Plans To Proceed With $1.5 Million Multi-Phase Drill Program On Promontorio Silver Project 

VANCOUVER, BC - Kootenay Gold Inc. has obtained an independent mineral resource estimate from AGP Mining Consultants (AGP) for the Pit Discovery Zone at its Promontorio Silver-Lead-Zinc Property in Sonora, Mexico. A Multi-Phase drill program is now planned to expand the Pit Zone resource and test a 700 meter mineralized corridor trending to the North East. In addition, a systematic exploration program will prioritize targets from the Promontorio pit area in the south for approximately 25 kilometres to the northwest.

The AGP resource estimate comprises Indicated Mineral Resources of 5.22 million tonnes averaging 52.7 g/t silver, 0.86% lead and 0.96% zinc, containing 8.9 million oz Silver, 99.3 million pounds of lead and 110.8 million pounds of zinc. AGP also estimated that Promontorio contains 0.65 million tonnes averaging 55.7 g/t silver, 0.94% lead and 1.00% zinc in the Inferred category, containing 1.17 million oz Silver, 13.4 million pounds of lead and 14.3 million pounds of zinc.

Jim McDonald, CEO said, "The resource estimate is further validation that Promontorio is a maturing project displaying all the earmarks to develop into a substantial mineral entity. The resource identified to date, coupled with existing data and upcoming concurrent exploration and drill programs on multiple prospective targets, within known areas of widespread mineralization, bode extremely well for the projects' future development."

The 2010 mineral resource estimate is reported below at two different cut-offs for two depth ranges to reflect the mining methodology likely to be employed at Promontorio. AGP used a cut-off of $12.50 USD for resource the first 200 m of the deposit and for resources below that, a cut-off of $32 USD was selected.

The resource is located at the junction of two mineralized trends (NNW and NE) as evidenced by geological mapping, mineral showings and geophysical data such as ground I.P. and airborne magnetic, EM and resistivity data. These geophysical data suggest that mineralization may extend to the northeast and southwest. Drilling has identified mineralization comparable to that seen within the Promontorio resource 700m north east of the pit drilling; KP-80-10 returned 29m averaging 78g/t silver, 1.43% combined lead/zinc and 1.17 g/t gold including 4.5m averaging 115 g/t silver, 5.13% combined lead zinc and 1.11 g/t gold from 88m.

AGP modelled two zones of mineralization based on assay values from 50 drill holes completed by Kootenay Gold in 2007 and 2008 in the vicinity of the historical pit. The two zones define zones of mineralization greater than a recoverable metal value of $10USD. Zone 1 is a small sub-vertical mineralized domain measuring 70 by 20 m and extends down dip 140 m. Zone 2 is a steeply dipping pipe shaped domain measuring 140 by 60 m at surface and extends 450 m deep. Mineralization occurs outside of the modelled zones; however AGP was not able to interpret continuous zones between drill holes at the current drill hole spacing.

AGP estimated mineral resources based on 3022 drill core assay values contained within the mineralized zones. Assay values in Zone 1 for silver, lead and zinc were capped to 750 g/t, 6% and 6% respectively, and assay values in Zone 2 for silver, lead and zinc were capped to 300 g/t, 9% and 8% respectively. Capped assays were then composited to 2 metre lengths and block grades were interpolated from the composites using Inverse Distance weighted to the second power for Zone 1, and Ordinary Kriging for Zone 2. A block was classified as indicated if at least 6 composites from 2 drill holes were found within 30 m along strike and 60 m down dip, and as inferred if at least 6 composites from 2 drill holes were found within 60 m along strike and 120 m down dip. Blocks were interpolated with not more than 15 of the nearest composites. A bulk specific gravity of 3.12 was applied to the mineralized zones based on the average of laboratory results on 63 samples from 5 drill holes.

Supported by highly encouraging results to date, Kootenay plans to initiate a $1.5 million, multi-phase drill program commencing in September 2010. Drill testing will seek to identify the extensions from the known resource and will focus on several High-Priority Targets that bear similar geological characteristics to the main discovery zone.

The company's address is Suite 920 - 1055 W. Hastings St., Vancouver, BC V6E 2E9, 604-601-5650, fax: 604-683-2249, email: [email protected].