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Kestrel Gold Announces Definitive Agreement and Technical Report for Huachi Gold Property in Argentina

February 24, 2011

Kestrel Gold Inc.(the “Corporation“) (TSX VENTURE:KGC) is pleased to announce that the Corporation has entered into a definitive share purchase agreement (the “Agreement“) to acquire all of the issued and outstanding shares (the “Acquisition“) of Rio Diablillos (S.R.L.) (“Rio“) in consideration of the issuance of 2,000,000 common shares of the Corporation over a period of 18 months. (See news release dated September 15, 2010). Rio is a private corporation, incorporated under the laws of Argentina. The Agreement is subject to both the satisfactory meeting of certain closing conditions customary to transactions of the nature of the Acquisition, and applicable regulatory body approvals, including the approval of the TSX Venture Exchange. The Corporation anticipates closing of the Acquisition in the near future.

As stated in the news release of September 15, 2010, Rio holds an option and right to acquire one hundred (100%) percent interest in 32 mining claims located in the Andean Pre-Cordillera of San Juan Province, Argentina (the “Huachi Mining Property“). The Corporation has obtained a National Instrument 43-101 compliant technical report with respect to the Huachi Mining Property (the “Technical Report“), which will be filed with the applicable regulatory authorities and on SEDAR (at www.sedar.com) upon the closing of the Acquisition.

Pursuant to a loan agreement between the Corporation and Rio, the Corporation has agreed to loan up to US$3,000,000 to Rio for the exclusive purpose of performing mining exploration activities in Argentina, acquiring mining concession rights in Argentina, mining exploration and prospecting costs, purchasing mining exploitation rights in Argentina or costs related to those mining activities (the “Loan“). As of the date of this news release, the Corporation has loaned US$350,000 to Rio. The Loan is to be repaid over a 30 month period commencing in August 2012, with interest at a rate of 2% per annum, and is secured against all of the issued and outstanding shares of Rio.

Highlights of the Technical Report

Stephen de Wit, P.Geo and William Gilmour, P.Geo of Discovery Consultants (“Discovery Consultants“), an independent, geosciences and exploration consulting firm, were retained by Kestrel to prepare an independent technical report on the Huachi Mining Property. As part of the Technical Report, twenty-five rock samples were collected by Mr. de Wit in October 2010. The samples consisted of outcrop and float material and grab samples. All 25 rock samples returned with gold values, ranging from 0.03g/t to 52.3g/t Au, with notable quantities of silver and lead.

About the Huachi Mining Properties

The Huachi Mining Property is located within the Huachi mining district in northern San Juan Province, Argentina, about 135 km due north of the city of San Juan, and 40 km northwest of the small town of San Jose de Jachal. The Huachi Mining Property is comprised of 32 mining tenures that cover 462 hectares. Mining in the Huachi valley extends back to pre-Columbian times indicated by the presence of ancient Incan mining tools in the region. Throughout this history there has been gold mining activity, ranging from small artisanal miners to small-scale mechanized operations in the 1960s. The Huachi Mining Property contains copper gold sulphide mineralization that was deposited in an environment that transitions from the basal roots of a low to intermediate sulphidation epithermal to a subvolcanic copper porphyry environment at depth.

About Kestrel Gold Inc.

Kestrel Gold Inc. is a gold exploration company headquartered in Canada. Its principal projects are King Solomon Dome and the Toe properties in Canada’s Yukon Territory and, upon completion of the Acquisition, will include the Huachi Mining Property in Argentina. Kestrel Gold (KGC) is listed on the TSX Venture exchange.

Technical aspects of this news release have been reviewed and approved by T.J. Termuende, P.Geo., hereby designated as a qualified person under National Instrument 43-101.

Cautionary Statements

This news release contains “forward-looking statements” within the meaning of applicable securities laws relating to the acquisition of an option in certain exploration properties in Argentina through the acquisition of all the issued and outstanding shares of an Argentina corporation. Readers are cautioned to not place undue reliance on forward-looking statements. Forward-looking statements are based on certain key assumptions made by the Corporation, including assumptions regarding the satisfaction of conditions to the completion of the transaction and the receipt of all regulatory and stock exchange approvals. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the transaction will not be successfully completed for any reason, including the failure to obtain the required approvals or clearances from regulatory authorities or the failure by any party to complete the conditions to the completion of the Acquisition. 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.