Klondex Mines Continues to Advance Surface Exploration and Underground Development at its Fire Creek Gold Project in Nevada

Klondex Mines Ltd. (TSX: KDX) today reviewed the exploration and
development progress being made at its 100%-owned Fire Creek gold
property in the Battle Mountain-Eureka Trend in Northern Nevada. Photos
of Fire Creek activity are available at the Klondex
website.

Klondex CEO, Blane Wilson, commented, 'We are making excellent headway
on both our surface and underground programs, having completed 9,435
meters (30,954 feet) of surface drilling and 537 meters (1,763 feet) of
underground workings through October 10, 2011. We have also commenced
in-fill drilling from underground. Despite a late start for our surface
drilling program, resulting from weather and permitting delays, we are
now making excellent progress, with encouraging results. We anticipate
making our first drilling results announcement from the surface program
in the near future.

'Our underground program is also moving along well and enabled us to
commence underground in-fill drilling in mid-September. Based on our
overall development progress, we expect to be able to commence our bulk
sampling program during the first quarter of 2012. This unprecedented
level of activity at Fire Creek should enable Klondex to provide
progress updates with increased frequency through the fall and winter
months.?

Surface Drilling Program:

Klondex is executing its largest-ever surface drilling program this
season at Fire Creek. The program is budgeted at U.S. $3.4 million and
includes approximately 11,000 meters (36,000 feet) of diamond core
(core) drilling and 7,000 meters (23,000 feet) of reverse circulation
(RC) drilling focused on the following goals:

• 
  In-fill core drilling of the Main, Far North and New North Zones.
  
• 
  Core drilling of new veins intersected by RC drilling of IP anomalies.
  
• 
  Directional drilling to test possible extensions of Main Zone veins at
  depth.
  
• 
  RC drilling of all ten remaining untested IP targets.
  

Through October 10^th approximately 52% of the planned program
has been completed. In late September Klondex received regulatory
approvals to construct new drill roads and drill pads required to
complete the 2011 drilling program and that work is now being completed.

Presently Klondex has five surface drill rigs ? two RC, two core and one
directional core ? working at Fire Creek. In addition, an underground
drill rig is now on site and has been operating since mid-September. In
aggregate, this represents the largest base of drilling activity since
Klondex initiated its exploration program in 2004.

Underground Exploration & Development Program:

Klondex embarked on its underground exploration and development program
in April 2011. The underground program involves a 1,113 meter (3,650
foot) decline to access Main Zone mineralization to enable further
evaluation of the resource at depth as well as for bulk sampling.

Through October 10, 2011, Klondex has completed 537 meters (1,763 feet)
of underground development, including 379 meters (1,243 feet) of the
decline.

Klondex′s underground drilling program has so far completed 608 meters
(1,996 feet) in three separate holes. The program is testing the Main
Zone mineralization to help further define the Fire Creek mineral
resource and to guide underground development. Klondex also expects to
initiate bulk sampling in the first quarter of 2012. Under its Nevada
state permits, Klondex is able to extract and process up to 36,500 short
tons of material per year with a maximum of 120,000 short tons over the
permit's five-year life. Klondex plans to target higher grades for its
bulk sampling activity.

Fire Creek Site Progress:

Construction of Fire Creek′s surface facilities is also moving forward
according to plan, with the completion of two lined water drainage ponds
and the lined Waste Rock Repository. Klondex has also completed the two
ground water monitoring wells that are required under its Water
Pollution Control Permit.

About Klondex Mines Ltd. (www.klondexmines.com):

Klondex Mines is focused on the exploration and development of its 100%
owned Fire Creek gold deposit in North Central Nevada. Fire Creek is a
compelling gold mining prospect that is located near power,
transportation, mining infrastructure and several milling facilities.
Fire Creek′s updated mineral resource is reviewed in the table below.
For more information on the mineral resource estimates, please refer to
Klondex′s disclosure available at the SEDAR
website and here.

In addition to an active surface exploration program at Fire Creek, in
April 2011 Klondex initiated an underground exploration and development
program being pursued via an underground decline. The program is
designed to enable more cost effective in-fill drilling of its existing
resource from underground stations as well as to enable bulk sampling
for metallurgical testing of up to 120,000 short tons of material
(limited to 36,500 short tons per year). Bulk sampling is targeted to
begin in Q1 2012.

As of October 10, 2011, Klondex had 37.0 million shares issued and
outstanding and 43.8 million shares on a diluted basis

Richard Kern (P.Geo), of Reno, Nevada, a qualified person as defined
under National Instrument 43-101, has reviewed and approved the
technical information contained in this press release.

On Behalf of Klondex Mines Ltd.

Blane W. Wilson

President & CEO

Investor & Media:

Jaffoni & Collins

David Collins,
212-835-8500

KDX@jcir.com