Drilling Success Continues at Promontorio as Kootenay Hits 205 meters of 117 gpt Silver Equivalent in Step-Out Drilling in Southwest Zone that includes 169 gpt Silver Equivalent over 50 meters. ktn.v, ilc.v, tnr.v, czx.v, rm.v, lmr.v, abn.v, asm.v, btt.v, bva.v, bvg.v, epz.v, fst.v, gbn.v, hao.v, jnn.v, ks.v, ktn.v, kxm.v, mgn, mxr.v, rvm.to, svb, ura.v, nup.ax, srz.ax, usa.ax

"US Dollar Collapse: Inside Job: S&P Downgrades US Long Term Debt to AA+, Outlook Negative. Once the panic settles we will see flight to the Real assets, China will not be able to diversify all 1.2 Trillion holdings in US Treasuries, but the gradual transition will be in place - new world currency will be the Hard one based on Gold, Silver, Copper and access to strategic commodities like Oil, Lithium and REE. We are expecting that first the gold Majors will properly reflect the Gold valuation in their market caps and after that liquidity will go downstream into the Gold and Silver Juniors. Copper juniors will be at the mercy of the M&A consolidation game again and Lithium will show its truly strategic status with every uptick in the Oil price again."

  We are searching for the value among the bitten into the dust by the recent market panic juniors. Strong portfolios, solid management and special situations are the name of this game today as usual.

  The Fear and Panic will pass and the recent turmoil provides another opportunity to accumulate your favorite plays among the Juniors in Gold, Silver, Lithium, REE and Copper. If you have people with money involved in the game your chances for reward will be even more higher. Chinese players with their appetite to secure resources can make not only REE and Lithium plays interesting, but even such a dull and out of love commodity as Zinc can be transformed into the promising value M&A plays.

Advanced Exploration Project

WORK PROGRAMS UNDERWAY
PROMONTORIO SILVER PROJECT
MULTIPLE HIGH-GRADE SILVER INTERCEPTS REPORTED ACROSS 1 KM TREND
HIGH AND MEDIUM GRADE SILVER MINERALIZATION EXTENDS 300 M OUTSIDE 43-101 RESOURCE
237 G/T SILVER EQV OVER 51 M
INCL. 526.2 G/T SILVER EQV OVER 18 M
25,000 METRE DRILL PROGRAM UNDERWAY

August 23, 2011

PROMONTORIO - Drilling Success Continues at Promontorio as Kootenay Hits 205 meters of 117 gpt Silver Equivalent in Step-Out Drilling in Southwest Zone that includes 169 gpt Silver Equivalent over 50 meters.

Kootenay Gold Inc. (TSX VENTURE: KTN.V) is pleased to announce assay results from the first seven holes of its ongoing 25,000 meter multi-phase drilling program on its Promontorio Silver project in Sonora, Mexico.

Results include three holes (DH 54 to 56) of in-fill drilling of the Pit Resource and four holes (DH 58 to 61) into the Southwest Zone outside of the Pit Resource designed to confirm continuity between the two mineralized areas. Results from the first seven holes demonstrate widely disseminated Zones of silver mineralization extend beyond current resource boundaries and continuation of higher grades within the Pit Resource.

States Kootenay President and CEO James McDonald "We are very pleased with results from the first seven holes of our 25,000 meter drill program. Not only is diamond drilling continuing to hit higher grades of silver at depth where previous drilling bottomed out in silver mineralization within the Pit resource itself, equally important to our resource expansion program, we are seeing continuity of silver mineralization developing in the Southwest Zone from step-out drilling that returned impressive intervals and grades of widespread silver mineralization extending to depth".

Highlights from the seven holes include:

DH 54

80 gpt Silver Equivalent over 103 meters including 105 gpt Silver Equivalent over 68 meters.

DH 54 tested 120 meters down dip of DH 53 (146 gpt Silver Equivalent over 234 meters announced May 31, 2011).

DH 56

116 gpt Silver Equivalent over 251 meters including 186 gpt Silver Equivalent over 66 meters.

DH 56 is on section with DH 55 and 57 and is in-fill drilling of the Pit Resource and an approximate 25 meter step out to the Northeast of DH 53 and 54.

DH 61

96 gpt Silver Equivalent over 182 meters including 290 gpt Silver Equivalent over 24 meters.

DH 61 drilled outside of the Pit Resource shows mineralization continuing about 50 meters into the Southwest Zone.

DH 58, 59 and 60 are on section with DH 61.

DH 60

71 gpt Silver Equivalent over 107 meters including 237 gpt Silver Equivalent over 12 meters.

85 gpt Silver Equivalent over 58 meters with 129 gpt Silver Equivalent over 23 meters in a second deeper interval.

DH 58

117 gpt Silver Equivalent over 205 meters including 169 gpt Silver Equivalent over 50 meters and 152 gpt Silver Equivalent over 48 meters.

*See initial 25,000 meter drill highlights below - Visit www.kootenaygold.ca for complete Drill Results and Map"