1,833,423 |
8.63 |
508,799 |
* Fire Creek has a gold-to-silver ratio of approximately 1:1, indicating the resource is approximately 98.3% gold and 1.7% silver. Reflects a cutoff grade of 5 grams per tonne and 60 units of silver equivalent to one unit of gold.
For more information, please visit www.klondexmines.com.
Richard Kern (P.Geo), of Reno, Nevada, a qualified person as defined under National Instrument 43-101and has reviewed and approved the technical information contained in this press release.
ON BEHALF OF KLONDEX MINES LTD.
"William Solloway"
President
"Bob Sibthorpe"
Director
Investor Contact:
David Collins, Ratula Roy
Jaffoni & Collins Incorporated
KDX@jcir.com
(212) 835-8500
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