Klondex Completes CDN $1.75 Million Private Placement

VANCOUVER, British Columbia--(BUSINESS WIRE)--Klondex Mines Ltd. (TSX: KDX.TO) announced today it has completed a non-brokered private placement of 1,520,000 units (the “Units”) at a price of CDN $1.15 per unit, yielding gross proceeds of CDN $1,748,000. Each Unit consists of one common share and one share purchase warrant that entitles the holder to purchase one additional common share of the Company at a price of CDN $1.60 for up to one year after closing. The warrants are 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 CDN $1.90 or greater.

Net proceeds of the private placement were CDN$1,658,300 and will be used principally to complete Phase 7 of the surface drilling program at Klondex’s Fire Creek Property in North Central Nevada. The private placement proceeds, in addition to existing cash reserves, bring Klondex’s current cash position to approximately CDN$2.5 million.

William Solloway, President of Klondex, commented, “Surface drilling has been a successful path to building our indicated mineral resource of gold at Fire Creek. With additional funding now in place we plan to complete our Phase 7 surface drilling program this fall, and thereafter we intend to update our NI-43-101 resource estimate to incorporate data from the two productive years of drilling since our last resource calculation.”

Shares issued under the private placement are subject to a hold period of four months and one day from the date of issuance. A 6% commission attributable to authorized agents was applied to a portion of the financing and amounted to CDN$89,700. Reflecting the issuance of shares pursuant to this financing, as of August 21, 2008, Klondex had 25,069,804 shares issued and outstanding.

About Klondex Mines Ltd.:

Klondex Mines (TSX: KDX.TO) 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 which will be defined in an updated 43-101. Klondex has filed for permits, which it anticipates in Q3 of this year, to begin bulk sampling for metallurgical testing of up to 120,000 tons of ore.

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 two 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

Investors:
Jaffoni & Collins Incorporated
David Collins, 212-835-8500
KDX@jcir.com