Kestrel Announces Surface Sampling Exploration Results at Huachi Property, Argentina


VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2012) -

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Kestrel Gold Inc. ("Kestrel" or the "Corporation") (TSX VENTURE:KGC) is pleased to announce the release of further exploration results from its surface sampling of road cuts and trenches on its 540 hectare Huachi property (the "Huachi Property").

The results from 170 continuous two metre rock chip samples sampled in February (not including QA/QC samples) have been processed and compiled by Kestrel. Sampling was conducted along trenches (that include road trenches) in the vicinity of the 'Agua Dulce' and 'Sanjuanina Structure' areas.

The Huachi Property is in San Juan Province which is one of Argentina's oldest mining provinces and currently host to Barrick Gold Corporation's Veladero and Yamana Gold Inc.'s Gualcamayo gold producing mines, the latter of which is within 30 kilometres of the Huachi Property. Kevin Nephin, the President and Chief Executive Officer of Kestrel stated that, "While the market is currently out of favor and has over sold junior producing and non-producing equities, the announcement this week by Yamana regarding its agreement to acquire Extorre Gold Mines Limited will hopefully demonstrate to the market that Argentina boasts some of the world's greatest unexplored mining projects, similar to our Huachi project. We see further consolidation by well-capitalized major developers and producers with access to capital and project financing who will pursue other acquisition opportunities in the region to exploit these potential resources".

Highlights

Significant new continuous chip road sections include:

Sanjuanina Area:

  • 0.48 g/t Au over 58.0 metres including 1.81 g/t Au over 8.0 metres

  • 0.58 g/t Au over 10.0 metres

  • 0.55 g/t Au over 10.0 metres

  • 0.34 g/t Au over 18.0 metres

Agua Dulce Area:

  • 0.48 g/t Au over 18.0 metres including 1.11 g/t Au over 6.0 metres

  • 0.36 g/t Au over 12.0 metres

The results are consistent with previous findings from drilling and surface sampling that suggest gold mineralization at the Huachi Property is particularly strong in the Sanjuanina area as well as the highly prospective Agua Dulce area (in addition to the known Sentazon area).

Geological Setting

Dioritic wall rock is present in the Sanjuanina trench area with the trench towards Agua Dulce approximately 700 metres to the south of this, exhibiting grabbros with what are thought to be dacitic intercalations. Commonly, in both areas, hydrothermal limonitic alteration occurs in association with vein related brecciated structures and is superimposed over partial propylitic argillic alteration.

The gold mineralization is open to depth but also laterally, particularly towards the east of these areas in unexplored regions of the Huachi Property, now more accessible as a result of the road construction that has been completed to date. The surface sampling represents a continuation of Kestrel's testing of the structurally controlled gold vein component of what is believed to be the upper part of a significant copper-gold porphyry system.

Maps relating to the content of this news release showing the distribution of samples will be posted on the Corporation's website in the near future.

Quality Assurance/Quality Control

Samples were submitted to Alex Stewart Assayers Argentina S.A. in Mendoza, Argentina an ISO 9000-2000 accredited laboratory. Gold and silver results were determined using standard fire assay techniques on a 30 gram sample with a gravimetric finish for gold and silver. In addition to this, ICP-AR (Aqua Regia digestion) analysis was performed on 39 elements. Field duplicate, standard, blank and preparation duplicate samples were used in compliance with National Instrument 43-101 requirements.

About Kestrel Gold Inc.

Kestrel is a gold exploration company headquartered in Canada. Its two principal projects are the King Solomon Dome project in Canada's Yukon Territory and the Huachi project in Argentina. Kestrel (KGC) is listed on the TSX Venture Exchange.

Technical aspects of this news release have been reviewed and approved by W.A. Taylor, P.Geo., hereby designated as a qualified person under National Instrument 43-101.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws, including with respect to the potential mineralization of the Huachi Property. Readers are cautioned to not place undue reliance on forward-looking statements. Forward-looking statements are based on certain key assumptions made by the Corporation, including assumptions based on the Corporation's current exploration results. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the inherent risks involved in the exploration and development of mineral properties and the uncertainties involved in interpreting exploration results and other geological data. The forward-looking statements in this press release are made as of the date of this release and the Corporation undertakes no obligation to update publicly or revise any forward looking statements whether as a result of new information or otherwise, except as required by applicable securities laws. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation or its financial or operating results or (as applicable) its securities.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information:

Kestrel Gold Inc.
Kevin Nephin
604-824-6056 or 604-799-2456
kvnephin@telus.net
www.kestrelgold.com

Macam Investor Relations
Cameron MacDonald
Office: (403) 452-6600
cmacdonald@macamgroup.com
www.macamgroup.com