Kootenay Hits 706 gpt Silver Equivalent Over 16 Meters (370 Ag and 7.79 % Pb-Zn) as Promontorio Drilling Continues to Encounter High Grade Intercepts of Silver in Top Priority Southwest and Northeast Zones

VANCOUVER, Jan. 17, 2012 /CNW/ - 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:
http://www.kootenaygold.ca/i/projects/Promontorio/drillingupdate

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:

                                            *AgEq
                                Interval  (Ag,Pb,Zn)
Hole ID  Target  From(m)  To(m)   (m)       (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.


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.



For further information:

James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
or visit: www.kootenaygold.ca