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Klondex Mines Announces $14-Million Financing Deal

US miner Klondex Mines Ltd. has announced it has entered into an agreement to raise $14 million in financing to accelerate exploration and development a...

Admin
|Jul 14|magazine4 min read

US miner Klondex Mines Ltd. has announced it has entered into an agreement to raise $14 million in financing to accelerate exploration and development at its Midas and Fire Creek properties.

The gold producer said last week it will raise the money through a private placement deal with GMP Securities L.P., RBC Dominion Securities Inc., M Partners Inc., Industrial Alliance Securities Inc., Dundee Securities Ltd. and Mackie Research Capital Corporation.  

The deal allows the companies to purchase 7.0 million common shares of Klondex at a price of $2.00 a piece including an option, any time up to 30 days after closing, to purchase an additional 1.05 million shares to cover their over-allotment position.  

Klondex is preparing to advance its Fire Creek project while also working to improve and expand the operations at its new Midas mine. The company is planning to incorporate $26 million of sustaining capital into both projects, with $5 million of exploration drilling allotted to each site.

Purchased in February from Newmont Mining, the Midas property is located 112 miles from the company’s Fire Creek project, providing upside for Klondex in terms of equipment, milling operations and expansion opportunities.  

The company is also preparing a new mining model for Midas to prolong the mine life as well as employing innovative mining methods in new areas.

The deal is expected to close July 30, 2014 with all the necessary regulatory approvals, including the approval of the Toronto Stock Exchange (TSX).

Based in Nevada, Klondex Mines is engaged in the exploration, development and production of gold and silver at its Fire Creek project in north central Nevada and newly acquired Midas property located 110 miles north of Fire Creek.