Klondex Announces Active 2007 Drilling and Underground Development Program; Extends New Ore Zone at Battle Mountain-Eureka Trend Property



    - Expands Management Team with Senior Geologist Appointment -

    VANCOUVER, BRITISH COLUMBIA, March 2 /CNW/ - Klondex Mines Ltd. (TSX:
KDX) today announced that its exploratory drilling program at its Fire Creek
Property in the Battle Mountain-Eureka Trend in Northern Nevada is scheduled
to resume by mid-April. The drilling program is intended to expand the
resource in the Main Zone as well as to test the remaining IP anomalies
(possible ore bearing structures) identified outside of the Main and Far North
Zones. Additionally, the Company is filing an Amendment to its Plan of
Operations to permit underground access to the Main Zone mineralization for
the purpose of definition drilling and bulk sampling.

    To support its increased level of activity at Fire Creek, Klondex will
establish an administrative office in North Central Nevada and a field office
on site. The Company is pleased to announce the appointment of James L.
Balagna III, B.A. (Geology) as Senior Geologist and manager of the Company's
underground development program. Mr. Balagna has 18 years of gold mining
experience in Northern Nevada, most recently with Glamis Gold at their
Marigold project near Valmy, Nevada, where he served as Senior Geologist.
Prior to joining Glamis in 1999, Mr. Balagna also worked with FirstMiss Gold,
Rayrock Mines and Placer Dome. He earned his geology degree from the
University of Colorado at Denver. Given Mr. Balagna's substantial experience
in exploration and mining geology, he is expected to make a valuable
contribution to the progress of the Company and its plans for Fire Creek.

    In September 2006, Klondex announced an NI-43-101 compliant Indicated
Mineral Resource totaling 1,045,738 ounces of gold in two zones: the Main Zone
(801,681 ounces in 912,366 metric tonnes grading 27.33 grams per tonne "gpt")
and the Far North Zone (244,047 ounces in 724,188 tonnes grading 10.48 gpt).

    2007 Fire Creek Development Program:

    1. Main Zone Resource Expansion; Seven holes totaling 2,560 meters will
be drilled in the untested areas of the "boiling zone" (which carries most of
the gold values) in the Main Resource area. Constraints imposed on the area of
influence of individual drill intercepts in the September resource estimate
resulted in the exclusion of these areas from the resource calculation, and it
is believed that these seven drill holes may result in a significant addition
to the overall high-grade resource. The primary purpose of these holes will be
to extend known high-grade mineralization to depths as shown in Table 1 below.

    
    Table 1; Fire Creek Main Zone Resource Expansion Drilling 2007
     (Potential Targets)
    Proposed Targets and Objectives
    ----------------------------------------------------------------------
       Extend zone to south indicated by FC0619 on Vein #2 (34.0 gpt over
        est true 2.4 m width)
    1  Extend zone to south indicated by FC0619 on Vein #3 (85.8 gpt over
        est true 2.13 m width)
       Additional Intercept on Vein # 4 near FC0619 (54.8 gpt/3.7m),
        FC0519 (9.1 gpt/1.0m) and FCO508 (8.0 gpt/2.1m)
    ----------------------------------------------------------------------
       Extend zone to depth indicated by FC0619 on Vein #2 (34.0 gpt over
        est true 2.4 m width)
    2  Extend zone to depth indicated by FC0619 on Vein #3 (85.8 gpt over
        est true 2.13 m width)
       Additional Intercept on Vein # 4 below FC0519 (9.1 gpt/1.0m)
    ----------------------------------------------------------------------
       Extend zone to depth indicated by FC0621 on Vein #2 (43.6 gpt over
        est true 2.4 m width)
    3  Extend zone to depth indicated by FC0621 on Vein #3 (5.5 gpt over
        est true 1.0 m width)
       Additional Intercept on Vein # 4
    ----------------------------------------------------------------------
       Intercept on Vein #2 between FC0621 (43.2 gpt/2.4m) and FC0416 (5.6
        gpt/3.7m)
    4  Extend zone to depth indicated by FC0412 on Vein #3 (8.5 gpt over
        est true 2.13 m width)
       Additional Intercept on Vein # 4 and Vein #5
    ----------------------------------------------------------------------
       Additional Intercept on Vein # 2
    5  Extend zone to depth indicated by FC0408 on Vein #3 (14.2 gpt over
        est true 2.13 m width)
       Additional Intercept on Vein # 4 and Vein #5
       Extend zone to depth indicated by FC0416 on Vein #6 (19.4 gpt over
        est true 2.13 m width)
    ----------------------------------------------------------------------
       Additional Intercept on Vein # 2
       Extend zone to depth indicated by FC0405 on Vein #3 (14.9 gpt over
        est true 2.13 m width)
    6  Additional Intercept on Vein # 4
       Intercept on Vein #5 between 95825 (4.0 gpt/2.5m) and FC0515 (88.8
        gpt/2.13m)
       Additional Intercept on Vein # 6
       Extend zone to depth indicated by FC0417 on Vein #7 (8.7 gpt over
        est true 2.13 m width)
    ----------------------------------------------------------------------
       Intercept on Vein # 3 between 95830(9.9 gpt/3.1m) and FC0515C (18.9
        gpt/2.13m)
    7  Additional Intercept on Vein # 4
       Extend zone to south indicated by FC0512 on Vein # 5 (12.7 gpt over
        est true 2.13 m width)
       Intercept on Vein # 6 between FC0417 (118.0 gpt/2.5m) and FC0426
        (37.2 gpt/1.52m)
       Extend zone to depth indicated by FC0417A on Vein # 7 (8.7 gpt over
        est true 2.13 m width)
    ----------------------------------------------------------------------
    

    2. Outside Target Exploration; In the summer of 2006 a large induced
polarization (IP) survey was conducted in an effort to identify additional
possible ore targets. The survey, which used 100 meter dipole spacing,
demonstrated a positive response from the Main and Far North Zones and
identified an additional 15 targets outside these zones. The anomalies which
could be drilled from areas permitted under the current Plan of Operations
were tested in the fall of 2006. The most encouraging results came from
drilling on Anomaly # 4. Drill hole FC0632 (previously reported) included 7.55
gpt over 3.05 m and 8.17 gpt over 3.05 m. Results for hole FC0634 located 100
meters to the north have been received and include 6.34 gpt over 4.6 meters.
Results from other 2006 drilling and plans for 2007 are shown in Table 2
below. The Company's exploration consultants, MinQuest Inc. of Reno, Nevada,
have noted that most of the known gold-bearing veins are within a N45(degree)W
trending 350 meters-wide - the "Fire Creek Mineral Trend" - suggesting that
the area between the Main and Far North Zones is very prospective. Target
priorities and drill plans are shown on the Company's website at
http://www.klondexmines.com/s/News.asp.

    
    Table 2; Fire Creek IP Target Drilling
    ----------------------------------------------------------------------
    Anomaly Status   Hole #    Result                 Comments

    ----------------------------------------------------------------------
      0     Tested   FC0639 1.23 gpt over 42.7 m  Possible open pit target
                             and 7.2 gpt over     Definition drilling in
                             2.43 m                2007
    ----------------------------------------------------------------------
      1     Untested                              First level Priority in
                                                   2007 Drilling
    ----------------------------------------------------------------------
      2     Untested                              Second level priority in
                                                   2007 drilling
    ----------------------------------------------------------------------
      3     Untested                              Second level priority in
                                                   2007 drilling
    ----------------------------------------------------------------------
      4     Tested   FC0632 7.55 gpt over 3.05 m  "New North Zone"
                             and 8.17 gpt over    Definition drilling
                             3.05 m                planned
                     FC0634 6.34 gpt over 4.6 m
    ----------------------------------------------------------------------
      5     Untested                              Second level priority in
                                                   2007 drilling
    ----------------------------------------------------------------------
      6     Tested          Pyrite only           No further work
    ----------------------------------------------------------------------
      7     Tested          Pyrite only           No further work
    ----------------------------------------------------------------------
      8     Tested          Pyrite only           No further work
    ----------------------------------------------------------------------
      9     Tested          Pyrite only           No further work
    ----------------------------------------------------------------------
    10 to   Untested                              Third level priority in
       14                                          2007 drilling
    ----------------------------------------------------------------------
    

    3. Underground Program; Fire Creek's current Plan of Operations is being
amended to include about 3,000 meters of underground workings to permit access
to the Main Zone on two levels. Subject to obtaining approval and availability
of contractors, this work is scheduled to commence in September of this year.
The underground levels will facilitate in-fill drilling to improve knowledge
regarding grade and vein continuity. Klondex will file an application for
designation as a "Small Scale Facility" as defined by Nevada Regulation NAC
445A.377, allowing for the extraction and processing of not more than 33,180
metric tonnes of ore per year and no more than 109,090 metric tonnes in total.
This designation will allow for the extraction of a series of bulk samples
from selected areas in the Main Zone. Possible sites for this activity as
defined by previous drilling and estimated in the NI 43-101 resource summary
are listed in table 3.

    
    Table 3; Possible locations for Bulk Sampling at Fire Creek Main Zone
    ----------------------------------------------------------------------
                                          True    Area
    VEIN   Section    Drill    Gold Grams  Width   Sq.    Tonnes    Gold
                       Hole     Per Ton   Meters Meters             Oz.
    ----------------------------------------------------------------------
     M6A   3+50-N     FC0417    118.00    3.62   5,838   53,891   204,445
     M5     3+00N    FC0515C     88.78    2.13   6,028   32,805   93,630
     M3     0+50N     FCO619     85.80    2.13   3,195   17,354   47,870
     M2     1+00      FC0413     68.01    2.44   1,121    6,972   15,244
     M4     3+50N     FC0513     64.90    2.13   2,696   14,643   30,554
     M4     0+50N     FCO619     54.80    3.66   1,112   10,378   18,285
     M2     0+50N     FCO618     55.42    2.13   1,185    6,436   11,468
     M2     1+00N     FC0621     43.80    2.44   3,268   20,333   28,633
     M2     0+50N     FC0419     38.74    2.29   1,147    6,688    8,329
    M12     750N      FC0608     34.13    3.20   5,441   44,399   48,718
     M2     0+50N     FCO619     34.00    2.44   2,994   18,629   20,363
     M4     4+00N     FC0403     30.65    2.29   2,674   15,592   15,364
     M3     3+50N     FC0402     30.11    2.13   1,299    7,056    6,830
    ----------------------------------------------------------------------
                     Weighted
                     Average     61.07            Total  255,175  549,731
    ----------------------------------------------------------------------
    

    Underground Development/Bulk Sampling Opportunity:

    During the exploration and development phase of the underground program
Feasibility Studies and Permit Applications will be carried out to advance the
deposit to full production. The Company anticipates that the processing of
bulk samples may be carried out at mills within trucking distance, such as
those owned by Newmont and Barrick. Based on preliminary estimates developed
in-house for permitting, underground access, exploration, drilling, mining and
other costs, Klondex believes it could generate a substantial operating profit
during a proposed three-year underground development/bulk sampling program.
Klondex currently believes that proceeds from such an effort could be more
than sufficient to fund the Company's move into full production of the Fire
Creek property, as well as to pursue other development opportunities. The
Company has determined that the extraction of these bulk samples will not
materially affect the overall economics of the Main Zone.

    Klondex's current working capital position is approximately CDN$9.5
million and currently 22.5 million shares are issued and outstanding. Dilution
to 26.9 million shares through the exercise of existing options and warrants
would result in an additional CDN$8.1 million in working capital.

    Richard Kern (P.Geo) 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.

    Klondex has in place a rigorous QA/QC program consistent with National
Instrument 43-101 and using best industry practice. Core is sawed in half and
assayed on 5-foot maximum lengths by ALS Chemex Labs of Reno, Nevada,
responsible for all Klondex Mine's assaying at Fire Creek.

    About Klondex Mines Ltd.

    Klondex Mines is a gold exploration company focused on the development of
its high grade Fire Creek deposit where to date the Company has identified an
Indicated Mineral Resource in excess of 1,000,000 ounces of gold. Fire Creek
is located in the Battle Mountain-Eureka Trend in the Northern Nevada Rift, in
North Central Nevada, an area of substantial mining activity that has produced
in excess of 100 million ounces of gold. The Company's property portfolio
contains five gold exploration projects, all in Nevada. For more information,
please visit www.klondexmines.com.

    This news release includes certain statements that may be deemed
"forward-looking statements." All statements in this release, other than
statements of historical facts, including the likelihood that bulk sampling
will generate significant revenues and the possible results of future
exploration are forward-looking statements. Although the Company believes the
expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from
those in the forward-looking statements. Factors that could cause actual
results to differ materially from those in forward-looking statements include
unsuccessful exploration results, inability to obtain necessary permits and
regulatory approvals, changes in metals prices, currency fluctuations, changes
in the availability of funding for mineral exploration, unanticipated changes
in key management personnel, unavailability of necessary equipment and
contractors, and general economic conditions. Mining is an inherently risky
business. There is no guarantee that the Company will be able to carry out its
work program or that the results of that work program will be successful.
Accordingly the actual results may differ materially from those projected in
the forward-looking statements. For more information on the Company and the
risks and challenges of its business, investors should review the Company's
filings available at www.sedar.com.

    
    ON BEHALF OF KLONDEX MINES LTD.

    "William J. Solloway"                        "Bob Sibthorpe"
    President                                     Director
    




For further information:

For further information: Jaffoni & Collins David Collins or Steven
Hecht, 212-835-8500 KDX@jcir.com

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