Kootenay Drill Programs Expected to Add Significant Shareholder Value in 2010

VANCOUVER , Jan. 6 /CNW/ - Kootenay Gold Inc. ("Kootenay") (KTN: TSX.V) is pleased to announce exploration has accelerated on its gold and silver properties. Seven drill programs in Mexico and Canada provide multiple opportunities for discovery and added shareholder value in 2010. During the first two quarters of 2010, drill results are expected for the following properties:

    
    -   Promontorio, Mexico                Drilling Underway
    -   Espiritu, Mexico                   Drilling Underway
    -   Rosetta Stone, Canada              Drilling Complete Results Pending
    -   Connor Creek, Canada               Drilling Complete Results Pending
    -   Santa Lucia, Mexico                Drilling Scheduled
    -   Jumping Josephine, Canada          Drilling Scheduled
    -   Deer Park, Canada                  Drilling Scheduled
    

James McDonald, CEO of Kootenay Gold commented, "Drilling and development at the Promontorio Silver/Gold Project continues to be our primary focus while Joint Venture partnerships maximize the potential for new discoveries. We are presently in a healthy financial situation with ~$10 million in the treasury and ~37 million shares outstanding."

GEOLOGICAL PROPERTY Information

Promontorio, Mexico

Phase I & II Promontorio Drill Results reported 950 grams per tonne ("g/t") over 18.4 meters ("m"), 162 g/t Silver eqv. over 151m & 386.64m of 70.8 g/t Silver eqv (for full assay results see News Release dated Feb 05 , 2009). Drilling continues at Promontorio. The program is designed to drill untested targets; expand on mineralization discovered at the Pit Discovery; and step-out across the 2km Dorotea Trend. The current program focuses on targets identified by systematic exploration (3D IP Geophysical Survey; Mapping; Sampling; EM Airborne Study; Trenching; Drilling) across this large silver-lead-zinc-gold mineral system; The program is being expanded and is to be followed with detailed drilling of the strongest mineralized zones.

Espiritu, Mexico - Joint Venture

The Espiritu is an exciting project that has the potential to be a 'Company Maker'. It has the text book characteristics of a large scale porphyry system. Erosion of the Leach Cap has exposed the enriched Supergene of a Gold Copper system. Mineralization and alterations are hosted along a 5km east northeast trending structure that measures between 1 and 2km in width. Two hundred and sixty-one samples have been collected, with 169 from the northwest porphyry setting. This drill phase is the first look at the system to determine grade and width potential of the supergene and hypogene mineralization (see News Release dated Dec 03 , 2009).

Rosetta Stone , Canada - Joint Venture

The drill program is a first test on two newly discovered gold showings named the Road and Rosetta Stone showings. The road showing which is 94m long and 4 to 6m wide and can be projected for another 450m along strike; and the Rosetta Stone showing which is exposed for 40m of strike over 2 to 4m wide before disappearing into overburden on both ends. Grab samples from the Rosetta Stone showing range from background to 21.1 g/t, 11.4 g/t, 7.7 g/t, 16.6 g/t, 7.1 g/t and 3.8 g/t, with 11 of 29 samples grading more than 1.0 g/t gold. Grab samples from the Road showing ranged from background to a high of 17.0 g/t gold (see News Release dated Oct 14 , 2009).

Connor Creek, Canada - Joint Venture

Gold-bearing shear zones, massive sulphide gold-copper veins, polymetallic veins and skarn occur on the property. The massive sulphide veins are similar in many respects to the veins that host the copper-gold deposits of the historic Rossland camp. Although hillsides are steep, little outcrop has been found away from roads and some creeks. A soil geochemical survey over about one-quarter of the property has located several unexplained zones of strongly anomalous values for gold (up to 1554 parts per billion) and other metals. These zones measure up to 1500m long and 500m wide. Drilling in 2007 of newly discovered gold-bearing shears at the CC gold zone at the north end of a 550 meter-long gold soil anomaly returned the following drill intercepts (see News Release dated Nov 13 , 2009):

    
        Hole No. 9 -- 16.2 g/t gold over 0.80m;
        Hole No. 10 -- 4.75 g/t Au over 3m; 3.29 g/t Au over 1.76m; 1.09 g/t
        Au over 4m.
    

Santa Lucia , Mexico - Joint Venture

During the last several years, Kootenay has conducted extensive exploration on the Santa Lucia Property which includes prospecting, mapping, sampling, airborne mag and EM work. In addition, a complete historic data package was purchased in 2009. The data contains information from more than US$1 million of exploration expenditures conducted in the 1990's. Based on Kootenay's exploration and drill intercepts contained within the data package, several compelling Drill Targets have been identified. Planning and permitting is now underway for a comprehensive diamond drilling program at Santa Lucia (see News Release dated Dec 10 , 2009).

Jumping Josephine, Canada - Joint Venture

Gold encountered over a strike length of 900m and to vertical depths of up to 240m below surface and remains open on strike and at depth. Visible gold is often observed within the stockwork quartz veins and individual meter-wide samples range up to 61.8 g/t gold (hole 048 58-59m). The presence of coarse gold was noted early during exploration and all samples from the stockwork zone were analyzed by metallic screen fire assays.

Planning and permitting is now underway for a focused and comprehensive trenching and diamond drilling program on the Jumping Josephine Project for the spring 2010, as well as the previously-announced bulk sampling at the JJ Main zone. This work will continue to evaluate the 2km JJ Main structure, as well as testing a number of other high-priority targets (see News Release dated Nov 18 , 2008).

Deer Park, Canada - Joint Venture

The Deer Park property comprises approximately 420 hectares. Several styles of mineralization have been recognized. Gold occurs within north trending shear zones in quartz veins, veinlets and irregular fracture zones, commonly with minor copper or other base metal sulphides; within a mapped and projected strike length of nearly 3km. Higher concentrations and better grades appear to be associated with small east-trending, crosscutting fractures or faults, with hand sample values containing up to 23 g/t. These gold zones have been the focus of most of Kootenay Gold's recent exploration including an airborne geophysical survey, geological mapping, soil geochemistry and trenching. Lead-zinc-silver veins occur in the southwestern part of the Deer Park property. Selected grab samples from numerous historical trench piles returned values of several percent combined lead and zinc and up to 68 g/t silver (see News Release dated Dec 11 , 2009).

About Kootenay

Kootenay is an emerging exploration Company actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada . The Company's top priority remains the ongoing development of its Promontorio Silver project in Sonora State, northwest Mexico , which encompasses the former producing Promontorio Silver Mine.

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 [phone] or Ken Berry, Chairman at [phone], 1-888-601-5650, www.kootenaygold.ca