Klondike Silver Corp.
TSX VENTURE : KS

Klondike Silver Corp.

August 27, 2009 09:01 ET

Klondike Silver Corp. Discovers Western Extension of Lode Structure on Initial Underground Drilling of Silvana Mine

- 'MAIN LODE' WAS PRINCIPAL SOURCE OF PRODUCTION FOR NUMEROUS MAJOR PRODUCERS WITHIN THE SLOCAN CAMP, INCLUDING THE SILVANA, MAMMOTH, SILVERSMITH AND STANDARD MINES - TARGET AREA WAS SLATED FOR FURTHER EXPLORATION WHEN MINE SHUT DOWN IN 1990s AS A RESULT OF LOW METAL PRICES

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 27, 2009) - Klondike Silver Corp. (TSX VENTURE:KS) (the "Company") is pleased to report that initial diamond drilling west of the past-producing Silvana Mine has revealed the presence of a favorable structure with similar geological characteristics to the historic "Main Lode" structure. The "Main Lode" structure was the principal source of silver/lead/zinc production in the prolific Sandon Silver Camp of south-central British Columbia.

An audio interview summarizing this release has been prepared with the Company's Mine Manager, Steve Phillips, is available through AGORACOM Investor Relations via the following link (link will go live at approximately 11:30am EST, August 27, 2009):

http://www.smallcapepicenter.com/executive/KSbtpr270809

"We have two goals in the current underground exploration program; first to identify the presence of the lode structure within the prospective horizon, and second to locate any ore-bearing chutes within the structure. The discovery of lode structure this early in the initial phase of exploration is exciting as we are just at the start of our target area," comments Company president Richard Hughes. "This 1.5 km area between the Mammoth and Silvana mines has never been tested before although it was slated for exploration before the mine shut down in the early 1990s as a result of low metal prices. Drilling will now focus on testing the newly discovered structure for the presence of ore-bearing chutes as well as further delineating its extent."

To view a map of the 2009 drilling and target area please click on the following link (if the link does not open cut & paste it into your browser address bar):

http://www.klondikesilver.com/i/pdf/MainLodeXsectioncropped.pdf

The "Main Lode" structure is more than 8 kilometers long, extending east from Silverton on Slocan Lake to Sandon through the "Silver Ridge" of the Selkirk Mountains some 50 kilometers north of Nelson, B.C.

The Company holds the ground for approximately 1.5 km to the west of this productive zone, to within 0.5 km of the Mammoth Mine. This program represents the first attempt since the early 1990s to explore west towards the Mammoth, Standard and the other major "Main Lode" producers.

The initial phase of diamond drilling was conducted from the new underground west extension of the main access (4625 Level) of the Silvana Mine.

- Four BQ-size holes totaling 363.6 meters (1,193 feet) were drilled at a departure of 9,250.00 feet E. (mine grid). This initial drilling program represents the first stage of exploring a 1.5-kilometer long (7,000 feet) presumed highly prospective segment of the "Main Lode" structure.

- The recently completed drill program achieved an important objective as the structure intersected by the drilling has characteristics typical of the "Main Lode" as mined at Silvana.

- Following this identification, the next 100 meters (330 feet) westerly extension of the main access (4625 Level) is now under way. The next drill station for testing the presence and resource potential of the "Main Lode" will be at approximately 9,500 feet E. (mine grid).

The Silvana Mine is one of 29 former producers staked or acquired by the Company within the Slocan Camp. Other assets include extensive exploration lands and a fully permitted 100-tonne-per-day (TPD) flotation mill.

The Silvana Mine produced approximately 8 million ounces of silver and more than 30,000 tons each of lead and zinc from 550,000 tons of mill-feed mined from a 1.5-kilometer section of the "Main Lode" under Silver Ridge. This section was explored, developed and mined almost continuously from 1970 to 1993 by the Silmonac Syndicate and its successors, including Kam-Kotia Mines Limited, Silvana Mines Inc., Dickenson Mines Limited and Treminco Resources Ltd. Sporadic mining has since been conducted by other companies, including Klondike Silver.

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

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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