Klondike Silver Corp. Negotiates New Smelter Contract

  Klondike Silver Corp. (the "Company") (TSX VENTURE: KS) is pleased to announce it has negotiated a new contract with a regional smelter to process material from their mine and mill site at Sandon, BC. The contract was negotiated with a smelter basic treatment charge more than 10% less than the previous contract. The contract is for the month of December 2009 and all of 2010.

Concentrate milled from the 4755 level will be shipped commencing December 20th with monthly shipments to be continued. Management plans to continue test mining while conducting further underground exploration in the Silvana, Wonderful and Hinckley mines. The concentrate from the material will be shipped to smelter subject to an agreed upon schedule.

The Company will continue its vigorous regional exploration program with emphasis being placed on locating and recovering zinc zones previously ignored due to low prices or penalties being assessed. Management team is pleased with the progress being made in the Silvery Slocan and looks forward to building on its successes.

Custom Milling

KS has been asked to custom mill material from a mine located within 100 miles of the Sandon mill. This milling will take place as soon as all ministry requirements have been met. Custom milling of this material is expected to bring considerable revenue to the Company. Material from the Sandon operation will continue to be the priority for the mill.

About Klondike Silver:

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.

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 local mines in the historic Slocan Silver Camp. As well, Klondike Silver entered into a joint venture with Kootenay Gold Inc. to explore a copper-porphyry property in the state of Sonoro in northern Mexico.

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 or Alan Campbell [phone] [e-mail] AGORACOM Investor Relations [e-mail] http://www.agoracom.com/ir/KlondikeSilver