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

VANCOUVER, BRITISH COLUMBIA, Aug 27 (MARKET WIRE) --
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.

Contacts:
Corporate Inquiries:
Klondike Silver Corp.
Kevin Hull
(604)-685-2222

Klondike Silver Corp.
Alan Campbell
(604)-685-2222
604-685-3764 (FAX)
info@klondikesilver.com
www.klondikesilver.com

AGORACOM Investor Relations
KS@agoracom.com
http://www.agoracom.com/ir/KlondikeSilver

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