SUNSTONE METALS LTD — Capital/Financing Update 2012

Feb 12, 2012

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VIA: WWW.ASXONLINE.COM

13 February 2012

The Manager Company Announcements ASX Limited Level 10, 20 Bond Street Sydney NSW 2000

UNDERWRITTEN CAPITAL RAISING AND RIGHTS ISSUE

Avalon Minerals Limited ( Avalon ) is pleased to announce that it intends to undertake a non-renounceable rights issue of one (1) new share for every five (5) existing shares held by shareholders at an issue price of $0.06 per share.

The rights issue which is fully underwritten by Indian Ocean Capital, who also act as lead Managers to the Issue, will raise A$2,868,736 (before costs of the Issue) and result in the Issue of 47,812,267 new shares.

Net proceeds of the Issue will be used to advance the Viscaria Copper Project and to provide general working capital for the Company.

Further information, including the proposed timetable, will be announced as soon as documentation is finalised.

Yours Sincerely

Jeremy Read Managing Director Avalon Minerals Limited

– ENDS –

On behalf of: The Board Avalon Minerals Limited Mobile: +61 0409 484 322

Avalon Minerals Ltd ACN 123 184 412 PO Box 165, West Perth WA 6872 Email: andrew.munckton@avalonminerals.com.au Mobile: Telephone: +61 8 9322 2752 0435 635 598

ASX Code: AVI Shares on Issue: ~239 million

www.avalonminerals.com.au