April 13, 2012
- All Seven Holes Have Intercepts > 12 Grams Gold/Tonne -
-Reviews Exploration and Development Progress
and Plans for an Updated Technical Report -
Elko, NV & Vancouver, BC
- 6.72 g Au/tonne over 7.62 meters, including 12.35 g Au/tonne over 1.5 meters
- 5.27 g Au/tonne over 12.1 meters, including 15.79 g Au/tonne over 3.0 meters
- 5.45 g Au/tonne over 15.2 meters, including 18.90 g Au/tonne over 1.5 meters
— April 13, 2012 —
Klondex Mines Ltd. (TSX: KDX), a Nevada gold exploration and development
company, today released its second batch of assay results from its
underground core drilling program at its 100%-owned Fire Creek
gold-silver project in Lander County, Nevada. The seven holes reported
today continued to test the southern end of the Main Vein Zone, a
northwest trending set f vein-like bodies of mineralization. The results
are reported in the tables below and reflected in the accompanying
A total of 35 underground in-fill holes have been completed at Fire
Creek since the program’s inception, for a total of 8,871meters.
Seventeen holes were completed in 2011, and all results have been
returned. ighteen additional holes totaling 5,098 meters have been
completed in 2012; their cores are in various stages of logging,
preparation and assay.
Klondex plans to update to its May 2011 technical report to incorporate
exploration data from its drilling activity in 2011 and through midyear
2012. Klondex has engaged
Micon International Limited
a leading provider of consulting services to the international mining
industry, to assist in the preparation of the updated technical report,
targeted for release in Q3 2012. Steven L. McMillin, Chief Geologist for
Klondex ines, will serve as a Qualified Person supervising the
technical report update, along with Micon Senior eologist,
Thomas C. Stubens
Exploration and Development Overview:
Klondex is engaged in a multifaceted exploration and development program
at Fire Creek. Exploration is being pursued through surface drilling,
underground drilling and via an underground decline. Initial bulk
sampling of mineralized material from the Main Zone of the deposit is
planned to begin in 2012, and Klondex is permitted to process up to
36,500 short tons of material per year, up to a maximum of 120,000 short
tons over the life of its five-year small-scale facility permit. The
bulk sampling program is intended to verify the grades and geometry of
mineralized material in the Main Zone and to assess mining onditions for
the planning of future mine operations. Processing of the bulk sample
will also test metallurgical conditions as well as gold recoveries.
In-fill drilling from the underground workings is allowing Klondex to
tighten its drill spacing and to seek to better establish continuity of
its mineralized zones. Underground drilling is lower-cost, involves
horter holes and is more accurate than drilling from the surface.
Klondex expects to complete over 20,000 meters of underground drilling
Klondex also plans to continue its active surface exploration program to
test IP anomalies and to conduct step out drilling of known veins.
Klondex plans to restart its surface-drilling program later this month.
The surface program’s principal goal in 2012 is to support the
underground in-fill drilling program in urther defining mineralization
in the Main Zone. The surface drill program is targeted to complete over
15,000 meters of core and reverse circulation drilling during 2012.
To date, Klondex has completed 742 meters of underground workings,
including 571 meters of the decline. Approximately 350 meters of decline
advance are still required to put Klondex in position to initiate the
bulk sampling program. Based on decline progress to date, Klondex now
expects to initiate bulk sampling during the later part of the third
quarter of 2012. Klondex had initially planned to begin the bulk
sampling in the first quarter. The delay into the third quarter is the
result of the temporary suspension of mining operations to install a
reverse osmosis system to reduce nitrate concentrations in ine water in
excess of the Company’s discharge permits. In addition, the Company has
encountered some ground condition challenges that have also slowed the
progress of the decline.
Blane Wilson, CEO of Klondex, commented, “Klondex is well underway on
our most ambitious program of exploration and development in the
Company’s history, and the expected start of bulk sampling is a few
months away. We are pleased with the ongoing progress of our underground
in-fill drilling program. The rogram enables us to continue active
exploration during the winter months when surface exploration is
“Though there remains much modeling and additional drilling to be done,
we are seeing some positive initial signs of apparent continuity from
this data. The knowledge we garner from the infill program will help
better define our Main Zone mineralization as well as shape the strategy
of our bulk sampling efforts. We expect to report periodic underground
drill results for the foreseeable future and look forward to the
preparation of an updated technical report this year.”
All of the holes included in this report are HQ core holes drilled in
2011 from a single underground station that is at the most advantageous
position to drill and explore the south mineralized system. The
objectives of the underground program are to 1) test for continuity of
mineralization along projected strike, 2) test for continuity up- and
down-dip within the mineralized zones, and 3) add new resources. The
cumulative underground results show spatial coincidence with the grade
shell shapes (Figure 1). In addition, preliminary modeling of the
underground holes with surface holes shows an apparent westward ip of
mineralization not seen in shapes generated from surface hole data.
Further modeling will help to lign the geometries of the mineralization.
Klondex’s underground drill results are presented below; the chart on
the left presents the data in meters nd grams per tonne and the chart on
the right presents the same data in feet and ounces per ton.
Grade shell model with currently reported underground core hole results
(shown with white lines and hole names ending with “U” suffix, surface
holes do not have suffix) with grade-shell model of veins (shown as red
bodies). Assay intervals are coincident to the grade-shell model, but
preliminary modeling shows a westward dip of mineralization. Magenta
lines show completed underground workings. Grid=100 m.
Grade shell model of veins with planned underground drill fans, and
targeted bulk sample location noted in light blue. Each fan contains 5
to 7 drill holes at various dip angles. Inset (upper right) shows
overall distribution of modeled mineralization. Grid=100 m
About Klondex Mines Ltd.
Klondex Mines is focused on the exploration and development of its 100%
owned Fire Creek gold deposit in North Central Nevada. Fire Creek is a
compelling gold mining prospect located near power, transportation,
mining nfrastructure and several milling facilities. Fire Creek’s
mineral resource is reviewed in the most recent technical report
with additional disclosure available via SEDAR
In addition to an active surface exploration program at Fire Creek, in
April 2011 Klondex initiated an underground exploration and development
program through an underground decline. The program is designed to
enable more cost effective in-fill drilling of its existing resource
from underground stations as well as to enable bulk sampling for
etallurgical testing of up to 120,000 short tons of material (limited to
36,500 short tons per year). Bulk sampling is anticipated to commence
during the third quarter of 2012.
As of April 11, 2012, Klondex had 46.6 million shares issued and outstanding and 59.1 million shares on a diluted basis.
Sample results cited in this news release were obtained from HQ diameter
core drill holes (96mm hole; 63.5mm ore) completed by American
Drilling, an independent contractor working under the direction of
Klondex Gold & Silver staff. Assays were determined by ALS Minerals,
Reno, Nevada, an independent analytical laboratory.
The content of this press release has been reviewed by Steven L.
McMillin, CPG-11031(American Inst. of Prof. Geol.) and Chief Geologist
for Klondex Mines Ltd., as a non-independent Qualified Person.
This news release contains forward-looking statements, including about
current expectations on the timing of project development. These
forward-looking statements entail various risks and uncertainties, are
based on current expectations, are subject to a number of uncertainties
and risks, and actual results may differ materially from those contained
in such statements. 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 factors which would make a mineral deposit commercially
viable are present; the risks and hazards associated with underground
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 available at
Readers are urged to read these materials. Klondex assumes no
obligation to update any forward-looking statement or to update the
reasons tual results could differ from such statements unless required
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING RESOURCES
This press release uses the terms “inferred mineral resources,”
“indicated mineral resources,” and “mineral resources” which are
Canadian mining terms defined in accordance with National Instrument
43-101 — Standards of Disclosure for Mineral Projects under the
guidelines set out in the Canadian Institute of Mining, Metallurgy and
Petroleum (the “CIM”) Standards on Mineral Resources and Mineral
Reserves (the “CIM Standards”). The CIM Standards differ significantly
from standards in SEC Industry Guide 7 under the United States
Securities Act of 1933, as amended. While the terms “mineral resource,”
“indicated mineral resources,” and “inferred mineral resources” are
recognized and required by Canadian regulations, they are not defined
terms under SEC Industry Guide 7 and are not normally permitted to be
used in reports filed with the Securities and Exchange Commission.
Readers are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves.
“Inferred mineral resources” have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred
mineral resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies, except in rare cases.
Readers are cautioned not to assume that all or any part of an inferred
mineral resource exists or is economically or legally mineable. As such,
information regarding resources contained in this press release may not
be comparable to similar information made public by United States
companies subject to reporting and disclosure requirements under United
States federal securities laws and the rules and regulations promulgated
On Behalf of Klondex Mines Ltd.
Blane W. Wilson
President & CEO
Investor & Media Contact:
David Collins, Toni Trigiani
Catalyst Global LLC
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