Shareholders Enter into Framework Agreement Regarding Sale of Shares of Stone Resources Limited

VANCOUVER, Nov. 21, 2011 /CNW/ - Stone Resources Ltd. (TSXV: SRH) ("Stone" or the "Company"), Stone Group Holdings Limited ("SGHL"), Duan Yongji ("Duan") and Stone Group Corporation (PRC) ("Stone Group" and together with SGHL and Duan, the "Stone Controlling Shareholders") are pleased to announce that on November 17, 2011, SGHL entered into a framework agreement (the "Framework Agreement") with Superb Summit International Timber Company Limited ("Superb Summit") whereby Superb Summit would acquire, in an entirely off-shore transaction, not less than 51% of the issued shares (the "Stone Shares") of the Company (the "Proposed Acquisition"), consisting of the Stone Shares owned by the Stone Controlling Shareholders.. Completion of the Proposed Acquisition is subject to, among other things, the negotiation of formal agreements ("Formal Agreements").

Superb Summit is a Cayman Islands company listed on The Stock Exchange of Hong Kong, principally engaged in integrated timber and electronic products including: (i) exploitation and management of timber resources in China; and (ii) distribution, marketing and sales of a wide range of timber products. Upon completion of the Proposed Acquisition, the parties to the Framework Agreement intend further cooperation in investing in the gold mining business in Australia.

The Company understands that SGHL was authorized by the other Stone Controlling Shareholders to, among other things, negotiate and attend to matters relating to the Proposed Acquisition. The Stone Controlling Shareholders own and control, directly and indirectly, the number and percentage of Stone Shares set forth below:

Shareholder     Number of Stone Shares
over which control is exercised
    Percentage of outstanding
Stone Shares
Stone Group Holdings Limited     34,160,907     10.46%
Duan Yongji     77,456,547     23.71%
Stone Group Corporation (PRC)     89,947,374     27.53%

Duan owns 71,151,394 Stone Shares through Seasource Holdings Limited, an indirectly wholly-owned company. Stone Group owns its Stone Shares through Springbend Holdings Limited, an indirectly wholly-owned subsidiary.

The key terms of the Framework Agreement are as follows:

  • Consideration for the Proposed Acquisition will be satisfied by the issuance by Superb Summit of: (i) shares of Superb Summit with a par value of HK$0.10 each ("Superb Summit Shares"); and/or (ii) convertible notes by Superb Summit which entitle the holder(s) thereof to subscribe for new Superb Summit Shares, at an issue price or conversion price, as applicable, of between HK$0.20 and HK$0.25 per Superb Summit Share or the average closing price per Superb Summit Share for the thirty business days prior to the completion date of the Proposed Acquisition, whichever is lower.

  • Pursuant to the Framework Agreement, the amount to be paid for each Stone Share is subject to, among other things, further negotiation between the parties, and will be fixed upon the entering into of the Formal Agreements.

  • For a period of four months from the date of the Framework Agreement, Superb Summit has exclusive rights to negotiate with the Stone Controlling Shareholders in respect of the Proposed Acquisition, to conduct a due diligence review and to conclude the Formal Agreements. The Stone Controlling Shareholders shall not during this period negotiate or enter into any agreement or arrangement with any third party in relation to the Proposed Acquisition.

  • In the event that the Formal Agreements are not entered into within four months from the date of the Framework Agreement, or such other date as is agreed to by Superb Summit and SGHL, the Framework Agreement will lapse.

  • Superb Summit will arrange for further funds to finance the operations and production of A1 Minerals Limited, a subsidiary of Stone, within seven days after the entry into of the Formal Agreements.

  • Superb Summit and SGHL will use best endeavours to cooperate with each other in respect of a due diligence review process.

Stone intends to appoint a special committee of independent directors to consider the Proposed Acquisition, and will provide further announcements when appropriate.

The Proposed Acquisition is subject to various conditions, including the entry into formal agreements, and obtaining approval from applicable regulators and stock exchanges.

On behalf of the Board,

"Yongji Duan"

Yongji Duan
Chairman

About Stone Resources Limited

Stone Resources Limited is a company incorporated in Bermuda and listed on the TSX Venture Exchange in Canada. The Company is involved with mineral resources exploration and development, and owns majority control of the Brightstar Project, a gold exploration property in Western Australia. Stone Resources plans to expand and develop its business using its effective team of experts in exploration, geology, metallurgy, mine engineering, law and finance.

Cautionary Statement on Forward-Looking Statements

The information in this document contains certain forward-looking statements with respect to the Proposed Acquisition, the negotiation of Formal Agreements, the satisfaction of conditions precedent to the Proposed Acquisition, and the future actions of Superb Summit and SGHL. Although management of the Company has a reasonable basis for the conclusions drawn, risk factors and uncertainties may cause actual results to differ materially from those currently anticipated in such statements. These risks and uncertainties relate to such factors as the ability of the Stone Controlling Shareholders to negotiate and complete the Proposed Acquisition as expected or at all. In view of these uncertainties we caution readers not to place undue reliance on these forward-looking statements. Statements made in this document are made as of the date hereof and the Company disclaims any intention or obligation to update or revise any statements made herein, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Stone Resources Limited

For further information:

For additional information or a copy of the early warning reports of the Stone Controlling Shareholders, contact:
Kelei Xin
Vice-President and Corporate Secretary
+1 (604) 303-9070

Profil de l'entreprise

Stone Resources Limited

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