Gold, News & Features, Research and Interviews

A uniquely strong gold presence in Geraldton-Beardmore, Goldstone combines proven resources, potential, assets

www.grcmines.com • 416.860.1636

Phil Cunningham
Chairman, Interim CEO

Goldstone Resources (TSX:GRC) is unique among Canadian junior mining companies with 800,000 oz of gold resources on its historically prolific 100%-owned lands, a 30% carried inter- est in 2.3 million ounces of resources discovered at the Hardrock Project by joint venture partner Premier Gold, great potential from a very active 2011 drilling program in both Geraldton and Beardmore camps, and the added asset strength of existing infrastructure, in- cluding a fully-permitted, updated mill.

Resource Intelligence: You talk of 2011 being a breakthrough year for Goldstone. Why is that?

Philip Cunningham: There are several reasons. We now have an adequate exploration budget of $6.5 million to aggressively pursue targets on some of our underexplored 100%-owned properties. Also, our JV partner Premier Gold will have eight rigs in operation on the Hardrock Project… and lastly, because we have established momentum on which we can follow up in a big way on 2010 successes at Key Lake, where important discoveries were made in 2010 and which borders on Hardrock. Ultimately, we believe that investors will come to realize that these strengths—combined with our Northern Empire Mill and NI 43-101 resources of 1.5 million ounces of gold (with a new estimate to come)—are not reflected in the valuation of our shares.

RI: What specifically are you doing in the field in 2011 and with what objective?

PC: The first phase of our 50,000-metre 2011 gold exploration program began in mid-February on our Key Lake property near Geraldton, where we are looking to add to gold resources established through a limited drilling program in 2010 and to establish the viability of an open pit mining operation. The objective is to expand the current resource base through in-fill drilling, with hole targeting assisted by a recently completed preliminary pit model, as well as to continue expanding the mineralized corridor an additional kilometre—more than a third of the strike length—to the west. In addition, crews will be carrying out line-cutting and IP surveys on other favourable geological horizons on the Key Lake property to delineate further drill targets.

While full plans for the Beardmore camp will develop over the coming months, we do know now that an additional drill rig will be added in March to drill promising extensions of the Northern Empire Mine and the Sand River-Leitch Mine complex, as well as the McWilliams showing on the Northern Empire property. The latter was drilled in the fall of 2010 and intersected a favourable gold-bearing horizon in hole NE10-03.

Goldstone’s objective in Beardmore is to develop more gold near the Northern Empire mill which could be developed sequentially with those identified at our Brookbank and Northern Empire properties. We recently hired Senior Project Geologist George Langstaff, whose primary mandate for 2011 will be to study and reinterpret past producing properties in the Beardmore camp, to identify additional promising drilling targets for this year and beyond.

RI: Can you quantify Goldstone’s gold resources?

PC: NI 43-101-compliant resource estimates for our Brookbank deposit and Northern Empire Mine properties contain resources of about 800,000 ounces of gold.

At the Hardrock project, an updated NI 43-101-compliant resource estimate is expected in 2011.  However, the NI 43-101-compliant estimate issued early in 2010 established uncut gold resources of 2.3 million ounces.  Our 30% of that represents nearly 700,000 ounces, without allowing for what was discovered in the remainder of 2010 or, of course, what is to come from an active program in 2011.

While we have reported successes at Key Lake, more drilling will need to be done before a NI 43-101 assessment can be commissioned. Our Sand River-Leitch Mine, once Canada’s richest is also pure potential.

RI: What is the infrastructure story?

PC: Goldstone properties aren’t distant from civilization. We are close to highways, power grids, and local labour pools and benefit from extensive existing mining infrastructure above and below ground, including the upgraded, fully-permitted Northern Empire mill.

RI: What have you learned from history in this historically rich area?

PC: The ten formerly productive mines on Goldstone lands produced in excess of 4 million ounces of gold. Whether it’s because they had to operate with a $35 gold price, or because miners of the time simply followed the high grade veins they had found, experience shows that a lot of gold was left behind both in known formations and through extensions and parallel occurrences. Many of these opportunities are close to surface. It’s also worth noting that the mines in Geraldton-Beardmore never ran out of gold and remained open at depth.

Investor Highlights:

• NI 43-101 gold resources at 100%-owned Brookbank and Northern Empire—close to Goldstone’s mill—total more than 800,000 oz
• NI 43-101 resources at the Hardrock Project joint venture with Premier Gold (in which Goldstone enjoys a 30% carried interest) total more than 2.3 million ounces uncut—and an updated report will be published in Q1 2011
• $6.5 million budget for 2011 drilling at Key Lake (2010 successes, borders on Hardrock) and at its Beardmore properties which include the Leitch-Sand River, once Canada’s richest producing mine
• As operator, Premier Gold will have eight rigs on the Hardrock Project in 2011 and is seeking permits to drill from underground as well as from surface