Klondex Mines Ltd. Warns Shareholders Against Hedge Fund Group′s Attempt to Take Control of Klondex′s Nevada Gold Assets; Urges Shareholder Support of WHITE Proxy Board Slate

Klondex Mines Ltd. (TSX: KDX):

Open Letter to Klondex Shareholders:

Dear Klondex Shareholders,

On June 13, 2011, a dissident hedge fund-led group controlling just 8.1%
of the outstanding shares of Klondex Mines Ltd. (TSX: KDX) launched a
proxy contest to elect their own slate of six directors and take control
of the Company. The dissident group is attempting to marginalize you and
take control of the Klondex Board of Directors while offering ZERO
premium for control.

To protect your investment in Klondex, it is important to vote your WHITE
proxy and discard the yellow proxy. For questions or assistance,
please call Georgeson at 1-866-676-3009.

Klondex has put in place an experienced board of directors to represent
the interests of all shareholders. Their backgrounds are setout online
and in the management
information circular sent to you by Klondex. YOUR BOARD OF
DIRECTORS RECOMMENDS THAT YOU USE THE WHITE
PROXY TO VOTE FOR A BOARD THAT HAS DELIVERED THE FOLLOWING SHARE PRICE
PERFORMANCE AND THE ACCOMPLISHMENTS LISTED THEREAFTER:

Klondex Share Price Performance

Klondex′s shares have substantially outperformed several indices over
the past year:

However, following the start of the dissident group′s campaign on
Monday, June 13^th KDX′s share price has declined 10.1%.

Klondex′s strong share price performance is in
stark contrast to that of companies in which the proposed dissident
group′s board has been associated, as described in the dissident
circular. A chart of this comparison over the 12-month period ending
Friday, June 10, 2011 appears below.

Recent Klondex Mines Achievements

• 
  Commenced exploration decline into Main Zone ? have completed over 800
  ft. to date.
  
• 
  Completed 2009 & 2010 surface exploration programs with 48,000 ft. of
  Core/RC drilling.
  
• 
  Secured 'Letter to Proceed? from the U.S. Bureau of Land Management.
  
• 
  Built highly experienced, seven-person team to manage Nevada
  operations, supported by 12 expert consultants in several areas of
  specialty.
  
• 
  Completed C$9 million equity offering.
  
• 
  Secured all required permits to execute underground exploration and
  bulk sampling.
  
• 
  Closed US$20 million gold loan financing with initial US$10 million
  funding.
  
• 
  Contracted Small Mine Development (SMD), with a team of over 35 highly
  specialized miners, engineers, geologists, etc., to drive the
  underground decline.
  
• 
  Launched 59,000 ft. Surface Drilling Program for 2011.
  
• 
  Completed bulk of Fire Creek surface work and drainage ponds.
  
• 
  Conducted active investor marketing program over the past 18 months in
  Canada, U.S., Europe & Asia which substantially expanded Klondex
  awareness and valuation.
  

Throughout, Klondex has held issued shares
to just 36.7 million and diluted shares to 43.3 million.

Dissident Group′s Plans/Motives are Highly Suspect

THE DISSIDENT GROUP HAS NOT STATED THEIR PLANS FOR THE COMPANY. Their
ownership stake clearly suggests they see substantial value in the
Company and in our accomplishments. However, we know at least one member
of the group is staunchly opposed to our underground initiative.
Additionally, their group has, on several occasions over the past two
years, brought potential merger/combination transactions to our
attention ? but on terms or at valuations that were not favorable to
Klondex shareholders, and/or with companies in which they had an
ownership stake. Their silence on their future plans for Klondex, and
their insistence on seeking 100% control, while offering ZERO takeover
premium, raises serious questions regarding their intentions should they
gain control of your Company.

TO TRANSFER LEADERSHIP TO A NEW BOARD THAT HAS NOT DISCLOSED ITS VISION,
PLAN OR GOALS IS A HIGH RISK PROPOSITION. INCUMBENT MANAGEMENT IS BEST
POSITIONED TO UNLOCK SHAREHOLDER VALUE AS DEMONSTRATED BY OUR CLEAR
PROGRESS. WE HAVE GRAVE CONCERNS ABOUT THE TRUE AGENDA OF THE DISSIDENT
GROUP.

WE BELIEVE KLONDEX′S TANGIBLE EXPLORATION AND DEVELOPMENT
ACCOMPLISHMENTS ARE WHAT MATTERS MOST TO OUR SHAREHOLDERS AND ARE WHAT
WILL CREATE THE GREATEST VALUE FOR SHAREHOLDERS. It is on our record of
achievement that we believe our Board and management team should be
judged.

Underground Program Making Solid Progress

After several years of substantial effort and preparation, in April 2011
we commenced our underground exploration and bulk sampling program at
Fire Creek, our gold property in North Central Nevada. As of the date
hereof, our crews have completed 824 feet of underground drifts. This
includes 632 feet of our 3,650-foot underground decline to access Main
Zone mineralization.

The decline will enable Klondex to commence exploration in-fill drilling
from underground stations before the end of August 2011 and to initiate
bulk sampling for metallurgical testing by year-end 2011. Photos of our
progress at Fire Creek are available on our website www.klondexmines.com.

The Fire Creek underground program is the culmination of a broad effort
put forth by Klondex′s Board of Directors, management team and
consultants and coincides with significant progress we have made across
a range of exploration, development and corporate initiatives.

Fire Creek Development History

• 
  Klondex-led exploration began at Fire Creek in 2004
  
• 
  NI 43-101 resource update ? September 2006
  
• 
  Underground program announced and permitting commenced ? March 2007
  
• 
  NI 43-101 resource update ? March 2009
  
• 
  Initiated underground decline ? April 2011
  
• 
  Initiated 2011 Surface Drilling Program ? June 2011
  
• 
  NI 43-101 resource update ? expected in June 2011
  

Technical Report Update

In May 2011, we commenced work on an updated NI 43-101 compliant
technical report. The report, which will incorporate results from our
2009 and 2010 exploration programs into our March 2009 technical report,
is intended to bring our filings into compliance with National
Instrument 43-101. The report is being prepared by Vancouver, BC-based
TTM Resources Inc. with the assistance of our geological team, including
Richard Kern, M.Sc. P. Geo. Mr. Kern is a Klondex Board member and the
Qualified Person responsible for Klondex′s exploration drilling results
and other technical information. Klondex has provided all the
exploration assays and source data to TTM and plans to file an updated
technical report by the end of this month.

Fire Creek Underground Program Strategy & Benefits

Klondex embarked on its underground program in March 2007, after
identifying this option as the most efficient and cost effective path to
the attainment of Company objectives. After careful comparison of
alternative approaches, it was determined that the estimated costs to
'prove up? our Fire Creek resource for full-scale development through a
deep drilling program from the surface were roughly the same as those
required to pursue an underground program to achieve many of the same
objectives. An underground program offered the additional advantage of
placing us in position to initiate bulk sampling of high-grade
mineralization within the Main Zone. The underground program allows us
to:

• 
  Conduct in-fill drilling at depth via shorter, more cost effective
  drill holes;
  
• 
  Prove grade, continuity and geometry of gold identified in the known
  zones;
  
• 
  Collect samples of 'fresh' mineralized material for metallurgical
  testing to verify gold recoveries;
  
• 
  Construct portal and underground workings at a scale that will support
  efficient transition to steady state operations and reduce future
  capital costs to construct the mine;
  
• 
  Provide a tangible demonstration of the underground mine operations to
  government regulators to support mine permitting and mitigate
  stakeholder concerns;
  
• 
  Provide revenues from sale of gold from the mill testing of the
  underground mineralized material which will be used to reduce costs of
  programs underway; and,
  
• 
  Provide important pilot scale information to support mine planning,
  and mine start-up and commissioning to mitigate development risk.
  

Klondex is Committed to Continued Corporate Improvement:

We are aware of the governance issues raised and our goal is to correct
them. The past year has made unusual demands on directors′ and officers′
time and attention due to Klondex′s efforts to complete the required
financings for its underground program, including regulatory approvals
and permits, due diligence conducted by various groups, and review of
various financing options presented to the Company. We intend to rectify
these issues promptly and the February 2011 appointment of Robin Goad as
an independent director and member of the audit committee is such an
initial step.

In summary, we believe the underground program delivers far more value
to Klondex shareholders than a surface exploration program. The coming
twelve months promise to be our most productive yet, with the release of
our updated technical report, a very active surface exploration program,
progress in driving our underground decline, and the planned initiation
of bulk sampling and underground exploration drilling.

We have assembled a world-class team of employees and industry-leading
consultants to direct and execute our strategy, and we are very pleased
with the progress our team is achieving.

OUR RECORD STANDS FOR ITSELF AND OUR PLAN IS POISED TO CREATE
SUBSTANTIAL VALUE FOR SHAREHOLDERS.

We thank you for your confidence in our vision, and we encourage you to
contact us should you have any questions. We are eager to speak with any
and all investors to answer any questions you may have at this time.

Shareholder Conference Call & Webcast

We will host a shareholder conference call and webcast on Tuesday, June
21st at 11:00 a.m. ET. We will review our vision and progress in more
detail, and we will answer shareholder questions. We urge you to
participate in this call.

This is an extremely important time for your company, and we urge you
to participate in the conference call and to VOTE THE WHITE
Proxy in support of the Klondex Board and plan.

With sincere regards,

The information in this release may contain forward-looking
information under applicable securities laws.This
forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause actual results to differ
materially from those implied by the forward-looking information.Factors
that may cause actual results to vary materially include, but are not
limited to, inaccurate assumptions concerning the exploration for and
development of mineral deposits, currency fluctuations, unanticipated
operational or technical difficulties, changes in laws or regulations,
the risks of obtaining necessary licenses and permits, changes in
general economic conditions or conditions in the financial markets and
the inability to raise additional financing.Readers are
cautioned not to place undue reliance on this forward-looking
information.The Company does not assume the obligation to revise
or update this forward-looking information after the date of this
release or to revise such information to reflect the occurrence of
future unanticipated events, except as may be required under applicable
securities laws.

YOUR VOTE IS IMPORTANT. VOTE ONLY THE MANAGEMENT WHITE
FORM OF PROXY.

PLEASE DISREGARD THE YELLOW
PROXY.

For questions or assistance, please call Georgeson, 1-866-676-3009.

Please direct all proxy inquiries to:

Questions and
Further Assistance

If you have any questions or require assistance in completing or
returning

your WHITE proxy form, please contact our proxy
solicitation agent at:

North American Toll Free Number: 1-866-676-3009

Email: askus@georgeson.com

Shareholder:

Klondex Mines Ltd.

Bryson Goodwin,
604-341-1531

brysongoodwin@shaw.ca

or

Jaffoni
& Collins

David Collins, 212-835-8500

KDX@jcir.com