Klondex Mines Ltd.
TSX VENTURE : KDX

Klondex Mines Ltd.

March 29, 2006 07:00 ET

Klondex Mines Ltd. Raises $7.3 Million

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 29, 2006) -

THIS RELEASE IS NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Klondex Mines Ltd. (TSX:KDX) (the "Company" or "Klondex") announces that it has completed its private placement previously announced March 9, 2006. The Company issued a total of 3,250,000 units at $2.25 per unit for total proceeds of $7,312,500. Each unit consists of one common share and one half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share for a period of 18 months from closing at an exercise price of $3.00 per share. The Company has the right to accelerate the expiry of the warrants if the common shares of the Company close at or above $4.00 for a minimum of 20 consecutive trading days. All securities issued with respect to the private placement will be subject to a four month hold period.

Quest Securities Corporation led a syndicate of investment dealers which included Canaccord Capital Corporation and Jones Gable & Company Ltd. in completing the financing. The agents received a cash commission equal to 7% of the total proceeds raised, and 227,500 warrants, each warrant is exercisable to acquire one unit for a period of 18 months from closing at a price of $2.25 per unit.

The proceeds from the private placement will be used primarily to expand the gold resource defined by drilling to date. The main Zone mineralization is open to the north and the most northerly previously reported Main Zone drill hole FC0528, returned intercepts of 0.312 oz/ton over 30 feet and 0.421 oz/ton over 20 feet. The Far North Zone is open to the north, south and west and previously reported drill hole FC0522 in this zone returned 0.487 oz/ton over 20 feet.

The Company also intends to initiate a surface geophysical surveys to identify other drill targets on its +10 square mile Fire Creek Property. Both the Main and Far North Zones were identified as geophysical anomalies in a previous survey. Klondex intends to drill continuously throughout 2006.

The technical information in this news release has been prepared under the supervision of Richard Kern, P. Geo, the Company's consulting geologist and a qualified person as defined in National Instrument 43-101.

Klondex has in place a rigorous QA/QC program consistent with National Instrument 43-101 and using best industry practice. ALS Chemex Labs of Reno, Nevada is responsible for all the Klondex Mine's assaying.

About Klondex Mines. Klondex Mines was founded in 1974 and is a mineral exploration company listed on the TSX Venture Exchange. The Company's property portfolio includes five gold exploration projects, all in Nevada. A description of these projects, including maps and photographs, can be viewed on the Company website at www.klondexmines.com.

ON BEHALF OF KLONDEX MINES LTD.

William Solloway, President and Chief Executive Officer

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

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