3 January 2024

GOLDSTONE RESOURCES LIMITED

("Goldstone" or the "Company")

Gold Loan & Corporate Update

Goldstone Resources Limited (AIM: GRL) is pleased to announce that it has agreed a standstill arrangement with Asia Investment Management Services Limited ("AIMSL") in respect of the gold loan agreement ("Gold Loan Agreement") dated 19 June 2020 between the Company (as borrower) and AIMSL (as lender).  

Under the terms of the standstill agreement (the "Standstill Agreement"), AIMSL has agreed, for the duration of a standstill period ending on 29 June 2024 (the "Standstill Period"), to temporarily defer (but not waive) its right to further demand repayment of any or all of the outstanding amount under the Gold Loan Agreement and/or enforce any security against the Company (or any member of its Group) under the pledge and security agreement dated 19 June 2020 between the Company (as grantor) and AIMSL (as secured party) securing the obligations of the Company under the Gold Loan Agreement (the "Security Agreement").   

During the Standstill Period, AIMSL has further agreed not to initiate insolvency proceedings against the Company (or any member of its group), or to sue or bring any legal proceedings against the Company (or any member of its group) to enforce payment of amounts outstanding under the Gold Loan Agreement or its rights under the Security Agreement.

For the duration of the Standstill Period, the Company will not be required to make repayments under the Gold Loan Agreement and interest will continue to accrue on the outstanding amount under the Gold Loan Agreement at the rate of 14% per annum.

As part of the Standstill Agreement, the Company has agreed with AIMSL that it will:

·    use commercially reasonable endeavours to secure investors to provide sufficient cash to cover the capital expenditure necessary to enable the Company to increase its gold production in line with its operational plan;

·    take all steps reasonably necessary and within its control to register the Gold Loan Agreement with the Bank of Ghana Collateral Registry;

·    review options and proposals, in conjunction with AIMSL, for a turnaround plan for the Company; and

·    procure that all revenue of GoldStone Akrokeri Ltd will accrue for the benefit of Goldstone Akrokeri Ltd and not be transferred or paid to the Company without the prior consent of AIMSL.

During the Standstill Period, the Company and AIMSL shall use all reasonable endeavours to agree a repayment plan for the outstanding amount due under the Gold Loan Agreement, commencing from the expiry of the Standstill Period, or earlier if agreed. 

AIMSL is entitled to terminate the Standstill Agreement with immediate effect on the occurrence of certain events, including any breach by the Company of its obligations under the Standstill Agreement, where the Company's Ordinary Shares are delisted from the AIM market of the London Stock Exchange or any step is taken to effect such a de-listing, and/or where any insolvency proceeding has been commenced or applied for against the Company or its subsidiary GoldStone Akrokeri Ltd.

Board and operational changes

As part of the Standstill Agreement, AIMSL has been granted the right to nominate a non-executive director to the board of the Company, subject to satisfactory completion of the requisite due diligence to be undertaken by the Company's Nominated Adviser in respect of such appointment, until the outstanding amount due under the Gold Loan has been repaid in full.

In addition, it has been agreed that Angela List will assume the role of Chair of the Board, with Bill Trew becoming a non-executive director, with such changes to take immediate effect. It has further been agreed that the Company will seek to appoint an operational management team, procured by Nguvu Mining Limited, an 11.9 per cent. shareholder in the Company and a company of which Angela List is a director and the majority shareholder, to be mobilised as soon as possible to manage operations at the Company's Akrokeri-Homase Project, with such arrangement to be subject to a separate agreement which will constitute a Related Party Transaction pursuant to AIM Rule 13.

Publication of 2022 Accounts

Further to the Company's announcement of 31 October 2023, publication of its annual report and accounts in respect of the year ended 31 December 2022 (the "2022 Accounts") and subsequently its interim accounts for the six months ended 30 June 2023 (the "Interim Results") is dependent on the Company's Board and auditors being satisfied that the Company represents a going concern.  The publication of both the 2022 Accounts and the Interim Results is required in order to satisfy the Company's obligations in respect of AIM Rules 19 and 18 respectively, following which the suspension of trading in the Company's Ordinary Shares can be lifted. 

Further to the execution of the Standstill Agreement, the Board is pursuing various avenues to seek to raise additional funding to provide working capital for the group's operational development and to settle various balances due to the Company's outstanding creditors in order to facilitate publication of the 2022 Accounts and Interim Results on a going concern basis. The Board is seeking to complete such arrangements by the end of February 2024 and will provide further updates as appropriate in due course.

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About GoldStone Resources Limited

GoldStone Resources Limited (AIM: GRL) is an AIM quoted mining and development company with projects in Ghana that range from grassroots exploration to production.

The Company is focused on developing the Akrokeri-Homase project in south-western Ghana, which hosts a JORC Code compliant 602,000oz gold resource at an average grade of 1.77 g/t.  The existing resource is confined to a 4km zone of the Homase Trend, including Homase North, Homase Pit and Homase South.

The project hosts two former mines, the Akrokerri Ashanti Mine Ltd, which produced 75,000 oz gold at 24 g/t recovered grade in the early 1900s, and the Homase Pit which AngloGold Ashanti developed in 2002/03 producing 52,000 oz gold at 2.5 g/t recovered.  Production is currently focussed on the Homase Mine however it is the Company's intention to build a portfolio of high-quality gold projects in Ghana, with a particular focus on the highly prospective Ashanti Gold Belt.