Kootenay Gold Inc.(TSX.V:KTN) announced today a brokered private placement led by PI Financial Corp. of up to 5 million units at a purchase price of $2.20 per Unit, for aggregate gross proceeds to Kootenay of up to $11 million.

Kootenay intends to increase the current 10,000 meter drill program to include an additional 100 drill holes which will test the large 3D IP Chargeability Anomoly described in the May 14th, 2008 news release. In addition an expanded IP survey, mapping, trenching and surface sampling program will test new mineralized zones in the surrounding area on its Promontorio Silver Discovery.

To date, the 3D IP chargeability anomaly at Promontorio has proven to be an exceptionally accurate predictive tool for identifying mineralization and drill targeting (view 3D model at www.kootenaygold.ca). Given the large extent of this anomaly and corresponding alteration at surface the pace of exploration will be stepped up. A second drill rig will be sourced and added to the program to assist in drilling an expanded program in the order of an additional 35,000 meters or ~ 100 holes. Also detailed mapping and sampling of the new mineralized zones discussed in the May 14th, 2008 news release is under way. This will be followed by trenching and likely further geophysical surveys, additional targets will be drill-tested where warranted. Kootenay will also initiate a regional exploration program on the 90,000 hectare Promontorio property where a third drill rig will be added to drill test these targets based on results of the preliminary work.

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 $2.75 for a period of 24 months from the closing date of the Private Placement. As consideration to the agents, Kootenay has agreed to pay a commission of 6.5 per cent of the total raised upon closing, which may be payable in cash or units, on the same term as the Units of the offering at the election of the Agent and issue agent warrants equal to 6.5 per cent of the units issued pursuant to this offering. Each agent warrant will be exercisable to acquire one common share at $2.50 expiring 24 months after the closing date. All of the securities issued pursuant to the Private Placement will be subject to a minimum four month hold period. The company has granted the agent an over allotment option to increase the offering by up to 1 million units, exercisable 48 hours prior to closing date. The net proceeds from the Private Placement will be used to finance additional work on Kootenay's Promontorio property, its other mineral projects and for general working capital.

About Kootenay
Kootenay Gold Inc. is an exploration and mining Company actively developing mineral exploration projects in British Columbia, Canada and Mexico. The Company's top priority remains the ongoing aggressive development of its rich Promontorio Silver project, which encompasses the former producing Promontorio Silver Mine in Northwest Mexico.