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Otis Commences First Phase Drill Program at Flagship Kilgore Gold Project in Clark County, Idaho

Otis Gold Corp. ("Otis" or the "Company") is pleased to announce that it has commenced a first phase 5,500-meter, 20-hole drill program at its flagship Kilgore Gold Project, Clark County, Idaho. This program will be funded from existing capital on hand and funds generated from the recently announced private placement (see News Release dated June 30, 2016 and July 13, 2016). This program is expected to take between eight to ten weeks to complete and a second phase program is planned to follow shortly thereafter.

Most of the first phase drilling will be concentrated in the northwestern half of the Kilgore Deposit (see background note below), particularly in and around the "Crab Claw" west of the Mine Ridge Fault where 10 holes drilled last year encountered significant mineralization, with 6 of these holes bottoming in mineralization hosted by Tertiary sill material and Late Cretaceous Aspen Formation basement sedimentary rocks. Noteworthy open-ended intercepts of significant thickness and grade from the area include 94.5 metres (m) of 4.21 grams per tonne (g/t) gold (Au) in hole 15 OKR-309, 50.3 m of 4.24 g/t Au in hole 15 OKR-308, 56.4 m of 2.05 g/t Au in hole 15 OKR-304, and 100.0 m of 0.57 g/t Au in hole 15 OKR-302 (see Otis Gold News Release dated January 8, 2016). These high average gold grades and extensive open-ended intercept thicknesses represent some of the strongest drilled to date at Kilgore by both Otis and prior operators.

This year's drilling will focus on further extending these mineralized holes to depth with both reverse circulation ("RC") and core drilling. Additional holes will be placed throughout areas within the northwestern half of the deposit, including the Crab Claw, as infills, extensions, and offsets of known mineralization to complete cross-sectional panels. Finally, several holes will be placed on Aspen Formation-hosted higher-grade mineralized intercepts in the northern part of the deposit that remain open-ended at depth, but were never followed up on (30.4 m of 2.53 g/t Au in hole 10 OKC-210 and 30.5 m of 2.81 g/t Au in hole 10 OKC-220; see Otis Gold News Releases dated September 8, 2010 and February 11, 2011).

The RC drilling will be conducted by O'Keefe Drilling of Butte, Montana using an articulated Foremost 650 buggy drill rig. The rig is currently being mobilized from Nevada. The core drilling will be conducted by Timberline Drilling of Hayden Lake, Idaho employing an LF-90 drill rig. The drilling will be staged with the RC rig starting in advance of the core rig to allow for RC pre-collaring of the planned deeper core holes in the Crab Claw area. HQ-diameter-size core will then be obtained for geological and assay evaluation of the potentially mineralized deeper portions of the holes.

Paul Gray, P. Geo., a Qualified Person (QP) as defined by National Instrument Policy 43-101, is responsible for the technical information contained in this news release.

About the Kilgore Deposit

The Kilgore Deposit contains a NI 43-101 Indicated Resource of 520,000 ounces (oz) Au in 27.4 million tonnes at a grade of 0.59 g/t Au and an Inferred Resource of 300,000 oz Au in 20.2 million tonnes at a grade of 0.46 g/t Au. The deposit is part of an extensive zoned low-sulfidation quartz-adularia epithermal hot-spring system hosted in volcanic rocks of late Miocene age and basement Aspen Formation calcareous siltstone, shale, and sandstone of Late Cretaceous age. Gold mineralization is of the classic disseminated, bulk-tonnage type similar to that comprising the classic and world-class size volcanic-hosted gold deposits at Round Mountain, Nevada and McDonald Meadows, Montana.


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