VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 8, 2010) - Alberta Star Development Corp. (the "Company") (TSX VENTURE:ASX)(OTCBB:ASXSF)(FRANKFURT:QLD) is pleased to announce that has entered into a letter agreement with Kootenay Gold Inc. ("Kootenay"), whereby the Company and Kootenay have agreed to cooperate in a joint bid to acquire a 100% interest in Sterling Mining Company ("Sterling") and its assets, and provide for financing of Sterling's continuing operations and development. The Company is a "qualified bidder" under the Sterling plan of reorganization.

STERLING MINING COMPANY-THE SUNSHINE MINE

Sterling's "Sunshine Mine" located near Coeur d'Alene, Idaho, USA, has been one of the world's largest producers of silver, having recorded production of over 360 million 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 tonnes at 21.8 ounces of silver per tonne
• Inferred resources of 231.5 million ounces of silver in 2.28 million tons at 101.6 ounces of silver per tonne.

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.

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).

THE GROUP-ALBERTA STAR & KOOTENAY GOLD

Alberta Star and Kootenay both maintain strong balance sheets, maintain seasoned and qualified management in both exploration & underground mining. Both companies are seeking to fulfill their stated mandates of creating long term shareholder value through the discovery of base and precious metals and by acquiring additional world class, advanced stage exploration and production projects.

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 Reorganization 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