Eloro Resources Announces Execution of Definitive Purchase Agreement with KWG Resources; Acquisition of Louvicourt Township Gold Property Closed in Escrow

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TORONTO, ONTARIO--(Marketwire - Dec. 12, 2011) - Eloro Resources Ltd. (TSX VENTURE:ELO.V - News)(FRANKFURT:P2Q.F - News) ("Eloro" or the "Company") is pleased to announce the execution of a binding Share Purchase Agreement (the "Agreement") with KWG Resources Inc. (TSX VENTURE:KWG.V - News) ("KWG") whereby KWG has agreed to exchange all of the outstanding shares of its wholly-owned subsidiary, 6949541 Canada Inc. ("6949541"), for shares and warrants of Eloro. 6949541 holds eleven contiguous mineral claims in Louvicourt Township ("Louvicourt Property"), adjacent to Eloro's wholly-owned Simkar Gold Property near Val d'Or, Quebec. Eloro's acquisition of all of the outstanding shares of 6949541 from KWG (the "Acquisition") has closed in escrow, subject to the occurrence of certain conditions discussed below.

The terms of the Agreement, previously announced on September 14, 2011 were amended such that 6949541's 3,080,581 million outstanding shares will be exchanged for 3,080,580 million Eloro units ("Units") and 3,080,580 Eloro premium warrants ("Premium Warrants").

Each Eloro Unit will consist of one common share and one half of one common share purchase warrant ("Warrant"). Each whole Warrant will entitle the holder to purchase one Eloro common share at a price of $0.24 per share for a term of 18 months, provided that, if the average closing price for the common shares on the TSX Venture Exchange ("TSXV") (or on any other stock exchange on which the Common Shares may be listed) is at least $0.36 per share for twenty (20) consecutive trading days (following the expiry of the four-month hold period), the Warrants will expire unless they are exercised within ten business days (or such longer period of time as Eloro may provide) after Eloro provides notice to accelerate the expiry time.

Each Premium Warrant will entitle the holder to purchase one Eloro common share at a price of $1.00 per share for a term of five (5) years, provided that, if the average closing price for the common shares on the TSXV (or on any other stock exchange on which the Common Shares may be listed) is at least $1.50 per share for twenty (20) consecutive trading days (following the expiry of the four-month hold period), the Premium Warrants will expire unless they are exercised within ten business days (or such longer period of time as Eloro may provide) after Eloro provides notice to accelerate the expiry time.

The Louvicourt Property was previously explored by KWG for its gold potential and KWG retains a net smelter returns ("NSR") royalty on gold production from the Louvicourt Property that is 1% of the NSR, plus an additional 1% of the NSR exceeding $2,000 per troy ounce, plus an additional 1% of the NSR exceeding $3,000 per troy ounce.

It is a condition of closing in favour of Eloro that 6949541 will have working capital of $200,000, or that an equivalent amount of funds will be paid to Eloro.

The transactions contemplated herein have closed in escrow subject to the occurrence of the following conditions: (i) receipt of the TSXV's final acceptance of the transaction; (ii) registration of the transfer of the mineral claims comprising the Louvicourt Property with the appropriate government offices in Quebec; and (iii) registration of a Net Smelter Returns Royalty Agreement with the appropriate government offices in Quebec.

About Eloro Resources

Eloro Resources is an exploration and mine development company with a portfolio of gold and base metal properties in northern and western Quebec. The Company is focused on expanding the historic gold resources at the past-producing Simkar Mine property. Eloro plans to pursue exploration work at Simkar with the objective to outline quality gold resources in an established mining camp.

Information in this news release respecting the occurrence of the conditions to the release of the escrow constitutes forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company. Forward-looking statements and information are based on assumptions that financing and personnel will be available when required and on reasonable terms, and all necessary regulatory approvals will be obtained, none of which are assured and each of which is subject to a number of other risks and uncertainties. There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Contacts

Thomas G. Larsen
Eloro Resources Ltd.
President and CEO
(416) 868-9168

Jorge Estepa
Eloro Resources Ltd.
Vice-President
(416) 868-9168
www.elororesources.com