TriStar Plans to Raise up to $4 Million to Continue Drilling at Castelo de Sonhos Project

HOUSTON -- (BUSINESS WIRE) -- TriStar Gold Inc. (the “Company” or “TriStar”) plans to raise up to $4 million by a combination of a warrant exercise incentive program and a non-brokered private placement. The proceeds will be used to continue drilling at the Company’s Castelo de Sonhos Project in Para state, Brazil.


Private Placement:

The private placement will consist of up to 12 million Units (“Units”) of the Company at the price of $0.25 per Unit. Each Unit will consist of one share of TriStar and one half of one share purchase warrant. Each such whole Warrant will entitle the holder to purchase one additional share of TriStar at the price of $0.30 per share for a period of one year.

Finders’ fees may be paid in connection with the private placement.

Certain directors and officers of the Company may acquire Units under the private placement. Any such participation would be considered to be a related party transaction as defined under Multilateral Instrument 61-101. The transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any securities issued to, or the consideration paid by, such persons will exceed 25 per cent of the Company's market capitalization. This private placement is subject to approval of the TSX Venture Exchange (the “Exchange”).


Warrant Exercise Program:

The Company will make application to the Exchange for formal approval of an incentive program to encourage the early exercise of outstanding warrants (the "Original Warrants") held by warrant-holders, other than insiders of the Company and pro group members who, in accordance with requirements of the Exchange, are not being offered the right to participate in the warrant incentive program.

The Original Warrants were issued as part of a financing in December 2010 and have an expiry date of December 20, 2015. Each Original Warrant is currently exercisable to acquire one common share of the Company at a price of $0.30.

In order to encourage the early exercise of such Original Warrants, the Company will be seeking approval of the Exchange to an amendment to the terms of the Original Warrants to enable the holders to receive a Warrant Exercise Unit (as defined and described below) for each Original Warrant exercised during the 30 day period following the receipt of formal approval of the Exchange (the “New Warrant Expiry Date”) at the price of $0.25 per Warrant Exercise Unit.

Subject to the receipt of formal approval of the Exchange to the incentive program and the resulting amendment to the Original Warrants, each holder of an Original Warrant who elects to exercise their Original Warrant at the reduced price of $0.25 prior to the New Warrant Expiry Date of the incentive program will receive a unit (a "Warrant Exercise Unit") comprised of one common share and one-half of a warrant (a "New Warrant"). Each whole New Warrant will allow the holder to acquire an additional common share of the Company at a price of $0.30 per share for one year following the date of issue of the Warrant Exercise Unit. The New Warrants, and any shares issued upon exercise thereof, will be subject to a four-month hold period. If an Original Warrant holder chooses not to exercise their Original Warrants by the New Warrant Expiry Date, the Original Warrants will continue to be exercisable for common shares on the same terms that previously existed, as will the warrants held by insiders of the Company and pro group members.


Drilling Program:

TriStar plans to start the second phase of drilling in July at its 100% owned Castelo de Sonhos project consisting of a minimum of 3,000 meters of core drilling. At Esperança South target, the new drilling campaign will aim to extend the known mineralization along strike as well down dip. At this target, the Company has already drilled 18 holes along a 2,000 meters long drilling line which follows the strike of the soil anomaly and the open cuts worked by the local garimpeiros. The mineralization is open to the South-west and North, where it widens. The current space between the traverse drilling lines range from 100 meters to 600 meters and the initial drilling will also aim to fill in this drilling grid.

At Esperança Center, where 14 holes were already drilled to investigate a 2,500 meters long by 800 meters wide soil anomaly, the Company will aim to fill in the grid, which has drilling lines spaced from 200 meters to 400 meters and also in a fence-like pattern, to follow mineralization along the cross-sections.

At Castelo de Sonhos, the main conglomerate package, which is the host for the gold mineralization, has a horse shoe shape and extends for approximately 16 linear kilometers. The continuing exploration performed by TriStar has expanded the soil anomalies to approximately 14 kilometers along the outcropping conglomerates. Also, a new anomaly, named East-Center target, has been identified to the East of Esperança Center. This new anomaly is 2,000 meters long by 800 meters wide (100 ppb cut-off) and its gold assays range from 100 ppb to 1,617 ppb. As the strike and dip of the conglomerates in this area are the same as in Esperanca Center, it indicates the potential of multiple zones of mineralized sediments. Some drill holes will target this new anomaly.

Gold mineralization at Castelo de Sonhos is hosted in early Proterozoic conglomerates and its geological setting, age (2.1 Ga years) and mineralized intercepts, are similar to those encountered at historical mining districts where large gold deposits like Jacobina (North-eastern Brazil) and Tarkwa (Ghana), have been producing gold for decades.

Mark E. Jones III, President and CEO of TriStar, stated: “We are pleased to be drilling to expand mineralization at Castelo de Sonhos, which has positive similarities to historic gold deposits worldwide. At Esperança South, for instance, the expansion potential clearly extends to the North, where the soil anomaly widens in a highly prospective setting.”


About TriStar:

TriStar Gold is a well-financed gold exploration company focused on high-potential properties in Brazil. In addition to Castelo de Sonhos, TriStar holds another exploration project in the Tapajós district known as the Bom Jardim Property. The Company’s shares are listed on the TSX Venture Exchange under the symbol TSG-V. Further information is available at www.Tristarau.com


Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.


Forward-Looking Statements

Certain statements contained in this press release may constitute forward-looking statements under Canadian securities legislation which are not historical facts and are made pursuant to the "safe harbour" provisions under the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon the Company's reasonable expectations and business plan at the date hereof, which are subject to change depending on economic, political and competitive circumstances and contingencies. Readers are cautioned that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause a change in such assumptions and the actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements or position expressed or implied by those forward-looking statements. Risks, uncertainties and other factors that could cause the Company's plans to change include changes in demand for and price of gold and other commodities (such as fuel and electricity) and currencies; changes or disruptions in the securities markets; legislative, political or economic developments in Brazil; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of the company’s projects; risks of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining or development activities; the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of reserves and resources; and the risks involved in the exploration, development and mining business. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.



Contacts

TriStar Gold Inc.
Mark Jones III, Chairman and CEO
281-579-3400
info@tristarau.com