Mr. John Seaberg reports

KLONDEX ANNOUNCES NEW DISCOVERY AT TRUE NORTH; DRILLING CONTINUES TO EXTEND KNOWN MINERALIZATION

Klondex Mines Ltd. has provided an update on underground drilling at its True North gold mine in Manitoba, Canada. The drill results herein are not included in the mineral reserve and mineral resource estimates released on Sept. 12, 2016. The company expects to provide an updated mineral reserve and mineral resource update for True North in the second quarter of 2017.

True North drilling highlights:

• 26-16-001: 0.36 ounce per ton gold over 15.0 feet, or 12.3 grams per tonne over 4.6 metres (007-26 level);
  • Including 1.75 ounces per ton Au over three feet or 60.0 grams per tonne over 0.9 m;
• 32-16-003A: 1.13 ounces per ton Au over 2.3 feet, or 38.8 grams per tonne over 0.7 m (710-32 level);
• 32-16-006: 0.20 ounce per ton Au over 16.5 feet, or seven grams per tonne over 5.0 m (710-32 level);
  • Including 0.63 ounce per ton Au over 2.6 feet, or 21.5 grams per tonne over 0.8 m;
• 32-16-006: 0.33 ounce per ton Au over 9.7 feet, or 11.3 grams per tonne over three m (new 710 HW-32 level);
• 645-16-002: 0.95 ounce per ton Au over 5.9 feet, or 32.5 grams per tonne over 1.8 m (711 FW new-24 level);
• 645-16-003: 0.67 ounce per ton Au over 2.4 feet, or 23 grams per tonne over 0.7 m (711 FW new-24 level);
• 645-16-004: 0.53 ounce per ton Au over 12 feet, or 18.2 grams per tonne over 3.7 m (711-24 level);
  • Including 1.83 ounces per ton Au over 2.5 feet, or 62.8 grams per tonne over 0.8 m.

True North gold mine drilling summary

Assay results have been received for 18 underground drill holes totalling 16,660 feet (5,078 metres). These holes targeted a significant downdip extension of the 007 zone, the downdip extension of the 710 zone at the 32 level, the up and downdip extensions of the 711 zone at the 24 level, and the downdip extension of Cohiba.

Four exploration holes were drilled from the 26 level targeting the downdip extension of the 007 zone into the historical San Antonio mine (SAM) unit. The SAM unit produced approximately 1.5 million ounces of gold throughout its history. This target was generated by projecting the 007 structure so that it extended out of the Shoreline basalt into the historically most productive SAM unit. The first drill hole, 26-16-001, intersected the downdip extension of the 007 structure approximately 1,775 feet (541 m) east of the current 26 level workings and 2,135 feet (651 m) below the 007 decline. Assays from the remaining three holes are pending.

Downdip extension of 710

Assay results were received for the first six holes testing the downdip extension of the 710 vein on the 32 level. All six holes intersected the mineralized structure in the targeted area, confirming continuity of the 710 zone over 600 feet (183 m) downdip, which remains open at depth. Additionally, drill hole 32-16-006 intersected a new mineralized structure in the hangingwall. Drilling is in progress, and subsequent assays are pending.

Up and downdip extension of 711

Assay results were received for the final two holes of the 711 downdip exploration program, as well as the first six holes from the 711 updip exploration program. Results from both programs suggest that the mineralization of the 711 zone extends both up and downdip and remains open in both directions.

Cohiba

The company is reporting the final three holes of the 2016 Cohiba downdip extension drill program. All three holes intersected mineralized material in the Cohiba structure, suggesting the Cohiba zone remains open at depth and along strike.

Brian Morris, vice-president, exploration, said: "These results from True North's exploration drilling program are extremely important. The team's exploration model and understanding of local vein systems have already led Klondex to a significant new discovery, which has the potential to add substantial resource growth at True North. This new discovery continues to suggest that the True North district remains underexplored and has the potential to be much larger than what we understand today."

Mr. Morris continued, "Moreover, not only are we continuing to extend the mineralization up and downdip in the 710 and 711 zones, we are consistently identifying new targets in close proximity to existing infrastructure."

Assays were performed by TSL Laboratories, an ISO 17025-accredited independent laboratory, and samples were collected and shipped under the supervision of Klondex staff.

A description of the data verification methods, quality assurance program and quality control measures applied can be found in the technical reports titled "Technical report and prefeasibility study on the True North gold mine, Bissett, Man., Canada," dated Oct. 27, 2016, and with an effective date of June 30, 2016, which are available under the company's issuer profile on SEDAR.

About Klondex

Klondex is a well-capitalized, junior-tier gold- and silver-mining company focused on exploration, development and production in a safe, environmentally responsible and cost-effective manner. The company has 100-per-cent interests in three producing mineral properties: the Fire Creek mine and the Midas mine and ore milling facility, both of which are located in the state of Nevada, United States of America, and the True North gold mine (formerly the Rice Lake mine) and mill in Manitoba, Canada. The company also has 100-per-cent interests in two recently acquired projects, the Hollister mine and the Aurora mine and ore milling facility (formerly known as Esmeralda), also located in Nevada, USA.

Qualified person

Scientific and technical information in this press release has been reviewed and approved by Mr. Morris (AIPG CPG-11786), a qualified person within the meaning of NI 43-101.

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