Estrella Gold Corporation
TSX VENTURE : EST

Estrella Gold Corporation

May 31, 2012 09:00 ET

Estrella Gold Extends Colpayoc Gold Project Terms

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 31, 2012) - Estrella Gold Corporation (TSX VENTURE:EST) ("Estrella" or the "Company") has renegotiated key agreements at its Colpayoc gold project, allowing for continued exploration and resource development and is working to reduce overall operating costs. Colpayoc is located 12 km southwest of the Yanacocha gold mine, the largest gold mine in South America. Estrella has renegotiated the two underlying Option Agreements which include much of the 54 square kilometer property. Estrella has (a) reduced its 2012 obligations by $3.9M, down to $0.7M; (b) eliminated its work commitments; and (c) extended the Term of the Agreements an additional 2.5 years until December 2014. These new Terms allow the Company to conduct exploration of the multiple targets on the property, while continuing venture negotiations with interested parties. Colpayoc has a +300,000 ounce NI 43-101 compliant gold resource which is open in three directions, and four other areas of mineralization. The Company is preparing an Environmental Impact Assessment in preparation for future drilling programs. Estrella has also reduced its Peru administrative costs by more than 50% by relocating to a more efficient office location and through funding by Venture partners. The Company is seeking to minimize all expenditures allowing the staff to continue to focus on new acquisitions. Mr. Keith Laskowski, President and CEO of Estrella, commented, "We have greatly reduced our administrative and operating costs, allowing us to protect our cash while continuing in full force with our prospect generator business strategy through 2012 and into 2013. We are pursuing negotiations with potential J.V. partners to fund additional drilling at Colpayoc."

About Estrella Gold Corporation (TSX VENTURE:EST)

Exploration is risky and Estrella is seeking to increase the chances of success as a "Prospect Generator" focused on gold exploration in Latin America. Estrella identifies and acquires new mineral properties, and then conducts initial, low-cost exploration to define a potential new deposit. Once defined, Estrella forms joint ventures with other companies that will provide funding and reduce Estrella's risk and expenditures. The Prospect Generator business model allows Estrella to aggressively seek the next major discovery. Estrella has thirty-two exploration properties in Perú, with twenty-eight held in venture agreements, most in a strategic exploration alliance with Cliffs Natural Resources Exploration Inc. Of the four properties held 100% by Estrella, the Company also established a NI 43-101 compliant inferred resource containing a minimum of 313,000 ounces of oxide gold at its Colpayoc Project in Peru (from 19.3 Mt @ 0.5 g/t gold, NI 43-101 Inferred Resource, 2011 Global Geotechnologies Inc.; News Release dated 12/21/2011). The Company has 24.1 million shares issued and outstanding on the TSX Venture Exchange (TSX VENTURE:EST). Mr. Keith A. Laskowski, MSc., is a Qualified Person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and has prepared, reviewed and verified the technical information contained in this news release. 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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