Mr. Richard Hughes reports

KLONDIKE SILVER CORP. RECEIVES GOLDER INSPECTION REPORTS

Golder Associates Ltd. out of Burnaby, B.C., has completed the engineering reports for Klondike Silver Corp. announced on July 15, 2014. Golder had the duties to complete inspection reports related to the underground mining structures and tailings storage facilities. This work included an update to the current operation, maintenance and surveillance manual; an update to the emergency preparedness and response plan; completion of the annual dam safety inspection review; and the assessment of the potential armouring along Carpenter Creek to protect these structures.

Golder completed the portal inspection, which reviewed the two adits at the 4625 level and the 4000 level focused on the visual assessment of rock bolting, the basic geometry of the drift and ground support practices. It was concluded that adequate support was in place. Minor upgrades to the support structure will be required prior to returning to exploration and production.

Golder completed the annual dam safety inspection which reviewed the tailings management facility (TMF), including tailings ponds one, two and three, which are currently under care and maintenance. Currently pond one is the only tailings pond classified as a major impoundment as the depth of dry tailings has been determined to be greater than 10 metres. As a result of this classification, the Canadian Dam Safety Guidelines (CDA 2013) apply. Under the CDA guidelines Golder has determined that ponds one, two and three all have the intermediate classification of high. This classification is as such given the village of New Denver is located approximately 15 kilometres downstream of the TMF. It has been determined that all three of the tailings ponds are very secure with minimal work recommended to increase long-term stability.

Golder completed the hydrological inspection of Carpenter Creek, which reviewed the necessity to increase the armouring of the creek to prevent erosion of the creek bank. It was concluded that it will be necessary to add rip rap to armour the creek under the guidance of Golder in the summer of 2015.

It is the goal of Klondike to have all necessary modifications completed by the summer of 2015. Klondike has scheduled to perform the underground work addressed in the portal inspection report this winter/spring.

We seek Safe Harbor.