Fire Creek Surface Drilling Discovers High Grade Mineralization

VANCOUVER – Klondex Mines Ltd. reported an update on the 2017 surface and underground exploration drill programs at its Fire Creek Mine (“Fire Creek”) located in northern Nevada. Three surface drill holes totaling 4,171 ft (1,271 m) have been completed to-date on the Zeus target. A total of 52 underground drill holes totaling 30,843 ft (9,401 m) were drilled from current underground workings.

This surface exploration drill program was to follow up on the 2016 exploration program which successfully tested a north-south geophysical anomaly located approximately 4,000 ft (1,219 m) west of the current mine workings. These drill results discovered a zone of high grade mineralization within the Zeus structure. Drilling to-date has delineated a mineralized area within the structure approximately 650 ft (198 m) in length and 400 ft (122 m) vertically, within 400 ft (122 m) of surface and is open in all directions. Additional follow up holes are in progress to continue to expand and infill this significant high grade mineralization.

The underground drill program was designed to extend mineralization up and down-dip on the existing veins currently in production. Results continue to support high grade mineralization continuity in both directions outside the currently defined resource. These drill results are not included in the current resource estimate. The up-dip underground drilling above the veins currently in production has returned significant assay results along a strike of 275 ft (84 m) and up-dip by 100 ft (31 m). The down-dip underground drilling below the Karen vein has returned significant assay results along a strike of 150 ft (46 m) and down-dip by 75 ft (23 m).

Brian Morris, Senior Vice President, Exploration, said, “The surface drill results are extremely exciting. These results demonstrate that the potential for high grade mineralization, similar to what is currently being mined at Fire Creek, exists within the Zeus structure about 4,000 feet northwest from our current underground development. Geophysics suggest this is a major 6,500 ft structure. We will continue step-out and infill drilling in this area to fully delineate this high grade structure with the intent to bring it into an inferred resource category in our year-end resource update to be released in Q1 2018.” Mr. Morris continued, “Additionally, the up and down-dip underground drilling was extremely productive, having the potential to add significant new near mine resources to our production profile.”