13 July 2022

GOLDSTONE RESOURCES LIMITED

("GoldStone" or the "Company")

Conversion of Loan

Issue of Equity

GoldStone Resources Limited (AIM: GRL), the emerging gold producer and developer focussed on Ghana,

is pleased to announce that it has reached agreement with Paracale Gold Limited ("Paracale") for the conversion of its total outstanding loan and associated interest into fully paid new ordinary shares of 1p each in the Company ("Ordinary Shares") (the "Loan Conversion").  

As announced 28 December 2018, Paracale, a company associated with Bill Trew, Chairman of Goldstone, provided the Company with a loan of US$1.224 million which accrues interest at 6% per annum (the "Loan"). On 29 July 2021, Paracale reduced the principal amount and interest due by the exercise of warrants to subscribe for 20,000,000 new Ordinary Shares at a price of 1.2 pence per Ordinary Share (the "Warrant Conversion Exercise") at nil cost, with the Warrant Conversion Exercise proceeds being set off against the Loan. Accordingly, following the Warrant Conversion Exercise, the balance of the Loan was reduced to US$723,669. Interest continued to accrue on this outstanding principal balance in accordance with the terms of the Loan agreement.

The outstanding Loan, totalling US$766,522 (including the accrued interest of US$42,853), which equates to GBP642,085 at an exchange rate of 0.83766, will be converted into 9,802,821 new Ordinary Shares (the "Conversion Shares") at a price of 6.55 p per Ordinary Share, being the closing mid-market price per share on 12 July 2022, being the latest practicable date at the time of signing.  

Following the Loan Conversion, there are no outstanding loans or warrants held by Paracale.

Emma Priestley, CEO of GoldStone, commented:

"Paracale Gold share our vision for the development of the Akrokeri-Homase Project in Ghana and have been a tremendous support to GoldStone in recent years and continue to be so following the conversion of their outstanding loan to equity.

"As the Company has transitioned from explorer and developer to commercial gold producer, the future of GoldStone is very encouraging. The elimination of Paracale's loan will reduce debt on the balance sheet and will further support the growth of the Company. With sufficient cash being generated from gold sales already, this latest conversion will go further to maintain the Company's cash position for operational developments and the Board is confident that it remains well positioned to continue the ramp up of production at Homase."

Admission and Total Voting Rights

The Conversion Shares will rank pari passu with the existing Ordinary Shares and application will be made for the 9,802,821 Conversion Shares to be admitted to trading on AIM ("Admission").  It is expected that Admission will become effective and dealings in the Conversion Shares will commence at 8.00 a.m. on or around 19 July 2022.

On Admission, Paracale, which currently holds 115,853,754 Ordinary Shares in GoldStone, representing 24.0% of the Company's current issued share capital, will hold 125,656,575 Ordinary Shares representing 25.52% of the Company's enlarged share capital. Together with his direct interest in the Company of 4,000,000 Ordinary Shares, Bill Trew, as a director and shareholder of Paracale, will, in aggregate, hold an interest in 129,656,575 Ordinary Shares representing approximately 26.33% of the Company's enlarged share capital on Admission.

Upon Admission, the Company's issued ordinary share capital will consist of 492,436,817 Ordinary Shares with one voting right each. The Company does not hold any Ordinary Shares in treasury, therefore the total number of Ordinary Shares and voting rights in the Company on Admission will be 492,436,817. With effect from Admission, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Related Party Transactions

Paracale, a company of which Bill Trew, Chairman of Goldstone, is a director and substantial shareholder, is a substantial shareholder of the Company and is a related party of the Company as defined in the AIM Rules for Companies ("AIM Rules").

Accordingly, the Loan Conversion is deemed to be a related party transaction pursuant to Rule 13 of the AIM Rules and the independent directors, being Emma Priestley, Richard Wilkins and Orrie Fenn, consider, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms and conditions of the Loan Conversion are fair and reasonable insofar as the shareholders of the Company are concerned.

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About GoldStone Resources Limited

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

The Company is focused on developing the Akrokeri-Homase project in south-western Ghana, which hosts a JORC Code compliant 602,000 oz 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.  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.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.