Indian River Placer

(KG owns a 5% royalty)

Overview

• Placer gold mining project ready for production
• This project is fully permitted and awaiting financing.
• A large scale placer mine can be developed on this long, broad, consistently mineralized river bench
• Depth to bedrock averages only 7 meters

Regional Exploration and Production

There are producing placer gold mines both upstream and downstream of this property. The Klondike placer gold district has produced about 20 million ounces since 1896, and continues to produce about 50,000 ounces per year.

The Indian River Placer Project is an advanced-stage placer gold exploration property consisting of 188 placer bench claims. It is located in a wide, shallow valley about 30km from Dawson City, Yukon in the heart of the Klondike gold-producing region. The gold target forms a wedge that is 300m at the beginning and broadens to a width of over 1500m.

To date, the mineralized zone extends over a distance of more than 3km and remains open to expansion to the east and south. The property lends itself to environmentally responsible mining methods already employed successfully in the Klondike that engineers have refined to reduce energy requirements and minimize operating costs.

The Indian River placer gold project consists of placer claims along the southern edge of the Klondike placer mining region. Klondike Star's objective is to develop a large placer mine which would bring cash flow to the Company, enabling further mineral exploration of its Klondike area claims.

Among the advantages of the Indian River property are that it can be brought into production quickly. It lends itself to environmentally responsible mining methods already employed successfully in the Klondike that engineers have refined to reduce energy requirements and minimize operating costs.

Other Local Exploration

Gimlex placer mine is situated about 3km downstream, and is one of the largest placer mines in the Yukon.

Property Geology

Gold is hosted in old gravels which overlie the Permian Klondike Schist and younger rocks. The Klondike region has not been glaciated, which allows the preservation of rich placer gravels. Depth to bedrock averages about 7m on the claims, with 1- 2m of organic-rich loess and peat near surface, overlying gravel. The majority of gold is found in at the bedrock contact.

Work Completed to Date

The Company's joint venture partner Klondike Star has thus far drilled over 600 holes on 60% of the Indian River property. Gold was recovered from nearly 100% of the holes in the main target area. The target zone forms a wedge that is 300 meters (984 feet) at the beginning and broadens to a width of over 1,500 meters (4,921 feet). To date, the mineralized zone extends over a distance of more than three km (1.9 miles) and remains open to expansion to the east and south. Gold is uneven but consistently distributed across this broad area with gold values present across the entire width of the property. The fineness of the gold assayed at over 82%. Klondike Gold has a 5% Net Smelter Royalty interest in the Indian River Placer project.

Recent Highlights

• The last work on the project was bulk testing and permitting in 2007.
• The project is fully permitted for production.