Klondex Enters Into Toll Milling Agreement With French Gulch
April 23 2014 - 6:30AM
Marketwired
Klondex Enters Into Toll Milling Agreement With French Gulch
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 23, 2014) -
Klondex Mines Ltd. (TSX:KDX)(OTCQX:KLNDF) announces that its
subsidiary, Klondex Midas Operations, today entered into a toll
milling agreement with French Gulch Nevada Mining Corp. to process
gravity concentrates produced from the Washington Mine at Klondex's
Midas mill.
Mike Doolin, Klondex VP Corporate Development stated, "This is a
mutually beneficial agreement for both parties. Processing third
party material makes excellent use of the excess capacity at the
Midas Mill. Toll milling provides the Company with additional
revenue, which will increase the cash flow from the
operations."
The toll milling agreement with French Gulch Nevada Mining Corp
has a one year term beginning April 17, 2014, and is subject to be
renewed annually. Under the terms of the agreement, gravity
concentrates from the Washington Mine, located in French Gulch,
California, will be delivered to the Midas Mill for processing. The
toll milling agreement is structured so that all dore produced from
the concentrate will become the property of Klondex, and Klondex
will pay French Gulch the value of the recovered gold minus all
toll mill charges.
Klondex is presently evaluating other toll milling opportunities
to determine which materials are best suited to being processed at
the Company's Midas Mill.
About Klondex Mines Ltd. (www.klondexmines.com)
Klondex Mines is focused on the exploration, development and
production of its high quality gold and silver projects. The
company is operating an ongoing bulk sampling program at its Fire
Creek gold project located in north central Nevada. Fire Creek is
in a mining-friendly jurisdiction, with onsite power and mining
infrastructure, and near major producers. Midas, Klondex's newly
acquired operating mine and milling facility are located ~100 miles
north of Fire Creek.
Cautionary Note Regarding Technical Information and
Forward-looking Information
A production decision at the Midas mine was made by prior
owners of the mine, prior to the completion of the acquisition of
the Midas mine by Klondex. To the knowledge of Klondex, this
production decision was not based on a feasibility study of mineral
reserves demonstrating economic and technical viability
prepared in accordance with NI 43-101 but was based on internal
studies conducted by the prior owner of the mine. Klondex has no
reason to believe that the data on which such studies were based or
that the results of such studies are unreliable. However, readers
are cautioned that there is increased uncertainty and higher risk
of economic and technical failure associated with such production
decisions.
This news release contains certain information that may
constitute forward-looking information under applicable Canadian
securities legislation, including but not limited to information
about the ability to generate revenue from the provision of toll
milling services to third parties, the impact of toll milling on
the Company's cash flows and the availability of potential toll
milling opportunities. 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 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 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.
Klondex Mines Ltd.Paul HuetPresident &
CEO775-284-5757investors@klondexmines.comKlondex Mines Ltd.Alison
TullisManager, Investor
Relations647-233-4348atullis@klondexmines.com
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