EDMONTON, ALBERTA--(Marketwire - March 2, 2011) - On behalf of the entire management team at Bandera Gold (News - Market indicators), I am pleased to provide shareholders with this update on the progress of the first ever drilling program at our Belmira project in Colombia. Our South American affiliate, Nueva California S.A., has commenced its Phase I drill program as laid out in previous reports. The program consists of 16 holes totaling 4,030m and is to verify the lateral and vertical continuity of the Filandia hydrothermal system which totals some 11 kilometers in identified strike length.

Our first hole drilled targeted a secondary zone in a more accessible area, known as La Ilusion. This area had been identified through our earlier surficial programs and was thought to contain a series of gold bearing veinlets. Drilled to a depth of 278.8m at an angle to the horizontal of -55 degrees, this hole intercepted a series of quartz-calcite-pyrite veinlets distributed along its total length including one fault zone between 32-34 meters yielding 1.372 grams per tonne (1372ppb). The most significant zone of mineralization-fracturing-brecciation was encountered between 120-140 meters but contained negligible gold values.

All continuing holes are addressing the Filandia as per the inset diagram. (The full exploration Up-date Report from which this was derived, including plan and sections referred to herein can be found on the Company Web Site www.banderagold.com).

The Filandia vein dips generally towards the south west but can be vertical to north east dipping. All holes are located to the south west of this structure and drilled to the north east. Host rocks are Intrusive Igneous rocks of the Granodiorite / Tonalite type referred to here as granodiorites. Near surface rocks are heavily weathered and altered to a very clayey state referred to as saprolite. This material provides for very poor recovery and prohibits accurate near surface core logging but has been known to contain values in gold-rich areas.

Holes BE10-02 (251.8m) and BE10-03 (440.6m) were both drilled at -55 degrees and N40°E bearing to intersect the Filandia Vein at right angles to the strike (see cross section F-1). Hole BE10-02 intersected a 7m white massive crystalline quartz vein containing no interesting gold values which is above the upper limit of identified gold mineralization. Filandia was intercepted from 224 to 231m yielding quartz with some pyrite but no meaningful gold values. The most interesting intersection in this hole correlated with a similar intersection in BE10-03 comprising a quartz-feldpar-biotite schist with abundant calcite veining and pyrite/pyrrhotite exceeding more than 3%. The following table provides details from BE10-02 and BE10-03:

Hole BE10-03 did not intersect any formalized structure that could readily be identified as the Filandia which could be due to a localized steepening in vein dip or faulting and offset.

The next hole, BE11-05 (125m at -55 degrees - see cross section F-3), was drilled in the same direction as BE10–02 and BE10-03 but 400 meters to the south east. From 79 to 81 m depth, a fractured white quartz vein (Filandia), typical of artisan mined veins in the area with goethite and limonite staining and small (less than 1mm) metallic mineral grains that could be free gold was intersected - we await assay results from SGS laboratory services at Lima. We are presently drilling BE11-05A at -75 degrees from the same location as BE10-05 to enlarge on the previous finding and get a down dip vein intersection. Results will be reported in our next communication.

Analytical results of holes presently completed, do not show any significant gold values on the Filandia system. However, as shown on cross section F-1, holes BE10-02 and BE10-03 detected a 130m dip extent of a wide, 10-30m, zone in true width and averages in the order of 0.283 and 0.526 grams per tonne Gold. In accordance with the established geological mineralization model, it is possible that the gold content may increase at depth. Laterally, BE11-04 will be drilled at 200 m distance to the north east to better identify this zone. If BE11-04 intercepts this gold mineralized zone, the probability of discovering a large gold deposit will be high.

Further, as is shown on section F-3, the newly located hole BE11-05A and the future BE11-06 will be orientated to demonstrate the Filandia vein continuity at depth and below the postulated upper limit of gold mineralization. Future drill site locations and dips may be re-considered as more information becomes available. Once we have proven the model within Filandia at depth, we will know that we have a structure of significance (not just longitudinally). It should be noted that while it is not normal in a major gold bearing structure to have gold mineralization throughout, economically recoverable values are often found in lenses throughout a structure often plunging within a vein to great depths. We should trust that future drill holes may encounter one or more of these zones at which time we would modify our drilling program with closer spaced holes to follow any zone encountered. This is a normal sequence in first stage exploration.

We are pleased with this early progress. With each drill hole that is logged our geologists learn more about the nature and extent of the mineralized systems. This information will assist us with our future work. We are still in the very early stages of what we believe will be an extremely exciting exploration effort. There are many targets on the property that we plan to investigate as we continue our exploration program.

As we continue with the drilling work we expect to receive assay results regularly and will report updates in subsequent news releases in the weeks ahead. We thank our shareholders for their ongoing confidence and patience.

On behalf of the Board

Kelvin Williams, CEO

Geological comments in this letter have been provided by our Chief Geologist and Project Manager, Mr Julio Mendez Garcia, and have been released for publication by our NI 43-101 Qualified Person, Sr Baltazar Solano Rico, President, Behre Dolbear de Mexico. Full disclosure of the Report that forms the basis of these comments can be viewed on www.banderagold.com.

Information provided herein contains forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, which are considered reasonable by Bandera at the time of preparation, may prove to be incorrect. Actual results achieved will vary from the information provided and the variations may be material. There is no representation by Bandera that actual results achieved will be the same in whole or in part as those indicated in the forward-looking statements.

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