VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 27, 2012) - Klondike Gold Corp. (TSX VENTURE:KG) (the "Company") is pleased to announce that construction work is under way at the Indian River Project under the terms of a newly signed Joint Venture Agreement with privately held 46799 Yukon Inc. As previously announced (July 12, 2012), Klondike Gold entered into the Joint Venture (JV) with 46799 Yukon Inc. to further explore and develop the Indian River mining project. The fully permitted placer gold property lies within the Indian River Valley - Yukon's largest gold producer in recent years - and is accessible by road (about a 75-minute drive) from Dawson City.
As part of the Joint Venture Agreement, Klondike Gold will provide the property and an extensive exploration database, while 46799 Yukon Inc. will provide the equipment and initial capital to the JV. Once these contributions are made, each partner will have a 50% participating interest in the JV and ongoing operations. An operating company has been formed to operate the mine under the supervision of an experienced placer-mining team appointed by the JV partners. A preliminary construction camp is being set up while the permanent camp site is prepared. A track-mounted auger drill has started drilling for mine planning and grade-control purposes. Two Caterpillar D9N bulldozers have arrived on the property and will start on-site preparation and overburden stripping while other mining and processing equipment is mobilized to the property. Stripped overburden gravels and sterile gravel layers will be used to improve the internal road system and for the building of an airfield, thereby improving project infrastructure without additional operating or construction cost.
The proposed Mine Plan calls for 50-ton trucks to be loaded by 50-ton Excavators with material prepared by the D9N bulldozers. Mined pay gravels will be stockpiled at a modular-design processing plant consisting of an EL-Jay MRS200 Metal Recovery System, which uses a 6-meter-long double-deck vibratory screen powered by a 5.9-litre Cummins diesel engine as a primary unit. A Rotary Screw Gold Machine 200 Fine Gold Recovery unit will provide secondary processing and serve as an intermittent recovery unit.
The processing plant will be fed by a front-end loader via a portable feeder/conveyor connected to a hopper. Once set-up is completed and pay gravels are stockpiled, the plant is expected to initially process 1,500 m3 per day, to be increased to 3,000 m3 during the second half of the 2013 mining season.
The partners will focus their initial efforts on only 10% of the 188 claims permitted to be mined. Recent staking has added two additional placer leases totaling 3 miles adjacent to the drilled property for the future benefit of the JV. Once converted into claims, this ground will increase the Indian River project to a total of 220 claims.
ABOUT KLONDIKE GOLD CORP.
Klondike Gold Corp. is a Canadian exploration company with offices in Vancouver, British Columbia, and Dawson City, Yukon. The Company is focused on the development of its Yukon and British Columbia gold properties, and also holds a large portfolio of base metal projects in southeastern British Columbia.
Statements in this press release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, may include forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.