Klondike Silver Corp.

Klondike Silver Corp.

October 27, 2009 15:15 ET

Klondike Silver Corp. Receives $1,050,960 from 506 Tonnes of Silver/Lead Concentrate



VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 27, 2009) - Klondike Silver Corp. (TSX VENTURE:KS) (the "Company") is pleased to announce the Company received $1,050,960 from over 500 tonnes of concentrate shipped to a smelter in the last year. The 506 tonnes of silver/lead concentrate had an average grade of 67.43% lead and 88 oz/tonne silver. At current metal prices the bulk sample would have grossed over $1.4M, encouraging management to move forward with more bulk sampling this coming year.

"We are encouraged by the results from the mill and are moving forward on a number of fronts to provide mill feed. The western drift extension in the 4625 level of the Silvana mine is underway into a previously unexplored area where the Main Lode structure was recently intersected. Underground drilling is currently testing a number of targets at the east end of the same level." comments Company President, Richard Hughes. "We've recently completed a four hole surface drill program in the Hewitt Van-Roi exploration area with the final hole intersecting a wide structural zone, on strike with the Hewitt vein, which is believed to be an extension of the lode system. The Connaught property and Stump property also saw summer exploration programs which we expect to see results from shortly. These programs were designed to further the Company's understanding of the high-grade vein systems occurring on both properties as well as prepare them for potential 2010 bulk samples."

The Company is especially encouraged with the positive performance and recovery rates shown by the mill throughout the processing of the bulk sample. With the knowledge gained the Company feels confident in its decision to continue providing mill feed from underground exploration in the immediate area as well as proposed bulk sampling from its high-grade Yukon properties.

Total milling costs of the 506 tonne sample were $217,970. Mining and transportation costs of the bulk sample, which were paid in advance in early 2008, totaled $877,500. Overall the Company experienced a slight loss of $36,490 due to collapsing metal prices in late 2008/early 2009. As the transportation and mining had been paid for in advance, the total milling cost was more than offset by revenue which prompted the Company to go ahead with the milling, even though the low metal prices meant it would not be able to recoup all of its transport costs. This is the largest/highest grade sample has put through the mill since its acquisition.

The Company would also like to announce it has arranged for a private placement of up to 2,500,000 units for total proceeds of up to $162,500. The financing will consist of flow through units priced at $0.065 per unit. Each of the units will consist of one flow through common share and one non-flow through, non-transferable share purchase warrant entitling the holder to purchase one additional common share for one year at a price of $0.065 per share in the first year, $0.10 per share in the second year and $0.15 for the remaining three years. Proceeds from the private placement will be used for general exploration expenditures.

About Klondike Silver:

Klondike Silver Corp. has assembled a quality portfolio of silver properties in historic mineral districts in North America, and is applying advanced exploration technologies to add value to these core assets. Klondike Silver is reviving the Gowganda and Elk Lake silver camps in Ontario, and the world-famous Klondike district of Yukon Territory. The Company owns a 100 TPD fully operational flotation mill in Sandon, BC, which is currently processing material from one of its Yukon properties and local mines in the historic Slocan Silver Camp.

Klondike Silver is a member of the Hughes Exploration Group of Companies and is led by a team with a stellar track record of discovery and development in Canada.

Visit Klondike Silver's web-site: www.klondikesilver.com to see Smartstox interviews with Company President, Richard Hughes.

The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy or contents of this news release.

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