Klondex Mines (TSE:KDX) (OTCQX:KLNDF) has reported more drill results from its Fire Creek gold project in Nevada ahead of initial production projected for later this year, with such high grades in new, unexplored areas prompting the gold developer to delay its resource update. The company said a new mineralized structure was found running parallel and to the west of the Joyce vein at the site, which included an intercept grading a whopping 869 grams per tonne (g/t) gold over 0.12 metres.
"Today's announcement further supports our belief that Fire Creek is an under-explored asset. We continue to further demonstrate continuity as the drill program moves forward. We have decided to delay our updated mineral resource estimate in order to incorporate recent underground drilling results," said the company's general manager of the project, Mike Doolin.
"We anticipate that this will push out the completion of the updated mineral resource estimate by approximately one month, from late June to the end of July, but will allow us to develop a more current resource model."
Initially, the plan had been to publish the updated resource estimate by the end of June, which would be followed by an updated mine plan and the bulk sampling program that had been targeted for the third quarter.
So far this year, the company has completed 27 underground drill holes, for a total of 3,523 metres at the Fire Creek project. Klondex said that both the Joyce and Vonnie vein structures remain open along strike and at depth, restricted only by the amount of drilling data.
From the latest results, at drill station nine, two drill holes intercepted a mineralized structure between the drill ramp and the Joyce vein, returning 1.5 metres of 70.6 g/t gold and 869 g/t gold over 0.12 metres.
Other intercepts from the Joyce vein included 767 g/t gold over 0.6 metres, and 570 g/t gold over 0.4 metres. The holes in drill station nine were located about 50 metres west of the vent raise, which the company says suggests a potential new zone strike length of at least 98 metres south from the vent raise access. The company is in the process of completing the vent raise access, after which it plans to move into its bulk sampling program.
Last week, the Nevada-focused company reported the metallurgical sampling program at its Fire Creek gold project in Nevada yielded 682 tons of mineralized material at an average grade of 73.8 grams per tonne (g/t) gold during the month of May, with sampling expected to continue throughout the year in an effort to gain a better understanding of the Joyce and Vonnie structures. It told investors that the high grade material is to be shipped for direct smelting, with contract finalization underway. Shipment of the first lot is expected before the end of June.
The Fire Creek property is situated at the intersection of the Battle Mountain trend and Northern Nevada Rift, which also hosts the Midas and Hollister narrow-vein epithermal gold deposits. Aside from being surrounded by major producers, it is also proximate to power, transportation, infrastructure and a milling facility in the heart of the U.S. state's gold trend.
Shares of Klondex picked up 4 per cent to $1.29 on Tuesday, with year-to-date gains of 3 per cent.
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