Kootenay Gold Inc.
TSX VENTURE : KTN

Kootenay Gold Inc.

July 02, 2008 16:03 ET

Joint Venture-Kootenay and Amador Announce Connor Creek Drill Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 2, 2008) - Kootenay Gold Inc. ("Kootenay") (TSX VENTURE:KTN) and Amador Gold Corp. (TSX VENTURE:AGX) are pleased to announce the results of their diamond drilling program on their Connor Creek Property located in southeastern British Columbia.

Kootenay Gold Inc. drilled 1850.49 metres of NQ2 sized core on the Connor Creek Property. Three principal targets areas were selected, 'EM' zone, 'CC shear' and the True Fissure/Root zone.

The EM zone was selected primarily on the basis of a strong airborne EM conductor which coincided with surface exposures of sulphidic metasediments in which anomalous gold values were obtained. Six holes were drilled on or near this target, (CC07-1 thru 6) for a total of 607.22 metres.

The CC shear zone represented strongly sheared and sulphide bearing metasediments in which surface gold values were obtained. Four holes were drilled on this target (CC07-7 thru 10) for a total of 461.46 metres.

The True Fissure/Root target area are actually two distinct targets located proximal to each other. The True Fissure target was an old working on a high grade lead-zinc-silver vein/replacement zone. One hole was drilled in an attempt to intersect a postulated strike extension of this zone.

The nearby Root target represents a massive sulphide skarn zone at the contact between a limestone/marble and a diorite. Five holes, (CC07-12 thru 16) were drilled through this target. 781.81 metres were drilled in total on the True Fissure/Root target.

EM TARGET

Hole# CC07-2 intersected 1m @ 2.1 gm/t Au within a broader zone of 4m which averaged 1.12 gm/t Au. This intersection occurred within a strongly foliated biotite quartz feldspar gneiss with massive to semi-massive pyrrhotite and locally strong disseminated arsenopyrite. Both arsenic and copper were strongly anomalous in this four metre interval. A second lower interval in this hole averaged 3.00 gm/t Au over 1.63 metres hosted by a feldspar porphyry with fracture controlled pyrrhotite, pyrite and traces of chalcopyrite.

Hole# CC07-3 intersected 0.84 gm/t Au over 2.51 metres between 104.46 and 106.97 metres. This interval is hosted in a biotite quartz feldspar metasediment/gneiss. Gold mineralization here is related to fracture controlled pyrrhotite and disseminated arsenopyrite.

Hole# CC07-6 was collared at the same location as CC07-2 and drilled to the northeast (Azimuth equals 50 degrees). This hole intersected the same mineralized horizon as in CC07-2 averaging 0.41 gm/t Au over 4.5 metres. Once again gold mineralization here correlates well with anaomalous arsenic and copper.

Of note, if projected to surface the mineralized zones in these three holes all correlate well with the airborne EM anomaly in this area.

CC SHEAR TARGET

Four holes were drilled in the CC Shear target for a total of 461.46 metres.

Hole# CC07-7 intersected 0.55 gm/t Au over 2 metres within a siliceous metasiltstone with minor disseminated and fracture-controlled pyrite and pyrrhotite.

Hole# CC07-9 intersected two significant intervals including 16.26 gm/t Au over 0.80 metres occurring within a pyrite and pyrrhotite-bearing fault. The second interval of 0.70 gm/t over 2 metres was hosted in a metasiltstone with minor disseminated and fracture controlled pyrite and pyrrhotite.

The most significant intersection within the CC Shear target occurred in Hole# CC07-10. Here 3 metres averaged 4.75 gm/t Au near the top of the hole. Gold mineralization here is related to an altered metasiltstone with fracture controlled pyrrhotite and chalcopyrite. A second interval further down the hole in the same lithology and alteration averaged 3.29 gm/t Au over 1.76 metres. Even further down the hole also within metasiltstones a 4 metre interval averaged 1.09 gm/t Au. In this hole gold mineralization appears to in part be lithologically controlled.

TRUE FISSURE/ROOT TARGET

Six holes were drilled in the area of the True Fissure/Root target. One hole (CC07-11) targeted the strike extension of the True Fissure vein. No significant results were obtained.

Five holes tested strike extensions of the Root skarn target.

In hole# CC07-13 from 11.31 metres to 13.00 metres returned a 1.69 metre interval averaged 0.70 gm/t Au. This mineralization occurred within a fractured calcsilicate/marble with fracture controlled pyrrhotite, minor chalcopyrite and arsenopyrite. Further down the hole a 0.64 metre interval averaged 1.12 gm/t Au hosted in a silicified section of hornfelsed metasiltstone with strongly disseminated pyrrhotite as well as fracture controlled pyrrhotite, pyrite and chalcopyrite.

Hole# CC07-15 intersected 2.38 gm/t Au over 1.18 metres. This mineralization occurs within a distinctive interval of bleached metasiltstones overprinted by strong fracture controlled arsenopyrite, pyrrhotite, pyrite and traces of sphalerite.

Hole# CC07-16 intersected 0.60 gm/t Au over 1.00 metres. Gold mineralization here is hosted in a strongly faulted marble with fracture controlled and replacement pyrrhotite, pyrite with lesser sphalerite and traces of galena.

The CC Shear and EM targets form some clear gold and gold-copper-lead-zinc enriched zones associated with sulfides in sheared metasediments.

All reported drill intercepts are drill hole lengths. True widths are unknown at this time.

Core samples were sawn in halves with one half being bagged, labelled, recorded and sealed in plastic bags before being shipped for analysis to Acme Laboratories in Vancouver, B.C. The other half of the core was retained in the core boxes for future reference. All core samples were analysed using Agua Regia ICP-MS analysis with Fire Assay Fusion Gold by ICP-ES.

2008 EXPLORATION

Connor Creek hosts a number of attractive gold enriched targets requiring more exploration. There are numerous zones of anomalous gold, gold-copper-lead-zinc and silver as identified in rock, soil and drill sampling which occur across the property. The 2007 season has identified two priority areas and three secondary areas of interest for 2008. The primary areas of focus for 2008 will be the CC Shear and Debbie occurrences where historic results report high grade gold in sulfides. The secondary targets are comprised of open ended soil anomalies to the south and west of the CC Shear, a distinct open ended silver soil anomaly south several hundred meters south of the True Fissure area and a large EM anomaly associated with the historic Hungary Man occurrence. A program consisting of geologic mapping, trenching, and prospecting is planned for the 2008 season after which a drill program will be designed.



Table 1 Drill Hole Data

UTM UTM
HOLE_ID EAST NORTH ELEV_m AZIMUTH INCL DEPTH(m) TARGET AREA

CC07-01 463395 5473793 1185 20 -47 159.72 EM TARGET
CC07-02 463395 5473793 1185 20 -65 59.44 EM TARGET
CC07-03 463396 5473718 1185 360 -47 140.61 EM TARGET
CC07-04 463396 5473724 1185 75 -47 37.49 EM TARGET
CC07-05 463350 5473552 1175 50 -47 147.78 EM TARGET
CC07-06 463395 5473793 1185 50 -47 62.18 EM TARGET
CC07-07 463945 5472989 1238 90 -47 133.04 CC SHEAR
CC07-08 463945 5472989 1238 270 -47 143.26 CC SHEAR
CC07-09 463945 5472989 1238 340 -47 105 CC SHEAR
CC07-10 463954 5473165 1172 255 -47 80.16 CC SHEAR
CC07-11 465329 5473159 1440 180 -47 101.8 TRUE FISSURE
CC07-12 465329 5473159 1440 270 -47 123.14 ROOT
CC07-13 465274 5473238 1438 270 -47 107.9 ROOT
CC07-14 465274 5473238 1438 270 -65 77.72 ROOT
CC07-15 465252 5473301 1436 270 -47 68.28 ROOT
CC07-16 465248 5473335 1435 240 -47 302.97 ROOT


Table 2 Drill Results

HOLE_ID From_m To_m Sample_ID Width_m Au_gm/t

CC07-02 18.00 19.00 676048 1.00 0.66
CC07-02 19.00 20.00 676049 1.00 2.1
CC07-02 20.00 21.00 676050 1.00 1.05
CC07-02 21.00 22.00 676051 1.00 0.68
CC07-02 47.15 48.78 676069 1.63 3.00

CC07-03 104.46 105.10 676104 0.64 1.0
CC07-03 105.10 106.00 676105 0.90 0.33
CC07-03 106.00 106.97 676106 0.97 1.2

CC07-06 19.00 20.00 676192 1.00 0.51
CC07-06 20.00 21.00 676193 1.00 0.22
CC07-06 21.00 22.00 676194 1.00 0.47
CC07-06 22.00 23.00 676195 1.00 0.42
CC07-06 23.00 23.50 676196 0.50 0.45

CC07-07 17.00 19.00 676214 2.00 0.55

CC07-09 11.80 12.60 676271 0.80 16.26
CC07-09 39.00 41.00 676286 2.00 0.70

CC07-10 5.50 6.50 676304 1.00 1.97
CC07-10 6.50 7.50 676305 1.00 4.71
CC07-10 7.50 8.50 676306 1.00 7.58
CC07-10 13.07 14.83 676310 1.76 3.29
CC07-10 39.00 41.00 676312 2.00 0.59
CC07-10 41.00 43.00 676313 2.00 1.59

CC07-13 11.31 12.00 676409 0.69 1.11
CC07-13 12.00 13.00 676410 1.00 0.42
CC07-13 66.68 67.32 676447 0.64 1.12

CC07-15 55.05 56.23 756808 1.18 2.38

CC07-16 26.00 27.00 756821 1.00 0.60


KOOTENAY AQUIRES ADDITIONAL GENERATIVE CLAIMS

Under the terms of the Kennedy Grubstake Agreement dated March 20, 2003, Kootenay Gold Inc. has elected to option three additional properties namely, Deer Park, McDonald Creek and Monashee. All projects are located in the West Kootenay region of British Columbia.

Deer Park covers 10,573 hectares in 24 claims, Monashee covers 11,459 hectares in 24 claims and Mc Donald Creek covers 11,588 hectares in 26 claims.

Deer Park covers four types of mineralization in veins and shears which are; copper bearing sulfide veins, lead-zinc silver sulfide veins and gold bearing quartz veins and shears. Mineralization occurs in Jurassic aged intrusives and Paleozioc aged sediments and volcanics. Mineralization occurs along north south trending dyke swarms and structures that can be traced up to 2 kilometers in length by mapping and geophysics. Some gold mineralization is closely associated with both electromagnetic highs and magnetic highs. Over one hundred samples have been collected with gold samples ranging from background to 36,398 ppb (36.398 grams per tonne), silver ranging from background to greater than 100 ppm (100 grams per tonne) and copper, lead and zinc ranging from background to greater than 10,000 ppm (1%), 9999 ppm (0.9%), and 49,458 ppm (4.9%) respectively. Mineralization occurs in zones exceeding ten meters in width but nothing is known about the grade across these zones at this time as all samples are grabs and exposure is low.

Monashee covers 11,459 hectares in 24 claims. This project lies along the intersection of two regional structural zones trending to the northeast and northwest. Gold mineralization is found in many outcrops over several square kilometers occurring in felsic intrusions. It is associated variably with weak silica veining, weak argillic and sericitic alteration, and fracturing and shearing with a possible spatial association with diatremes. The area is known for historic placer mining as well. About 150 grab samples have been taken with values ranging from background to 4016 ppb gold. The widespread and subtle nature of the gold mineralization associated with strong fracturing and shearing, placer deposits and diatremes indicates the potential for a large tonnage low grade style of deposit.

McDonald Creek covers 11,588 hectares in 26 claims which are host to Jumping Josephine style gold mineralization. Gold is associated with silica flooded and veined structural zones with some brecciation. Very few sulfides are observed. At least two parallel gold bearing structures some 700 meters apart have been identified. Individual structures can be traced by prospecting for about 500 meters along strike. The strongest gold mineralization found to date is in a silicified zone of brecciation and veining exposed in several outcrops over a strike length of near 100 meters and widths of 1.5 to 4.0 meters. Grab samples from this showing range from background to 21,150 ppb (21.1 grams per tonne), 11,489 ppb, 7734 ppb, 16,676 ppb, 7,158 ppb, and 3872 ppb with 11 of 29 samples grading more than 1000 ppb.

All samples reported above are grab samples. All analysis were conducted by Acme Laboratories using an Agua Regia ICP-MS analysis with Fire Assay Fusion Gold by ICP-ES.

Terms of the Grubstake Agreement for each property require work commitments of $40,000 over three years and share payments of 25,000 shares on election of the option and 25,000 shares on each of years one, two and three to maintain the option in good standing. If production is achieved on a specific property a bonus of 200,000 shares would be paid.

The foregoing geological disclosure has 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 the Company.

ABOUT KOOTENAY

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

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.

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

Contact Information

  • Kootenay Gold Inc.
    James McDonald
    CEO
    (403) 238-6986
    or
    Kootenay Gold Inc.
    Ken Berry
    President
    (604) 601-5652 or 1-888-601-5650
    Website: www.kootenaygold.ca