PROMONTORIO - Kootenay Initiates Geotechnical, Hydrogeologic, Environmental Baseline and Metallurgical Studies to Accelerate Development of Promontorio Silver Project

September 29, 2011

Kootenay Gold Inc. (TSX VENTURE: KTN.V) is pleased to announce the Company has contracted U.S. based companies Hatch Engineering out of Scottsdale, Arizona and Sanguaro Geosciences Inc., as well as Canadian based G&T Metallurgical Services Ltd and independent Consulting Engineer Patricia Aguayo Hurtado to conduct preliminary environmental baseline, scoping studies and metallurgical work with respect to the Company's plans to proceed with a pre-feasibility study and mine modeling analysis on the Company's Promontorio Silver Project in Sonora, Mexico.

States Company CEO James McDonald "An extensive drilling and analysis program is underway to quantify and confirm the scope and size of our silver deposit. Based on the continued success of our current 25,000 meter drill program, combined with results from our previous phases of drilling, we are sufficiently encouraged with results to begin taking the requisite steps to pursue our ultimate goal, which is to advance the Promontorio Silver Project to commercial production".

Among the contracts secured, the Company has engaged Hatch Engineering out of Scottsdale Arizona to conduct initial hydrologic studies to design a program to characterize the ground water resources on the project and develop a conceptual hydrogeologic model. This information will then form the basis for additional studies going forward in the longer term for prefeasability level evaluation of mine water supply, including potential dewatering flow rates needed for potential open pit and underground mining and mine water supplies.

Saguaro Geosciences Inc. has been engaged to design a detailed geotechnical logging program that goes beyond the basic specific gravity and RQD data currently being recorded. The geotechnical program will collect all the necessary data appropriate to future geotechnical analysis for open pit and underground mining.

G&T Metallurgical Services Ltd. out of Kamloops B.C. has been contracted to conduct additional metallurgical work on Promontorio mineralization. Work will include grind calibrations, bond ball tests, and rougher, cleaner and locked cycle tests. Additionally acid base accounting of mineralized and wall rock will be conducted and a gold deportment study will be done to determine if the significant gold content of the deposit,which is not yet factored into any of the Company's resource calculations, can be extracted economically.

Independent Consulting Engineer Patricia Aguayo Hurtado has been contracted to conduct an environmental baseline study.

Further developments with respect to the Company's environmental baseline, scoping studies and metallurgical work will be announced in a future release.

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.
-30- 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: 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 17


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