PROMONTORIO - Intercepts 47 Meters of 214.2 gpt Silver Eqv (84.47 gpt Ag, 3.04% Pb+Zn) and 54 meters of 197 gpt Silver Eqv (91.98 gpt Ag, 2.47% Pb+Zn) in NE Zone, 700 Meters from Current 43-101 Resource

October 3, 2011

High Grade Intervals Include 16 Meters of 492 gpt Silver Eqv (202.7 gpt Ag, 6.8% Pb+Zn) and 11 Meters of 480.6 gpt Silver Eqv (179.4 gpt Ag, 7.0% Pb+Zn)

Kootenay Gold Inc. (TSX VENTURE: KTN.V) is pleased to announce assay results from its ongoing 25,000 meter, multi-phase drilling program on its Promontorio Silver project in Sonora, Mexico. At present, three diamond drill rigs are operating on site.

States Kootenay President and CEO James McDonald "We are extremely pleased with current drill results. Step out drilling returned multiple intercepts of high-grade silver mineralization in the Northeast Zone, which sits 700 meters outside of and on strike to the Company's established 43-101 Pit Resource. Equally critical to the current resource expansion program, hole DH 68 drilled in the Southwest expansion zone of the Pit Resource, returned widespread zones of medium to high-grade silver, showing excellent continuity of silver mineralization with the Pit Resource on strike and to depth, extending more than 50 meters outside the Pit Resource."

Highlights are as follows:

DH 68 Southwest Zone

  • Two composited intervals within 225 meters of mineralization as follows:
  • 149 meters of 145.7 gpt Silver Equivalent (59.93 gpt Ag, 2.0% Pb+Zn) and 50 meters of 111 gpt SilverEquivalent (44.39 gpt Ag, 1.55% Pb+Zn). Includes Higher Grade interval of 50 meters of 226.9 gpt SilverEquivalent (93.92 gpt Ag, 3.1% Pb+Zn).
  • DH 68 shows excellent grade and width increase 30 meters down dip on section with previously announced DH 67
  • DH 68 demonstrates continuance of mineralization into the Southwest Zone and is over 50 meters (from center point of mineralization) along strike and outside of the Pit Resource

DH 71 Southwest Zone

  • About 90 meters southwest of and beyond Pit Resource
  • 6 different mineralized composites within 225 meters of mineralization
  • 19 meters of 108.1 gpt Silver Equivalent (50 gpt Ag, 1.35% Pb+Zn)
  • 14 meters of 79.21 gpt Silver Equivalent (36.21 Ag gpt, 1.0% Pb+Zn)
  • 4 meters of 172.6 gpt Silver Equivalent (78.5 gpt Ag, 2.17% Pb+Zn)
  • 20 meters of 64.87 gpt Silver Equivalent (27.5 gpt Ag, 0.87% Pb+Zn)
  • 45 meters of 56.2 gpt Silver Equivalent (22.46 gpt Ag, 0.79%Pb+Zn)
  • 21 meters of 44.85 gpt Silver Equivalent(21.62 gpt Ag, 0.54% Pb+Zn)

DH 63 Southwest Zone

  • Intercepts mineralization 100 meters west of Pit Resource boundary
  • Down dip extension of DH 62 that returned 92 meters of 147 gpt Silver Equivalent (56 gpt Ag, 2.11% Pb+Zn)
  • Two composited intervals within a 100 meter long mineralized intercept that grades 36 meters of 36 gpt SilverEquivalent (13 gpt Ag, 0.52% Pb+Zn) and 27 meters of 48 gpt Silver Equivalent (16 gpt Ag, 0.76% Pb+Zn)
  • Remains open to depth

DH 70 Northeast Zone

  • 47 meters of 214 gpt Silver Equivalent (84 gpt Ag, 3.05% Pb+Zn) including 11 meters of 481 gpt Silver Equivalent (179 gpt Ag, 7.06% Pb+Zn) and 54 meters of 197 gpt Silver Equivalent (92 gpt Ag, 2.47% Pb+Zn) including 16 meters of 492 gpt Silver Equivalent (203 gpt Ag, 6,81% Pb+Zn)
  • Both composite intervals of 47 and 54 meters occur within 115 meter mineralized interval.
  • 25 meters along strike and to southwest of PC 28 and DH 66 both high grade holes
  • Shallow intercept on minus 45 degree hole
  • On section and up dip of DH 69 released September 15, 2011

DH 66 Northeast Zone

  • Twin hole offset from PC 28 with 51 meters of 91 gpt Silver, 3.44% Pb+Zn
  • Extends mineralization 70 meters beyond the bottom of PC 28 and hits second 67 meter interval deeper in hole
  • Total of 6 composited mineralized zones totaling 137 meters within a 224 meter hole length

Upper interval intercepts 39 meters of 309 gpt Silver Equivalent (128 gpt Ag, 4.25% Pb+Zn) including 3 different 6 meters intervals of 667 gpt Silver Equivalent (357 gpt Ag, 7.25% Pb+Zn) and 6 meters of 430 gpt Silver Equivalent (76 gpt Ag, 8.44% Pb+Zn) and 6 meters of 655 gpt Silver Equivalent (277 gpt Ag, 8.9% Pb+Zn)

*See 25,000 meter highlights below

Click here for complete Drill Results and Map

Hole ID

Target

From

To

Interval

*AgEq (Ag,Pb,Zn)

Ag

Pb

Zn

Pb+Zn

(m)

(m)

(m)

(g/t)

(g/t)

(%)

(%)

(%)

DH-063-11

Pit SW Extension

359.00

395.00

36

35

13

0.25

0.27

0.52

DH-063-11

Pit SW Extension

423.00

450.00

27

48

16

0.20

0.56

0.76

DH-066-11

NE Zone

131.00

170.00

39

309

128

1.27

2.98

4.25

including

NE Zone

132.00

138.00

6

667

357

2.98

4.27

7.25

including

NE Zone

143.00

149.00

6

430

76

0.99

7.45

8.44

including

NE Zone

157.00

163.00

6

655

277

2.99

5.91

8.90

DH-066-11

NE Zone

179.00

195.00

16

59

48

0.11

0.14

0.25

DH-066-11

NE Zone

204.00

209.00

5

46

32

0.10

0.21

0.31

DH-066-11

NE Zone

228.00

233.00

5

215

116

1.06

1.25

2.31

DH-066-11

NE Zone

240.00

245.00

5

180

86

1.09

1.11

2.20

DH-066-11

NE Zone

288.00

355.00

67

56

25

0.33

0.40

0.72

DH-068-11

Pit SW Extension

137.00

286.00

149

146

60

0.93

1.07

2.00

including

Pit SW Extension

172.00

222.00

50

227

94

1.44

1.67

3.10

DH-068-11

Pit SW Extension

297.00

347.00

50

111

44

0.80

0.75

1.55

DH-070-11

NE Zone

125.00

179.00

54

197

92

0.89

1.58

2.47

including

NE Zone

145.00

161.00

16

492

203

2.23

4.58

6.81

DH-070-11

NE Zone

191.00

238.00

47

214

84

1.10

1.95

3.05

including

NE Zone

223.00

234.00

11

481

179

2.74

4.33

7.06

DH-071-11

Pit SW Extension

106.00

151.00

45

56

22

0.34

0.45

0.79

DH-071-11

Pit SW Extension

162.00

166.00

4

173

79

1.10

1.09

2.19

DH-071-11

Pit SW Extension

177.00

196.00

19

108

50

0.63

0.72

1.35

DH-071-11

Pit SW Extension

203.00

223.00

20

65

28

0.44

0.43

0.87

DH-071-11

Pit SW Extension

247.00

261.00

14

79

36

0.44

0.56

1.01

DH-071-11

Pit SW Extension

302.00

323.00

21

45

22

0.26

0.28

0.54

*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

Three diamond drill rigs are currently operating on Promontorio with two stepping out in a systematic manner outside of the Pit Resource to the Southwest and Northeast. The third rig is working on stepping out from PC 28 in the Northeast Zone, which measures 300 meters in strike length and sits 700 meters outside of and on strike to the Company's current established 43-101 Pit Resource.

The current 25,000 meter in-fill drilling and resource definition program represents the single largest and most expansive drilling campaigns conducted by Kootenay on the Promontorio Silver project to date.

Upcoming drilling will continue to concentrate on step out and in-fill drilling off setting the numerous medium to high grade silver intercepts concentrated along a 1.0 kilometer long mineralized corridor that includes the Pit Resource, Pit NE zone, Northeast zone and Southwest zone.

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 posted on the Kootenay Gold Inc. website.

The foregoing geological disclosure has also been reviewed by James McDonald, P. Geo (a qualified person for the purpose of National Instrument 43-101 Standards of Disclosure for Mineral Projects). Mr. McDonald is the President and CEO and 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. 2011 number 18