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� Kestrel Gold Inc.: Phase One Drilling Campaign Completed at Huachi Property, Argentina Continues to Affirm Near Surface
Bulk Tonnage Potential Gold Mineralization

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VANCOUVER, BRITISH COLUMBIA--(March 12, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Kestrel Gold Inc.: Kestrel Gold Inc. ("Kestrel" or the "Corporation") (TSX VENTURE:KGC) is pleased to announce that the results from the last 1299 metres of the Corporations 4174 metre phase one diamond drilling campaign on its 540 hectare Huachi Property in San Juan Province, Argentina have now been received and duly processed.

The drilling successfully encountered high grade gold mineralization at the Sentazon Structure 270 metres to the NNE of the known intersection achieved by diamond drill hole 07-HU-08 (Cardero Resources Corp).

Highlights

Significant new drill intersections include:

� � 65.07 g/t Au over 3.0 metres from hole 11-HU-22 � � 0.53 g/t Au over 92.5 metres from hole 11-HU-23 � � � including 1.33 g/t Au over 20.0 metres � � � � � 0.68 g/t Au over 19.0 metres from hole 11-HU-23 � � � including 1.09 g/t Au over 10.0 metres

Geological Setting

Hole 11-HU-23 was drilled to a depth of 310.5 metres with the purpose of intersecting the gold bearing Sentazon Structure. The Sentazon Structure was intersected 40 metres NNE of the known intersection achieved by diamond drill hole 07-HU-08 (Cardero Resources Corp) and importantly approximately 200 metres above the level of that gold bearing intersection. The gold mineralization (above 0.5 g/t Au) in hole 11-HU-23 occurs in more than one intercept and suggests the Sentazon Structure has a wider zone of influence than previously thought (with the hole ending in mineralization - see table below), with possible parallel to sub-parallel and related gold mineralized structures occurring beside the main Sentazon Structure itself.

Hole 11-HU-21 was drilled to a depth of 405 metres with the purpose of confirming the continuation of the Sentazon Structure to the NNE, which was achieved. The distance of drill hole 11-HU-21 from drill hole 07-HU-08 is 270 metres where the structure was intersected with the intersection at approximately 100 metres below the surface in the case of 11-HU-21. As in drill hole 11-HU-23, felsic rocks with porphyritic and brecciated textures exhibit a high level of fracturing with moderate to strong silicification and argillic alteration.

Drill Hole 11-HU-22 was drilled to a depth of 583 metres with the purpose of investigating the Sanjuanina Structure. The mineralized zone encountered in drill hole 11-HU-22 returned the highest grade to date from either drilling or surface sampling at Huachi (65.07 g/t Au). Due to the crushed and disintegrated nature of the rock, high in pyrite and clay content and thus low in cohesion, the core recovery in some of the important intercepts was low. As a result of this, the full extent of the gold mineralization in drill hole 11-HU-22 was not completely determined. The mineralization encountered is, however, believed to be related to the Sanjuanina Structure, which to date has given the best gold intercepts from previous drill hole 11-HU-20. The rock encountered in drill hole 11-HU-22 is generally more gabbroic than in drill holes targeting the Sentazon Structure, with intercalations of more felsic units in part brecciating and cementing the more mafic components.

Drill hole 11-HU-24 was terminated at 87.5 metres for logistical reasons with no samples submitted for assay.

Drill Assays

All intersections stated are drill core interval lengths. True widths are not known at this stage. All diamond drill holes were drilled with a 60 degree dip angle. Significant gold values for the three holes assayed are shown in the table provided. Maps and sections illustrating the content of this news release will be posted on the Company website.

Table: Significant Gold Intercepts from diamond drill holes 11-HU-21 to 11-HU-23

HOLE INTERVAL (m) INTERVAL LENGTH (m) � Au g/t Azimuth From � to 11-HU-21 13 � 21 8 � 0.33 290 including 14 � 18 4 � 0.51 11-HU-21 52 � 67 15 � 0.33 11-HU-21 105 � 113 8 � 0.45 11-HU-21 117 � 147 30 � 0.33 including 117 � 137 20 � 0.41 including 117 � 122 5 � 0.84 11-HU-21 169 � 179 10 � 0.49 11-HU-22 52 � 55 3* � 65.07 130 11-HU-22 109 � 112 3 � 0.55 11-HU-22 134 � 137 3 � 0.67 11-HU-22 166 � 172 6** � 1 11-HU-22 241 � 248 7 � 0.43 11-HU-22 385 � 394 9 � 0.45 11-HU-22 461 � 470 9 � 0.35 11-HU-22 485 � 488 3 � 0.71 11-HU-23 71 � 90 19 � 0.68 285 including 80 � 90 10 � 1.09 11-HU-23 158 � 169 11 � 0.79 including 161 � 167 6 � 1.26 11-HU-23 218 � 310.5 92.5 � 0.53 including 255 � 275 20 � 1.33

*recovery from 52.0 m to 55.0 m is 20% so results may not reflect the true thickness or tenor of mineralization.

**recovery from 167.0 m to 172.0 m is 18%. The value of 1.0 g/t Au over 6.0 m is an estimated weighted average comprising three samples taken from this interval.

Kevin Nephin, CEO of Kestrel Gold Inc., commented, "We are pleased with the very high grade results of our Phase One drilling campaign on our Huachi Property. We look forward to continued progress as we gain a better understanding of the potential of our Argentinian gold deposits in the months ahead."

Planned Exploration

Kestrels 2nd phase of diamond drilling is anticipated to begin next month and will focus on further defining the Sentazon and Sanjuanina structures in terms of continuity of gold mineralization. The mineralized Sentazon Structure is still open in both directions along an approximate 500 metre strike length and extends to a depth in excess of 360 metres where it is still open to depth. The indication from the drilling to date, that related sub-parallel structures may have increased the aggregate width of gold mineralization, will be investigated further. Highly prospective areas such as Agua Dulce will also be mapped in more detail. Further road building (with further surface rock sampling) will concentrate on accessing the Agua Amarga Canyon area to prepare for a third and comprehensive program of deeper diamond drill holes to test the main copper gold porphyry mineralization at Huachi. The management is of the belief that the extensive gold bearing brecciated vein type structures identified by the first phase of diamond drilling, are closely associated with a larger porphyry system which ultimately must be explored.

Quality Control

HQ and NQ diamond drill core (drilled by Major Drilling, Argentina) was submitted to Alex Stewart Assayers Argentina S.A. in Mendoza, Argentina an ISO 9000-2000 accredited laboratory. Gold and silver results were determined using standard fire assay techniques on a 30 gram sample with a gravimetric finish for gold and silver. In addition to this, ICP-AR (Aqua Regia digestion) analysis was performed on 38 elements. QA/QC performed by Kestrel Gold Inc. included the collection of core duplicate samples, coarse reject samples and the insertion of certified reference samples (standards) and blanks. Gustavo Fernandez P. Geo of UAKO Geological Consultants supervised and assessed the QA/QC procedures and data in compliance with National Instrument 43-101 requirements.

About Kestrel Gold Inc.

Kestrel is a gold exploration company headquartered in Canada. Its two principal projects are the King Solomon Dome project in Canadas Yukon Territory and the Huachi project in Argentina. Kestrel (KGC) is listed on the TSX Venture Exchange.

Technical aspects of this news release have been reviewed and approved by W.A. Taylor, P.Geo., hereby designated as a Qualified Person under National Instrument 43-101.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws, including but not limited to, statements with respect to possible future exploration of the Huachi Property and the upcoming reporting of additional drilling results. Readers are cautioned to not place undue reliance on forward-looking statements. Forward-looking statements are based on certain key assumptions made by the Corporation, including assumptions based on the Corporations current exploration results, obtaining sufficient financing and other resources to carry out any future exploration and the timing of testing procedures. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting exploration results and other geological data and the ability of the Corporation to obtain the funds and resources required to carry out further exploration. The forward-looking statements in this press release are made as of the date of this release and the Corporation undertakes no obligation to update publicly or revise any forward looking statements whether as a result of new information or otherwise, except as required by applicable securities laws. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation or its financial or operating results or (as applicable) its securities.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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