ELKO, NV and VANCOUVER, BC--(Marketwired - Sep 16, 2013) - Klondex Mines Ltd. (
Paul Huet, Klondex President and CEO stated, "We have reached a major milestone in defining the Fire Creek deposit, only limited by the completed drilling and underground development program. This high quality resource estimate shows the potential of Fire Creek and is substantiated by the underground development program. The deposit remains open along strike and at depth providing Klondex with upside for resource growth given that 93% of Fire Creek's property is unexplored. We've focused drilling to define the Main Zone and can now begin to expand exploration and step out our drilling, providing the needed data to convert the existing known mineralization into additional resource ounces and as a result, further unlock the value at Fire Creek."
Mr. Huet continued, "We will use this resource and the knowledge gained from our underground development program to complete a Preliminary Economic Assessment (PEA) prepared by PM, which is anticipated to be completed by the end of 2013. The high-grade nature of this deposit will play a key role in assessing economic scenarios for Fire Creek."
TABLE 1: New Fire Creek Resource Estimate
|Gold Cutoff |
|Contained Au (oz)|
|(1)||Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues.|
|(2)||The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.|
New Mineral Resource Estimate:
The new mineral resource estimate prepared by PM is based primarily on data from 380 surface and underground drill holes, available up to September 1, 2013, and includes information obtained from relogging 240,000 feet of core earlier this year. It also utilized over 1,381 independently assayed channel samples from underground drifting on the Joyce and Vonnie structures. Infill drilling on 75ft (22.9m) centres in conjunction with the underground development program increased the confidence level of the resource and therefore introduced the Measured category to the new resource estimate.
Wire frame solid models were constructed for thirty-two veins striking approximately N15W and steeply dipping both east and west. The vein models were constructed from cross sections on 50 foot intervals. Assay values were composited into 10 foot lengths and truncated at the vein hanging wall and footwall. Only composites flagged as representing vein material were used in the grade estimation. Grades greater than 1,370 g/t (40 opt) were restricted to the block containing the intercept and the capped value of 1,370 g/t (40 opt) was then used to estimate nearby blocks. Grades were assigned to individual blocks using the inverse distance cubed method (ID3).
The search orientation for each of the 32 veins was determined based on the individual veins approximate strike and dip. Measured blocks require a minimum of 5 drill hole intercepts within 25 feet while indicated blocks required 2 intercepts within 100 feet. Inferred blocks required two intercepts within 1,000 feet. Grades were estimated only for blocks contained within the modeled vein wireframe. Block extents are 5 feet along strike and vertically. Across the strike the block extents were limited to the width of the vein with 0.5 foot resolution. This method allows veins as narrow as 1/2 foot perpendicular to strike to be modeled accurately. A density of 0.0774 tons per cubic foot was used for all veins. This value was derived from 15 samples collected from the Joyce and Vonnie veins and analyzed by SGS Laboratories of Elko.
The majority of ounces delineated in the new resource estimate are in the Main Zone. The veins are open along strike to the north and south, and at depth, demonstrating excellent continuity of both grade and width. PM used "inverse distance cubed" (ID3) constrained to wireframe vein solid models, which is an effective method to estimate narrow-vein gold deposits. A block model with 0.5 m constraints will overlay the wireframe. In the view of both Practical Mining and Klondex, the conservative methodology provides the best framework for the planning and execution of underground exploration, development and future production, allowing Klondex to optimize the efficiency of its operations.
Opportunity for Continued Resource Growth:
The Fire Creek deposit, onsite infrastructure and mine workings represent only 7% of the 17.5 sq. mi. land package with 93% remaining untested. Future exploration programs will follow up on recent discoveries near the ramp and mine workings to the south (see news release dated April 9, 2013), and to the west (see news release dated May 30, 2013) as well as in the North Zone and the parallel zones identified to the east by an IP survey completed in 2011.
Preliminary Economic Assessment:
This estimate will be incorporated into a PEA being prepared by PM and is expected to be completed by the end of 2013. The new mineral resource estimate provides PM with a detailed model to build an efficient mine plan on Fire Creek.
Practical Mining, LLC:
PM, under the management of Mark Odell, Karl Swanson and Michele White, is well-respected for its resource, PEA, and feasibility studies in Nevada. Its experience and background in high-grade gold systems similar to Fire Creek made them the obvious consultant for Klondex; the company has completed models for Agnico-Eagle, Newmont, Barrick and others. Most importantly, the company is well versed with the narrow-vein epithermal vein systems of the Northern Nevada Rift and was used by Klondex CEO, Paul Huet, while operating well-known mines in the Northern Nevada rift. A technical review of site data was undertaken for the purpose of gaining an understanding of previous mining, proposed new mining methods, as well as a review of other data needed for reporting on the technical aspects of mining these deposits. A review of historical databases and sampling protocol was performed by Michele White for the purpose of validating data integrity. The authors reviewed the land tenure situation in terms of verifying good standing with the Bureau of Land Management (BLM) for Klondex's unpatented lode mining claims and reviewed a title opinion report dated November 14, 2012 by Erwin & Thompson LLP. The legal status or ownership of the fee properties and/or any agreements that pertain to the Fire Creek gold deposit for all relevant mining claims have been provided by Bill Houston, RPL, independent land consultant to Klondex. Assumptions made as to accuracy of land tenure are based on his opinion.
The technical information contained in this press release has been approved by Steven L. McMillin, CPG-11031 (American Inst. of Prof. Geol.), Chief Geologist for Klondex Mines Ltd., as a non-independent Qualified Person for the purposes of National Instrument 43-101.
For Practical Mining LLC, Michele White (CPG 11252), Mark Odell (Nevada PE 13708 and SME 2402150) and Karl Swanson (SME 443076 and AusIMM 304871) have reviewed and approved the contents of the press release, for the purposes of National Instrument 43-101. These three individuals are considered Independent Qualified Persons as defined by Canadian National Instrument 43-101.
The technical information contained in this press release has also been reviewed and approved by Steven L. McMillin, CPG-11031 (American Inst. of Prof. Geol.), Chief Geologist for Klondex Mines Ltd., as a non-independent Qualified Person for the purposes of National Instrument 43-101.
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 facilities. At September 16, 2013, Klondex had 65.5mm shares issued and outstanding and 88.4mm shares, fully diluted.
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, statements regarding estimated mineral resources and the potential for delineation of additional mineral resources through further exploration at the Fire Creek project; the accuracy of current interpretation of drill and other exploration results, the execution of the Company's existing plans or exploration programs for the Fire Creek project, the results of exploration and metallurgical sampling at the Fire Creek Project, the Company's intention and ability to monetize mineralized material, timing of the updated mineral resource estimate at the Fire Creek Project and the bulk sampling program. 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 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.