Tailings Processing Project

Under the ownership of Klondex Mines Ltd., the operations identified the potential in the tailings stored in the impoundment facility at site. Drilling undertaken in 2014 showed an average grade of .043 oz/t or 1.47g/t, supporting the development of a system to re-process the tailings.

The initial design and testing took place over 2015 and 2016 with the first gold pour coming from the tailings re-processing project in July of 2016.

True North Tailings Mineral Reserves:

Notes to True North Tailings Mineral Resource

1. Tailings Mineral Resource is inclusive of Mineral Reserves.
2. Tailings Mineral Reserve estimate is based on tailings located at True North produced by previous operators to 1911 Gold Corporation.
3. Tailings Mineral Reserve was estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
4. No mining losses have been applied to the designed historic tailing excavations and no additional unplanned dilution has been included.
5. Contained metal may differ due to rounding.
6. Cut-off grade = 0.026 opt Au (0.89 g/t Au) for 2016 to 2018 and 0.020 opt Au (0.69 g/t Au) for 2019 to 2023.
7. A dry bulk density of 0.044 tons per cubic foot was utilized in the tailings Mineral Reserve tonnage calculation.

True North Tailings Mineral Resources:

Notes to True North Tailings Mineral Reserve

1. Tailings Mineral Resource is inclusive of Tailings Mineral Reserve.
2. Tailings Mineral Resource estimate is based on tailings located at True North produced by previous operators to 1911 Gold Corporation.
3. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues.
4. Mineral Resource was estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
5. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
6. Contained metal may differ due to rounding.
7. Cut-off grade = 0.015 opt Au (0.51 g/t Au).
8. A dry bulk density of 0.044 tons per cubic foot per cubic foot was utilized in the tailings Mineral Resource estimate tonnage calculation.