VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 29, 2012) - Estrella Gold Corporation (News - Market indicators) ("Estrella" or the "Company") -

• Estrella Nominates New Property of Merit - Yanac Copper Discovery
• Estrella Discovers and Acquires 6 new epithermal gold prospects from Venture.

Estrella Gold Corporation is pleased to announce the results of regional exploration managed under its Alliance Agreement with Cliffs Natural Resources Exploration Inc., a wholly owned subsidiary of Cliffs Natural Resources Inc. (NYSE:CLF)(PARIS:CLF) ("Cliffs"). The program is fully funded by Cliffs and commenced in February of 2011. As manager, Estrella carried out an integrated exploration program for iron-oxide-copper-gold mineralization (IOCG) in south-central Peru within and adjacent to the Marcona iron district. The program included systematic development of a detailed exploration database and targeting strategy, followed by target identification and property acquisition and evaluation. Estrella identified and evaluated 35 target properties containing 51,100 hectares (511 square kilometers) over the last 20 months.

Estrella has discovered several exciting mineral occurrences which are being explored, including the Yanac porphyry copper occurrence. The Yanac Property contains 5,200 hectares of mineral lands which host a large zone of outcropping copper mineralization, extending 800 meters (N-S) by 400 meters (E-W). Estrella has nominated the Yanac property as a "Property of Merit" within the Alliance Agreement. Cliffs has 90 days to accept or decline the property as a new "Joint Venture Project", until December 1, 2012. If accepted, Yanac will become a new Joint Venture Project, with a minimum US$500,000 first year exploration budget funded by Cliffs. As described below, Cliffs can earn up to a 70% interest by funding US$4.0 million in exploration, and can then earn to 80%, subject to staged terms and conditions. Yanac will be described in detail in a separate forthcoming news release. In addition to Yanac, Cliffs also continues to fund exploration of the Pampa Poroma Joint Venture Project (news release September 11, 2012), and 9 additional target properties which have potential for IOCG mineralization. They also continue to fund exploration for new properties.

Eighteen (18) other properties (16,000 hectares) have been designated as Rejected Targets under the Alliance Agreement, and exploration of these properties will no longer be funded by Cliffs under the Alliance Agreement. These include 6 properties with 7,100 hectares that contain volcanic-hosted alteration systems, which have potential for discovery of precious metal mineralization. The properties contain variable amounts of favorable alteration including vuggy silica, hydrothermal clay, iron oxide with elevated trace element geochemistry including gold, silver, antimony, arsenic, or mercury. These six new properties will be explored independently and offered for Joint Venture to qualified parties from Estrella as part of the Company's Prospect Generator Business Model.

Mr. Keith Laskowski, QP, President and CEO of Estrella, commented, "We are pleased with the success of our exploration alliance with Cliffs. The program has generated some exciting new discoveries which Cliffs may continue to pursue, and as a secondary benefit, we have received six new epithermal gold properties which do not fit the current objectives of our partner. The Alliance Agreement with Cliffs provides several paths to value for Estrella shareholders. We look forward to additional encouraging news in the coming months."

AGREEMENT: Estrella's Alliance Agreement with Cliffs establishes Estrella as the operator, and Cliffs provides US$400,000 per year for two years for regional exploration. The Cliffs-Estrella Alliance focuses on the discovery of IOCG deposits, a type of deposit present in Peru and Chile. Prospective properties meeting certain criteria, including a minimum of US$50,000 in expenditures, will be nominated to Cliffs as "Properties of Merit". Any "Property of Merit" accepted by Cliffs then becomes a Joint Venture Project ("Project") with Cliffs and Estrella each owning an initial 50% interest. Any Property of Merit which is declined by Cliffs shall be released to Estrella.

Cliffs can acquire an additional 20% interest in selected Projects, to a total 70%, by spending a minimum of US$4,000,000 and completing 3,000 meters of drilling within four years of selection. Cliffs will be required to expend a firm commitment of US$500,000. If Cliffs fails to acquire the additional 20%, the property reverts 100% to Estrella Upon earning 70%, Cliffs can acquire an additional 10% interest to a total 80% in selected Projects by completing a 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. The Agreement also provides Cliffs with the option to acquire up to an 80% interest in the Company's Pampa Poroma property, subject to the same terms described above, except Cliffs must spend a minimum of US$2,000,000 by August 31, 2013 to earn its initial 50% interest.

About Estrella Gold Corporation (News - Market indicators):

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 Perú, with fourteen (14) held in venture agreements, most in a strategic exploration alliance with Cliffs Natural Resources Exploration Inc. 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 (News - Market indicators). Mr. Keith A. Laskowski, MSc., is a 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.