Phase I Diamond Drilling At The Lone Star Zone

VANCOUVER, BC - Klondike Gold Corp. reported results of Phase 1 diamond drilling at the Lone Star Zone on the Company's wholly owned 586 square kilometer Klondike District Property, Yukon Territory. Phase 1 drilling tested for consistency in grade of gold mineralization and was designed to constrain the geometry and boundaries of gold mineralization. Information obtained from results will be used to prioritize next phases of drilling scheduled to commence this month.

The Company has received assays from the Phase 1 diamond drilling program targeting a 125-meter length by 75-meter width at the western end of the known 3.0 kilometer gold-mineralized length of the Lone Star Zone along the Bonanza Fault. A total of 13 new holes were drilled at Lone Star on four sections totaling 748.24 meters. The drilling was designed to provide 25 by 25-meter hole spacing within a 125-meter by 75-meter area. The Lone Star Zone is gold mineralized from surface over a 60-meter width across the 125-meter length tested in detail, with lateral and vertical grade continuity. This Phase 1 program extended gold mineralization 25-meters further southward, expanding the Lone Star Zone in this direction and opening a significant area with gold potential to test further to the east along the 3.0 km length.

Core logging the Lone Star Zone Phase 1 drill holes documented the Bonanza Fault as a major 60+ meter wide "D3" thrust fault which was re-activated during a 4th deformation event "D4" and was accompanied by gold mineralization. Assays from Phase 2 and Phase 3 diamond drill holes targeting respectively the Stander Zone and potential Stander Zone extensions are still pending.

Peter Tallman, President and CEO, said, "Positive results from the Lone Star Zone continue to solidify the Company's guiding geologic theory of gold mineralization in the Klondike. The grade and consistency of the drill results reported here at Lone Star and other areas allow the Company to move away from exploration and towards resource delineation".

Thirteen drill holes at the western end of the Lone Star Zone on four drill ‘Sections' tested a sub-area where gold mineralization outcrops over a 125 meter by 75-meter area. A total of 748.24 meters of core was drilled. All holes had 200-degree azimuth. The collar dip is -85 or -55 degrees angle from surface. The width of the Lone Star Zone gold mineralization has been extended southward by 25-meters to the south, wider than previously mapped, opening a large area with gold potential to test further to the east along the known 3.0 km mineralized strike length.

Core logging of the Lone Star Zone Phase 1 drill holes documented the Bonanza Fault as a major 60+ meter wide "D3" thrust fault (the "Bonanza Fault") exhibiting significant progressive alteration (silicification, fuchsite alteration, chlorite-magnetite, and epidote) and deformation (laminar D3 shear fabric, and D4 intense z-folds, kink-foliation fabrics, and extensional quartz fracture veins). Gold mineralization within the Lone Star Zone occurs as disseminations within the laminar shear portions hosted along later kink-foliation planes, and as extensional gold-bearing quartz veinlets within more brittle portions of the deformation zone. The Company's mapping supports earlier interpretations that the Bonanza Fault cuts a regional recumbent anticline that folds Klondike district rocks and this is an important potential gold-fluid focus and trap for gold-bearing fluids and a high priority exploration target.