Kootenay Announces Non-Brokered Private Placement Of up to $6,000,000

Shares Outstanding: 37,276,600

VANCOUVER, Dec. 9 /CNW/ - Kootenay Gold Inc. ("Kootenay") (TSX Venture: KTN.V) is pleased to announce a Non-Brokered private placement (the "Private Placement") of up to 7.06 million units (each "Unit") at a purchase price of $0.85 per Unit, for aggregate gross proceeds to Kootenay of up to $6,000,000. Sprott Asset Management LP for and on behalf of certain Sprott Funds and Managed Accounts has agreed to purchase $4,000,000 of the Non-Brokered Placement.

Private Placement
Each Unit will consist of one common share ("Common Share") of Kootenay and one-half of one transferable share purchase warrant ("Warrant").  Each whole Warrant will entitle the holder to acquire one Common Share at an exercise price of $1.20 for a period of 24 months from the closing date of the Private Placement. Finder's fees in cash or units and finder's warrants may be paid in connection with the Private Placement. All of the securities issued pursuant to the Private Placement will be subject to a minimum four month hold period.  The Private Placement and payment of any finder's fee are subject to acceptance by the TSX Venture Exchange.

The net proceeds from the Private Placement will be used to finance additional work on Kootenay's Promontorio property, its other properties and for general working capital.

Drilling the Promontorio Silver Property
Kootenay's current 10,000-meter Drill Phase is part of an important program to substantially expand the known 43-101 mineral resource at Promontorio. The first four holes have been drilled along a single fence across the western side of the Pit Zone, establishing mineralization another 100 meters outside the current 43-101 resource which includes the high grade intercept of 262.4 g/t Ag and 1.1 % Pb+Zn over 13.5 meters including 819 g/t Ag and 2.57% Pb+Zn over 3 meters in hole PC 004.

ABOUT KOOTENAY
Kootenay is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. The Company flagship property is the former producing Promontorio Silver Mine in Sonora State, Mexico.

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

To view an interview with James McDonald visit:www.kootenaygold.ca