Klondike Star Acquires Placer Gold Property.

SEATTLE -- Donald W. Flinn, Vice-President, Operations for Klondike Star Mineral Corporation (OTCBB:KDSM) is pleased to announce the acquisition of a 100% interest in 60 miles of placer leases in the Indian River and Montana Creek area, along the southern edge of the Klondike gold fields. The leases cover benches along the Indian River between Montana Creek and Eureka Creek, and a large part of the Montana Creek valley and its tributaries. The agreement is subject to a one-time payment of $28,300 for staking costs and a 10% royalty on future production.

The area covered by the leases is considered to have potential to host a very large placer deposit, suitable for a large placer mining operation. An independent report published in 2003 by geologists of the Geological Survey of Canada, Faye E.N. Nelson and Lionel E. Jackson, Jr., stated:

"There is a high potential for buried gold placers at the base of the extensive fill within the pre-glacial Indian River valley, between the present course of Indian River and Montana Creek. Here, the fill of White Channel Gravel and overlying outwash diverted Indian River to the north side of a bedrock knob, where a new valley was cut by subsequent river incision. Although the placer gold content of the fill remains to be evaluated, it is thought to be of high potential for placer gold considering its location immediately downstream from known producing tributaries, Eureka and Dominion creeks."

The White Channel Gravel is an ancient sedimentary unit that has hosted most of the placer gold mined in the Klondike. Most of the obvious White Channel gravel was mined during the past hundred years, initially by hand, then by the large dredges of the Yukon Consolidated Gold Company, and recently by mechanized methods. The upstream tributaries of the Indian River include Dominion Creek, Sulphur Creek, Eureka Creek and Gold Run Creek, which have collectively produced about 3 million ounces of placer gold. Additionally, hundreds of thousands of ounces of placer gold have been recovered from the Indian River down stream from the leases. The Indian River drainage has been the Yukon's largest producer of placer gold during the past 25 years. The bench claims covered by this agreement have never been mined, and have seen very limited exploration to date.

Competitors are actively mining the Indian River bench immediately downstream from the leases, and in the Indian River stream adjacent to the benches near Eureka Creek. The placer bench claims currently being explored by competitor Boulder Mining Corporation (TSXV:BDR) begin just downstream and across the Indian River from the Klondike Star leases, and extend about 9 kilometers to the northwest.

Klondike Star acquired this project from Klondike Gold Corp. and 19651 Yukon Inc, owned by Vern Matkovich and Tom Morgan. Mr. Matkovich and Mr. Morgan live on the Indian River adjacent to the leases, and have been gradually exploring the area for the past 15 years with their own resources. The Yukon Prospectors Association jointly named these gentlemen "Yukon Prospector of the Year" for 2004. Klondike Star is fortunate to have the benefit of working with Vern Matkovich and Tom Morgan as partners in the project, with their extensive local experience in placer exploration and mining.

Klondike Star will explore the placer leases by auger drilling, geophysics and test pitting, starting immediately.

The leases will be converted to claims within the next three years.

In addition to these placer claims the company also owns 114 placer claims overlying some of the hard rock claims in the Eldorado creek area.

About Klondike Star

Klondike Star Mineral Corporation is developing 5 mineralized zones on a 250 square km land position underlying the site of the Klondike Gold Rush. The area has been in constant Placer production since the discovery of gold in 1896. Thousands of ounces of gold continue to be produced from placer mining operations each year on streams in the Klondike.

Klondike Star can earn up to 75% interest in the Lone Star claim group from its joint venture partner by completing certain exploration programs and delivering a bankable feasibility study.

The statements in the press release that relate to the company's expectations with regard to the future impact on the company's results from new products or actions in development are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. The statements in this document may also contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Since this information may contain statements that involve risk and uncertainties and are subject to change at any time, the company's actual results may differ materially from expected results.