NEVADA – Vancouver-headquartered Klondex Mines has closed a C$42.6 million private placement by selling 29.4 million subscription receipts at a price of C$1.45 each. The proceeds from which will be used to partially fund the purchase of the Midas mill from Newmont Mining. The completion of the acquisition is expected in February.
Klondex agreed to pay Newmont US$55 million in cash as well as replace Newmont’s surety arrangement with the state and federal authorities for a further US$28 million. Klondex also issued 5.0 million common share purchase warrants to Newmont
Klondex produced its first gold at Fire Creek from a 2,000-tonne leach pad test in 1981, but only 67 oz were produced. The deposit was considered to be a low grade, high tonnage Carlin type open pit deposit. It did not reach commercial leaching rates as the gold price hovered around $300/oz.
Now the company is taking development underground. The resource includes 7,000 measured tonnes at 237.7 g/t Au, 198,000 indicated tonnes at 37.4 g/t, and 683,000 inferred tonnes at 19.2 g/t. Contained gold in all categories is approximately 717,300 oz. The high grades were there all along but hidden beneath the surface.
Klondex plans to release a preliminary economic assessment for Fire Creek in Q1 2014. Please see KlondexMines.com.