ALBUQUERQUE, NM--(Marketwire -02/13/12)- Lone Star Gold, Inc. (OTC.BB: LSTG.OB - News) ("Lone Star" or "the Company") is pleased to announce the Company plans to begin its initial shipments of 1.2 million tons of mine tailings from the San Antonio del Potrero mine tailings project ("Tailings Project") ahead of schedule. Lone Star acquired an undivided 65% interest in the Tailings Project on January 26, 2012, when the Company signed a Joint Venture Agreement ("JV Agreement") with the specially formed Mexican subsidiary company, AMIKO KAY, S de RL de CV, and Miguel Jaramillo. The project is located near the city of Hidalgo Del Parral in the state of Chihuahua, Mexico
The Company's development plan originally projected that shipments of 100 tons per day (tpd) would commence at the end of February 2012. The Company now projects the initial shipments will commence ahead of schedule in the week of February 20, 2012. The majority of ore will be processed in the city of Parral (less than 15 minutes drive from the Tailings Project). Once a sufficiently large pile of Tailings Project ore has been accumulated, the plant will then commence a processing run. Upon the plant selling the resulting concentrate, it will arrange payment to Miguel Jaramillo's firm, at which point Mr. Jaramillo will transfer 65% of the total revenue to Lone Star's US-based bank account.
The team in Mexico also performed additional unofficial testing by having a sample quantity of approximately 40 kilograms (~88 pounds) of ore processed last week. Grade assays based on the sampling were received from SGM (Servicio Geologico Mexicano). The grade assays (which are not recognized by the N43-101 standard) represent an increase from the figures in the previous tailings summary:
- Gold (Au): 0.7 grams/tonne
- Silver (Ag): 115 grams/tonne
- Lead (Pb): 1%/tonne
- Zinc (Zn): 1%/tonne
While the processing plant in the city of Parral is the closest to the Tailings Project, the Mexico team has recently visited other processing plants in the area with the intention of securing additional processing options. Additional processing plants in Parral, Torreon and Zacatecas have expressed interest in receiving shipments from the Tailings Project and are currently discussing shipping scenarios that would have the potential to double or possibly triple the total first year production. Accordingly, the Mexico team is currently sourcing additional trucks and heavy equipment as needed to accommodate the expected increase in first year production from the Tailings Project.
Lone Star Gold's President, Daniel Ferris, commented: "From the moment the news went out that the Tailings Project had been acquired, our team in Mexico began receiving offers from multiple plants in the surrounding area that were interested in processing our tailings. By leveraging the processing capacity of these additional plants, we have the opportunity to instantly increase our first year projected production. At the same time, by contracting out the ore processing in the short-term, we have the opportunity to establish consistent revenues while simultaneously working on the mine development plan and future onsite processing plant construction, which may take up to 18 months to complete."
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.
None of the drilling estimates, test results or figures noted in this release are intended to represent or indicate the existence of proven or probable reserves under SEC rules.
To learn more about the Tailings 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 (OTC.BB: LSTG.OB - News) 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 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.
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.