Klondex Mines and French Gulch Nevada Mining Corp. Sign Toll Milling Agreement

Klondex Mines Ltd. (TSX:KDX,OTCQX:KLNDF) subsidiary, Klondex Midas Operations, announced a toll milling agreement beginning April 17, 2014, with French Gulch Nevada Mining Corp. for the processing of gravity concentrates produced from the Washington Mine at Klondex’s Midas mill. Under the agreement, all dore produced from the concentrate will become property of Klondex. Klondex, in turn, will pay French Gulch the value of the recovered gold minus all toll mill charges.

As quoted in the press release:

The toll milling agreement with French Gulch Nevada Mining Corp has a one year term beginning April 17, 2014, and is subject to be renewed annually. Under the terms of the agreement, gravity concentrates from the Washington Mine, located in French Gulch, California, will be delivered to the Midas Mill for processing. The toll milling agreement is structured so that all dore produced from the concentrate will become the property of Klondex, and Klondex will pay French Gulch the value of the recovered gold minus all toll mill charges.

Klondex Mines VP Corporate Development, Mike Doolin, said:

This is a mutually beneficial agreement for both parties. Processing third party material makes excellent use of the excess capacity at the Midas Mill. Toll milling provides the Company with additional revenue, which will increase the cash flow from the operations.

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