Estrella Announces New Joint Venture with Cliffs on Yanac Porphyry Copper Project, Peru

Property of Merit Confirmed for Joint Venture

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/04/12 -- Estrella Gold Corporation (TSX VENTURE: EST) ("Estrella" or the "Company") is pleased to announce that Cliffs Natural Resources Exploration Inc., a wholly owned subsidiary of Cliffs Natural Resources Inc. (NYSE: CLF)(Paris: CLF) ("Cliffs"), has accepted the Yanac Property as a Joint Venture Project. Cliffs and Estrella each now hold a 50% interest in the property, and Cliffs must spend a firm commitment of US $500,000 in year one on exploration or payment to Estrella; with an additional US $250,000 (not firm) to a total of US $750,000 to maintain their interest beyond year one. Details of the Agreement are included below.

The Yanac Project is located 50 km northwest of the town of Chincha in the department of Ica in south-central Peru. The project contains 5,200 hectares that were acquired by Estrella through concession applications in April of 2011 within the Exploration Alliance Agreement with Cliffs (see prior news releases). Results to date identify a prospective outcropping area covering 1.0 km x 0.75 km containing a porphyry-copper style quartz-iron oxide stockwork zone, with 3 centers of silicification, within a phyllic alteration zone. The alteration and mineralization is hosted by a plagioclase-hornblende-biotite quartz-eye porphyry intrusion of probable Cretaceous age. Initial rock samples over a 300 x 200 meter area returned copper values ranging from 0.12- 2.9%, with 8 of those samples greater than 0.74%. A systematic grid sampling program was completed with three hundred and five (305) samples of approximately one meter square chip samples, collected on a 100 meter square grid. Assay results identify a continuous core area containing 0.2 - 2.8% copper covering an area extending approximately 900 meters (north-south) by 400 meters (east-west). Copper mineralization is closely related to stockwork development within this porphyry system. Outcropping mineralization occurs within a zoned ASTER alteration anomaly which suggests that the mineralized system may be much larger, extending beneath surrounding covered areas. The outcropping copper mineralization occurs within phyllic, or sericitic facies alteration assemblages which suggests that higher grade, and/or larger areas of copper mineralization may be present at depth. The property contains four historical drill holes located outside the main zones of mineralization, however analytical results are not available.

Mr. Mark Brown, President and CEO of Estrella, commented, "Yanac is an exciting new porphyry copper discovery that provides Estrella with the upside of a major deposit, if exploration is successful. The identification and selection of Yanac demonstrates the benefits of our prospect generator model."

EARN-IN TERMS: Cliffs can acquire an additional 20% interest in the Yanac Project, to a total 70% interest, by spending a minimum of US$4,000,000 (including the above mentioned US$750,000) and completing 3,000 meters of drilling within four years of selection. If Cliffs fails to acquire the additional 20%, the property reverts to Estrella. Upon earning 70%, Cliffs can acquire an additional 10% interest in the Yanac Project, to a total 80% by completing an NI 43-101 Compliant Pre-Feasibility Study or by defining a compliant Mineral Resource containing a minimum of 1,000,000, ounces of gold or gold equivalent, within four years of earning its 70% interest. If Cliffs elects not to earn an additional 10% interest, Cliffs will pay Estrella US$2,000,000 within 60 days and the parties will fund their proportional interest, subject to conventional dilution. If either party's interest in the Project is reduced to 10%, that interest will be convert to a 2% NSR royalty.

QA/QC: Rock samples were collected as described and in accordance with accepted industry standards and procedures. The samples were submitted to the ALS Chemex Labs (ISO 9001:2000 accredited) in Lima, Peru for analysis. Gold was analyzed by fire assay with an AAS finish and multi-element analyses were determined with aqua regia digestion and ICP MS/AAS techniques. The Company conducts routine QA/QC analysis on all assay results, including the systematic utilization of certified reference materials, blanks and field duplicates.

About Estrella Gold Corporation (TSX VENTURE: EST) - Exploration is risky and Estrella is seeking to increase the chances of success as a "Prospect Generator" focused on gold exploration in Latin America. Estrella identifies and acquires new mineral properties, and then conducts initial, low-cost exploration to define a potential new deposit. Once defined, Estrella forms joint ventures with other companies that will provide funding and reduce Estrella's risk and expenditures. The Prospect Generator business model allows Estrella to aggressively seek the next major discovery. Estrella has twenty-three (23) active exploration properties in Peru, with fourteen (14) held in venture agreements, most in a strategic exploration alliance with Cliffs. Of the nine properties held 100% by Estrella, the Company has six new epithermal gold targets, two early stage epithermal gold targets, and the Colpayoc gold-porphyry target which has a NI 43-101 compliant inferred gold resource containing 313,000 ounces of oxide gold (19.3 Mt @ 0.5 g/t gold, Global Geotechnologies Inc.; News Release dated 12/21/2011). The Company has 31.7 million shares issued and outstanding on the TSX Venture Exchange (TSX VENTURE: EST). Mr. Keith A. Laskowski, MSc., is the Company's Qualified Person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and has prepared, reviewed and verified the technical information contained in this news release. Further information is available at Estrella Gold's website: www.estrellagold.com.

STATEMENTS IN THIS NEWS RELEASE, OTHER THAN PURELY HISTORICAL INFORMATION, INCLUDING STATEMENTS RELATING TO THE COMPANY'S FUTURE PLANS AND OBJECTIVES OR EXPECTED RESULTS, MAY INCLUDE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS AND ARE SUBJECT TO ALL OF THE RISKS AND UNCERTAINTIES INHERENT IN RESOURCE EXPLORATION AND DEVELOPMENT. AS A RESULT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS.

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.

Contacts:

Estrella Gold Corporation

Mark Brown, CA

President and CEO

(604) 687-3520

(888) 889-4874 (FAX)
mtbrown@pacificopportunity.com
www.estrellagold.com