Klondike Gold Corp. (TSX.V: KG) (the “Company) is pleased to announce that it proposes to offer to acquire, by way of a take-over bid to be conducted in accordance with applicable regulatory requirements, a majority equity interest in the common voting shares of Klondike Star Mineral Corporation (“Klondike Star”), a publicly traded Delaware company. The Company will invite the shareholders of Klondike Star to exchange their common shares (the “Klondike Star shares”) for newly issued Klondike Gold Corp. (“Klondike Gold”) common shares on the basis of four (4) Klondike Star shares for one (1) share of Klondike Gold. The offer is subject to the tender of a sufficient number of Klondike Star shares to provide the Company with a minimum 66.6% interest in Klondike Star. The offer is also subject to acceptance for filing by the TSX Venture Exchange.

Klondike Star has in the order of 68 million common shares issued and outstanding. Accordingly, the Company will be seeking to acquire a minimum of 45 million Klondike Star shares. To make this acquisition, the Company will issue a total of 11.25 million common shares in its capital, if the minimum amount is tendered, and up to a total of 17 million shares, if all of the shares of Klondike Star are tendered. There will be no change in effective control, or change in control, of the Company as a result of the share exchange, and no new control person in the Company will be created by this transaction.

Klondike Star’s principal asset is a 20 % interest in Lonestar Gold Inc. and a 55 % interest in the Lone Star Property located 20 kilometres south east of Dawson City, Yukon Territory, which interest has been optioned to Lonestar Gold Inc. Klondike Star also holds a 55% stake in 376 quartz claims that cover important areas of the northern Klondike Gold Fields and a 100 % interest in the 35 quartz claims that form the Aime Property on Gold Run Creek, Yukon Territory. Further, Klondike Star also holds rights over some 300 placer claims located in the Klondike and Indian River Gold Fields in the Dawson Mining District, Yukon Territory.

The acquisition of a controlling interest in Klondike Star and its mineral property holdings, combined with the Company’s 45% interest in the Lone Star Property, unifies title on the Lone Star Property, and, adding the additional Klondike Star claims, produces a continuous block of 1,100 quartz claims covering nearly 200 square kilometers of the northern and southern Klondike Gold Fields. The consolidation of this title will allow for a more efficient exploration of this project and enhance access to exploration funding.

The Company also announces that it has granted incentive stock options on 2,000,000 shares in the capital of the Company to directors and officers of the Company and on 2,000,000 shares in the capital of the Company to consultants and employees of the Company. The options are exercisable for a period of five years at a price of $0.20 per share.


Inquiries: Robert A. Young 604-685-2222 (Ext 398)
Email: info@klondikegoldcorp.com
Erich Rauguth, President & CEO 604-685-2222