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Kootenay Gold Inc. (KTN)

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Monday 31 March, 2008

Kootenay Gold Inc.

Kootenay Options Six Mexican Mineral Concession...





VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- 03/31/08 --  Kootenay
Gold Inc. ("Kootenay") (TSX VENTURE: KTN) is pleased to announce the
completion of six option agreements with Klondike Silver Corp.
("Klondike") (TSX VENTURE: KS) on six of Kootenay's 100% owned
mineral concessions in the Sierra Madre Region of Northwest Mexico.
Kootenay acquired the six properties through mineral concession
staking and a payment of 150,000 shares as a finder's fee.

Under the terms of each option agreement, Klondike can earn a 50%
undivided interest in the mineral concession by incurring or funding
a minimum of US$1,000,000 in exploration expenditures in stages over
three years and issuing 500,000 shares to Kootenay in stages over two
years. In order for Klondike to earn an undivided interest in all six
mineral concessions, Klondike must incur or fund minimum exploration
expenditures totaling in the aggregate $6,000,000 (US$1,000,000 on
each mineral concession) and issue to Kootenay an aggregate of
3,000,000 shares (500,000 shares per mineral concession). The options
are subject to Klondike obtaining regulatory approval.

The six concessions selected by Klondike include two epithermal
precious metal settings (Suzanne and Ofelia), three porphyry settings
(Los Alamos, Cerro Colorado and Espiritu) and one skarn (Los Chinos).
All the prospects have received little or no modern exploration and
evidence of old exploration is noted on four of these, by small adits
and pits; none have evidence of past drilling. From north to south,
these concessions include:

1. Ofelia Epithermal Gold/Silver Prospect

The Ofelia concession is located some 40-50 km northeast of the
village of Huasaba some 250 km east of the city of Hermosillo. Its
most eastern part is transected by the main paved Sierra Madre
highway. The property is comprised of two concessions totaling about
9,667 hectares.

The area is underlain by northerly trending, steeply dipping
rhyolite, dacites and andesites locally with intense argillic
alteration. In the area east of the highway, within a massive to flow
banded rhyolite, grabs from veins and stockworks (10 to 200 cm width)
of quartz, gave values of gold to 5,760 ppb (ppb equals parts per
billion and 1000 ppb equals 1 gram per tonne) and silver to 469 ppm
(ppm equals parts per million and 1 ppm equals 1 gram per tonne)
within an approximately 500 x 500 metre area. In total 19 grab
samples have been taken with 6 of 19 containing greater than 100 ppb
Au and 7 of 19 containing greater than 10 ppm silver.

A block of "acid-leach" silica containing 1,180 ppb gold and 180 ppm
silver was found as proximal float near the road in the south part of
the property

2. Suzanne Epithermal gold/silver/lead/zinc Prospect

The Suzanne concession is located at the southern end of a major Late
Tertiary graben within the Huasaba valley, about 200 km east of
Hermosillo. This prospect consists of about 12,960 hectares in one
concession.

Very strong argillic alteration marking a number of northerly
trending shear zones lead to the discovery of an epithermal, low
sulphidation gold/silver/lead/zinc vein system. This vein system
hosts quartz vein and breccia up to 5 metres width and traceable for
up to 1000 metres along strike. Grab samples from along this vein
gave results of gold (to 600 ppb), silver (to 580 ppm) and highly
anomalous lead (to 5%) and zinc (to 10%). Gold and silver values from
grab samples ranged from background to the highs noted above.

3. Los Chinos zinc/gold/copper skarn prospect

The Los Chinos area is some 250 km from Hermosillo and 30 km north of
the village of Sahuaripa on the east side of the Yaqui River. The Los
Chinos project is 10,000 hectares in areal extent.

The skarn area traceable for some 2,000 metres has formed along the
lower contact of a thick limestone unit with a granodiorite. The
skarn is represented by lenses, pods and masses of magnetite,
siderite, ankerite with local zones marked by garnet (grossular) with
the presence of epidote and actinolite noted. Locally, sections of 4
to 10 meter thick lenses of magnetite are exposed. Limited sampling
has indicated the presence of anomalous zinc mineralization (to
2,000+ ppm) and anomalous gold (116 ppb) and arsenic. The remainder
of values are in background levels.

4. Espiritu Porphyry-polymetallic
gold/silver/copper/lead/zinc/molybdenum/ tungsten Prospect

The Espiritu alteration zone is located some 20 km east of the pueblo
of Sahuaripa at the head of arroyo Espiritu. The project covers
approximately 10,000 hectares

The pervasive alteration covering some 1-2 km x 5 km area define the
Espiritu area. The alteration includes variations of propylite, iron
carbonate, argillic (kaolinitic), phyllic (sericite), tourmaline and
biotite. The presence of "leach-cap" weathering features have been
noted from a number of locations. Secondary copper mineralization has
been noted. The northeastern portion of the alteration zone is marked
by a distinctive "kill" zone.

Grab samples from across the area showed gold to 4,000 ppb (9 of 30
samples greater than 100 ppb), silver to 1,200 ppm (10 of 30 samples
greater than 30 ppm) and strongly anomalous copper (to 3,700 ppm),
lead (to 2.5%), zinc (to 1%), molybdenum (to 800 ppm) and tungsten
(to 1,000 ppm). The Espiritu prospect appears to host a complex
system of mineralization that includes precious metal veins,
lead/zinc/silver stockworks and porphyry potential.

Espiritu bears similarities to Kootenay Gold's Promontorios Ag
project.

5. Cerro Colorado Porphyry copper/gold/silver/molybdenum/tungsten
Prospect

The Cerro Colorado prospect is located about 25 km northwest of the
city of Obregon.

Mineralization comprises east-trending, subvertical veins and
veinlets (2 cm to 50 cm) of quartz with boxworks of goethite and
jarosite hosted in granitic intrusions. Selvages of sericitic
alteration encase the veins. The veins and veinlets are anomalous in
gold (to 495 ppb), silver (to 100 ppm), molybdenum (to 450 ppb) and
tungsten (to 250 ppm). Much of the area is covered by overburden.
Seventeen grab samples have been taken and values range from
background to the highs noted above.

6. El Alamos Porphyry prospect.

The El Alamo prospect is located some 20 km southeast of the city of
Obregon.

The area is one of very low relief and very poor outcroppings. Local
zones of subcrop comprise altered porphyritic andesite and
fine-grained intrusive, locally as breccias.

Intermittent sub-croppings over an area of some 1 x 3 km show
mineralization comprised of small veinlets of quartz, goethite and
jarosite, and locally "live-hematite", suggestive of the former
presence of secondary enrichment. Magnetite has been noted as
proximal float within the sub-crops and locally quartz fragments with
minor copper staining.

Final title has been received for the concessions covering the
Ofelia, Suzanne, Los Chinos Skarn and Espiritu prospects while the
solicitudes for Cerro Colorado and El Alamos are still awaiting final
titling.

All samples were individually bagged, numbered, tied and then
delivered to the preparation laboratory of IPL (International Plasma
Labs of Richmond, B.C. Canada) Laboratories in Hermosillo, Sonora
Mexico where a pulp of each sample was prepared and sent to Richmond,
B.C. for analysis. Each sample was then analyzed using a multi acid
digestion ICP (Inductively Coupled Plasma) measuring 30 elements with
gold and silver being measured with a fire assay and an AAS finish.

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.

Kootenay has also issued a total of 970,000 incentive stock options
exercisable for a period of five years at $1.95 per share to various
consultants and employees 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.

View a live interview with Jim McDonald on Kootenay's vision and
strategy visit www.kootenaygold.ca.

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.

Contacts:
Kootenay Gold Inc.
James McDonald
CEO
(403) 238-6986

Kootenay Gold Inc.
Ken Berry
President
(604) 601-5652 or 1-888-601-5650
Website: www.kootenaygold.ca






                                

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