Initial Underground Drill Results Show Continuity of Gold Mineralization at Klondex Mines′ Fire Creek, Nevada Project

Klondex Mines Ltd. (TSX: KDX), a Nevada gold exploration and development
company, today released initial assay results from its ongoing
underground core drilling program at its 100%-owned Fire Creek
gold-silver project in Lander County, Nevada. The nine holes reported
today tested the southern end of the Main Vein Zone, a northwest
trending set of vein-like bodies of mineralization with a known length
of over 1,000 meters. Through February 25th Klondex had completed 28
underground infill holes for a total of 6,591 meters (18 holes were
completed in 2011 and 10 holes in 2012). Klondex expects to report the
remaining 2011 holes in the next several weeks.

Blane Wilson, CEO of Klondex, commented, 'With the results from our
first nine holes, our underground infill program is off to a strong
start. This program is an important component of our strategy to
establish continuity of the gold mineralization that is hosted in a
series of parallel vein-like zones. The data from these and future holes
will help define the nature and extent of gold mineralization that will
be further evaluated with through our bulk sampling program.
Importantly, both the exploration and bulk sampling program will utilize
the same underground workings. We look forward to reporting further
underground results in the coming weeks.?

Results from the drilling program, using a 2.00 g Au per tonne cut-off
grade, follow:

Exploration Overview:

All of the holes included in this report are HQ diameter (96mm hole;
63.5mm core) core holes which were drilled from a single drill station
at the southern end of the northwesterly progressing Fire Creek
underground mine workings. Hole FC 11 003 U was drilled in a
west-southwesterly direction, whereas the remaining holes were drilled
in easterly to east-northeasterly directions. This drill program seeks
to test the continuity of mineralization along the projected strike, as
well as along the dip of the mineralized zones, which was previously
indicated from surface drilling. The results from this group of
assays have provided an early indication of continuity of gold
mineralization between surface drill holes (drilled on nominal 50
meter line spacing).

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 located near power, transportation,
mining infrastructure and several milling facilities. Fire Creek′s
mineral resource is reviewed in the most recent technical report
available here
with additional disclosure available via SEDAR.

In addition to an active surface exploration program at Fire Creek, in
April 2011 Klondex initiated an underground exploration and development
program through 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 anticipated to commence
by the end of June 2012.

As of February 29, 2012, Klondex had 46.5 million shares issued and
outstanding and 59.2 million shares on a diluted basis.

Sample results cited in this news release were obtained from HQ diameter
core drill holes completed by American Drilling, an independent
contractor working under the direction of Klondex Gold & Silver staff.
Assays were determined by ALS Minerals, Reno, Nevada, an independent
analytical laboratory.

The content of this press release has been reviewed by Dean T. Wilton,
CPG-7659 (American Inst. of Prof. Geol.) and Vice President ?
Exploration for Klondex Mines Ltd., as a non-independent Qualified
Person.

This news release contains forward-looking statements, including about
current expectations on the timing of project development. These
forward-looking statements entail various risks and uncertainties, are
based on current expectations, are subject to a number of uncertainties
and risks, and actual results may differ materially from those contained
in such statements. These uncertainties and risks include, but are not
limited to, the strength of the global economy; the price of gold;
operational, funding and liquidity risks; the degree to which mineral
resource estimates are reflective of actual mineral resources; the
degree to which factors which would make a mineral deposit commercially
viable are present; the risks and hazards associated with underground
operations. Risks and uncertainties about the Company′s business are
more fully discussed in the Company′s disclosure materials filed with
the securities regulatory authorities in Canada and available at www.sedar.com.
Readers are urged to read these materials. Klondex assumes no obligation
to update any forward-looking statement or to update the reasons why
actual results could differ from such statements unless required by law.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING RESOURCES

This press release uses the terms 'inferred mineral resources,'
'indicated mineral resources,' and 'mineral resources' which are
Canadian mining terms defined in accordance with National Instrument
43-101 ? Standards of Disclosure for Mineral Projects under the
guidelines set out in the Canadian Institute of Mining, Metallurgy and
Petroleum (the 'CIM') Standards on Mineral Resources and Mineral
Reserves (the 'CIM Standards'). The CIM Standards differ significantly
from standards in SEC Industry Guide 7 under the United States
Securities Act of 1933, as amended. While the terms 'mineral resource,'
'indicated mineral resources,' and 'inferred mineral resources' are
recognized and required by Canadian regulations, they are not defined
terms under SEC Industry Guide 7 and are not normally permitted to be
used in reports filed with the Securities and Exchange Commission.
Readers are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves.
'Inferred mineral resources' have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred
mineral resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies, except in rare cases.
Readers are cautioned not to assume that all or any part of an inferred
mineral resource exists or is economically or legally mineable. As such,
information regarding resources contained in this press release may not
be comparable to similar information made public by United States
companies subject to reporting and disclosure requirements under United
States federal securities laws and the rules and regulations promulgated
thereunder.

On Behalf of Klondex Mines Ltd.

Blane W. Wilson

President
& CEO

Investor & Media:

Jaffoni & Collins

David
Collins, 212-835-8500

KDX@jcir.com