Kestrel Gold Inc. (TSX-V:KGC) is pleased to announce that it has entered into a binding letter of intent with respect to the acquisition of an option to earn an undivided one hundred (100%) percent interest in 12 properties totalling approximately 22,065 hectares, from Bernie Kreft.
 

The Properties
 

The Properties that are to be acquired pursuant to the LOI are located in British Columbia (nine (9) properties and thirty eight (38) Mineral Title Tenures) and the Yukon Territory (three (3) properties and six hundred and twenty four (624) Quartz Claims). The Properties range from being grassroots to very close to drill ready in exploration status, and cover targets that include epithermal, intrusion-related and orogenic gold types as well as porphyry copper type models.
 

The more advanced projects include Ten Mile Creek, Clear Creek and Barney Ridge, all of which are located in the Yukon beside placer gold mining camps. The Yukon projects lie within the prolific gold producing Tintina gold province, home to the large Alaskan gold mines and deposits such as Fort Knox, Pogo and Donlin Creek. Vallaeu Creek, in central British Columbia is situated in the Quesnel Trough, a regional geological Terrane belt extending from southern to northern British Columbia hosting many of the provinces larger gold and copper deposits.
 

An initial geological compilation of existing exploration data for all Yukon and British Columbia Properties has begun and prioritized field exploration is expected to commence shortly. In addition, the Properties will have an area of common interest surrounding them, whereby the Company will pay the Optionor all costs associated with the acquisition of additional mineral properties within the area.
 

The Acquisition
 

Subject to the terms of the LOI and upon entering into a definitive option agreement between the Company and Bernie Kreft, Kestrel will be granted the exclusive Option to acquire a one hundred (100%) percent interest of all mineral rights in respect of the Properties. To fully exercise the Option, Kestrel will be required to issue an aggregate of 11,100,000 common shares in the capital of the Company to the Optionor and to make staged payments totalling $500,000 to the Optionor to be used for exploration programs on the Properties. Upon exercise of the Option, the Optionor shall receive a 1.5% NSR on each of the Properties, 0.75% of which can be purchased by the Company for $1,000,000 (other than with respect to the NSR on the Ten Mile Creek property).
 

The cash payments are to be made in two separate instalments of $250,000, the first instalment to be paid on or prior to the first anniversary of the effective date of the Definitive Agreement and the second instalment on or prior to the third anniversary of the effective date of the Definitive Agreement.
 

The Common Shares are to be issued to the Optionor in three separate instalments of 3,700,000 Common Shares, to be paid on or prior to each of: (i) the execution of the Definitive Agreement; (ii) January 31, 2015; and (iii) the first anniversary of the effective date of the Definitive Agreement. The Common Shares will be subject to a four (4) month hold period from the date of issuance.
 

Kevin Nephin, the Company’s Chief Executive Officer, states: “Having worked with Bernie over the past 4 years on other projects we are very excited to solidify our relationship with him by moving ahead with this acquisition. Bernie is one of Canada’s top prospectors. His work ethic, discipline, prospecting abilities and big picture approach are ingredients critical to the discovery of new deposits, highlighted by his numerous previous industry successes. Working with Bernie and his team will allow Kestrel to quickly and effectively explore these highly prospective Properties in a cost effective manner.”
 

Bernie Kreft states, “I look forward to working with Kevin and the Kestrel team. Combining Kestrel’s financial and geological support with my prospecting and field exploration skills should yield an aggressive acquisition as well as discovery-based mineral exploration company.”
 

The acquisition of the properties is subject the parties entering into the Definitive Agreement and the receipt of all required regulatory approvals, including the acceptance of the TSX Venture Exchange. The acquisition will constitute a “reviewable transaction” pursuant to the policies of the TSXV and as such, TSXV approval will be subject to a review by the TSXV of the proposed acquisition and may include the requirement for a title opinion on the properties and the provision of NI 43-101 compliant technical reports with respect to the Properties. In accordance with Exchange policy, the Common Shares are currently halted from trading and will remain halted until further notice.
 

Effect of Acquisition on Outstanding Securities of Kestrel
 

Kestrel currently has 11,095,842 Common Shares issued and outstanding. Upon closing of the acquisition, the Company will be required to issue 3,700,000 Common Shares to Mr. Kreft, which represents approximately 33% of the currently outstanding Common Shares.
 

In addition, further to the news releases of the Company dated April 21, 2014 and May 1, 2014, the Company plans to complete non-brokered private placement of up to 10,000,000 units of the Company and to issue an additional 500,000 Common Shares as payment of certain debts of the Company. Assuming the completion of the acquisition, the completion of a fully subscribed Private Placement and the completion of the Debt Settlement, the Company will have up to a total of 21,595,842 Common Shares outstanding at the time of completion of the acquisition, of which Mr. Kreft will hold approximately 17%.
 

In order to exercise the Option, the Company will be required to issue Mr. Kreft up to a total of approximately 50% of the outstanding Common Shares, excluding the Private Placement and Debt Settlement, which amounts to approximately 34% of the Common Shares assuming completion of a fully subscribed Private Placement and Debt Settlement and no other issuances of Common Shares.
 

In the event that Mr. Kreft will acquire greater than 20% of the outstanding Common Shares as of the date of closing of the acquisition of the Option, the Company will be required to obtain the consent of at least 50% of the shareholders of the Company pursuant to the policies of the TSX Venture Exchange.
 

Bernie Kreft
 

Mr. Kreft has been a full time prospector in the Yukon Territory since 1988. He manages an active and aggressive family run exploration and development company with numerous projects throughout British Columbia and the Yukon. Mr. Kreft has a history of acquiring and advancing mineral prospects ranging from grassroots to advanced projects, and has made several mineral discoveries over the course of his career. In addition, Mr. Kreft has years of experience in the area of placer mining. Bernie was named Yukon Prospector of the Year for 1998 by the Yukon Prospectors Association.
 

About Kestrel Gold Inc.

Kestrel Gold Inc. is a gold exploration Company headquartered in Canada. Kestrel (KGC) is listed on the TSX Venture Exchange and explores primarily for gold in Canada. The Company has ongoing exploration projects in the famed Klondike Gold Fields just south of Dawson City, Yukon Territory