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Kestrel Gold Concludes Option to Acquire King Solomon Dome Gold Project, White Gold/Dawson City District, Yukon Territory

December 2, 2010

Kestrel Gold Inc. (“Kestrel” or the “Corporation”) (TSX-V:KGC). Further to the news release of the Corporation, dated September 8, 2010, the Corporation is pleased to announce that it has concluded entering into separate definitive option agreements (“Option Agreements”) to acquire an option to earn a 100% interest in four individual properties, collectively known as the King Solomon Dome Project, located within the heart of the Yukon Territory's world-renowned Klondike Goldfields where total placer gold production to date has exceeded 13 million ounces of gold. The projects are located 30-60 km southeast of Dawson City and occur within an area of extensive past and present placer mining activity.

To fully exercise the option on all four properties, Kestrel will be required to make staged payments totalling $920,000 over a period of approximately four (4) years and fund exploration expenses of up to $100,000. Each individual property is subject to a 2.5% NSR, one half (1/2) of which can be purchased for $1,000,000, in the case of each individual property. To date, the Corporation has paid $20,000 and issued 150,000 common shares of the Corporation in favour of the Optionor under the Option Agreements. These common shares are subject to a four (4) month hold period which expires on March 24, 2011.

The claims are located within the Tintina Gold Belt which extends across the Yukon and Alaska and contains several major deposits including Pogo, Donlin Creek and Fort Knox, as well as recent significant discoveries such as White Gold (Kinross/formerly Underworld Resources Inc.), Rau (Atac Resources Ltd.) and Coffee (Kaminak Gold Corp). Project geology consists of various schist and gneiss units with mineralization concentrated within quartz veins, altered and sheared or weakly brecciated host rocks in zones generally parallel, and adjacent, to regional scale thrust faults.

Previous soil sampling within the project area claims had encountered 3 main anomalous zones, each at least 1.0km in length and varying from 25 metres to 400 metres in width, with soil geochemical values of up to 965 ppb Au associated with occasional highly anomalous arsenic, antimony and lead. This metal signature is common to White Gold area mineralized zones such as the Golden Saddle and Arc deposits held by Kinross Gold (formerly Underworld Resources).

Recent trenching of these anomalies has encountered mineralization including narrow high-grade zones often containing visible gold with grades ranging up to 14,700 ppb (14.7g/t) Au over 1.9m, 8100 ppb Au over 1.9m and 40,670 ppb Au (40.7 g/t) over 0.7m; as well as broad intervals with grades such as 1622 ppb (1.6 g/t) Au over 8.4m and 2242 ppb (2.2 g/t) Au over 18.2m. “These acquisitions give Kestrel a foothold in the most productive placer district of the Yukon. The King Solomon Dome project is considered highly prospective given the amount of bedrock gold mineralization that exists within project boundaries, the significant amount of placer mining that has taken place within and immediately downstream from the properties, and the fact that no diamond drilling has been completed on any of the gold mineralized showings. Our plan is to immediately begin various geological studies, preparatory work and geological compilations in preparation for a major drill program,” stated Kevin Nephin, President and Chief Executive Officer.

About Kestrel Gold Inc.

Kestrel is listed on the TSX-V and is committed to the acquisition, exploration and development of precious metal projects in North and South America. It has an experienced and committed board of directors and the financial ability to aggressively meet its objectives. Technical aspects of this news release have been reviewed and approved by Tim J. Termuende, P.Geo., hereby designated as a qualified person under National Instrument 43-101.

On behalf of the Board of Directors


“Kevin Nephin”

President and CEO

For further information, please contact Kevin Nephin at 604-824-6056 or 604-799-2456
Email: [email protected] or visit our website at kestrelgold.com

Cautionary Statements
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to planned exploration activities properties in the Yukon Territory. 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 availability of equipment and funds to complete future exploration activities. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the Corporation will not proceed with exploration activities for any reason. 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