Alberta Star Development Corp. (the “Company”) is pleased to update its previously announced transaction to acquire a 100% interest in Sterling Mining Company (“Sterling”) and its assets and provide for financing of Sterling’s ongoing operations (refer to the Company’s press releases of June 10, 2009, November 2, 2009 and November 23, 2009).

STERLING MINING COMPANY

Sterling is currently a debtor-in-possession in Chapter 11 Bankruptcy in the District of Idaho, U.S.A. Sterling is engaged in the business of acquiring, exploring, developing and mining mineral properties primarily those containing silver and associated base and precious metals. Sterling operates the Sunshine Silver Mine in Idaho and has exploration projects in Idaho, U.S.A. Sterling was incorporated under the laws of the State of Idaho on February 3, 1903 and its common shares are currently listed on the OTCBB: SRLMQ and Frankfurt Stock Exchange: SMX.

THE SUNSHINE SILVER MINE

The Sunshine Silver Mine located near Couer d’Alene Idaho, U.S.A. and has been one of the world’s largest producers of silver, having recorded production of over 360,000,000 ounces of silver since 1904. A 2007 Canadian “National Instrument 43-101- Standards of Disclosure for Mineral Projects”, report (the “Report”) by Behre Dolbear & Company estimated remaining resources as follows: measured and indicated resources of 31.51 million ounces of silver in 1.43 million tons at 21.8 ounces of silver per ton and inferred resources of 231.5 million ounces of silver in 2.28 million tons at 101.6 ounces of silver per ton. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon. The Report can be found under Sterling’s profile with the U.S. Securities and Exchange Commission and available in Canada at www.sedar.com.

TERMS OF ACQUISITION OF STERLING AND CHAPTER 11 PLAN

As previously announced by the Company (refer to the Company’s press release of June 10, 2009), the Company filed a “Notice of Appearance and Request for Special Notice” with the United States Bankruptcy Court for the District of Idaho, U.S.A. (the “Court”) regarding Sterling and subsequently executed a Binding Term Sheet which is superseded by the acquisition agreement (the “Agreement”) dated November 17, 2009 between the Company and Sterling. Pursuant to the Agreement, the Company has agreed to acquire up to 100% interest in Sterling and its assets and provide for financing of Sterling’s ongoing operations. The Agreement contains a number of conditions precedent to the obligations of the parties. Unless all of such conditions are satisfied or waived by the party for whose benefit such conditions exist, to the extent that they may be capable of waiver, the proposed transaction will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all. Such conditions include: an order (“Order”) of the Court approving a Plan of Reorganization of Sterling (the “Plan of Reorganization”); all claims of all the creditors of Sterling are paid, satisfied, settled or compromised under the Plan of Reorganization and that all other consents and approvals, including regulatory approvals, are obtained. The proposed transaction has not been approved by the TSX Venture Exchange (the “Exchange”) and remains subject to Exchange approval.

There can be no assurance that the proposed transaction will be completed as proposed or at all. The proposed transaction is an “arms length transaction” as defined in Exchange Policy 1.1.

Sterling has filed its Second Amended Disclosure Statement (“Disclosure Statement”) in the bankruptcy proceedings. The Disclosure Statement has been approved by the Court and contains a Plan of Reorganization for Sterling. The Sterling Plan of Reorganization proposes a bidding process for 100% of the issued and outstanding common stock of Sterling entitling the purchaser to all assets of Sterling. The key dates for the sale process are as follows:
 

The Sterling Plan of Reorganzation sets forth specific bidding procedures and processes which must be followed. The Sterling Plan of Reorganization and the Disclosure Statement are available at (a) the Clerk’s Office of the U.S. Bankruptcy Court for the District of Idaho, located at 6450 N. Mineral Dr., Couer d’Alene, ID 83815; or (b) online at https://ecf.idb.uscourts.gov/cgi-bin/login.pl (a fee-based registration is required to access the information on this website).

The Company is a “qualified bidder” under the Sterling Plan of Reorganization and the Company intends, subject to Court and Exchange approval, and being the highest bidder to acquire not less than 100% of the outstanding Sterling shares, and for Sterling to exit the Chapter 11 process with the following assets in place: its interest in the Sunshine Silver Mine, facilities, Sunshine Silver Mine lease, and exploration interest in the Sterling exploration projects in Idaho. In addition, the Company upon meeting of the above referenced conditions, including the confirmation of a Plan of Reorganization, will reconstitute the Sterling Board of Directors and make additions to senior management of Sterling.
The Company believes that the proposed acquisition of Sterling represents a significant opportunity for the Company to become a near-term, mid-tier silver producer.

The Company maintains a strong balance sheet and has no long term debt. The Company continues to maintain seasoned and qualified management and seeks to fulfill its stated mandate of acquiring a world class advanced stage exploration and production projects.

ALBERTA STAR DEVELOPMENT CORP.

The Company is a Canadian mineral exploration company that identifies, acquires and finances advanced stage mineral exploration projects in North America. The Company is committed to creating long term shareholder value through the discovery of base and precious metals.

INVESTOR RELATIONS

Investors are welcomed to contact Benjamin Curry of Progressive I.R. Consultants Corp. at (604) 689-2881, the Company’s Investor Relations specialists for all corporate updates, and investor inquiries, Allan Feldman at (604) 948-9663, or Morgan Brewster, Corporate Development of the Company at (778) 989-2739 or mbrewster@alberta-star.com.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Tim Coupland, President and CEO
Alberta Star Development Corp.
Tel 604.681.3131
Fax 604.408.3884
www.elyseedevelopment.com

The in house qualified person is Michael Bersch PhD, LPG., CPG., who is the Chief geologist of the Company and who has reviewed and approved the contents of this press release.

Forward-Looking Statements

In the interest of providing the Company’s shareholders and potential investors with information regarding the Company, including managements’ assessment of the future plans and operations of the Company, certain statements contained in this document constitute forward-looking statements or information (collectively “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “potential”, “target” and similar words suggesting future events or future performance. In addition, statements relating to “resources” are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the resources described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this document contains, without limitation, forward-looking statements pertaining to the following: expectations of management regarding the proposed acquisition of Sterling, including the timing of completion of the acquisition; operating and financial metrics of the acquisition; potential synergies resulting from the acquisition and the effect of the acquisition on the Company’s operations.

With respect to forward-looking statements contained in this document, we have made assumptions regarding, among other things: future capital expenditure levels; future silver and base and precious metals prices and future silver and base and precious metal production levels; future exchange rates and interest rates; our ability to obtain equipment other resources in a timely manner to carry out development activities; our ability to market our silver and base and precious metals successfully to current and new customers; the impact of increasing competition; our ability to obtain financing on acceptable terms; our ability to attract new senior management and board members; and our ability to add production and resources through our development and exploitation activities. Although the Company believes that the expectations reflected in the forward-looking statements contained in this document, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the Company’s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the following: that the proposed transaction may not close when planned or at all or on the terms and conditions set forth herein; the failure of the Company to obtain the necessary Court, Exchange, regulatory and other third party approvals required in order to proceed with the proposed transaction; volatility in market prices for silver and other base and precious metals; incorrect assessment of the value of the acquisition; failure to realize the anticipated benefits and synergies of the acquisition; general economic conditions in Canada, the U.S. and globally; and the other factors described under “Risk Factors” in the Company’s annual reports and Form 20-F available in Canada at www.sedar.com, as well as on file with the U.S. Securities and Exchange Commission. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Statements contained in this news release relating to future results, events, and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, scheduling, re-scheduling, and other factors which may cause the actual results, performance, estimates, projections, resource potential, interpretations, prognoses, schedules, or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such statements. Such factors include, among others, those described in the Company’ annual reports on Form 20-F on file with the U.S. Securities and Exchange Commission and available in Canada at www.sedar.com.

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