LSTG News Lone Star Gold, Inc. Signs Term Sheet Outlining Common Stock Financing Agreement of Up to $24 Million

2012-05-01 09:48 ET - News Release

ALBUQUERQUE, NM -- (Marketwire) -- 05/01/12

Lone Star Gold, Inc. (OTCBB: LSTG) ("Lone Star" or "the Company") is pleased to announce that on April 30, 2012, the Company signed an Investment Agreement with Fairhills Capital Offshore LTD ("the Investor") outlining the terms and conditions under which the Investor has agreed to provide the aggregate amount of up to $24 million to the Company in exchange for the purchase of Lone Star's Common Stock ("the Common Stock").

The Company plans to use the funds for general working capital purposes. In particular, the funds will be used toward Lone Star's current second-year exploration and drilling program at its Mexico-based La Candelaria gold-silver property as well as subsequent project activities. The funds will also be used to help with the Company's involvement in the Mexico-based Tailings Project JV agreement, which currently involves the ongoing construction and planning of on-site Plant Production operations, including a wash plant and the design and development of a Benign nitrogen leaching pile process. In addition, Lone Star's current plans include expanding the Company's market presence in the Mexico area through the acquisition of one or two more properties in the surrounding area.

According to the agreement's Commitment Period will begin on the effective date of the filing of an S-l with the Securities and Exchange Commission, and will end on the earlier of (i) the date in which the Investor has invested an aggregate amount equal to USD$24M, (ii) 36 months from when the S-l becomes effective, or (iii) at such time as the Registration is no longer effective.