Silverstone Resources Corp.

Silverstone Resources Corp.

April 04, 2007 15:51 ET

Silverstone Completes Cozamin Silver Transaction and Closes $32 Million Private Placement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 4, 2007) - Silverstone Resources Corp. ("Silverstone") (TSX VENTURE:SST) is pleased to announce the closing of the previously announced transaction pursuant to which a 100% owned Subsidiary of Silverstone has agreed to purchase all silver produced by Capstone Gold S.A. de C.V. ("Capstone Mexico"), a wholly owned subsidiary of Capstone Mining Corp. (TSX:CS), at its Cozamin mine in Mexico for the next 10 years. The silver will be purchased for an upfront payment of US$44 million plus a per ounce payment at a price equal to the lesser of US$4.00 (subject to an inflationary adjustment after three years and yearly thereafter), and the then prevailing market price per ounce of silver. The upfront payment is comprised of US$20 million payable in cash and US$24 million payable in 19,155,310 special warrants of Silverstone which is convertible into common shares at no additional cost. The Silverstone special warrants being issued to Capstone are subject to a four month hold period which expires on August 5, 2007.

The Cozamin mine, located in Zacatecas State, Mexico, is expected to produce approximately 1.2 million ounces of silver annually for a minimum of 10 years. The mine is located in Zacatecas State, Mexico.

Silverstone also announces that it has closed the brokered private placement previously announced on February 20, 2007. The offering was co-led by Pacific International Securities Ltd. and Salman Partners Inc. (the "Agents"). The Agents exercised the over-allotment option in full, and accordingly, the Company issued 16.09 million units (the "Units") at a price of $1.45 per Unit to raise gross proceeds of $23,330,500. Each Unit consists of one common share and one half of one common share purchase warrant (each whole such purchase warrant, a "Warrant"). Each Warrant will be exercisable into one additional common share of the Company at an exercise price of $2.10 per common share for a period of 2 years from the closing date.

As consideration for acting as Agents, the Company paid the Agents a commission equal to 6% of the subscription proceeds realized from the sale of the Units. The commission was comprised of $312,976.70 and 748,354 Units. In addition, the Company issued a total of 964,200 Agent's Options (the "Agent's Options"), which is equal to 6% of the number of Units sold by the Agents. Each Agent's Option entitles the holder to purchase one common share at an exercise price of $1.70 for a period of two years.

Also the Company has closed the non-brokered private placement previously announced on February 20, 2007. The Company issued 2.0 million Units at a price of $1.45 per Unit to raise gross proceeds of $2,900,000 with the same terms as the brokered private placement. The commission was comprised of 120,000 Units and 120,000 Agent's Options.

Also the Company has closed the other non-brokered private placement previously announced on February 20, 2007. The Company issued 4.03 million Units with the same terms as the above non-brokered private placement. The Company paid a finder's fee of 240,000 shares and 240,000 compensation options.

All securities issued pursuant to this financing have a four-month hold period expiring on August 5, 2007.

The net proceeds of the placement will be used for the purchase of the silver of the Cozamin mine, exploration on its four silver exploration projects and general corporate purposes.

Silverstone is also pleased to announce it has added Mr. Hugh Willson and Mr. Munir Ali to the board of directors. Mr. Willson is the current Vice President of Exploration for Silverstone Resources Corp. and has 30 years of hands-on experience as an exploration geologist throughout the America's.

Mr. Ali has represented the following companies in Agriculture commodities; Toepfer International Asia pte Ltd., Glencore International, Trafigura Ltd., Saskatchewan Wheat Pool, Land o Lakes and Agrocorp International.


Silverstone is a Canadian based silver exploration company with an option to earn a 90% interest in 4 advanced silver-gold projects located in Mexico. More information is available online at:

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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

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