Klondex Completes Acquisition of Rice Lake Mine and Mill Complex

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 22, 2016) - Klondex Mines Ltd. (TSX:KDX)(NYSE MKT:KLDX) ("Klondex" or the "Company") is pleased to report that the previously announced acquisition (the "Acquisition") of the Rice Lake Mine and Mill complex near Bissett, Manitoba (collectively, "Rice Lake") has closed. The Acquisition was carried out pursuant to the terms of an asset purchase agreement dated December 16, 2015 among Klondex, its wholly-owned subsidiary, Klondex Canada Ltd. ("Klondex Canada") and the vendor, 7097914 Manitoba Ltd. (formerly Shoreline Gold Inc., "7097914"). The aggregate purchase price of US$32 million was comprised of US$20 million in cash paid at closing and US$12 million in deferred payments in the form of a promissory note with an annual interest rate of 4% (the "Note"). The Note is secured against Rice Lake and other purchased assets and contains customary covenants.

Paul Andre Huet, President and CEO commented, "The acquisition of the Rice Lake Mine and Mill complex is an important milestone for Klondex and its shareholders. We now have three mines in North America, our flagship operations in Nevada, and Rice Lake in Manitoba, Canada, and are well on our way to becoming the next mid-tier mining company." Mr. Huet continued, "Our team has extensive experience in underground mining and we are confident that we can leverage our successes at both Fire Creek and Midas at our newest mine in Canada."

Pursuant to the Acquisition, Klondex Canada also acquired certain common shares ("Common Shares") of SGX Resources Inc. ("SGX"). Klondex Canada acquired, and after giving effect to the Acquisition, has beneficial ownership and control over, 43,047,256 Common Shares representing approximately 31.84% of the issued and outstanding Common Shares. A purchase price for the Common Shares was not allocated at the time of closing of the Acquisition.

Klondex obtained ownership of the Common Shares as part of the larger Acquisition and not for the purpose of exercising control or direction over SGX. Klondex may acquire additional securities or dispose of some or all of its existing securities according to market conditions and other relevant factors in the future. Klondex obtained ownership of the Common Shares pursuant to the prospectus exemption contained in section 2.8 of National Instrument 45-102 - Resale of Securities and the private agreement exemption from formal takeover bid requirements under applicable securities legislation. An Early Warning Report reflecting the change of ownership of the Common Shares will be filed on SEDAR at www.sedar.com.