Telson Resources Inc : Telson Signs Letter of Intent for Near Term Gold & Silver Production Opportunity

The Realito Project mining and processing facility is accessible via 45km of paved highway, plus 15km of gravel road north-northeast from the City of Culiacan. The Realito Project is a low sulfidation epithermal gold-silver deposit that consists of several mineralized structures hosted within igneous rocks. The most explored and main structure, El Realito, has been traced over 4km of strike length and extensively exposed along approximately
1.5km of that strike length on mineralized zones stripped of overburden in preparation of surface mining. The El
Realito structure has been sampled on the surface and tested with at least ten widely spaced diamond drill holes. Tables presenting this historic data are available for viewing on the Company's website http://www.telsonresources.com/elrealitoproject/historical-data.html
A historic potentially open pittable resource was calculated in a report dated February 8th, 2008 (the "Historical Resource Report"), prepared by Mexican geological engineer, Ezael Martin Rocha Turrubiates ("Turrubiates"). Senor Turrubiates graduated in 1968 from "Instituto Politecnico Nacional", The National Polytechnic Institute in Mexico DF, with a professional certificate issued by the "Direccion General de Profesiones".
The Historical Resource Report calculates a resource, in all resource categories, of 1,461,099 tonnes at 2.918 g/t gold and 11.46 g/t silver. Please see the table below for details of the resource.

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As the historic resource has been calculated on the basis of widely spaced drill holes, underground and surface sampling, Telson cautions that readers should not place undue reliance on same. Telson advises that considerable in-fill drilling, assaying and QA/QC work would be required to verify the resource as current. No Qualified Person has done sufficient work to classify the historical estimate as a current mineral resource and Telson is not treating the historical estimate as a current resource or reserve.
The Realito Project has a mining and processing facility on site, financed and installed by Hestgold, capable of processing up to 300 tonnes per day by ball mill processing and gravity precious metal separation. The crushing circuit has an over capacity of up to 800 tonnes per day, in anticipation of transitioning to heap leach
operations in the future. The processing facility is not yet operational, requiring additional work to complete the final installation, which work is estimated to take up to six months to complete, at an estimated budget of US
$1.3 million.
The Realito Project is fully permitted with a mining environmental permit and change of use of soil permit granted by Proteccion Ambiental Y Recursos Naturales, (MIA Oficio No. SG/145/2.1.1/0560/08) dated November
5, 2008) and Cambio De Uso De Suelo de Terrenos Forestales, Oficio No. SG/145/2.2/0843/08/ dated October 24
2008.
The Realito Project also holds a Surface Rights Agreement with the local Ejido Organization, Ejido de "Bagresitos" entered into February 14, 2004, having a term of 30 years.

1. Under the terms of the Agreement, Hestgold and Samarkand intend to form a new private Mexican company ("Newco") to hold title to all of the Realito Project concessions and mining equipment, including the processing plant, as described above. Newco will fund and direct the development of the Realito Project.
a) Initial ownership interest in Newco is to be 51% Telson - 49% Hestgold.
b) Telson, through Samarkand, will invest, on a secured loan basis, up to an initial USD$2 million into Newco, and will be issued redeemable preferred shares (the "Investment"). Hestgold and Telson will agree on a payment schedule to repay the Investment by redeeming the preferred shares, based on cash flow from production. USD $1.5 million of the Investment will be made available for the Realito Project development to finish construction of the milling facility and commence commercial production, and USD$500,000 of the Investment will be paid to Hestgold and used to payout Hestgold's most urgent high interest liabilities, as identified on a schedule to be prepared by Hestgold and approved by Telson.
2. Hestgold will transfer 100% of the Realito Project concessions and the mining facility equipment into Newco at a value to be agreed upon. This value would be a combination of the investment recorded on Hestgold's books that can be verified (the "Verifiable Investment"), plus a reasonable amount of investment to be agreed upon by Telson and Hestgold (the "Good Will"), plus the value of all surface equipment and milling equipment (the "Equipment"). It is the intention of Hestgold and Telson that the combination of the values of the Verifiable Investment, the Good Will, and the Equipment (the "Hestgold Project Investment") would
be equal, or close to the total investment that Hestgold has made in the Realito Project to date. It
Suite 250, 1090 West Georgia St., Vancouver, BC, V6E 3V7, Canada
Tel: 1.800.685.0576, Email: ir@telsonresources.com, http://www.telsonresources.com
is anticipated, as represented by Hestgold, that the total value of the Hestgold Project Investment will be between USD $7 million to USD $10 million.
a) Newco will issue redeemable preferred shares to Hestgold having a value based on the Hestgold Project Investment, in return for Hestgold transferring 100% ownership of the concession and assets described above. Hestgold and Telson will agree on a payment schedule to repay the Hestgold Project Investment by redeeming the preferred shares, based on cash flow from production.
b) The USD$500,000 payment from Newco to Hestgold outlined in 1b, when paid out of Newco, will be treated as a return of investment capital to Hestgold, and will reduce the amounts to be recorded as the Hestgold Project Investment.

Telson shall have the right to contribute additional funding to Newco in order to explore and develop the Realito Project, with the goal of outlining a resource of sufficient quantity to support either a gravity mill expansion or heap leach operation. For each USD $2,500,000 funded, Telson shall earn an additional 4.75% stake in Newco, such that upon funding an additional USD $10 million, Telson will own a cumulative total of 70% of Newco. If Telson fails to invest an amount equal to the Hestgold Project Investment at the end of three years from the
date of formation of Newco, Telson's cumulative interest in Newco shall be reduced on a prorated basis, but at
no time or under any circumstances will Telson's interest in Newco be reduced to less than 25%.
"In these difficult times for the junior mining sector, I am very pleased to present to Telson shareholders and investors this opportunity for Telson to fund and participate in the Realito Project, thereby securing a significant interest in a project that we hope can be developed to a production situation relatively quickly and cost effectively." states Ralph Shearing, President and CEO of Telson, "If we are successful in securing initial funding for this project, we hope to have the mill operating within six months and thereby advance from an exploration and development company to a small scale gold producer. We note that a feasibility study has not been completed and there is no certainty the proposed operations will be economically viable." "We consider that the Realito Project will complement our advanced Tahuehueto Project, located in the prolific Sierra Madre Mineral Belt".

Hestgold has advised Telson that it entered into two funding agreements, the first, on October 26th, 2010 and amended on December 22nd, 2010; and the second on June 21st, 2011. Both of these agreements contemplated that funding would be provided to Hestgold and/or the Realito Project in a timely manner in order to allow the construction of a mill processing facility. Hestgold has represented that its previous funding partners are in default of their respective agreements, however, until such time as those agreements are mutually cancelled, renegotiated or terminated by Hestgold, there remains a contingent liability of Hestgold to the respective parties in the amount of approximately USD $1,800,000.

Samarkand and Telson have 45 days within which to conduct further due diligence investigations and make a decision on whether to proceed based on such investigations. Samarkand has already conducted
Suite 250, 1090 West Georgia St., Vancouver, BC, V6E 3V7, Canada
Tel: 1.800.685.0576, Email: ir@telsonresources.com, http://www.telsonresources.com
extensive due diligence on the Realito Project and Hestgold, however completion of the transaction is subject to a number of conditions, including but not limited to satisfaction with final due diligence and TSX Venture Exchange acceptance. There can be no assurance that the transaction will proceed and be completed as proposed or at all.
The proposed transaction is subject to the acceptance of the TSX Venture Exchange.
For further information please contact the Company directly or visit the Company's web site at the address
noted below.

This press release was prepared by Ralph Shearing, P.Geol, a qualified person as defined under NI 43-101

ON BEHALF OF THE BOARD OF DIRECTORS

(signed) "Ralph Shearing"

Ralph Shearing, Chief Executive Officer

Glen Sandwell

Email: ir@telsonresources.com Tel: 1.800.685.0576 http://www.telsonresources.com

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange)

accepts responsibility for the adequacy or accuracy of this release."

WARNING: The Company relies upon litigation protection for "forward-looking" statements. This News Release may contain forward-looking statements including but not limited to comments regarding the timing and content of up-coming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

Telson Resources Inc. relies upon litigation protection for forward-looking statements.

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