Klondex Mines Provides August Update on Fire Creek Project; Ships Lot #2 to Newmont

RENO, NV and VANCOUVER, BC--(Marketwired - Sep 30, 2013) - Klondex Mines Ltd. (TSX: KDX) (OTCQX: KLNDF), a Nevada gold exploration and development company, today provides an update on its toll milling and underground development programs, as well as the results of the metallurgical test-work from its Fire Creek Project in Lander County, Nevada.

Toll Milling
Toll milling of Fire Creek's Lot #1 is complete (see press release dated September 23, 2013). Final receivables for Lot #1 totaled $1,967,176, sold at an average gold spot price of US $1,332/oz. Processing of Lot #1 included 1,055 dry tonnes (1,165 dry tons) at an average head grade of 50.7 g/t (1.48 opt) Au.

Toll milling of Lot #2, comprised of 1,812 tonnes (2,000 tons), started on September 18, 2013.

Paul Huet, Klondex President and CEO stated, "Continuing to toll mill and treat our second lot of material from the Fire Creek project is an important step moving forward. We are very fortunate to have multiple options (Newmont and Veris agreements) in place to treat the Fire Creek material. Through toll milling, we are able to better understand the metallurgical characteristics of the Fire Creek material, and the proceeds can be applied towards future exploration and development."

Underground Development
Over the past four months, Klondex's underground development program targeting the Joyce and Vonnie structures within the Main Zone of its Fire Creek project has yielded 4,375 tonnes (4,824 tons) of mineralized material averaging 63.7 g/t (1.86 opt) Au. Development on the Joyce (5370N and 5400S) structure in August consisted of 192 samples taken and submitted for assay. Gold grades ranged from 0.2 g/t Au to 486 g/t Au (0.005 opt Au to 14.172 opt Au) over a vein width ranging from of 0.1 m to 1.3 m (0.2 ft to 3.5 ft). For May - July development results please see press releases dated June 13, 2013, July 29, 2013 and September 12, 2013.

The average grade from the development program is 43% higher than the recent mineral resource estimate average grade (see press release dated September 16, 2013).

Metallurgy
Metallurgical test-work was conducted by McClelland Laboratories (MLI Job #3834), an independent laboratory based in Sparks, Nevada, on two samples taken from the underground development to determine the amenability of the Fire Creek material to gravity/cyanidation treatment. Composite sample FCM1 was taken from material stockpiled during the development of the 5400 and 5370 crosscuts. Sample 3834-01 was generated by compositing coarse assay rejects from the face sampling on the Joyce 5400 N.

Each sample was milled to 80%-212µm (65 mesh) and processed through a Knelson concentrator to determine precious metal recovery via gravity concentration. The tailings from the Knelson concentrator were reground to 80%-75µm (200 mesh). Bottle roll tests were then performed on the tailings to determine precious metal recovery via cyanidation. Results of the test-work are shown in the tables below.

Results indicate both samples were readily amenable to gravity/cyanidation treatment. Gold and silver recoveries achieved from Composite FCM1 were 94.8% and 82.4%, respectively. Gold and silver recoveries achieved from Sample 3834-01 were 99.0% and 89.5%, respectively. Cyanide consumption was low, averaging 0.2 kg/mt material.

Mike Doolin, GM of Fire Creek stated, "We are very encouraged by the high gold recoveries from our Fire Creek material. These results indicate that Fire Creek material is amenable to conventional gravity/cyanidation circuit. Additional test-work is scheduled to be conducted throughout 2013 in order to continue understanding the metallurgical characteristics of the Fire Creek deposit."

The technical information contained in this press release has been approved by Steven L. McMillin, CPG-11031 (American Inst. of Prof. Geol.), Chief Geologist for Klondex Mines Ltd., as a non-independent Qualified Person for the purposes of National Instrument 43-101. Assays were performed by SGS Minerals Services of Elko, Nevada (an independent laboratory), under the supervision of Klondex staff.

Sampling a given face is conducted after the face location has been measured, photographed, and mapped in detail. Continuous rock-chip channel samples are then collected by Klondex staff in 11" x 17" sample bags from the footwall, vein, and hanging wall. Salient features including sample number, channel length, location on face, rock type, and alteration are documented. Samples are sent to SGS Mineral Services Division lab in Elko, Nevada, an independent laboratory, for gravimetric fire assay analysis with blanks and standards.

About Klondex Mines Ltd. (www.klondexmines.com)
Klondex Mines is focused on becoming a major player in the Nevada junior gold producer space, via the development of its Fire Creek gold project in North-Central Nevada. Fire Creek is a compelling gold project located in a mining-friendly jurisdiction, near major producers, transportation, mining infrastructure and its milling facilities. As at September 30, 2013, Klondex had 65.0M shares issued and outstanding and 87.2M shares, fully diluted.

This news release contains certain information that may constitute forward-looking information under applicable Canadian securities legislation, including information about the magnitude and quality of the Fire Creek Project the results of exploration and metallurgical sampling at the Fire Creek Project, the Company's intention and ability to monetize mineralized material, timing of the updated mineral resource estimate at the Fire Creek Project and the bulk sampling program. This forward-looking information entails various risks and uncertainties are based on current expectations, and actual results may differ materially from those contained in such information. These risks and uncertainties include, but are not limited to the risks and hazards associated with environmental compliance and permitting for its underground operations, 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. 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 information or to update the reasons why actual results could differ from such information unless required by law.