Mr. Benjamin Mossman reports

BANKS ISLAND GOLD LTD. PROVIDES Q1 COST ANALYSIS FROM BOB BULK SAMPLE

Banks Island Gold Ltd. has provided an analysis of financial results for the first quarter of the 2015 fiscal year from the bulk sample program at the Yellow Giant gold property, located on Banks Island, British Columbia.

The company has released its financial statements and management discussion and analysis for the first quarter of the 2015 fiscal year for the period from March 1 to May 31, 2014. The financial statements can be accessed at SEDAR and should be read in conjunction with this news release.

In first quarter the company was mining and processing a bulk sample from the Bob zone at Yellow Giant property. Processing was done solely with gravity methods using the dense media separation plant and spiral concentrator.

Recovered and payable gold and silver sales recognized in first quarter were 5,175 ounces of gold equivalent as displayed in the associated table.

Recovered and payable gold figures are preliminary and subject to change based on final settlement of sales based on smelter and umpire assays. Recoverable and payable gold does not include concentrate production that was considered a work in progress as of May 31, 2014.

   Q1 RECOVERED AND PAYABLE GOLD IN CONCENTRATE

Gold                                        4,980 oz
Silver                                     12,657 oz
Gold equivalent                             5,175 oz

As the company is not yet in commercial production the proceeds and costs related to gold concentrate production are captured as deferred exploration expenses in the first quarter financial statements. Readers may reference a note in the company's first quarter financial statements for additional details.

The gross proceeds from concentrate sold in first quarter and the amount of concentrate inventory on hand as of May 31, 2014, was $7,011,000. The direct costs of production totalled $4,225,000 and include concentrate charges, royalties, site overhead, mining and processing. Income and mineral taxes are not included in this cost analysis. Details of the direct cost of production are displayed in the associated table.

       Q1 PROCEEDS FROM CONCENTRATE AND DIRECT COST OF PRODUCTION

                                                     $CDN        $CDN/oz
                                          
Proceeds from concentrate sold                 $6,124,000
Inventory of concentrate                         $887,000
Total proceeds from concentrate sold           $7,011,000         $1,355
Total concentrate charges                      $1,199,000           $232
Estimated royalties payable                      $184,000            $36
Site overhead                                    $681,000           $132
Mining                                         $1,208,000           $233
Processing                                       $954,000           $184
                                               $2,843,000           $549
Total direct cost of production                $4,226,000           $816

As discussed in previous news releases, the company has been constructing a grinding and flotation circuit to improve gold recovery and concentrate grade which is expected to have a significant positive impact on gold production and concentrate charges.

The company has provided a comparison of gold recovery, concentrate grade, and payable metals for the results of first quarter using DMS processing versus the metallurgical testwork for the Bob zone, as disclosed by news release on Oct. 22, 2012, for grinding and flotation processing is displayed in the associated table. Gold payable from concentrate varies with concentrate grade and is based on the sales contract with Metallica Commodities Corp.

This comparison illustrates the potential impact that the addition of the grinding and flotation sections will have on costs at the Yellow Giant property in the future. For example, an increased gold recovery would reduce site overhead, mining and processing costs on a per-ounce basis and increased concentrate grade would reduce concentrate charges on a per-ounce basis.

As discussed by news release on July 10 the company has a significant quantity of DMS fines which will be reprocessed using the grinding and flotation sections in order to recover gold that was not recoverable from processing through the DMS plant during first quarter.

          PROJECTION OF GRINDING AND FLOTATION CIRCUIT ADDITION


                                          Q1   Testwork    Variance

Estimated gold recovery                  68%         93%        +37%
Average concentrate grade             58 g/t     127 g/t       +119%
Average payable gold                   88.7%       90.5%         +2%

Benjamin Mossman, PEng, is the qualified person who reviewed and approved the contents of this news release.

The company is not basing its production decision on a feasibility study of mineral reserves with demonstrated economic and technical viability. Banks Island Gold has decided to put the property into production without first establishing mineral reserves supported by a National Instrument 43-101-compliant technical report and feasibility study. The company cautions readers that such production may not be economically feasible and historically such projects have a much higher risk of economic or technical failure.

We seek Safe Harbor.