Estrella Gold Corporation
TSX VENTURE : EST

Estrella Gold Corporation

March 07, 2011 10:11 ET

Estrella Program Review and 2011 Exploration Plans

TORONTO, ONTARIO--(Marketwire - March 7, 2011) - Estrella Gold Corporation (TSX VENTURE:EST) ("Estrella" or the "Company") is pleased to provide a program summary and plans for the 2011 Gold Exploration Programs. Estrella is a "Prospect Generator" company, focused on gold in Latin America. The Company focuses on generating new prospects/discoveries and increasing the Company's inventory of gold resource ounces. Estrella seeks to optimize each property's individual value by conducting exploration either directly or through Joint Ventures with qualified venture partners. The Company's programs fall into four (4) categories.

(1) Prospect Generator Program: Estrella is exploring for new gold discoveries in three regions of Latin America. In Peru, Estrella has two generative programs. For the first generative program, Estrella established a Strategic Exploration Alliance with Cliffs Natural Resources Exploration Inc. ("Cliffs") to explore for Iron oxide-Copper-Gold (IOCG) deposits in the southern Peru IOCG belt. Cliffs is funding the program and Estrella is operating the program and providing two field teams that are conducting exploration programs. The program is budgeted for two years and a minimum of $400,000 per year. New properties acquired pursuant to the strategic alliance will initially be held jointly and managed under the terms of the Alliance Agreement and other relevant venture agreements. In the second generative program, (which does not involve Cliffs), Estrella is exploring for epithermal, volcanic-hosted gold deposits in the southern Peru altiplano. This program is funded by Estrella and is evaluating exploration targets that were identified using the Company's proprietary Regional Andean Gold Exploration data base. The Company acquired three new properties in 2010 which are also being evaluated. Estrella is exploring for new gold deposits in the Dominican Republic, which hosts the Pueblo Viejo gold deposit now being developed by Barrick Gold. Geological targeting was completed last year and Estrella recently applied for 27,000 hectares of mineral concessions to explore for epithermal gold deposits, similar to Pueblo Viejo. 

(2) Gold Resource Development Projects: Estrella has two gold projects with either NI 43-101 compliant gold resources or historic, non-compliant gold resources. In each case, the potential resource is being explored and each has significant potential to be greatly expanded. 

Colpayoc Gold Project (100%): contains 4,200 hectares of land located 12 kilometers southwest of the Yanacocha mine complex, the largest gold producer in South America. Colpayoc contains three types and areas of gold mineralization The Daylight Zone has been the focus of most work at Colpayoc and contains oxidized, outcropping gold and copper mineralization hosted within a porphyry gold-copper system. The zone contains a 300 meter diameter area of outcropping gold mineralization, surrounded by sedimentary rocks. Based on previous drill results, SRK Consultants calculated an initial NI 43-101 compliant inferred resource (2010) containing 7.6 million tonnes @ 0.6 g/t gold with 144,600 ounces of gold. The historic drilling and resource block model indicate that the gold zone is open at depth and in all directions with higher grade zones oriented northeast-southwest. Estrella completed three new drill holes in 2010, totaling 462.6 meters. Each drill hole intersected wide zones of gold mineralization, including values up to 100.7 meters @ 0.67 g/t Au (COL-02), confirming the potential to increase the gold resource. Estrella also completed an initial trenching program at the Cerro Rico Zone, located less than two kilometers northwest from the Daylight Zone. Three trenches totaling 231.8 meters identified significant structurally controlled silica-manganese replacement style mineralization, primarily hosted within limestone and containing high grade silver and gold mineralization.

Trench values included:  
  Trench CR-01: 8.0 meters @ 372.5 g/t silver with 3.9 g/t gold (74.0-82.0 m)
  Trench CR-03: 5.8 meters @ 872.6 g/t silver with 0.7 g/t gold (37.8-43.6 m)
    including 1.8 meters @ 1,515 g/tsilver and 0.8 g/t gold. (41.8-43.6 m)

Reprocessing of available ground magnetic data indicates that both the Daylight Zone and the Cerro Rico Zone occur within a zone of possible alteration that covers a total diameter of more than 3,000 meters. Estrella is conducting additional surface mapping, sampling and trenching at the Cerro Rico Zone, and additional drilling is planned at the Daylight Zone during the second quarter of 2011. 

Trol Gold Project (100%): contains 2300 hectares of land located within the Madre de Dios placer district, Chile's largest historic placer gold district (IX Region). Bedrock gold mineralization occurs within a sequence of complex, low and high-angle shear zones and faults, hosted within Carboniferous-age, metamorphosed volcanic and sedimentary rocks. The area contains significant gold mineralization, with historic drill intercepts up to 112 m @ 1.12 g/t gold, as identified and reported by Minera Cominco Resources Chile Ltda. ("Minera Cominco"). Historic drilling by the Shell/Amax Joint Venture, and subsequent drilling by Cominco, occurred along a 400 meter zone, that occurs within a 2,600 meter long by 400 meter wide soil gold anomaly. Based on these drill results, and additional surface rock sampling from trenches, outcrops and tunnels driven into the mineralized zone, Minera Cominco Resources Chile Ltda. prepared a "preliminary geological gold resource estimate" in 1992. Cominco's historic resource estimate does not utilize classifications included in National Instrument 43-101 of the Canadian Securities Administrators, and is not compliant with NI 43-101. Cominco estimated a minimum geological gold resource of 6.25 million tonnes with an average grade of 0.72 g/t gold, which equates to approximately 144,700 ounces of contained gold, using a minimum 0.5 g/t low grade cutoff. The historic resource estimate is included in a report titled "Llipe Project Final Report, Summer 1992 Campaign and Exploration Possibilities for Stratiform Gold in the Metamorphic Basement of Southern Chile Coastal Belt" by John Davidson, April 15, 1992. Estrella is finalizing concession titles and is compiling all regional data, ahead of completing a NI 43-101 Technical Report, and possible drilling. The Company is considering possible venture opportunities on this property. 

(3) Gold Exploration Joint Venture Projects: Estrella has established Joint Ventures on two of its properties. In each case the Joint Venture partner is seeking to acquire an interest in the property by completing certain work expenditure commitments, and payments, subject to the terms and conditions of the relevant legal agreements.

Pampa Poroma Project Joint Venture with Cliffs Natural Resources Exploration Inc. (project currently owned 100% by Estrella): The Pampa Poroma IOCG project contains 900 hectares of land, located 22 kilometres south of Nazca, Peru, in the Department of Ica. The property is approximately 20 kilometres northeast of the Marcona-Mina Justa IOCG district, which contains three major deposits that contain between 750 thousand to 1.4 billion tonnes of iron-oxide-copper-gold reserves or resources. The Pampa Poroma property contains prospective alteration and mineralization. Estrella established a Joint Venture with Cliffs for the exploration and potential development of the property in February 2011. Under the terms of the Joint Venture agreement Cliffs can earn an initial 50 percent interest in the property by making exploration expenditures of $2 million within 2 years, including at least $750,000 in the first year ($500,000 of which is firmly committed). Estrella will operate the Joint Venture until such time that Cliffs elects to take over as operator. Cliffs must spend an additional $4 million and complete 3,000 meters of drilling, within 4 years of earning its 50 percent interest, to earn an additional 20 percent for a total 70 percent interest. Cliffs can acquire an additional 10 percent interest, for a total 80 percent in Pampa Poroma, by completing an NI 43-101 compliant Pre-Feasibility Study or by defining an NI 43-101 compliant "Inferred Mineral Resource" containing a minimum of 1,000,000, ounces of gold or gold equivalent, within four years of earning its 70 percent interest. Systematic exploration programs commenced in February 2011 and are expected to include surface sampling, mapping and geophysical surveys. It is anticipated that the program will identify drill targets that are expected to be tested later this year. 

Pucarana Gold Project Joint Venture with Esperanza Resource Corporation (100%): The Pucarana Gold project, contains 1,889 hectares of land located in the Orcopampa Silver-Gold District of Peru. The property is located between Buenaventura Mines' Poracota Mine, and Chipmo Mine. A 10% interest in the property is held by Gallant Minerals Ltd. Pucarana is 8 kilometres southwest along trend from the Chipmo mine, which produced more than 290,000 ounces of gold in 2010 from high grade underground vein mining. Together, Poracota and Chipmo produced 360,000 ounces of gold and 131,000 ounces of silver in 2010, indicating that the district contains very significant potential for additional mineralization. Pucarana contain gold and silver mineralization hosted in quartz vein zones, and associated with favourable epithermal alteration zones. Esperanza can earn up to a 60% interest through combined payments of $155,000 and work commitments totalling $1.3 million. Esperanza's program has been delayed due to permitting however they received drilling permits recently and Esperanza has announced a Phase I drilling program planned for the second quarter of 2011, including 10 holes and 2,500 meters of drilling.

(4) Gold-Silver-Copper Exploration Projects: Estrella has three additional projects located in Peru that are at varying stages of exploration. These properties are being evaluated for additional drilling and are available for Joint Ventures.

Estrella Gold-Silver Project (100%): contains 1,200 hectares located 130 km south of Huancayo in the Department of Juancavalica. The Estrella property contains a volcanic-hosted epithermal gold-silver system with associated base-metal mineralization hosted within a north-south trending graben. The property has a total of 615 surface rock samples and 33 drill holes totaling 5,800 meters of drilling. Gold assays from outcrops and drill holes range from 0.2 - 54.0 g/t and average 0.44 g/t gold. Silver mineralization assays range from 15.0 – 1,400 g/t and average 21.15 g/t silver. Mineralization is present within a 1,200 meter north-south by 200 meter east-west zone, which remains open for expansion. The largest area of mineralization occurs as a north-south trending, west dipping, stratabound zone measuring 50 – 150 meters in thickness. This stratabound zone contains variable grade gold and silver mineralization with disseminated and vein hosted pyrite, tetrahedrite, galena and sphalerite. The zone has been intersected along strike for 600 meters, and remains open to the north and south. It also remains open up and down-dip. A second type of gold and silver mineralization cross-cuts the stratabound zone and occurs as north and northeast trending, sub-vertical fault zones, which outcrop at surface. These structures have been intersected in drill holes, which extend north of the stratabound zone for 600 meters. The sub-vertical zone locally contains some of the highest grade mineralization on the property, including drill intersections of up to 11 meters @ 311.2 g/t silver and 0.59 g/t gold (RC-E10 from 43 - 54 m). These high grade structures also remain open along trend to the north and south and at depth for exploration. Estrella received its Phase II drill permit during the fourth quarter of 2010 and is now considering additional drilling or establishing a Joint Venture.

Ccello-La Tola Project (100%): contains 7,200 hectares located in the Department of Arequipa. Estrella recently signed a formal Purchase Option Agreement, replacing its initial letter agreement with Solitario Resource and Royalty Corporation, to acquire the 1,000 hectare La Tola Property. The property contains extensive areas of volcanic hosted epithermal alteration, variably exposed beneath younger post mineral cover. By combining these properties, Estrella has established an attractive, district scale exploration target. The property contains two areas of mineralization, including the leached, high-sulfidation alteration zone on the Ccello property in the south and wide-spread epithermal alteration with outcropping gold mineralization at La Tola, in the north. No drilling has occurred on the Ccello zone, however historic drilling by Newmont at La Tola identified values up to 18 meters @ 1.3 g/t gold hosted in altered volcanics. The property covers a 12 kilometer long alteration trend with multiple exploration targets remaining. Estrella will complete surface mapping at La Tola and is seeking Joint Venture partners for this property. 

Cerro Cori Copper-Gold Project (100%): contains 3,993 hectares located in the Department of Ayucucho, 40 kilometres east of the town of Puquio. This property contains a huge high-sulphidation epithermal alteration system overlying a potential porphyry copper-gold system. Initial drilling by former venture partner Southern Peru Copper intercepted values up to 24m @ 0.58% copper. Alteration studies suggest additional targets are available at depth. Preliminary evaluation of the historic sulphur mine on the property and 9 core holes indicates the property also contains a potential native sulphur resource. The property contains a blanket like zone containing 5-30% native sulphur, up to 200 meters thick. Estrella is preparing formal reports and the property is available for Joint Venture.

About the Colpayoc NI 43-101 Compliant Gold Resource: The initial resource estimate was prepared by SRK Consulting (U.S.) Inc. as part of a NI 43-101 Technical Report completed in June 2010. The resource estimate contained the following:

Colpayoc Daylight Gold Zone: Inferred Resource (0.30 g/t low-grade cutoff): 
  Oxide: 4,663,275 tonnes @ 0.59 g/t containing 87,800 oz
  Reduced: 2,913,019 tonnes @ 0.61 g/t containing 56,800 oz
  Total: 7,576,293 tonnes @ 0.60 g/t containing 144,600 oz gold

The block model utilizes an inverse-distance squared (ID2) model, with 6m x 10m x 10m block sizes, using Mintec's MineSight software. All gold mineralization is hosted within sheeted and stockwork quartz+/magnetite+/pyrite-iron oxide veins, hosted within a highly altered granitic intrusion. Oxidation extends to approximately 45 meters depth, and preliminary bottle-role tests on surface trench samples indicate favorable recoveries for oxidized material. The outcropping area of the intrusion is almost entirely altered and mineralized, however overlying sedimentary rocks limit the exposure of this mineralized rock. Although the property has received only a small amount of drilling, due to the consistent and broad areas of gold mineralization, the Company has prepared this initial gold resource estimate to guide future exploration and expansion of the resource. This initial resource estimate benefits from extensive surface trench data, however the small number of drill holes generally limits the extent of interpolated mineralization at depth. The four drill holes penetrated consistent mineralization to the end of each hole (200 meters), however resources can only be included adjacent to the drill holes, and between the drill holes on interpreted northeast structural trends, until additional drilling is completed. There is exploration potential beneath mineralized trenches that is not fully tested by drilling.

QA/QC: Assay results identify those mineralized intervals that contain a minimum continuous width of 2.4 meters with a minimum of 0.3 g/t gold (Au) or 100 g/t silver (Ag). Only one internal or adjacent interval of dilution is allowed. Trench samples were collected in accordance with accepted industry standards and procedures. The samples were submitted to the ALS Chemex Labs (ISO 9001:2000 accredited) in Lima Peru for analysis. Gold was analyzed by fire assay with an AAS finish and multi-element analyses were determined with aqua regia digestion and ICP MS/AAS techniques. Silver assays were conducted with ICP MS/AAS and values above 100 g/t were re-analysed with an AAS finish. The Company conducts routine QA/QC analysis on all assay results, including the systematic utilization of certified reference materials, blanks and field duplicates.

About Estrella Gold Corporation (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. Estrella Gold has seven precious metal exploration projects in Perú and one in Chile. The Company has 17.3 million 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.

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