Kootenay Gold Inc.

Kootenay Gold Inc.

December 14, 2006 04:00 ET

Kootenay Gold Inc.: Reports 7 Metres of 31.19 g/t '0.91 oz/t' Gold From Jumping Josephine

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 14, 2006) - Kootenay Gold Inc. (TSX VENTURE:KTN) is pleased to announce that its joint venture partner Astral Mining Corporation (TSX VENTURE:AST), has received channel sample results from the Phase II infill and extension trenching program at the JJ Main Zone discovery on the Jumping Josephine "JJ" Project in southeastern British Columbia (Figure 1). Trench-02a graded 31.19 g/t(i) gold over 7m, including 133.91 g/t gold over 1m. The JJ Main Zone now has a cumulative strike length of 270 metres and remains open in both directions.

All surface results from the 2006 summer and fall exploration programs are currently being compiled and a comprehensive Phase I drill program is being planned for early 2007. To view all of the results to date for JJ visit www.kootenaygold.ca.

Highlights from the Phase II trenching include:

- 31.19 g/t(i) gold over 7m, including 133.91 g/t gold over 1m from Trench 02a (0.91 opt(ii) over 22.97 feet including 3.906 opt over 3.28 feet)

- 25.24 g/t gold over 4m from Trench 02c (0.736 opt over 13.12 feet)

- 14.1 g/t gold over 5m from Trench 03a (0.411 opt over 16.40 feet)

- 9.28 g/t gold over 1m from Trench 03b (0.271 opt over 3.28 feet)

(i)grams per tonne (ii)ounces per ton

The Phase I trenches (October 2 and 16, 2006 and November 14, 2006 News Releases) spaced at 50m along the strike of the zone were infilled during October 2006 with eight trenches on 10m intervals (Figure 2). In addition two trenches north of Trench 04 and one located 50m south of Trench 01 were designed to test for extensions to the JJ Main Zone (Figure 2). Channel sample assays confirm the previously reported high-grade gold values from the central portion of the quartz stockwork zone at JJ Main.

All new Phase II infill and extension channel samples from the quartz stockwork zone at JJ Main reported herein were analyzed using the Metallic gold assay method. Trenching has now identified the auriferous quartz stockwork zone over a strike length of 270m when the dextral fault-offset observed in Trench 03 is restored. Grades exceeding 5 g/t gold were encountered in most trenches between Trench 01 and the eastern zone of Trench 03 over a strike length of 145m when the dextral fault-offset is restored. This trenching confirms the continuity of the mineralized zone, which remains open to the southwest and northeast. A summary of the metallic gold assay results from the new trenching is tabulated below in Table 1.

Table 1: Phase II Infill and Extension Trenching - Significant Metallic
Gold Assays

Metallics Metallics
From Interval Grade Interval Grade
Trench (m) To (m) (m) (g/t gold) (ft) (oz/ton)
T00 17 21 5 0.66 16.40 0.019
T01c 8 10 2 2.46 6.56 0.072
T01d 8 9 1 5.43 3.28 0.158
T02a 0 7 7 31.19 22.97 0.910
(including) 2 3 1 133.91 3.28 3.906
and 5 6 1 71.55 3.28 2.087
and 6 7 1 9.71 3.28 0.283
T02b 7 15 8 3.73 26.25 0.109
(including) 12 14 2 8.13 6.56 0.237
T02c 6 10 4 25.24 13.12 0.736
(including) 6 8 2 46.21 6.56 1.348
and 7 8 1 66.91 3.28 1.952
T02c 13 14 1 3.59(1) 3.28 0.105(1)
T02d 9 13 4 1.01 13.12 0.029
18 19 1 3.80(1) 3.28 0.111(1)
T03a 12 17 5 14.1 16.40 0.411
(including) 15 16 1 65.32 3.28 1.905
T03b 13 14 1 9.28 3.28 0.271
T04a 10 15 5 0.42 16.40 0.012
T04b 10 14 4 0.53 13.12 0.015
(1) 30gm Fire Assay-not Metallic Gold Analysis

Further trenching and initial drill-testing of JJ Main is planned for the spring of 2007 and will be carrying out an extensive exploration program to identify additional "JJ Main style" zones and to advance a number of other prospects on the JJ Property during the balance of the 2007 field season. Updated maps and photographs of the JJ Project and JJ Main Zone discovery are available on the Company's website (www.kootenaygold.ca).

Option Agreement

Kootenay has an option agreement with Astral whereby Kootenay has granted Astral the right to earn a 60% undivided interest in the 11,785 hectare Jumping Josephine (JJ) Property located in the Nelson Mining Division of southern British Columbia. The JJ Property consists of mineral claims held 100% by Kootenay and straddles Highway 3, north of the town of Rossland and west of Castlegar. To fulfill the terms of the option agreement, Astral must spend $2.1 million on exploration and issue 400,000 shares to Kootenay over 5 years. Subsequent to exercise of the earn-in, Astral and Kootenay will form a 60/40 joint venture.

Technical Summary:

The JJ property is located in the West Kootenay region of southeastern British Columbia in a mining district that has had historical production in excess of nine million ounces of high-grade gold, yet has remained under-explored since before the Second World War. Numerous gold showings were discovered on the JJ property during 2003 by Kootenay Gold through intensive prospecting efforts. Kootenay Gold subsequently assembled a claim position in the area, surrounding and including several small past producers in the Granville Mountain (Bonanza pass) area.

The JJ property is primarily underlain by fine to medium-grained granodiorite, monzonite and diorite, thought to belong to the mid-Jurassic Nelson intrusive suite, and by quartz syenite and monzonite of the Eocene age Coryell intrusive suite. The stockwork zone at JJ Main is hosted by granodiorite and monzonite of probable mid-Jurassic age that are cut by north-south trending faults often occupied by syenite (Coryell) or lamprophyre dykes. Gold mineralization is currently interpreted as being temporally-related to the Eocene magmatic episode and may have occurred during the early stages of widespread extensional faulting that accompanied it.

The airborne survey magnetic data places the JJ Main Zone within a large circular magnetic feature, roughly 2km in diameter, that Astral interprets as a buried intrusive stock - potentially a magmatic source of the siliceous gold-bearing mineralizing fluids for JJ Main. The JJ Main stockwork zone itself corresponds with a distinct, laterally extensive, northeast-trending linear magnetic low feature centred above the inferred stock, and represents a possible structural conduit for fluids emanating from the buried intrusion. Gold mineralization at JJ Main is hosted in silicified breccias, quartz-filled shear zones and sheeted quartz veins, and is associated with arsenic-antimony-silver-lead and to a lesser extent cadmium-mercury-copper. Astral is currently applying an intrusion-related gold genetic model (i.e. Tintina Gold Province of the Yukon Territory and Alaska) to the JJ Project. One of the primary aims of the 2007 field program on the property will be to identify JJ Main style occurrences elsewhere on the large project, particularly within the circular magnetic feature referred to above.

A total of 187 one-metre channel samples were collected during Phase II trenching program from eleven trenches. Astral's sampling methodology is described in its October 2, 2006 News Release. Intervals representing the quartz stockwork zone or immediately adjacent wall rock material (91 samples) were identified on site and marked for analysis for gold using the 500g 'metallic gold assay' technique. Gold assay results from this sample suite ranged from below detection up to 133.91 g/t gold. The 96 remaining samples were analysed for gold by the traditional 30g fire assay and all samples were subjected to a 36-element suite analysis by aqua-regia digest and ICPMS finish. Gold results from these samples ranged between below detection and 3.59 g/t gold

Visible gold has not been observed at JJ Main, though a nugget effect is suspected. The metallic gold assay method was described in Astral's November 14, 2006 News Release and is a preferable technique for analyzing high-grade samples as it uses a large 500g sample size compared to the 30g sample of the standard fire assay method, and is able to more accurately estimate the total gold content. Comparison of three assay methods showed an increase of up to 132% per interval when original fire assayed samples were re-analysed using the metallic gold technique (see November 14, 2006 News Release).

Samples were submitted to Acme Analytical Laboratories Ltd., Vancouver for analysis. Exploration work reported in this release was completed under the supervision of Astral's Project Geologist Dale Brittliffe B.Sc. Technical information contained in this release has been reviewed by Dr. David Terry, P.Geo., Director and Vice President of Exploration for Astral Mining Corporation, a Qualified Person as defined in National Instrument 43101.

The Company

Kootenay is an emerging gold and silver company focused on acquiring 100% interests in mineral properties through acquisitions and exploration discoveries. During the past four years Kootenay has successfully made four new mineral discoveries in the Rossland Republic Gold Trend of British Columbia. In addition to its Canadian mineral discoveries, the company acquired the Santa Lucia Property, the Sabina Property and former producing Promontorio 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.

To view Figure 1 - JJ Project Location and Figure 2 - JJ Main Trench Location and Assay Highlights please click on the following link: http://www.ccnmatthews.com/docs/ktn1214.pdf

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
    (403) 238-6986
    Kootenay Gold Inc.
    Ken Berry
    (604) 683-2214
    Website: www.kootenaygold.ca