Mr. Peter Tallman reports

KLONDIKE GOLD PROCEEDS WITH OFFER FOR KLONDIKE STAR SHARES

Klondike Gold Corp. is proceeding with its proposal to acquire a majority interest in the issued and outstanding shares of Klondike Star Mineral Corp. (KSMC), a widely held, private Delaware company, announced in the company's news release of March 1, 2012. Klondike Gold is offering each shareholder of KSMC the opportunity to exchange each share of KSMC held for 0.25 Klondike Gold share. This offer to exchange is subject to shareholders of KSMC tendering for exchange a minimum of 51 per cent of the outstanding shares of KSMC. With a total of 68,653,461 shares of KSMC issued and outstanding, Klondike Gold may issue up to 17,163,365 shares if 100 per cent of the shares of KSMC are tendered for exchange.

Klondike Gold's principal focus has been the exploration and development of a group of 974 quartz claims situated in the Yukon and covering an area of approximately 185 square kilometres, including claims underlying a large part of the Bonanza Creek-Eldorado Creek catchment area credited with providing over 50 per cent of the historic alluvial (placer) gold production from the Klondike Goldfield. Klondike Gold holds a 22.5-per-cent interest in these claims directly, and another 50-per-cent interest is held by Lonestar Gold Inc., a private company, which is 80 per cent owned by Klondike Gold.

KSMC's principal assets are its holdings of the remaining interests in these 974 quartz claims, 27.5 per cent of which it holds directly, along with a 20-per-cent interest in Lonestar Gold. Additionally, KSMC owns directly a further 368 quartz claims covering an area of approximately 61 square kilometres that are adjacent and/or contiguous to the base group of 974 quartz claims.

The objective of the offer is to acquire control of KSMC and thereby consolidate the title to this package of a total of 1,342 quartz claims covering approximately 246 square kilometres, part of which underlie 70 per cent of the Bonanza Creek-Eldorado Creek catchment area of the historic Klondike Goldfields to enhance the ability to finance the further development of these claims.

In addition to the interest in the quartz claims described above, KSMC also holds title to 188 placer claims in the Yukon extending approximately 60 miles along the Indian River at the confluence with Montana Creek, subject to a 5-per-cent gross production royalty payable by KSMC to the vendors. In 2012, by way of a royalty and lease agreement, KSMC granted an exclusive lease of the claims and the mining rights thereto, including the water licence and the mining permit held by KSMC, to Klondike Gold.

Peter Tallman, president and chief executive officer of Klondike Gold, commented: "Klondike Gold's vision to create a successful exploration enterprise in the Yukon first requires consolidation of the property titles into one business entity. The addition into Klondike Gold's portfolio of KSMC's interests in the key Bonanza-Eldorado area mineral claims, as well as the other KSMC mineral claims nearby plus the alluvial placer claims, creates a combination with the threshold needed to attain that vision."

The offer is being made by Klondike Gold as an exempt takeover bid under Canadian securities regulations and is subject to acceptance for filing by the TSX Venture Exchange.

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