Intercept Highlights:

 1.83 g/t Au over 117.3 meters (385 feet) beginning at 6.1 meters in hole FC12-20S.
 1.17 g/t Au over 70.1 meters (205 feet) beginning at 1.5 meters in hole FC12-15S.
 1.08 g/t Au over 99.0 meters (325 feet) beginning at 21.3 meters in hole FC12-21S.

Elko, NV & Vancouver, BC � August 29, 2012 � Klondex Mines Ltd.  (TSX: KDX and OTCQX: KLNDF), a Nevada gold exploration company, today reported long intercepts of near-surface, oxidized gold mineralization for the recently completed surface drilling program at its Fire Creek gold project in Lander County, Nevada. Fifteen reverse circulation (RC) holes were drilled for a total of 2,781 meters (9,124 feet). Ten of these holes were extended by core drilling to test for deeper, high-grade gold veins. Results presented here are for the RC portions of the holes only, as summarized in Table 1. Klondex expects to announce assay results for the core-hole extensions in the coming weeks when they are complete.
 
Historically, exploration at Fire Creek focused on this disseminated, low-grade, gold mineralization as an open-pit, heap-leach project. However, since Klondex resumed exploration on the property in 2004, exploration has successfully targeted the deeper, high-grade vein system. The rise in gold prices since then makes it timely to revisit the bulk-minable potential of the low-grade mineralization, in addition to the existing underground resource.
 
Project Overview:
As previously disclosed in the Company�s June 30, 2012 MD&A, in July Klondex deferred further surface and underground drilling activity at Fire Creek in order to focus its efforts on the advancement of the Fire Creek resource model and geology. The Company will report the remaining results from its 2012 surface and underground drilling programs in the coming months.
 
The Board also decided to delay the preparation of an updated technical report until the Company has concluded a thorough review of the Fire Creek project. This is expected to take several months and will delay the updated technical report until sometime in the first half of 2013.
 
Drilling Overview:
The 15-hole surface-drilling program was designed to delineate gold mineralization in the Main Zone. RC pre-collar holes were drilled from the surface to approximately 183 meters in depth, and then certain holes were extended by core drilling. The program consisted of five fans of three holes each, as shown in Figure 1. Table 2 shows the depths, azimuths and dips of the pre-collars.

About Klondex Mines Ltd. (www.klondexmines.com):
Klondex Mines is focused on the exploration and development of its Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling gold mining prospect located in a region of prolific gold production that is near power, transportation, mining infrastructure and several milling facilities. As of August 29, 2012, Klondex had 47.3 million shares issued and outstanding, and 59.1 million shares on a fully diluted basis.
 
Sample results cited in this news release were obtained from reverse circulation holes completed by Rimrock Drilling, an independent contractor working under the direction of Klondex staff. Assays were determined by ALS Minerals, Reno, Nevada, an independent analytical laboratory.
 
The content of this press release has been reviewed by Steven L. McMillin, CPG-11031 (American Inst. of Prof. Geol.), Project Manager and Chief Geologist for Klondex Mines Ltd., as a non-independent Qualified Person.
 
This news release contains forward-looking statements, including about current expectations on the timing of project development. These forward-looking statements entail various risks and uncertainties, are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the global economy; the price of gold; operational, funding and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations. Risks and uncertainties about the Company�s business are more fully discussed in the Company�s disclosure materials filed with the securities regulatory authorities in Canada and available at www.sedar.com. Readers are urged to read these materials. Klondex assumes no obligation to update any forward-looking statement or to update the reasons why actual results could differ from such statements unless required by law.