StoneShield Capital Corp.
TSX VENTURE : STS.P

StoneShield Capital Corp.

November 26, 2008 19:09 ET

StoneShield Completes Qualifying Transaction and Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 26, 2008) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

StoneShield Capital Corp. (TSX VENTURE:STS.P) ("StoneShield") is pleased to announce that further to StoneShield's news releases dated February 1, 2008 and September 4, 2008, StoneShield has completed its Qualifying Transaction consisting of an option to earn up to a 70% undivided interest in the Jefferson Gold/Silver property located in Nevada. StoneShield's common shares are expected to commence trading on November 28, 2008 on Tier 2 of the TSX Venture Exchange under the trading symbol "STS".

Qualifying Transaction

As previously announced, StoneShield signed of an arm's length letter of intent dated January 21, 2008, as amended (the "Letter of Intent") with Mexivada Mining Corp. ("Mexivada") pursuant to which StoneShield has been granted an option (the "Option") to earn up to a 70% undivided interest in the Jefferson Gold/Silver property (the "Property") located 50 miles north-northwest of Tonopah, Nevada and three miles east of Round Mountain, Nevada.

Under the terms of the option agreement, StoneShield can acquire an initial 51% interest in the Property by incurring a total of US$3,500,000 in exploration expenditures on the property as follows: a minimum US$100,000 in expenditures on the Property to be incurred in the first year following TSX Venture Exchange acceptance ("Acceptance") of the agreement, a minimum US$150,000 in expenditures in the second year, and a total US$3,250,000 in expenditures on the project in the third and fourth years. In addition, StoneShield will make cash payments of US$50,000 to Mexivada on Acceptance and US$50,000 to Mexivada on the first, second and third anniversary dates of Acceptance as well as issue to Mexivada 100,000 shares of the Company on Acceptance, 150,000 shares on the second anniversary and an additional 250,000 shares upon the Company notifying Mexivada that StoneShield has completed the stipulated requirements for earning a 51% interest in the property. StoneShield shall also pay all County, BLM and lease-option payments required to hold all of the existing Jefferson property mining claims and those claims and properties acquired in the future during the life of this option agreement, and all such subsequent payments during the term of option agreement and the life of the subsequent Mexivada-StoneShield joint venture.

StoneShield has a further option to acquire in aggregate an additional 19% interest (for a total 70% interest) in the Property by incurring an additional US$2,500,000 in expenditures within 24 months of the date upon which StoneShield earns an initial 51% interest in the Property (the "Initial Earn-in Date") and completing a mining feasibility study within 30 months of the Initial Earn-In Date that recommends development of the Jefferson property. StoneShield must also issue 250,000 shares of StoneShield upon the successful completion of the mining feasibility study. Each party shall then finance its own share of the proposed mining operation. At this point, StoneShield and Mexivada will also have the pro-rata right to purchase a 3% net smelter royalty ("NSR") from the property lessor at the rate of US$1,000,000 for each 1% of NSR purchased (70% as to StoneShield and 30% to Mexivada).

Concurrent Financing

StoneShield has completed the non-brokered private placement of 5,004,994 units (the "Units") at $0.15 per Unit for gross proceeds of $750,750. Each Unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for 24 months from the closing of the private placement at a price of $0.20 per share for the first 12 months and $0.25 for the remaining 12 months. All the shares issued in the private placement and any resulting shares issued upon the exercise of any warrants will be subject to a hold period expiring on March 1, 2009.

"As recent market events have caused many investors to become cautious, we are very happy with working capital raised," commented President/CEO Kris Kottmeier. "The vote of confidence received in raising sufficient capital to complete our Qualifying Transaction in such a difficult time is greatly appreciated. We thank our shareholders for their support and look forward to commencing operations to increase shareholder value." Finder's fees of $5,565 in connection with the private placement were paid to finders. Net proceeds from the private placement will be utilized to fund the proposed work program on the Jefferson property and for general working capital.

Filing Statement

Further information concerning the Company and the Property is contained in the Company's Filing Statement dated August 28, 2008 which is available for review under the Company's profile at www.sedar.com. To reflect the current financial environment, management has reduced the estimated management and administration costs for the following 12 months from approximately $519,600 (as disclosed in the section "Information Concerning the Resulting Issuer - Available Funds and Principal Purposes" of the Filing Statement) to approximately $365,400 for the following 12 months. Accordingly, the estimated unallocated working capital has changed from $464,100 (as disclosed in the section "Information Concerning the Resulting Issuer - Available Funds and Principal Purposes - Principal Purposes" of the Filing Statement) to $166,500.

ON BEHALF OF THE BOARD OF DIRECTORS OF STONESHIELD CAPITAL CORP.

Kris Kottmeier, President

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • StoneShield Capital Corp.
    Kris Kottmeier
    President
    (604) 506-2502