Klondex to acquire the Midas Mine and mill complex in US

5 December 2013 (Last Updated December 5th, 2013 18:30)

Klondex Mines has signed an agreement with Newmont Mining to acquire the Midas mine and related ore milling facility in Nevada, US, for around $83m.

Klondex Mines has signed an agreement with Newmont Mining to acquire the Midas mine and related ore milling facility in Nevada, US, for around $83m.

The Midas underground mine and mill complex is situated in north central Nevada, between Elko and Reno.

The purchase price of $83m, which is subject to customary adjustments, is comprised of approximately $55m in cash and $28m in surety payments to state and federal authorities.

Klondex will issue to Newmont 5 million common share purchase warrants of the company with a 15-year term, subject to acceleration in certain circumstances, and an exercise price to be specified on the closing date of the acquisition.

Newmont expects to close the transaction, which was subject to normal closing conditions, including regulatory and third-party approvals, by early 2014.

The Midas operation includes an underground mine, waste rock area, crushing plant, conventional mill, refinery, cyanide destruction circuit, tailings impoundment, and two settling ponds.

In addition, the mine provides ancillary facilities like a maintenance shop, warehouse complex, administration and security building, and facilities for distributing diesel fuel, gasoline and propane.

Newmont acquired Midas through its merger with Normandy in 2002.

Klondex president and CEO Paul Huet said tha the acquisition is transformational for Klondex during a pivotal point in the company's development.

"I am confident that Klondex's management team can leverage past experience, with some of the core leadership team having previously worked at Midas, to vastly benefit from the synergies and to unlock continued value in Klondex for shareholders going forward," Huet added.

Newmont executive VP for strategic development Randy Engel said, "This agreement underscores our ongoing commitment to optimising our portfolio, as we continue to focus on our longer-life and lower-cost core assets."

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