Estrella Gold Corporation
TSX VENTURE : EST

Estrella Gold Corporation

December 03, 2010 16:16 ET

Estrella Gold Closes Private Placement Financing

TORONTO, ONTARIO--(Marketwire - Dec. 3, 2010) - Estrella Gold Corporation (TSX VENTURE:EST) ("Estrella" or the "Company") is pleased to announce it has closed a non-brokered private placement offering of 2,000,000 units (each a "Unit") at $0.50 per Unit for gross proceeds of $1,000,000 (the "Financing").

Each Unit is comprised of one common share (each a "Common Share") and one non-transferable warrant (each a "Warrant"). Each Warrant entitles the holder to purchase one Common Share at an exercise price of $0.80 per share until December 3, 2012. The Warrants are callable, at the option of Estrella, after April 4, 2011 if its Common Shares trade at or over $1.00 per share for 20 consecutive trading days. The number of Common Shares issuable pursuant to the Financing, if all Warrants are exercised, is 4,000,000 Common Shares for gross proceeds of $2,600,000.

In connection with the Financing, the Company paid eligible finders (the "Finders") a cash fee equal to 6% of the gross proceeds placed through each Finder under the Financing and also issued compensation warrants equal to 10% of the total number of Units (the "Compensation Warrants"), issued through each Finder, under the Financing. Each Compensation Warrant entitles the holder to acquire one Common Share of Estrella at $0.60 until December 3, 2012. On closing, the Company paid $45,600 and issued 152,000 Compensation Warrants to the Finders.

The securities issued pursuant to the Financing will all be subject to a four-month regulatory hold period from the date of closing. With the closing of this Financing, Estrella has 16,006,845 common shares issued and outstanding. 

The net proceeds of the Financing will be used for:

  1. Regional Andean Gold Exploration (RAGE) program; and
  2. working capital and general corporate purposes.

About Estrella Gold Corporation (TSX VENTURE:EST) Estrella Gold is "Prospect Generator" focused on gold in Latin America. The Company's dual strategy focuses on generating new prospects/discoveries and increasing the Company's inventory of gold resource ounces. Estrella has a NI 43-101 compliant inferred gold resource of 144,600 ounces at its Colpayoc project in Peru, and additional historic non-compliant gold resources. Estrella Gold has seven precious metal exploration projects in Perú and one in Chile. The Company has 16,006,845 shares issued and outstanding on the TSX Venture Exchange (TSX VENTURE:EST). Further information is available at Estrella Gold's website: www.estrellagold.com

STATEMENTS IN THIS NEWS RELEASE, OTHER THAN PURELY HISTORICAL INFORMATION, INCLUDING STATEMENTS RELATING TO THE COMPANY'S FUTURE PLANS AND OBJECTIVES OR EXPECTED RESULTS, MAY INCLUDE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS AND ARE SUBJECT TO ALL OF THE RISKS AND UNCERTAINTIES INHERENT IN RESOURCE EXPLORATION AND DEVELOPMENT. AS A RESULT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS.

NEITHER 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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