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- Sets Annual Meeting for July 5, 2007 -
Vancouver, British Columbia - May 22, 2007 - Klondex Mines Ltd. (TSX: KDX) today announced that its Board of Directors has approved the adoption of a ShareholderRights Plan (the "Rights Plan"), subject to approval of the Company's shareholders at its annual meeting planned for July 5, 2007. The Rights Plan is being adopted to ensure that, in the event of a take-over bid being made for common shares of the Company, all shareholders will receive full and fair value for their shares and that the Board, on behalf of the Company and all of its shareholders, will have the time and opportunity to evaluate the bid and its effects, to seek alternative bidders and to explore, develop and evaluate other ways of maximizing shareholder value.
The Rights Plan is not being adopted in response to any proposal to acquire control of Klondex Mines. The Board elected to put such a plan in place at this time in light of the Company's current market valuation, the increase in Klondex's Indicated Mineral Resource that was achieved over the past year, the Company's expectations for its 2007 exploration drilling program as well as its planned underground development program expected to launch this fall and its bulk sampling effort targeted to begin in early 2008. In a September 2006 NI 43-101 filing, Klondex reported an Indicated Mineral resource estimated at 1,636,555 tonnes of ore bearing an estimated 1,045,738 ounces of gold.
The Board proposed the adoption of the Rights Plan to protect the shareholders of the Company from any possible strategies to take control of the Company without providing full value to the Company's shareholders. Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders are deemed to be "Permitted Bids." A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions, must remain open for 60 days. In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of Klondex Mines at a significant discount to the market price of the common shares at that time.
The Rights Plan has been approved, subject to certain conditions, by the Toronto Stock Exchange and will be presented for ratification by the shareholders at the Klondex Mines Annual Meeting to be held on July 5, 2007. If ratified by shareholders, the Rights Plan will have a term of five years expiring on the date of the Corporation's annual general meeting in 2012.
About Klondex Mines Ltd.
Klondex Mines is a gold exploration company focused on the development of its high grade Fire Creek deposit where to date the Company has identified an Indicated Mineral Resource in excess of 1,000,000 ounces of gold. Fire Creek is located in the Battle Mountain-Eureka Trend in the Northern Nevada Rift, in North Central Nevada, an area of substantial mining activity that has produced in excess of 100 million ounces of gold. The Company's property portfolio contains five gold exploration projects, all in Nevada.
At December 31, 2006 Klondex's working capital position was approximately CDN$9.4 million and 22.5 million shares are issued and outstanding. Dilution to 26.4 million shares through the exercise of existing options and warrants would result in an additional CDN$8.2 million in working capital. For more information, please visit www.klondexmines.com.
This news release includes certain statements that may be deemed "forward-looking statements." All statements in this release, 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 forward-looking 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 its work program or that the results of that work program 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 its business, investors should review the Company's filings available at www.sedar.com
ON BEHALF OF KLONDEX MINES LTD.
"William J. Solloway"
President
"Bob Sibthorpe"
Technical Director
Contact:
David Collins, Steven Hecht
Jaffoni & Collins
KDX@jcir.com
212-835-8500 |
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You can view the Next News item: Tue May 22, 2007, Klondex Mines Expands Board with Appointment of Mining Industry Executive, Ronald Shorr
You can view the Previous News item: Mon May 7, 2007, Klondex to Highlight Nevada Gold Exploration Progress at Hard Assets Investment Conference in New York May 14th - 15th - Booth #417
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