Klondex Mines (TSE:KDX) (OTCQX:KLNDF) says that through additional exploration and metallurgical sampling it has uncovered what it calls "significant visible gold mineralization" on the Joyce structure at its Fire Creek gold project in Nevada ahead of an initial bulk sampling program in the third quarter at the mine.
At the 5370 cross cut, assays from the south segment returned a grade of 137.1 grams per tonne (g/t) gold over 2.4 metres, with results from the north area still pending.
As a result of the sampling, the company said it expects to have a better understanding of the structure character, widths, grades and metallurgy ahead of the bulk sampling later this year.
Klondex is aiming to extract around 10,000 tons of material in 2013 as part of its initial bulk sampling, with targets for next year to be announced with the completion of the updated mineral resource estimate - expected in June.
"We're excited to be encountering visible gold mineralization from further exploration, especially as we're preparing to begin the bulk sample program in Q3," said president and CEO Paul Huet in a statement released Monday.
"Fire Creek's gold mineralization will allow us to be flexible and reactive in today's volatile gold environment. This is an extremely important year for Klondex, as we finalize the resource model and mine plan, complete the vent-raise egress, construct the rapid infiltration basin and initiate bulk sampling from Fire Creek."
He further said that encountering this type of visible gold mineralization only adds to "the excitement surrounding the Fire Creek project."
The initial bulk sampling program is expected to begin between the 5370 and 5400 crosscuts in the Joyce and Vonnie structures where, in addition to the sampling results announced today, substantial gold mineralization was found by the two crosscuts last year. These assays were as high as 496.6 g/t gold over 1.8 metres.
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 nearby power, transportation, infrastructure and a milling facility in the heart of the U.S. state’s gold trend.
Earlier this month, the company said it completed its drill core re-logging program at the site five weeks ahead of schedule. Klondex started the campaign in January, which involved the photographing and re-logging of around 73,000 metres of archived drill core from previous operators at the property.
Shares of Klondex advanced by one penny in early deals Monday, to $1.10 per share.
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