Banks Island Gold Ltd. Closes First Tranche of $3 Million Non-Brokered Financing

Banks Island Gold Ltd. (the “Company”) (TSX VENTURE:BOZ) is pleased to announce that, further to its news release dated March 29, 2012, it has closed the first tranche of the non-brokered private placement and has issued 1,866,666 Units at a price of $0.60 per Unit for gross proceeds of $1,120,000. Each Unit is comprised of one common share of the Company and one half of one non-transferrable share purchase warrant. One whole warrant entitles the holder to purchase one additional share of the Company at a price of $1.00 per share. The term of the Warrants was originally set at one (1) year expiring on April 19, 2013, but the Company has extended the term to two (2) years, with the expiration of the Warrants being April 19, 2014. If, during the exercise period of the Warrants, the closing price of the Company’s common shares is $1.50 per share or higher for 20 consecutive trading days, the Company may accelerate the expiry date of the Warrants to 30 days from the date written notice of same is provided to the holders. The securities are subject to a hold period which expires on August 20, 2012.

The Company has also issued an aggregate of 133,333 common shares as a finder’s fee in connection with the financing.

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

The Company is currently working towards completing the balance of the private placement of $1,800,000, which is expected to close on or before May 15, 2012 and which is subject to receipt of applicable regulatory approvals including approval of the TSX Venture Exchange.

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) without such registration or without 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 junior mining resource exploration company focused on exploring for and developing economically viable mineral resources. The Company’s mineral property is located on Banks Island 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.