ELKO, NV and VANCOUVER, BC--(Marketwired - Jul 25, 2013) - Klondex Mines Ltd. (
Paul Huet, Klondex President and CEO, commented, "We are grateful for the continued support of our significant shareholders as we continue to develop the Fire Creek project." He continued, "The bridge loans not only enable us to meet our financial requirements, but also to enhance our exploration and development program at the Fire Creek project. Monetizing the high-grade material remains our number one priority and we intend to repay the loan with the funds we expect to generate from Fire Creek, by November 2013."
Each of the Loans is evidenced by a promissory note bearing interest at the rate of 1% per 30-day period and maturing on November 30, 2013, with provisions for additional interest payments in the event that certain minimum payments are not made during the term of the Loan. The Loans are guaranteed by Klondex and are secured against the personal property of KGS, including extracted minerals obtained from the Company's Fire Creek Project in Nevada. Proceeds from the Loans will be used for general working capital purposes. In addition, KGS and the Lender have also agreed to amend the terms of an existing US$1.6 million promissory note in favour of the Lender to, among other things, extend the term of such note (the "Extension").
In connection with the Loans and the Extension, the Company issued an aggregate of 500,000 warrants (the "Warrants") to each of K2 and the Lender, with each Warrant entitling the holder to purchase one common share of the Company (a "Common Share") at a price (the "Exercise Price") of $1.19 and $1.2215, respectively, for a period of one year following its date of issue. The Warrants are subject to an early expiry date in the event that the daily volume-weighted average price of the Common Shares on the Toronto Stock Exchange ("TSX") has exceeded the Exercise Price by 35% for any 10 consecutive trading days. The Warrants and the Common Shares underlying the Warrants are subject to a four-month plus one day hold period pursuant to Canadian securities laws. The issuance of the Warrants is subject to the customary final approval conditions of the TSX.
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 facility. At July 25, 2013, Klondex had 64.4M shares issued and outstanding and 86.8M 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, the results of exploration at the Fire Creek project and the intention to monetize mineralized material at the Fire Creek project. 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 Corporation's business are more fully discussed in the Corporation'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.
Contact: Paul Huet President & CEO Klondex Mines Ltd. 807-939-2841 Email Contact Alison Tullis Manager, Investor Relations Klondex Mines Ltd. 647-233-4348 Email Contact Toni Trigiani Investor Relations Catalyst Global LLC 212-924-9800 Email Contact
