Banks Island Gold Ltd. Reports Drill Intersection of 21gpt Gold (0.61oz/ton) Over 10.4m (7.4m Estimated True Width)

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Jan. 9, 2012) – Banks Island Gold Ltd. (TSX VENTURE:BOZ) (the "Company") announces that it has received assay results for ten of nineteen diamond drill holes (2,158m) completed at the Tel Zone in December 2011. Assays for the remaining holes are pending and will be reported when received.

Diamond drilling was focused in the area of the current Inferred Resource at the Tel Zone. Highlights from the recent drilling include an intercept of 20.7gpt Au, 55gpt Ag, 1.3% Cu, and 12.0% Zn over 10.4m in drillhole BIG-11-15 and 64.4gpt Au, 25gpt Ag, and 2.3% Zn over 1.3m in drillhole BIG-11-13. Significant mineralized intersections are displayed in Table 1.

Mr. Mossman, CEO of the Company stated; "Recent drilling at the Tel Zone illustrates the potential for discovery of significant gold values over substantial widths. With the resource definition drilling at Tel essentially complete, drilling will now focus on exploring and expanding the Tel Zone resource at depth. We are excited about the excellent potential of the Tel Zone which is developing into a significant high grade gold resource."

Table 1 – Significant Mineralized Intersections
Hole From (m) To (m) Core
Interval (m)
Estimated
True
Width (m)
Au (gpt) Ag (gpt) Zn (%)
BIG-11-11 84.65 85.00 0.35 0.25 12.5 3 0.5
BIG-11-13 61.73 63.07 1.34 0.95 64.4 35 2.3
BIG-11-15 33.63 43.49 10.36 7.36 20.7 55 12.0
BIG-11-17 51.34 52.56 1.22 0.74 11.4 32 6.2
BIG-11-22 31.90 34.00 2.10 1.45 38.4 55 4.9
BIG-11-23 18.82 19.39 0.57 0.41 42.4 63 10.9
BIG-11-23 45.03 45.88 0.85 0.61 49.7 55 3.5
BIG-11-24 122.40 125.35 2.95 2.52 14.1 19 0.3
BIG-11-24 125.35 134.50 9.15 7.82 1.5 0 0.0

Drillhole BIG-11-24 intersected a mineralized intercept of 12.1m, with the hanging wall portion assaying 14.1gpt Au over 3.0m and the footwall portion assaying 1.5gpt Au over 9.2m. The mineralization in this intercept was highly oxidized resulting in poor core recovery. The Company plans further drilling in this area to determine if a widening in the vein is present similar to that discovered in drillhole BIG-11-15.

With definition drilling inside the current resource effectively complete, the Company plans to target the potential projection of the mineralized zone to depth. The current resource at the Tel Zone is open at depth and is currently defined to a depth of only 150m below surface. The Company anticipates that diamond drilling at the Tel Zone on Banks Island will recommence shortly.

Dr. Dirk Meckert, PhD, P.Geo is the qualified person who reviewed and approved the contents of this news release.

Analytical work was carried out by AGAT Laboratories Ltd. in Mississauga, Ontario. Quality assurance and quality control programs include the use of analytical blanks, standards, and duplicates in addition to the lab's own internal quality assurance program. Samples are fire assayed with an ICP-EOS finish to determine gold values. Samples containing greater than 10 g/t gold are fire assayed with a gravimetric finish.

The Company is a junior mining resource exploration company focused on exploring for and developing economically viable mineral resources. The Company's mineral property is located in British Columbia. For more information, please refer to the Company's website atwww.banksislandgold.com.

ON BEHALF OF THE BOARD OF DIRECTORS

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

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.

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.