Klondike Silver Corp. Signs Binding Letter of Intent to Option a Portion of the Silver Slocan Mining Camp, British Columbia

Klondike Silver Corp. (TSX-v symbol: KS) (the "Company′) is pleased to
announce that it has executed a binding Letter of Intent ("LOI′) with
Victory Mountain Ventures Ltd. (TSX-v symbol: VMV) ("Victory′) to option
a portion of the Silver Slocan Mining Camp located in south eastern
British Columbia. The parties agree to use their best efforts to execute
a definitive Option Agreement within 15 days.

The Agreement will allow Victory to acquire a 50% interest in the
Silvana West and the Cody Creek claims by making payments to the Company
and incurring exploration expenditures over a three year period. At the
sole discretion of the Company, Victory will be able to earn an
additional 25% of the project by making a lump sum payment of cash and
shares to the Company.

Under the agreement, Victory will also be entitled to a royalty payment
equal to 50% of net profit received from the sale of any newly
discovered resources should exploration prove successful before the
three year option has been satisfied. All agreement will be subject to
TSX Venture Exchange approval.

The primary exploration focus will be on the silver-lead-zinc expansion
potential to the west of the Silvana Mine located centrally in the
Silver Slocan Mining Camp. As part of the Option Agreement, Victory and
the Company will form a management committee to oversee all the
exploration activities on the property, with the Company being the
operator.

The map provided at this link (http://www.klondikesilver.com/i/maps/longitude.jpg)
illustrates the exploration potential between the Company′s Silvana Mine
and the Standard & Mammoth Mines which are along strike to the west. The
area labeled as the 'Prospective Horizon? is where exploration will be
focused as the existing underground mine structure will allow for
underground drilling to explore the western extension potential.

The second land package offered in the option agreement are the Cody
Creek claims located to the northeast and is believed to be along the
same strike as the Silvana Mine. Cody Creek has excellent access and
exploration potential containing several past producing mines.

With the advantage of modern exploration techniques in this historically
productive mining camp, the Company intends to discover new deposits and
develop past producing mines in the Slocan Mining Camp.

Option Agreement Terms:

For Victory to acquire a 50% right, title and interest on the Silvana
West and Cody Creek claims, as seen in the proposed Option Agreement, it
must make an initial cash payment of $75,000 upon signing and then pay
2,000,000 shares to the Company and incur $3,750,000 dollars in
exploration costs over a three year period broken down as follows;

At the sole discretion of the Company, Victory will be able to earn an
additional 25% of the project by making a lump sum payment of $5,000,000
dollars and issuing 5,000,000 common shares of Victory to Klondike.

About Klondike Silver Corp.

Klondike Silver Corp. has assembled a quality portfolio of silver
properties throughout Canada, most notably, in the historic Slocan
Mining District southeastern British Columbia. This historic camp has
produced more than 24 million ounces of silver since the first
discoveries in the late 1800s. Klondike Silver is the dominant
land-holder controlling a majority of the historic camp and the fully
permitted, 100% owned 'Sandon Mining Complex?. The Company owns the
past-producing Silvana, Wonderful, and Hinckley Mines and several other
properties with significant exploration potential.

For additional information please visit the company website www.klondikesilvercorp.com

On Behalf of the Board of Directors

Klondike Silver Corp.

'Richard
Hughes'

Richard Hughes,

President and Director

Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

Cautionary note:

This report contains forward looking statements. Resource estimates,
unless specifically noted, are considered speculative. Any and all other
resource or reserve estimates are historical in nature, and should not
be relied upon. By their nature, forward looking statements involve risk
and uncertainties because they relate to events and depend on factors
that will or may occur in the future. Actual results may vary depending
upon exploration activities, industry production, commodity demand and
pricing, currency exchange rates, and, but not limited to, general
economic factors. Cautionary Note to US investors: The U.S. Securities
and Exchange Commission specifically prohibits the use of certain terms,
such as 'reserves' unless such figures are based upon actual production
or formation tests and can be shown to be economically and legally
producible under existing economic and operating conditions.

Corporate Inquiries:

Klondike Silver Corp.

Mark Luchinski,
604-685-2222

mark.luchinski@klondikesilver.com

or

Alan
Campbell, 604-685-2222

acampbell@klondikesilver.com