Rainbow Resources Closes First Tranche of Private Placement

TORONTO, ONTARIO, January 5, 2012 -- Rainbow Resources Inc. (TSX VENTURE:RBW) ("Rainbow" or the "Company") is pleased to announce that it has closed the first tranche of its non-brokered private placement financing. The initial tranche consisted of a total of 1,094,000 units at $0.15 per unit and an additional 275,000 flow-through units at $0.20 per unit for gross proceeds of $219,100.

Each of the units and flow-through units comprise one common share and one-half of a common share purchase warrant. Each full warrant will entitle its holder to acquire one additional common share of Rainbow at a price of $0.25 for 18 months.

The gross proceeds from the sale of the flow-through units will be used for continued exploration including a drill program at the Company’s recently acquired gold-silver-lead properties in the West Kootenay region of British Columbia. The net proceeds from the sale of the units will be used for potential expansion of that overall land package, and for general corporate purposes.

The offering is subject to certain conditions, including but not limited to, the receipt of all necessary approvals, including the TSX Venture Exchange and applicable securities regulatory authorities.

Rainbow's shares are listed for trading on the TSX Venture Exchange under the symbol RBW.V. Rainbow currently has 26,245,137 common shares issued and outstanding.

For further information: R. Brian Murray, (416) 985-7810 David W. Johnston (403) 701-2781

Visit our website at www.rainbowresourcesinc.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.