Vancouver, British Columbia (FSCwire) - Klondike Gold Corp. (TSX.V:KG; FRA: LBDP) ("Klondike Gold" or the "Company") announces drill assay results from two holes each at the Pioneer (LS17-95 and -96) and O'Neil (LS17-97 and -98) targets while drilling continues at the Lone Star target area within the Company's 527 square kilometer Klondike district property, Yukon Territory.

Summary

• Phase 2 step-out holes announced here including Pioneer to the east, and O'Neil to the west expands the known length of the Lone Star target gold mineralization in drill intercepts by 1,200 meters to a new overall total strike length of 2,000 meters, which remains open.

• The Pioneer area 500 meter step-out to the east intersected 0.7 g/t Au over 10.7 meters in LS17-95, extending gold associated with the Lone Star target along the Bonanza fault 500 meters to the east.

• The O'Neil area 700 meter step-out to the west intersected 0.5 g/t Au over 13.3 meters in LS17-98, extending specifically the Lone Star laminated schist lithology-controlled mineralization 700 meters to the west to a strike length of 1,500 meters.

• Newly identified late cross-cutting faults potentially cross-cut or overprint the Bonanza fault and laminated schist gold-bearing units and also contain gold mineralization.At Pioneer, a minor cross-cutting fault assayed 0.4 g/t Au over 5.1 meters in LS17-96.At O'Neil, a significant cross-cutting fault intersected 0.6 g/t Au over 13.7 meters within anomalous gold mineralization averaging 0.3 g/t Au over 52.6 meters in LS17-97.

• Phase 3 drilling with two rigs is ongoing.Approximately 60 holes are planned or pending assay.

Geology Summary:

The Company's Klondike property has identified orogenic gold mineralization with gold introduced regionally by a series of major thrust faults acting as conduits.At the Lone Star target area, the 'Bonanza fault' is interpreted to be a regionally significant secondary structural focus controlling deposition of gold mineralization.

Gold mineralization occurs within 'laminated schist' striking at 310 degrees (northwest) parallel to the 'Bonanza fault'.The Bonanza fault dips approximately 50 degrees (northeast) semi-parallel to the hillside which falls toward Bonanza Creek (the 1896 Klondike gold rush era discovery creek).'Laminated schist' has been identified as a host of disseminated gold with additional contributions from gold within cross-cutting quartz veins.Gold-bearing laminated schist unit widths intersected in drilling are up to 40 meters thick at surface over a strike length of 800 meters, as reported in many news releases in 2017.

Discussion:

Assay results have been received from two step-out holes at the Pioneer area (LS17-95 and LS17-96) 500 meters away along strike to the east that intersected a competent unaltered 'mafic schist' unit cross-cut by visible gold-bearing quartz veinlets adjacent the Bonanza Fault in LS17-95 (see NR July 11, 2017).

Assay results have also been received from step-out holes at the O'Neill area (LS17-97 and LS17-98) which intersected a pyritic schist 700 meters away along strike to the west of the Lone Star target.Visible gold was observed in LS17-98 (see NR July 11, 2017).

All holes were drilled at -55 degrees dip at 200 degree azimuth.True thickness of mineralization for these intersections requires additional drilling to determine.An updated plan map of drilling and cross-sections are available on the Company's website.

Table of Results:

Hole ID	From (m)	To (m)	Interval (m)	Au g/t
LS17-95	71.5	82.2	10.7	0.7
LS17-96	29.8	34.8	5.1	0.4
LS17-97	9.1	22.9	13.7	0.6
LS17-98	25.4	78.0	52.6	0.3
including	28.9	42.2	13.3	0.5
LS17-99	No Significant Result

Drilling Results:

The Pioneer and O'Neil area drill tests were designed to each be large 500 to 700 meter step-outs beyond the east and west ends of Lone Star target mineralization along the Bonanza fault.Gold mineralization including visible gold was intersected in each area (see NR July 11, 2017) discussed in detail below.The step-out tests successfully expand the known length of the Lone Star target gold mineralization in drill intercepts by 1,200 meters to a new overall total strike length of 2,000 meters, which remains open.

Pioneer 500 meter East Step-Out:

LS17-95 and LS17-96 were drilled 500 meters east off the end of the Lone Star laminated schist target in the Pioneer area.The two holes are located 50 meters apart on section but offset with respect to geology.

LS17-95 intersected a competent brittle mafic unit containing a network of 1 to 5 cm cross-cutting gold-bearing quartz veins which assayed 0.7 g/t gold over 10.7 meters from 71.5 meters downhole, nearing the position of the Bonanza fault.The brittle mafic unit in proximity to a major fault, hosting a network of gold-bearing quartz veining, is comparable to the Nugget zone geology and mineralization (see NR July 14, 2016).The Lone Star 'laminated schist' target zone is interpreted to lie downhill and behind the area tested by LS17-95 in a different but parallel zone of mineralization.

LS17-96 intersected a later cross-cutting fault.The fault is also mineralized and assayed 0.4 g/t Au over 5.1 meters from 29.8 meters.This gold mineralized interval suggests later faults are introducing additional and potentially overprinting gold mineralization.Recent results of surface prospecting (see NR 16 August, 2017) supports this supposition.

O'Neil 700 meter West Step-Out:

A total of three O'Neil area holes, LS17-97 to LS17-99 tested geology approximately 700 meters west from the Lone Star laminated schist target.The three holes form a widespread 'fence' in an attempt to detect the along strike continuation of the gold mineralization.

LS17-97 encountered a major late cross-cutting fault containing quartz veins that assays 0.6 g/t Au over 13.7 meters from 9.1 meters downhole.Significantly 350 meters along strike to the southeast an outcrop of quartz veining containing visible gold in the fault has yielded two prospecting grab samples assaying 24 and 96 g/t gold, 110 and 149 g/t silver, and 86 and 110 ppm tellurium respectively.Prospecting grab samples are selective, non-representative in nature, and systematic additional test results may vary significantly.

LS17-98 intersected the Lone Star laminated pyritic schist unit which assayed 0.5 g/t Au over 13.3 meters from 28.9 meters downhole.Visible gold was observed in this interval (see NR 11 July, 2017).An interesting broader interval contained anomalous gold mineralization averaging 0.3 g/t Au over 52.6 meters starting from 25.4 meters downhole.

Also in the O'Neil vicinity, LS17-99 was a short hole testing an area in the unmineralized felsic footwall of the Bonanza fault for other gold mineralized structures.No significant result or assay was obtained.

Drilling and Assay Update:

Drilling is ongoing with two drill rigs beginning the Phase 3 program.A total of approximately 4,000 meters of drilling for 40 holes is planned, notionally divided into 20 holes for 2,000 meters for each drill.This Phase 3 program is expected to be complete in mid- to late-September, with logging, sampling, and assaying to follow. (Approximately 40 planned holes pending).

All results from Phase 2 drilling LS17-100 to LS17-117 are pending (18 holes pending).

Results for holes LS17-92 to LS17-94 are pending, and are the last remaining holes to report from the Company's Phase 1 drilling.These holes targeted the eastern end of the Lone Star target laminated schist unit. (3 holes pending).

Drill Core and Assay Protocols 2017

All drill holes are photographed wet.Magnetic susceptibility, foliation, and rock quality determination ("RQD") measurements are systematically collected.All cross-cutting (potentially mineralized) quartz veins and adjoining alteration envelopes are individually photographed.Core logging records lithology, structure, and alteration.Visible gold is identified, measured, photographed, and then excluded from the assay sample for that interval.Assay samples from drill core are cut using a diamond saw.Half the core sample interval is bagged, tagged, and sealed; the other half is returned to the core box with a corresponding tag and retained for reference.Sample bags are aggregated into rice bags, sealed, and submitted by Klondike Gold personnel to Bureau Veritas Mineral Laboratories ("BV Labs") (formerly Acme Labs) preparation facility in Whitehorse, YT with chemical analysis of sample pulps completed in Vancouver, British Columbia.Bureau Veritas Labs is an accredited ISO 9001:2008 full-service commercial laboratory.

At BV Labs each rock sample is crushed to 80% passing 2 mm size.A 500 g subsample is pulverized to >85% passing -75 microns size (Code PRP70-500). The 500 g subsample is then sieved to 106 microns (140 mesh) for "metallic screen" assaying. The plus 140 mesh fraction is then weighed and assayed for gold by fire assay ("FA") fusion with a gravimetric finish (Code FS631). A 30 g subsample of the minus 140 mesh fraction is assayed for gold by fire assay ("FA") fusion with an atomic absorption ("AA") finish (Code FA430).All over-limit results in excess of 10 ppm (10 g/t) for both silver and gold are re-assayed using a 30 g subsample and assayed by FA with a gravimetric finish (Code FA530-Au/Ag).Total gold grade is then calculated using a weighted average of the plus and minus fraction assay results. Samples were also analyzed for multi-element chemistry by ICP-MS analysis (AQ201+U code).Samples over-limit in lead are rerun by a high-detection limit ICP-ES procedure (Code MA370).QA/QC includes the insertion and continual monitoring of Klondike Gold standards, blanks, and duplicates within each batch, in addition to BV Labs QA/QC samples.A description of sample and assay procedures and protocols are also disclosed on the Company's website.

The technical and scientific information contained within this news release has been reviewed and approved by Peter Tallman, P.Geo, President of Klondike Gold Corp. and Qualified Person as defined by National Instrument 43-101 policy.

ABOUT KLONDIKE GOLD CORP.

Klondike Gold Corp. is a Canadian exploration company with offices in Vancouver, British Columbia, and Dawson City, Yukon Territory.The Company is focused on exploration and development of its Yukon gold projects, accessible by government maintained roads located on the outskirts of Dawson City, YT, covering district scale 527 square kilometers of hard rock and 20 square kilometers of placer claims including "McKinnon Creek" featured on the Discovery Channel show "Gold Rush".

On behalf of Klondike Gold Corp.

"Peter Tallman"

President and CEO
(604) 609-6110
E-mail:info@klondikegoldcorp.com
Website:www.klondikegoldcorp.com

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.

Disclaimer for Forward-Looking Information

"This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. This information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may," "will," "should," "anticipate," "plan," "expect," "believe," "estimate," "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management of Klondike in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause Klondike's actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and accordingly, undue reliance should not be placed thereon.

Risks and uncertainties that may cause actual results to vary include but are not limited to the availability of financing; fluctuations in commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com. Klondike disclaims any obligation to update or revise any forward-looking information or statements except as may be required.

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Source: Klondike Gold Corp. (TSX Venture:KG)

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