PROMONTORIO - Kootenay Hits 706 gpt Silver Eqv Over 16 Meters (370 gpt Ag, 7.79% Pb+Zn) as Promontorio Drilling Continues to Encounter High Grade Intercepts of Silver in Top Priority SW and NE Zones

January 17, 2012

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:
drillresultsmap.pdf

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:

Hole ID

Target

From

(m)

To

(m)

Interval

(m)

*AgEq
(Ag,Pb,Zn)
(g/t)

Ag

(g/t)

Pb

(%)

Zn

(%)

Pb+Zn

(%)

DH-081-11

Pit SW Extension

283.00

318.00

35

120

49

0.86

0.80

1.66

including

Pit SW Extension

297.00

303.00

6

259

101

1.83

1.86

3.69

including

Pit SW Extension

287.00

303.00

16

189

78

1.41

1.18

2.59

DH-081-11

Pit SW Extension

324.00

352.00

28

97

40

0.67

0.66

1.33

including

Pit SW Extension

330.00

334.00

4

160

71

1.05

1.01

2.06

DH-081-11

Pit SW Extension

359.00

392.00

33

134

51

0.93

0.99

1.92

including

Pit SW Extension

369.00

375.00

6

261

94

1.78

2.11

3.89

including

Pit SW Extension

385.00

392.00

7

183

73

1.23

1.32

2.56

DH-082-11

Pit SW Extension

318.00

427.00

109

115

40

0.67

1.08

1.75

including

Pit SW Extension

320.00

354.00

34

148

54

0.88

1.34

2.22

including

Pit SW Extension

327.00

342.00

15

189

66

1.08

1.81

2.89

including

Pit SW Extension

342.00

343.00

1

136

73

0.70

0.76

1.46

including

Pit SW Extension

395.00

398.00

3

491

193

3.49

3.44

6.93

including

Pit SW Extension

394.00

416.00

22

186

65

1.13

1.71

2.84

DH-082-11

Pit SW Extension

439.00

440.00

1

644

312

5.50

2.12

7.62

DH-083-11

Pit SW Extension

275.00

307.00

32

75

30

0.49

0.56

1.05

including

Pit SW Extension

286.00

301.00

15

97

38

0.66

0.73

1.39

DH-083-11

Pit SW Extension

316.00

341.00

25

72

30

0.47

0.51

0.98

DH-083-11

Pit SW Extension

370.00

392.00

22

54

23

0.34

0.38

0.72

DH-084-11

Pit SW Extension

297.00

307.00

10

36

14

0.20

0.31

0.51

DH-084-11

Pit SW Extension

318.00

393.00

75

122

48

0.87

0.84

1.71

including

Pit SW Extension

327.00

343.00

16

189

80

1.40

1.12

2.53

including

Pit SW 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

DH-091-11

Pit SW Extension

254.00

258.00

4

77

32

0.39

0.67

1.06

DH-091-11

Pit SW Extension

292.00

378.00

86

57

23

0.41

0.41

0.81

including

Pit SW 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

DH-097-11

Pit Infill

122.00

126.00

4

49

16

0.19

0.58

0.78

DH-097-11

Pit Infill

181.00

193.00

12

48

16

0.33

0.41

0.74

DH-097-11

Pit Infill

203.00

307.00

104

107

47

0.67

0.71

1.39

including

Pit Infill

239.00

259.00

20

168

72

0.97

1.28

2.24

DH-097-11

Pit Infill

314.00

361.00

47

93

42

0.59

0.58

1.18

including

Pit Infill

314.00

321.00

7

242

97

1.60

1.78

3.38

including

Pit 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

DH-100-11

Pit Infill

413.00

470.00

57

46

14

0.27

0.46

0.73

DH-101-11

Pit SW Extension

28.00

30.00

2

25

2

0.04

0.52

0.56

DH-102-11

Pit SW Extension

155.00

167.00

12

35

12

0.25

0.29

0.54

DH-102-11

Pit SW Extension

332.00

333.00

1

253

218

0.61

0.20

0.81

DH-102-11

Pit SW 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.

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For additional information, please contact:
James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
or visit: www.kootenaysilver.com

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.
2012 number 1