SOURCE: Lone Star Gold, Inc.

December 05, 2011 08:30 ET

Lone Star Gold, Inc. Announces the Signing of a Second LOI Regarding the Mexico-Based San Antonio Del Potrero Mine Tailings Project

ALBUQUERQUE, NM--(Marketwire - Dec 5, 2011) - Lone Star Gold, Inc. (OTCBB: LSTG) ("Lone Star" or "the Company") is pleased to announce the Company signed a letter of intent (LOI) on November 28, 2011, committing to the option to acquire an undivided 65% interest in the San Antonio del Potrero mine tailings project in the city of Hidalgo Del Parral in the state of Chihuahua, Mexico. According to information provided to Lone Star by the current owners, the project represents a resource of 1.2 million tons of mine tailings which shows potential for Silver recovery and additional bi-products including Gold, Zinc and Lead.

"This potential new project could be an ideal fit with our goal of rapidly becoming a mid-tier producer in the short term," stated Daniel Ferris, Lone Star Gold's Company President. "Should the current owners' estimates and calculations be confirmed during our due diligence sampling and testing period, we would effectively be in the position of potentially beginning 6-8 years of production as soon as February 2012."

The following items outline the project's Initial Stage details as provided to Lone Star by the current owners with all calculations being solely based on tonnage estimates:

  • The project is estimated to represent 1.2 million tons of Tailings from previous mining activities over the last 100+ years.
  • An agreement is in place with a processing plant in Parral (20-minute drive) to take 100 tons per day (tpd) for the first 4-6 months starting in February 2012.
  • Throughput can be increased after that, likely to 200+ tpd during the 6-12 month period.

The following items outline the project's Secondary Stage details as provided to Lone Star by the current owners with all calculations being solely based on tonnage estimates:

  • Following the first year of production, the project would continue to ship 200 tpd to the plant in Parral.
  • Simultaneously, a processing plant would be constructed on the property consisting of a heap leach pad and, potentially, a float plant (to be determined within the first 6 months of shipping to Parral). Total maximum cost for both would be ~$1.5 million.
  • The plant would take between 4-6 months to construct, and would have initial capacity of 200-300 tpd, then ramping up production after the first 6 months of operation by adding a second circuit for a total of 600 tpd capacity on the property.
  • The onsite plant is expected to liberate over 85% of the resources in the tailing's pile.
  • In addition to the 600 tpd being processed onsite, the option would also exist to continue shipping the 200 tpd to the Parral plant, thereby running at 800+ tpd.
  • Mine life, based on 20 days per month, is calculated at 8.3 years at 600 tpd; and 6.2 years at 800 tpd.

The proposed deal structure includes Lone Star initially acquiring the option to purchase an undivided 65% interest in the San Antonio del Potrero mine tailings project (as accomplished through the signing of the LOI). The Company will then have a 60-day due diligence period, during which time a total of 10 holes will be augured to acquire 40 undisturbed samples at depths of 20-25 meters. Servicio Geologico Mexicano (SGM) and ALS Global will test the samples to provide confirmation of the estimated resource as provided to Lone Star by the current owners. Based on positive due diligence sampling results, a Definitive Option agreement would be signed.

Cautionary Note to U.S. Investors -The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We may use certain terms in this press release, such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from our website at http://www.sec.gov/edgar.shtml.

ADDITIONAL INFORMATION
To learn more about the Company and regular news updates, visit Lone Star Gold's official website: http://www.lonestargold.com.

ABOUT LONE STAR: Lone Star Gold, Inc. is a publicly traded (OTCBB: LSTG) gold exploration and development company based in Albuquerque, New Mexico. The Company's aggressive acquisition and exploration approach is strategically focused on proven, stable precious metal regions in America and Mexico. Currently, Lone Star has a 70% Working Interest in concessions covering 800 hectares in the La Candelaria project in Chihuahua, Mexico, which the Company is evaluating to determine the potential sites that represent the best potential for silver and gold deposits. Lone Star also has an option to purchase a 70% interest in the Ocampo Project, a 570-hectare gold-silver project in Chihuahua State, Mexico.

ON BEHALF OF THE BOARD OF DIRECTORS,

Lone Star Gold, Inc.
Daniel Ferris, Company President

This press release contains statements that are forward-looking and which involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements in question are based on Lone Star Gold, Inc.'s current expectations and projections about future events, based on information currently available. The forward-looking statements found in this press release may also include statements relating to Lone Star Gold, Inc.'s anticipated financial performance, business prospects, new developments, strategies, and similar matters. Lone Star Gold, Inc. provides no assurance regarding the actual outcome of the events contemplated by any forward-looking statements included in this release. Lone Star Gold, Inc. disclaims any obligation to update any of its forward-looking statements, except as may be required by law.

Contact Information

  • Contact:
    Lone Star Gold, Inc.
    6565 Americas Parkway NE, Ste 200
    Albuquerque, New Mexico
    87110
    USA

    INVESTOR RELATIONS
    Toll Free: 1-800-986-9358
    E-mail: ir@lonestargold.com
    Web: www.lonestargold.com

    OTCBB: LSTG.OB