Mr. Brian Morris reports

KLONDEX PROVIDES EXPLORATION UPDATE AT FIRE CREEK; SURFACE DRILLING DISCOVERS HIGH GRADE MINERALIZATION, INCLUDING 8.25 OPT AU OVER 1.7 FT; UNDERGROUND DRILLING CONTINUES TO EXTEND NEAR MINE HIGH GRADE VEINS

Klondex Mines Ltd. has provided an update on the 2017 surface and underground exploration drill programs at its Fire Creek mine located in northern Nevada, United States.

Surface exploration drilling highlights:

• FCC-0092: 1.27 ounces per ton gold over 14.0 feet, or 43.69 grams per tonne over 4.3 metres: Zeus (formerly identified as the West zone);
  • Including 8.25 ounces per ton Au over 1.7 feet, or 282.93 g/t over 0.5 m and 0.58 ounce per ton Au over 1.9 feet, or 19.71 g/t over 0.6 m;
• FCC-0093: 2.03 ounces per ton Au over 2.0 feet, or 69.43 g/t over 0.6 m: Zeus and 0.18 ounce per ton Au over 15.7 feet, or 6.08 g/t over 4.8 m.

Underground drilling highlights:

• FCU-0796: 9.96 ounces per ton gold equivalent over 0.8 feet, or 341.35 g/t over 0.2 m: Karen;
• FCU-0901: 2.56 ounces per ton AuEq over 1.9 feet, or 87.78 g/t over 0.6 m: Joyce and 4.88 ounces per ton AuEq over 1.3 feet, or 167.25 g/t over 0.4 m: Honeyrunner;
• FCU-0913: 4.73 ounces per ton AuEq over 1.4 feet, or 162.05 g/t over 0.4 m: Joyce;
• FCU-0900: 2.18 ounces per ton AuEq over 3.2 feet, or 74.79 g/t over 1.0 m: Vein 18;
• FCU-0902: 2.13 ounces per ton AuEq over 1.0 feet, or 73.13 g/t over 0.3 m: Joyce;
• FCU-0916: 2.01 ounces per ton AuEq over 1.0 feet, or 68.96 g/t over 0.3 m: Joyce.

Drill summary

Three surface drill holes totalling 4,171 feet (1,271 m) have been completed to date on the Zeus target. A total of 52 underground drill holes totalling 30,843 feet (9,401 m) were drilled from current underground workings.

Surface exploration drilling key points

This surface exploration drill program was to follow up on the 2016 exploration program, which tested a north-south geophysical anomaly located approximately 4,000 feet (1,219 metres) west of the current mine workings. These drill results discovered a zone of high-grade mineralization within the Zeus structure. Drilling to date has delineated a mineralized area within the structure approximately 650 feet (198 m) in length and 400 feet (122 m) vertically, within 400 feet (122 m) of surface, and the structure is open in all directions. Additional follow-up holes are in progress to continue to expand and infill this significant high-grade mineralization.

Underground drilling key points

This underground drill program was designed to extend mineralization up and downdip on the existing veins currently in production. Results continue to support high-grade-mineralization continuity in both directions outside the currently defined resource. These drill results are not included in the current resource estimate.

The updip underground drilling above the veins currently in production has returned significant assay results along a strike of 275 feet (84 m) and updip by 100 feet (31 m). The downdip underground drilling below the Karen vein has returned significant assay results along a strike of 150 feet (46 m) and downdip by 75 feet (23 m).

Brian Morris, senior vice-president, exploration, said: "The surface drill results are extremely exciting. These results demonstrate that the potential for high-grade mineralization, similar to what is currently being mined at Fire Creek, exists within the Zeus structure about 4,000 feet northwest from our current underground development. Geophysics suggest this is a major 6,500-foot structure. We will continue stepout and infill drilling in this area to fully delineate this high-grade structure with the intent to bring it into an inferred resource category in our year-end resource update to be released in Q1 2018."

Mr. Morris continued, "Additionally, the up and downdip underground drilling was extremely productive, having the potential to add significant new near-mine resources to our production profile."

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 for the Fire Creek project, Lander county, Nevada," dated March 28, 2016, and with an effective date of June 30, 2015, which is available under the company's issuer profile on SEDAR and on EDGAR.

About Klondex Mines Ltd.

Klondex is a 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 four producing mineral properties: the Fire Creek mine, the Midas mine and ore milling facility, the Hollister mine, all of which are located in the state of Nevada, United States, and the True North mine and mill in Manitoba, Canada. The company also has a 100-per-cent interest in the Aurora mine and ore milling facility (formerly known as Esmeralda), also located in Nevada, United States.

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 National Instrument 43-101.

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