======================================================================= Re: News - Friday, June 17, 2011 Open Letter to Klondex Shareholders: ======================================================================= Klondex Mines Ltd.

Warns Shareholders Against Hedge Fund Groups Attempt to Take Control of Klondexs Nevada Gold Assets; Urges Shareholder Support of WHITE Proxy Board Slate - Klondex to Host Shareholder Conference Call on Tuesday, June 21st at 11:00 a.m.

ET - Call Details Provided on Page 5 Below- June 17, 2011
Dear Klondex Shareholders, On June 13, 2011, a dissident hedge fund-led group controlling just 8.1% of the outstanding shares of Klondex Mines Ltd.

(TSX: KDX) launched a proxy contest to elect their own slate of six directors and take control of the Company.

The dissident group is attempting to marginalize you and take control of the Klondex Board of Directors while offering ZERO premium for control. To protect your investment in Klondex, it is important to vote your WHITE proxy and discard the yellow proxy.

For questions or assistance, please call Georgeson at 1-866-676-3009. Klondex has put in place an experienced board of directors to represent the interests of all shareholders.

Their backgrounds are setout online and in the management information circular sent to you by Klondex.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU USE THE WHITE PROXY TO VOTE FOR A BOARD THAT HAS DELIVERED THE FOLLOWING SHARE PRICE PERFORMANCE AND THE ACCOMPLISHMENTS LISTED THEREAFTER: Klondex Share Price Performance Klondexs shares have substantially outperformed several indices over the past year:
However, following the start of the dissident groups campaign on Monday, June 13th KDXs share price has declined 10.1%.

Klondexs strong share price performance is in stark contrast to that of companies in which the proposed dissident groups board has been associated, as described in the dissident circular.

A chart of this comparison over the 12-month period ending Friday, June 10, 2011 appears below.
Recent Klondex Mines AchievementsThroughout, Klondex has held issued shares to just 36.7 million and diluted shares to 43.3 million. Dissident Groups Plans/Motives are Highly Suspect THE DISSIDENT GROUP HAS NOT STATED THEIR PLANS FOR THE COMPANY.

Their ownership stake clearly suggests they see substantial value in the Company and in our accomplishments.

However, we know at least one member of the group is staunchly opposed to our underground initiative. Additionally, their group has, on several occasions over the past two years, brought potential merger/combination transactions to our attention - but on terms or at valuations that were not favorable to Klondex shareholders, and/or with companies in which they had an ownership stake.

Their silence on their future plans for Klondex, and their insistence on seeking 100% control, while offering ZERO takeover premium, raises serious questions regarding their intentions should they gain control of your Company. TO TRANSFER LEADERSHIP TO A NEW BOARD THAT HAS NOT DISCLOSED ITS VISION, PLAN OR GOALS IS A HIGH RISK PROPOSITION.

INCUMBENT MANAGEMENT IS BEST POSITIONED TO UNLOCK SHAREHOLDER VALUE AS DEMONSTRATED BY OUR CLEAR PROGRESS.

WE HAVE GRAVE CONCERNS ABOUT THE TRUE AGENDA OF THE DISSIDENT GROUP. WE BELIEVE KLONDEXS TANGIBLE EXPLORATION AND DEVELOPMENT ACCOMPLISHMENTS ARE WHAT MATTERS MOST TO OUR SHAREHOLDERS AND ARE WHAT WILL CREATE THE GREATEST VALUE FOR SHAREHOLDERS.

It is on our record of achievement that we believe our Board and management team should be judged.

Underground Program Making Solid Progress After several years of substantial effort and preparation, in April 2011 we commenced our underground exploration and bulk sampling program at Fire Creek, our gold property in North Central Nevada.

As of the date hereof, our crews have completed 824 feet of underground drifts.

This includes 632 feet of our 3,650-foot underground decline to access Main Zone mineralization.

The decline will enable Klondex to commence exploration in-fill drilling from underground stations before the end of August 2011 and to initiate bulk sampling for metallurgical testing by year-end 2011.

Photos of our progress at Fire Creek are available on our website www.klondexmines.com. The Fire Creek underground program is the culmination of a broad effort put forth by Klondexs Board of Directors, management team and consultants and coincides with significant progress we have made across a range of exploration, development and corporate initiatives. Fire Creek Development HistoryTechnical Report Update In May 2011, we commenced work on an updated NI 43-101 compliant technical report.

The report, which will incorporate results from our 2009 and 2010 exploration programs into our March 2009 technical report, is intended to bring our filings into compliance with National Instrument 43-101.

The report is being prepared by Vancouver, BC-based TTM Resources Inc.

with the assistance of our geological team, including Richard Kern, M.Sc.

P.

Geo.

Mr.

Kern is a Klondex Board member and the Qualified Person responsible for Klondexs exploration drilling results and other technical information.

Klondex has provided all the exploration assays and source data to TTM and plans to file an updated technical report by the end of this month. Fire Creek Underground Program Strategy & Benefits Klondex embarked on its underground program in March 2007, after identifying this option as the most efficient and cost effective path to the attainment of Company objectives.

After careful comparison of alternative approaches, it was determined that the estimated costs to "prove up" our Fire Creek resource for full-scale development through a deep drilling program from the surface were roughly the same as those required to pursue an underground program to achieve many of the same objectives.

An underground program offered the additional advantage of placing us in position to initiate bulk sampling of high-grade mineralization within the Main Zone.

The underground program allows us to: Klondex is Committed to Continued Corporate Improvement: We are aware of the governance issues raised and our goal is to correct them.

The past year has made unusual demands on directors and officers time and attention due to Klondexs efforts to complete the required financings for its underground program, including regulatory approvals and permits, due diligence conducted by various groups, and review of various financing options presented to the Company.

We intend to rectify these issues promptly and the February 2011 appointment of Robin Goad as an independent director and member of the audit committee is such an initial step.

In summary, we believe the underground program delivers far more value to Klondex shareholders than a surface exploration program.

The coming twelve months promise to be our most productive yet, with the release of our updated technical report, a very active surface exploration program, progress in driving our underground decline, and the planned initiation of bulk sampling and underground exploration drilling. We have assembled a world-class team of employees and industry-leading consultants to direct and execute our strategy, and we are very pleased with the progress our team is achieving.

OUR RECORD STANDS FOR ITSELF AND OUR PLAN IS POISED TO CREATE SUBSTANTIAL VALUE FOR SHAREHOLDERS.

We thank you for your confidence in our vision, and we encourage you to contact us should you have any questions.

We are eager to speak with any and all investors to answer any questions you may have at this time.

Shareholder Conference Call & Webcast We will host a shareholder conference call and webcast on Tuesday, June 21st at 11:00 a.m.

ET.

We will review our vision and progress in more detail, and we will answer shareholder questions.

We urge you to participate in this call. Date & Time: Tuesday, June 21st at 11:00 a.m.

ET Conference Call Number: 800-952-6697 Webcast and Replay Link: Click Here Replay Number: 402-977-9140 or 800 633 8284, code 21528625; through June 30 This is an extremely important time for your company, and we urge you to participate in the conference call and to VOTE THE WHITE Proxy in support of the Klondex Board and plan. With sincere regards,
William J.

Solloway Chairman and CEO Klondex Mines Ltd.

Blane Wilson President and COO Klondex Mines Ltd.
Shareholder Contacts: Bryson Goodwin Klondex Mines Ltd.

(604) 341-1531 David Collins Jaffoni & Collins (212) 835-8500
The information in this release may contain forward-looking information under applicable securities laws.

This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information.

Factors that may cause actual results to vary materially include, but are not limited to, inaccurate assumptions concerning the exploration for and development of mineral deposits, currency fluctuations, unanticipated operational or technical difficulties, changes in laws or regulations, the risks of obtaining necessary licenses and permits, changes in general economic conditions or conditions in the financial markets and the inability to raise additional financing.

Readers are cautioned not to place undue reliance on this forward-looking information.

The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.


Please direct all proxy inquiries to: Questions and Further Assistance If you have any questions or require assistance in completing or returning your WHITE proxy form, please contact our proxy solicitation agent at:
North American Toll Free Number: 1-866-676-3009 Email: ======================================================================= Copyright (c) 2011 KLONDEX MINES LIMITED (KDX) All rights reserved.

For more information visit our website at http://www.klondexmines.com/ or send mailto: Message sent on Fri Jun 17, 2011 at 6:55:40 AM Pacific Time ======================================================================= ======================================================================= Copyright (c) 2011 KLONDEX MINES LIMITED (KDX) All rights reserved.

For more information visit our website at http://www.klondexmines.com/ or send mailto: ----------------------------------------------------------------------- To Unsubscribe from this email list, click here: http://www.klondexmines.com/s/Unsubscribe.asp? =======================================================================