July 25, 2013
NV and VANCOUVER, BC - (Marketwired - Jul 25, 2013) - Klondex Mines Ltd.
(TSX: KDX) (OTCQX: KLNDF) (“Klondex” or the “Company”) is pleased to
announce that its subsidiary, Klondex Gold & Silver Mining Company
(“KGS”), has obtained and drawn down on a bridge loan facility of
$1,999,999 (the “K2 Loan”) advanced by the K2 Principal Fund L.P.
(“K2”), a significant shareholder of the Company, and on a bridge loan
facility of $400,000 (the “Third Party Loan” and together with the K2
Loan, the “Loans”) advanced by a third party (the “Lender”).
Paul Huet, Klondex President and CEO, commented, “We are grateful for
the continued support of our significant shareholders as we continue to
develop the Fire Creek project.” He continued, “The bridge loans not
only enable us to meet our financial requirements, but also to enhance
our exploration and development program at the Fire Creek project.
Monetizing the high-grade material remains our number one priority and
we intend to repay the loan with the funds we expect to generate from
Fire Creek, by November 2013.”
Each of the Loans is evidenced by a promissory note bearing interest at
the rate of 1% per 30-day period and maturing on November 30, 2013, with
provisions for additional interest payments in the event that certain
minimum payments are not made during the term of the Loan. The Loans are
guaranteed by Klondex and are secured against the personal property of
KGS, including extracted minerals obtained from the Company’s Fire Creek
Project in Nevada. Proceeds from the Loans will be used for general
working capital purposes. In addition, KGS and the Lender have also
agreed to amend the terms of an existing US$1.6 million promissory note
in favour of the Lender to, among other things, extend the term of such
note (the “Extension”).
In connection with the Loans and the Extension, the Company issued an
aggregate of 500,000 warrants (the “Warrants”) to each of K2 and the
Lender, with each Warrant entitling the holder to purchase one common
share of the Company (a “Common Share”) at a price (the “Exercise
Price”) of $1.19 and $1.2215, respectively, for a period of one year
following its date of issue. The Warrants are subject to an early expiry
date in the event that the daily volume-weighted average price of the
Common Shares on the Toronto Stock Exchange (“TSX”) has exceeded the
Exercise Price by 35% for any 10 consecutive trading days. The Warrants
and the Common Shares underlying the Warrants are subject to a
four-month plus one day hold period pursuant to Canadian securities
laws. The issuance of the Warrants is subject to the customary final
approval conditions of the TSX.
About Klondex Mines Ltd. (www.klondexmines.com)
Klondex Mines is focused on the exploration and development of its Fire
Creek gold deposit in North-Central Nevada. Fire Creek is a compelling
gold project located in a mining-friendly jurisdiction, near major
producers, power, transportation, mining infrastructure and its milling
facility. At July 25, 2013, Klondex had 64.4M shares issued and
outstanding and 86.8M shares, fully diluted.
President & CEO
Klondex Mines Ltd.
Manager, Investor Relations
Klondex Mines Ltd.
Catalyst Global LLC
This news release contains certain information that may constitute
forward-looking information under applicable Canadian securities
legislation, including information about the magnitude and quality of
the Fire Creek project, the results of exploration at the Fire Creek
project and the intention to monetize mineralized material at the Fire
Creek project. This forward-looking information entails various risks
and uncertainties are based on current expectations, and actual results
may differ materially from those contained in such information. These
risks and uncertainties include, but are not limited to the risks and
hazards associated with environmental compliance and permitting for its
underground operations, 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 factors which would make a mineral deposit
commercially viable are present. Risks and uncertainties about the
Corporation’s business are more fully discussed in the Corporation’s
disclosure materials filed with the securities regulatory authorities in
Canada and available at www.sedar.com. 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.
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