ELKO, Nev. & VANCOUVER, British Columbia--(BUSINESS WIRE)-- Klondex Mines Ltd. (TSX: KDX), a Nevada gold exploration and development company, today released its second batch of assay results from its underground core drilling program at its 100%-owned Fire Creek gold-silver project in Lander County, Nevada. The seven holes reported today continued to test the southern end of the Main Vein Zone, a northwest trending set of vein-like bodies of mineralization. The results are reported in the tables below and reflected in the accompanying figures.

A total of 35 underground in-fill holes have been completed at Fire Creek since the program�s inception, for a total of 8,871meters. Seventeen holes were completed in 2011, and all results have been returned. Eighteen additional holes totaling 5,098 meters have been completed in 2012; their cores are in various stages of logging, preparation and assay.

Klondex plans to update to its May 2011 technical report to incorporate exploration data from its drilling activity in 2011 and through midyear 2012. Klondex has engaged Micon International Limited, a leading provider of consulting services to the international mining industry, to assist in the preparation of the updated technical report, targeted for release in Q3 2012. Steven L. McMillin, Chief Geologist for Klondex Mines, will serve as a Qualified Person supervising the technical report update, along with Micon Senior Geologist, Thomas C. Stubens.

Exploration and Development Overview:

Klondex is engaged in a multifaceted exploration and development program at Fire Creek. Exploration is being pursued through surface drilling, underground drilling and via an underground decline. Initial bulk sampling of mineralized material from the Main Zone of the deposit is planned to begin in 2012, and Klondex is permitted to process up to 36,500 short tons of material per year, up to a maximum of 120,000 short tons over the life of its five-year small-scale facility permit. The bulk sampling program is intended to verify the grades and geometry of mineralized material in the Main Zone and to assess mining conditions for the planning of future mine operations. Processing of the bulk sample will also test metallurgical conditions as well as gold recoveries.

In-fill drilling from the underground workings is allowing Klondex to tighten its drill spacing and to seek to better establish continuity of its mineralized zones. Underground drilling is lower-cost, involves shorter holes and is more accurate than drilling from the surface. Klondex expects to complete over 20,000 meters of underground drilling in 2012.

Klondex also plans to continue its active surface exploration program to test IP anomalies and to conduct step out drilling of known veins. Klondex plans to restart its surface-drilling program later this month. The surface program�s principal goal in 2012 is to support the underground in-fill drilling program in further defining mineralization in the Main Zone. The surface drill program is targeted to complete over 15,000 meters of core and reverse circulation drilling during 2012..

To date, Klondex has completed 742 meters of underground workings, including 571 meters of the decline. Approximately 350 meters of decline advance are still required to put Klondex in position to initiate the bulk sampling program. Based on decline progress to date, Klondex now expects to initiate bulk sampling during the later part of the third quarter of 2012. Klondex had initially planned to begin the bulk sampling in the first quarter. The delay into the third quarter is the result of the temporary suspension of mining operations to install a reverse osmosis system to reduce nitrate concentrations in mine water in excess of the Company�s discharge permits. In addition, the Company has encountered some ground condition challenges that have also slowed the progress of the decline.

Blane Wilson, CEO of Klondex, commented, �Klondex is well underway on our most ambitious program of exploration and development in the Company�s history, and the expected start of bulk sampling is a few months away. We are pleased with the ongoing progress of our underground in-fill drilling program. The program enables us to continue active exploration during the winter months when surface exploration is normally halted.

�Though there remains much modeling and additional drilling to be done, we are seeing some positive initial signs of apparent continuity from this data. The knowledge we garner from the infill program will help better define our Main Zone mineralization as well as shape the strategy of our bulk sampling efforts. We expect to report periodic underground drill results for the foreseeable future and look forward to the preparation of an updated technical report this year.�

All of the holes included in this report are HQ core holes drilled in 2011 from a single underground station that is at the most advantageous position to drill and explore the south mineralized system. The objectives of the underground program are to 1) test for continuity of mineralization along projected strike, 2) test for continuity up- and down-dip within the mineralized zones, and 3) add new resources. The cumulative underground results show spatial coincidence with the grade shell shapes (Figure 1). In addition, preliminary modeling of the underground holes with surface holes shows an apparent westward dip of mineralization not seen in shapes generated from surface hole data.. Further modeling will help to align the geometries of the mineralization.

Klondex�s underground drill results are presented below; the first chart below presents the data in meters and grams per tonne and the second chart below presents the same data in feet and ounces per ton.

About Klondex Mines Ltd. (www.klondexmines.com):

Klondex Mines is focused on the exploration and development of its 100% owned Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling gold mining prospect located near power, transportation, mining infrastructure and several milling facilities. Fire Creek�s mineral resource is reviewed in the most recent technical report available here with additional disclosure available via SEDAR.

In addition to an active surface exploration program at Fire Creek, in April 2011 Klondex initiated an underground exploration and development program through an underground decline. The program is designed to enable more cost effective in-fill drilling of its existing resource from underground stations as well as to enable bulk sampling for metallurgical testing of up to 120,000 short tons of material (limited to 36,500 short tons per year). Bulk sampling is anticipated to commence during the third quarter of 2012.

As of April 11, 2012, Klondex had 46.6 million shares issued and outstanding and 59.1 million shares on a diluted basis.

Sample results cited in this news release were obtained from HQ diameter core drill holes (96mm hole; 63.5mm core) completed by American Drilling, an independent contractor working under the direction of Klondex Gold & Silver 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.) 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.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING RESOURCES

This press release uses the terms "inferred mineral resources," "indicated mineral resources," and "mineral resources" which are Canadian mining terms defined in accordance with National Instrument 43-101 � Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves (the "CIM Standards"). The CIM Standards differ significantly from standards in SEC Industry Guide 7 under the United States Securities Act of 1933, as amended. While the terms "mineral resource," "indicated mineral resources," and "inferred mineral resources" are recognized and required by Canadian regulations, they are not defined terms under SEC Industry Guide 7 and are not normally permitted to be used in reports filed with the Securities and Exchange Commission. Readers are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Readers are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. As such, information regarding resources contained in this press release may not be comparable to similar information made public by United States companies subject to reporting and disclosure requirements under United States federal securities laws and the rules and regulations promulgated thereunder.

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