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:
Number of Stone Shares
over which control is exercised
Percentage of outstanding
Stone Group Holdings Limited
Stone Group Corporation (PRC)
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
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
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
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,
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:
Vice-President and Corporate Secretary
+1 (604) 303-9070