VANCOUVER, BC and ELKO, NV--(Marketwired - Apr 2, 2013) - Klondex Mines Ltd. (
Under the terms of the agreement, Veris Gold will accept for processing, delivery of the Fire Creek material to the Jerritt Canyon Mill, approximately 120 miles northeast of Fire Creek. Klondex will pay to Veris Gold the costs to mill and transport the mineralized material and a toll-milling fee with quarterly adjustments reflecting the change in contributing costs associated with processing of mineralized material. All precious metals milled pursuant to the agreement will be the property of Klondex. The total costs for shipping (transportation) and milling will be $148.50 per ton. Klondex will receive the recoveries achieved by Veris Gold's circuit.
Mike Doolin, General Manager of the Fire Creek project, stated, "I'm happy to report we continue to gain momentum in the development of the Fire Creek gold project towards a production decision via our bulk sampling program. Finalizing this milling agreement is another major step forward for us, and we are extremely pleased to be working with the team at Veris Gold."
Paul Huet, Klondex Mines CEO, commented, "The Nevada team delivers another important milestone for Klondex; the group has a reputation of consistently delivering and this is another great example. 2013 is a pivotal year for us as we continue to de-risk the Fire Creek asset. The excavation of the secondary egress, necessary to begin our bulk sampling, is now 20% complete and is on-track to be commissioned mid-June, 2013. Now, through this milling agreement with Veris Gold, we have a place to process mineralized material from Fire Creek. I have had the opportunity to work with this group at Veris Gold in the past and look forward to a continued relationship with such a professional team."
Randy Reichert, Co-CEO and COO of Veris, stated, "This second toll milling agreement adds to our third party ore processing revenue stream and provides an excellent additional source of ore as the Klondex team ramps up their mining operations into 2014. This agreement will further reduce our costs by making use of the excess capacity at the Jerritt Canyon Mill when we begin processing the Fire Creek ore in the third quarter of 2013. We look forward to working with yet another gold producing neighbour in Nevada."
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 mining prospect located in a region of prolific gold production that is near power, transportation, mining infrastructure and several milling facilities. As of March 25, 2013 Klondex had 64.4 million shares issued and outstanding, and 85.3 million shares on a fully diluted basis.
This news release contains forward-looking information, including about current expectations on the timing of project development. This forward-looking information entails 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 information. 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 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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