Klondex Mines to Acquire Rice Lake Mine and Mill Complex

Klondex Mines Ltd. (TSX:KDX,NYSEMKT:KLDX) announced that it’s entered into a definitive agreement to acquire the Manitoba-based Rice Lake mine and mill complex. It will pay US$32 million to do so.
Acquisition highlights are as follows:

• Cash Transaction with Zero Dilution to Klondex Shareholders;
• Production Ready Asset in a Top Ranked Mining Jurisdiction: Fully permitted operation consisting of three main deposits that comprise the Rice Lake Mine and a milling complex in Manitoba, Canada;
• Leverages Klondex’s Technical Expertise in Narrow-vein Underground Mining: Klondex will apply the same principles used at Fire Creek and Midas at Rice Lake;
• Extensive Surface and Underground Infrastructure: Approximately C$375 million in historical capital investment since 2007, including extensive underground development and a fully functional 2,500 tons per day milling facility;
• Immediate Value Opportunities: Potential to re-process gold contained in tailings and redeploy excess equipment to Fire Creek and Midas as the Rice Lake Mine is “right-sized”;
• Significant Exploration Opportunity and 400km²Land Package: Several opportunities to extend mineralized zones down-dip and along strike as well as excellent targets for new discoveries; and
• Proven Gold Production: Over 450 kozs of gold production since 2000; as of December 31, 2014, estimated proven and probable gold reserves were 455kozs and measured and indicated mineral resources were 634 kozs of gold and inferred mineral resources were 1,101 kozs of gold. (see “Rice Lake Historical Mineral Estimate” below)

Paul Andre Huet, president and CEO at Klondex, commented:

This acquisition represents an excellent opportunity for Klondex to acquire a production ready gold asset in a top ranking mining jurisdiction in Canada. Rice Lake is similar to the Midas acquisition in that we will not only benefit from the redeployment of equipment and other mining synergies with our existing operations, but we will also be able to apply our team’s demonstrated operational expertise to a deposit ideally suited for narrow vein underground mining techniques. Even with this acquisition, our number one strategic objective is to fill the Midas mill from our Nevada operations. Fire Creek and Midas continue to be our flagship assets and we will not lose our focus on these core properties.

Click here to read the full Klondex Mines Ltd. (TSX:KDX,NYSEMKT:KLDX) press release.