Mr. John Seaberg reports

KLONDEX ENCOUNTERS HIGH-GRADE MINERALIZATION AT HATTER GRABEN; MIDAS MILL RECOVERY OF HOLLISTER ORE IMPROVING

Klondex Mines Ltd. provides the initial results from the 2017 surface exploration drill program at the Hatter Graben zone near its Hollister mine and reports on progress made at the Midas mill regarding recovery of Hollister ore. Both Hollister and the company's Midas mill are located in northern Nevada.

Hatter Graben surface drilling highlights:

• H17-001: 1.53 ounces per ton silver-equivalent over 3.1 feet, or 52.4 g/t over 0.9 m;
• H17-005: 1.18 oz/t AuEq over six feet, or 40.5 g/t over 1.8 m;
• H17-004: 0.87 oz/t AuEq over 2.5 ft, or 29.7 g/t over 0.8 m;
• H17-001: 0.74 oz/t AuEq over 6.5 ft, or 25.4 g/t over two m;
• Including 1.25 oz/t AuEq over 2.9 ft, or 42.9 g/t over 0.9 m.

Key points:

Assays were received for the first five surface core holes at Hatter Graben. These are the first assays from an 11-hole drill program which was designed to infill drilling completed during 2008. The intent of this drill program is to develop an initial inferred resource at Hatter Graben.

Drilling intersected several zones of multiple subparallel veins similar to features encountered in 2008. Moreover, the results have extended the vein system down dip approximately 200 feet from the known mineralization. The company now has a total of approximately 1,400 feet of vertical height of mineralized veins and the continuing drilling is intended to further extend mineralization east along strike. Mineralization at Hatter Graben remains open in all directions. Drilling continues and is scheduled to be completed in early December. After which, the company expects to receive final assays from the remaining six core holes by year-end and publish an initial resource during the first quarter of 2018.

Additionally, drill results have demonstrated that Hatter Graben comprises more competent rock compared with the Hollister mine. The host rock in the Hollister mine is clay rich and contains marginal ground conditions. The preferable ground conditions at Hatter Graben should allow for better vein development, superior dilution control and makes the more efficient long-hole stoping mining method a viable option.

Brian Morris, senior vice-president, exploration, said: "I am extremely encouraged by the initial results from our first five holes at Hatter Graben. At the onset, we had permitting delays which required us to drill our first three holes from the least optimal locations. We also experienced deviations on some of the initial holes which resulted in intercepting the vein system much deeper than the targeted elevations. Even with all of those challenges, we still encountered multiple veins similar to historical findings." Mr. Morris continued: "The most optimal drill sites are now fully permitted and drilling is ongoing from these locations. We are infilling and stepping to the east in the most desirable elevations where we fully expect robust results."

Midas mill CIL modification update:

During the fourth quarter, the company made a number of modifications to the new CIL circuit at the Midas mill in order to improve gold recoveries from Hollister ore. A plant trial, in which residual cyanide concentrations were reduced, has shown significant promise to improve gold recoveries and is being optimized. Longer term, the company expects the gold recoveries from Hollister ore to average between 80 per cent and 90 per cent. In addition, the company has gained efficiencies in the carbon handling circuit, which has reduced the time required to transition from CIL to Merrill Crowe, optimizing mill throughput.

Assays were performed by American Assay Laboratories of Sparks, Nev., as directed under the supervision of Klondex staff. This organization is an ISO 17025 accredited independent laboratory.

A description of the data verification methods, quality assurance program and quality control measures applied can be found in the technical report titled "Technical Report and Pre-Feasibility Study for the Hollister Underground mine", as amended on Aug. 9, 2017, with an effective date of May 31, 2017, which is available under the company's issuer profile on SEDAR.

About Klondex Mines Ltd.

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, and the True North gold 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, also located in Nevada.

Qualified person

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

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