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NEWS

Kestrel Gold Announces Closing First Tranche of Private Placement

October 31, 2012 – Vancouver, British Columbia: Kestrel Gold Inc. (“Kestrel” or the “Corporation”) (TSXV: KGC) is pleased to announce that, further to its press releases dated September 12, 2012 and October  29, 2012, it has completed the first tranche of its non-brokered private placement (the “Private Placement”).

Pursuant to the first tranche of the Private Placement, the Corporation issued 2,550,000 units (“Units”) of the Corporation at a purchase price of $0.10 per Unit for gross proceeds of $255,000.  Each Unit consists of one (1) common share in the capital of the Corporation (“Common Share”) and one half of one (½) Common Share purchase warrant of the Corporation (“Warrant”).  Each full Warrant entitles the holder to purchase one (1) Common Share at a purchase price of $0.20 per Common Share exercisable on or before one (1) year from October 31, 2012, (the “Closing Date”), subject to earlier expiry in certain circumstances.

If at any time prior to the expiry of the Warrants the trading price of the Common Shares on the TSX Venture Exchange (the “Exchange”) exceeds $0.35 for a period of 20 consecutive trading days, the Corporation may, in its sole discretion, within five (5) days after such an event, provide notice (a “Notice”) to the warrant holders of early expiry of the Warrants.  The Notice would provide that the Warrants would expire at 3:30 p.m. (Calgary time) on the date which is twenty one (21) days after the date of the Notice.

The Offering was conducted on a non-brokered basis. However, the Corporation paid $17,200 and issued 172,000 finder’s warrants (“Finder’s Warrants”) to certain arms length finders in connection with the Private Placement.  Each Finder’s Warrant entitles the holder to purchase one (1) Unit at a purchase price of $.20 and is exercisable on or before one (1) year from the Closing Date. 

The Corporation intends to use the net proceeds of the Private Placement to fund a portion of its exploration activities with respect to its mining properties in the Yukon Territory and for other general working capital requirements.  The second and final tranche of the Private Placement is anticipated to close on or around November 14, 2012. The Private Placement is subject to final approval by the TSX Venture Exchange (the “Exchange”). 

About Kestrel Gold Inc.

Kestrel is a gold exploration corporation headquartered in Canada.  Its principal project is the King Solomon Dome property in Canada's Yukon Territory. Kestrel is listed on the TSX Venture Exchange.

For further information, please visit our website at www.kestrelgold.com  or contact:

Kevin Nephin, President & CEO
Office (604) 824-6056
kvnephin@telus.net

 

And/or

Cameron MacDonald
Macam Investor Relations
Office (403) 452-6600
cmacdonald@macamgroup.com

Cautionary Statements

This news release contains “forward-looking statements” within the meaning of applicable securities laws.  Readers are cautioned to not place undue reliance on forward-looking statements.  In particular, forward-looking statements in this news release include, but are not limited to the use of proceeds from the Private Placement, the completion of an additional tranche of the Private Placement and the receipt of Exchange approval for the Private Placement.  Forward-looking statements are based on certain key assumptions made by the Corporation, including assumptions regarding the receipt of all regulatory and stock exchange approvals and that the proceeds will be used as currently intended.  Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk of delays in obtaining or failure to obtain regulatory approval and general economic, market and business conditions. 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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.