Klondike Silver Corp. Increases Production at the Silver Slocan Mining Camp, British Columbia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 29, 2013) - Klondike Silver Corp. (TSX VENTURE:KS) (Klondike) is pleased to announce that it has increased its underground mining operations at the Silvana Mine located in the Silver Slocan Mining Camp. Klondike is now producing at a rate of 40 tons per day through its 100% owned mill, the "Sandon Mining Complex", the only fully permitted mill in Sandon which has the capacity to process up to 100 tons per day. The milling process produces a Silver/Lead and a Silver/Zinc concentrate which are then transported to Smelting Plant located in Trail, British Columbia. The Silver/Lead concentrate holds approximately 100-125 ounces of Silver per dry metric ton and the Silver/Zinc concentrate holds approximately 50-60 ounces of Silver per dry metric ton.

Klondike currently holds three mining permits within its Silver Slocan Mining Camp which are the Silvana, Hinkley, and the Wonderful. Current production is primarily coming from the Silvana mine which is nearest to the Mill in Sandon, producing approximately 40 tons per day from the 4755' adit level.

Klondike Silver has generated revenues of approximately $2.45 million dollars from selling its concentrates in 2012. Approximately 53,620 ounces of Silver, 136 metric tons of Lead, and 253 metric tons of Zinc have been sold.

Klondike may elect to increase the mill capacity to 250 tons per day with the addition of a larger ball mill and other upgrades. It is the company's intention to develop many of the old silver mines within the Camp by way of cash flow generated through production and new partnerships.

It is the vision of management to revive the historic "Silvery Slocan" Mining Camp into the major mining camp that it was intended to be all those years ago. Through using modern geochemical and geophysical techniques, coupled with the economic potential for the price of Silver to increase, the capacity exists to enlarge the "Silvery Slocan" into a major silver mining camp for Canada.

About Klondike Silver Corp.

Klondike Silver Corp. has assembled a quality portfolio of silver properties throughout Canada, most notably, in the historic Slocan Mining District southeastern British Columbia. This historic camp has produced more than 24 million ounces of silver since the first discoveries in the late 1800s. Klondike Silver is the dominant land-holder controlling a majority of the historic camp and the fully permitted, 100% owned "Sandon Mining Complex". The Company owns the past-producing Silvana, Wonderful, and Hinckley Mines and several other properties with significant exploration potential.

For additional information please visit the company website www.klondikesilver.com.

On Behalf of the Board of Directors

Klondike Silver Corp.

Richard Hughes, President and Director

Cautionary note:

This report contains forward looking statements. Resource estimates, unless specifically noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. The production rate and mine-life projections have been made without support of a feasibility study, there is no certainty the proposed operations will be economically viable. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact:

Klondike Silver Corp.

Mark Luchinski

(604) 685-2222

mark.luchinski@klondikesilver.com

Klondike Silver Corp.

Alan Campbell

(604) 685-2222

acampbell@klondikesilver.com

www.klondikesilver.com

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