Stone Resources Limited
TSX VENTURE : SRH.H

March 18, 2010 18:58 ET

Stone Resources Limited: Change of Business and Reverse Takeover

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 18, 2010) -

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 that it has obtained conditional regulatory approval from the TSX Venture Exchange (the "Exchange") for a change of business and reverse takeover (the "Acquisition") of Stone Resources Limited, a company incorporated under the laws of Hong Kong ("SRLHK").

Pursuant to the Share Purchase Agreement dated December 21, 2009 between the shareholders of SRLHK and the Company, SRLB purchased 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 issued to the shareholders of SRLHK in amounts proportional to their respective shareholdings. The vendors of the shares of SRLHK were: Stone Group Holdings Limited ("SGHL"), Seasource Holdings Limited ("Seasource"), Tycoon Rich Holdings Limited, Lau Kan Kan, Pak Yu Investments Limited, Verbier International Inc., Wealth Spectrum Limited and Yongji Duan residing in Hong Kong, China and Asia Communications Network Limited, Fang Lu, Kaiye Shuai, Wenhua Shan, Ali Mohamad, Disheng Zhang and Fumin Cheng residing in Beijing, China.

SRLB had been an inactive company since June 26, 2007 when it ceased operations involving biopharmaceutical production. The principal business of SRLHK is mineral resources exploration in Yemen, Africa and other countries. 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.

The Company is also pleased to announce that it has obtained conditional regulatory approval from the Exchange for a debt conversion ("Debt Conversion" and together with the "Acquisition" the "Transaction") with one of its major shareholders, Springbend Holdings Limited ("Springbend"). Pursuant to the Shares for Debt Agreement dated December 21, 2009 between SRLB and Springbend, SRLB converted debt in the amount of US$1,157,681 owed to Springbend 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 was deemed to have been fully settled and repaid by SRLB to Springbend.

Details of the Transaction can be found in the Filing Statement of the Company dated March 18, 2010 filed (the "Filing Statement") on SEDAR at www.sedar.com.

The Transaction involves non-arm's length parties. The beneficial owner of Springbend, Grandera Limited ("Grandera") and Luxeon Limited ("Luxeon"), shareholders of SRLB, is Stone Group Corporation, a company incorporated in the People's Republic of China ("Stone Group (PRC)"), which also has indirect interests in SRLHK.

Springbend, Grandera and Luxeon collectively own 58.37% of the common shares of SRLB. After the Transaction, Stone Group (PRC) will indirectly own 30.63% of the common shares of SRLB. As permitted under Chinese law, Stone Group (PRC) is collectively owned by its employees but profits remain in the company and are not distributed to its employees. At the completion of the Transaction, Springbend, Grandera and Luxeon will constitute principal securityholders of SRLB.

Yongji Duan is a director of SRLB and Chairman of SRLHK, Springbend, Grandera, Luxeon, SGHL, Seasource and Stone Group (PRC). Fang Lu is a director for both SRLB and SRLHK. Disheng Zhang is a director for SRLB, SRLHK and Springbend.

On March 10, 2010, the Company entered into a Sponsorship Agreement (the "Sponsorship Agreement") with Canaccord Financial Ltd. ("Canaccord") and SRLHK. Under the Sponsorship Agreement, Canaccord agreed to act as sponsor within the meaning of the sponsorship policies of the Exchange for the Transaction in consideration of a cash payment of $50,000 plus GST and the reimbursement of expenses reasonably incurred by the Sponsor in connection with the transactions contemplated in the Sponsorship Agreement.

The Company obtained conditional acceptance from the Exchange on February 26, 2010 and disinterested shareholder approval for the Transaction on March 18, 2010. Completion of the Transaction is subject to final Exchange acceptance. The Transaction cannot close until final Exchange acceptance is obtained.

Investors are cautioned that, except as disclosed in the Filing Statement, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of SRLB should be considered highly speculative.

On behalf of the Board,

Yongji Duan, 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
    Yongji Duan
    Chairman
    604-303-9070
    604-303-9070 (FAX)