Klondex Announces C$15 Million Private Placement

TORONTO, ONTARIO--(Marketwired - Sept. 30, 2013) -

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Klondex Mines Ltd. (the "Company") (TSX:KDX) is pleased to announce that it has entered into an agreement with GMP Securities L.P. ("GMP") in connection with a private placement of special warrants (the "Special Warrants") to raise aggregate gross proceeds of C$15 million, at an issue price to be determined in the context of the market (the "Offering"). The Offering will be made on a "best efforts" agency basis by a syndicate of agents led by GMP and including MGI Securities Inc., Mackie Research Capital Corporation, M Partners Inc., Euro Pacific Canada Inc., Jones, Gable & Company Limited and PI Financial Corp.

Subject to the penalty provision described below, each Special Warrant will entitle the holder to receive upon exercise or deemed exercise following the Qualification Date (as defined below), one common share of the Company ( "Common Share") for no additional consideration. The Special Warrants not already exercised will be deemed exercised at the earlier of: (a) the third business day after the date of receipt for a final prospectus to qualify, in each of the provinces of Canada, except Quebec (the "Qualifying Provinces"), the distribution of the Common Shares to be issued upon exercise or deemed exercise of the Special Warrants (the "Qualification Date"); and (b) 4:59 p.m. (Toronto time) on the date which is four months and one day following the Closing Date (as defined below).

The Company shall use reasonable commercial efforts to obtain a receipt for a final short form prospectus to qualify the distribution of the Common Shares by the date that is 45 days from the Closing Date (the "Penalty Date"). If the Company fails to qualify the Common Shares for issuance in the Qualifying Provinces by the Penalty Date, the holders of Special Warrants will be entitled to receive an additional 1% of Common Shares issuable upon the exercise of the Special Warrants for each seven-day period following the Penalty Date in which the Company fails to qualify the distribution of the Common Shares, subject to a maximum aggregate amount of 10% of additional Common Shares (the "Penalty Provision").

The net proceeds from the Offering are expected to be used for the development of the Fire Creek gold project in Nevada, USA, for general working capital requirements and for the repayment of debt.

The Offering is expected to close on or about October 16, 2013 (the "Closing Date"). Closing of the Offering is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange.

About Klondex Mines Ltd. (www.klondexmines.com)

Klondex Mines is focused on the exploration and development of its high-grade Fire Creek gold deposit in North-Central Nevada. Fire Creek is a compelling gold project located in a mining-friendly jurisdiction, near major producers, power, transportation, mining infrastructure and milling facilities. As at September 30, 2013, Klondex had 65.0mm shares issued and outstanding and 87.2mm shares, fully diluted.

Cautionary Note Regarding Forward-Looking Information

This news release contains forward-looking information, including about current expectations on the timing of the Offering, the amount of proceeds to be raised pursuant to such Offering and the expected use of proceeds of the Offering. This forward-looking information entails various risks and uncertainties, is based on current expectations, is subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such information. These uncertainties and risks include, but are not limited to, the ability to successfully complete the Offering, the approval of the TSX, the strength of the global economy; the price of gold; operational, funding and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations. Risks and uncertainties about Klondex's business are more fully discussed in Klondex's disclosure materials filed with the securities regulatory authorities in Canada and available at www.sedar.com. Readers are urged to read these materials. Klondex assumes no obligation to update any forward-looking information or to update the reasons why actual results could differ from such information unless required by law.