VANCOUVER, Feb. 10, 2012 /CNW/ - Stone Resources Limited (TSX-V: SRH ) ("Stone" or the "Company") announces today that it has entered into a loan agreement (the "Loan Agreement") with Superb Summit International Timber Company Limited ("Superb Summit") under which Superb Summit will lend the Company HK$39,000,000 (Cdn.$5,036,889 at the Bank of Canada February 10, 2012 noon exchange rate of 0.129151). The loan will be unsecured, have a term of twelve months and bear interest at a rate of 5% per annum.
The Loan Agreement includes provisions governing the use of the loan funds, which are intended to fund the daily operations, maintenance of equipment and exploration work of the Company's 67.58%-owned subsidiary Stone Resources Australia Limited ("Stone Australia"), a company listed on the Australian Securities Exchange and formerly known as A1 Minerals Limited. The Company and Stone Australia intend to enter into an agreement on standard commercial terms addressing the usage and repayment of the loan proceeds.
The Loan Agreement contemplates that Stone will use reasonable commercial measures to obtain the approval of the TSX Venture Exchange for the conversion of the loan into a convertible note exercisable for common shares of the Company ("Stone Shares"). The terms of the convertible note have yet to be negotiated between Stone and Superb Summit.
Stone has previously announced that Superb Summit has entered into a framework agreement with the holders of approximately 61.7% of the outstanding Stone Shares to acquire, in an entirely off-shore transaction, not less than 51% of the outstanding Stone Shares (the "Proposed Acquisition"). The Company has appointed a special committee of independent directors to consider the Proposed Acquisition, and is not aware of any further agreements that have been entered into in this respect.
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 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 entry into the Loan Agreement and related agreements, the use of proceeds from the Loan Agreement, the issuance of a convertible note, and the Proposed Acquisition. 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 Stone to obtain requisite approvals for the entry into the Loan Agreement and the issuance of the convertible note. 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.
For further information:
Vice-President and Corporate Secretary
+1 (604) 303-9070