Lone Star Gold, Inc. Exercises $200k Draw Down Against $15 Million Line of Equity

ALBUQUERQUE, NM--(Marketwire - Dec 20, 2011) - Lone Star Gold, Inc. (OTCBB: LSTG) ("Lone Star" or "the Company") has exercised a USD$200,000 Put Notice, which represents the Company's third draw down request against the USD$15 million line of equity agreement Lone Star entered into on August 26^th, 2011 with Hong Kong based equity investor North American Gold Corp (NAGC). The equity financing agreement does not involve any debt. Rather, the terms of the agreement give Lone Star the option to draw down from the $15 million amount as and when needed in the amount of $100,000 or multiples thereof. In return for the current $200,000 draw down, 273,972 Lone Star shares will be issued to NAGC.

According to the terms of the agreement, Lone Star is to specifically use the proceeds from the financing to fund operating expenses, working capital and general corporate activities related to the exploration and development of the Company's gold and silver mining projects. Besides general day-to-day Company out goings, the funds will specifically be used for the ongoing drilling exploration work on Lone Star's La Candelaria gold-silver project and ongoing due diligence activities on the Ocampo gold-silver property and the San Antonio del Potrero mine tailings project. All three projects are located in the state of Chihuahua, Mexico.

Lone Star Gold's President, Daniel Ferris, commented: "We're fortunate to have access to the funding needed to continue advancing the work on these three projects. This $200K draw down will not only keep the drilling going on our La Candelaria Project, but will also enable us to acquire and assess the due diligence information we need to make final decisions in the near term on whether or not we exercise our options to purchase interests in the Ocampo Project and the Tailings Project."

Lone Star has a 70% Working Interest in the La Candelaria project, which comprises ~1,976 acres (~800 hectares) of mining concessions located roughly 125 miles (200 km) southwest of the state's capital city of Chihuahua. A first-stage drilling program of 10-15 holes is currently underway on the project. Samples from the initial 3 holes have already been transported to ALS Chemex in Chihuahua with first results expected back within 3-4 weeks.

The Company also has an option to purchase an undivided 65% interest in the San Antonio del Potrero mine tailings project in the city of Hidalgo Del Parral. Lone Star is currently in a 60-day due diligence period for the project, during which time a total of 10 holes will be augured to acquire 40 undisturbed samples at depths of 20-25 meters to provide confirmation of the property's estimated resource as provided to Lone Star by the current owners (i.e., 1.2 million tons of mine tailings which show potential for Silver recovery and additional bi-products including Gold, Zinc and Lead). Based on positive due diligence sampling results, a Definitive Option agreement would be signed.

ADDITIONAL INFORMATION
To learn more about Lone Star's projects, the Company, and regular news updates, visit Lone Star Gold's official website: http://www.lonestargold.com.

ABOUT LONE STAR: Lone Star Gold, Inc. is a publicly traded (OTCBB: LSTG) gold exploration and development company based in Albuquerque, New Mexico. The Company's aggressive acquisition and exploration approach is strategically focused on proven, stable precious metal regions in America and Mexico. Currently, Lone Star has a 70% Working Interest in concessions covering 800 hectares in the La Candelaria project in Chihuahua, Mexico, which the Company is evaluating to determine the potential sites that represent the best potential for silver and gold deposits. Lone Star also has an option to purchase a 70% interest in the Ocampo Project, a 570-hectare gold-silver project in Chihuahua State, Mexico, and an option to purchase an undivided 65% interest in the San Antonio del Potrero mine tailings project in the city of Hidalgo Del Parral in the state of Chihuahua, Mexico.

ON BEHALF OF THE BOARD OF DIRECTORS,

Lone Star Gold, Inc.
Daniel Ferris, Company President

(OTCBB: LSTG)

This press release contains statements that are forward-looking and which involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements in question are based on Lone Star Gold, Inc.'s current expectations and projections about future events, based on information currently available. The forward-looking statements found in this press release may also include statements relating to Lone Star Gold, Inc.'s anticipated financial performance, business prospects, new developments, strategies, and similar matters. Lone Star Gold, Inc. provides no assurance regarding the actual outcome of the events contemplated by any forward-looking statements included in this release. Lone Star Gold, Inc. disclaims any obligation to update any of its forward-looking statements, except as may be required by law.

Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We may use certain terms in this press release, such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from our website at http://www.sec.gov/edgar.shtml.