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Kestrel Gold Inc. – Results from King Solomon Dome 3D-IP geophysical survey

September 4, 2012

Vancouver, British Columbia: Kestrel Gold Inc. ("Kestrel" or the "Corporation") (TSX Venture: KGC) announces the results from a deep 3D-IP geophysical survey have been processed from Kestrel Gold Inc.'s King Solomon Dome Property south of Dawson City, in the Yukon Territory.

The Resistivity and chargeability survey using the Volterra-3DIP system was conducted by SJ Geophysics of Delta, B.C., in late June in conjunction with a magnetometer survey using 200 metre line spacing over a 1.6 km x 1.6 km grid.

Significantly, the survey has detected a large chargeability anomaly at depths to around 350 metres below the topography, and below the main gold, silver, arsenic and lead soil anomaly associated with the Sheba, Mitchell, Orekon vein systems (where gold values in rock samples of up to 17.1 g/t Au were collected in Kestrel's 2011 trenching program).

Highlights of the survey:

  • Two deep chargeability anomalies totalling over 1 km in width (approx. 300m below surface) are present east and west of the Sheba vein showing
  • The two deep chargeability anomalies are spatially related to gold, silver, lead and arsenic soil geochemical anomalies at surface
  • The two deep chargeability anomalies are generally shallow dipping to the east (north plunge) and are open to depth
  • The chargeability anomaly east of Sheba is approximately 800 metres in strike length (approx. 300 metres below surface)
  • An additional strong chargeability anomaly is present in the south western part of the property detected from near surface to 300 metres below surface and open to depth
  • Another chargeability anomaly is present in the north eastern part of the property at depths of 250 metres below surface and open to depth

The 2012 survey follows up on the first phase of geophysical work conducted in 2011 which was successful in outlining a large chargeable IP anomaly centred in the area around the Sheba showing and trending towards the Mitchell Shaft in the north over a distance of approximately 1.2 kilometres open along strike and extending to depth. The 2011 survey concentrated on levels generally above 130 metres depth and covered a longer strike length of the vein system. The 2012 survey was specifically designed to test the system centred on the Sheba showing from 130 metres to 400 – 500 metres depth. Confidence levels in the 2012 data are generally good to about 350 metres below surface.

Magnetometer survey results are interpreted as providing evidence for possible fault structures that may off-set the generally NNW trending Klondike vein system and associated gold mineralization. Contrasting magnetic susceptibilities may also reflect areas where magnetite has been replaced by pyrite as a result of hydrothermal processes.

Surface mapping suggests that strong gold, silver, arsenic and lead mineralization occurs in veins and pyrite rich schist (altered) wall rock near fractures. The relatively deep (and shallow dipping) large chargeability high below the surface expression of this mineralization may suggest a sulphide rich litho-tectonic source host.

This provides the highly encouraging prospect that a broad pyritic and possibly gold enriched litho-tectonic host to the vein system and historically gold rich placer streams still exists at depth, a potential deeper source for the metals that were ultimately emplaced in the discordant D4 vein systems at higher structural levels at King Solomon Dome.

Interestingly, the main large tabular nearly flat lying chargeability high is strongest at elevations coincident with the upstream limits of past and present placer operations of some of the richest gold bearing creeks in the Klondike.

The deeper geophysical survey work has provided Kestrel with additional diamond drill targets. The priority of the next phase of exploration will be to test both the steep dipping vein system and the flatter potentially sulphide and gold enriched target both open to depth.

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

About Kestrel Gold Inc. Kestrel is a gold exploration company headquartered in Canada. Its two principal projects are the King Solomon Dome project in Canada's Yukon Territory and the Huachi project in Argentina. Kestrel (KGC) is listed on the TSX Venture Exchange. Technical aspects of this news release have been reviewed and approved by W.A. Taylor, P.Geo., hereby designated as a qualified person under National Instrument 43-101.

Cautionary Statements This news release contains "forward-looking information" within the meaning of applicable securities laws, including with respect to the scope and timing of the Survey, potential exploration results mineralization of KSD and anticipated future exploration of KSD. 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 based anticipated size and scope of the Survey, the timing of the completion of the Survey and the future exploration activities, potential mineralization of KSD and assumptions related to obtaining sufficient financing and other resources to carry out future exploration. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting exploration results and other geological and geophysical data and the ability of the Corporation to obtain the funds and resources required to carry out further exploration. 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) its securities.

Contact Information:

Kestrel Gold Inc. Kevin Nephin
Office: (604) 824-6056 or (604) 799-2456
kvnephin@telus.net  www.kestrelgold.com

And/or

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

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.

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