August 1, 2008
Klondex Arranges Non-Brokered Private Placement
Klondex Mines Ltd. (TSX: KDX) is pleased to announce that it has arranged a non-brokered private placement of up to 1,500,000 units (the "Units") at a price of $1.15 per share for gross proceeds of $1,725,000. Each Unit will consist of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one additional common share of the Company at a price of $1.60 for a period for 12 months after closing. The warrants will be subject to a 30-day early expiration if the stock closes on the Toronto Stock Exchange, for a period of 30 consecutive trading days, at a price of $1.90 or greater. A 6% commission will apply to a portion of the financing attributable to authorized agents. The private placement is subject to exchange acceptance.
In accordance with securities legislation, the shares issued under the private placement will be subject to a hold period of four months and one day from the date of issuance of such securities. The net proceeds of the private placement will be added to working capital and will be used to complete Phase 7 of the surface drilling program for the Fire Creek Property.
About Klondex Mines Ltd.:
Klondex Mines (TSX: KDX) is a gold exploration company focused on the development and expansion of its high-grade Fire Creek deposit in Nevada, covering 10,708 acres of fee and federal mining claims 100% controlled by Klondex. At Fire Creek, Klondex has a September 2006, NI 43-101 defined Indicated Mineral Resource estimated at 1,636,555 tonnes grading 19.88 grams per tonne (0.639 oz/tonne) containing 1,045,738 oz of gold in two separate mineral zones. Since 2006, over 100,000 feet of drilling has expanded the Company's resource, now being defined for an updated 43-101. Klondex has filed for permits to begin bulk sampling for metallurgical testing of up to 120,000 tons of ore and anticipates receipt of these permits during Q3 '08.
Fire Creek is located along the Northern Nevada Rift and on the Battle Mountain-Eureka Trend in North Central Nevada, an area of prolific gold production. Klondex currently has three drill rigs working to expand its resource at Fire Creek. The Company was founded over thirty years ago, and its property portfolio consists of four gold exploration projects, all in Nevada. Eighty percent of Klondex's known resource is on private land. For more information, please visit www.klondexmines.com.
ON BEHALF OF KLONDEX MINES LTD. "William J. Solloway" President