Lone Star Gold Inc. Acquires Mexico-Based La Candelaria Gold-Silver Project
August 11 2011 - 8:00AM
Marketwired
Lone Star Gold Inc. (OTCBB: LSTG) ("Lone Star" or "the Company") is
pleased to announce it has signed a definitive agreement in a J.V.
option to purchase a 70% Working Interest in the ~ 1,976-acre (~
800-hectare) La Candelaria gold-silver project property with
Metales HBG Sa. de C.v. By forming a strategic alliance with
Metales, as well as the Bustillos-Gonzalez family, Lone Star is
able to effectively advance toward its goal of production in the
Sierra Madre Occidental (SMO) gold and silver belt. The
Bustillos-Gonzalez family has a long mining history in the region,
dating back to the Spanish occupation of Mexico in the early 1600s,
and has operated multiple wildcat mines over generations throughout
the SMO.
The Company has agreed to a $240,000USD cash payment; 250,000
Company shares; and a work commitment of $450,000 over the first
three years. The agreement also includes an NSR of 2%, of which 1%
can be purchased for $1,000,000 at any time.
The La Candelaria property is located 25 miles (40 km) southeast
of Batopilas in Chihuahua State, Mexico, and roughly 125 miles (200
km) southwest of the state's capital city. The property is accessed
via established roadways, and the nearby town of Tonachi includes
an airstrip and telecommunication services.
In the summer of 2009, Luis Olvera, Engineering Geologist, and
his team conducted a geological study on the La Candelaria property
that found gold samples grading as high as 0.35 grams/ton (g/t),
and silver samples grading as high as 89 g/t. In his October 2009
report, Mr. Olvera estimated La Candelaria's potential reserves as
10,312,898 ounces gold at an average grade of 0.20 g/t, and
215,697,280 ounces silver at an average grade of 40 g/t. The report
also stated evidence of a potential collapsed caldera structure and
the possibility of a re-insurgence and secondary caldera structure
that caused the hydro-thermal mineralization along the major N.W.
and S.E. fault line on the property.
Over the last few weeks, Lone Star has conducted its own study
of the property as due diligence toward verifying the findings of
the initial report. The Company also currently has a team of
geologists on the La Candelaria property conducting additional
geo-chemical rock-chip samples; an electro-magnetic geo-physical
study; and a stream sediment study of the surrounding drainage
areas. Further mapping and a channel/trenching program will be
conducted over the following weeks.
Once all of the new data has been analyzed, the Lone Star team
will map a 10-hole diamond core drill program scheduled for early
fall 2011. All samples will be transported to the Company's
Chihuahua satellite office then shipped to the head office of ALS
Chemex in Vancouver, Canada, for full spectral analysis.
"Our goal is to bring the Company into production in the near
term and separate us from the scads of exploration companies in the
area," commented Daniel Ferris, Lone Star's Company President. "To
do so, we'll simply utilize the knowledge and experience of our
partners in conjunction with that of our own internal team. And
since it's well documented that only 10% to 15% of the calderas in
this area of the Sierra Madres have been located and defined, we're
excited by the significant upside potential when it comes to
resource discoveries to be made."
Lone Star's short-term mandate is to rapidly become a mid-tier
producer in Mexico, while its long-term strategy is to have
multiple operating gold and silver mines in North America. As such,
the Company is also currently in negotiations on a number of
potential targets. While no further agreements have been reached
with any of these projects at this time, the Company will remain
confidential in its dealings in order to maintain its competitive
position. Further news will be made when appropriate.
ADDITIONAL INFORMATION To learn more about the La Candelaria
project, 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. Lone Star's La
Candelaria gold-silver project comprises ~ 1,976 acres (~ 800
hectares) of mining concessions located roughly 125 miles (200 km)
southwest of the capital city of Chihuahua State, Mexico.
Geological characteristics in the surrounding area indicate
potential for gold and silver mining. In 2009, a geological survey
and report* on the property found gold samples grading as high as
0.35 grams/ton (g/t), and silver samples grading as high as 89 g/t.
The report estimated La Candelaria's potential reserves as
10,312,898 ounces gold at an average grade of 0.20 g/t, and
215,697,280 ounces silver at an average grade of 40 g/t. Based on
the 2009 report's reserve estimates, the La Candelaria project
represents a combined potential valuation of ~ $22.68B.** The
property is accessed via established roadways, and the nearby town
of Tonachi includes an airstrip and telecommunication services.
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. disclaims any obligation to
update any of its forward-looking statements, except as may be
required by law.
* Geological Survey of La Candelaria Property. Luis E. Olvera
Rosas, Oct. 2009 ** Valuation = 10,312,898 oz gold x $1496.90/oz +
215,697,280 oz silver x $33.58/oz (closing NY prices, June
27/11)
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)
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