Bandera Gold Ltd.

Bandera Gold Ltd.

May 30, 2006 11:49 ET

Bandera Gold Ltd.: Update on Cinco Minas

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 30, 2006) - Bandera Gold Ltd. (TSX VENTURE:BGL) is pleased to announce the hiring of Eng. Ismael Manriquez Olmos, an experienced Senior Mining Engineer, as the Project Manager for the Cinco Minas test facility and all subsequent mining and milling operations. Mr. Manriquez has degrees in both mining engineering and metallurgy. He has worked in senior management positions for the Fresnillo Mining Co. at Fresnillo, Zacatecas, one of the largest operating silver mines in the world today. Eng. Manriquez later worked for one of the largest gold producers in Mexico at El Cubo located in the historic Guanajuato mining district directing the expansion of milling and mining operations.

Bandera is also pleased to announce the hiring of Eng. Armando Gabriel Hernandez, a renowned mexican metallurgist bringing more than 30 years of experience in metallurgy ranging from the selective flotation of complex ores to the cyanidation leaching of ores in heap leaching operations and leaching using agitation in tanks with cyanide. Notably, Eng. Armando Gabriel was the lead metallurgist at the Federal Government's large gold mine, El Barqueno and later worked on cyanide leaching with agitation in tanks for First Silver Reserve. He is now working for Bandera as a resident consulting metallurgist.

Bandera Gold Ltd. is fortunate to have this exciting combination of seasoned professionals in its employ as it begins installing the pilot test facility. The Company has purchased a small pilot plant which is the first step towards establishing a larger "intermediate" mill at Cinco Minas. Upon delivery, management anticipates start up of this mode to be approximately 60 days. Testing will initially include gold and silver mineralization from current mine dumps containing bonanza grade silver-gold ores, processing and testing 3,000 cubic meters of un-treated tailings left in the old mill when it was dismantled and virgin ores from outcropping, near-surface and new open pit cuts blasting out deeper mineralization for testing.

Exploration is currently focused on better defining existing, known mineralization and taking bulk samples which will help determine metallurgical characteristics of mineralization from various mineralized zones. The Company will use the test results from the initial small milling operations to design and install the "intermediate" plant facility.

Concurrent with the construction of the "intermediate" milling operation, the Company will conduct bulk tests in order to process gold ores using conventional, well known heap leach technology.

The "final" phase of work will involve designing and construction of milling and heap leaching operations optimized to treat different grades of mineralization with differing metallurgical characteristics. Based on historical processing at the old mill site of more than one (1.0) million tonnes of silver and gold ores with grading up to 476 g/t of silver and 3.17 g/t of gold (previously reported in a BGL news release dated Nov 16/05), Bandera's consultants do not foresee any metallurgical problems regarding recovery of more than approximately 90 percent of the contained silver and gold using well known, conventional processing methods and a Merrill-Crowe precipitation unit(s) for production of precipitates that will be smelted to produce impure silver-gold bars known as dore.

Work continues on upgrading the camp facilities and new haul roads designed around the current pilot test mill facility and future site for the full-sized mill. The haulage road to the pilot mill test site has been finished. Construction of the haulage roads to the heap leach site and final tailings site is proceeding as well as a newer access to the top of the pilot processing plant site.

The Agrarian Community ("Ejido") of Cinco Minas has signed an agreement for granting the Minera San Jorge and Bandera Joint Venture slightly over three hundred fourteen (314) hectares to the JV. This includes all surface areas planned for mining and beneficiation facilities, underground and open pit mines, milling operations for the pilot test plant and the future larger full-scale mill and/or heap leaching operations, crushers and conveyor systems.

A recent visit to the Cinco Minas project by senior management accompanied by Senior Mining Consultants for both geology and mining/metallurgical testing and review of the design for the pilot test plant resulted in approvals for all phases of work done to date and for the current work program by the board of directors.

Bandera's joint venture partner, Minera San Jorge, is creating a foundation for the local members of the Cinco Minas Ejido donating nearly twenty percent of its gross proceeds to the locals and to regional development under the care and management of a Trust Committee comprised of three men and two women and three independent Trustees. This foundation will provide scholarships for education, local transportation, busing of school children and support for improving local health services or more costly medical procedures. This is in support of the Bandera - MSJ joint venture which has set a goal to enhance living conditions and future prospects for the local community.

Exploration programming for this month and for the following four months includes mobilizing three track drills to drill and blast mineralization exposed at the surface. One drill will be dedicated to working on the El Abra area, the famous old Spanish ore shoot developed to a depth of more than 2000 feet in the early 1900's by the company operating Cinco Minas established by the founder of Anaconda Mining Co. A second track drill will continue on the project with the assignment of cutting into the top of the El Abrita zone where old workings indicate interesting values of gold and silver at the surface and in the shallow underground workings. The third track drill is programmed to work on expanding mineralization at the Cerro Colorado site and opening up this area for determination of continuity and grade of outcropping silver and gold mineralization with grades similar to those processed in other mining operations by either milling or in conventional heap leach operations.

Senior management from Bandera acting on the recommendation of their consulting mining engineer and geologist have approved the driving of a horizontal drift into the Destajos Level and accessing underground workings to use them to bulk test known mineralization containing bonanza grades of silver and gold once the "Destajos" mine dump is removed and processed. During the month of May, major advances include the purchasing of milling equipment and completion of access roads as well as discovery of interesting silver and gold mineralization exposed at the surface that remains open both at depth and along strike. Bandera Gold's management is committed to providing reliable testing of precious metals mineralization at Cinco Minas and enhancing shareholder value in this exciting project.

The technical information contained in this news release was collected and complied by Richard Munroe, B.Sc., FGAC, P.Geo., a qualified person under NI 43-101.

Bandera Gold Ltd. is a Junior Canadian Exploration Company whose corporate strategy is to build shareholder value by finding and developing overlooked and undervalued mineral properties in North America and South America. By partnering with an experienced mining and mineral exploration entity, the Company's core focus will be the continued exploration and advancement of the Cinco Minas property in Mexico to production, exploration of the Gran Cabrera property in Mexico and the exploration of the Belmira property in Colombia.

On Behalf of the Board

Kelvin Williams, CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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