Klondex Mines Ltd.
TSX VENTURE : KDX

Klondex Mines Ltd.

June 01, 2006 08:00 ET

Klondex Mines Receives $4,230,249 from the Exercise of Warrants and Commences Geophysical Program at 100% Owned 'Fire Creek' Gold Property in Nevada

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 1, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Share Purchase Warrants Exercised

Klondex Mines (TSX VENTURE:KDX) is pleased to report that it has received $4,230,249, the proceeds of the exercise of 1,800,106 share purchase warrants @ $2.35. This represents a 96% conversion rate of these warrants which expired on May 26, 2006. The Company now has a net cash position of $13,630,561 or $0.61 per share based on 22,461,423 shares now outstanding. These funds will be sufficient to execute the Company's planned exploration and development activities for the next two years.

Geophysical Survey

The Company's geophysical contractor, Fritz Geophysics of Reno, Nevada has commenced a Gradient IP Survey at Fire Creek. The 26.1 line-kilometer survey conducted in 1995 identified IP anomalies associated with the Main/West and Far North resource areas. It is hoped that this new survey will generate additional drill targets in this area which is extensively covered by post-mineralization basalt flows.

Permitting Activities

Work associated with amending the current Plan Of Operations continues under the guidance of Enviroscientists, Inc., of Reno, Nevada, the Company's environmental and permitting consultants.

The permitting time frame is approximately 40% complete.

Drilling Progress

The reverse circulation and diamond drill rigs dedicated to the Fire Creek Project continue to investigate the strike extensions of both the Main/West (MW) and Far North (FN) resource zones. About 1800 feet of drilling and 300 samples for assaying are being generated weekly and additional staff has been added to handle the increased work load. Results will be reported as received and a NI 43-101 compliant updated resource estimate will be compiled and reported once the final extent of these zones are determined.

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.

Klondex Mines was founded in 1974 and is a Tier two exploration company listed on the TSX Venture Exchange under the symbol "KDX". The company's property portfolio contains 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

Bob Sibthorpe, Director


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

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