Klondex Mines has entered into an agreement with Newmont Mining to begin processing Klondex’s higher grade mineralised material from the Fire Creek gold and silver project in Nevada this month. Under the agreement, Newmont is responsible for the handling, milling and refining of minerals as well as tailings and disposal, and Klondex is responsible for delivering the material. Shipments will be in lots of 1,000 t up to 9,000 t in 2013.

The shipments will continue as needed through to the end of 2014 as high grade material is generated, with the first shipment of 1,000 t scheduled to begin in August 2013 and processing is expected to follow immediately upon receipt of the first lot.

An initial payment of 60% will be paid to Klondex by Newmont, based on Newmont assays. The 40% balance will be paid based upon finalisation of settlement assays. The first payment from processing is expected in August 2013.

Paul Huet, Klondex President and CEO said, “Testing this high-grade material not only gives us the much needed metallurgical information on Fire Creek mineralisation, but it allows us the opportunity to monetise mineralised material generated from the trial exploration drifting from the Joyce and Vonnie structures. Proceeds from the processing of this material will be used towards funding our own waste development and a second drill to follow up on recent discoveries. Newmont’s terms to process the Fire Creek material provide great opportunity and support for both parties based on the processing costs, improved recoveries and resulting payables. All near-term shipments of mineralised material will be sent for processing to Newmont, including May’s material previously slated for direct-smelter processing. The agreement with Newmont continues our ongoing focus of de-risking Fire Creek and building Klondex into a profitable and strong mining company.”