Kootenay Announces Two Drill Rigs Operating on Promontorio, Third Diamond Drill Rig Has Been Mobilized and is Expected to Commence Drilling in Two Weeks

VANCOUVER, June 15, 2011 -

Shares Outstanding:
44,958,100 

Kootenay Gold Inc. (TSX VENTURE: KTN.V) is pleased to
announce that two diamond drills are now operating at the Company’s
Promontorio Silver Project in Sonora, Mexico and a third diamond
drill rig has recently been mobilized on site and is expected to
commence drilling in the next two weeks.

As previously announced on May 31, 2011, Kootenay has initiated
25,000 meters of drilling to follow up on the success of the
Company’s recently concluded 10,000 meter drill program on
Promontorio. The current in-fill drilling and resource definition
program represents the single largest and most expansive drilling
campaigns conducted to date by Kootenay on the Promontorio Silver
project.

The 25,000 meter, multi-phase program will concentrate on step
out and in-fill drilling off setting the numerous drill intercepts
concentrated along a 1.0 kilometer long mineralized corridor that
includes the Pit Resource, Pit NE zone, Northeast zone and
Southwest zone.

See 25,000 meter drill highlights and map: href="www.kootenaygold.ca/i/projects/Promontorio/drillresultsmap.pdf">
www.kootenaygold.ca/i/projects/Promontorio/drillresultsmap.pdf

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 +1-403-238-6986,
Ken Berry, Chairman at +1-604-601-5652;
+1-888-601-5650
or visit:  href="www.kootenaygold.ca">www.kootenaygold.ca

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