Desert Star Resources Ltd.
TSX VENTURE : DSR

Desert Star Resources Ltd.

January 28, 2013 08:30 ET

Desert Star Announces Non-Brokered Private Placement, Corporate Update and Option Agreement with Southern Silver

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 28, 2013) - Desert Star Resources (TSX VENTURE:DSR) ("Desert Star" or the "Company") is pleased to announce that it will conduct a non-brokered private placement of up to 8,333,333 units ("Units") of the Company at a price per Unit of $0.06 for aggregate proceeds of up to $500,000. Each Unit will consist of one common share in the capital of the Company and one transferable share purchase warrant, each warrant entitling the holder to purchase one additional common share at a price of $0.15 for two years from the closing of the offering.

Finder's fees in amounts yet to be determined may be paid to persons who introduce the Company to investors. In accordance with applicable securities legislation, all securities issued will be subject to a hold period of four months and a day from the date of completion of the financing. The proceeds of the private placement will be used by the Company for general corporate purposes and to pay outstanding indebtedness.

Corporate Update

The Company announces that it has effected its previously announced consolidation of its common shares on the basis of 2 old shares for 1 new share and has changed its name to Desert Star Resources Ltd.

The Company also announces that it has entered into an option agreement (the "Option Agreement") dated January 14, 2013 with Southern Silver Exploration Corp. ("Southern Silver") to earn up to a 70% interest in Southern Silver's copper and gold project (the "Oro Project"), located in southwestern New Mexico, United States.

The Oro Project is located approximately 80 km southwest of the Silver City porphyry copper district and lies within the prolific Laramide Porphyry Copper Belt, which hosts the world class Tyrone (Freeport-McMoRan; 1,050 Mt @ 0.49% Copper, 0.013% Molybdenum) and Resolution (Resolution Copper Mining; 1,624 Mt @ 1.47% Copper, 0.037% Molybdenum) porphyry deposits.

In addition to bulk tonnage porphyry copper-molybdenum-gold potential, the Oro Project claims also include the high-grade sediment-hosted Stock Pond gold target. Reconnaissance rock sampling has been completed over a strike length of 140 meters at Stock Pond, yielding values up to 4.8 g/t gold. Gold mineralization at Stock Pond is interpreted to be related to the main porphyry center, located 4 kilometers to the southwest.

In accordance with the terms of the Option Agreement, the Company paid to Southern Silver $75,000 upon execution. The Option Agreement provides that the Company can earn an initial undivided 51% interest in the Oro Project by making an additional cash payment of $150,000 by August 1, 2013 and, over a period of 42 months after approval of the Option Agreement by the TSX Venture Exchange (the "Exchange"), incurring exploration expenditures aggregating $3 Million and issuing an aggregate of 1,000,000 common shares of the Company to Southern Silver. The Company also has the option to earn an additional 19% undivided interest in the Oro Project by incurring a further $3 Million in exploration expenditures and completing a Preliminary Economic Assessment, on or before the date that is 66 months after Exchange approval . If Exchange approval is not obtained by March 15, 2013, either party may terminate the Option Agreement, in which case Southern Silver will refund the $75,000 paid by the Company on execution of the Option Agreement.

Portions of the properties included in the Oro Project are subject to royalties of either one or two percent of net smelter returns. In addition, the State Leases included in the Oro Project provide for royalties of 5% on specified special minerals (such as uranium, thorium, precious and semi-precious stones, rare earth minerals, or minerals determined to be essential to the production of fissionable materials) and 2% on other minerals (including gold and silver) mined from the property subject to such State Leases.

Qualified Person

Technical aspects of this news release have been reviewed and approved by Dr. Alan J. Wainwright, Ph.D., P.Geo., a consultant to the Company, designated as a qualified person under National Instrument 43-101.

About Desert Star Resources

Desert Star Resources is a Vancouver-based mineral exploration company focused on creating shareholder value through the identification, acquisition and development of world-class copper and gold projects in top-tier mineral belts, with excellent infrastructure and an established mining culture, located in the southwestern United States.

Vince Sorace, President and CEO, Desert Star Resources

Cautionary Note Regarding Forward-Looking Statements

This news release contains certain statements that may be deemed "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Desert Star Resources believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or realities may differ materially from those in forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of Desert Star Resources' management on the date the statements are made. Except as required by law, Desert Star Resources undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

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.

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