Banks Island Closes First Tranche of Non-Brokered Private Placement Offering

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES


Banks Island Gold Ltd. ("Banks Island" or the "Corporation") (TSX VENTURE:BOZ)
is pleased to announce that it has closed the first tranche of its previously
announced non-brokered private placement offering (the "Offering"). 


In connection with the closing of the first tranche of the Offering, the
Corporation has issued 2,449,667 Units and 4,715,000 Flow Through Units for
gross consideration of $3,459,850.15, less previously announced finder's fees.
The Offering consists of up to 8,444,444 Units at a price of $0.45 per Unit and
$0.50 per Flow Through Unit. 


Each Flow-Through Unit consists of one flow-through common share and one half of
one non-transferrable share purchase warrant. Each whole warrant entitles the
holder thereof to acquire one non flow through common share in the capital of
the Company at a price of $0.60 per Common Share for a period of twenty-four
months following closing of the financing.


Each Common Share Unit consists of one Common Share and one non-transferable
share purchase warrant. Each whole warrant entitles the holder thereof to
acquire one common Share at a price of $0.60 per Common Share for a period of
twenty-four (24) months following the closing of the Offering. 


The Company will pay to certain finders, including Secutor Capital Management
Corp., a fee equal to 8% of the gross proceeds received by the Company from the
sale of certain of the FT Units and NFT Units and will issue finder warrants
("Finder Warrants") entitling certain finders to purchase that number of shares
of the Company equal to 8% of the total number of NFT Units and FT Units sold
pursuant to the Offering. 


The Company intends to use the net proceeds of the Offering for continued
exploration and development activities on its Yellow Giant Gold Property located
on Banks Island in British Columbia.


The securities have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the "1933 Act"), or under any state
securities laws, and may not be offered or sold, directly or indirectly, or
delivered within the United States or to, or for the account or benefit of, U.S.
persons (as defined in Regulation S under the 1933 Act) absent registration or
an applicable exemption from the registration requirements. This news release
does not constitute an offer to sell or a solicitation to buy such securities in
the United States.


The Company is a mining company focused on gold production, exploration, and
development of economically viable mineral resources. The Company's mineral
property is located in British Columbia. For more information, please refer to
the Company's website at www.banksislandgold.com.


ON BEHALF OF THE BOARD OF DIRECTORS

Benjamin W. Mossman, P.Eng, President, Director, & Chief Executive Officer

The TSX Venture Exchange has not reviewed and does not accept responsibility for
the accuracy or adequacy of this release. Neither the TSX Venture Exchange nor
its Regulation Service Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this release.


This press release contains forward-looking statements. All statements, other
than statements of historical fact, constitute "forward-looking statements" and
include any information that addresses activities, events or developments that
the Company believes, expects or anticipates will or may occur in the future
including the Company's strategy, plans or future financial or operating
performance and other statements that express management's expectations or
estimates of future performance.


Forward-looking statements are generally identifiable by the use of the words
"may", "will", "should", "continue", "expect", "anticipate", "estimate",
"believe", "intend", "plan" or "project" or the negative of these words or other
variations on these words or comparable terminology. These statements, however,
are subject to known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or achievements of the
Company to be materially different from those expressed, implied by or projected
in the forward-looking information or statements. Important factors that could
cause actual results to differ from these forward-looking statements include but
are not limited to: risks related to the exploration and potential development
of the Company's project, the actual results of current exploration activities,
conclusions of economic evaluations, changes in project parameters as plans
continue to be refined, future prices of gold, as well as those factors
discussed in the sections relating to risk factors of the Company prospectus
dated September 30, 2011 filed on SEDAR.


There can be no assurance that any forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader should not place any
undue reliance on forward-looking information or statements. Except as required
by law, the Company does not intend to revise or update these forward-looking
statements after the date of this document or to revise them to reflect the
occurrence of future unanticipated events.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Banks Island Gold Ltd.
Benjamin W. Mossman
604-245-0066