Lone Star Gold, the precious mineral developer based in Albuquerque with a decided focus on North American resource projects, reported today that the proceeds from their recent $15M common stock purchase agreement (Jan 7) with Deer Valley Management, LLC, have been applied to extant operating costs and are now being funneled to the San Antonio del Potrero tailings project in order to fund processing plant construction.

The new facility will really accelerate silver, as well as gold, zinc, and lead, recovery from the over 1.2M tons of mine tailings (from over a century of previous mining activities) the company has at their disposal. Testing has confirmed that without any additional crushing of the tailings, LSTG is looking at an 88-90% recovery range using the cyanide-free, low environmental impact, and inherently benign nitrogen leaching pile process. Plans call for a facility able to handle around 1k tons/day which should be fully operational within six months.

President of LSTG, Daniel Ferris, was extremely pleased with the success of this financing effort and expressed supreme confidence to investors that Lone Star is well-positioned to move ahead rapidly with construction of the tailings facility. Ferris pointed to the extensive work already done at the site and asserted that the efforts made by the company at San Antonio del Potrero thus far have really laid the groundwork necessary to ensure that they will be able to execute on the project superbly.

Ferris also noted that while several factors yet exist which may lengthen the processing plant’s construction up time, LSTG essentially has matters well in hand and even if they have to go past the aforementioned operational date, good logistics and the drive to capture concentrate sales should bolster morale, helping to keep things on track. The logistics are really good here and it is an established mining district, with a local, government-owned processing plant nearby that could potentially afford LSTG a source of even earlier concentrate sales.

This tailings project is a nice, immediate capital-generating backdrop to the company’s flagship La Candelaria project, which showed gold and silver samples in 2009 as high as 0.35 g/t and 89 g/t respectively. The company is already quite advanced in developing a resource production footprint in Chihuahua and is one of the few really attractive juniors operating in the region today.

For more information on Lone Star Gold, visit www.LoneStarGold.com

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