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TORONTO (miningweekly.com) – Nevada-focused narrow-vein gold miner Klondex Mines on Friday announced that it would start an exploration programme at its Midas Mine, near Winnemucca.
Following a detailed review of Midas' historic database, Klondex said it had identified multiple drilling targets to assess over the next 18 months. The exploration programme would include surface and underground drilling of about 73 200 m, plus 1 220 m of underground development.
Having completed bought-deal financing for gross proceeds of C$16.1-million in July, Klondex had scheduled the exploration work to start in the last two weeks of this month.
Klondex finalised the purchase of Midas from a subsidiary of Newmont Mining in February for an aggregate purchase price of about US$83-million.
The Midas deal not only secured a long-term milling solution for Klondex but also lifted its long-range free cash flow and margins, adding a producing property to its asset portfolio with the potential to increase throughput, recoveries and mine life.
The main objectives of the Midas drill programme included advancing the 805 and 905 veins to support mine planning and mine development; to develop additional data to prepare an updated mineral resource estimate by evaluating remnant targets on historic veins, employing more selective mining methods and completing drilling and technical work on known veins, including Queen, 777 and SR; and to discover new mineralisation by testing the extensions of known structures and exploring new priority targets in the Opal Hill, Rico and Rattler zones.
"Following our operational success in the second quarter and our subsequent bought deal financing, we are initiating our Midas exploration programme with the intent of increasing its mineral resources. In any epithermal system, the most difficult part of the exploration programme is finding the targets.
“We have the advantage that the targets have already been identified through previous drilling. Our goal is to gain a better understanding of the quality and character of the mineralisation. We are optimistic about Midas' potential surrounding the historically mined veins, given our extensive experience and knowledge of this property, and by working with our geologists and third-party expertise to continue enhancing our understanding of the mineralisation,” Klondex COO Brent Kristof said.
American Drilling would complete the surface and underground drilling and Magorian Mine Services and American Mining and Tunneling (AMT) would undertake the underground development. AMT was one of four mining contractors to share first place for the 2013 Safest Mining Contractor, awarded by the Nevada Mining Association for their work at Fire Creek, as they had no reportable injuries in 2013.
Despite Klondex not having made a formal production decision at its flagship Fire Creek deposit, owing to it still being in the bulk-sampling phase, the ore extracted from Fire Creek under the bulk sample permit was processed through the Midas mill, generating the first revenue from the project during the second quarter ended June 30.