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Klondike Gold Corp. (TSX-V: KG) is pleased to update drilling progress started in mid-October on the Quartz Mountain IOCG property located about 20 kilometres WNW of Cranbrook, B.C. in southeastern B.C.  The central portion of the QM property is structurally complex, cut by the regional east-trending St. Mary Fault.  Past exploration on the property has been mainly directed towards a number of small past-producing gold and base metal veins, including the Golden Egg and Price’s Pit.  Numerous indicators on the property, such as extensive albitic and chloritic alteration, hematite breccias, felsic dikes, and gold and copper mineralization are indicative of IOCG style mineralization.

This news release describes preliminary evaluation of four exploratory holes drilled on the property.  Most of the holes are widely spaced, targeting either known surface mineralization, extensive alteration and structure, or a geophysical EM anomaly (Hole 4).  Hole 01 was drilled in an area containing zones of intense silica and albite alteration with brecciation about 500 metres west of the Golden Egg vein.  The hole intersected highly altered sediments throughout its 357-metre length, with some thin intervals of brecciation with minor hematite and sulphides including chalcopyrite.  Three separate zones of highly altered, brecciated rock containing minor pyrite have been submitted for analyses.

Holes 02 and 03 were drilled from one site about 2 kilometres east-southeast of Hole 01 on the footwall (south) side of the St. Mary Fault.  Sparse outcrops here indicate intensely deformed and altered sedimentary rocks that contain quartz-albite-hematite (magnetite) zones that locally contain copper.  The drill holes intersected very chloritic sediments, with two separate, extensively brecciated hematite-enriched zones of quartz-albite.  The thinner 18-metre zone contains visible chalcopyrite and pyrite.  A thicker 40-metre wide zone is pyritic.  Both zones are being sampled for their gold and copper content plus other indicator elements to check for an IOCG signature.

Hole 04, centered on an isolated circular airborne EM (low resistivity) anomaly, intersected mainly limonitic clays.

Considerably more sampling is planned throughout the first three holes, testing the wide zones of alteration and sulphide/iron oxide mineralization.  This preliminary drilling confirms that the QM property has the potential for discovery of an IOCG-type deposit.  Further drilling is warranted, targeting several untested magnetic anomalies as well as zones of known surface alteration and structure.

The Qualified Person as defined in National Policy 43-101 is Trygve Höy, P.Eng, Ph.D.

The Company is also pleased to announce, subject to regulatory approval, that it has arranged a private placement for up to $750,000 through the sale of approximately 7,500,000 units.  The financing will consist of both flow-through and non flow-through units priced at $0.10 per unit.  Each unit will consist of either one flow-through or non flow-through common share and one non flow-through non-transferable share purchase warrant entitling the holder to purchase one additional common share for a period of two years at a price of $0.10 per share.  In accordance with Exchange policies, finders' fees may be paid on a portion of the funds raised.  The private placement is subject to regulatory approval.

The proceeds of the private placement will be used for additional drilling on Quartz Mountain, the Company’s Red Point Property, as well as for drilling other properties in the Cranbrook area, including, Midway, Pit and Irishman properties, and for general working capital.

KLONDIKE GOLD CORP.

ON BEHALF OF THE BOARD

“Richard W. Hughes”

President, President

For further information contact The Hughes Exploration Group: (604) 685-2222 or visit Golden Chalice’s web-site: www.goldenchaliceresources.com to see Smartstox interviews with Company Chairman and President.

This document contains certain forward looking statements which involve known and unknown risks, delays and uncertainties not under the corporation’s control which may cause actual results, performance or achievements of the corporation to be materially different from the results, performance or expectation implied by these forward looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.