Klondex Mines Ltd. (TSX:KDX) (NYSE American:KLDX)
(“Klondex” or the “Company”) reported today a Mineral Reserve and
Mineral Resource update for the Fire Creek mine (“Fire Creek”)
located in northern Nevada, USA.
An updated technical report (the “Technical
Report”) titled “Technical Report for the Fire Creek Project,
Lander County, Nevada” dated February 5, 2018 with an effective
date of November 30, 2017, has been filed on SEDAR. The Technical
Report also will be filed on EDGAR and will be available on the
Company’s website. Practical Mining LLC authored the report.
Fire Creek Mineral Reserve and Resource
Highlights
- Increase in total Measured, Indicated and Inferred Mineral
Resource driven by the addition of the open pit (Mars Pit) resource
(previously disclosed on December 21, 2017): ° Increase
in total (underground and open pit) Measured and Indicated
(“M&I”) Mineral Resource to 1.6M AuEq oz from 505k AuEq
° Increase in total (underground and open pit) Inferred
Mineral Resource to 1.6M AuEq oz from 507k AuEq
- Underground Mineral Proven and Probable (“P&P”) Mineral
Reserves of 229k AuEq oz
Mr. Brian Morris, Senior Vice President, Exploration, commented,
“We had great success with our drill programs at Fire Creek in
2017. Results included significant growth of our indicated and
inferred resource, driven by the addition of the Mars Pit.
Furthermore, our underground resource is expanding to the northwest
of existing mine workings. This area now contains approximately 30%
of the total underground resource ounces. The Zeus target,
discovered in 2016, now provides 100k gold ounces to our inferred
resource estimate alone.” Mr. Morris continued, “With ongoing
district-wide exploration and the 9-haulage development to the
northwest in 2018, which will provide access for infill drilling, I
fully expect to see continued growth of our underground and open
pit resource at Fire Creek.”
Table 1: Fire Creek Underground Mineral
Reserve
Category |
Tons (k) |
Au opt |
Au g/t |
Ag opt |
Ag g/t |
AuEq opt |
AuEq g/t |
Au koz |
Ag koz |
AuEq koz |
Proven |
108 |
1.079 |
36.98 |
1.033 |
35.42 |
1.089 |
37.34 |
117 |
112 |
118 |
Probable |
211 |
0.517 |
17.74 |
0.514 |
17.61 |
0.524 |
17.98 |
109 |
108 |
111 |
Total P&P |
319 |
0.708 |
24.27 |
0.690 |
23.66 |
0.716 |
24.55 |
226 |
220 |
229 |
Notes:1. Reserves have been estimated using a gold price of
US$1,200/ounce and a silver price of
US$17.00/ounce.2. Metallurgical recoveries for gold and silver
are 93% and 88% respectively.3. Gold equivalent ounces were
calculated based on one ounce of gold being equivalent to 74.60
ounces of silver.4. Mineral Reserves were estimated at a
cutoff grade of 0.288 Au opt and an incremental cutoff grade of
0.09 Equivalent Au opt.5. Mine losses of 5% and unplanned
mining dilution of 10% have been applied to the designed mine
excavations.6. The effective date for the Mineral Reserve is
November 30, 2017.
Table 2: Fire Creek Underground Mineral
Resource
Category |
Tons (k) |
Au opt |
Au g/t |
Ag opt |
Ag g/t |
AuEq opt |
AuEq g/t |
Au koz |
Ag koz |
AuEq koz |
Measured |
154.0 |
1.215 |
41.65 |
1.118 |
38.33 |
1.230 |
42.18 |
187.0 |
172.1 |
189.4 |
Indicated |
532.5 |
0.526 |
18.04 |
0.554 |
18.99 |
0.534 |
18.30 |
280.1 |
294.9 |
284.2 |
Total M&I |
686.4 |
0.681 |
23.33 |
0.680 |
23.33 |
0.690 |
23.66 |
467.2 |
467.0 |
473.6 |
Inferred |
1,141.7 |
0.457 |
15.67 |
0.430 |
14.74 |
0.463 |
15.88 |
521.9 |
490.8 |
528.7 |
Notes:1. Mineral resources have been estimated at a gold price
of US$1,400/troy ounce and a silver price of US$19.83per troy
ounce.2. Mineral resources have been estimated using metallurgical
recoveries for gold and silver of 94% and 92% respectively.3.
Mineral resources have been estimated at a grade thickness cut-off
grade of 0.974 Au equivalent opt-feet and a diluted Au equivalent
cut-off grade of 0.228opt.4. Gold equivalent ounces were calculated
based on one ounce of gold being equivalent to 72.12 ounces of
silver.5. The minimum mining width is defined as four feet or the
vein true thickness plus two feet, whichever is greater.6. Mineral
resources include dilution to achieve mining widths and an
additional 7% unplanned dilution.7. Mineral resources include
allowance for 5% mining losses.8. Mineral resources are
inclusive of mineral reserves.9. 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 factors.10. The quantity and grade of
reported inferred mineral resources in this estimation are
uncertain in nature and there is 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.11. The underground Mineral Resource is exclusive
of the open pit Mineral Resource.12. The effective date for the
Mineral Resource is November 30, 2017.
Table 3: Fire Creek Open Pit Mineral
Resource (previously disclosed)
Category |
Tons (M) |
Au opt |
Au g/t |
Ag opt |
Ag g/t |
AuEq opt |
AuEq g/t |
Au koz |
Ag koz |
AuEq Moz |
Indicated |
42.9 |
0.025 |
0.87 |
0.055 |
1.88 |
0.026 |
0.88 |
1.1 |
2.4 |
1.1 |
Inferred |
31.7 |
0.034 |
1.17 |
0.091 |
3.12 |
0.035 |
1.19 |
1.1 |
2.9 |
1.1 |
Notes:1. Mineral resources are calculated at a
gold price of US$1,400 per ounce and a silver price of US$19.83 per
ounce.2. Metallurgical recoveries for gold and silver are 65% and
30%, respectively for oxide mineralization and 60% and 25%
respectively for mixed mineralization.3. One ounce of gold is
equivalent to 152.94 ounces of silver.4. Mineral Resources include
10% dilution and 5% mining losses.5. Cut off grades for the Mineral
Resources are 0.01opt AuEq opt.6. Mineral Resources which are not
Mineral Reserves have not yet demonstrated economic viability. The
estimate of mineral resources may be materially affected by
environmental, permitting, legal, title, taxation, sociopolitical,
marketing, or other relevant issues, and.7. The quantity and grade
of reported Inferred Resources in this estimation are uncertain in
nature and there has been insufficient exploration to define these
Inferred 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.8. The
open pit Mineral Resource is exclusive of the underground Mineral
Resource.9. The effective date for the Mineral Resource is November
30, 2017.
The Fire Creek Mineral Resource is based on
1,474 drill holes totaling 1,022,230 ft (311,576 m) and includes
data from 431 new drill holes totaling 329,989 ft (100,581 m),
completed by Klondex since June 30th, 2016. In addition to the
drilling, the Mineral Resource estimate also utilizes 6,398 channel
samples provided from mining on the structures.
Mineral Resource
Assumptions
Classification of the Mineral Resource as
Measured, Indicated or Inferred was undertaken based on the number
of drill and channel sample composites used and the average
distance from the block to the composites. The open pit Mineral
Resource is exclusive of the underground Mineral resource.
For a Measured Mineral Resource, an AuEq grade
model block must have incorporated four composites within a
distance of 40 feet. For Indicated Mineral Resource, an AuEq grade
model block must have used three composites within 100 feet, and an
Inferred Mineral Resource must have incorporated two composites
within 300 feet.
Drill interval assays for the Nevada Operations
were performed by ALS Chemex of Reno, Nevada. The quality control
and assurance program included the insertion of standards five
percent of the sample stream, and the retention of pulps and
rejects. Duplicates are generated by the lab and re-assayed by
American Assay Laboratories (AAL) of Reno, Nevada. QA/QC samples
are tracked and if a result is outside of pre-determined limits the
batch is re-assayed and the result replaces the previous values.
Channel samples were performed by an in-house laboratory using fire
assay with gravimetric finish as directed under the supervision of
Klondex staff and check samples were sent to AAL.
Drill samples cited in this news release for
Fire Creek were obtained from drilling by independent contractor
American Drilling Corp. of Spokane, Washington under the direction
of Klondex staff. Logging, splitting, and sampling are conducted at
the Fire Creek site.
Qualified PersonScientific and
technical information in this press release has been reviewed and
approved by Mark Odell, P.Eng. (NV Lic#13708), a “qualified person”
within the meaning of National Instrument 43-101.
About Klondex Mines Ltd.
(www.klondexmines.com)Klondex
is a junior-tier gold and silver mining company focused on
exploration, development, and production in a safe, environmentally
responsible, and cost-effective manner. The Company has 100%
interests in four producing mineral properties: the Fire Creek
Mine, the Midas Mine and ore milling facility, the Hollister Mine,
all of which are located in the state of Nevada, USA, and the True
North Mine and mill in Manitoba, Canada. The Company also has a
100% interest in the Aurora mine and ore milling facility, also
located in Nevada, USA.
Contact: Mike
BecksteadDirector, Investor RelationsO: 775-284-5757M:
406-290-4165mbeckstead@klondexmines.com
Cautionary Note Regarding
Forward-looking Information This news release contains
certain information that may constitute forward-looking information
or forward-looking statements under applicable Canadian and United
States securities legislation (collectively, “forward-looking
information”), including but not limited to the exploration
potential at the Fire Creek Mine, expected gold recoveries, the
potential of the drilling to increase resources, the timing of an
updated mineral resource update and future exploration and
production plans of Klondex. This forward-looking information
entails various risks and uncertainties that are based on current
expectations, 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 mineral
reserve estimates are reflective of actual mineral reserves; the
degree to which factors which would make a mineral deposit
commercially viable are present; the risks and hazards associated
with underground operations; and the ability of Klondex to fund its
substantial capital requirements and 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 United States available at
www.sedar.com and www.sec.gov, respectively. 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.
Cautionary note to U.S. investors regarding estimates of
measured, indicated and inferred resources and proven and probable
reserves The terms “mineral reserve”, “proven mineral
reserve” and “probable mineral reserve” are Canadian mining terms
as defined in accordance with Canadian National Instrument
43-101-Standards of Disclosure for Mineral Projects (“NI 43-101”)
and the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM)-CIM Definition Standards on Mineral Resources and Mineral
Reserves, adopted by the CIM Council, as amended (“CIM Definition
Standards”) These definitions differ from the definitions in the
SEC Industry Guide 7 (“SEC Industry Guide 7”) under the Securities
Act.
The terms “mineral resource”, “measured mineral
resource”, “indicated mineral resource” and “inferred mineral
resource” are defined in, and required to be disclosed by NI 43-101
for Canadian filers; however, these terms are not defined terms
under SEC Industry Guide 7 and are normally not permitted to be
used in reports and registration statements filed with the SEC.
Investors are cautioned not to assume that all or any part of a
mineral deposit 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. Investors are
cautioned not to assume that all or any part of an inferred mineral
resource exists or is economically or legally mineable.
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