KLONDEX MINES LTD. Forward Looking Statements

Transcription

1 TSX: KDX OTCQX:KLNDF KLONDEX MINES LTD. TMX/Equicom On The Radar June 19, 2012 Gold Exploration and Development in the Heart of Nevada Gold Country Forward Looking Statements Forward-Looking Statements. This presentation may include certain statements that may be deemed forward-looking statements." All statements in this presentation or those made by Klondex management or representatives, other than statements of historical facts, including the likelihood that bulk sampling will generate significant revenues and the possible results of future exploration are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forwardlooking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include unsuccessful exploration results, inability to obtain necessary permits and regulatory approvals, changes in metals prices, currency fluctuations, changes in the availability of funding for mineral exploration, unanticipated changes in key management personnel, unavailability of necessary equipment and contractors, and general economic conditions. Mining is an inherently risky business. There is no guarantee that the Company will be able to carry out their work programs or that the results of those work programs will be successful. Accordingly, the actual results may differ materially from those projected in the forward-looking statements. For more information on the Company and the risks and challenges of their businesses, investors should review the Company filings available at and. CAUTIONARY NOTE TO U.S. INVESTOR CONCERNING RESOURCES This presentation uses the terms Indicated and Inferred resources as defined in accordance with National Instrument While such terms are recognized and required by Canadian Securities laws, the United States Securities and Exchange Commission does not recognize them. Under the United States standards, mineralization many not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve calculation is made. Inferred Resources have a great amount of uncertainty as to their economic and legal feasibility and readers are cautioned not to assume that all or any part of the inferred resources exists or is economically mineable. 2

2 Company Overview Gold exploration company with 4 properties in Northern Nevada Fire Creek, Reef, Hot Springs Point and Maggie Creek 13,600 acres (21.3 sq. mi) of fee & claim land All located in the Heart of the Northern Nevada Gold Belt Fire Creek is the flagship property Indicated resource of 1.65 million oz. of gold at 9.9 GPT* Inferred resource of 0.46 million oz. of gold at 8.2 GPT* Resource update planned: completion targeted for Q ,200 acres (17.5 sq. mi.) of fee & claim land 100% owned by Klondex 2009 IP (induced polarization) survey identified 15 new resource targets Further exploration potential surrounding Fire Creek deposit Active surface and underground exploration programs Transitioning from surface to underground exploration Permitted for underground in-fill drilling and bulk sampling Completed first full year of underground operations Bulk sampling slated to commence by end of Q Preliminary metallurgical testing completed and positive (90% RR) * NI Compliant, May Fire Creek - Project Location 100% owned project in heart of Nevada Gold District Area is host to world class gold deposits Large land package of 11,208 acres (17.5 sq miles) Accessible via federal & state roads Close to electrical grids; fresh water well on-site Significant mining infrastructure and talent pool in area Pipeline Cortez/Barrick: 29 miles Carlin mills/newmont: 48 miles Battle Mountain: 51 miles Mule Canyon mine: 16 miles Elko: 64 miles 4

3 Fire Creek Mineral Zones 5 Fire Creek Resource as of May 21, 2011 Gold Cut Off (g/t) Category Metric Tonnes Grade (g/t) Gold (0z) 4.0 Indicated 5,176, ,647, Inferred 1,732, , Indicated 2,145, ,215, Inferred 555, ,794 Reference: Technical Report released September 12,

4 Longitudinal Section 7 Fire Creek Deposit Exploration Potential 8

5 Fire Creek 2012 Surface Exploration 9 Fire Creek Surface Drill Program 2012 Surface Exploration: Surface drilling program begun Focus on Main Zone mineralization Support underground in-fill drilling Targeting over 15,000 meters (49,000 ft.) Micon International Limited engaged to assist in preparation of updated technical report 2011 Surface Exploration Results: Results in 33 holes totalling 15,726 meters (51,599 ft) Extended Main Zone Veins to East (FC1126 & 27) Discovered Two Vein extensions in north Main Zone (FC1104, 24, 36) Discovered New Vein zone between Main and Far North Zones (FC1107RC) Key intercepts: 30.9 g/t Au over 4.9m, incl g/t Au over 1.2 m (FC1126) 10.2 g/t Au over 16.3m, incl g/t Au over 1.2 m (FC1104) 13.3 g/t Au over 1.3m, incl g/t Au over 0.6m (FC1107RC) 10

6 Fire Creek Main Zone Core Visible Gold 11 Underground Strategy Completed first year of operations in April 12 Developing 3.7m x 4.3m (12x14 ft) ramp to mineralized zones Decline enables underground in-fill drilling and initial production via bulk sampling: In-fill drilling is more accurate and efficient Small scale facility designation allows exploration bulk sampling of 120,000 short tons (36,500 short tons/year) Will target higher-grade Main Zone material to generate cash flow to help fund operations. Small Mines Development (SMD) is underground contractor 12

7 Underground Decline Total advance to date 3,305 ft. or 1,007 meters, including 2,433 ft. or 742 meters of decline On target of goal to start bulk sampling Initial bulk sampling expected by end of Q Underground In-Fill Drill Program Underground definition drilling started Q Goal is to tighten drill spacing and further define Main Zone mineralization 2012 targets 20,000 meters of drilling 29 holes for 7,024 meters completed to date Approximately 5 holes remain to be drilled Program will yield ongoing drill results reporting 2011 completed 18 holes for 3,774 meters Gold mineralization encountered in 16 holes reported Initial results suggest apparent continuity of gold mineralization between surface holes 14

8 Positive Underground In-Fill Results Klondex Fire Creek Project 2011 Underground Drilling Highlights through April 12, 2012 ( 2.0gAupertonnecut off) HoleNo. Length Grade(g (meters)* Au/tonne) FC11002U FC11003U FC11004U including FC11005U including FC11006U FC11009U FC11010U including FC 11011U including FC including FC U including FC11014U FC U including FC U including FC U including FC U including FC U including *Apparent truewidths ofthemineralizedzonesrangefrom50 90percentofthetabulatedlengthbasedonpreliminarymodeling. KlondexFireCreekProject 2012UndergroundDrillingHighlights throughjune4,2012 (>1gramAuperTonnecut off) HoleNo. Length Grade (meters)* (gau/tonne) FC U including including and including including including including including FC12 02U and including including FC12 31U FC12 33U including and including including and including and FC U including including and including including FC U including FC U and including and and *Apparent"truewidths"ofthemineralizedzonesrangefrom 50 90%ofthetabulatedlengthbasedonpreliminarymodeling. 15 Vulcan Plan Views Fire Creek Mineralized Zones with Faults and Underground Design Mineralized Zones with Topography and Underground Design Decline face location April 12,

9 Decline June 10 Total decline 2,200 ft. Distance to vent raise 500 ft. 17 Underground Workings with Mineralization and Faults 18

10 Processing Strategy Initial processing plan: Toll-mill bulk sample at nearby custom facility Phase 2 processing plan: Purchase mill within trucking distance Considering four mills within miles Capacities of 250, 400, 750 or 3,500 tpd Utilize excess capacity for KDX toll-milling Alternative processing plan: Construct 1,000 tpd facility onsite 19 Share Data Current share price implies valuation of $48.32 per indicated gold ounce. Symbol TSX: KDX; OTCQX: KLNDF Share Price C$1.70 at 6/12/12 52 Week Range C$1.67 to C$3.33 Average Volume (3M) 57K Shares Issued and Out 47.0M Fully Diluted 59.1M Market Cap C$79.9M Management Ownership 14% of Fully Diluted Cash Position C$17M as of 3/31/12 Debt: Gold Loan + Note C$16M as of 3/31/12 20

11 Management & Board Blane W. Wilson Jorge Avelino Brendan J. Donohoe William J. Solloway Robin Goad Ken Stowe Andre Douchane Warren Moysey Chad Williams President and CEO / Director CFO Treasurer Chairman/Director Director Director Director Director Director 21 Staff and Consultants Doug Carter Surface Superintendent Fire Creek Jim Newton Underground Mine Superintendent Fire Creek Larry Wilson Environmental and Permitting Coordinator Fire Creek Rick Magness Nevada Controller Fire Creek Steve McMillin Chief Geologist Fire Creek David Bixler Safety and Security Supervisor Fire Creek Richard Seidl Senior Geologist Fire Creek Hazel Reynolds Geologist Fire Creek Zachary Williams Geologist Fire Creek David Fox Financial Consultant Toronto Richard Kern Consulting Geologist Reno Jeff Phinesey Consulting Geologist Fire Creek Keith Jones SMD Mine Engineer Fire Creek Dave Joggerst SMD Project Manager Fire Creek 22

12 Fire Creek Milestones Raised over $50M to fund Fire Creek since Q4 10 Received all remaining permits for bulk sampling program Q1 11 Mobilized Underground Mining Contractor Q1 11 Began Advance of the Underground Decline Q2 11 Installed Ground Water Monitoring Wells #2 & #3 Q3 11 Initiated underground in-fill drilling Q3 11 BLM OKed for surface exploration south of Fire Creek Q4 11 Geo Technical holes for vent raise completed by AMEC Q1 12 File for full scale mining permits Q2 12 Complete connection to high-voltage power grid Q3 12 Bulk sampling targeted start Q3 12 Anticipated Technical Report Update via Micon Int l Q Klondex Catalysts Ideal location: North Central Nevada Gold resource: 1.6M oz. indicated and 0.46M oz. inferred Grade: Average indicated grade 9.9 g/t gold (0.29 oz./ton) Timing: Potential for cash generation starting Q Low Risk: Permitted, negligible geopolitical, well drilled Well Funded: ~$14M cash + bulk sampling proceeds Proven Mgmt. & Board: Deep Nevada gold mining/milling experience Blue Sky: ~25% of property explored to date Mining Contractor: SMD highly skilled underground contractor Small Share Base: 46.8M shares out / 59.1M fully diluted Favorable Gold Pricing: Gold prices at all time high ranges Attractive Valuation: Market Cap of C$79.6M (C$1.70/share) 24

13 Research Coverage Fraser Mackenzie Limited Michael Starogiannis Mackie Research Capital Barry Allan MGI Securities Marc Pais Very Independent Research John Tumazos Churchill Research, Inc. Mike Churchill Gold Energy & Tech Stocks Newsletter The Mining Speculator Greg McCoach Jay Taylor THANK YOU FROM YOUR KLONDEX TEAM Investor Contacts: David Collins / Antonia Trigiani Catalyst Global LLC KDX@catalyst-ir.com