KDX President Comments on Permitting Significance
A personal letter from the president of Klondex Mines Ltd. on Permitting, a Key Strategic Asset of the Company
Dear KDX Investor,I wanted to take a moment to give you a personal update on the incredibly positive and significant changes occurring at Klondex. We are making huge strides forward on our deliverables and big additions to both management and marketing. Please look to future news releases as we advance through 2010. The primary purpose of this letter is to explain in some detail the importance of our accomplishments and our underground permitting successes to date.
In late December 2009, Klondex successfully secured permits from the U.S. Bureau of Land Management (BLM) for our underground confirmation program at Fire Creek. This in itself is a mighty accomplishment for Klondex as it clearly underscores our transition from an exploration company with proven resources in the ground into a hybrid company focused on underground production AND continued exploration. We feel the importance of this distinction will be graphically demonstrated over the next 12 months as previously uninterested investors begin to position themselves into the Klondex shareholder base. The BLM approvals also pave the way for Klondex to extend to the south its Main Zone surface exploration program. This is very good news as it gives us the opportunity to build upon our already substantial 1.64 million ounce NI 43-101 compliant indicated gold resource and our 0.5 million ounces of inferred gold resource.
To ensure the timely completion of the permitting process, Klondex has posted the required $1.4 million reclamation bond, and we have executed a $258,000 contract with Western Cultural Resource Management to complete a required Archeological Site Study which, weather permitting, should begin in the next few weeks. Klondex must also secure final state approvals, including approval from the Nevada Department of Environmental Protection. The Nevada state permit is expected to enter the public comment stage in the next few weeks, and we are excited to report that we continue to anticipate receipt of final permits between April and June 2010.
The permits will enable Klondex to pursue bulk sampling and processing of 120,000 tons of high-grade ore (limited to 36,500 tons per year). Given a target grade of one ounce per ton, the bulk sampling initiative could enable Klondex to produce approximately 120,000 ounces of gold with a current market value before production costs of over $120 million. With approximately 36.2 million diluted shares outstanding, this represents an enormous opportunity for our Company. To initiate the underground program, the permits will allow Klondex to drive 3,000 meters of decline tunneling to access our Main Zone mineralization. This access will facilitate more cost effective exploratory and in-fill drilling of KDX's resource to expand and improve the geologic model of Main Zone gold mineralization. This should support our efforts to build our NI 43-101-compliant resource and give us the ability to initiate appropriate underground mine planning.
After careful consideration and concerted negotiation, Klondex has chosen to proceed with Small Mine Development Co. (SMD) of Boise, Idaho to engineer and perform the underground development and bulk sampling work. SMD is a highly respected underground mining contractor with substantial high-grade gold mining experience and in-depth knowledge. Their understanding of our project and the local geology will ensure we extract the ore and produce gold at the lowest possible cost. The excellent and very convenient location of our high-grade deposit at Fire Creek gives Klondex a number of choices for processing the approximately one ounce per ton ore we will target. Currently we are reviewing several regional mills where after a short truck ride our ore could be milled on a contract basis. Klondex is very sensitive to our shareholders and to limiting dilution, so we are focused on financing future requirements for this program with the least dilution possible.
In summary, we believe KDX's permitting program is creating substantial value for our shareholders. If you would like a more detailed and personal review please feel free to contact me or my team to set up a time convenient for you. We are also available to meet with you today, the final day of the PDAC show in Toronto. Our booth number is 2835.
Finally, for a window on the true scope and effort behind the permitting process, we have provided some additional background below.
Kindest regards,
William J. Solloway
President
Klondex Mines Ltd.
Background on Scope of Permitting Process
Years expended to date: Approximately 3 years; initial permits filed March 2007
Permits received to date: BLM Environmental Assessment.
Amended Plan of Operations.
Permit for Reclamation and Surface and Underground Exploration
Contractors utilized:
Enviroscientists, Inc -- leading environmental consulting firm focused on resource permitting. www.enviroincus.com
Knight Piésold -- leading global consulting engineers and environmental scientists. www.knightpiesold.com
SRK - international consulting practice in earth and water resource industries. www.SRK.com
Western Cultural Resource Management . is a full service cultural resource consulting firm. www.wcrminc.com
Regulatory bodies involved: U.S. Bureau of Land Management (BLM)
Nevada Department of Environmental Protection (NDEP)
Consultant fees to date: $586,000
Estimated KDX man-hours to date 2,300 hours across 3 professionals
Estimated # of regulatory meetings 20
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Klondex Reports Progress on Permitting for Its Underground Program
Vancouver, British Columbia -- March 10, 2010 - Klondex Mines Ltd. (TSX: KDX) announced today an update on permitting for its underground development program focused on bulk sampling and exploration drilling.
KDX has posted a U.S. $1.4 reclamation bond required pursuant to the Company's U.S. Bureau of Land Management permits (BLM) issued in late December 2009. To fund the bond without issuing common stock at current levels, Klondex has secured a U.S. $1.4 million loan facility bearing interest at 6% per year. KDX has also executed a contract with Western Cultural Resource Management (WCRM) to perform archeological site work also required pursuant to KDX's BLM permits. The WCRM work will commence in the next few weeks, assuming suitable weather, and should be completed within six weeks thereafter. Klondex continues to anticipate the receipt of remaining state permits for its underground program between April and June 2010.
William Solloway, Klondex's President, commented, "We believe investors have yet to realize the significant accomplishment and value being created through our permitting process. Permitting is amongst the most difficult hurdles faced by mining companies. Once completed, it will enable KDX to graduate from a focus solely on exploration to a dual focus on exploration and production/cash generation, via bulk sampling. Our progress in permitting clearly demonstrates to investors that we are delivering on our commitments and entering an exciting new stage in our corporate development. With our recent management appointments, we are very well positioned to execute on our underground program during 2010 and to secure greater investor awareness and appreciation for the value and potential of our high-grade gold resource at Fire Creek."
About Klondex Mines (www.klondexmines.com):
Klondex Mines Ltd. is focused on bringing into production, via bulk sampling, its 100% owned high-grade Fire Creek gold deposit in North central Nevada. Fire Creek is centrally located near power and transportation and represents a compelling mining prospect. Klondex has identified the following NI 43-101 compliant resource:
Fire Creek Project -- Indicated and Inferred Resource *
As of March 30, 2009
Classification |
Metric |
Grams Gold Equivalent |
Total Ounces |
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.
ON BEHALF OF KLONDEX MINES LTD.
"William Solloway" President
Investor Contacts:
Bryson Goodwin
Klondex Mines Ltd.
brysongoodwin@shaw.ca
(604) 341-1531
David Collins
Jaffoni & Collins
KDX@jcir.com
(212) 835-8500
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Klondex to Review Underground Program at PDAC Booth #2835
- Meet KDX's New Executive Mining Advisor and its Director, Investor Relations -
Vancouver, British Columbia - March 4, 2010 -- Klondex Mines Ltd. (TSX: KDX) invites all current and prospective investors to visit KDX at booth #2835 during the PDAC conference being held at the Metro Toronto Convention Centre, South Building, Sunday, March 7th through Wednesday, March 10th. Management will update investors on the Company's transition to a dual focus on production and the continued exploration of its high-grade Fire Creek gold resource in Nevada.
KDX will be represented by William Solloway, President; Blane Wilson, Executive Mining Advisor, Nevada Operations; Robert Sibthorpe, Technical Director; Brendan Donohoe, Treasurer, and Bryson Goodwin, Director of Investor Relations.
Contact Bryson Goodwin (604) 341-1531 or brysongoodwin@shaw.ca or David Collins (212) 835-8500 or kdx@jcir.com to arrange a meeting.
William Solloway, President of Klondex commented: "Klondex has never before had the level of success and forward momentum that we are now experiencing in 2010. My team and I will be available to discuss Klondex, our accomplishments and our plans for the continued exploration and underground development of our Fire Creek gold deposit. I invite existing and prospective shareholders to meet with us in our booth or to schedule a private meeting."
Underground Program Update:
Klondex has secured initial permitting from the U.S. Bureau of Land Management (BLM) for its underground development at Fire Creek and expects by late spring to receive the remaining permits required to initiate underground operations. Klondex is also making progress in its efforts to secure the capital needed to initiate the underground program. The underground program includes the bulk sampling and processing of up to 120,000 tons of high-grade material over three-five years. Given the high-grade and relatively modest anticipated cost of production, Klondex forecasts that bulk sampling could generate substantial cash flows enabling the Company to become self-funding. Accordingly, Klondex anticipates that 2010 will be a significant and demonstrative year for Klondex and its shareholders.
Please refer to our website for additional information: www.klondex.com
About Klondex Mines:
Klondex Mines Ltd. is focused on bringing into production its 100 % owned high-grade Fire Creek Nevada gold deposit. It is centrally located near power and transportation and represents a compelling mining prospect. To date Klondex has identified the following NI 43-101 compliant resource:
Fire Creek Project -- Indicated and Inferred Resource *
As of March 30, 2009
As of March 30, 2009
| Classification | Metric Tonnes |
Grams Gold Equivalent Per Metric Tonne |
Total Ounces Gold Equivalent |
| Indicated | 5,043,033 | 10.11 | 1,639,822 |
| Inferred | 1,833,423 | 8.63 | 508,799 |
ON BEHALF OF KLONDEX MINES LTD.
"William Solloway" President
Investor Contacts:
Bryson Goodwin
Klondex Mines Ltd.
brysongoodwin@shaw.ca
(604) 341-1531
David Collins
Jaffoni & Collins
KDX@jcir.com
(212) 835-8500
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Klondex Builds Management with Two Strategic Hires
Vancouver, British Columbia -- March 2, 2010 - Klondex Mines Ltd. (TSX: KDX) announced the hiring two strategic and vital components of its go forward strategy. Blane W. Wilson has been appointed as Executive Mining Advisor, Nevada Operations, to oversee the advancement of the Company's mining and production programs at its high-grade Fire Creek gold deposit, and Bryson Goodwin has been appointed as Director of Investor Relations to manage our market strategies and outreach.
William Solloway, Klondex's President, commented, "Klondex has made significant advancements in its efforts to begin underground operations. We anticipate that we will be commencing our underground mine development and support facilities construction this spring. I am pleased to report the appointment of Blane Wilson to spearhead and manage this critical process; he is very well known in the industry and possesses significant Nevada related gold mining experience and expertise.
"In addition, for some time we have acknowledged the need for a specialist to build and manage corporate and market awareness as we make the transition from an exploration company to a dual focus on production and the continued exploration of Fire Creek. Management has committed to spending the required funds to grow our shareholder base and support our market valuation for current and future shareholders. We are very pleased to have secured Bryson Goodwin to initiate an active investor relations outreach program across Canada, the United States, Asia and Europe. Given the value inherent in our Fire Creek resource and the profit potential of our bulk sampling program, we are confident these investments in expanded management and improved communications will benefit our shareholders."
Please refer to our website for additional information, including bios on Messrs. Wilson & Goodwin: www.klondexmines.com
About Klondex Mines:
Klondex Mines Ltd. is focused on bringing into production its 100% owned high-grade Fire Creek Nevada gold deposit. It is centrally located near power and transportation and represents a compelling mining prospect. To date Klondex has identified the following NI 43-101 compliant resource:
Fire Creek Project -- Indicated and Inferred Resource *
As of March 30, 2009
As of March 30, 2009
Classification |
Metric |
Grams Gold Equivalent |
Total Ounces |
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.
ON BEHALF OF KLONDEX MINES LTD.
"William Solloway" President
Investor Contacts:
Bryson Goodwin
Klondex Mines Ltd.
brysongoodwin@shaw.ca
(604) 341-1531
David Collins
Jaffoni & Collins
KDX@jcir.com
(212) 835-8500
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High-Grade Gold Veins Discovered East of Main Zone in Klondex's 2009 Exploration Program
Mineralization With Further Exploration Planned for 2010 -
Vancouver, British Columbia - January 20, 2010 - Klondex Mines Ltd. (TSX: KDX) ("Klondex" or "KDX") today announced final results from its 2009 drilling campaign. The 2009 program included RC drilling of two IP anomalies, one of which yielded the discovery of two new veins. The IP anomaly targets were developed in a geophysical survey also conducted in 2009. KDX completed 15 holes totaling 20,221 feet (6,163 meters) within the Fire Creek project in 2009. The results are reported in the table below, and the drill plan showing all 2009 drill holes is posted at www.klondexmines.com. The bulk of the results for holes FC0901 through FC0905 were previously released.
2009 Geophysical Survey Identifies 15 Drilling Targets
In the summer of 2009 a new detailed, multi-method geophysical survey was run at Fire Creek (FC). The survey identified 15 untested anomalies that are drilling targets. Using a reverse circulation (RC) drill rig Klondex tested two of the anomalies. Drill holes FC0912RC through FC0915RC tested two anomalies located east of the Main vein zone. Holes FC0912RC and FC0913RC intersected two high-angle dikes with weakly anomalous gold values near the margins of the dikes below the first anomaly drilled.
RC Program Identifies Two New Veins
Hole FC0914RC intersected a broad zone of +0.03 oz/ton gold occurring between 925 and 1360 feet. Within this anomaly are two veins consisting of 3.5 feet (1.1 meter) true width of 0.26 oz/ton (9.1 g/t) gold and 0.76 oz/ton (25.9 g/t) silver and 3.5 feet (1.1 meter) true width of 0.26 oz/ton (9.1 g/t) gold and 0.18 oz/ton (6.3 g/t) silver. This new discovery is approximately 300 feet (91 meters) east of the nearest vein. FC0915RC was lost before reaching the mineralized horizon. Core drilling of the new discovery is planned in the spring of 2010.
Robert Sibthorpe, KDX's Technical Director, commented, "Our 2009 drilling program continued to expand the scope of mineralization at Fire Creek, an effort we will recommence in the spring. Drilling in 2009 extended Main zone mineralization further south and extended New North zone mineralization to the north, while also establishing a new vein system in the Eastern side of the Main zone. We also initiated an RC drilling program to more cost effectively test 15 anomalies identified in our 2009 geophysical program. Given our substantial property position and the success we have achieved, we are very optimistic about the potential to further extend the scope of the Fire Creek resource in 2010 and in the future."
Main Zone Definition Drilling Yields 1.45 oz/ton Intercept
Holes FC0901 through FC0905 were targeted within the Main vein zone and were used to further define areas suitable for bulk sampling once underground work is initiated. These results included several +0.25 oz/ton gold values including 8.8 feet (2.7 meters) true width of 1.45 oz/ton (49.9 g/t) gold and 0.88 oz/ton (30.1 g/t) silver in hole FC0903.
| Summary 2009 Drill Results - Fire Creek | ||||||||||
| Hole No. | From (feet) |
To (feet) |
Interval (feet) |
True Width (feet) |
Gold (oz/ton) |
Silver (oz/ton) |
True Width (meters) |
Gold (grams/ tonne) |
Silver (grams/ tonne) |
Target 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 |
| 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 | 220 | 270 | 50 | 40.0 | 0.104 | 0.057 | 12.2 | 3.56 | 1.9 | Main |
| including | 250 | 260 | 10 | 8.0 | 0.331 | 0.044 | 2.4 | 11.34 | 1.5 | Main |
| 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 | 575 | 590 | 15 | 10.7 | 0.043 | 0.006 | 3.3 | 1.47 | 0.2 | Main |
| 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 | |
| FC0906 | 500 | 510 | 10 | 7.0 | 0.093 | 0.219 | 2.1 | 3.17 | 7.5 | S. Main Ext. |
| 615 | 625 | 10 | 7.0 | 0.063 | 0.234 | 2.1 | 2.17 | 8.0 | S. Main Ext. | |
| FC0907 | 905 | 920 | 15 | 10.6 | 0.062 | 0.059 | 3.2 | 2.14 | 2.0 | N. Main Ext. |
| FC0908 | 850 | 885 | 35 | 29.8 | 0.077 | 0.053 | 9.1 | 2.63 | 1.8 | N. Main Ext. |
| 1195 | 1220 | 25 | 20.0 | 0.046 | 0.172 | 6.1 | 1.56 | 5.9 | N. Main Ext. | |
| FC0909 | No Values >10 feet @ > 0.03 oz/ton Gold | N. Main Ext. | ||||||||
| FC0910 | 790 | 805 | 15 | 12.0 | 0.053 | 0.053 | 3.7 | 1.80 | 1.8 | New North |
| FC0911 | 815 | 840 | 25 | 20.0 | 0.044 | 0.155 | 6.1 | 1.51 | 5.3 | New North |
| 895 | 910 | 15 | 12.0 | 0.063 | <0.015 | 3.7 | 2.16 | <0.5 | New North | |
| FC0912RC | No Values >10 feet @ > 0.03 oz/ton Gold | IP Anom. #2 | ||||||||
| FC0913RC | No Values >10 feet @ > 0.03 oz/ton Gold | IP Anom. #2 | ||||||||
| FC0914RC | 925 | 940 | 15 | 12.0 | 0.053 | 0.020 | 3.7 | 1.83 | 0.7 | IP Anom. #1 |
| 1010 | 1025 | 15 | 12.0 | 0.032 | 0.140 | 3.7 | 1.10 | 4.8 | IP Anom. #1 | |
| 1115 | 1125 | 10 | 7.1 | 0.054 | 0.126 | 2.2 | 1.84 | 4.3 | IP Anom. #1 | |
| 1225 | 1235 | 10 | 7.1 | 0.196 | 0.581 | 2.2 | 6.70 | 19.9 | IP Anom. #1 | |
| including | 1225 | 1230 | 5 | 3.5 | 0.265 | 0.756 | 1.1 | 9.08 | 25.9 | IP Anom. #1 |
| 1345 | 1360 | 15 | 10.5 | 0.127 | 0.143 | 3.2 | 4.35 | 4.9 | IP Anom. #1 | |
| including | 1350 | 1355 | 5 | 3.5 | 0.265 | 0.184 | 1.1 | 9.07 | 6.3 | IP Anom. #1 |
| FC0915RC | No Values >10 feet @ > 0.03 oz/ton Gold -- Hole Lost | IP Anom. #1 | ||||||||
| Note: Table only includes values equivalent to ≥ 10 feet @ ≥ 0.03 oz/ton gold | ||||||||||
Main and New North Zone Extension Drilling
Six of the remaining holes were targeted on possible extensions of the Main zone to the north and south and the north extension of the New North vein zone. FC0906 is the first hole to test the southernmost extension of Main, and it found two sub-grade veins worthy of further testing. FC0907 through FC0909 tested the northern extension of the Main zone. FC0907 and FC0908 both hit sub-grade veins with FC0908 intersecting 29.8 feet (9.1 meters) true width of 0.08 oz/ton (2.6 g/t) gold. Located on the northernmost discovery at Main, this major fault zone will be tested further. FC0909 did not intersect any significant veining.
Drill holes FC0910 and FC0911 tested the northern extension of the New North zone. FC0910 was a 100-meter step-out and the first hole to explore this far north. The sub-grade vein intersected indicates the mineralized structure is still present, and a fence of holes are planned to further test this area. FC0911 was drilled to test directly west of a previous vein intercept and intercepted two sub-grade veins.
Klondex will continue testing additional geophysical anomalies in 2010 using an RC rig to identify vein zones and then following up with core drilling.
As of September 30, 2009, KDX had 30,964,089 shares issued and outstanding, 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:
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 |
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
Jaffoni & Collins Incorporated
KDX@jcir.com
(212) 835-8500
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