KLONDIKE SILVER CORP.

711-675 West Hastings Street, Vancouver, B.C. V6B 1N2 (604) 685-2222 *Fax: (604) 685-3764

FOR IMMEDIATE RELEASE

May 29, 2007

TSXV: KS

www.klondikesilver.com                                                                                                                         

Santa Lucia Update

Klondike Silver Corp. is pleased to announce the receipt of the Santa Lucia Update Report from Kootenay Gold Inc., Optionor of the Company’s Santa Lucia project in Mexico.

Santa Lucia is located in southern Sonora State, Mexico and is comprised of two concessions covering about 9,350 hectares. Mineralization is comprised of classic epithermal and mesothermal style quartz veining, silicification, stockwork and breccias.

Two areas of identified mineralization occur, one on the north part of the project and a second on the south part of the project. Combined, alteration and mineralization of the two zones covers over 20 square kilometers. The zones are about 12 kilometers apart. Grab samples taken by Kootenay Gold range from background to 648 grams per tonne (GPT) silver and 12 gpt gold (as analysed by 34 element ICP with an AA assay finish on silver and gold conducted by ALS Chemex in Vancouver, B.C.) Given the large extent of mineralization in multiple structures and host rocks potential for the discovery of a medium to large sized deposit of silver and gold is considered good.

The Company has recently concluded detailed airborne EM and Magnetometer surveys along 1254 line kilometers spaced 75 meters apart and acquired a data set from exploration in the late 1990’s. The historic data consists of 1526 soil samples, 450 rock chip samples from hand and mechanical trenches, geologic mapping, and a ground magnetometer survey covering a 12 square kilometer area.

The airborne survey was the AeroTEM system flown by Aeroquest Limited. The survey was successful in mapping structural trends and in identifying discrete coincident EM and magnetic anomalies indicating the potential for both new areas and extensions to known areas of mineralization. Magnetics has mapped the structural trends controlling known mineralization and shown that these structures continue for significant distances beyond identified mineralization. Four distinct EM anomalies have been identified. These anomalies are focused along intersecting structural zones and in one case along an arcuate trend possibly reflecting a caldera like ring fracture system. They are important as the highest grades of gold and silver are associated with higher sulfide contents and the EM may be caused by higher sulfides. The anomalies vary from elongate 80 to 200 meter wide zones 3000 meters long to broad zones 350 meters by 650 meters to circular highs 80 meters across.

The historic data acquired is for the southern part of the project only. This work identified 4 targets two of which have been traced for 2 kilometers of strike. The zones consist of individual quartz veins up to 3 meters wide and of silicified stockwork and breccias between 50 and 100 meters wide. This work also indicates silver and gold mineralization is found with deeper style mesothermal veins and shallow type epithermal veins. Values of silver and gold range from background to over 500 gpt silver and 34 gpt gold. The arithmetic mean of all the mechanical trenching on the property was 7.2 meters at 0.75 gpt gold and 19.56 gpt silver. Highlights form trench results include 18 meters of 1.10 gpt gold and 3.8 gpt silver; 10.5 meters of 0.93 gpt gold and 50 gpt silver; and 3.0 meters of 4.7 gpt gold and 18.2 gpt silver. All samples were analysed by Bondar Clegg of Vancouver B.C. using 34 element ICP with an AA assay finish. It is reported that a small program of only 17 drill holes was conducted in 1999 and the company is working on obtaining that data. It is believed this work did not encounter ore grade mineralization but may aid in the understanding of controls and targeting future drilling. All data is historic in nature cannot be considered NI43-101 compliant and therefore should not be relied upon.

The new airborne data and old historic data are being integrated into a GIS system to aid planning the next exploration program which is being designed to identify a number of drill targets. It is expected this program will entail some detail mapping assisted by select trenching to help establish controls and may include some ground geophysics. Lessons learned form this work will be used to design a drill program for sometime in the fall.

Technical information contained in this release has been reviewed by James McDonald, P.Geo., Director and CEO of Exploration for Kootenay Gold, a Qualified Person as defined in National Instrument 43-101.

On behalf of the Board of Directors

Klondike Silver Corp.

Signed “Richard W. Hughes”

President

For Further Information Visit the Company’s website:  www.klondikesilver.com to see the Smartstox Report in which Stanlie Hunt interviews Klondike Silver Corp. President Richard Hughes.

This document contains certain forward looking statements which involve known and unknown risks, delays and uncertainties not under the corporation’s control which may cause actual results, performance or achievements of the corporation to be materially different from the results, performance or expectation implied by these forward looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.