Mr. Thomas Kennedy reports

KLONDIKE SILVER ANNOUNCES PRIVATE PLACEMENT NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Klondike Silver Corp. has arranged a non-brokered private placement for gross proceeds of up to $1.5-million through the issuance of 30 million units at a price of five cents per unit. Each unit will consist of one common share and one share purchase warrant, with each warrant exercisable for a period of five years from the closing at a price of five cents per share in years 1 and 2 then eight cents per share in years 3, 4 and 5. All units are subject to a four-month hold period from the date of issuance. Commissions may be paid on a portion of the funds raised. The offering is subject to TSX Venture Exchange final acceptance.

The net proceeds will be used for advancing the Sandon, B.C., project, located 138 kilometres north of the Trail, B.C., smelter, and for general working capital.

About Klondike Silver Corp.

Klondike's Silvana silver-zinc-lead mine project is located in southeastern British Columbia.

Klondike's 114-square-kilometre claim block is 138 kilometres north of the Trail, B.C., smelter.

Klondike Silver is exploring from underground, along the nine-kilometre Main Lode. The Main Lode is the most prolific mineralized structure in the Slocan mining camp. There are 13 past-producing mines that are situated along the Main Lode, which have produced 886,000 kilograms of silver, 95 million kilograms of zinc and 117 million kilograms of lead so far (source: British Columbia Minfile).

There are 67 past-producing mines that are situated in Klondike Silver's 114-square-kilometre claim block (source: British Columbia Minfile).

We seek Safe Harbor.