KTN.V 2011-02-03: Kootenay Reports Assay Results From 15 Holes on Promontorio

Highlights Include:

• 15 Drill holes encountered consistent and multiple intercepts of widespread silver mineralization.
• 149 g/t silver over 10.5 meters.
• 108 g/t silver over 16.5 meters.
• Silver mineralization has now been extended from the 43-101 Pit Discovery Zone towards the North East Zone a further 200 meters, remaining open in three directions. 
• A second diamond drill rig that will run concurrent to its RC drilling program, to test the deposit at depth.

http://www.kootenaygold.ca/s/NewsReleases.asp?ReportID=440998&_Type=News-Releases&_Title=htmlFONT-COLORFF6600bPROMONTORIO-bfonthtmlKTN-Reports-Assay-Results-From-15... 

“Our goal from the outset of the current 10,000 meter drill program has been to expand silver mineralization outside of the existing 43-101 Pit resource. We are very pleased and excited with results from the current 15 holes. Not only have we dramatically extended silver mineralization to the NE and SW of the Discovery Zone, we are achieving consistent grades and continuity within areas of widespread silver mineralization not yet calculated into the current 43-101 resource.  Adding a second diamond drill rig will allow us to drill test a host of existing holes at depth that bottomed out in mineralization, which is expected to play a major factor in further boosting the size of our growing silver resource at Promontorio”.  

---Jim MacDonald President and CEO

Please find the drill fencing and assay map at:

http://www.kootenaygold.ca/i/projects/Promontorio/drillingupdate20110203.pdf

Kootenay Closes $6,000,000 Non-Brokered Private Placement

December 23, 2010,

 Kootenay Gold Inc. ("Kootenay") (TSX Venture: KTN) is pleased to announce the completion of its previously announced non-brokered private placement. The private placement was fully subscribed raising gross proceeds of approximately $6,000,000. Sprott Asset Management LP for and on behalf of certain Sprott Funds and Managed Accounts purchased $4,000,000 of the Non-Brokered Placement.

A total of 7,059,000 units were issued. Each unit ("Unit"), priced at $0.85 per Unit consists of one common share ("Share") of Kootenay and one-half of one transferable common share purchase warrant ("Warrant"). Each whole Warrant entitles the holder to purchase one Share at a purchase price of $1.20 per Share until December 22, 2012. Cash fees in the aggregate amount of $137,700 were paid to arm's length parties and certain advisory fees were paid in relation to the private placement. All of the securities issued pursuant to the Offering will have a hold period which expires April 23, 2011.

Stated Kootenay President and CEO James McDonald "We are pleased to close our financing. The new influx of capital further strengthens our treasury as we continue to accelerate drilling on our flagship Promontorio Silver Project".
The net proceeds from the private placement will be used to finance additional work on Kootenay's Promontorio property, its other properties and for general working capital.

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.

For additional information, please contact:
James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650

Source 

UKAnalyst: Woodburne Square Ag Invests in "Highly Regarded" Kootenay Gold

The relentless upward march of gold during the last 5 years has seen a remarkable rekindling of interest in mining juniors. But despite the large numbers of junior and mid cap gold companies coming to AIM there is a paucity of quality silver plays for AIM followers to back. It was to tap into this interest that the moribund media company Directex Realisations was in January 2011 transformed into Woodburne Square Ag (Ag being the chemical symbol for silver) with a direct mandate to invest in high quality global silver plays as well as special situations in gold.

 

During the twentieth century the average value ratio between gold and silver was 47:1 but in recent years silver has lagged well below the long term norm. The investment management team behind Woodburne has long been of the view that this would not only correct itself but over-correct and hence positioned itself accordingly. This is already being vindicated with current ratio at $33oz silver and $1400 oz gold being 42:1.


At the time of the transformation of Directex into Woodburne, the CEO of GE&CR's parent company Tom Winnifrith was appointed Chief Investment Officer in January and it is he who decides where the company invests while the board of chairman Martin Kiersnowski and directors Nicholas Hall and Russell Darvill ensure that the corporate body runs smoothly. Winnifrith manages the SF t1ps Smaller Companies Gold Fund (which has long held a material weighting in silver) and which was the UK's top performing fund across all sectors during the past 12 months returning a gain of 102% - the next best gold fund booked a 56% gain. Among the 117 fund managers accorded Alpha Status by Trustnet, Winnifrith is ranked first by performance over 6 months, 1 year and 3 years.


Since its change of focus, the company has invested in 5 listed holdings, 4 of which are silver plays and the fifth gold.

UKAnalyst: Kootenay Gold Offers Potential, Great Value

Finally, an update on our newest investment, TSX listed Kootenay Gold. As our unit holders know, we rarely invest in new holdings in the Fund, and only ever do where we see real upside potential, couple with great value. Kootenay provides that, plus as the name suggests, a great deal of exposure to the less liquid and smaller Silver market.

As detailed in last month's silvery newsletter Kootenay is actively developing mineral projects in the Sierra Madre region of Mexico (a highly prospective Silver region) and a number of license areas in British Columbia, Canada. The company's flagship project is the former producing Promontorio Silver mine in Sonora State Mexico which already boasts a NI 43-101 compliant resource of just over 10 million ounces of Silver (plus 112.7m lbs of lead and 125.1m lbs of Zinc). However, as of 3 February 2011 the company updated the market in regards to its continuing 10,000 metre drill programme which it is currently undertaking on its flag ship project. The aim is to dramatically expand the current 10 million ounce NI 43-101 resource and it seems the company is doing just that.

All 15 of the company's most recent drill holes intersected consistent Silver grades over a wide spread area of mineralisation extending outside of the company's already large delineated resource. Most notably Silver values as high as 149g/t and 108g/t over 10.5 metres and 16.5 metres respectively were reported. It is clear that the current NI43-101 is significantly underwhelming and in light of this the company has already mobilised a second drill rig to now test the deposit at depth.

So, a few weeks on from having added Kootenay to our portfolio it is safe to say that we are happy with the rarity that is a new addition. We would not be surprised to see even more positive news reported to the market over the next quarter and almost without doubt an upgrade NI43-101 compliant 10 million ounce resource. We are patient (but excited!) holders. 

Source:  Ross Jones, James Faulkner UKAnalyst

UKAnalyst: Kootenay Gold - Targeting 100+ Million Ounces of Silver in Mexico

"A Mine In The Making" is how TSX-V listed Kootenay Gold describes itself and its flagship Promontorio Silver Project in Mexico, and exploration results are beginning to support this claim. According to a recent 43-101 Resource Estimate, Promontorio contains $320 million of Recoverable Metal (10,070,000 ounces Silver; 112.7 million pounds lead and 125.1 pounds of zinc).

 

Kootenay was established in 2002 and gained its listing in 2005. Strategically, the company is looking to define a world-class minable silver resource at Promontorio while simultaneously advancing several gold and silver property assets in both Mexico and Canada. The business model leverages the exploration expenditures of various earn-in and/or joint venture partnerships allowing multiple ongoing exploration activities with minimal KTN share dilution.

Promontorio is located in the mineral rich and fast developing Sierra Madre region of Mexico. Sierra Madre hosts existing resources of 15 million ounces of gold and 520 million ounces of silver, with the 3.71 million ounce Mulatos (Alamos) gold mine and 3.1 million ounce gold / 149 million ounce silver Dolores (Minefinders) mine to the North East. To the South East copper is the dominant metal with Tyler Resources' 4.6 billion pound copper / 68 million ounce silver Bahuerachi mine and Fronterra Copper's 2.1 billion pound copper mine the standout operations.

 

Kootenay announced its maiden resource estimate at Promontorio on the 18th of August 2010, and separated its definition into that expected to be accessed by way of an open pit mine, and that expected to be mined by underground methods. The cut-off level was set at 200 metres, above which a US$12.50 recoverable metal value (RMV) was used, and below which a US$32.00 recoverable metal value was used to reflect the economics of each respective mining method.

Above 200 metres (cut-off US$12.50 RMV)
		Grade					Contained Metal
Category	Tonnes (m)	Silver (g/t)	Lead (%)	Zinc (%)		RMV (C$/t)	Silver (M oz)	Lead (M lbs)	Zinc (M lbs)
Indicated	2.19	53.7	0.73	0.87		50.40	3.8	35.2	42.0
Inferred	0.23	58.9	0.85	0.95		56.10	0.44	4.3	4.8
Below 200 metres (cut-off US$32.00 RMV)
		Grade					Contained Metal
Category	Tonnes (m)	Silver (g/t)	Lead (%)	Zinc (%)	RMV (C$/t)		Silver (M oz)	Lead (M lbs)	Zinc (M lbs)
Indicated	3.03	52.0	0.96	1.03	56.70		5.1	64.1	68.8
Inferred	0.42	53.9	0.98	1.03	58.00		0.73	9.1	9.5

Kootenay Options Prospective Gold/Silver Concessions to First Mexican Gold and International Millennium Mining

Kootenay Gold Inc. (TSX.V: KTN) is pleased to announce that it has entered into an Option Agreement with First Mexican Gold Corp (TSX.V: FMG) and International Millennium Mining whereby they can earn an undivided 60% interest in four properties, located in Sonora State, Mexico.

The Option Agreement allows First Mexican and IMI to acquire a 60% undivided interest by paying US$25,000 on signing, issuing an aggregate 1,200,000 common shares of FMG over 5 years and spending US$2 million on the property over 5 years. Plus Kootenay retains a 1% NSR interest which can be purchased for US$1 million. The earn-in period can be accelerated at the discretion of FMG. At completion of the earn-in a JV Agreement will be formalized.

States Kootenay President and CEO James McDonald, "We are very pleased to have First Mexican and IMI as a partner. Their aggressive consolidation of an 11,506 hectare land package contiguous with the Corex Gold Corp's Santana Property is an exciting development. Our exploration team has been diligent in advancing this prospect over recent months. The high grade gold results returned from assays and the multiple 1Kg+ Silver Targets identified to date supports that initiative and underlines the highly prospective nature of the prospect.

Adds Kootenay Chairman Ken Berry, "The First Mexican Gold joint venture provides our shareholders with multiple opportunities for new drill discoveries. As we continue to prioritize the aggressive ongoing development of our core asset the Promontorio Silver Project in Sonora, Mexico, we have now successfully joint ventured 18 of our 100% owned precious metals properties in Canada and Mexico. Collectively, these strategic partnerships afford Kootenay minimal financial exposure and up to $20.7 million in exploration expenditures over the next 5years."
 
See Full News Release Here:

Mexico’s Newest Emerging Silver Resource

Mexico’s Newest Emerging Silver Resource

Richard (Rick) Mills

Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

If you believe in the adage ‘mines are made, not discovered’  then the time has come to turn your attention to Kootenay Gold Inc. TSX.V – KTN.

Drawing from the experience of its management team, led by Company CEO and Chief Geologist James McDonald, Kootenay is applying the same pragmatic approach to its flagship Promontorio Silver Project in Sonora Mexico, that has helped companies McDonald has been associated with, such as Alamos Gold Inc., turn into accomplished producers.

Since first acquiring the historic past producer in 2005, Kootenay has taken no shortcuts in its quest to systematically exploit the vast silver resources believed to exist within Promontorio’s 79,000-hectare borders. Based on its success to date and the projects’ maturing status, the Company’s comprehensive approach appears to be paying off.

To summarize, detailed work conducted to date on Promontorio has included extensive ground exploration, till sampling, airborne geophysical, 3-D IP Survey, 3-D modeling along with 3-D geophysics and over 28,000 meters of drilling. Characterized by excellent grades and widespread silver mineralization, the highly focused, multi-phase strategy has been met with success at virtually every turn. Highlights from 49 drill holes in Promontorio’s Pit Discovery included 18.4 meters grading 950 g/t and 151 meters grading 162 g/t silver-equivalent.

Not surprisingly, Promontorio’s growing silver resource and its potential to develop into a substantial mining entity has not been lost on the investment community. A recently completed $6 million non-brokered financing, led by Sprott Asset Management and a consortium of institutional investors, has boosted the Company’s cash reserves to a healthy $11 million and paved the way to further fast track development on the project over the coming months. Going forward, the current multi-phase drilling program now underway on Promontorio is expected to play a vital role in establishing grades and continuity and the overall size and tonnage of the silver resource.

A 43-101 Resource Estimate released late last year shows the property contains indicated and inferred resources of over 10 million ounces of silver along with substantial amounts of lead and zinc. The overall contained metal values at Promontorio are now estimated at over $320 million. These are exciting developments considering many pundits believe the resource doesn’t have to get substantially larger before it starts looking like a mine.

Clearly, Kootenay has carried the momentum into its current 10,000 meter drill program now underway on Promontorio. Results from the first four drill holes have already extended silver mineralization 100 meters outside the current 43-101 Pit Discovery Zone with mineralization remaining open to the West, North, East and to depth.

Based on results to date, combined with management’s acute understanding of the Project’s geological control within large areas of widespread silver mineralization, Kootenay CEO James McDonald remains confident Promontorio contains a silver resource commensurate with other notable producers within Mexico’s Sierra Madre region.

“We have said all along the proof will be in the drill bit, and thus far it has yet to let us down. Based on supporting scientific data and the advancements we are seeing now, we have every reason to believe we have a viable shot to double or triple our current resource, or more, through the current program.” James McDonald, Kootenay Gold CEO

Granted results are going to be the determining factor, but there is no doubt the Company has good reason for its optimism. Doubling or tripling its current silver resource at Promontorio could drive the total contained metal values on the project to over $1 billion. In short, if objectives are met, Promontorio could well be a ‘Company Maker’.

At present, Kootenay is looking forward to receiving results from a series of recently completed drill holes that have been sent in for assaying from the current 10,000 meter program. To further accelerate its aggressive development on Promontorio, the Company says it expects to add a second drill rig to the program in the near future.

It should be very interesting to follow Kootenay’s developments on Promontorio over the coming weeks and months.

Is Kootenay Gold and its Promontorio Silver Project on your radar screen?

If not, maybe it should be.

Richard (Rick) Mills

rick (at) aheadoftheherd.com

www.aheadoftheherd.com

If you're interested in learning more about the junior resource market please come and visit us at www.aheadoftheherd.com.

Membership is free, no credit card or personal information is asked for.

***

Richard is host of www.aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.

***

Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.




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