Taylor Combaluzier, P.Geo.

| Mining Analyst
research@redcloudsecurities.com

Klondike Gold Corp. (TSXV:KG) Initiating Coverage

March 18, 2021
Ho, To The Klondike!
(Currency is CAD$ unless noted otherwise)
We are initiating coverage on Klondike Gold Corp. (TSXV:KG) with a BUY
Closing Price ($/sh) $0.24
Rating BUY rating and a target price of C$0.50/sh representing 113% upside from the
Target ($/sh) $0.50 current share price. The company holds a 100%-interest in the Klondike
Return to Target 113%
52 Week Low / High $0.17 / $0.39 District property, which covers the area that was at the center of the historic
CAPITALIZATION Basic Diluted Klondike Gold Rush. After demonstrating that the Klondike does in fact host
Shares Outstanding (M)
Market Capitalization ($MM)
133.7 179.9
$31.4
bedrock Au through significant drilling since 2015, the company is aiming
Enterprise Value ($MM) $28.2 to delineate a maiden resource at the property in 2022. In our view,
Cash and Cash Equivalents ($MM) $3.2 Klondike Gold offers investors the opportunity to get in before 2021
Total Debt ($MM) $0.0
STOCK CHART drilling and a maiden resource estimate at the Klondike District
$0.40 20,000 property in 2022 that we believe could outline an initial resource of
$0.30 15,000 ~0.5M oz Au that could then grow to +2M oz Au with additional drilling.
$0.20 10,000 Investment Thesis:
$0.10 5,000 • A geological story. The Klondike is located within the Tintina gold belt,
$0.00 0 which hosts significant gold deposits, such as Donlin (+45M oz Au), Pogo
2020-03-17 2020-07-17 2020-11-17 2021-03-17
(7.6M oz) and Coffee (4.1M oz). These deposits are associated with
Volume Price
RELATIVE PERFORMANCE flexures in the crustal-scale shear zone that created conduits for the
150%
formation of Au deposits that are both intrusion-related and orogenic
100% types. The company has successfully built up its understanding of the
50% geological controls on orogenic Au mineralization and is successfully
0% using that knowledge to identify new bedrock Au zones in the Klondike.
-50%
2020-03-17 2020-07-17 2020-11-17 2021-03-17
• We see a path to +2M oz of Au. We believe the company could likely
TSXV:KG GDXJ delineate an initial mineral resource of ~0.5M oz of Au at the Klondike
POTENTIAL VALUATION District property in 2022 based on existing and planned drilling in 2021.
We then believe it could grow it to +2M oz of Au over the following two
years through additional drilling at the Lone Star and Stander zones.
• An ideal location for a future mine. In contrast to other gold projects
in the north, the Klondike property is only ~20km south of Dawson City.
RELATIVE VALUATION EV ($MM)
The project has excellent access to infrastructure and local mining
Klondike Gold Corp. $28
Peers* $57 expertise. As such, we believe this would make a compelling case to
*S&P Capital IQ move the project quickly into the development phase after defining a
MAJOR SHAREHOLDERS
sufficient mineral resource and completing the relevant technical
Management (12.49%), Sprott Foundation (8.25%), Fiore
Financial Corporation, The Giustra Foundation (1.33%) studies. Additionally, we expect this would result in lower overall costs.

DISCLOSURE CODE: 3,4 Valuation:

(Please refer to the disclosures listed on the back page)
Source: RCS, Company Information, S&P Capital IQ
Company Description
Klondike Gold Corp. is a resource exploration company that
engages in the exploration and development of mineral
properties in Canada. The company primarily explores for
gold. It is focusing on the exploration and development of its
Yukon gold projects located on the outskirts of Dawson City
covering a 585 square kilometers of hard rock and 20
square kilometers of placer claims. The company was
formerly known as Arbor Resources Inc. and changed its
name to Klondike Gold Corp. in January 1996. Klondike
Gold Corp. was incorporated in 1978 and is headquartered
in Vancouver, Canada.
Positive drill results and a maiden resource could drive share price
higher. Our price target of C$0.50 is derived using our probability-based
valuation method (page 4). With an enterprise value (EV) of ~$28M versus
peers at ~$57M, we believe continued exploration success could drive
Klondike Gold’s share price upwards – potentially by a factor of 2x to 10x. We
would also expect a re-rating when the company releases a maiden
resource estimate for the Klondike District property in 2022E. Upcoming
Catalysts: 1) 2020 (Phase 4) drill results (Q1/21), 2) 2021 drilling (Q2/21) and 3)
maiden resource estimate at the Klondike District property (2022).
Mining/exploration is inherently risky and Klondike Gold is subject to
various geopolitical, technical, corporate, or financial risks.

Table of Contents
Investment Thesis 1
Catalysts 4
Valuation 4
Relative Valuation 5
Assets 7
Klondike District Property 7
Risks 17
Appendix A: Mineral Inventory
Estimate 18
Appendix B: Management &
Directors 19
The creeks in the Klondike
have produced +20M oz of
Au since 1896
The Klondike District is
located in the Tintina Gold
Belt, which hosts numerous
significant gold deposits
March 18, 2021
Taylor Combaluzier, P.Geo. | Mining Analyst
Investment Thesis
Klondike Gold is an explorer focused on delineating a maiden resource
at its Klondike District property in the Yukon. The company holds a 100%-
interest in the Klondike District property (~585 km2), which covers the area
that was at the center of the historic Klondike Gold Rush. Previously, the
company’s objective was to identify the hard rock source for the legendary
Klondike placer gold. Having accomplished that goal near the end of 2019,
the company’s focus switched to delineating a maiden resource at its most
advanced zones of gold mineralization – the Lone Star and Stander zones,
which run parallel to one another. Klondike Gold has also started to develop
a pipeline of earlier-stage targets on the property. In our view, Klondike
Gold has a comprehensive understanding of the geological controls on
orogenic gold mineralization and a dominant land position in the
Klondike District, which should enable it to continue having success
with the drill bit. We believe that the time to invest is now, in advance
of 2021 drilling and a maiden resource estimate planned for 2022.
A little bit of history. The historic Klondike Gold rush was precipitated by
the discovery of gold in the beds of the numerous creeks that run through
the district in 1896. When two ships, the Excelsior and Portland, arrived in
San Francisco and Seattle, respectively, with prospectors carrying a total of
three tons of gold it set off a mad dash for the Yukon. A total of ~100,000
men and women endured treacherous conditions as they journeyed
towards the Klondike, with only ~30,000 of those who set out ultimately
reaching Dawson City. Of that number, only ~4,000 struck gold and much
fewer ultimately became rich. The stampede reached its climax in the
winter of 1897-1898, after which word started to get out that there was no
prospective placer ground left to be had. Dawson City reached a population
of ~40,000 in 1898 and was temporarily the largest city north of San
Francisco, before gold was discovered in 1899 in Nome, Alaska which,
together with the Spanish-American war, prompted its swift decline and
marked the end of the Klondike Gold Rush. Placer mining gold from the
Klondike creeks has continued at a less fervent pace from then until now;
currently ~25k oz Au per year production. Ultimately, a total of +20M oz of
placer Au is estimated to have come out of the creek beds in the Klondike
since 1896. However, since the original Gold Rush in 1987 the ultimate
bedrock source of the Klondike placer gold has been sought, and until
Klondike Gold started conducting significant exploration in 2015,
nobody had seriously looked for it. To date, the company has made
substantial progress advancing its geological understanding of the
district and has identified numerous bedrock sources of Klondike Gold.
A new geological model for the Klondike. Since 2015, the company has
refined its understanding of how gold ended up in the Klondike. The
exploration model essentially recognizes that NE-trending “D4” faults are
responsible for gold mineralization, and that the D4 fault process also
reactivated and introduced gold mineralization into some earlier “D3” NW-
trending faults. “Hotspots” for gold mineralization occur where these
two types of faults intersect, which explains one of the best
intersections to date at the Stander zone of 1,009 g/t Au and 1,035 g/t Ag
over 1m (EC190267). Gold mineralization identified to date is hosted in both
quartz sheeted vein arrays in addition to the Klondike schist, which hosts
broad widths of disseminated gold. With this new understanding of the
Klondike geology, the company has successfully drilled numerous
targets on the property and is well on its way towards delineating a
maiden resource at the Lone Star and Stander zones in 2022.
1 Ho, To The Klondike!
 Taylor Combaluzier, P.Geo. | Mining Analyst

Figure 1: The Klondike District is located in the Tintina Gold Belt

Source: Company Reports

We see a path to a +2M oz Au resource at the Klondike District property

within three years. In our view, the company could likely delineate a ~0.5M
oz Au resource at the Lone Star and Stander zones in 2022 based on existing
and planned drilling in 2021. We would view this resource as an interim
estimate as it aims to quantify and demonstrate the potential of the
We see a path to +2M oz Au at the
Klondike District Property. Going forward, we believe the company would
Klondike District property
likely be able to delineate +2M oz Au within three years based on the size of
the identified gold zones to date and assuming a reasonable amount of
drilling in line with prior years. We have outlined our Lower Case and Upper
Case mineral inventory estimates in Appendix A and would note that in the
lower case the majority of the Au is derived from the Lone Star zone with a
small component from the Stander zone. We believe additional future
drilling at the Stander zone would boost its contribution in the Upper Case.

Figure 2: Location of Lone Star Zone and Stander Zone Segments

Source: Company Reports

March 18, 2021 2 Ho, To The Klondike!


We’ve seen it before: a maiden
resource could re-rate the stock
Banyan Gold could serve as a
blueprint for what can happen
with the release of a maiden
resource estimate
March 18, 2021
Taylor Combaluzier, P.Geo. | Mining Analyst
Banyan Gold Corp. (TSXV:BYN, Not Covered) provides a compelling case
study of what a maiden resource can do to the share price. Banyan Gold
is a Yukon-based explorer for gold that announced a maiden resource
estimate on May 26th, 2020 for its Aurmac property in the Yukon. The
resource comprised ~900k oz Au and catapulted the stock from $0.12 to
$0.31 (+165%) in little over a month (see Figure 3 below). Over the past year,
the stock has returned +325%. By comparison, the GDXJ is up only 75% over
the past year. If Klondike Gold is able to produce a maiden resource at its
Klondike District property, we believe Banyan Gold’s performance could
serve as a blueprint for what could happen.
Figure 3: Banyan Gold event-driven share performance
$0.45
$0.40
$0.35
BYN announces 903,945
$0.30 oz Au initial mineral
resource estimate for
$0.25 the Aurmac property
$0.20
$0.15
$0.10
$0.05
$0.00
16-Jan-20 16-Apr-20 16-Jul-20 16-Oct-20 16-Jan-21
TSXV:BYN
Source: S&P Capital IQ, RCS, Company Reports
Management is strongly aligned with shareholders. Klondike Gold is led
by a seasoned management team that has a strong technical background
and experience in capital markets. The company is led by CEO Peter
Tallman, an accomplished geologist and executive who has a history of
delivering exploration success. We are pleased to note that management
has invested substantially in the company, holding ~12.5% (Figure 4). We are
encouraged to see a strong technical and capital markets grounding
among the company’s leadership coupled with a significant ownership,
a combination which we believe could help deliver success for Klondike
Gold.
Figure 4: Ownership Structure of Klondike Gold
Source: S&P Capital IQ, Company Reports
3 Ho, To The Klondike!

Key catalysts include: 2021
drilling and a maiden resource
in 2022
We believe Klondike Gold
could eventually delineate
up to a ~2M oz AuEq deposit
March 18, 2021
Taylor Combaluzier, P.Geo. | Mining Analyst
Catalysts
2021 drilling to form backbone for maiden resource. We expect assays for
30 holes drilled as part of the Phase 4 program at the Klondike property in
the latter part of 2020 to kick off news flow for the company in 2021. Going
forward, the company plans to drill at least 6,000m largely at existing
mineralized zones in preparation for a maiden resource, but also at new
targets at the Klondike District property. After receiving data from the
upcoming 2021 program, the company is planning to put together a
maiden resource estimate, likely in the inferred category, for release in 2022.
Upcoming Catalysts for Klondike Gold include:
1. 2020 drill results from the Klondike District property (Q1/21)
2. 2021 drilling (min. 6,000m) (Q2/21)
3. Maiden resource for the Klondike District property (2022)
Valuation
Our C$0.50 target was derived using our probability-weighted valuation
methodology. This methodology accounts for the probability of each
scenario being achieved, along with the time and money required to
achieve them. It uses our mineral inventory estimates as shown in Appendix
A. For Klondike Gold our three valuation scenarios are outlined as follows:
1. Upper Case – C$0.57/sh – 60% probability – This case assumes that
the company can delineate ~2M oz of Au (~1.2 g/t Au) at the Klondike
District property. We believe the company may define an initial
resource of ~0.5M oz Au in 2022 and then expand it in the following
years to reach ~2M oz Au. Given the significant drilling at Lone Star
and the excellent results to-date from the Stander zone, we are
confident the company could eventually achieve this case.
2. Middle Case – C$0.46/sh – 30% probability – We believe the
company could define a resource of ~1.5M oz Au (~1.1 g/t Au). We view
this scenario as an interim stage, after having achieved the Lower
Case and en route to achieving the Upper Case of 2M oz Au.
3. Lower Case – C$0.18/sh – 10% probability – This case assumes that a
nominal resource of ~0.5M oz Au (~1.0 g/t Au) is defined in 2022.
However, we believe the company would then subsequently grow
the resource to ~2M oz Au (Upper Case) and this would only serve as
an interim, baseline resource estimate.
As outlined in Figure 5, in each scenario, we try to account for time, money
and the cost of capital to further define the target. To achieve each case, we
assume the company’s share price progressively increases or decreases
with exploration success or failure. Additionally, the capital required to
achieve each case is reduced by any work done in the Lower Case (i.e. to
achieve the Upper Case, $5M in additional spending is required to
supplement the $5M required to achieve the Middle Case for a total of
$10M). For each case, our potential value is based on North American peer
trading multiples of US$40/oz Au. Finally, to account for time, we have used
a discount rate of 8%. We note that with each new piece of exploration data,
we plan to adjust our estimates.
4 Ho, To The Klondike!
 Taylor Combaluzier, P.Geo. | Mining Analyst

Figure 5: Probability Weighted Valuation Estimate for Klondike Gold

Potential Cost to Shares to be Est. Share Per Time to Time Adjusted

Scenario Description Value Achieve issued to achieve Count When Share Achieve Per Share Probability
(C$M) (C$M) this case Achieved (C$) (Years) Value (C$)

Lower Case ~0.5M oz at ~1.0 g/t Au (US$40/oz) $26.7 $0.0 0.0 133.7 $0.20 1.0 $0.18 10%

Middle Case ~1.5M oz at ~1.1 g/t Au (US$40/oz) $80.0 $5.0 16.5 150.2 $0.53 2.0 $0.46 30%

Upper Case ~2M oz at ~1.2 g/t Au (US$40/oz) $112.9 $10.0 6.2 156.4 $0.72 3.0 $0.57 60%

Probability Weighted Valuation Estimate $0.50

Notes:
Discount rate of 8%
To achieve downside case, shares issued at current share price
Medium case shares issued in 3 tranches at an average price of $0.37
Upside case shares issued in 3 tranches at an average price of $0.83
Capital to be raised in subsequent cases, reduced by prior case
Assumed that any in the money warrants/options would reduce the required capital to be raised and would have a roughly neutral impact

Source: RCS Estimates

Relative Valuation
Continued exploration success and a maiden resource could drive re-
rating. With an enterprise value (EV) of ~$28M, we believe continued
exploration success at the Klondike property could drive the share price
Klondike Gold trades at a upwards. We would also expect a re-rating when the company releases a
discount to pre-resource peers maiden resource estimate for the project. Based on comparative valuations
for early-stage peers (see table below), we estimate that Klondike Gold’s EV
could re-rate by a factor of 2x to 10x on positive drilling news.

Figure 6: Comparable Companies

Price YTD Shares Mkt. Cap Cash Debt EV

Company Ticker
(C$/sh) Perf. (M) C$M C$M C$M C$M

Klondike Gold Corp. TSXV:KG $0.24 -4% 133.7 $31.4 $3.2 $0.0 $28.2

Amex Exploration Inc. TSXV:AMX $2.87 -25% 90.5 $259.8 $31.8 $0.0 $228.0
QMX Gold Corporation TSXV:QMX $0.29 78% 478.9 $136.5 $9.4 $2.8 $129.9
Northern Superior Resources Inc. TSXV:SUP $1.40 -8% 71.5 $100.0 $6.6 $0.0 $93.5
Metallic Minerals Corp. TSXV:MMG $0.70 4% 137.6 $96.3 $6.2 $0.0 $90.1
NuLegacy Gold Corporation TSXV:NUG $0.14 -4% 606.4 $81.9 $6.2 $0.0 $75.7
Cantex Mine Development Corp. TSXV:CD $0.93 1% 55.5 $51.6 $4.0 $0.3 $47.9
Trillium Gold Mines Inc. TSXV:TGM $1.34 -14% 38.9 $52.1 $8.6 $0.1 $43.6
Galleon Gold Corp. TSXV:GGO $0.09 -18% 489.3 $44.0 $3.6 $0.3 $40.7
StrikePoint Gold Inc. TSXV:SKP $0.22 -21% 192.5 $42.3 $2.1 $0.0 $40.3
Pacton Gold Inc. TSXV:PAC $0.89 -14% 37.4 $33.3 $5.4 $0.0 $27.9
K2 Gold Corporation TSXV:KTO $0.35 -51% 65.2 $22.8 $3.0 $0.0 $19.8
Northern Shield Resources Inc. TSXV:NRN $0.08 -12% 279.9 $21.0 $2.0 $0.0 $19.1
Stratabound Minerals Corp. TSXV:SB $0.23 -26% 92.7 $21.3 $4.4 $0.0 $16.9
Strategic Metals Ltd. TSXV:SMD $0.40 0% 106.9 $42.2 $28.3 $0.8 $14.7
Quebec Precious Metals Corporation TSXV:QPM $0.25 7% 67.8 $16.6 $2.1 $0.0 $14.5
Aben Resources Ltd. TSXV:ABN $0.07 -7% 128.7 $8.4 $1.2 $0.0 $7.2

Median $40.5
Note: Average $56.9
*Peer financial metrics are as of the latest financial statements.

Source: RCS Estimates, S&P Capital IQ

March 18, 2021 5 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

We are initiating on Klondike Gold with a BUY rating that is based on

the anticipated news flow from drill results and an upcoming maiden
resource in 2022. Given that past drilling at the Lone Star and Stander
zones returned positive results, we anticipate similarly positive results from
drilling conducted in late 2020 and from the upcoming 2021 drill program.
Additionally, Banyan Gold’s share price climbed upward by ~165% on the
back of its initial resource estimate at its Aurmac property and is currently
Drilling success and a maiden
resource could result in a
trading at ~61% above its share price before the resource was released. As
significant re-rating such, we believe a re-rating of ~2-3x for Klondike Gold when it delivers its
maiden resource in 2022 to be reasonable. We would note that at Klondike
Gold’s current valuation the delineation of a hypothetical resource between
1.5 and 2M oz Au (Middle and Upper Case, respectively) would result in an
EV/oz Au of between US$14.81 and US$11.11, respectively. This range
compares favourably with the average of resource-stage Yukon peers that
trade at US$17.09/oz Au (Figure 7). Additionally, given that Klondike Gold’s
project is located at Dawson City and is close to all necessary infrastructure,
we believe a premium to peers would be warranted.

Figure 7: US$EV/oz Au Yukon peers with KG range based on hypothetical resource (1.5-2M oz Au)

$40.00
$37.01

$35.00
$32.58

$30.00

$25.00
US$EV/oz Au

$20.00
$16.16
Average
$14.81
$15.00
$12.29
$10.27
$10.00 $11.11
$8.33

$5.00
$2.95

$0.00
White Gold Cantex Mine Banyan Gold Golden Klondike Gold Triumph Gold ATAC Strategic
Corp. Development Corp. Predator Corp. Corp. Resources Ltd. Metals Ltd.
Corp. Mining Corp. (RCS Est.)

Source: RCS Estimates, S&P Capital IQ, S&P Global Market Intelligence

March 18, 2021 6 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Assets
Klondike District Property

Klondike Gold is focused on discovery and gold resource growth in the

historic Klondike District (Figure 8). The company holds one large (585
km2) contiguous district-scale property in the Yukon, plus three placer gold
properties (24 km2) overlapping parts of the same area located ~20km
south of Dawson City, Yukon. All of its properties are 100%-owned. The
property is comprised of 585 km2 of hard rock claims that overlie the region
historically regarded as the “Klondike Gold Rush” region, which has
produced ~20M oz Au from surface alluvial creek gravels since 1896.
Approximately 43% of the hard rock claims are subject to a NSR royalty
ranging from 1-2% and the Montana Creek placer property is subject to a 5%
NSR (Figure 9). All hard rock claims will remain in good standing to at least
2025 without further expenditure.

Figure 8: Klondike District Property Location

The Klondike District is located

just south of Dawson City, Yukon

Klondike
District
Property

Source: S&P Global Market Intelligence

March 18, 2021 7 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Figure 9: Klondike Gold’s Yukon Properties Summary

The Klondike District property

covers an area of ~585 km2

Source: Company Reports

Infrastructure
Given that the Klondike District is in the vicinity of Dawson City (pop. 1,375 –
The Klondike District property 2016), the project has excellent access to government roads within the
has excellent access to project area, as well as direct access to the Klondike Highway, the Dawson
infrastructure airport, as well as power, water and town facilities and infrastructure.
Importantly, heavy equipment and considerable local mining expertise is
available in the region.

Geology & Mineralization

Since 1898 the hunt for the hard-rock source of the Klondike placer deposits
has been ongoing and modern research has shown that the placer gold was
derived from adjacent ridges. Work completed since 2015 by the
company has resulted in the discovery of multiple multi-kilometer
sources of Klondike placer gold. In this section, we present a more in-
depth overview of the geology than typical given its importance to
understanding the company’s past activities and current objectives. We
also believe investors with a technical background and an interest in the
Klondike will find the Klondike exploration model particularly beneficial.

The Klondike region is underlain by the Klondike Schist, which is correlated

with units of the Yukon-Tanana terrane which extends from Alaska to the
southern Yukon and B.C. These units are polydeformed and, over a regional
scale, show a range of metamorphic grade from lower greenschist to
amphibolite and have been intruded by Mississippian to Permian
granitoids. The northwestern Klondike area is underlain by three
recognisable thrust fault bounded assemblages that constitute the mid-
Permian Klondike Schist – the source rock for gold in the district.

Quartz veining is widespread in the Klondike, and some rock units locally
have up to 10% vein material by volume. Most of this quartz occurs as early,
segregation veins that are parallel to compositional layering in the schistose
Quartz veining is widespread in lithologies and are interpreted to have formed during the ductile
the Klondike deformation associated with the D1/D2 and D3 deformational events. These
veins in the Klondike contain neither gold nor sulfides. Gold-bearing quartz
veins represent a later veining event (D4) and occur at scattered localities
throughout the district. Gold generally occurs most often as free grains
within vein quartz, and also adjacent to or as inclusions within pyrite,
especially in pyritic selvages that are present along the margins of some of
the veins.
March 18, 2021 8 Ho, To The Klondike!
 Taylor Combaluzier, P.Geo. | Mining Analyst

Figure 10: Geology of the Klondike District

The main source rock for gold in

the district is the Klondike schist

Source: Company Reports

In the right good neighbourhood. The Tintina Gold Belt extends from
Alaska through the Yukon into British Columbia and is known to host
significant gold deposits including Northern Star’s (ASX:NST, Not Covered)
Pogo mine (7.6M oz Au), Newmont’s (NYSE:NEM, Not Covered) Coffee
deposit (4.1M oz Au) and White Gold’s (TSXV:WGO, Not Covered) Golden
Saddle deposit (1.5M oz Au). In total, >50M oz of gold have been defined
throughout the Tintina Gold Belt in the past 20 years (Figure 11).

Figure 11: The Klondike District is within the Tintina Gold Belt

The Tintina Gold Belt contains

numerous significant gold
deposits

Source: Company Reports

March 18, 2021 9 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

A new geological model for gold in the Klondike. The company’s

exploration of the Klondike District project supports an orogenic gold
deposit model of mineralization. In 2019, Klondike Gold revealed an updated
exploration model which identified NE trending orogenic faults and linked
them to gold mineralization. We have outlined this model below and
believe an understanding of it will help investors grasp the company’s
strategy and demonstrate the potential of the Klondike District. This new
model is the key element driving the company’s ongoing exploration
efforts and has successfully helped the company vector in on new
exploration targets at the Lone Star and Stander zones in 2020.

The Klondike Exploration Model

− The new orogenic structural model identifies three phases of early
deformation (“D1” to “D3”) associated with obduction of the Klondike
island arc terrain onto continental North America ~250Ma – similar
to modern day Japan. This pre-100Ma of compression created NW-
SE oriented unmineralized faults as well as “dead” (unmineralized)
quartz veins through the Klondike District.
− A later post-obduction deformation phase (“D4”) with approximately
NE-SW oriented faults that dip northwesterly. This represents an
almost 90-degree rotation of the main compressional stress
direction and is implied to occur well after (D1 to D3) terrain
A new exploration model is
obduction. The company believes this to have occurred ~100Ma,
helping the company
which puts it in line with dated ages of the Pogo and Coffee deposits.
successfully target gold in the
Klondike − At this point, ~100Ma, the district was left untouched to weather in
place until ~3Ma when a glacial event occurred, wherein dammed
glacial melt water burst and carried away the micas that had
accumulated due to weathering in the softer fault zones. The ease
with which this soft material was removed resulted in the faults
becoming channels for the melt water. Importantly, the larger
quartz rocks did not get carried away, nor did the heavy and coarse
gold nuggets. The major thrust faults acted as the first channels,
which were followed by smaller faults acting as channels. In this way,
a drainage pattern was sited in the faults.
− Also recognized are subsequent post-mineralization N-NW (“D5”)
faults containing Cretaceous age mafic, felsic and lamprophyre
dykes which indicate a direct magmatic connection to the upper
mantle. Most recent intrusions of north-south trending, reverse-
magnetic-polarity (“D6”) Eocene porphyry dykes complete the
structural evolution.

The exploration model essentially recognizes that NE trending “D4”

An explanation for “hotspot”
gold zones
faults are responsible for gold mineralization, and that the D4 fault
process also reactivated and introduced gold mineralization into some
earlier “D3” northwest-trending faults. As seen in Figure 12, where D4
(yellow lines) and D3 (red lines) faults intersect, in the gulches, hotspot
zones are found that contain the richest Au mineralization. Historically, the
D3 faults have been the focus of all exploration in the Klondike District and
were previously considered to be the only faults with gold mineralization.

Notably, the Lone Star Zone and Stander Zone are both (D3-related)
structures cross-cut by the newly recognized (D4) faulting. The company
interprets the Stander Zone intersection of 1,009 g/t Au and 1,035 g/t Ag
over 1m from 104-105m depth (EC19-267) to be situated at the
intersection of localized NW (D3) and NE (D4) trending structures.

March 18, 2021 10 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Figure 12: Potentially Au-mineralized fault network

Klondike Gold has mapped four

D3 faults reactivated during the
D4 gold mineralizing event:

1. Bonanza Fault (hosting the

Lone Star Zone)
2. Nugget Fault (hosting the
Stander Zone)
3. Eldorado Fault (hosting the
Gay Gulch showing)
4. Irish Fault (hosting the Violet
showing)

Source: Company Reports

Exploration
The Company’s exploration has primarily focused on the Lone Star zone and
the Stander zone, which cover ~10% of the total land position in the NW end
of the Klondike District property. Other areas identified by prospecting
and/or outlined by soils and geophysics require additional work to vector
exploration and have yet to be significantly drill tested. Nevertheless, the
company intends to develop a pipeline of targets as it works towards a
maiden resource estimate for the Lone Star and Stander zones in 2022. A
total of 393 holes (37,560m) have been drilled on the property since the
beginning of 2015. Additionally, the company has carried out district-scale
geophysical surveys including: LIDAR, ground magnetic surveys, airborne
magnetic and radiometric surveys and geological mapping. A large
number of soil samples, rock sample and channel samples have been
collected and analyzed as well.

Figure 13: Drilling Summary for the Klondike District Property (2015-2020)

Drilling
Year # of Holes meters
2020 52 4,055
A total of 393 holes (37,560m) 2019 94 8,628
has been drilled since 2015
2018 87 9,512
2017 70 8,621
2016 71 5,375
2015 19 1,369
Total 393 37,560

Source: Company Reports

March 18, 2021 11 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Lone Star Zone

The Lone Star zone contains Au mineralization with a footprint of over 5km
in length and up to ~800m in surface width with most identified
mineralization near surface (to 100m depth). The mineralized footprint
remains open within the larger Lone Star zone that extends for ~7km as
defined by VLF-EM/magnetic geophysical survey, Au mineralization in
outcrop, Au-in-soils and Au intersected in drilling. The gold, both as
disseminations in host rock and contained within quartz veins, is located in
a zone above (in the hanging wall) and adjacent to the Bonanza Fault. Gold
mineralization outcrops at surface, can occur across an inferred width of up
to 130m, to a vertical depth of 50m consistently and to below 100m on some
sections, and the zone is interpreted to strike N-NW and dip 35 to 50
degrees to the N-NE.

The Lone Star zone is the company’s most advanced target with 216 holes
having been drilled since the beginning of 2015. Based on reported assays
for 150 holes (with a total of 170 unique intercepts) we have calculated a
The Lone Star zone is the
weighted average grade of 0.77 g/t Au over an average width of 25.4m.
most advanced target in the
In our view, this grade would likely be lower than an actual resource
Klondike District
estimate (which would be more selective and refined than our crude
estimate). We believe the average width is favourable and would be
supportive of an open pit mining scenario. In addition to drilling, the
company has collected data from geophysical surveys (IP, magnetic and
radiometric), structural and lithological mapping, rock sampling and
channel sampling.

Highlight Intercepts:
• 2.4 g/t Au over 40.9m (LS17-82)
• 1.02 g/t Au over 91m (LS18-201)
• 2.4 g/t Au over 37m (LS16-58)

Figure 14: Location of Lone Star Zone and Stander Zone Segments

Source: Company Reports

March 18, 2021 12 Ho, To The Klondike!


Defining parameters for a
conceptual starter open pit at
Lone Star
Higher grades at the Stander
zone are attributable to Au
being hosted in quartz veins
Drilling has concentrated on
Au mineralization to a depth
of ~50m
March 18, 2021
Taylor Combaluzier, P.Geo. | Mining Analyst
The company is currently completing definition drilling to delineate a
maiden resource estimate at the Lone Star zone. The company has outlined
target model parameters for a conceptual starter open pit that includes:
3,500m length of mineralization, Au mineralization from surface to 50m
depth, +60m surface width. 2.6 specific gravity, 1-+2 g/t Au model grade and
+90% gravity recovery. Most recently, 2020 drilling was designed to test
Lone Star for consistency in grade of Au mineralization and to constrain the
geometry and boundaries of Au mineralization. Notably, Phase 4 drilling
tested Lone Star across a strike length of 3.5km with 30 holes (results remain
outstanding) and 2021 drill plans have been released (see next subsection).
Stander zone
The Stander zone is the company’s second most advanced target with 113
holes having been drilled since the beginning of 2015. Based on reported
assays for 43 holes (with a total of 56 unique intercepts) we have
calculated a weighted average grade of 2.63 g/t Au over an average
width of 13.8m. We would note that the grade is higher in the Stander zone,
as gold mineralization identified to date is predominantly hosted by quartz
veining and quartz vein arrays along the Nugget Fault, in contrast to the
Lone Star zone where intermediate schist is the primary host unit for gold
which is permissive for extended widths of disseminated gold with much
less frequent quartz veining.
Highlight Intercepts:
• 404.2 g/t Au and 415.4 g/t Ag over 2.5m (EC19-267)
• 4.3 g/t Au and 1.1 g/t Ag over 21.5m (EC19-256)
• 1.4 g/t Au over 65.05m (LS18-156)
Stander Zone Au mineralization has been traced by sampling Au-bearing
outcrop and local floats in a NW-SE direction for ~5 km (that remains open)
within a broader zone that extends for ~15km along the Nugget Fault, which
is interpreted as a major ‘second-order’ (“D3”) thrust fault.
Figure 15: Au is localized along the “Felsic Schist” and “Intermediate Schist”
contact at the Stander zone
Source: Company Reports
13 Ho, To The Klondike!
 Taylor Combaluzier, P.Geo. | Mining Analyst

Most recently, 2020 drilling successfully constrained the geometry and

boundaries of Au mineralization and the consistency in grade of Au
mineralization and will contribute to future resource delineation.
Additionally, drilling has established the geometry of the quartz vein arrays
as horizontal, and that multiple horizontal Au-bearing vein arrays are
developed approximately every 20 vertical meters adjacent the Nugget
Fault within the area tested at the Stander zone (Figure 16). The best
intersection to date, EC19-267 from 104 to 105 m downhole intersected
an average grade of 1,009 g/t Au and 1,035 g/t Ag over a 1m interval. This
one-meter interval is a mafic schist containing coarse 2 cm size cubic pyrite
in a chocolate coloured presumed ankerite alteration zone that includes a
0.4m rubble interval with pyrite.

Figure 16: Three ‘levels’ of quartz veining at the Stander zone (Long section)

Multiple horizontal Au-

bearing vein arrays are
developed at the Stander
zone

Source: Company Reports

Gay Gulch
At the Gay Gulch gold showing, mapping and drilling have identified Au-
bearing quartz veining hosted within brittle felsic rocks developed adjacent
to the NW-trending fault Eldorado Fault over a 5-km distance. Gold was
discovered in quartz veins and first drill tested by a six-hole program in
2015. The best result at the time was an intersection of 75.6 g/t Au over
2.8m in hole EC15-10. A seven-hole program was subsequently completed
in 2019 that showed the potential for Au mineralization along the main NW-
trending Eldorado Fault and also along an intersecting N-trending zone of
younger faulting and intrusions.

Highlight Intercepts:
• 75.6 g/t Au over 2.8m (EC15-10)
• 10.9 g/t Au over 1.55m (EC15-13)
• 1.09 g/t Au over 9.8m (EC19-245)

March 18, 2021 14 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Gold Run target

The Gold Run target is associated with the major basement fault imaged in
2018 airborne magnetics and named the Rabbit Fault, associated with the
Lone Star Zone, and now interpreted to run the 50km length of the
Klondike District to the vicinity of Gold Run Creek area. Four initial holes
were drilled in the Gold Run Creek area that targeted an area of historic
shafts located by prospecting from which numerous grab samples
returned values of 0.6 to 55 g/t Au. Drilling in all four holes encountered
Au-bearing quartz veins, some with visible gold, within extensive carbonate
alteration hosted by weakly foliated mafic schist.

Highlight Intercepts:
• 1.23 g/t Au over 13.5m (GR18-162)
• 0.99 g/t Au over 1.45m (GR18-160)

Figure 17: Exploration Summary for the Klondike District Property (2015-2021)

Quartz Veins
Drilled 94 holes
(8,628m)
Initial Exploration targeting high-
Drilled 19 holes grade Au
(1,369m) at the mineralization at
Stander, Gay Testing Lone Star Gay Gulch and Resource
Gulch and Drilled 70 holes Stander zone. Definition
Buckland zones. (8,621m) primarily Highlights: 1,009 Plan to drill
Highlights: at the Lone Star g/t Au and 1,035 6,000m starting in
75.6 g/t Au over zone g/t Ag over 1m Q2/21 in
2.1m (EC15-10) Five holes drilled (EC19-267) and 9 preparation for a
4.6 g/t Au over at the Stander g/t Au over 10m maiden resource
7.65m (EC15-01) zone (EC19-256) estimate in 2022

2015 2016 2017 2018 2019 2020 2021

Disseminated Drilling & Towards a

Gold Structure Resource
Drilled 71 drill Drilled 87 holes Drilled 52 holes
holes (5,375m) at a (9,512m) primarily (4,055m). Results
variety of targets at the Lone Star pending for 30
demonstrating in- zone plus five holes from the
place bedrock Au other target areas. Lone Star zone
mineralization. Expanded gold (Q1/21). Highlights:
Highlights: footprint at Lone 0.94 g/t Au over
2.4 g/t Au over Star zone to 34m (LS20-339),
37m (LS16-58) ~900m length. 5.82 g/t Au over
3.5 g/t Au over Completed 5m (LS20-340)
11.3m (LS16-70) structural and Phase 2: 7.57
mapping g/t Au over 10.5m
(EC20-350)

Source: Company Reports

Placer Properties
Although the main focus remains the Klondike District hard rock claims, the
company also holds interests in three placer gold properties, including: the
Klondike Gold also owns Upper Eldorado Creek Placer, the Eldorado Creek Bench and the Montana
three placer properties (24 Creek Placer projects. Of note, Klondike Gold entered into a lease
km2) agreement with Dulac Mining on the Upper Eldorado Creek Placer,
whereby it receives a direct 10% gold production royalty from mining on the
placer, payable in raw gold. In 2020, Dulac Mining recovered a total of 500
oz of raw gold from 2020 processing. Dulac plans to conduct a full operating
season on the property in 2021.

March 18, 2021 15 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Next Steps
The company has planned an initial 6,000m drill program set to
commence in early Q2/21. Drilling is expected to target the Lone Star zone
to depth beneath the known gold envelope for deeper extensions of gold
mineralization, along with near-surface drill testing of both the Stander and
Lone Star zones. Drilling at these two zones is designed to support a maiden
resource estimate anticipated for release in Q2/22. Additionally, Klondike
Gold is planning to drill the Gold Run and Virgin targets, as part of its
pipeline growth program to evaluate and advance prospective areas within
the Klondike District. These newly defined targets are believed to be of
similar scale to the Lone Star and Stander zones, and positive drill results
could potentially start to demonstrate the district scale potential of the
project (Figure 18).

Figure 18: Klondike District Property 2021 Drill Areas (red stars)

2021 drilling (6,000m) is

mainly targeting the Lone
Star and Stander zones, and
will also test the Gold Run and
Virgin targets

Source: Company Reports

Steady news flow in 2021 Klondike Gold is well-funded for exploration in 2021 with $3.2M in the
should kick off with assays treasury. We are expecting a steady stream of drill results this year,
from 30 drill holes completed beginning with assays for 30 holes that were completed as part of the
in late 2020 company’s Phase 4 drill program at the property in late 2020.

March 18, 2021 16 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Risks
Exploration, development, and mining projects are inherently risky
investments given the large initial expenses that are required in advance of
any potential revenue. Our view is based on publicly available information
but note that our estimates and views are not without political, technical,
geologic or financing risk typical for junior exploration companies. For
Klondike Gold, these risks may include:

1. Geopolitical/jurisdictional risks – Some of these risks may be out of

the control of the company, including royalty and taxation levels,
land agreement liabilities, regulatory, environmental and permit
requirements and timing, global trade wars and political instability.
We note that Klondike Gold already has exploration permits and the
project is in the Yukon, a world-class mining jurisdiction.

2. Technical risks – This covers a wide variety of issues that we see

associated with the deposit including exploration, development and
exploitation strategies and methods. It would cover such issues as
accuracy of geological interpretation, resource/reserve estimates
and economic studies and inputs such as commodity prices, cost
and grade fluctuations, assay reconciliation, metallurgical issues and
exploration success. Our positive view relies on using existing
technical data, recent exploration results and to a limited extent,
expected positive results from future drilling. Future results may
differ and negatively impact our assumptions.

3. Corporate risks – These may include project execution by

management, investor relations effectiveness, or market sentiment.
Management pedigree and performance are paramount. Market
sentiment is also an issue. While we expect the current robust gold
market to continue to improve throughout 2021, our estimates may
be negatively impacted by a change in market sentiment.

4. Financial risks – These may occur at the project or corporate level,

including variation in valuation parameters/metrics, commodity
price or foreign exchange fluctuations, access to credit including
debt, equity financing or potential for shareholder dilution.

As new information becomes available, we plan to refine our estimates and

forecasts.

March 18, 2021 17 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Appendix A: Mineral Inventory Estimate

We believe the Klondike District property could support a Lower-Case

mineral inventory of ~0.5M oz Au and an Upper Case of ~2.1M oz Au. To
derive our deposit dimensions, we based our estimates of lengths and
widths on the existing areal extent of drilling, sampling and identified
mineralized zones and trends. We then extrapolated these estimates to
arrive at our Upper Case, which we believe is achievable with additional
drilling. Existing drilling has largely been confined to a maximum depth of
~50m, which we assumed as the extent of mineralization. We use the
density of quartz given that mineralization is hosted in the Klondike schist
and/or quartz veining. Our grade assumptions use a calculated weighted
average grade based on published drill results since 2015 for the Lone Star
zone (0.78 g/t Au over an average width of 25.4m) and the Stander zone
(2.63 g/t Au over an average width of 13.8m). We would note that we applied
a cut-off grade of >0.2 g/t Au to the drill intercepts, which resulted in our
estimates including a total of 138 intercepts from 120 holes at the Lone Star
zone and 51 intercepts from 38 holes at the stander zone. Our mineral
inventory estimate for the Klondike District property is shown below in
Figure 19.

Figure 19: RCS Mineral Inventory Estimate for the Klondike District property
Deposit Dimensions (m)
Case Zone Length Width Depth Volume (m3) Density (t/m3) Tonnes Grade (g/t) Au (oz)
Lone Star 1,000 100 50 5,000,000 2.65 13,250,000 0.78 332,278
Lower
Stander 300 50 50 750,000 2.65 1,987,500 2.63 168,056
Total 15,237,500 1.02 500,334

Lone Star 3,000 100 50 15,000,000 2.65 39,750,000 0.78 996,833

Upper
Stander 2,000 50 50 5,000,000 2.65 13,250,000 2.63 1,120,372
Total 53,000,000 1.24 2,117,205

Source: RCS Estimates

March 18, 2021 18 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Appendix B: Management & Directors

Peter Tallman, President, CEO and Director

Mr. Peter Tallman, P.Geo., is an experienced mining entrepreneur and
Professional Geologist. He has 35+ years’ experience in the mining industry.
Mr. Tallman has worked in Canada, Chile, Mexico, and Australia. His career
has included the grassroots discovery and delineation of three mineral
deposits, two of which have been mined, diversely including one gold, one
antimony, and one zinc deposit. He is currently Director of Fiore Gold Ltd.
which operates a Carlin-style, open-pit, heap-leach gold mine in east-
central Nevada. Mr. Tallman has held either Founder, Director, and/or senior
management positions with publicly listed Canadian mining companies
continuously since 1995.

Ian Perry, VP Exploration

Mr. Ian Perry, P.Geo., has been Vice President of Exploration at Klondike
Gold Corp. since May 24, 2018. Mr. Perry has over 35 years of experience
including the management of the technical and engineering aspects of
advanced exploration and development projects, both in Canada and
internationally. Mr. Perry has assumed responsibility for directing ongoing
exploration.

Jasvir Kaloti, CFO

Ms. Kaloti has an extensive background in Corporate Finance spanning over
15 years and has served as an officer and director of multiple public
companies primarily focused in the resource sector. She has also been
responsible for coordinating equity financings, private placements, debt
financings and reverse takeovers transactions. Ms. Kaloti is a graduate of
Simon Fraser University where she received a Bachelor of Business
Administration.

Gordon Keep, Director

Gordon Keep has extensive business experience in investment banking and
creating public natural resource companies. Mr. Keep currently is CEO of
Fiore Management & Advisory Corp., a private financial advisory firm. He
also serves as an officer and/or director for several natural resource
companies. From January 2001 to July 2007, Mr. Keep was Managing
Director of Corporate Finance at Endeavour Financial Corporation,
September 1997 until March 2004, he was Senior Vice President and a
director of Lions Gate Entertainment Corp., and from April 1987 until
October 1997, he was Vice President, Corporate Finance in the Natural
Resource group of Yorkton Securities Inc. He obtained his B.Sc. in
Geological Science from Queen’s University in 1979 and his Master of
Business Administration from the University of British Columbia in 1983 and
is a Professional Geologist in the province of British Columbia.

John Pallot, Director

Mr. John L. Pallot has over 32 years business experience in the
telecommunications industry. Mr. Pallot has subsequently served as the
Chief Executive Officer and President of Windarra Minerals Ltd. and West
African Iron Ore Corp. (formerly, Westward Explorations Ltd.) from 2002 to
2013 and has served as a Director of various public companies focused on
the resource sector continuously since 1993.

March 18, 2021 19 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst

Steve Brunelle, Director

Mr. Brunelle is a graduate of Queen’s University with over 30 years of
exploration and management experience of Canadian and international
exploration projects. Mr. Brunelle was an Officer and Director of Corner Bay
Silver Inc. and played an integral part in the discovery and assessment of
the Alamo Dorado silver-gold project in Sonora, Mexico. Corner Bay Silver
(TSX) was merged with Pan American Silver Corp. in 2003. Mr. Brunelle was
a founder, Officer and Director of Stingray Copper Inc. that took the El Pilar
Copper Property, Sonora to Feasibility after which the company was
acquired by Mercator Minerals Ltd. in a plan of arrangement in December
2009. Mr. Brunelle is a Director of several resource companies listed on the
TSX Venture Exchange.

Tara Christie, Director

Ms. Christie has over 20 years’ experience in the exploration and mining
business. Ms. Christie is currently President of KECM Services and is past
president of privately owned Gimlex Gold Mines Ltd. (2006-2016), one the
Yukon’s largest placer mining operations. Ms. Christie currently is President
of TSXV listed Banyan Gold Corp, Director of Constantine Metal Resources
Ltd, and Director of the Prospector & Developers Association of Canada. She
was a founding board member of the Yukon Environmental and Socio-
Economic Assessment Board (2004-2016) and past president of the
Klondike Placer Miners Association. Ms. Christie has a master’s degree in
geotechnical engineering from the University of British Columbia and is a
registered professional engineer in BC and Yukon.

March 18, 2021 20 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst
Taylor Combaluzier | Mining Analyst
Paul Kostuik | Research Associate
Koby Kushner | Research Associate
Alina Islam | Research Associate

Red Cloud Securities Inc.

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BUY (S) 10%
HOLD 0%
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Company Name Ticker Symbol Disclosures
Klondike Gold Corp. TSXV:KG 3,4

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March 18, 2021 21 Ho, To The Klondike!

 Taylor Combaluzier, P.Geo. | Mining Analyst
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March 18, 2021 22 Ho, To The Klondike!