Klondex Sets Term Sheet for $10 - $20 Million in Gold-Backed Financing to Fund its Underground Program in Nevada
William J. Solloway states;
"We are very pleased with our new financial associates and the results of our negotiations. Our continued efforts to protect shareholder value with minimum dilution are represented in this term sheet. This varied transaction confirms the financing to further develop Fire Creek at a one-time cost of a small percentage of our start up gold recovery from the bulk sampling shipments."
Corporate funding has been secured at an interest rate of Prime + 3%. The funding will take the form of a gold loan and associated gold sales agreement. The loan will be repaid through the delivery of gold at US$825 from KDX's anticipated gold recovery of its Underground Exploration and Bulk Sampling program. We anticipate that the ounces at $825 will apply to only 11% of gold recovered from KDX's planned bulk sampling program and will amount to monthly payments of 433 ounces of gold (12,121 ounces total over the 36-month term of the loan). The US $10 million gold loan commitment representing 12,121 ounces is less than 1% of KDX's 43-101 compliant indicated and inferred resource of 2.1 million ounces at an average grade of approximately 10 g / ton.
The 3 year repayment schedule begins concurrently with the anticipated extraction of our first blocks of high grade ore and will be fully paid through our 120,000 ton (EST. 107,000 oz's) permitted bulk sample program at KDX's Fire Creek property southwest of Elko, Nevada.
Under the gold sales agreement, the investor has been granted the right to purchase KDX's gold production at a 3% discount to Spot Price for a period of three years after repayment of the US $10 million gold loan.
KDX will grant the investor 1 million 4-year purchase warrants at $3.00 per share (at US $20 million loan amount KDX will grant 2 million 4-year purchase warrants at $3.00 per share) and pay a 1.5 % cash fee at closing. The term sheet provides the investor with a 45-day exclusive right to provide KDX with financing of this nature. KDX's obligations under the gold loan and the gold sales agreement will be secured by a charge over all of the company's assets.
About Klondex Mines (http://www.klondexmines.com):
Klondex Mines Ltd. is focused on exploration and development of its 100% owned high-grade Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling low CapEx mining prospect that is well located near power, transportation, mining infrastructure and several milling facilities.
ON BEHALF OF KLONDEX MINES LTD.
"William J. Solloway" Chairman and CEO
"Blane Wilson" President and COO
Tel: 775-388-3885
Klondex Mines Appoints Mining Veteran Blane Wilson President and COO
William Solloway, commented, "Blane Wilson brings to Klondex acknowledged 21 years of Nevada gold mining, exploration and production experience, and he has already made invaluable contributions to operations and brings his hands on management expertise to the Fire Creek Development Plan. This appointment ensures better shareholder communications and the continued exploitation of the 1.6 million ounces indicated and 0.5 million ounces inferred high-grade resource at Fire Creek."
Klondex also announced the election of Blane Wilson and Richard Kern to the board of directors at the AGM held here yesterday. Messrs. Wilson and Kern join Mr. Solloway; Brendan Donohoe, Treasurer; and Ronald Shorr, Chairman and CEO of Maudore Minerals Ltd., who were re-elected to the Company's five-member Board. Bios of the Board are available for reference on the KDX website.
About Klondex Mines (http://www.klondexmines.com):
Klondex Mines Ltd. is focused on bringing into initial production, via bulk sampling, its 100% owned high-grade Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling mining prospect that is well located near power, transportation, mining infrastructure and several milling facilities.
ON BEHALF OF KLONDEX MINES LTD.
"William Solloway" Chairman and CEO
Investor Contacts:
Bryson Goodwin
Klondex Mines Ltd.
brysongoodwin@shaw.ca
(604) 341-1531
David Collins
Jaffoni & Collins
KDX@jcir.com
(212) 835-8500
Klondex and Paramount Agree to Release of Claims and Dismissal of Litigation
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
View News Release in PDF Format:
| File: | http://www.klondexmines.com/i/pdf/2010-06-22_NRM-3.pdf |
| 16 KB, approx. 4 seconds at 56.6Kbps |
Proposed 2010 Fire Creek Surface Drilling Program Map
View Map in PDF Format:
| File: | http://www.klondexmines.com/i/pdf/2010-06-22_NRM.pdf |
| 624 KB, approx. 1 minute, 57 seconds at 56.6Kbps |
Klondex Initiates Step-Out and Infill Drilling of High Grade Gold Targets in Nevada
Vancouver, BC - June 22, 2010 - Klondex Mines Ltd. (TSX: KDX), is very pleased to announce details on its summer drill program. Blane Wilson commented, "We are incredibly excited to initiate drilling on some of the most prospective targets identified by last year's exploration program. Our Multi-Method Geophysical Survey completed last summer indicated several new targets that may offer the possibility of an increase to our 43-101 compliant resource. We look forward to reviewing the data generated with this summer's program."
Drilling will commence under the direction of Richard Kern and will focus on step-out drilling through the use of RC and Core. This program will enable KDX to begin the process of including the southern extension in our underground development plans and also work towards adding gold ounces to the already impressive 1.6 million indicated ounces and 0.5 million inferred ounces. In an effort to complement our underground plans we also plan to initiate some strategic infill drilling. This will allow us to show vein continuity and generate further metallurgical testing as we prepare for underground mine development later this year and initial bulk sampling in 2011. We anticipate the first rig will arrive on site June 28th and commence work shortly thereafter.
A map showing the planned holes is available at www.klondexmines.com/s/News.asp.
About Klondex Mines (http://www.klondexmines.com):
Klondex Mines Ltd. is focused on bringing into initial production, via bulk sampling, its 100% owned high-grade Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling mining prospect that is well located near power, transportation, mining infrastructure and several milling facilities.
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
View News Release in PDF Format:
| File: | http://www.klondexmines.com/i/pdf/2010-06-22_NR.pdf |
| 269 KB, approx. 51 seconds at 56.6Kbps |