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Re:   News - Tuesday, June 30, 2009
      Klondex Rejects Silvercorp's Hostile Takeover Bid
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-Klondex Shareholders Need to "DO NOTHING" to Reject Silvercorp's Bid-

Vancouver, British Columbia - June 30, 2009 - Klondex Mines Ltd. (TSX:
KDX) announced today that its Board of Directors is recommending that
shareholders of Klondex Mines REJECT the unsolicited takeover bid from
Silvercorp Metals Inc. (TSX: SVM; NYSE Amex: SVM) and NOT tender their
shares to the Silvercorp Offer. Klondex shareholders need to "DO
NOTHING" in order to reject the Silvercorp bid.

On June 15th, 2009, Silvercorp formally commenced an unsolicited offer
to acquire all of the issued and outstanding common shares of Klondex
on the basis of 0.50 of a Silvercorp common share for each Klondex
common share. Based on yesterday's closing price of Silvercorp, the
value of the Silvercorp Offer is equivalent to CDN $2.12 per Klondex
common share. The Silvercorp Offer will expire on July 21, 2009, unless
withdrawn or extended.

Rationale for the Rejection of the Silvercorp Bid:

Based on the advice and recommendations from a Special Committee of
independent directors, financial advisors and legal counsel, the
Klondex Board unanimously recommends that Klondex Shareholders reject
the Silvercorp Offer. All of the directors and officers of Klondex will
neither accept the Silvercorp Offer nor tender their Klondex Shares to
the Silvercorp Offer. Klondex's directors and officers own or exercise
control over an aggregate of more than 15% of the issued and
outstanding Klondex Shares and 19.6% of Klondex Shares on a fully
diluted basis.

The Board's rationale for rejecting the Silvercorp Offer includes the
following points. A more detailed explanation of all of the reasons for
the Board's unanimous recommendation will be provided in the Directors'
Circular to be mailed to shareholders.

- The Silvercorp Offer Significantly Undervalues Klondex's Assets. The
  Board believes that the Silvercorp Offer significantly undervalues
  Klondex's assets and fails to adequately compensate Klondex
  Shareholders for the loss of the opportunity to participate in the
  development of the Fire Creek project. Based on the publicly
  disclosed measured and indicated resources of each of Silvercorp and
  Klondex, and current prices of gold, silver, lead and zinc, Klondex
  Shareholders are being offered approximately US$7 per Klondex Share
  of in situ gross metal value, which is significantly below their
  current in situ gross metal value of US$56 per Klondex Share. This is
  not necessarily indicative of the economic viability of any of the
  resources of either Silvercorp or Klondex. This information is
  provided simply as a measure of the relative value of the Silvercorp
  Offer without reference solely to relative share prices of Silvercorp
  and Klondex.

- The Transaction Value Per Ounce Contemplated by the Silvercorp Offer
  is Significantly Below the Price Paid in Comparable Mining M&A
  Transactions. The Silvercorp Offer of approximately US$21 per ounce
  of gold resources is significantly below the average transaction
  value per ounce of gold resources paid in comparable mining M&A
  transactions since 2006, which ranged from approximately US$133 to
  US$113 per ounce of gold resources.

- The Silvercorp Offer is Financially Inadequate. Scotia Capital has
  delivered an opinion that the consideration offered pursuant to the
  Silvercorp Offer is inadequate, from a financial point of view, to
  Klondex Shareholders (other than Silvercorp).

- The Silvercorp Offer is Not a Cash Offer and the Share Consideration
  Offered by Silvercorp is Volatile and of Uncertain Value. Silvercorp
  is not offering cash - it is offering Silvercorp shares. The value of
  the consideration being offered is uncertain and dependent on the
  value of the Silvercorp shares. The Silvercorp shares are
  historically volatile. The market value of the Silvercorp shares has
  decreased by as much as 19% since Silvercorp announced its intention
  to make the Silvercorp Offer.

- As a Company Operating Exclusively in China, Silvercorp Faces
  Significant Risks. All of Silvercorp's properties are located in
  China which involves a significantly different risk profile than
  Klondex. Klondex's operations are located in Nevada, generally deemed
  to be a preferred mining destination. If Silvercorp acquires Klondex,
  Klondex Shareholders will be exposed to this change in risk.

- The Silvercorp Offer Represents an Undesirable Shift in Commodity
  Focus Away from Purely Gold. Silvercorp's assets are
  silver/lead/zinc mineral properties. Operations at all but one of
  Silvercorp's silver/lead/zinc mines were suspended and activities at
  another exploration project were also suspended in December 2008,
  resulting in a total of US$45.7 million in impairment charges.
  Further, Silvercorp derives approximately 50% of its revenues from
  the sale of lead and zinc, the markets for which are determined by
  economic variables different from gold. If the Silvercorp Offer
  succeeds, Klondex Shareholders will be exposed to this change in
  commodity risk.

- Superior Proposals Delivering Greater Value for Klondex Shareholders
  May Emerge. Alternative transactions are being pursued that may
  provide greater value to Klondex Shareholders than the value offered
  by the Silvercorp Offer.

- The Timing of the Silvercorp Offer is Opportunistic. The Board
  believes that the Silvercorp Offer is opportunistic, taking advantage
  of the recent decline in share prices generally, including those of
  mineral exploration and development companies, as a result of the
  current global economic crisis. Klondex expects that the permit
  necessary to commence underground work will be issued in July, 2009
  and that bulk sample production at its Fire Creek project will
  commence within 12 months from the start of the underground program.
  The Silvercorp Offer will deny Klondex Shareholders the opportunity
  to capitalize on the higher valuations typically associated with
  companies as they move from development into production.

- The Silvercorp Offer is not a Permitted Bid. The Silvercorp Offer is
  not a "Permitted Bid" under the Rights Plans. The Silvercorp Offer is
  coercive as it seeks to limit, to the statutory minimum, the period
  in which the Board and Special Committee has to develop, review and
  evaluate alternatives to the Silvercorp Offer.
 
Robert Sibthorpe, Chairman of the Special Committee, said, "We believe
the Silvercorp Offer is financially inadequate and fails to compensate
Klondex Shareholders for the current or future value of the Fire Creek
deposit as the project moves towards underground in-fill drilling, bulk
sampling and thereafter feasibility and full scale production.
Silvercorp is asking Klondex Shareholders to trade a 100% interest in a
world-class, high-grade gold asset for an approximately 10%
fully-diluted interest in a combined company with a number of
significant operational and financial risks, none of which are
currently associated with an investment in Klondex.

"We believe there remains too much near term potential for Klondex and
Fire Creek for shareholders to suffer dramatic dilution and accept this
strategic commodity shift from pure gold to silver, zinc and lead at
this time. Accordingly, the Board has unanimously recommended that
shareholders reject Silvercorp's Share Offer."

Near Term Outlook for Klondex

Separately, Klondex announced today it has completed a private
placement of 1,714,285 shares of common stock at CDN $1.75 per share to
China Mineral United Management Limited (CMU), a new major investor in
global mining projects, yielding gross proceeds of CDN $3.0 million.
Proceeds of this financing, combined with approximately CDN $1.0
million generated from recent stock option and warrant exercises, will
fund the Company's near term operations, including:

- Continued exploration drilling of the Fire Creek deposit from the
  surface
- Securing U.S. Bureau of Land Management (BLM) and other permits for
  Klondex's underground program
- Posting a US $1.2 million BLM reclamation bond required under the BLM
  permit
- Upcoming property payments
- Securing strategic equity and/or debt investment to enable Klondex to
  initiate its underground program at Fire Creek comprised of a decline
  to the mineralization to enable in-fill drilling of the resource as
  well as the bulk sampling of the deposit for metallurgical testing.

The Silvercorp Offer contained two conditions relevant to the CMU
private placement: first, that there has been no change or event that
may have a material adverse effect on Klondex, and second that Klondex
not issue any securities. Klondex completed the private placement to
meet its near term financing needs, including making necessary payments
to secure the needed permits and to move forward with the development
of the Fire Creek project. These expenditures are consistent with the
recommended work program disclosed in the most recent technical report
on the Fire Creek project, entitled "Updated Technical Report on the
Fire Creek Project, Lander County, Nevada" dated March 30, 2009, and
are consistent with Silvercorp's disclosure that, if the Silvercorp
Offer is successful, it will proceed with the current plan to develop
Fire Creek.

Exploration of Strategic Alternatives to Maximize Shareholder Value

The Board of Directors and the Special Committee, together with
Klondex's management, financial advisors and legal advisors, are
working to pursue alternative transactions aimed at enhancing Klondex
Shareholder value. Klondex has been solicited by, and has initiated
contact with, a number of third parties who have expressed an interest
in considering alternative transactions.

Discussions are in progress with third parties with respect to such
value-enhancing alternatives. Though impossible to predict whether any
alternative transactions will emerge, the Board believes that Klondex
and its assets are potentially very attractive to parties other than
Silvercorp, including parties that are more aligned on the basis of
geography, strategy, infrastructure and experience with Klondex's focus
on high-grade gold in Nevada.

Tendering Klondex Shares to the Silvercorp Offer before the Board of
Directors and its advisors have had an opportunity to fully explore all
available alternatives may preclude the possibility of a financially
superior transaction emerging.

Directors' Circular Availability

Shareholders are urged to read the Directors' Circular in its entirety,
a copy of which will be available on Klondex's web site at
www.Klondexmines.com and on SEDAR at www.sedar.com. Copies of the
Directors' Circular will also be mailed to all Klondex Shareholders.
Shareholders may also contact David Collins, Ratula Velez Roy or Jim
Leahy at Jaffoni & Collins toll free at 877-882-2587, 212/835-8505 or
212/835-8500 (switchboard) or via e-mail at kdx@jcir.com with any
questions they have regarding the Silvercorp Offer and/or Klondex's
recommendation.

How to Withdraw Shares from the Silvercorp Offer

Shareholders who have already tendered their shares to the Silvercorp
offer and wish to withdraw them, may do so by contacting Jaffoni &
Collins Incorporated, the information agent retained by Klondex, toll
free at 877-882-2587, 212/835-8505 or 212/835-8500 (switchboard) or via
e-mail at kdx@jcir.com.

About Klondex Mines:
Klondex Mines Ltd. is a gold exploration company focused on the
development and expansion of its 100%-owned, high-grade Fire Creek
deposit in Nevada which consists of 11,098 acres of fee land and
unpatented mining claims. In March 2009 Klondex defined and disclosed
in a technical report entitled "Updated Report on the Fire Creek Gold
Property Lander Co., Nevada" dated March 30, 2009, an Indicated Mineral
Resource at Fire Creek estimated at 5,043,033 tonnes grading 10.11
grams per metric ton (gpt) containing 1,639,822 ounces of gold and an
Inferred Mineral Resource Estimated at 1,833,423 tonnes grading 8.63
gpt for 508,799 ounces of gold equivalent. The Fire Creek deposit is
classified as a "bonanza" grade epithermal gold deposit characterized
by high-grade drill intervals including 1.52 meters grading 411 grams
(13 oz.) per metric ton in hole FC0417. Richard Kern (P.Geo), Project
Manager, of Reno, Nevada, is the Company's qualified person on the
project as required under NI 43-101and has reviewed the technical
information contained in this press release.

Fire Creek is located in North Central Nevada, an area of prolific gold
production, at the intersection of the Battle Mountain-Eureka Trend and
the Northern Nevada Rift. The Company was founded over 35 years ago,
and its property portfolio consists of four gold exploration projects,
all in Nevada. 75-80 percent of Klondex's known resource is on private
land. For more information, please visit www.klondexmines.com.

For Further Information Contact:
David Collins
Jaffoni & Collins Incorporated
KDX@jcir.com
(212) 835-8500

Cautionary Statement:
This news release may contain forward-looking statements. Actual
results may differ materially from those indicated by such statements.
All statements, other than statements of historical fact, included in
this news release, are forward looking statements that involve various
risks and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.

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Copyright (c) 2009 KLONDEX MINES LIMITED (KDX)  All rights reserved.
For more information visit our website at http://www.klondexmines.com/
or send mailto:info@klondexmines.com
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