Klondike Silver Completes Underground Drilling in Wonderful Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 7, 2009) - Klondike Silver Corp. (the "Company") (TSX VENTURE:KS) is pleased to announce results of underground diamond drilling from the Fall of 2008 through Spring 2009 from the Wonderful Mine, near Sandon, British Columbia. Underground exploration and development, including a raise and two diamond drill stations, has been undertaken in the lowermost workings, Levels 3 and 4, located half a kilometre from Klondike Silver's 100-tonne-per-day flotation mill in the Sandon townsite. Two drill stations were developed in the lowest underground workings, Level 4 at 1140m elevation, 100 meters apart, creating setups for two drill arrays. Ten diamond drill holes were completed, targeting mineralization at and above this elevation, for a total of 637m drilled. These holes tested the extent of mineralization between Level 4 and Level 3, the latter at 1192m elevation. Klondike Silver had mined a new raise by the fall of 2008, from Level 4 up to Level 3, following continuous, if narrow, mineralization along a single, near vertical, E-W striking vein. Widths and grades improved where there were structural distortions and a splaying or stepping vein. Drilling results demonstrate that the Wonderful vein, in the lower levels, is a nearly straight, vertical E-W planar structure with a typical width of 35cm, and is primary a sphalerite (zinc) - carbonate vein; minor amounts of lead and silver are present. Recent underground mapping, of Levels 3 and 4, show the vein to vary between 20 and 65cm width. One drillhole, DD09-06, intercepted an interpreted zone of structural distortion where the vein is divided into at least 3 closely-spaced veins, combining for a true width of 2.47m (8.12ft) with average grade of 12 g/T silver, 0.16% lead and 11.16% zinc (see table below). Holes drilled around DD09-06 found a single vein at the typical 35cm width, but were not able to follow the splaying structure. A final hole, DD09-10m was drilled steeply upward to test the vein continuity above the Level 3 working. It had been formerly interpreted that the zinc vein, shown in the lower workings, was structurally connected to a lead-silver vein, known as McLander's vein, found on surface (grab values reported as high as 79% lead and silver as high as 197 oz per ton as previously reported), at 1265m elevation. DD09-10 intercepted a major fault, near 1230m elevation - Level 2 and it is possible that this fault separates the zinc resource delineated in the lower workings from McLander's vein. Continued exploration at the Wonderful will apply this new structural information while focusing on locating fault systems and their relationship to the McLander's vein at surface. Drilling is currently underway in the Silvana mine and the Company will be providing an update on its progress in the near future. For details on the Silvana drill program see news release dated May 28, 2009. Table: Mineralized interval DD09-06 54.45m - 58.30m - Apparent width = 3.85m /T/ ---------------------------------------------------------------------------- From (m) To (m) Width (m) Ag (g/T) Pb% Zn% ---------------------------------------------------------------------------- 54.45 58.30 3.85 12 0.16 11.16 ---------------------------------------------------------------------------- Including ---------------------------------------------------------------------------- 54.45 55.2 0.75 13 0.13 13.51 ---------------------------------------------------------------------------- 55.20 56.00 0.80 less than 5 0.04 6.06 ---------------------------------------------------------------------------- 56.00 56.50 0.50 less than 5 0.02 0.09 ---------------------------------------------------------------------------- 56.50 57.20 0.70 27 0.16 25.05 ---------------------------------------------------------------------------- 57.20 57.80 0.60 less than 5 0.01 0.09 ---------------------------------------------------------------------------- 57.8 58.30 0.50 25 0.74 20.69 ---------------------------------------------------------------------------- /T/ True Width Calculation: CORE ANGLE apparently 40 degrees - 2.47 m / 8.12 ft The Company also announces that after an extensive review of its Mexican property portfolio it has decided to terminate its options on the Alaska North & South, Mina Grande, San Dimas, San Luis, Santa Lucia and 5 of its Starling properties. The Company's focus in Mexico will continue to be the Espiritu property, a joint venture with Kootenay Gold Corp. Klondike Silver is pleased to report, subject to regulatory approval, the terms of the acquisition of the 100% interest in the Goldsmith property, located in the Slocan Mining Camp. The property consists of the Enterprise Mine Group, Hallmac Mine Group, Conductor Mine Group, Vulture Mine Group, Adams Lode Mine Group, and Chambers Mine Group, as well as some additional claims. The claims cover a total of 1,063 hectares in prime mining area. Consideration for the property consists of $200,000 (payable over 10 years) and 200,000 shares (payable over 4 years). The Company is also required to incur $400,000 in exploration expenditures over a period of 10 years. There is a 2% net smelter return payable on the claims, of which half (1%) may be purchased for $250,000. 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.