SUNSTONE METALS LTD — Capital/Financing Update 2010

Aug 15, 2010

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ASX/Media Release 16 August 2010

AVALON RAISES $3.2M TO ADVANCE FEASIBILITY STUDIES ON VISCARIA COPPER-IRON PROJECT

RAISING SUPPORTS OBJECTIVE OF BECOMING A PRODUCER OF COPPER & IRON CONCENTRATES

The Board of Avalon Minerals Ltd (ASX: “ AVI”) and (“Avalon” ) is pleased to announce that it has resolved to undertake a placement to professional and sophisticated investors to raise $3.2 million to support the continued exploration and development of its flagship Viscaria CopperIron Project in northern Sweden.

Avalon Minerals Ltd ACN 123 184 412

PO Box 165 West Perth WA 6872

The placement, which comprises 20 million shares at $0.16 per share, is subject to shareholder approval at a General Meeting of Avalon shareholders to be held shortly. Hartleys Limited is Broker to the offer.

The proceeds of the placement will primarily be applied to a Definitive Feasibility Study at the Viscaria Project, where Avalon is aiming to become a producer of copper and iron concentrates from open pit mining operations at Viscaria commencing in 2013.

Avalon recently increased the Base Case for the Viscaria Pre-Feasibility Study from 500,000 tonnes per annum (“tpa”) of copper ore to 1.5 million tpa of copper and iron ore, while the upside case was increased from 750,000 tpa of copper ore to 3.0 million tpa of copper and iron ore.

The base case scenario would result in prospective average annual production of approximately 13,500 tpa of copper metal and 392,000 tpa of magnetite concentrate grading approximately 69% Fe for a period of 10 years.

Avalon will also use the funds raised to advance the exploration of high priority copper and iron targets on recently acquired tenure adjacent to the Viscaria Project.

Members of Avalon’s Board and senior management team have also, subject to shareholder approval, subscribed to the placement, including Tan Sri Abu Sahid Bin Mohamed (Avalon’s largest shareholder and a non-executive Director of the Company), who is increasing his interest to 19.9% of Avalon’s issued shares. A notice of meeting will be mailed to shareholders shortly.

Telephone: +61 8 9322 2752 Mobile: 04 3563 5598

Email: andrew.munckton@avalonminerals. com.au Web: www.avalonminerals.com.au

ASX Code: AVI

Directors David McSweeney (Executive Chairman)

Andrew Munckton (CEO)

Tan Sri Abu Sahid Mohamed (Non-Executive Director)

Stephen Stone (Non-Executive Director)

Gary Steinepreis (Non-Executive Director)

This announcement will now bring to an end the current trading halt.

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For more information contact:

David McSweeney +61 4 3939 9318

Andrew Munckton +61 4 3563 5598

Released by: Nicholas Read Read Corporate Telephone: +61 (0)8 9388 1474

On behalf of: Mr David McSweeney Chairman Avalon Minerals Limited Mobile: +61 0439 399 318