Silverstone Resources Corp.
TSX VENTURE : SST

Silverstone Resources Corp.

June 06, 2007 01:12 ET

CORRECTION: Silverstone Purchases All of the Silver From Lundin Mining's Neves-Corvo and Aljustrel Mines

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 6, 2007) - The following corrects and replaces the release sent on June 6, 2007, at 12:01 am ET. The date of the conference call was noted incorrectly and has now been corrected to, Wednesday, June 6, 2007.

Silverstone Resources Corp. ("Silverstone") (TSX VENTURE:SST) is pleased to announce that it has agreed to acquire 100% of the life of mine payable silver production from Lundin Mining Corp.'s ("Lundin") Neves-Corvo and Aljustrel mines located in Portugal. With this acquisition together with Silverstone's rights to acquire silver from Capstone Mining Corp.'s Cozamin mine in Mexico, Silverstone is expected to sell in excess of 1 million ounces of silver in 2007 and increasing to 3 million ounces of silver by late 2009.

Neves-Corvo and Aljustrel are base metal mines (copper-zinc-lead-silver) located in Portugal. Although in close proximity, both mines are operated independently of each other.

The mill at Neves-Corvo, located in southern Portugal, produces approximately 0.5 million ounces of payable silver annually contained in copper concentrate. In July 2006 production of zinc concentrate commenced at the site.

The Aljustrel mine is scheduled to start commissioning in September 2007. The mill is scheduled to process 1.8 million tons of lead-zinc-silver ore annually, which is expected to yield approximately 1.2 million ounces of silver in lead concentrate when full production of the Feitais ore body is reached in 2009.

The silver will be purchased for US$42.5 million in cash and 15.4 million common shares and 4,256,250 special warrants (allocation of which may change upon closing) of Silverstone which are convertible into common shares at no additional consideration. The Silverstone common shares and special warrants being issued to Lundin are subject to a four month hold period. In addition, Silverstone will make on-going per ounce payments at a price equal to the lesser of US$3.90 (subject to a 1% annual inflationary adjustment after three years and yearly thereafter), and the then prevailing market price per ounce of silver.

Each Special Warrant may be exercised into a common share of Silverstone at a deemed price of $2.42 per common share at no additional consideration at any time provided that: (a) the common shares issued pursuant to such exercise would not result in Lundin owning, together with any other common shares under its ownership, control or direction, of 20% or more of the issued and outstanding common shares after immediately giving effect to such issuance; or (b) the shareholders of Silverstone other than Lundin pass a resolution at a meeting of Silverstone's shareholders approving any exercise that would result in Lundin owning 20% or more of the issued and outstanding common shares of Silverstone.

In order to fund the US$42.5 million cash payment, in addition to US$10 million in cash on hand, Silverstone has arranged US$40 million in bank debt through Scotia Capital Inc. Drawdown in the bank debt is subject to certain usual conditions including the approval of the TSX Venture Exchange.

"This transaction will triple Silverstone's silver stream production by 2009. We have acquired this silver production from base metal mines with long mine lives and significant exploration potential," said Darren Pylot, Silverstone's President and Chief Executive Officer.

Closing of the transaction is subject to certain conditions to be met by both companies and receipt of all regulatory approvals including acceptance by the TSX Venture exchange.

Scotia Capital Inc. acted as financial advisor to Silverstone with respect to this transaction and will receive 370,000 common shares of Silverstone as part of a success fee.

The following tables set forth the estimated Proven and Probable Reserves and the Mineral Resources for the Neves-Corvo and Aljustrel Mines as of December 31, 2006. All reports referenced are available on www.sedar.com.

Current Proven and Probable Reserves for the Neves-Corvo and Aljustrel mines are tabulated below:



Proven and Probable Mineral Reserves (1,2,3,4)

--------------------------------------------------------------------------
Mine Zone Reserves Tonnes Copper Zinc Silver Contained
Category (M) % % g/t Ounces (M)
--------------------------------------------------------------------------
Neves- Copper Proven 6.23 5.17 1.15 N/A N/A
Corvo
--------------------------------------------------------------------------
Probable 11.01 4.74 0.68 N/A N/A
--------------------------------------------------------------------------
Proven + 17.24 4.89 0.85 N/A N/A
Probable
--------------------------------------------------------------------------
Neves- Zinc Proven 0.14 0.29 6.36 N/A N/A
Corvo
--------------------------------------------------------------------------
Probable 10.78 0.43 7.89 N/A N/A
--------------------------------------------------------------------------
Proven + 10.92 0.43 7.87 N/A N/A
Probable
--------------------------------------------------------------------------
Aljustrel Zinc Proven 0
--------------------------------------------------------------------------
Probable 14.4 0.27 5.49 62.6 29.0
--------------------------------------------------------------------------
Proven + 14.4 0.27 5.49 62.6 29.0
Probable
--------------------------------------------------------------------------
Aljustrel Copper Proven 0
--------------------------------------------------------------------------
Probable 1.6 2.16 0.97 14.3 0.7
--------------------------------------------------------------------------
Proven + 1.6 2.16 0.97 14.3 0.7
Probable
--------------------------------------------------------------------------

N/A. These values have not been previously released. Production of copper
concentrates from Neves-Corvo has averaged approximately 350,000 tonnes
per year containing approximately 750,000 ounces of silver for the past
several years.
1. Reserves for the Neves-Corvo mine are estimated using cut off grades of
5.58% zinc and 1.91% copper. Resources are estimated using cut off grades
of 3.3% zinc, and 2.0% copper. The reserves and resources are calculated
by the mine's geologists and audited by Wardell Armstrong International
(WAI). The Qualified Person for the 2006 Reserve estimates is WAI
personnel Mark L. Owen, Associate Director and Principal Geologist,
assisted by Owen Mihalop, Senior Mining Engineer and Anton Kornitskiy,
Senior Resource Geologist. These reserves and resources are shown in
Lundin Mining Corporation's Annual Information Form for the year ended
December 31, 2006.
2. The 2006 Aljustrel zinc Mineral Reserves and Resources are estimated
using cut-off grades of 4.5% zinc,4.0% zinc and 4.0% zinc for the
Feitais, Moinho, and Estacao deposits respectively. The copper mineral
reserves are estimated using a 1.5% copper cut-off. The Qualified
Persons responsible for the Aljustrel reserve estimates are Guy Lauzier,
P.Eng., Bob Carmichael, P.Eng., and Neil Burns, P.Geo. These reserves
and resources are shown in Lundin Mining Corporation's Annual Information
Form for the year ended December 31st, 2006.


The Measured, Indicated and Inferred mineral resources (prepared in accordance with JORC 2004) are presented below and include the mineral reserves tabulated above:



Measured and Indicated and Inferred Resources (1,2,3,4,5)

--------------------------------------------------------------------------
Mine Zone Category Tonnes Copper Zinc Silver g/t Contained
(M) % % ounces (M)
--------------------------------------------------------------------------
Neves- Copper Measured 6.59 6.1 1.5 N/A N/A
Corvo
--------------------------------------------------------------------------
Indicated 12.83 5.3 0.8 N/A N/A
--------------------------------------------------------------------------
Measured & 19.42 5.6 1.0 N/A N/A
Indicated
--------------------------------------------------------------------------
Inferred 3.00 4.5 0.8 N/A N/A
--------------------------------------------------------------------------

--------------------------------------------------------------------------
Zinc Indicated 26.18 0.6 6.4 62.5 50.9
--------------------------------------------------------------------------
Inferred 24.17 0.4 5.5 62.1 46.7
--------------------------------------------------------------------------

--------------------------------------------------------------------------
Aljustrel Zinc Measured 2.58 0.3 5.2 52.5 4.3
--------------------------------------------------------------------------
Indicated 21.00 0.2 5.7 61.8 41.8
--------------------------------------------------------------------------
Measured & 23.58 0.2 5.7 60.8 46.1
Indicated
--------------------------------------------------------------------------
Inferred 9.32 0.3 5.3 51.2 15.3
--------------------------------------------------------------------------

--------------------------------------------------------------------------
Copper Measured 0.26 1.8 1.3 20.3 0.2
--------------------------------------------------------------------------
Indicated 6.66 2.1 1.1 17.1 3.7
--------------------------------------------------------------------------
Measured & 6.92 2.1 1.1 17.2 3.9
Indicated
--------------------------------------------------------------------------
Inferred 1.99 2.1 0.8 11.7 0.7
--------------------------------------------------------------------------

N/A. These values have not been previously released. Production of copper
concentrates from Neves-Corvo has averaged approximately 350,000 tonnes
per year containing approximately 750,000 ounces of silver for the past
several years.
3. Additional reference material includes "Technical Report on The
Aljustrel Project, Portugal Dated March 31st, 2006, Qualified Persons:
James S. Drake, P.Eng., Guy Lauzier, P.Eng., and Garnet L. Dawson, P.Geo.
4. Technical Report on the Neves-Corvo Mine, Portugal Dated March 2004, by
Wardell Armstrong International.
5. News Release March 8, 2007, by Lundin Mining concerning the addition of
the Estacao deposit to the Aljustrel Mine.


Silverstone will host a conference call on Wednesday, June 6, 2007 at 10:00am PST (1:00pm ET) to discuss this acquisition. The conference call may be accessed by dialing 1.866.365.1119 or 1.416.849.7329. Please ask for the Silverstone Lundin news release conference call.

The conference call will be archived for later playback until Thursday, June 14, 2007 and can be accessed by dialing 1.866.501.5559 and the passcode is 21235620#.

Mr. Hugh Willson, P.Geo., Vice-President, Exploration of Silverstone, who is a "qualified person" under National Instrument 43-101, has reviewed and approved the technical aspects of this news release. Silverstone will have an independent National Instrument 43-101 technical report prepared on Neves-Corvo and Aljustrel.

ABOUT SILVERSTONE

Silverstone is a silver mining company with 100% of its revenue from silver production. Silverstone expects to have 2007 silver sales of approximately 1.0 million ounces and increasing to 3 million ounces by late 2009. More information is available online at: www.silverstonecorp.com.

This press release contains "forward-looking information" that is based on Silverstone's current expectations, estimates, forecasts and projections. This forward-looking information includes, among other things, statements with respect to Silverstone's mineral discoveries, plans, outlook and business strategy. The words "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "intend", "estimate", "plan", "forecast", "project" and "believe" or other similar words and phrases are intended to identify forward-looking information.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Silverstone's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: projected sales or production rates; uncertainties related to drilling results; the ability to raise sufficient capital to fund exploration; changes in economic conditions or financial markets; changes in prices for costs; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration activities; and labor relations matters.

This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Silverstone disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has neither approved or disapproved of the contents herein.

Contact Information