SUNSTONE METALS LTD — Capital/Financing Update 2009

Jun 11, 2009

ASX Release 12 June 2009

LANDMARK 3,500M RC AND DIAMOND DRILLING PROGRAM COMMENCES AT VISCARIA COPPER PROJECT, SWEDEN

HIGHLIGHTS

• Two-stage 3,500m Reverse Circulation (RC) and Diamond drilling program commences at Viscaria Copper Project, Sweden.
• Stage one to consist of 1,500m of RC drilling to test the large shallow Bahpagobba Electro Magnetic (EM) conductor located 500m north of the 3km long 'A' Zone.
• Results from the stage one drilling program anticipated to be available in July 2009.
• Drilling to underpin Avalon's aggressive exploration campaign aimed at unlocking the vast potential of the Viscaria mineralised system.

Australian-based minerals company Avalon Minerals Ltd (ASX: AVI; "Avalon") is pleased to announce the commencement of a landmark twostage drilling program at the Company's Viscaria Copper Project, located in the Norbotten region in Northern Sweden.

The first stage of the program commenced today with the arrival on site of a Reverse Circulation (RC) drilling rig to conduct the first 1,500m of drilling (see figure 1 below)

The drilling programme has been designed to test the large shallow Electro Magnetic (EM) Bahpagobba Conductor, which is located 500m north of the 3km long Viscaria 'A' Zone and estimated to start at 50m below the surface.

The program will also test along interpreted strike extensions of the 'A' Zone, where historical production totalled 12.3mt @ 2.3% Cu.

RC drill rig on site at Viscaria

Avalon's primary objective is to become a significant copper producer within three years based on existing resources at Viscaria. In addition, the Company plans to extend the known high-grade resources at Viscaria through exploration campaigns such as the current extensional drilling, which is designed to expand the overall resource base and future potential production profile.

Results from the stage one drilling program are anticipated to be available in July 2009.

Avalon Minerals Ltd ACN 123 184 412

PO Box 165 West Perth WA 6872

Telephone: +61 8 9322 2752

Mobile: 0439 399 318

Email: david@avalonminerals.com.au Web: www.avalonminerals.com.au

ASX Code: AVI

Directors David McSweeney (Managing Director & CEO)

Tan Sri Abu Sahid Mohamed (Director)

Stephen Stone (Director)

Gary Steinepreis (Director)

– ENDS –

Released by: On behalf of: Nicholas Read/Jason Cunningham Mr David McSweeney Read Corporate Managing Director and CEO Telephone: +61 (0)8 9388 1474 Avalon Minerals Limited

Mobile: +61 0439 399 318

Avalon Minerals – Background

Avalon Minerals Ltd listed in March 2007 with the aim of developing and discovering mineral deposits.

Avalon's corporate objective is to build a diversified resource mining group based on cash flows from producing operations. The primary project generation strategy has been successful with the acquisition of the advanced Viscaria and Adak copper deposits in northern Sweden where a current JORC Code compliant copper resource comprising an Inferred Resource of 39.9 million tonnes grading 1.3% Cu for 515,000 tonnes of contained copper has been delineated.

Competent Persons Statements

The information in this report relating to Exploration Results is reviewed by Mr Peter Batten BAS(Geol) who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Geological Society of Australia and is the company's Exploration Consultant. Mr Batten has over 20 years of exploration experience in a variety of mineral deposit styles including uranium, base metals and gold mineralisation and he consents to inclusion of the information in this report in the form and context in which it appears. He qualifies as a Competent Person as defined in the 2004 Edition of the "Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves".