Lone Star Gold, Inc. Announces $15M Investment Agreement Now
Effective and Plans to Commence On-Site Processing Plant Construction
ALBUQUERQUE, NM -- (Marketwire) -- 01/07/13 -- Lone Star Gold, Inc.
(OTCBB: LSTG) ("Lone Star" or "the Company") is pleased to announce
the effectiveness of its Form S-1 dated December 20, 2012, which
outlines the details of the Company's $15 million
common-stock-purchase investment agreement with Deer Valley
Management, LLC (see more details about the "Deer Valley Investment
Agreement" further below).
Lone Star intends to raise capital through the Deer Valley Investment
Agreement commencing January 2013. In particular, the Company will
commence construction as soon as possible on its own on-site
processing plant at its Tailings Project near the city of Hidalgo Del
Parral in the state of Chihuahua, Mexico. The processing plant will
further enhance Lone Star's ability to maximize the silver and gold
content per ton of shipment from the project's 1.2 million tons of
mine tailings. The plant will use the relatively new benign nitrogen
leaching pile process. In Q3 2012, the Company's team in Mexico
completed a preliminary leach plant development plan, which includes
a processing capacity of 1,000 tons per day (tpd) while avoiding the
use of cyanide and having minimal environmental impact. Leach testing
has also been completed, which determined that no additional crushing
of the tailings material is required and that expected recovery will
be between the 88-90% range.
The Company expects the on-site processing plant to be operational
within 3-4 months following access to the necessary funding through
the Deer Valley Investment Agreement.
Lone Star's President, Daniel Ferris, commented: "We want to thank
Deer Valley in bringing the $15 million Deer Valley Investment
Agreement. We are now looking forward to a very active first few
months of 2013 culminating in concentrate sales possibly commencing
in April 2013."
DEER VALLEY INVESTMENT AGREEMENT DETAILS
By way of background, on April 30, 2012, Lone Star entered into an
investment agreement with Fairhills Capital Offshore Ltd.
("Fairhills"). Under the agreement, Fairhills committed to purchase
up to $15,000,000 of Lone Star's common stock over a period of up to
36 months. From time to time during the 36 months period, Lone Star
may deliver a put notice to Fairhills, stating the dollar amount it
intends to sell to Fairhills on a date specified in the put notice.
On November 12, 2012, Fairhills entered into an assignment and
assumption agreement with Deer Valley Management, LLC ("Deer
Valley"), pursuant to which Fairhills transferred and assigned all
rights and obligations under the investment agreement to Deer Valley
(the "Deer Valley Investment Agreement"). Fairhills and Deer Valley
have common ownership and management. As outlined in Lone Star's Form
S-1 filing, the Company may raise capital through the Deer Valley
Investment Agreement as needed for current running costs, general
operating expenses and capital expenditures related to Lone Star's
Tailings Property and Candelaria Project, and, in particular, the
construction of the nitrogen leach plant on Lone Star's Tailings
Property. Further details of the Deer Valley Investment Agreement are
available in Lone Star's Form S-1 filing from December 20, 2012.
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
To learn more about the Tailings Property,
the Company, and regular news updates, visit Lone Star's official
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 undivided 65%
interest in the San Antonio del Potrero mine tailings project near
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.
Lone Star Gold, Inc.
6565 Americas Parkway NE, Ste 200
Albuquerque, New Mexico
Toll Free: 1-800-986-9358
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