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  • Acquisition Of Viscaria Completed – Sunstone Metals Largest Owner

Danderyd, March 8, 2019

Copperstone Resources AB’s (“Copperstone”) acquisition of Avalon Minerals Viscaria AB (“Viscaria”) was completed today. Viscaria is from now on a wholly-owned subsidiary of Copperstone. Copperstone’s copper mineral resources increases by 480%. Copperstone plans to apply for work permits at the County Administration Board, recruit a technical team and plan core drillings at the Viscaria site outside Kiruna alongside with increased environmental base line studies.

At Closing today, Copperstone paid to Sunstone Metals Ltd (“Sunstone”) the initial purchase price consisting of 20 MSEK in cash and 160m new shares of series B (resolved and allotted today, pending registration with the Swedish Companies Registration Office). An additional amount of 20 MSEK plus an annual interest of 7% will be paid in cash at the latest 4 months after Closing, or, alternatively, converted into newly issued Copperstone shares of series B at 10% discount on the VWAP 10 trading days preceding the 4 month expiration. At the granting of an Environmental Permit for Viscaria, Sunstone will receive an additional 46m shares and 20 MSEK in cash. The transaction is completed on a fully net-debt neutral basis, i e Sunstone has, prior to Closing, neutralized the 297 MSEK of debt in the Viscaria subsidiary, by means of an unconditional shareholder contribution.

Estimated merger effects

Mining and exploration assets in Viscaria amounts to 278.9 MSEK and Copperstone to 59.2 MSEK. The potential additional purchase price to Sunstone, on receival of environmental permit, of 46m shares and 20 MSEK are treated according to IFRS. Adjustments may occur. Complete proforma accounts will be officially reported as from the Q1 2019 report. The number of outstanding shares in Copperstone will increase to 408.603.716, whereof approximately 180.300.000 B-shares (or 44% of the outstanding shares), from an owner perspective, are locked up for 18 months from today’s date.

Mineral resources table

Indicative Mineral resources in the Copperstone Group (according to Sunstone and the Company) is presented according to the table below. The Copperstone projects northern area, Granliden/Sandberget, constitutes an exploration target of 150-210mton 0.25-0.45% Cu according to JORC-code, in excess of the estimated resources below, e g 736,000 tons of copper in different categories. Further core drillings and QAQC documentation could increase the total mineral resources base.

The Company has received full and exclusive access to the modern offices and core shed facilities in Kiruna. Viscaria is, as Copperstone, highly cost effective and the current cash flow requirements of Viscaria (excluding potential cost synergies) amounts to some 112,000 SEK per month, predominantly regarding Environmental consultancy services (water base line) and office leases.

Looking ahead

Copperstone intends to file work plans on both project areas with the County Administration Board of Norrbotten. Quotations regarding drill rigs are being administrated. The recruitment process of a Project Manager for Viscaria and Chief Geologist for Copperstone has commenced.

The Company has working capital for the upcoming one to two quarters (depending on the size of any core drilling campaign), and continues to evaluate longer term financing alternatives, such as different forms of equity funding including, among others, European commodity investors, in order to fund any increased exploration activity, and funds to Sunstone. In addition, the Company is working closely with the US-based fund Yorkville and will together evaluate the outstanding tranche 1 with regard to liquidity in the Copperstone share, trading pattern, investor comfort, before potentially calling for further funds.

Permits and Concessions

Below, please find the Copperstone Group’s updated and complete permission portfolio presented. All exploitation concessions and exploration permits are 100% owned, either directly or through a subsidiary. The Copperstone Board will at any point in time, invest wisely in order to create shareholder value by bringing forward increased assets while working on all relevant permits.

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