Sunstone Metals : Gold-copper porphyry at Alba below gold zone

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20 JANUARY 2022

Bramaderos Project, southern Ecuador

Well mineralised gold-copper porphyry intersected below Alba gold discovery

Highlights

• Significant intersections from the first follow-up drillhole (BMDD020) at Alba include: 264.7m at 0.49g/t gold and 0.13% copper, from 95m to end of hole; including

1. 20m at 0.91g/t gold from 119m (Gold Zone), including
2. • 7.0m at 1.77g/t gold, from 126m; and

• 1. 193.7m at 0.5g/t gold and 0.16% copper from 164m (Porphyry Zone), including
  2. • 9.1m at 0.91g/t gold and 0.16% copper from 173m; and
     • 7.8m at 0.81g/t gold and 0.15% copper from 185m; and
     • 21.0m at 0.91g/t gold and 0.17% copper from 203m
• Further follow-up drilling is underway, and assays are pending for 3 drillholes
• Deep drilling at El Palmar in northern Ecuador returns visible copper and significant alteration from the margin of the large magnetic target zone

Sunstone Metals (ASX: STM) is pleased to advise that the second hole drilled at its Alba gold discovery within the Bramaderos Project in southern Ecuador has returned a 193.7m porphyry intersection grading 0.5g/t gold and 0.16% copper from 164m. Mineralisation remains open at depth and along strike.

Hole BMDD020 was drilled below the maiden hole BMDD012 at Alba, which returned 111m at 2.3 g/t, including 7.2m at 26.88 g/t (see ASX release dated November 18, 2021). Hole BMDD020 also intersected the Upper Gold Zone returning 7.0m at 1.77g/t gold.

The results show that the Alba discovery comprises a gold zone sitting above a well mineralised gold-copper porphyry that remains open and largely untested. The Upper Gold Zone is currently interpreted to be a structurally controlled epithermal system. A geological model is being developed for this system, but the current understanding is shown graphically in Figures 1 and 2. Petrographic studies are underway.

Visible gold was identified in drill holes BMDD012 and 020 (Figure 2), and importantly in BMDD020 it was observed in both the Upper Gold Zone and within the broader porphyry zone leading to the potential for future high grade gold intervals.

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Additional follow-up drill holes BMDD021 and 022 at Alba have been completed, and hole BMDD023 is well advanced (Figures 1 and 2) and are being sampled for laboratory submission. All holes have intersected rock types and alteration similar to that documented in holes BMDD012 and 020. The drill holes appear to have drilled the equivalent of the Upper Gold Zone (significant anhydrite veining), and well developed stockwork at depth with some visible copper sulphides representing the porphyry zone.

Sunstone Managing Director Malcolm Norris said the latest results provided more firm evidence that Alba was emerging as a major discovery.

"The results so far demonstrate the presence of an Upper Gold Zone above a well-mineralised porphyry," Mr Norris said.

"These are some of the best porphyry gold-copper results we have seen in the broader Bramaderos Project. We are also seeing local visible gold within the porphyry system, which is extremely encouraging.

"The Upper Gold Zone at Alba will be further defined as we undertake additional drilling. It is likely to be structurally controlled, and we are testing NE and N-S oriented structures from interpretation of magnetics.

"We are also undertaking detailed electrical geophysics to help map the distribution of the Upper Gold Zone, and the porphyry mineralisation. We are getting indications that there is lateral continuity, and the target area is wide open."

The assay results to date from Alba include:

Drill Hole	From (m)	To (m)	Interval (m)	Au (g/t)	Cu (%)	Mo (ppm)	Ag (g/t)
BMDD012	93	353.4	260.40	1.11	0.08	24.0	1.2
	93.00	204.00	111.00	2.35	0.07	40.6	0.9
	106.80	136.00	29.20	7.68	0.05	35.5	0.7
	116.80	134.00	17.20	12.45	0.05	28.0	0.8
	124.80	132.00	7.20	26.88	0.04	16.9	0.8
	154.00	188.00	34.00	0.61	0.10	64.6	1.2
BMDD013	107.00	180.45	73.45	0.32	0.13	14.6	0.8
	165.00	167.00	2.00	2.02	0.07	81.0	0.5
BMDD020	95	359.73	264.73	0.49	0.13	29.0	1.3
incl	119	139	20.00	0.91	0.04	32.6	0.51
and	126	133	7.00	1.77	0.05	27.1	0.7
incl	164	357.7	193.70	0.5	0.16	29.5	1.51
and	173.3	182.4	9.10	0.91	0.16	31.7	1.4
and	185.25	193	7.75	0.81	0.15	41.3	1.36
and	203	224	21.00	0.91	0.17	42.1	1.5

Table 1: Significant gold intersections from holes BMDD012, BMDD013 and BMDD020.

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Visible gold was also identified in drill hole BMDD013 and correlated with an interval of 2m at 2g/t gold, located approximately 100m from the BMDD012 and BMDD020 Upper Gold Zone intervals.

The Upper Gold Zone is currently interpreted as a late-stagegold-rich event superimposed over a broad and deeper gold-copper porphyry mineralised system. The grades in the porphyry system in BMDD020 are some of the best seen at Bramaderos since Sunstone commenced drilling. This is very encouraging as exploration is advanced across the broader Alba target.

A conventional IP survey comprising 6 x 1,600m long lines has been planned for the Alba target and is expected to commence in late January. A 3-D Magnetotellurics (MT) survey will also be undertaken over the Alba target. MT is a geophysical method which uses natural time variations of the Earth's magnetic and electric fields to measure the electrical resistivity of the sub-surface. Application of MT in exploration for porphyry systems has advanced significantly over the last several years and it is anticipated that the combination of MT and conventional IP will deliver multiple drill targets for both high grade epithermal systems and porphyry gold- copper mineralisation, as currently interpreted at Alba.

El Palmar Update

Two drilling rigs continue to operate at the El Palmar gold-copper porphyry discovery in northern Ecuador.

Hole EPDD009 is targeted on part of the deep magnetic anomaly and at the time of announcement is at a depth of 837m.

Based on visual 'quick logs' of the core, and the results from a handheld XRF instrument it can be confirmed that the deep magnetic anomaly is mineralised.

Hole EPDD009 has lifted and deviated to the west so that it is drilling the margin of the main magnetic anomaly. The hole is likely to be stopped soon and a better positioned hole (to account for increased lift and deviation) will be commenced. This new hole is then likely to form the parent hole for future wedge holes to test the broad anomaly.

It is very encouraging to see the geology, alteration and intervals of mineralisation throughout this deep hole as it validates the deep magnetic anomaly as a significant target.

Assay results from holes EPDD004, 005 and 006 will be available in February.

Drill holes EPDD007 and 008 are currently being logged in preparation for sampling. Drill hole EPDD010 is nearing completion.

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Figure 1: Alba target drill status plan showing the interpreted porphyry gold-copper and epithermal gold target zones, located adjacent to the Brama porphyry gold-copper system.

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Figure 2: Alba cross section showing drill holes BMDD012, 20, 21 and 22. Assays are pending for holes 21 and 22.