VANCOUVER, BC--(BUSINESS WIRE)--Klondex Mines Ltd. (TSX: KDX) ("Klondex", or the "Company"), a Nevada gold and exploration and development company, today reported the completion of a previously announced C$7 million placement of 9% Senior Unsecured Notes due January 5, 2015, which notes were issued to investors at a 98% original issue discount. Proceeds from the note placement plus available cash were used to repay all outstanding borrowings and related discount amortization, totaling US$10.9 million, under Klondex’s former debt facility with Waterton Global Value, L.P.
Paul Andre Huet, Klondex’s President & CEO, commented, “Extinguishing the Waterton facility was a top priority when I joined Klondex last fall. We have reduced our cash burn from debt service by over US$780,000 per month for the next 14 months, freeing us to focus our cash on productive exploration and development initiatives at our Fire Creek gold project. The new structure also substantially de-risks the Company by removing the security lien on our Fire Creek property.”
Investors in the note offering received a total of 525,000 warrants (75 warrants per C$1,000 investment), each entitling the purchase of one Klondex Mines common share at a price of C$1.55 for a period of 18 months following their date of issue. The warrants are callable if Klondex Mines’ common shares close above C$2.79 for 20 consecutive days. The warrants and common shares underlying the warrants are subject to a four month plus one day hold period pursuant to Canadian securities laws.
About Klondex Mines Ltd. (www.klondexmines.com)
Klondex Mines is focused on the exploration and development of its Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling gold mining prospect located in a region of prolific gold production that is near power, transportation, mining infrastructure and several milling facilities.
This news release contains forward-looking statements, including about current expectations on the timing of project development and related permitting. These forward-looking statements entail various risks and uncertainties, are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the global economy; the price of gold; operational, funding and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations. Risks and uncertainties about the Company’s business are more fully discussed in the Company’s disclosure materials filed with the securities regulatory authorities in Canada and available at www.sedar.com. Readers are urged to read these materials. Klondex assumes no obligation to update any forward-looking statement or to update the reasons why actual results could differ from such statements unless required by law.
On Behalf of Klondex Mines Ltd.
President & CEO