Kestrel Gold Announces Results of Surface Rock Sampling at the Huachi Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 13, 2011) -

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Kestrel Gold Inc. ("Kestrel" or the "Corporation") (TSX VENTURE:KGC) is pleased to announce that, further to the Corporation's news release dated May 12, 2011 announcing that it has received conditional acceptance to acquire all of the issued and outstanding securities of Rio Diablillos S.L.R. ("Rio"), a private corporation formed under the laws of Argentina, Rio has released results from its surface mapping and rock sampling program at the Huachi Property in San Juan Province, NW Argentina (the "Huachi Property"). Highlights include:

• Four rock chip samples with assay values greater than 5g/t at the Sentazon Zone
• 57 rock chip samples at the Sentazon Zone With averages of 1.06g/t Au and 16.3 g/t Ag over 1.29 m
• A 0.67m continuous chip of vein returned a value of 12.93 g/t Au at the North Ridge Road Cut Zone

These results confirm the existence of significant and widespread, near surface, precious metal mineralisation at Huachi. These recent results are particularly encouraging as they confirm significant and widespread near-surface lateral extent of high level precious metal mineralisation at Huachi. The copper – gold porphyry component of the Huachi Property, which is expected to occur deeper in the system, is anticipated to be further investigated by Kestrel in future work programs.

Overview of 2011 Huachi Exploration Program

The focus of the 2011 exploration program is to target the gold, silver, lead bearing epithermal part of the system which occurs mainly to the east of the previously recognized copper-gold porphyry region to the west and southwest of the Huachi Property (see the Corporation's news release dated February 24, 2011). Reinterpretation and evaluation of previously mapped structures, alteration and mineralised zones by Kestrel geologists has outlined several potential drill targets.

A program of road building and trenching has been planned, which is expected to extend the lateral extent of the near surface gold silver mineralisation. A drilling program is planned to be carried out later in the year to test for higher grade gold and silver concentrations at depth.

A number of zones were systematically and selectively sampled across precious metal bearing structures. The results of all 158 samples collected during this phase are summarised below. Please see Kestrel's website for maps of the results.

Details of the Rock Sampling Program

Sentazon Zone: 57 surface rock chip samples were collected at the Sentazon Zone and returned a composite average of 1.06 g/t Au and 16.3 g/t Ag (Silver values up to 169 g/t). Sample widths range from 0.45 m to 2.8 m with a composite average sample width of 1.29 m. Gold values range from 0.05 g/t to 5.53 g/t Au. Four samples returned assay values greater than 5 g/t Au and indicate that higher grade precious metal mineralisation occurs at surface. Four samples that returned greater than 1 g/t Au also returned Lead (Pb) values above ICP detection limits (>10,000 ppm).

The higher values of gold mineralisation occur in silicified breccias (hydrothermal re-brecciatied) with vuggy quartz textures and disseminated pyrite and manganese oxide. The breccias are often intensely argillically altered and consist of feldspar porphyry host rock typically with limonite-hematite-goethite-manganese rusty coloring. Minor gypsum and jarosite have also been recognised. Quartz veining and veinlets also occur as stockwork and chalcedonic textures with multiphase crosscutting relationships.

The historical Sentazon mine workings consist of several cuts and pits and collapsed underground workings that follow the southwest trending part of the SFZ (Sentazon Fault Zone) for about 450 m. The SFZ consists of multiple sub-parallel faults that control strongly argillically altered, sheared hydrothermal breccia.

Agua Dulce Zone: 9 surface rock chip samples were collected and returned a composite average of 0.74 g/t Au. Sample widths range from 0.5 m to 1.75 m with a composite average sample width of 1.34 m.

The Agua Dulce area to the south of the Sentazon Zone, shows mineralogical similarity to the Sentazon zone with significant values of gold (to 51 g/t), silver (to 80 g/t) and lead (to 2.3%), as previously reported in gabbroic host rocks (see NI 43 -101 Huachi Technical report - February 24, 2011, News Release).

Aleatory (noncontinuous) chip sampling over 75 m on ground comprising suboutcrops of hydrothermal breccias hosted in gabbroic rocks plus altered K-Feldspar porphyries, returned a composite value of 5.72 g/t Au..

East Cerro Los Bronces: 29 surface rock chip samples were collected at the East Cerro Los Bronces Zone and returned a composite average of 0.52 g/t Au. Sample widths range from 0.3 m to 1.4m with a composite average sample width of 0.84 metres.

The higher values of gold mineralisation (up to 4.59 g/t Au) occur in vuggy quartz veins in rust colored argillite and limonitic altered brecciated gabbros and diorites. A 1.4 m chip sample of brecciated highly fractured jarosite stained feldspar porphyry returned a value of silver beyond ICP detection limits (>200 ppm). In addition to the rock chip samples, 2 grab samples returned gold values of 1.33 g/t Au and 0.34 g/t Au.

EW and ENE mineralised structural trends recorded at East Cerro Los Bronces are similar to those recorded at the Sentazon zone. The regional NE trend between these two mineralised zones extends for 1 km with the potential to be extended with further sampling and mapping.

NE Agua Amarga Head Waters Zone: 17 surface rock chip samples were collected at the NE Agua Amarga Head Waters Zone across a 16.8m wide subvertical structure striking 60°NE and returned a composite average of 0.33 g/t Au, including a composite average of 0.62 g/t Au across a width of 2.8 m. Sample widths range from 0.8 m to 1.0 m with an average sample width of 0.99 m. Sampled rocks include silicified and argillically altered breccias with epithermal textures similar to those at the Sentazon Zone.

North Ridge Road Cut Zone: 32 surface rock chip samples were collected at the North Ridge Road Cut Zone and returned a composite average of 0.57 g/t Au with a composite average sample width of 0.76 m. Sample widths range from 0.3 m to 1.8 m.

The higher values of gold mineralisation occur in several limonitic fault shear zones (with variable attitudes) that intersect highly argillically altered diorite host rock. A 0.67 m continuous chip of vein within a fault zone in silicified, brecciated, pyrite and argillite altered diorite, returned a value of 12.93 g/t Au. These shears hosting the higher values of gold mineralisation, occur approximately 700 m NW of the higher values of gold mineralisation at the Sentazon Zone (as mentioned above).

North Ridge West Access road area: 5 surface rock chip samples were collected to the west of the North Ridge Road cut zone and returned a composite average of 0.20 g/t Au with a composite average sample width of 1 m.

NE of North Ridge (Chichi mine) area: 6 rock chip samples collected in the north (Chichi mine) area of the property returned a composite average of 0.06 g/t Au with composite sample widths averaging 1m.

Quality Assurance and Control: Rock samples were submitted to Alex Stewart Laboratory in Mendoza, Argentina. Alex Stewart is certified to ISO 9001-2008 and to ISO 14001:2004 by Det Norske Veritas. The laboratory regularly participates in certification programs including Geostats and CANMET round robins.

As part of Rio's QA program, Discovery Consultants ("Discovery Consultants"), an independent, geosciences and exploration consulting firm set up a quality assurance and control program which included the inclusion of blank and duplicate rock samples in the sample batches.

About the Huachi Property

The Huachi Property is located within the Huachi mining district in northern San Juan Province, Argentina, about 135 km due north of the city of San Juan, and 40 km northwest of the small town of San Jose de Jachal, at 3500 m asl. The Property is comprised of 32 mining tenures that cover 462 hectares. Mining in the Huachi valley extends back to pre-Columbian times indicated by the presence of ancient Incan mining tools in the region. Throughout this history there has been gold mining activity, ranging from small artisanal miners to small-scale mechanized operations in the 1960s. More recent exploration activity from the 1970's to 2007 has focussed on Huachi hosting a copper-gold porphyry deposit.

The property is located within the central part of the Precordillera tectonostratigraphic belt that forms the eastern slope of the Andes in central western Argentina, a belt that trends north south over 400 km. This belt hosts a number of porphyry copper deposits and precious metal deposits. The nearby Gualcamayo gold mine which began production in 2009 is 20 km northeast of the Huachi property.

Both precious metal epithermal and copper porphyry style mineralisation at Huachi is spatially and genetically related to the Huachi Intrusions, a group of probable Late Miocene epizonal intermediate to felsic stocks and dykes. This Tertiary Andean arc magmatism is associated with the uplift of the Andean Cordillera.

Rio's geological exploration model is based on the potential for Huachi to be a large low grade bulk tonnage near surface gold and silver epithermal deposit with the potential for concentrations of higher grade feeders at depth related to the Huachi porphyry intrusions and associated structures.

The intrusions cut a pre-Tertiary basement and are also capped by Tertiary intermediate to mafic volcanic and subvolcanic rocks (where erosion has not occurred). Structural controls are believed to play a major role in the spatial distribution of the intrusions. The Property may be what is described as "telescoped" because of the close spatial distance between the deeper copper porphyry and higher level precious metal epithermal alteration systems.

Technical aspects of this news release have been reviewed and approved by T.J. Termuende, P.Geo., hereby designated as a qualified person on behalf of the Corporation under National Instrument 43-101.

About Kestrel Gold Inc.

Kestrel Gold Inc. is a gold exploration company headquartered in Canada. Its principal projects are the King Solomon Dome and the Toe properties in Canada's Yukon Territory and, upon completion of the acquisition of Rio, is anticipated to include the Huachi Mining Property and the Antofalla property, in Argentina. Kestrel Gold (KGC) is listed on the TSX Venture Exchange.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the acquisition of an option in certain exploration properties in Argentina through the acquisition of all the issued and outstanding shares of an Argentina corporation, the existence of near surface precious metal mineralization at the Huachi Property and future exploration work to be carried out on 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 regarding the satisfaction of conditions to the completion of the transaction and the receipt of all regulatory and stock exchange approvals therefore, as well as assumptions regarding sufficient financing and other resources to carry out future exploration programs and assumptions regarding the existence and extend of precious metals mineralization at the Huachi Property. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the transaction will not be successfully completed for any reason, including the failure to obtain the required approvals or clearances from regulatory authorities or the failure by any party to complete the conditions to the completion of the Acquisition or insufficient funds or other resources to carry out future exploration programs or that the quantity of precious metal mineralization at the Huachi Property is less significant or widespread than they are currently believed to be. 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) their securities.