Sunstone Metals Ltd. announced that it has agreed to acquire the Verde Chico Project in northern Ecuador through a Staged Acquisition Agreement from the Verde Chico Group. The Verde Chico project is located to the west of Sunstone's El Palmar gold-copper porphyry discovery and quadruples Sunstone's land position in this prospective belt in northern Ecuador to 3,672ha. The Verde Chico project was explored by the Rio Tinto group (then called RTZ) in 1992-1995, and by Canadian junior Balaclava Mines in 1998.

No exploration has been undertaken on the land since 1998. The historical exploration identified a 1.1km-long gold-in-soil anomaly that is open to the north and south, and which includes several high-grade gold-bearing veins at surface and wide lower grade zones of gold mineralisation in some drill holes. A total of 12 trenches for 683m were opened and sampled following mineralised structures.

A total of 28 drill holes for 4,436m were drilled by RTZ and Balaclava. The area of initial effective exploration only covers approximately 10% of the concession. Historical exploration comprised regional stream sediment sampling, soil sampling, limited geophysics (CSAMT), trench sampling, and diamond drilling.

The soil sampling by Rio Tinto defined a >1.1km long gold-in- soil anomaly, coincident with a CSAMT resistivity anomaly. This area was drilled at several locations and returned significant intervals of gold mineralisation including 68.5m at 1.05g/t gold from surface in hole RVC-08, including 1m at 11.3g/t gold from 40.5m. Trenching delivered locally very high grades across and along multiple veins at surface including.

Perdida vein - 6.5m @ 25.11 g/t Au; Peligrosa vein - 24m @ 21.2 g/t Au, 19m @ 7.72 g/t Au, 25m @ 10.24 g/t Au; Gato vein - 39m @ 3.08 g/t Au; Pavas vein - 26.5 @ 2.28 g/t Au, 10m @ 11.72 g/t Au; Oso Hormiguero vein - 29m @ 8.26 g/t Au, 11m @ 9.08 g/t Au; Falla vein - 8m @ 7.28 g/t Au During technical due diligence nothing has come to the attention of Sunstone that causes it to question the accuracy or reliability of the historical exploration results. Sunstone will undertake a systematic exploration program commencing once the full Staged Acquisition Agreement is signed, and once all access approvals and permits are in place. Terms of the Letter of Intent: Verde Chico Group (VCG) have agreed to transfer the Concession to MinVCH (`COMPAÑÍA MINERA VERDE CHICO MINVERDECHICO CIA.

LTDA.' a new entity which will hold the Verde Chico concession) Staged Acquisition Agreement between Sunstone, VCG, and MinVCH whereby Sunstone will ultimately own 100% of MinVCH Cash payments to VCG linked to specific time frames and milestones: Cash payments totalling $100,000 prior to commencement of drilling, linked to signing of agreements At commencement of drilling a payment of $100,000 Up to 1 year after start of drilling a payment of $150, 000 at which time a 25% equity interest in MinVCH will be transferred to Sunstone Up to 2 years after start of drilling a payment of $250,000 + $50,000 in Sunstone shares (subject to any required shareholder approval to satisfy ASX) and Sunstone receives additional 26% equity, taking its ownership in MinVCH to 51% Within 4 years of Sunstone holding 51% equity in MinVCH make a payment of $1,500,000 + $300,000 in Sunstone shares (subject to any required shareholder approval to satisfy ASX), and Sunstone receives an additional 34% equity, taking its ownership in MinVCH to 85% Within 1 year of Sunstone holding 85% equity in MinVCH making a payment of $1,500,000 and make a one-off inaugural Mineral Resource Estimate linked payment of 1/1000 of the current value of each ounce of gold equivalent estimated within the Measured and Indicated Resources in the inaugural Mineral Resource Estimate up to a maximum payment of $3,000,000. Sunstone receives additional 15% equity taking its equity to 100% of MinVCH.

An ongoing 1% NSR royalty from production, with a buyback option to Sunstone of ¾ for $1,000,000. A firm commitment for community funding through MinVCH.