Klondex Responds to Silvercorp’s C$70m Bid

8 June 2009 (Last Updated June 8th, 2009 18:30)

Gold miner Klondex has had a C$70m unsolicited bid placed following its call for funds to help its underground and bulk sampling programme on its high-grade Fire Creek deposit in north central Nevada, US. In reaction to Canadian-based silver producer Silvercorp’s bid, Klondex says it w

Gold miner Klondex has had a C$70m unsolicited bid placed following its call for funds to help its underground and bulk sampling programme on its high-grade Fire Creek deposit in north central Nevada, US.

In reaction to Canadian-based silver producer Silvercorp’s bid, Klondex says it will advise shareholders to defer from taking any decision until the board completely reviews the offer.

According to Klondex president William Solloway the company’s current goal is to secure funds to develop its Fire Creek gold project in Nevada without affecting shareholders.

“We are surprised by the haste of Silvercorp in making this unilateral bid for our prized assets,” Solloway said.

“We have come too far in developing our high-grade resource at Fire Creek to make any hasty decisions regarding the best path forward.”

Under the proposal directly offered to Klondex’s shareholders last week, Silvercorp planned to pay 0.50 of its shares per Klondex share, valuing the company at about C$70m on a fully diluted basis.

Klondex's Fire Creek property has an indicated mineral resource of five million tonnes with 1.64 million ounces of gold and inferred mineral resource at 1.8 million tonnes containing 0.51 million ounces of gold.

Silvercorp plans to formally open the offer mid June 2009 for 35 days from the announcement date.