Klondex Plans Initial Gold Production 
 

ELKO, NV - Klondex Mines Ltd. reported the official start of underground mining at its high-grade Fire Creek mine site in Northern Nevada. Yesterday afternoon Klondex has completed the inaugural blast of its underground decline at the mouth of the Fire Creek portal.

Klondex plans to drive a 3,650 foot decline to access Fire Creek's Main Zone mineralization to enable further evaluation of the resource at depth as well as for bulk sampling production. Including the decline and all development, maintenance and support requirements, Klondex expects to complete a total of 6,475 feet of underground development in 2011. Klondex anticipates first gold production from bulk sampling by year-end 2011, with production increasing in 2012 and beyond. The decline will also provide in fill drill sites to further test Main Zone mineralization, providing valuable data for underground development and Klondex's mineral resource. Fire Creek has shown strong indicators of continuity and high grades favorable to underground mining. The project has low capital costs and offers high potential operating margins. In the underground development Klondex is utilizing small-scale mechanized mining performed by Small Mines Development (SMD), an experienced underground contract miner. KDX plans to utilize toll processing of the bulk sample. The outsourcing of mining and processing activities, under the close supervision of KDX's experienced Nevada team, serves to limit capital investment while ensuring the program is able to meet its development timelines and production schedule. The company's address is Suite 600, 595 Howe St., Vancouver, BC V6C 2T5, (604) 662-3902, fax: (604) 662-3904.