Stone Resources Limited
TSX VENTURE : SRH.H

December 21, 2009 18:16 ET

Stone Resources Limited: Share Purchase Agreement and Shares for Debt Agreement Signed

VANCOUVER, BRITISH COLUMBIA--(Marketwire – Dec. 21, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Stone Resources Limited (TSX VENTURE:SRH.H), a company incorporated under the laws of Bermuda ("SRLB" or the "Company"), is pleased to announce the signing of a Share Purchase Agreement with the shareholders of Stone Resources Limited, a company incorporated under the laws of Hong Kong ("SRLHK").

Under the terms of the Share Purchase Agreement, SRLB has the right to purchase all of the issued and outstanding shares of SRLHK in the amount of 60,000,000 common shares of SRLHK from the shareholders of SRLHK, in consideration for 126,103,053 common shares of SRLB at a deemed value of CAD$0.05 per common share of SRLB to the shareholders of SRLHK in amounts proportional to their respective shareholdings.

The Share Purchase Agreement is subject to an increase in the authorized capital to US$12,000,000 by the creation of an additional 1,100,000,000 common shares with a par value of US$0.01 each, which needs to be approved by shareholders at the Special General Meeting scheduled for January 21, 2010. The Share Purchase Agreement is also subject to approval by the shareholders of SRLB and final regulatory approval by the TSX Venture Exchange.

SRLHK is currently focused on the exploration and development of property in the Al Hamurah copper-nickel mining area located in the Taiz Governorate of the Republic of Yemen. SRLHK has obtained a technical report on the Al Hamurah property prepared in accordance with National Instrument 43-101 dated October 5, 2009 entitled "Technical Report on the Al Hamurah Property" prepared by Peter G. Folk, P. Eng., Qualified Person ("Technical Report"). The Technical Report has been filed on SEDAR and is available at www.sedar.com. SRLHK has acquired a prospecting permit and exploration license for the Al Hamurah property and SRLHK has already commenced the recommended program described in the Technical Report.

SRLHK has also entered into an Amended and Restated Shareholders' Agreement dated June 12, 2009 with Hood Energy Limited ("Hood Energy"), a company incorporated in Dubai, United Arab Emirates. Under the terms of the Shareholders' Agreement, SRLHK has agreed to assign and transfer the prospecting permit and exploration license to a joint venture vehicle incorporated by SRLHK and Hood Energy. SRHLK and Hood Energy will own 70% and 30% of the shares of the joint venture company, respectively. Under the Shareholders' Agreement, SRLHK and Hood Energy will work together so as to maximize the utilization of their respective skills, technical know-how and expertise to prospect for minerals, conduct mineral exploration activities, develop and commercially exploit minerals in the Al Hamurah property.

SRLHK has obtained a valuation report on the Al Hamurah property dated December 15, 2008 entitled "Opinion of Value for the Al Hamurah Copper-Nickel Property" prepared by Barry James Price, M.Sc., P.Geo. ("Valuation Report"). The Valuation Report suggests that a 70% interest in the Al Hamurah property is valued at around CAD$1,500,000.

The Company is also pleased to announce the signing of the Shares for Debt Agreement with Springbend Holdings Limited ("Springbend"), one of its shareholders.

Under the terms of the Shares for Debt Agreement, SRLB and Springbend agreed to convert debt in the amount of US$1,157,681 into 24,790,578 common shares in the capital of SRLB at a subscription price of CAD$0.05 per common share and that upon such conversion and the issuance of the shares by SRLB to Springbend, the debt shall be deemed to have been fully settled and repaid by SRLB to Springbend.

The Shares for Debt Agreement is also subject to an increase in the authorized capital to US$12,000,000 by the creation of an additional 1,100,000,000 common shares with a par value of US$0.01 each, which needs to be approved by shareholders at the Special General Meeting scheduled for January 21, 2010. The Shares for Debt Agreement is also subject to final regulatory approval by the TSX Venture Exchange.

On behalf of the Board,

Duan Yongji, Chairman

About Stone Resources Limited

The Company is involved with mineral resources exploration and mining development. The Company is focusing on the exploration of and development of a copper-nickel property located in Yemen.

This release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration and development activities and events or developments that the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see our public filings at www.sedar.com for further information.

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.

Contact Information

  • Stone Resources Limited
    Duan Yongji
    Chairman
    604-303-9070
    604-303-9070 (FAX)