Klondex sees potential to extend Nevada high-grade gold resource

The Klondex Mines Fire Creek gold mine in Lander County, northern Nevada. Source: Klondex Mines Ltd.

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The Klondex Mines Fire Creek gold mine in Lander County, northern Nevada. Source: Klondex Mines Ltd.

Klondex Mines Ltd. [KDX-TSX; KLDX-NYSE] on Friday January 26 announced the final results of a 2017 surface exploration drill program at its Fire Creek Mine in northern Nevada.

The program was designed to test the Zeus target (formerly known as the West Zone), which is 1.2 km northwest of the current mine workings and has been defined over an area of 275 metres in length and 122 metres in vertical extent. It remains open in all directions.

Notable highlights include hole FCC-0095, which returned 56.7 g/t gold over 10.7 metres. Hole FCC-0097 returned 4.75 g/t gold over 4.8 metres and FCC-0107 returned 5.6 g/t gold over 4.6 metres.

Klondex Mines is a junior gold and silver mining company with a focus in safe and environmentally responsible jurisdictions. The company has 100% interests in four producing mineral properties: the Fire Creek Mine, the Midas Mine and ore facility, the Hollister Mine, all of which are located in Nevada. The company also has a 100% stake in the True North Mine and mill in Manitoba.

The Fire Creek Project, covering 17,000 acres, includes a mechanized narrow vein mine. Proven and probable reserves stand at 291,000 ounces of gold and 225,000 ounces of silver.

In late December 2017, the company announced a new open pit mineral resource estimate for the Fire Creek Project, including 1.1 million gold equivalent ounces in the indicated category and 1.1 million ounces in the inferred category.

The new estimate excludes all underground mineral resources reported at Fire Creek, the company said.

On Friday, the company said seven surface holes were drilled in 2017, totaling 3,007.9 metres. The focus of the program was to infill and step out from last year’s drilling with the intent to develop a resource within this mineralized corridor.

The company said it expects to release an updated resource estimate for Nevada operations in the first quarter of 2018. This surface exploration program builds on results that were released in November, 2017, and the 2016 program which successfully tested a north-south geophysical anomaly located about 1,219 metres northwest of the current mine workings.

The drilling has identified a zone of high-grade mineralization within the Zeus structural corridor. The high-grade zone is within 122 metres of surface and is open in all directions.

Additional drilling is scheduled in 2018 as Klondex expects to continue to infill and extend this significant high grade mineralization, the company said.

“The final 2017 drill results continue to support the tremendous potential to expand the high grade resource in the Fire Creek District,” said Brian Morris, Klondex’s Senior Vice-President, Exploration.

“In addition, we are seeing evidence of a halo of lower grade mineralization outside the high grade structures, similar to the Fire Creek open pit resource,” he said. “Moreover, geophysics suggest that Zeus is part of a major 1,981-metre structural corridor which we plan to continue to define along strike in 2018.”

Klondex said it plans to release its 2017 operating results and 2018 guidance metres before North American financial markets open on February 7, 2018. This information will be discussed at an Investor Day meeting on the same day.

Klondex shares advanced 2.9% or $0.08 to $2.84 on Friday. The 52-week range is $7.73 and $2.10.

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