KLDX Klondex Mines Ltd. (delisted)

Klondex Mines Ltd. (TSX: KDX and OTCQX: KLNDF), a Nevada gold exploration company, today reported long intercepts of near-surface, oxidized gold mineralization for the recently completed surface drilling program at its Fire Creek gold project in Lander County, Nevada. Fifteen reverse circulation (RC) holes were drilled for a total of 2,781 meters (9,124 feet). Ten of these holes were extended by core drilling to test for deeper, high-grade gold veins. Results presented here are for the RC portions of the holes only, as summarized in Table 1. Klondex expects to announce assay results for the core-hole extensions in the coming weeks when they are complete.

Historically, exploration at Fire Creek focused on this disseminated, low-grade, gold mineralization as an open-pit, heap-leach project. However, since Klondex resumed exploration on the property in 2004, exploration has successfully targeted the deeper, high-grade vein system. The rise in gold prices since then makes it timely to revisit the bulk-minable potential of the low-grade mineralization, in addition to the existing underground resource.

Project Overview:

As previously disclosed in the Company’s June 30, 2012 MD&A, in July Klondex deferred further surface and underground drilling activity at Fire Creek in order to focus its efforts on the advancement of the Fire Creek resource model and geology. The Company will report the remaining results from its 2012 surface and underground drilling programs in the coming months.

The Board also decided to delay the preparation of an updated technical report until the Company has concluded a thorough review of the Fire Creek project. This is expected to take several months and will delay the updated technical report until sometime in the first half of 2013.

Drilling Overview:

The 15-hole surface-drilling program was designed to delineate gold mineralization in the Main Zone. RC pre-collar holes were drilled from the surface to approximately 183 meters in depth, and then certain holes were extended by core drilling. The program consisted of five fans of three holes each, as shown in Figure 1 (click here). Table 2 shows the depths, azimuths and dips of the pre-collars.

Geology and Mineralization

The target area drilled is composed of a Tertiary basalt lava flow and interbedded tuff sequence typical of the Northern Nevada Rift, a NNW-trending regional structural feature which hosts numerous epithermal gold deposits, including Fire Creek. The stratigraphy is divided into an upper basalt package, a clay altered tuff unit, and a lower basalt package. The tuff is a marker unit that may represent a hiatus in between deposition of the lower and upper basalts; it occurs in all the holes from a depth of approximately 15 meters to 58 meters.

The highest assays in the RC pre-collars occur in the oxidized material. Oxidation extends from surface to approximately 96 meters, while the gold mineralization extends to depths of over 300 meters. Alteration within the basalts is composed of variable clay, silica, and calcite, with iron oxides and pyrite defining the transition from oxidized to reduced material. The mineralized intervals are commonly associated with either pervasive silica or silica veinlets. Metallurgical test work is required before assumptions can be made about gold recovery. Klondex is considering options for modeling, metallurgy, and further drilling. Table 1 shows intercepts relative to oxidized and reduced rock.

  Table 1:

Significant intercepts from the reverse circulation portions of the 2012 surface drilling program.

From

To Thickness From

To 

Thickness

Avg. Grade

Hole Id

(m)

(m)

(m)   

(ft) (ft)

(ft)  

Gold-ppm*

OX** FC12-07S 12.2 45.7 33.5 40 150 110 0.61 O including 16.8 19.8 3.0 55 65 10 2.03 O including 30.5 35.1 4.6 100 115 15 3.53 O including 39.6 44.2 4.6 130 145 15 3.03 R and 50.3 70.1 19.8 165 230 65 0.88 R including 62.5 65.5 3.0 205 215 10 5.31 R and 74.7 80.8 6.1 245 265 20 0.23 M and 108.2 161.5 53.3 355 530 175 0.45 R and 170.7 182.9 12.2 560 600 40 0.27 R FC12-08S 0 38.1 38.1 0 125 125 0.81 O including 30.5 35.1 4.6 100 115 15 3.42 O including 50.3 51.8 1.5 165 170 5 6.02 O and 42.7 114.3 71.6 140 375 235 0.63 O/R including 50.3 56.4 6.1 165 185 20 2.33 O and 167.6 179.8 12.2 550 590 40 0.19 R FC12-09S 0 38.1 38.1 0 125 125 0.64 O including 30.5 32.0 1.5 100 105 5 5.05 O and 67.1 93.0 25.9 220 305 85 0.27 O and 123.4 182.9 59.4 405 600 195 0.30 R FC12-10S 0 7.6 7.6 0 25 25 1.28 O and 15.2 38.1 22.9 50 125 75 0.48 O/M and 65.5 83.8 18.3 215 275 60 0.20 O and 138.7 166.1 27.4 455 545 90 0.27 O/R and 175.3 182.9 7.6 575 600 25 0.32 R FC12-11S 0 7.62 7.6 0 25 25 0.23 O and 15.2 73.2 58.0 50 240 190 0.63 O including 36.6 38.1 1.5 120 125 5 5.69 O and 108.2 112.8 4.6 355 370 15 0.20 R and 117.3 152.4 35.1 385 500 115 0.21 R and 161.5 179.8 18.3 530 590 60 0.19 R FC12-12S 0 65.5 65.5 0 215 215 0.45 O and 70.1 115.8 45.7 230 380 150 0.33 O/R and 144.8 167.6 22.9 475 550 75 0.26 R and 173.7 179.8 6.1 570 590 20 0.21 R FC12-13S 0 41.1 41.1 0 135 135 0.81 O including 0 1.5 1.5 0 5 5 4.39 O including 21.3 25.9 4.6 70 85 15 2.82 O and 59.4 73.2 13.7 195 240 45 0.23 O and 114.3 128.0 13.7 375 420 45 0.20 R and 155.4 163.1 7.6 510 535 25 0.14 R and 167.6 173.7 6.1 550 570 20 0.26 R FC12-14S 0 45.7 45.7 0 150 150 0.89 O including 0 3.0 3.0 0 10 10 3.79 O including 41.1 44.2 3.0 135 145 10 2.75 O and 59.4 82.3 22.9 195 270 75 0.20 O/R and 111.3 134.1 22.9 365 440 75 0.25 R and 161.5 167.6 6.1 530 550 20 0.16 R and 176.8 182.9 6.1 580 600 20 0.18 R FC12-15S 1.5 71.6 70.1 5 235 230 1.17 O including 29.0 32.0 3.0 95 105 10 2.40 O including 33.5 39.6 6.1 110 130 20 4.06 O including 42.7 44.2 1.5 140 145 5 10.55 O and 79.2 82.3 3.0 260 270 10 0.25 O and 88.4 112.8 24.4 290 370 80 0.32 R and 138.7 182.9 44.2 455 600 145 0.50 R FC12-16S 1.5 10.7 9.1 5 35 30 0.55 O and 16.8 54.9 38.1 55 180 125 0.79 O and 62.5 67.1 4.6 205 220 15 0.25 O and 111.3 153.9 42.7 365 505 140 0.25 R FC12-17S 3.05 71.6 68.6 10 235 225 0.66 O including 36.6 39.6 3.0 120 130 10 2.31 O and 100.6 123.4 22.9 330 405 75 0.30 R and 141.7 153.9 12.2 465 505 40 0.57 R and 163.1 167.6 4.6 535 550 15 0.17 R and 173.7 182.9 9.1 570 600 30 0.53 R FC12-18S 0 48.8 48.8 0 160 160 0.71 O FC12-19S 3.0 57.9 54.9 10 190 180 1.45 O including 32.0 39.6 7.6 105 130 25 2.88 O including 42.7 56.4 13.7 140 185 45 3.22 O and 74.7 102.1 27.4 245 335 90 0.34 O/M and 118.9 147.8 29.0 390 485 95 1.25 O including 138.7 146.3 7.6 455 480 25 2.49 O and 152.4 239.3 86.9 500 785 285 1.02 M/R including 169.2 173.7 4.6 555 570 15 10.66 M including 198.1 201.2 3.0 650 660 10 3.11 R and 246.9 335.3 88.4 810 1100 290 0.79 R including 317.0 320.0 3.0 1040 1050 10 4.88 R FC12-20S 6.1 123.4 117.3 20 405 385 1.87 O including 35.1 47.2 12.2 115 155 40 12.96 O and including 38.1 42.7 4.6 125 140 15 31.87 O including 61.0 65.5 4.6 200 215 15 2.99 O and 128.0 131.1 3.0 420 430 10 0.43 O/M and 135.7 141.7 6.1 445 465 20 0.49 R and 150.9 182.9 32.0 495 600 105 0.33 R FC12-21S 21.3 120.4 99.1 70 395 325 1.08 O including 64.0 68.6 4.6 210 225 15 2.40 O including 71.6 82.3 10.7 235 270 35 3.96 O and 152.4 161.5 9.1 500 530 30 0.88 R and 167.6 181.4 13.7 550 595 45 1.06 R True widths cannot be determined at this time. *0.15 ppm cutoff, 3.5 meters maximum internal waste **Oxidation O=oxidized, M=mixed, R=reduced   Table 2

Reverse circulation (RC) hole depths, azimuths, and dips.

Hole Id Depth-m Depth-ft Azimuth Dip FC12-07S 182.9 600 78.3 -51.2 FC12-08S 182.9 600 80.4 -70.3 FC12-09S 182.9 600 77.1 -45.4 FC12-10S 182.9 600 85.4 -45.3 FC12-11S 182.9 600 93.7 -51.0 FC12-12S 182.9 600 93.6 -65.6 FC12-13S 182.9 600 103.0 -45.2 FC12-14S 182.9 600 103.9 -51.5 FC12-15S 182.9 600 104.4 -66.5 FC12-16S 182.9 600 116.3 -43.7 FC12-17S 182.9 600 114.2 -60.9 FC12-18S 48.8 160 116.3 -42.8 FC12-19S* 355.1 1165 129.2 -40.0 FC12-20S 182.9 600 129.8 -50.6 FC12-21S 182.9 600 128.9 -53.9 *Completed as RC in its entirety  

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 mining prospect located in a region of prolific gold production that is near power, transportation, mining infrastructure and several milling facilities. As of August 29, 2012, Klondex had 47.3 million shares issued and outstanding, and 59.1 million shares on a fully diluted basis.

Sample results cited in this news release were obtained from reverse circulation holes completed by Rimrock Drilling, an independent contractor working under the direction of Klondex staff. Assays were determined by ALS Minerals, Reno, Nevada, an independent analytical laboratory.

The content of this press release has been reviewed by Steven L. McMillin, CPG-11031 (American Inst. of Prof. Geol.), Project Manager and Chief Geologist for Klondex Mines Ltd., as a non-independent Qualified Person.

This news release contains forward-looking statements, including about current expectations on the timing of project development. These forward-looking statements entail various risks and uncertainties, are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, 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; the risks and hazards associated with underground operations. Risks and uncertainties about the Company’s business are more fully discussed in the Company’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 statement or to update the reasons why actual results could differ from such statements unless required by law.

On Behalf of Klondex Mines Ltd.

William MatlackInterim CEO