VANCOUVER, British Columbia, January 17, 2012 /PRNewswire/ --

Shares Outstanding: 45,415,100

Kootenay Gold Inc. (TSX VENTURE: KTN.V) is pleased to announce assay results from an additional 20 drill holes from its 25,000 meter, ongoing, multi-phase, step out drill and resource definition program on its Promontorio Silver Project in Sonora, Mexico.

The Company reports the multi-rig diamond drilling program continues to yield exceptional results extending from the Pit Discovery Zone across the central 1km mineralized corridor.

The strike continuity of silver mineralization in the Southwest Zone connecting to the NI 43-101 Pit Resource has now been extended from 140 meters to 300 meters. In the Northeast Zone, which sits 700 meters outside of the current NI 43-101 Pit Resource, mineralization along strike is now 210 meters.

To view map of drill hole locations please visit:
http://www.kootenaygold.ca/i/projects/Promontorio/drillingupdate

States Kootenay CEO James McDonald "We continue to consistently hit multiple intercepts of high-grade silver mineralization confirming and extending continuity of the Pit Resource and Southwest Zone. In the Northeast Zone we also continue to hit multiple high-grade silver zones as demonstrated by the 706 gpt Silver Equivalent in hole 88. These are exciting developments for the future prospects of Promontorio as we move toward an updated NI 43-101 resource estimate."

Highlights from the Northeast (NE) Zone include:

DH 88
16 meters of 706 gpt Ag Equivalent (370 Ag and 7.79 % Pb-Zn)
On section up dip of DH 87 and down dip of DH 95 about 25 meters.

DH 87
22 meters of 104 gpt Ag Equivalent (55 Ag 1.14% Pb-Zn) including 5 meters of 208 gpt Ag Equivalent (97 Ag and 2.59% Pb-Zn) with three other composited intervals including 32 meters of 70 gpt Ag Equivalent (30 Ag and 0.93% Pb-Zn) including 3 meters of 175 gpt Ag Equivalent (73 Ag and 2.38% Pb-Zn) and 3 meters of 205 Ag Equivalent (98 Ag and 2.49% Pb-Zn)

DH 94
15 meters of 74 gpt Ag Equivalent (59 Ag and 0.34% Pb-Zn) including 6 meters of 110 gpt Ag (86 Ag and 0.56% Pb-Zn)
On section with DH 69 and 70

DH 95
13 meters of 117 gpt Ag Equivalent (97 Ag and 0.47%Pb-Zn) including 4 meters of 139 gpt Ag Equivalent (104 Ag and 0.81% Pb-Zn) and
31 meters of 102 Ag Equivalent (54 Ag and 1.13 % Pb-Zn) including 11 meters of 155 gpt Ag Equivalent (74 Ag and 1.9% Pb-Zn and 2 meters of 291 Ag Equivalent (217 Ag and 1.73% Pb-Zn)

DH 96
41 meters of 111 gpt Ag Equivalent (86 Ag and 0.58 % Pb-Zn) including 7 meters of 259 gpt Ag Equivalent (181 Ag and 1.81% Pb-Zn) and a second interval of 20 meters of 59 gpt Ag Equivalent (31 Ag and 0.67% Pb-Zn)
On section with KP 40, DH 99 and PC 27

DH 104
11 meters of 221 gpt Ag Equivalent (129 Ag and 2.13% Pb-Zn)
On section down dip of DH 90 and 98

Highlights from the Southwest Zone include:
DH 82
109 meters of 115 gpt Ag Equivalent (40 gpt Ag and 1.75% Pb-Zn) including 15 meters of 189 Ag Equivalent (66 gpt Ag and 2.89 % Pb-Zn) and 22 meters of 186 Ag Equivalent (65 Ag gpt and 2.84% Pb-Zn)
On section down dip of DH 82

DH 81
35 meters of 120 gpt Ag Equivalent (49 gpt Ag and 1.66% Pb-Zn) including 6 metes of 259 Ag Equivalent (101 Ag and 3.69% Pb-Zn)  with in 16 meters of 189 Ag Equivalent (78 Ag and 2.595 Pb+Zn) and a second interval of 134 gpt Ag Equivalent (51 Ag and 1.92% Pb-Zn) over 33 meters including 6 meters of 261 Ag Equivalent (94 Ag and 3.89% Pb-zn) and 7 meters of 183 gpt Ag Equivalent ( 73 Ag and 2.56% Pb-Zn)

DH 84
75 meters of 122 gpt Ag Equivalent (48 gpt Ag and 1.71% Pb-Zn) including 16 meters of 189 Ag Equivalent (80 Ag and 2.53% Pb-Zn) and 20 meters of 190 gpt Ag Equivalent (72 Ag and 2.74% Pb-Zn)
On section down dip of DH 83

DH 83
32 meters of 75 gpt Ag Equivalent (30 Ag and 1.05% Pb-Zn) including 15 meters of 97 gpt Ag Equivalent (38 Ag and 1.39% Pb-Zn)

DH 91
86 meters of 57 gpt Ag Equivalent (23 Ag and 0.81% Pb-Zn) including 9 meters of 162 gpt Ag Equivalent (67 Ag and 2.19% Pb-Zn)
Down dip on section of DH 101 and 102

Highlights for the Pit NE Zone

DH 97
104 meters of 107 gpt Ag Equivalent (47 Ag and 1.39% Pb-Zn including 20 meters of 168 gpt Ag Equivalent (72 Ag and 2.24% Pb-Zn) and
47 meters 93 gpt Ag Equivalent (42 Ag and 1.18 % Pb-Zn) including 7 meters of 242 gpt (97 Ag and 3.38% Pb-Zn) and 11 meters of 160 gpt Ag Equivalent (81 Ag and 1.83 % Pb-Zn)
Infill between previously released DH 76 and 77

DH 89 was drilled sub parallel to the hang wall of the Pit Resource encountering anomalous results. DH 103 was abandoned. DH 101 and 102 in the Southwest Zone up dip of DH 91 appear to be above or at the top edge of the zone. DH 90 and 98 returned no significant results and appear to be above the mineralization hit on section in DH 104 further down dip.

Table of the full results follows:

                                                 *AgEq
                         From    To   Interval (Ag,Pb,Zn)  Ag    Pb   Zn  Pb+Zn
     Hole ID   Target    (m)    (m)     (m)      (g/t)    (g/t) (%)  (%)   (%)

               Pit SW
    DH-081-11 Extension 283.00 318.00    35       120      49   0.86 0.80 1.66
               Pit SW
    including Extension 297.00 303.00    6        259      101  1.83 1.86 3.69
               Pit SW
    including Extension 287.00 303.00    16       189      78   1.41 1.18 2.59
               Pit SW
    DH-081-11 Extension 324.00 352.00    28        97      40   0.67 0.66 1.33
               Pit SW
    including Extension 330.00 334.00    4        160      71   1.05 1.01 2.06
               Pit SW
    DH-081-11 Extension 359.00 392.00    33       134      51   0.93 0.99 1.92
               Pit SW
    including Extension 369.00 375.00    6        261      94   1.78 2.11 3.89
               Pit SW
    including Extension 385.00 392.00    7        183      73   1.23 1.32 2.56
 
               Pit SW
    DH-082-11 Extension 318.00 427.00   109       115      40   0.67 1.08 1.75
               Pit SW
    including Extension 320.00 354.00    34       148      54   0.88 1.34 2.22
               Pit SW
    including Extension 327.00 342.00    15       189      66   1.08 1.81 2.89
               Pit SW
    including Extension 342.00 343.00    1        136      73   0.70 0.76 1.46
               Pit SW
    including Extension 395.00 398.00    3        491      193  3.49 3.44 6.93
               Pit SW
    including Extension 394.00 416.00    22       186      65   1.13 1.71 2.84
               Pit SW
    DH-082-11 Extension 439.00 440.00    1        644      312  5.50 2.12 7.62
 
               Pit SW
    DH-083-11 Extension 275.00 307.00    32        75      30   0.49 0.56 1.05
               Pit SW
    including Extension 286.00 301.00    15        97      38   0.66 0.73 1.39
               Pit SW
    DH-083-11 Extension 316.00 341.00    25        72      30   0.47 0.51 0.98
               Pit SW
    DH-083-11 Extension 370.00 392.00    22        54      23   0.34 0.38 0.72
 
               Pit SW
    DH-084-11 Extension 297.00 307.00    10        36      14   0.20 0.31 0.51
               Pit SW
    DH-084-11 Extension 318.00 393.00    75       122      48   0.87 0.84 1.71
               Pit SW
    including Extension 327.00 343.00    16       189      80   1.40 1.12 2.53
               Pit SW
    including Extension 349.00 369.00    20       190      72   1.37 1.38 2.74
 
    DH-087-11  NE Zone  128.00 150.00    22       104      55   0.56 0.58 1.14
    including  NE Zone  145.00 150.00    5        208      97   1.14 1.45 2.59
    DH-087-11  NE Zone  171.00 195.00    24        59      47   0.11 0.18 0.29
    DH-087-11  NE Zone  279.00 311.00    32        70      30   0.46 0.46 0.93
    including  NE Zone  286.00 289.00    3        175      73   1.26 1.12 2.38
    including  NE Zone  301.00 304.00    3        205      98   1.43 1.06 2.49
 
    DH-088-11  NE Zone  85.00  101.00    16       706      370  4.24 3.55 7.79
    DH-088-11  NE Zone  112.00 126.00    14        40      32   0.08 0.11 0.19
    DH-088-11  NE Zone  179.00 189.00    10        67      41   0.13 0.48 0.61
    DH-088-11  NE Zone  204.00 213.00    9         74      45   0.31 0.38 0.69
    DH-088-11  NE Zone  246.00 255.00    9         73      24   0.64 0.48 1.12
 
    DH-089-11 N of Pit  439.00 442.00    3         67      18   0.55 0.57 1.12
    DH-089-11 N of Pit  454.00 473.00    19        25       8   0.16 0.24 0.40
    DH-089-11 N of Pit  490.00 498.00    8         42      20   0.22 0.29 0.51
 
    DH-090-11  NE Zone  190.00 192.00    2         41      34   0.09 0.07 0.16
 
               Pit SW
    DH-091-11 Extension 254.00 258.00    4         77      32   0.39 0.67 1.06
               Pit SW
    DH-091-11 Extension 292.00 378.00    86        57      23   0.41 0.41 0.81
               Pit SW
    including Extension 294.00 303.00    9        162      67   1.14 1.05 2.19
 
    DH-094-11  NE Zone  100.00 115.00    15        74      59   0.17 0.18 0.34
    including  NE Zone  100.00 106.00    6        110      86   0.29 0.27 0.56
    DH-094-11  NE Zone  156.00 174.00    18        30      22   0.06 0.12 0.18
    including  NE Zone  158.00 164.00    6         54      41   0.08 0.22 0.30
    DH-094-11  NE Zone  183.00 214.00    31        48      20   0.24 0.43 0.67
    DH-094-11  NE Zone  243.00 252.00    9         62      22   0.42 0.50 0.92
    DH-094-11  NE Zone  259.00 268.00    9         68      25   0.49 0.52 1.01
 
    DH-095-11  NE Zone  97.00  110.00    13       117      97   0.28 0.18 0.47
    including  NE Zone  98.00  102.00    4        139      104  0.46 0.35 0.81
    DH-095-11  NE Zone  151.00 163.00    12        30      23   0.05 0.11 0.16
    DH-095-11  NE Zone  170.00 201.00    31       102      54   0.51 0.62 1.13
    including  NE Zone  190.00 201.00    11       155      74   0.81 1.09 1.90
    DH-095-11  NE Zone  207.00 209.00    2        291      217  0.78 0.95 1.73
 
    DH-096-11  NE Zone  132.00 173.00    41       111      86   0.31 0.27 0.58
    including  NE Zone  132.00 139.00    7        259      181  0.94 0.87 1.81
    DH-096-11  NE Zone  181.00 201.00    20        59      31   0.27 0.40 0.67
 
                 Pit
    DH-097-11  Infill   122.00 126.00    4         49      16   0.19 0.58 0.78
                 Pit
    DH-097-11  Infill   181.00 193.00    12        48      16   0.33 0.41 0.74
                 Pit
    DH-097-11  Infill   203.00 307.00   104       107      47   0.67 0.71 1.39
                 Pit
    including  Infill   239.00 259.00    20       168      72   0.97 1.28 2.24
                 Pit
    DH-097-11  Infill   314.00 361.00    47        93      42   0.59 0.58 1.18
                 Pit
    including  Infill   314.00 321.00    7        242      97   1.60 1.78 3.38
                 Pit
    including  Infill   334.00 345.00    11       160      81   1.04 0.79 1.83
 
    DH-099-11  NE Zone  184.00 185.00    1        410      260  2.14 1.32 3.46
    DH-099-11  NE Zone  281.00 309.00    28        40      15   0.29 0.30 0.58
    DH-099-11  NE Zone  320.00 326.00    6         69      35   0.39 0.40 0.79
 
                 Pit
    DH-100-11  Infill   413.00 470.00    57        46      14   0.27 0.46 0.73
 
               Pit SW
    DH-101-11 Extension 28.00  30.00     2         25       2   0.04 0.52 0.56
 
               Pit SW
    DH-102-11 Extension 155.00 167.00    12        35      12   0.25 0.29 0.54
               Pit SW
    DH-102-11 Extension 332.00 333.00    1        253      218  0.61 0.20 0.81
               Pit SW
    DH-102-11 Extension 352.00 354.00    2        318      223  1.30 0.91 2.21
 
    DH-104-11  NE Zone  219.00 230.00    11       221      129  1.01 1.13 2.13

*Assuming 100% Metallurgical Recovery
*Prices used in Silver Equivalent (AgEq) Calculations:

    Ag dollars/oz  15
    Zn dollars/lb 0.91
    Pb dollars/lb 0.97

QA/QC

All holes reported here were drilled with HQ sized diamond drill core with some sections reduced down to NQ sized core. Core samples were cut using a core saw with 1 to 2 meter long sample intervals. All mineralized intercepts are drill core length drilled across a vertically inclined breccia system at angles of 45 to 70 degrees. Dimensions of the breccia system are being determined. The current resource sits approximately along 140 meters of strike by 60 meters of horizontal width in a range of 20 to 90 meters and to a 400 meter depth. Further Quality Assurance and Control procedures are disclosed on the Kootenay Gold Inc. website.

The foregoing geological disclosure has also been reviewed and verified by Kootenay's CEO, James McDonald, P.Geo (a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects). Mr. McDonald is a director of Kootenay.

ABOUT KOOTENAY

Kootenay Gold is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. The Company's flagship property is the former producing Promontorio Silver mine in Sonora State, Mexico. The Company's objective is to develop near term discoveries and long term sustainable growth. Kootenay's management and technical team are proven professionals with extensive international experience in all aspects of mineral exploration, operations and venture capital markets. Multiple, ongoing J/V partnerships in Mexico and Canada maximize potential for additional, new discoveries while maintaining minimal share dilution.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release. Cautionary Note to US Investors: This news release may contain information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

For further information:
James McDonald, CEO and President at +1-403-238-6986
Ken Berry, Chairman at +1-604-601-5652; +1-888-601-5650
or visit: http://www.kootenaygold.ca

SOURCE Kootenay Gold Inc.