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Banks Island Gold Ltd. Clarifies Technical Disclosure

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/06/13 -- Banks Island Gold Ltd. (TSX VENTURE:BOZ) (the "Company") reports that as a result of a review by the British Columbia Securities Commission (BCSC), the Company is issuing the following news release to clarify our disclosure.

The Company is now filing amended technical reports on its Banks Island (Yellow Giant) and Red Mountain properties. An amended Banks Island report was required to carry forward a previous Preliminary Economic Analysis (PEA), to apply gold grade cutting to the Kim deposit, and to provide additional information required by NI 43-101 about assumptions, parameters, and methods used for resource estimates. There are no material changes to resources and no changes to the previous PEA in the amended Banks Island report.

The Red Mountain report required amendment to document a personal property inspection required by NI 43-101, and to provide additional information about assumptions, parameters, and methods used for resource estimates. There are no changes to the Red Mountain resource estimate and PEA in the amended Red Mountain Report.

Additional details about the amended reports are in following sections of this news release.

Clarification of Non-Compliant Disclosure by Fundamental Research Corp.

Fundamental Research Corp. (Fundamental) distributed a report dated November 5, 2012 (the "Fundamental Report"). Banks Island Gold has no control or influence over Fundamental. All reports prepared by Fundamental are the work and property of Fundamental and they bear the full responsibility for those reports. The Company cautions readers that the Fundamental Report is not complaint with NI43-101, for example it summarized the Company's PEA at Yellow Giant without disclosing the type of mining study (a PEA), and omitted mandatory cautionary language always required by NI 43-101 with disclosure of PEA results. In particular, the Yellow Giant PEA is preliminary in nature, is based on inferred resources that are too speculative geologically to have economic considerations applied that would enable them to be categorized as mineral reserves, and there is no certainty the PEA will be realized. Mineral resources that are not reserves do not have demonstrated economic viability.

The Fundamental Report also disclosed a change to parameters of the PEA, which the Company cannot support at this time. The company disassociates itself from this and other information in the Fundamental Research Report.

Clarification of disclosure in Corporate Website, Investor Presentation, and Factsheet

The Company's provides clarification of its December 2012 Investor Presentation (the "Presentation"), a Fact Sheet, and additional information on the Corporate website.

1.  The Presentation disclosed a "mineable resource"; a class restricted
    under NI 43-101. The Company retracts the use of the term "minable
    resource" and has removed it from all materials. 
    
2.  The Presentation included resource estimates not compliant with N43-101.
    To correct this, the Company has revised its mineral resource statements
    to always include classifications, disclose all classes of Mineral
    Resources separately, and not add inferred quantities to other classes. 
    
3.  The Corporate Presentation disclosed a high-grade subset of the current
    Red Mountain resource estimate. This disclosure omitted resource
    classifications and was not supported by the current Technical Report.
    The Company retracts this high-grade subset resource estimate. 
    
4.  The Company's website disclosed that the Yellow Giant Property has
    "potential for a major ore deposit" and provides a definition of a major
    ore deposit using a large gold ounce quantity. The Company retracts this
    gold ounce quantity, which did not comply with NI 43-101 rules for
    disclosure of a potential exploration target and is unsupported in the
    current Technical Report, and cautions that "a major ore deposit", may
    or may not exist on the Property. 
    
5.  The company's Presentation also disclosed exploration potential at
    Yellow Giant using a large gold ounce quantity with a fixed gold grade,
    and by comparing it to a significant deposit in British Columbia. As
    previously indicated, the Company retracts prior disclosure of
    exploration potential on the Property, as it is unable to provide a
    basis for such estimates, and its disclosure failed to use ranges of
    grade and tonnes, and did not include cautionary language always
    required by NI 43-101 for potential exploration targets. 
    
6.  The Presentation displays a graph displaying cashflows projected from
    the 2011 PEA study at Yellow Giant at various gold prices. The graph
    highlights cases with gold price higher that the PEA's $1360/oz base
    case, does not identify the base case, and does not equally present
    downside gold price risk. The Company retracts the information contained
    in this graph. 
    
7.  The Company's December 2012 Factsheet (the "Fact Sheet") displays
    information form the 2011 PEA at a $1700/oz gold price, but omits the
    $1360/oz base-case of the PEA. The Company retracts this information and
    will provide balanced sensitivities around the base-case in future
    disclosure. 
    
8.  A map showing historic production and current resources of various
    properties contained in the Company's presentation and Factsheet had an
    error which overstated the mineral resources at Red Mountain. The M&I
    resource at Red Mountain contains 435,000oz of gold and not 540,000oz as
    was shown in that figure. This error has been corrected. 
    
9.  The resource table in the Presentation contained an error in the silver
    grade of the M&I resources for Red Mountain. The average silver grade of
    the M&I resources at Red Mountain is 29gpt Ag and not 39gpt Ag as shown
    in the table. This error has been corrected. 

Clarification Regarding Production Decisions and Development Periods

The Company disclosed information on its Presentation with production plans and schedules which are not supported by a technical report. The Company is actively working on bringing the Yellow Giant Gold Property into production within the next 12 months. However, readers are cautioned that the Company has not completed a pre-feasibility or feasibility study which establishes mineral reserves with demonstrated economic and technical viability. Further, the Company cautions readers that any potential production may not be economically feasible and historically projects taken to production without establishing reserves through a feasibility study have a much higher risk of economic or technical failure.

The Company is currently evaluating its plans for the advanced Red Mountain Gold Property. The Company plans to do further technical and geological work in the summer of 2013 which will be used in studies to evaluate mining rates, methods, permitting, and site infrastructure. The company does not currently have the financial capability to advance the Red Mountain project to a production decision and retracts information on the timing of any potential production from Red Mountain which was disclosed in the Presentation.

Amended Technical Report for the Banks Island Mineral Property (Yellow Giant) Property

The Company has previously released a Preliminary Economic Assessment (the "2011 PEA") for the Yellow Giant Gold Property which is contained in the technical report "Technical Report & Preliminary Economic Assessment on the Banks Island Mineral Property" dated November 23rd 2011 authored by Robert Baldwin, P.Eng. Subsequent to the release of the 2011 PEA, the Company released a resource update for the Banks Island Mineral Property technical report "Resource Update on the Banks Island Mineral Property" dated October 22th 2012 (the "2012 Report") by Robert Baldwin P.Eng.

The company has amended its Technical Report to include the results of the 2011 PEA. The 2011 PEA was based on a previous current inferred resource estimate contained in the 2011 PEA document. The PEA's information has not been updated to consider the revised mineral resource statement in the current Technical Report. The current Technical report summarizes the PEA results and presents the key conclusions and recommendations reproduced. Mr. Baldwin considers that significant components of the 2011 PEA remains valid. The author has included a commentary in the current technical report regarding the potential effects of the revised resource estimate on the results of the 2011 PEA.

The amended Technical Report provides further details on the selection of cut-off grades and additional information on the selection of search ellipsoids for the resource block model.

The amended Technical Report incorporates a grade cap for the Kim Zone. Mr. Baldwin applied a 98 percentile grade cap for the Kim Zone which resulted in a revised estimate for the Kim Zone as displayed in Table 1. The cut grade for the gold at the Kim Zone resulted in a reduction from 9.0gpt Au to 8.7gpt Au.

Table 1 - Kim Zone Inferred Resource - Effect of Grade Capping              
                                                                            
----------------------------------------------------------------------------
                                  Au   Au - Cut (1)        Ag   Ag - Cut (2)
Zone                Tonnes     (g/t)          (g/t)     (g/t)          (g/t)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Kim                 59,000       9.0            8.7      29.5           22.0
----------------------------------------------------------------------------
(1) - Au grades cut to 55 g/t                                               
(2) - Ag grades cut to 116 g/t                                              

There is no change in the mineral resource calculation for the Bob, Tel, and Discovery Zones previously disclosed in the news release dated October 22nd 2012.

The Company clarifies the cut-off grade used in the calculation of the mineral resource for Yellow Giant is 6gpt gold.

Mr. Baldwin, P.Eng prepared an updated current Mineral Resource estimate for four mineral zones at Yellow Giant incorporating diamond drilling completed in 2011 and 2012. Mr. Baldwin modeled the significant mineralized zones at Yellow Giant and calculated the Mineral Resource for gold and silver using a 6gpt cutoff grade. The current Mineral Resource is displayed in Table 2 and is effective as of February 1th 2013. The resource calculation incorporates a 98th percentile top capping of gold and silver assays.

Table 2 - Yellow Giant Mineral Resource at a 6gpt cutoff grade              
                                                                            
----------------------------------------------------------------------------
                 Measured              Indicated             Inferred       
          ------------------------------------------------------------------
                       Au     Ag             Au     Ag             Au     Ag
                    Grade  Grade          Grade  Grade          Grade  Grade
Zone        Tonnes  (gpt)  (gpt)  Tonnes  (gpt)  (gpt)  Tonnes  (gpt)  (gpt)
----------------------------------------------------------------------------
Tel         15,000   21.1     43  21,000   18.5     41   8,000   20.6     40
Bob          6,000   32.0     63  11,000   30.9     58   8,000   29.3     50
Discovery   10,000   22.1     36  15,000   22.8     36   6,000   30.8     36
Kim                                                     59,000    8.7     22
----------------------------------------------------------------------------
Total       31,000   23.4     44  47,000   22.7     43  81,000   13.7     28
----------------------------------------------------------------------------
                                                                            
Total Measured &    78,000 tonnes @ 23.0gpt=57,624oz Gold, 109,000oz Silver 
Indicated:          Au & 44gpt Ag                                           
                                                                            
Total Inferred:     81,000 tonnes @ 13.7gpt=35,678oz Gold, 73,000oz Silver  
                    Au & 28gpt Ag                                           

The NI 43-101 Technical Report on the Yellow Giant Gold Property dated February 1st 2013 was prepared by independent consultant, Mr. Robert Baldwin, P.Eng, has been posted on SEDAR and will be available on the Company's website.

Amended Technical Report - Red Mountain Gold Property

The Company has amended its Technical Report on the Red Mountain Gold Property.

The amended Technical Report provides further details on Mr. Baldwin's 2012 site visit to Red Mountain (disclosed by previous new release on Oct 15, 2012), additional details on the selection of cut-off grades, and additional information on the selection of search ellipsoids for the resource block model.

There are no changes to the PEA results and Mineral Resource calculation previously disclosed in the news release dated June 18th 2012.

The Company clarifies the cut-off grade used in the calculation of the mineral resource at Red Mountain is 3gpt gold.

The NI43-101 Technical Report & Preliminary Economic Assessment on the Red Mountain Gold Property dated February 1st 2013 was prepared by independent consultants, Mr. Robert Baldwin, P.Eng and Mr. Lyn Jones, P.Eng., has been posted on SEDAR and will be available on the Company's website.

Mr. Benjamin Mossman P.Eng, CEO of Banks Island Gold is the qualified person who reviewed and approved the contents of this news release.

The Company is a junior mining resource exploration company focused on exploring for and developing economically viable mineral resources. The Company's mineral properties are 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

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.

Contacts:
Banks Island Gold Ltd.
Benjamin W. Mossman, P.Eng
President, Director & Chief Executive Officer
604-245-0066
www.banksislandgold.com

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