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Friday, 2 August 2013
Board member shows support for Klondex Mines through $30,000 share purchase
Klondex Mines (TSE:KDX) (OTCQX:KLNDF) has received a show of confidence from the company's board director, Rodney Cooper, who has more than 20 years experience in the gold mining industry and is currently the president and COO of Labrador Iron Mines, with the exec buying up nearly $30,000 worth of the gold developer's shares.
According to filings on Tuesday, Cooper purchased 19,577 shares of Klondex in the public market at $1.36 apiece and 2,500 shares at $1.35 apiece.
Indeed, the board member has reason to believe in Klondex, following a series of big announcements for the gold company in the last week.
On Monday, Klondex reported that it yielded 1,302 tonnes (1,435 tons) of mineralized material in June from its underground development program at its Fire Creek project in Nevada, ahead of targeted initial production later this year. The results from the program, which targeted the Joyce and Vonnie structures at the site, came just days after the company made two big announcements, including an agreement with U.S. mining giant Newmont (NYSE:NEM) to begin processing the company's higher grade mineralized material from the Nevada property this month.
And that's not all. Klondex also announced last Thursday that it secured $2.39 million in bridge loans as a means to support the development of Fire Creek, from where initial production from bulk sampling is due to start later this year, with an updated resource from drilling due this summer, to be followed by a new and comprehensive mine plan.
The underground development program at Joyce and Vonnie in June yielded 1,302 tonnes of mineralized material at an average grade of 119.8 grams per tonne gold (3.49 ounces per ton), using a 1,714.7 g/t cap on gold sample results. The development program is expected to continue throughout the rest of the year, with June's production adding to the 682 tons in May, for a total of 2,117 tons that will be shipped to Newmont for processing.
The agreement with Newmont is part of the gold development company's way to monetize its high grade material, with CEO Paul Huet highlighting at Klondex's annual shareholder meeting in June that these deals will be a "great opportunity to improve margins and separate the high grades over 3 ounces that [the company] has." Proceeds from the processing of this material will be used toward funding the company's own waste development ahead of the 2014 bulk sampling program, and for a second drill to follow up on recent discoveries.
The first shipment of 1,000 tons is scheduled to begin in August, and processing is expected to follow immediately after the receipt of the first lot.
Aside from being surrounded by major producers, the Fire Creek property is as expected also proximate to power, transportation, infrastructure and a milling facility in the heart of the U.S. state’s gold trend. Apart from the Rapid Infiltration Basin permit, which has been submitted and is on track for the third quarter, most other major permitting is in place.
In the last week, shares of Klondex have surged almost 14 per cent, with its stock currently sitting 2 cents higher from previous close, at $1.41 on the Toronto Stock Exchange.