Edmonton, Alberta. Bandera Gold Ltd. (The ?gCompany?h) has been made aware by its Mexican counsel that the Mexican Supreme Court has ruled on the Company?fs petition for review of the constitutionality of a previous decision of September 30, 2010 by the 5th Collegiate Court of Jalisco, acting as an ?gamparo?h Court, upholding the decision of such Court. The challenged decision of the 5th Collegiate Court of Jalisco had ruled that the Company?fs case should be decided by Mexican Federal Courts, rather than by State Courts. This had the effect of (i) voiding the decisions of the 9th Supreme Court of Jalisco (acting as appellate Court) of March 22, 2010 and of the 5th Mercantile Court (acting as first instance Court) of July 7, 2009; both of which had upheld the Company?fs petition to enforce its ownership rights over the Properties; and (ii) having the case sent for decision to the relevant Federal Court.

The official written ruling has not yet been released and is not available to the parties. The Company?fs counsel expects for the ruling to be available within the next 30 days. The only information available about the ruling is what has been published in the Supreme Court?fs website on August 17, 2011 informing of a 4 to 1 split decision of the Supreme Court upholding the decision of the 5th Collegiate Court of Jalisco directing that the Company?fs case be decided by a Federal Court, rather than by a State Court, and therefore denying the Company?fs petition. Once the Supreme Court?fs ruling is available, the Company will analyze the particulars of the decision and will issue a news release informing about it and on its further strategy on the matter.

The Company still believes that the decision of the 5th Collegiate Court of Jalisco confuses the jurisdiction of Federal courts over issues regarding mining titles (validity, termination, compliance, terms, etc.) with the jurisdiction of State courts on commercial disputes as the one initiated by the Company, which relates to enforcement of an option agreement over shares of a company with underlying mining concessions. The dispute does not relate to the validity or terms of the mining concessions, but on the terms and enforcement of an option agreement. Therefore, being the dispute related to alleged breach of a commercial contract and not to the validity or terms of a mining concession, the State Courts have jurisdiction to rule on the dispute. In fact, the jurisdiction of State courts to hear the Company?fs case was never objected by the defendants (they in principle objected the competence of Mexican courts vs US courts, but when ruled against, never objected the jurisdiction of State courts vs Federal courts in Mexico); nor was it objected when prohibitions on transfer of the relevant mining concessions were imposed to the National Mining Registry. The issue of jurisdiction of Federal courts in this case was brought ex-­officio by the 5th Collegiate Court of Jalisco and not per petition of any of the parties to the case.

When the September 30, 2010 decision of the 5th Collegiate Court of Jalisco was issued, stating that the State Courts which had decided on the matter had no jurisdiction to do so, and ordering the case to be ruled by a Federal Court, the Company had the choice to accept such decision right away and have the case re-­?]tried in Federal Court, or to try an extraordinary recourse (revision of amparo) before the Supreme Court to have it uphold the State?fs court decisions on constitutional grounds. While the extraordinary recourse referred to a matter which constitutional relevance had never been tested at the Supreme Court level, the Company decided to take such route because of the clear grounds of its case and relying on the possibility that the Supreme Court would determine such relevancy, hear the case and rule in the Company?fs favor, upholding the results of the two instance trial already won by the Company and saving the time and expense of re-­?]trying the case. However, given the borderline nature (constitutional relevancy) of the matter, the Company is disappointed but not totally surprised by the Supreme Court?fs decision.

The Company is disappointed that, after two favorable judicial decisions on its legal action to enforce its ownership rights to the Properties, the jurisdiction of the deciding courts had been brought into question by the judiciary itself and that because of this circumstance the final resolution of its case is being further delayed.

However, the Company is convinced on the strength of its case and that its rights will be upheld also by the Federal Courts. The Company will rapidly engage such courts seeking the quickest decision on the matter.

On Behalf of the Board
Stephen Roehrig President and CEO

For further information please contact:
Stephen Roehrig, President and CEO (780) 465-­?]4129

Web: www.banderagold.com
Or Micro Cap et al, Investor Relations at: (877) 642-­?]7622
E mail: [email protected]

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. 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.