"Barrick's" Pascua-Lama Project and the Bi-National Treaty (the "Pascua Protocol")

(MSX-CNSX)

VANCOUVER, July 25, 2012 /CNW/ - Mining publication Business News Americas reported on August 12, 2004: "Representatives from the governments of Argentina and Chile will meet in Santiago to sign the mining integration treaty protocol for the Pascua Lama bi-national project, Argentina's mining secretary reported. The protocol will provide the legal framework to begin the gold and silver project, whose construction will require some US$1bn. The document will be signed by Argentina's foreign affairs minister Rafael Bielsa and his Chilean counterpart, Soledad Alvear, together with Argentina's mining secretary Jorge Mayoral. Also present at the ceremony will be provincial authorities, legislators, and Argentine and Chilean businessmen, among others. The Pascua Lama project is owned by Canada's Barrick Gold (NYSE: ABX), which has already greenlighted development of the project on the Chile and Argentina border. The project will have a three-year construction period and will begin operations within 18 months once tax and financing issues are settled, the company said in July."

Mountainstar Gold Inc., the Company, formerly known as Mountain-West Resources Inc., is currently funding a legal challenge to the bona fides of the Pascua Protocol in Chile and seeks, among other things, a Court Order that the Pascua Protocol be extinguished.  Without the Pascua Protocol, the Pascua Lama project, as currently proposed by Barrick Gold Corp. and its subsidiaries (referred to herein together, or variously, as "Barrick"), in the opinion of Management, cannot possibly proceed.  The basis for this Court challenge is that the Pascua Protocol was erroneously obtained upon fatally-flawed representations and assertions by Barrick, which errors are detailed as follows:

1. Amarillos 1-3000, a mining concession obtained by Barrick from Lac Minerals in 1994 and included in the Pascua Protocol, is a non-metallic (salts and nitrates only) concession according to Sernatgeomin (Chile's Geological Authority) and as such, cannot rationally support a gold and silver project.
2. Amarillos 1-3000 is in the process of Mining Registry cancellation in the Courts at Vallenar, Chile, owing to a long-outstanding super-positioning flaw (per the Chilean Mining Code).
3. Barrick, which claims to own Tesoros Uno 1 - 30 to Tesoros Doce 1 - 5 concessions ("Tesoros") and which concessions are also included in the Pascua Protocol, has admitted to the Court at Vallenar, Chile that it does not possess any documents of ownership of Tesoros, nor does it possess any valid legal rights in Chile to allow the exploitation of the Tesoros concessions.  Accordingly, in the opinion of Management, Barrick must cease claims of ownership or legal control over the Tesoros claims or, potentially face serious consequences in Chile, where such transgressions are taken very seriously by the Courts.
4. The Tesoros concessions have been subject to a Court-Ordered Injunction since 2001 which prohibits, among other things, contracting with, encumbering or otherwise commercially exploiting the Tesoros concessions pending the outcome of a Court action in Santiago, Chile (case No. C-1912-2001).  In the opinion of Management, the Tesoros concessions, having also been included in "Barrick's" Pascua Protocol, should never have been claimed to have been owned by Barrick, as these concessions have never been legally owned or controlled by Barrick, in accordance with Chilean law.

MSX's joint venture partner, Mr. Jorge Lopehandia, owns unencumbered title (certified domain) to the Amarillo Norte and Amarillo Sur concessions ("Restituted Amarillo"), over the Mina Pascua Chile areas of geological interest.  These concessions are positioned super-imposed over the Tesoros areas, which Barrick's own lawyer Gonzalo Nieto identified, in 2010 Court proceedings in the 14th Civil Court of Santiago, Chile (case no. C-1912-2001"), as possessing the greatest geological interest for the Pascua Lama project.

These Restituted Amarillo concessions are described in the Option Agreement between the Company and Mr. Lopehandia.

On behalf of the Board of Directors,

"Brent Johnson"
Brent Johnson
President & CEO

Some of the statements contained in this release are forward-looking statements, such as MSX' s expectation that it the Amarillos 1-3000 claims are in the process of cancellation. Actual results and developments may differ materially from those contemplated by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on any forward-looking statements.

Neither the Canadian National Stock Exchange nor the Investment Industry Regulatory Organization of Canada (IIROC) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Mountainstar Gold Inc.

Bruce Olivier, Director: Telephone: [phone],
E-mail: [email protected]