Klondex Mines

Klondex Mines Completes $9 Million Bought Deal Private Placement
17:50 10.11.10

VANCOUVER, British Columbia--(BUSINESS WIRE)--

Klondex Mines Ltd. (TSX: KDX), a high-grade Nevada gold explorationcompany moving into underground development for a bulk sampling program, announced today that it has completed its previously announced bought deal private placement. A syndicate of underwriters led by NCP Northland Capital Partners Inc. and including Mackie Research Capital Corporation and Wellington West Capital Markets Inc. have completed the sale of 4,000,000 common shares priced at $2.25 per share for gross proceeds of $9 million. The shares have been placed primarily with institutional investors.

Net proceeds from the offering will be used for ongoing exploration and site work at Klondexs Fire Creek property in Nevada as well as for general working capital purposes. Klondex is also seeking to complete a gold-backed financing intended to fully fund its contemplated underground program at Fire Creek.

Klondex has completed approximately half of its 29-hole, 2010 surface drilling program at Fire Creek and is also actively engaged in surface work to prepare Fire Creek for a planned underground decline to provide access for in-fill drilling and bulk sampling of the resource.

After giving effect to the private placement, as of November 10, 2010 Klondex Mines has 36,544,089 shares issued and outstanding and 41,319,089 shares on a fully diluted basis.

This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The common shares of Klondex have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

About Klondex Mines (www.klondexmines.com):

Klondex Mines Ltd. is focused on the exploration and development of its 100% owned high-grade Fire Creek gold deposit in North Central Nevada. Fire Creek is a compelling, low-Capex mining prospect that is well located near power, transportation, mining infrastructure and several milling facilities. Klondex has identified the following NI 43-101 compliant resource at Fire Creek:

 
Fire Creek Indicated and Inferred Resource*

As of March 30, 2009
Classification   Metric Tonnes   Grams Gold

Equivalent

Per Metric Tonne
  Total Ounces

Gold Equivalent
Indicated   5,043,033   10.11   1,639,822
Inferred   1,833,423   8.63   508,799
*The resource is approx. 98.3% gold and 1.7% silver and reflects a cutoff grade