Mr. Paul Huet reports

KLONDEX REPORTS NET INCOME OF $18.3 MILLION OR $0.16 PER SHARE IN INAUGURAL YEAR OF PRODUCTION

Klondex Mines Ltd. has filed its management discussion and analysis, and its audited consolidated financial statements for the year ended Dec. 31, 2014, which will be available on the company's website and on SEDAR. The financial statements were prepared in accordance with international financial reporting standards.

Fourth quarter and year-end 2014 financial highlights:

• Production costs for the fourth quarter per gold-equivalent ounce sold were $685 ($603 (U.S.)); full year were $679 ($585 (U.S.)); fourth quarter production costs per gold ounce sold on a byproduct basis were $553 ($487 (U.S.)); fiscal year were $526 ($454 (U.S.));
• Cash balance as of Dec. 31, 2014, was $52.8-million;
• Working capital as of Dec. 31, 2014, was $56-million;
• Revenue for the fourth quarter was $44.6-million from the sale of 32,617 gold-equivalent ounces, which consisted of 26,272 gold ounces and 400,706 silver ounces, at an average realized price of $1,401 ($1,234 (U.S.)) and $19.48 ($17.15 (U.S.)), respectively;
• Revenue for the year was $121.7-million from the sale of 88,352 gold-equivalent ounces, which consisted of 70,661 gold ounces and 1,117,288 silver ounces, at an average realized price of $1,399 ($1,264 (U.S.)) and $20.44 ($18.47 (U.S.)), respectively;
• Net income for the fourth quarter totalled $9-million or seven cents per basic share. Net income for the year was $18.3-million or 16 cents per basic share;
• Cash flow for the fourth quarter provided by operating activities was $10.7-million; for the year was $33.1-million;
• Capital expenditures for the fourth quarter were $10.5-million; for the year were $30.8-million, principally for exploration and development at both sites;
• Gold-equivalent ounces recovered in the fourth quarter were 30,460, which consisted of 22,262 gold ounces and 517,761 silver ounces; fiscal year gold-equivalent ounces recovered were 107,861, which consisted of 86,239 gold ounces and 1,365,586 silver ounces.

Operational targets for 2015

Klondex provides the following guidance for 2015:

• Production of 120,000 to 125,000 gold-equivalent ounces;
• Production costs on a gold-equivalent basis of $688 to $750 ($550 (U.S.) to $600 (U.S.));
• All-in sustaining costs on a gold-equivalent basis of $1,000 to $1,063 ($800 (U.S.) to $850 (U.S.)).

The cost guidance was prepared in United States dollars and converted to Canadian dollars using an exchange rate of 1.2511, the Bank of Canada noon rate at March 24, 2015.

Paul Huet, Klondex president and chief executive officer, commented: "I am so proud of what Klondex accomplished in 2014, none of which would have been possible without the dedication and commitment of the talented individuals who make up the Klondex team. In our inaugural year of production, we recovered approximately 108,000 gold-equivalent ounces, and our working capital increased to $56-million. The year was highlighted by the acquisition of the Midas mine and mill, transforming the company into a multiasset producer. We were able to take advantage of the many synergies between Fire Creek and Midas to become one of the lowest-cost gold producers with a company-wide production cost per gold ounce sold on a byproduct basis of $454 (U.S.) in 2014.

"We begin 2015 with newly published reserve plans for Midas and Fire Creek that will generate free cash flow and profitability for years to come. We are dedicated to ongoing resource development with a view to deliver sustainable production and organic growth. We will build on the foundations we established in 2014 as we benefit from continuing cost reductions and productivity improvements."

             UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (LOSS)                          
             (in thousands of dollars except per-share amounts)

                              Three months ended                 Year ended         
                                         Dec. 31,                   Dec. 31,       
                               2014         2013          2014         2013    

Revenues              $      44,609  $        --   $   121,693  $        -- 
Cost of sales                                                               
Production costs             22,333           --        59,985           -- 
Depreciation and                                                          
depletion                    10,764           --        25,664           -- 
Gross profit                 11,513           --        36,044           -- 
General and                                                                 
administrative                                                             
expenses                      2,573        1,851         9,953        4,614 
Income (loss) from                                                          
operations                    8,940       (1,851)       26,091       (4,614)
Business acquisition                                                        
costs                            --         (804)       (2,257)        (804)
Gain (loss) on change                                                       
in fair value of                                                           
derivative                    1,637       (8,763)        3,671       (8,763)
Finance charges              (2,696)          --        (9,683)          -- 
Foreign currency gain         3,717           60         8,973           60 
Other expenses                 (845)          --          (845)          -- 
Income (loss) before tax     10,753      (11,358)       25,950      (14,121)
Income tax expense            1,706           --         7,649           -- 
Net income (loss)     $       9,047  $   (11,358) $     18,301  $   (14,121)
Net income (loss) per                                                       
share                                                                      
Basic                 $        0.07  $     (0.16) $       0.16  $     (0.21)
Diluted               $        0.07  $     (0.16) $       0.16  $     (0.21)

Revenue

During the three months and the year ended Dec. 31, 2014, Klondex's revenue was $44.6-million and $121.7-million, respectively, from the sale of 26,272 gold ounces and 400,706 silver ounces, and 70,661 gold ounces and 1,117,288 silver ounces, respectively. The revenue increased 17 per cent during the fourth quarter from the third quarter due to a 16-per-cent increase in gold-equivalent ounces sold and a 1.3-per-cent increase in the average price per gold-equivalent ounce.

Cost of sales

Production costs for the three months and the year ended Dec. 31, 2014, were $22.3-million and $60-million, respectively. Production costs per gold-equivalent ounce sold in the three months and the year ended Dec. 31, 2014, were $685 ($603 (U.S.)) and $679 ($585 (U.S.)), respectively. Production costs per gold ounce sold on a byproduct basis in the three months and the year ended Dec. 31, 2014, were $553 ($487 (U.S.)) and $526 ($454 (U.S.)), respectively. The production costs per gold-equivalent ounce sold and the production costs per gold ounce sold on a byproduct basis in the fourth quarter were higher by 13 per cent and 16 per cent, respectively, compared with the third quarter of 2014. Depreciation and depletion costs in the three months and the year ended Dec. 31, 2014, were $10.8-million and $25.7-million, respectively.

Gross profit

Gross profit in the three months and the year ended Dec. 31, 2014, was $11.5-million and $36-million, respectively.

General and administrative expenses

General and administrative expenses for the three months and the year ended Dec. 31, 2014, were $2.6-million and $10-million, respectively (2013 -- $1.9-million and $4.6-million, respectively). The increase in general and administrative expenses over the prior year is due to the growth of the company, as it has transformed from an exploration-stage company to a production-stage company.

Business acquisition costs

Business acquisition costs for the year ended Dec. 31, 2014, of $2.3-million were related to the acquisition of the Midas mine and mill.

Gain on change in fair value of derivative

The company recorded a gain on the valuation of the derivative associated with a gold supply agreement with a third party in the three months and the year ended Dec. 31, 2014, of $1.6-million and $3.7-million, respectively. The derivative is valued at each quarter-end. The reduction in the derivative value from previous periods is principally related to gold ounces produced and offered under the gold supply agreement, and a decrease in the estimated forward gold spot price and in the estimated volatility of gold price over the remaining term of the gold supply agreement.

Finance charges

The finance charges for the three months and the year ended Dec. 31, 2014, were $2.7-million and $9.7-million, respectively. The finance charges are mainly related to the obligations under a gold purchase agreement and a senior secured facility agreement, each of which was entered into in connection with the acquisition of the Midas mine and mill in February, 2014. In 2013, the finance charges were capitalized into the Fire Creek evaluation and exploration assets.

Income tax expense

Income tax expense for the three months and the year ended Dec. 31, 2014, was $1.7-million and $7.6-million, respectively. Income tax expense includes the State of Nevada net proceeds tax and reflects unbenefited losses in Canada.

Net income

Total net income for the three months and the year ended Dec. 31, 2014, was $9-million and $18.3-million, respectively (2013 -- loss of $11.4-million and $14.1-million, respectively). The net income increase for the three months and the year ended Dec. 31, 2014, over the previous year is due to the recognition of revenue and profit from the Fire Creek project and Midas mine.

Fourth quarter and year-end 2014 results conference call

Management will host a conference call on Wednesday, March 25, 2015, at 10:30 a.m. Eastern Time/7:30 a.m. Pacific Time to discuss fourth quarter and fiscal results. Presenting on the call will be Mr. Huet, Brent Kristof, chief operating officer, and Barry Dahl, chief financial officer.

The call can be accessed by dialling 1-800-319-4610 (North America toll-free), 1-416-915-3239 (Toronto and international), and 604-638-5340 (outside of Canada and the U.S.).

Registration is required for the call.

Please dial in at least 10 minutes prior to the scheduled start time.

A replay will be available until 11:59 p.m. on Wednesday, April 1, 2015. The replay can be accessed by dialling toll-free from the U.S. and Canada: 1-800-319-6413, or dialling international toll: 1-604-638-9010, and entering the passcode 3599 followed by the pound sign.

We seek Safe Harbor.