Klondike Silver Corp.

Klondike Silver Corp.

October 13, 2010 09:01 ET

Klondike Silver Corp. Continues to Intersect Lode Structure in Silvana Drilling

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 13, 2010) - Klondike Silver Corp. (TSX VENTURE:KS) (the "Company") is pleased to announce it has completed 2,341 feet (714 m) in 6 holes of an expected maximum of 4,000 feet (1,220 m) of diamond core drilling at Station No. 3 located on the westerly extension completed earlier this year of the 4625 level of the Silvana silver-lead-zinc mine. This drift extension and the associated drilling is exploring the initial portion of the 7,000 feet (1.5 km) long segment of unexplored and presumed highly prospective ground hosting the Main Lode structure of the Slocan mining camp between Sandon and Silverton, BC. The core drilling underway at Station No. 3 has continued to intersect a structure interpreted as the Main Lode structure including a zone of intersections of significant widths containing strong quartz-carbonate veining occasionally accompanied by minor lead and zinc sulphides mineralization. The four such intersections cut so far have estimated true widths of 20 feet (6 m) or more. They represent a strike length of some 200 feet (60m), with a dip length on the structure of 300 feet (90 m) indicating an openness updip and northwesterly towards the former Carnation mine workings. The latter workings as mapped in the 1950s contained discontinuous mineralized vein segments in the Main Lode structure with sampled accompanying Ag/Pb/Zn mineralization having assays of potential economic grade. 

In order to extend coverage and expand on the knowledge base of the Main Lode structure up dip the Company may consider re-activation of the accessible Carnation mine 5480 Level workings. A down-hole drilling program from the hangingwall side of the Main Lode into the interval from the Carnation to Silvana would be proposed. A footwall cross-cut and subsequent drilling program from the area of the current 4625 Level drilling would also be proposed to extend coverage of this interval, which has an approximate dip length of 1,500 feet (450 m).

A third phase of southwesterly drift advance on 4625 Level started earlier in the year, was also based on geological information obtained from the recent drilling. It is planned for an approximate a 660 foot (200 m) advance and will similarly be followed by core drilling to further explore the Main Lode structure and its mineralization in this extensive untested area of Company-owned property.

The Company also announces that it has entered into a loan agreement to borrow $400,000 over a 6-month period.  The terms include interest at the rate of 10%, cumulative monthly, and the issuance of a bonus of 800,000 shares at a deemed price of $0.05 per share, subject to regulatory approval.  There are no warrants or finder's fees involved in this transaction.  A security agreement has been completed, and the funds for the loan will be used for operating capital.

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 processes material from local mines in the historic Slocan Silver Camp. 

The Qualified Person for the purpose of National Instrument 43-101 is Edward Craft, PEng, who has read and agreed with the technical information in this news release.

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.

Contact Information