Klondex posts drill results from Rice Lake prior owner

2016-04-14 09:02 ET - News Release

Mr. Paul Huet reports

KLONDEX UPDATE ON RICE LAKE DEVELOPMENT ACTIVITIES

Klondex Mines Ltd. has provided an update on the company's exploration and development activities at its Rice Lake mine in Manitoba, Canada. The drill results summarized below were conducted by a prior owner of the Rice Lake project. The company intends to follow up on the 15-hole drill program later this year. A summary of the results of this prior drill program is set out below.

Rice Lake drilling highlights from the fourth quarter of 2014

• 644-14-009: 0.15 ounce per ton gold over 14 feet, or 5.1 g/t over 4.3 m (hangingwall):
• Including 0.30 ounce per ton Au over 5.3 feet, or 10.3 g/t over 1.6 m;
• 644-14-011: 0.59 ounce per ton Au over 2.3 feet, or 20.4 g/t over 0.7 m (hangingwall);
• 644-14-016: 0.70 ounce per ton Au over 4.2 feet, or 24.1 g/t over 1.3 m (foot wall), and 0.53 ounce per ton Au over 7.3 feet, or 18.1 g/t over 2.2 m (91 vein);
• 644-14-017: 0.42 ounce per ton Au over 10.0 feet, or 14.3 g/t over three m (foot wall);
• Including 0.76 ounce per ton Au over 4.3 feet, or 26.0 g/t over 1.3 m;
• 644-14-018: 0.43 ounce per ton Au over 22.2 feet, or 14.8 g/t over 6.8 m (foot wall);
• Including 0.57 ounce per ton Au over 16.4 feet, or 19.6 g/t over five m;
• 644-14-019: 0.54 ounce per ton Au over 17.3 feet, or 18.4 g/t over 5.3 m (foot wall);
• 644-14-021: 1.89 ounce per ton Au over 14.0 feet, or 64.7 g/t over 4.3 m (foot wall), and 0.53 ounce per ton Au over 3.3 feet, or 18.1 g/t over one m (91 vein).

A total of 15 holes totalling 6,485 feet (1,977 m) were drilled during the fourth quarter of 2014 by San Gold Corp. from the 6440 drill station. These holes were targeting the downdip extension of the 91 vein. This drilling identified the potential for a new vein in the footwall of the 91 vein adjacent to the 24 level incline. Moreover, an additional mineralized structure was intersected in the hangingwall of the 91 vein. This mineralization occurred where northeast and northwest structures intercept the San Antonio mining unit (SAM) which is the host rock to much of the historic mining at the Rice Lake mine. Drilling is planned for later this year to follow up these high-grade intercepts.

Project development activities continue to advance and are on schedule and within budget.

Project development highlights

• Rice Lake project has completed 83 days without a lost-time incident.
• The notice to recommence mining and milling operations was approved by the director of Manitoba Mineral Resources in March, 2016.
• The Shafeet project is complete. One hundred per cent of the guides have been replaced.
• Track repair is continuing. Approximately 1,500 metres of track has been ditched and repaired at the 2600 level; the project is about 55 per cent complete.
• The company initiated testing of narrow-vein long-hole design to reduce dilution.
• New underground shop and new gear storage cut-outs are 80 per cent complete.
• Initial metallurgical testing on existing tailings indicate the tailings can be processed through the existing mill flow sheet.

Paul Huet, president and chief executive officer, commented: "Our progress at the Rice Lake mine has proceeded better than expected. The results of the fourth quarter 2014 drill program noted above are very encouraging and suggest the opportunity for new high-grade discoveries at Rice Lake." Mr. Huet continued: "Our progress in refurbishing the track and the Shafeet is on budget and on schedule and we are excited about the successful testing of long-hole stoping at the mine. We continue to expect to be in a position to announce a production decision in the second half of this year, and we remain grateful to be part of such an exceptional and supportive mining community in Bissett."

Underground drill core samples were assayed on-site in the then-owner's assay lab using the fire assay method with an atomic absorption and gravimetric finish. The quality control and assurance program included the insertion of standards, the retention of pulps and rejects, and spot checks utilizing independent labs including TSL Laboratories in Saskatoon, Sask., and Accurassay Laboratories in Thunder Bay, Ont. The core lengths are actual lengths as drilled and were not adjusted for the true width of the mineralized zones.

Scientific and technical information in this press release has been reviewed and approved by Brian Morris (AIPG CPG-11786), a qualified person within the meaning of National Instrument 43-101.

Qualified person

Scientific and technical information in this press release has been reviewed and approved by Brian Morris (AIPG CPG-11786), a qualified person within the meaning of NI 43-101.

We seek Safe Harbor.