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  • Klondex Mines Raises $595,000 Via Warrant Exercise 0 comments
    Sep 23, 2013 2:42 PM | about stocks: KLNDF

    Klondex Mines (TSE:KDX) (OTCQX:KLNDF) has raised $595,000 via a warrant exercise, the Nevada-focused gold exploration and development company announced Monday, for the continued development of its flagship Fire Creek project.

    The Vancouver-based miner announced that its largest shareholder, The K2 Principal Fund L.P., has exercised warrants to purchase 500,000 common shares at the price of $1.19 apiece, a transaction which will generate total proceeds of $595,000.

    The warrants were issued to K2 in conjunction with the firm providing Klondex with a $1.99 million bridge loan facility in July of this year.

    As a result of the warrant exercise, K2 owns about 9.83 million shares in the company, or approximately 13.6 per cent of Klondex's fully diluted common shares outstanding.

    The same day, Klondex also confirmed that it had been paid roughly $1.8 million from the processing of its first shipment of mineralized material to mining giant Newmont (NYSE:NEM), under a processing agreement signed between the two parties earlier this year, with processing on the company's second shipment of material having commenced on September 18.

    The company is developing its Fire Creek project with the aim of starting initial production later this year though bulk sampling. As a first step to unlocking value, it is undertaking an underground development program at the Joyce and Vonnie structures on the property as a way to monetize its high grades, with Klondex shipping the high grade mineralized material to Newmont, a move that CEO Paul Huet, speaking at the company's annual meeting in June, called a "great opportunity to improve margins and separate the high grades over 3 ounces that [the company] has."

    The Fire Creek project, a high-grade gold deposit in North-Central Nevada, is located in a mining-friendly jurisdiction, near major producers, power, transportation, mining infrastructure and milling facilities.

    "We are pleased to have the continued support of K2, whose counsel and guidance have been extremely valuable in transforming Klondex over the past year," said Huet.

    "Proceeds from their warrant exercise and the proceeds received from our first shipment of mineralized material will provide us with additional capital to continue exploration and development at Fire Creek for the foreseeable future."

    The news comes a matter of days after the company released to market its new mineral resource estimate for its Fire Creek project in Nevada, with the report emphasizing the high grades at the property and propelling the company closer to production.

    That new resource consists of 295,900 ounces of gold at a grade of 44.7 grams per tonne (g/t) in the measured and indicated category, and 421,400 ounces of gold in the inferred category at a grade of 19.2 g/t, applying a 7 g/t gold cut off.

    The company said in a statement released with the announcement that the report illustrates the high grades and confirms the continuity of gold mineralization down dip and along strike from work mainly completed in the Main zone.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: KLNDF
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