Klondike Gold's Exploration Model Update

VANCOUVER, December 10, 2019 - Klondike Gold Corp. (TSXV:KG)(FRA:LBDP)(OTC:KDKGF) ("Klondike Gold" or the "Company") is pleased to provide an update to the working exploration model which identifies newly recognized northeast trending orogenic faults and links these faults to gold mineralization. The updated exploration model is a result of a comprehensive three-month reprocessing and recompilation program of collected data involving in-house personnel and structural, geophysical, and LiDAR outside consultants. This new exploration model more adequately explains the recent gold discovery in drill hole EC19-267 which intersected mineralization grading 1,009 g/t Au with 1,035 g/t Ag over 1.0 meter (104.00-105.00 m) and provides vectors towards new exploration targets at the Lone Star and Stander zones. These areas, among others, will continue to be the focus of drilling and exploration efforts in 2020.

EXPLORATION MODEL OVERVIEW

The new orogenic structural model identifies three phases of early deformation ("D1" to "D3") associated with obduction of the Klondike island arc terrain onto continental North America, which created northwest-southeast oriented unmineralized faults through the Klondike District. A later post-obduction deformation phase ("D4"), recognized in outcrops in 2018 and recently documented in outcrop, oriented-drill core, in multiple geophysics and LiDAR datasets, and also in the topography (see Figure 1) shows approximately northeast-southwest oriented faults which dip northwesterly. This represents an almost 90-degree rotation of the main compressional stress direction, and is implied to occur well after (D1 to D3) terrain obduction.

The exploration model essentially recognizes that northeast-trending "D4" faults are responsible for gold mineralization, and that the D4 fault process also reactivated and introduced gold mineralization into some earlier "D3" northwest-trending faults. Historically the D3 faults have been the focus of all exploration in the Klondike District to date and were previously considered to be the only faults with gold mineralization.

The Lone Star Zone and Stander Zone are both (D3-related) structures cross-cut by the newly recognized (D4) faulting. The Company interprets the recent Stander Zone gold intersection in drill hole EC19-267 of mineralization grading 1,009 g/t Au with 1,035 g/t Ag over 1.0 meter (104.00-105.00 m) to be situated at the intersection of localized northwesterly (D3) and northeasterly (D4) trending structures.

Also recognized are subsequent post-mineralization north-northwest ("D5") faults containing Cretaceous age mafic, felsic and lamprophyre dykes which indicate a direct magmatic connection to the upper mantle. Most recent intrusions of north-south trending, reverse-magnetic-polarity ("D6") Eocene porphyry dykes complete the structural evolution.

FIGURE 1: STRUCTURAL MODEL SHOWCASING D3 AND D4 FAULTS ON LONE STAR RIDGE

Figure 1 provides an illustrative sketch of a potentially gold mineralized fault network. The new D4 (yellow) northeast trending faults are readily identifiable as gulches which connect between the two major thrust faults (purple) which occupy the major creeks and parallel secondary D3 reactivated faults (red).

The Company has mapped four D3 faults reactivated during the D4 gold mineralizing event, namely;

• Bonanza Fault (hosting Lone Star Zone)
• Nugget Fault (hosting Stander Zone)
• Eldorado Fault (hosting the Gay Gulch showing)
• Irish Fault (hosting the Violet showing)

The Company has also provisionally identified five northeast (D4) cross-faults in the same area which correspond directly to the pattern of creeks drainage (represented in yellow in Figure 1). The recognition and mapping of the D4 orogenic faults across multiple datasets and linking these faults to gold mineralization provides explanation for the distribution of gold in faults within the Klondike District. These northeast (D4) faults, the extensions of northwest D3 faults and the structural intersection of the (D3/D4) fault systems are considered primary targets of 2020 gold exploration.

GEOPHYSICAL EXPRESSION OF LONE STAR ZONE

The Lone Star Zone is known from drilling to be a broad zone hosting disseminated gold mineralization associated with the Bonanza Fault. A one-kilometer length by 200-meter width has been systematically drilled from 2016 to 2018 with relatively consistent gold grades across broad intervals. Additional drilling in 2019 tested for along-strike continuation of this mineralization with assay results pending.

The Lone Star Zone is recognized in gold-bearing outcrops and drilling for approximately 3 kilometers. The Lone Star Zone is directly correlated with gold-in-soils, very-low-frequency ("VLF") electromagnetics, reduced-to-pole magnetics and total field magnetics for an additional 4.5 kilometers with little exploration to date along this length, for a total interpreted length of approximately 7.5 kilometers.

GEOPHYSICAL EXPRESSION OF STANDER ZONE

The "Stander Zone" is the new name (previously ‘Nugget' and others) for the zone of quartz veining containing coarse gold mineralization found in outcrop on the east side of Eldorado Creek. The name remembers Anton Stander who was the first discoverer of placer gold in Eldorado Creek in August 1896.

The Stander Zone is recognized in gold-bearing outcrops and drilling for approximately 4 kilometers. The Stander Zone is recognizable in coincident tilt-derivative magnetics plus gold-in-soil anomalies for an additional 8 kilometers with no exploration to date along this length, for a total interpreted length of 12 kilometers.

The Stander Zone has been tested in various localized areas along approximately a 2-kilometer extent. Additional drilling in 2019 tested the area adjacent to the 1,009 g/t Au with 1,035 g/t Ag over 1.0 meter intersection with assay results pending.

2019 ASSAYS PENDING

Remaining unreleased 2019 drill results are undergoing interpretation and review in light of the new structural information and exploration model updates and will be forthcoming upon completion of this review. Results from other work such as additional soil sampling, GT-Probe surveying, rock sampling and oriented core analysis are also pending.

OTHER ACTIVITIES

Klondike Gold recently attended the 46th Annual Yukon Geoscience Forum and Trade Show organized by the Yukon Chamber of Mines and separately the 2019 Yukon Placer Forum organized by the Yukon Geological Survey. Peter Tallman, CEO, gave a technical presentation at the Geoscience Forum entitled "Structural Evolution and Timing of Gold Mineralization in the Klondike District, Yukon" and a second technical presentation at the Placer Forum entitled "Bedrock Gold Discoveries Explain Nearby Placer Deposits: A Model for Finding Placer Gold". These presentations incorporate concepts and information described in this news release.

QUALIFIED PERSONS REVIEW

The technical and scientific information contained within this news release has been reviewed and approved by Ian Perry, P.Geo., Vice-President Exploration of Klondike Gold Corp. and Qualified Person as defined by National Instrument 43-101 policy.

ABOUT KLONDIKE GOLD CORP.

Klondike Gold Corp. is a Canadian exploration company with offices in Vancouver, British Columbia, and Dawson City, Yukon Territory. The Company is focused on exploration and development of the Lone Star gold target at the confluence of Bonanza and Eldorado Creeks, within a district scale 576 square kilometer property accessible by government-maintained roads located on the outskirts of Dawson City, YT within the Tr'ondëk Hwëch'in First Nation traditional territory.

On behalf of Klondike Gold Corp.

"Peter Tallman"

President and CEO
(604) 609-6138
E-mail: info@klondikegoldcorp.com
Website: www.klondikegoldcorp.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward-Looking Information

"This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. This information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may," "will," "should," "anticipate," "plan," "expect," "believe," "estimate," "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management of Klondike in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause Klondike's actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and accordingly, undue reliance should not be placed thereon.

Risks and uncertainties that may cause actual results to vary include but are not limited to the availability of financing; fluctuations in commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com. Klondike disclaims any obligation to update or revise any forward-looking information or statements except as may be required."

SOURCE: Klondike Gold Corp.