Goldstone Resources Regulatory News (GRL)

21 July 2014

GOLDSTONE RESOURCES LIMITED

("GoldStone" or the "Company")

Conditional Subscription by Stratex International plc

& Proposed Share Consolidation

GoldStone (AIM: GRL), the AIM quoted exploration company focused on gold in West and Central Africa, is pleased to announce a proposed subscription for shares by Stratex International Plc ("Stratex") to raise gross proceeds of £1.25 million (the "Subscription"). The Subscription will occur after the proposed 1 for 10 consolidation (the "Share Consolidation") of the Company's existing ordinary shares of 1 penny ("Ordinary Shares") into new ordinary shares of 1 penny ("New Ordinary Shares") and will be for 20,833,333 New Ordinary Shares (the "Subscription Shares") at a price of 6 pence per share (the "Subscription Price").

The Subscription Shares would, following the Share Consolidation and the Subscription represent approximately 33.5% of the enlarged issued share capital of the Company. The Subscription Price, with adjustment for the Share Consolidation, represents a discount of approximately 3% to the volume weighted average price over the 20 trading days ended 18 July 2014.

Jurie Wessels, CEO of GoldStone commented as follows:

"The forging of an alliance with Stratex not only delivers funding at a critical time to advance GoldStone's attractive projects, but also leads to GoldStone gaining an experienced and well-funded shareholder with a proven track record of turning small to medium sized gold assets into cash generating enterprises. By becoming a major shareholder and gaining a significant presence at board level, Stratex shows commitment to unlock the synergies offered by both companies' resources."

Principal Terms of the conditional Subscription

Under the terms of the subscription agreement entered into between inter alia the Company and Stratex (the 'Subscription Agreement'), Stratex will subscribe for the Subscription Shares at the Subscription Price, conditional, inter alia, upon:

- admission of the Subscription Shares to trading on AIM ("Admission") becoming effective on or before 30 September 2014 or such later date as the Company and Stratex may agree, being not later than 31 October 2014 (the 'Long Stop Date');

- the issue of warrants to Stratex to subscribe for 20,833,333 New Ordinary Shares at a price of 7 pence per share for a period of 18 months from the date of Admission;

- the granting of a waiver by the Panel on Takeovers and Mergers of the obligation to make a general offer for the Company that would otherwise arise under Rule 9 of the City Code on Takeovers and Mergers as a result of the Subscription by Stratex (the 'Waiver');

- the approval by the shareholders of the Company in a general meeting of the Share Consolidation, the Waiver and the Subscription Shares;

- the appointment to the board of Directors of the Company (which is to include no more than five directors in total) of two non-executive directors nominated by Stratex, one of whom shall serve as chairman and one independent director also nominated by Stratex; and

- the approval by Stratex of terms of employment and incentive arrangements of certain Directors and employees of the Company. 

Unity Mining Limited, which holds 29.5% of the Company's issued share capital, has undertaken to vote in favour of the resolutions to be proposed at the general meeting to approve, inter alia, the Subscription and the Waiver.

In the event that such conditions are not satisfied, or waived by Stratex where capable of waiver, or become incapable of fulfilment, before the Long Stop Date, the Subscription Agreement will terminate. The Subscription Agreement may be terminated by Stratex prior to completion in certain circumstances, including if the warranties given to Stratex by the Company in the Subscription Agreement were not true or accurate, or were misleading when given or are breached before Admission, or if prior to Admission there occurs an event or omission which materially and adversely affects the financial position and/or prospects of the Company or which, in the reasonable and proper opinion of Stratex, is or may be materially prejudicial to the Company or the Placing.

Principal Terms of the proposed Share Consolidation

Under the Share Consolidation it is proposed that every ten Ordinary Shares of 1 penny will be consolidated into one New Ordinary Share and one new deferred share of 9 pence. The new class of deferred shares shall have no voting rights, no rights to dividends and negligible rights on a return of capital. The deferred shares will not be admitted to trading on AIM.

The Board believes that the Share Consolidation will result in a more appropriate number of shares in issue for a company of Goldstone's size in the UK market. The Share Consolidation may also help to make the company's shares more attractive to investors and may result in a narrowing of the bid/offer spread, thereby improving liquidity.

Following the Share Consolidation, Shareholders will hold the same proportion of the Company's ordinary share capital as before the Share Consolidation (save in respect of fractional entitlements). Other than a change in nominal value, the New Ordinary Shares will carry equivalent rights to the Ordinary Shares.

The Share Consolidation will be subject to the approval of shareholders in a general meeting.

General Meeting

In order to satisfy the conditions of the Subscription Agreement and approve the Share Consolidation, the Waiver and the Subscription, it is intended that a circular convening a general meeting of shareholders will be sent to shareholders in due course and a further announcement made at that time.

Enquiries:

GoldStone Resources Limited +27 (21) 913 0388

Jurie Wessels

WH Ireland Limited +44 (0) 207 220 1666

Tim Feather

Nick Field

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Notes To Editors

About Stratex International plc

Stratex is an AIM-quoted exploration and development company focused on gold and high-value base-metal deposits. Stratex is active in Turkey, East and West Africa and reportedly discovered more than 2.2 million ounces of gold and 7.9 million ounces of silver. Stratex has a record of forming joint-venture partnerships with private companies who operates in the respective countries of operation and with major international mining companies, including Antofagasta, Centerra and Teck in Turkey, and Thani Ashanti in East Africa. Stratex has relationships with AngloGold Ashanti, Teck, BlackRock Investment Management and with Investment and Exploration Capital Partners 2012 Limited Partnership, a Sprott Asset Management fund.

For more information about Stratex, please visit www.stratexinternational.com.