SUNSTONE METALS LTD — Capital/Financing Update 2023

Jun 19, 2023

20 JUNE 2023

El Palmar gold-copper discovery, northern Ecuador

T3 emerging as significant porphyry discovery

Assay results from EPDD026 show substantial gold and copper widths and grades in line with other prominent porphyry deposits globally

Key Points

• Drill hole EPDD026, the first drillhole to test the large T3 target, has intersected a strongly mineralised porphyry gold-copper system at depth
• Mineralisation is open in all directions and geophysics reveal multiple highly ranked drill targets; Results from drill hole EPDD026 include:
  • o Higher grade zone of 11.9m at 0.97g/t gold and 0.28% copper for 1.43g/t AuEq from 1,236m, within
  • o 190m at 0.4g/t gold and 0.11% copper for 0.58g/t AuEq from 1,171m down-hole
  • o Discrete intervals of 2m of up to 0.35% copper and 1.3g/t gold, from 1,240m within the higher-grade zone of 11.9m
  • o Lower grade mineralisation continues to end-of-hole and is open
• This well mineralised zone is interpreted to extend towards surface and follow-up drill hole EPDD028, which is in progress, is testing this up-dip potential and has intersected some chalcopyrite from 224m down-hole
• The T3 target is roughly circular and measures 1km in diameter and is part of a cluster of gold-copper porphyry systems which extends over 2.3km
• Importantly, the T3 target sits within the broad Toachi fault zone which is a key control on mineralisation at SolGold's 3Bt Alpala copper-gold porphyry deposit just 65km away, and 15km away from Codelco's 1Bt Llurimagua copper-molybdenum deposit
• "It is early days on the El Palmar concession but the potential here is huge. We see multiple porphyry systems, mineralisation extending from surface to depths exceeding 1,100m and grades locally exceeding 1g/t AuEq (or greater than 0.6g/t gold and greater than 0.2% copper). We believe we are onto a significant discovery at T3 that could deliver significant value uplift to Sunstone shareholders". – Sunstone MD Malcolm Norris

Sunstone Metals Ltd (ASX: STM) is pleased to announce assays from drill hole EPDD026 at the T3 porphyry target within its El Palmar porphyry gold-copper project in northern Ecuador.

* The gold equivalent calculation formula is AuEq(g/t) = (Au grade x Au price x Au recov / 31.1035) + (Ag grade x Ag price x Ag recov / 31.1035) + (Cu grade x Cu price x Cu recov / 100)) / (Au price x Au recov / 31.1035). The prices used were US$1,800/oz gold and US$9,500/t copper and US$22/oz silver. Recoveries are estimated at 89% for gold, 85% for copper, and 60% for silver based on metallurgical studies. In Sunstone's opinion all the elements included in the metal equivalents calculation have reasonable potential to be recovered and sold.

This is a very important development for the El Palmar project for several reasons:

• Strong gold-copper mineralisation in the first hole drilled into the very large T3 target (Figures 1 and 2)
• Geophysics and visual results from hole EPDD028 suggest a very extensive alteration system extends towards surface (Figures 2 and 7)
• Mineralisation in EPDD026 is typical of many porphyry systems comprising chalcopyrite and some bornite, within transitional potassic alteration, and copper-sulphide-bearing A vein and B vein stockworks (Figure 5)
• Multiple geophysical anomalies to test within the broader T3 target area (Figures 1-4, 6 and 7)
• The early T3 results, combined with drilling at T1, T2 and T5 which all intersected gold-copper mineralisation from surface, outline a 2.3km x 1km cluster of porphyry deposits. This is an extensive system of mineralised centres (Figures 1 and 3)
• The Sunstone El Palmar targets bear many geological similarities with the nearby Alpala system (within the Cascabel project owned by SolGold) and are the same geological age (Figure 4)

This scenario of clustered deposits is very similar to the giant Cobre Panama porphyry copper system in Panama (Mineral Resources of ~4.4Bt at 0.35% copper and 0.06g/t gold at 0.15% copper COG; www.firstquantum.com) in the sense of multiple close-spaced porphyry centres (7 contributing to mineral resources).

Sunstone Managing Director Malcolm Norris said: "Drill hole EPDD026 has delivered extremely promising results. The strong mineralisation is an incredible result for the first hole into the large T3 target.

"This area is wide open – we should expect mineralisation above this intersection extending towards surface, in addition to mineralisation below this intersection and laterally within a 1km diameter target. That is potentially a very large, mineralised area in an environment with many similarities to the 3Bt Alpala deposit nearby.

"Further drilling will obviously be aimed at testing the multiple discrete and shallower high amplitude magnetic anomalies within the T3 area, and ultimately the deeper magnetic and MT anomalies.

"It is early days on the El Palmar concession but the potential here is huge. We see multiple porphyry systems, mineralisation extending from surface to depths exceeding 1,100m and grades locally exceeding 1g/t AuEq (or greater than 0.6g/t gold and greater than 0.2% copper). We believe we are onto a significant discovery at T3 that could deliver significant value uplift to Sunstone shareholders".

DrillHole	TargetArea	EOH(m)	From(m)	To (m)	Interval(m)	Au(g/t)	Cu(%)	Ag(g/t)	AuEq(g/t)	CuEq(%)*
EPDD026	T3	1464.4	2.00	6.00	4.00	0.25	0.01	0.5	0.28	0.18
			67.00	87.00	20.00	0.40	0.01	0.2	0.42	0.27
			132.70	134.70	2.00	0.93	0.00	0.1	0.94	0.59
			191.80	224.00	32.20	0.24	0.02	0.1	0.27	0.17
			242.00	252.00	10.00	0.23	0.02	0.3	0.26	0.17
			463.40	1365.00	901.60	0.15	0.05	0.3	0.23	0.14
		incl.	1109.00	1119.00	10.00	0.33	0.10	0.5	0.49	0.31
		and	1171.00	1361.00	190.00	0.40	0.11	0.7	0.58	0.37

incl.	1192.30	1254.40	62.10	0.57	0.15	1.0	0.82	0.52
incl.	1236.00	1247.90	11.90	0.97	0.28	2.0	1.43	0.90
and	1287.40	1321.00	33.60	0.57	0.15	1.0	0.82	0.52
incl.	1307.00	1311.00	4.00	1.22	0.29	1.9	1.70	1.08
	1430.00	1454.00	24.00	0.16	0.07	1.3	0.29	0.19

Table 1: Significant intersections from hole EPDD026. Copper equivalent is included here to enable comparison with other porphyry copper-gold deposits that are commonly reported in CuEq (e.g. Alpala and Tandayama-America below)

* The gold equivalent calculation formula is AuEq(g/t) = (Au grade x Au price x Au recov / 31.1035) + (Ag grade x Ag price x Ag recov / 31.1035) + (Cu grade x Cu price x Cu recov / 100)) / (Au price x Au recov / 31.1035). The prices used were US$1,800/oz gold and US$9,500/t copper and US$22/oz silver. Recoveries are estimated at 89% for gold, 85% for copper, and 60% for silver based on metallurgical studies. In Sunstone's opinion all the elements included in the metal equivalents calculation have reasonable potential to be recovered and sold.

*The copper equivalent calculation formula is CuEq(%) = (Au grade x Au price per g/t x Au recov) + (Ag grade x Ag price x Ag recov) + (Cu grade x Cu price x Cu recov / 100)) / (Cu price x Cu recov / 100). The prices used were US$1,800/oz gold and US$9,500/t copper and US$22/oz silver. Recoveries are estimated at 89% for gold, 85% for copper, and 60% for silver based on metallurgical studies. In Sunstone's opinion all the elements included in the metal equivalents calculation have reasonable potential to be recovered and sold.

At surface within the T3 target stockwork veining has been identified in minor local outcrops, but the majority of the area, particularly in the northern portion of T3 is covered by up to at least 35m of young volcanic cover. Grid-based auger soil sampling that has penetrated below areas of thinner cover (<10m) has returned coincident arsenic (Figure 3 left hand panel) and antimony anomalies over the southern and western sectors of the T3 magnetic complex. These two elements are typically elevated in the altered lithocaps over the top and margins of porphyry copper systems. This supports the concept of a very large target area.

The T3 target is centred on the regionally-significant Toachi Fault zone and its intersection with orthogonal structures – a scenario strongly similar to the Alpala and Tandayama-America copper-gold porphyry deposits, within SolGold's Cascabel project, located 65km to the north-east. Age dating of the rocks associated with mineralisation at El Palmar T1 has confirmed that they are the same geological age as Alpala and are hosted within the northern section of the Eocene and Miocene volcanic arcs.

The 2.66 billion tonne Alpala copper-gold deposit grades 0.25g/t gold and 0.37% copper (0.53% CuEq), and the 0.53 billion tonne Tandayama-America deposit grades 0.19g/t gold and 0.24% copper (0.36% CuEq) (Figure 4; see also www.solgold.com.au for details). Also in the vicinity is the 1 billion tonne Llurimagua coppermolybdenum porphyry deposit grading 0.89% copper and 0.04% molybdenum (1.0% CuEq).

The clustering of deposits that are being discovered on the El Palmar property within the Eocene belt gives us strong cause to believe that the El Palmar deposits will be regionally significant.

Sunstone is also active at its southern Ecuador Bramaderos project where drilling is in progress at the Limon target. The drilling is following up the exciting results from drill holes LMDD017 (177m at 0.97g/t gold and 10.1g/t silver), and LMDD021 and 022 (see ASX announcements dated 29 March 2023, and 2 June 2023).

Figure 1: Location of the T3 anomaly relative to other targets T1, T2 and T5. Background image is RTP magnetics. Drill hole EPDD026 is shown with significant gold and copper assays corresponding to the main magnetic body at T3. The labelled cross sections are shown in Figures 2 and 7 below.

Figure 2: Northwest-Southeast section through the T1, T2 and T3 targets, showing the T1 system which is mineralised from surface on the left of the diagram, and the trend of EPDD026, through the T2 MT geophysical anomaly, and into the T3 magnetic anomalies. Current hole EPDD028 is shown here. EPDD027, drilled but assays not yet received, tested a shallow magnetic body off section. The yellow to pink contours show a slice through the magnetic model with pink being more magnetic.

Figure 3: Plan maps of the El Palmar porphyry gold-copper targets. The T3 magnetic complex is approximately 1km diameter and has 3 drill holes (including current hole EPDD028) all on its northern margin. Assays have only been received for hole EPDD026 within T3 (this announcement).

Figure 4: Same scale comparison of the El Palmar T1 and T3 complex with a cross section through the Cascabel Alpala copper gold deposit (reproduced from Garwin, 2022; Geohug presentation). The Alpala cross section shows >0.9% CuEq in green, surrounded by >0.3%CuEq in pink. The top of the largest >0.9%CuEq domain is 680m below surface.

Figure 5: Drill core from EPDD026 over the interval 1240 – 1314m showing strong stockwork veining and high grade gold and copper assays.

Figure 6: Plan view at a depth of 1,000 – 1,200m below surface of the magnetic bodies that make up T3 (yellow to pink contours). The red solid and dashed outlines show the MT (magneotellurics) anomalies at various depths that partially overlap with the magnetic bodies.

Figure 7: Broad interpretation of the T3 magnetic complex to date based on very limited drilling. The T3 target is to be tested in all dimensions over the coming months.

Figure 8: Location of the El Palmar project relative to the giant Llurimagua (Codelco-Enami), Alpala and Tandayama-America (Cascabel project, SolGold) porphyry deposits, and the Toachi fault system.

Figure 9: Location of the El Palmar project in northern Ecuador, the Verde Chico project nearby, and the Bramaderos Project in southern Ecuador.

Drill Hole ID	Easting (m)	Northing (m)	Dip(degrees)	Azimuth (UTM)(PSAD56 Grid) (degrees)	EOH (m)
EPDD026	746936	10030272	-65	115	1,464.4
EPDD027	747334	10029589	-50	25	305.0
EPDD028	747663	10029939	-82	248	In progress

Table 1: Drill hole details for the El Palmar Project.

For further information, please visit www.sunstonemetals.com.au

Mr Malcolm Norris Managing Director Sunstone Metals Ltd Tel: 07 3368 9888 Email: mnorris@sunstonemetals.com.au

Media: Paul Armstrong Read Corporate +61 8 9388 1474

About Sunstone Metals

Sunstone has an advanced portfolio of exploration projects in Ecuador. The portfolio comprises:

1. The Bramaderos Gold-Copper Project where Sunstone owns an 87.5% interest, and SolGold Canada, Inc. (formerly Cornerstone Capital Resources) a subsidiary of SolGold, holding 12.5% (loan carried through to start of commercial production) (see ASX announcement dated 10th April 2017, 28th August 2019, and 7 January 2020). The Bramaderos gold-copper project is located in Loja province, southern Ecuador, and is highly prospective for the discovery of large porphyry gold-copper systems, and high-grade epithermal gold systems. The Bramaderos concession is host to multiple fertile mineralised systems with significant discovery potential.

The Brama-Alba deposit, within the Bramaderos concession contains an initial Mineral Resource estimate of 156Mt at 0.53g/t AuEq for 2.7Moz gold-equivalent*. In addition to this is the Bramaderos project Exploration Target of between 3.3Moz and 8.6Moz AuEq within 255 to 360Mt at a grade between 0.40 and 0.74g/t AuEq (see ASX release dated December 13, 2022).

JORCClassification	Tonnage(Mt)	Au(g/t)	Cu(%)	Ag(g/t)	AuEq(g/t)	AuEq (Mozs)
Indicated	9	0.38	0.09	1.1	0.53	0.2
Inferred	147	0.35	0.11	1.3	0.53	2.5
Total	156	0.35	0.11	1.3	0.53	2.7

The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement for the Mineral Resource estimate and Exploration Target referred to above and, that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource for the target area reported. It is uncertain if further exploration will result in the estimation of a Mineral Resource.

*The gold equivalent calculation formula is AuEq(g/t) = (Au grade x Au price x Au recov / 31.1035) + (Ag grade x Ag price x Ag recov / 31.1035) + (Cu grade x Cu price x Cu recov / 100)) / (Au price x Au recov / 31.1035). The prices used were US$1,800/oz gold and US$9,500/t copper and US$22/oz silver. Recoveries are estimated at 89% for gold, 85% for copper, and 60% for silver based on metallurgical studies. In Sunstone's opinion all the elements included in the metal equivalents calculation have reasonable potential to be recovered and sold.

1. The El Palmar Copper-Gold Project where Sunstone holds 70% of the highly prospective 800ha El Palmar gold-copper porphyry project in Ecuador. Sunstone can acquire 100% through a Staged Acquisition Agreement. A Staged Acquisition Agreement to acquire the nearby Verde Chico Project has also been signed. The El Palmar and Verde Chico gold-copper projects are located in Imbabura province, northern Ecuador, within the same geological belt that includes the giant Alpala, Tandayama-America and Llurimagua porphyry copper-gold and copper-molybdenum deposits.

Competent Persons Statement

The information in this report that relates to exploration targets and exploration results is based upon information reviewed by Dr Bruce Rohrlach who is a Member of the Australasian Institute of Mining and Metallurgy. Dr Rohrlach is a full-time employee of Sunstone Metals Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Dr Rohrlach consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Mr Malcolm Norris, Managing Director of Sunstone Metals Ltd., has authorised this announcement to be lodged with the ASX.

TABLE 1 – Section 1: Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Samplingtechniques	•Nature and quality of sampling (e.g. cut channels,random chips, or specific specialised industry standardmeasurement tools appropriate to the minerals underinvestigation, such as downhole gamma sondes, orhandheld XRF instruments, etc.). These examples shouldnot be taken as limiting the broad meaning of sampling.•Include reference to measures taken to ensure samplerepresentivity and the appropriate calibration of anymeasurement tools or systems used.	• The drill core sampling was carried out using half core,generally at 1 to 2m intervals.• New results are based on visual assessment of drill core.• Core recovery was good, and core aligned prior tosplitting and sampling.
	•Aspects of the determination of mineralisation that areMaterial to the Public Report. In cases where 'industrystandard' work has been done this would be relativelysimple (e.g. 'reverse circulation drilling was used toobtain 1 m samples from which 3 kg was pulverised toproduce a 30 g charge for fire assay'). In other cases,more explanation may be required, such as where thereis coarse gold that has inherent sampling problems.Unusual commodities or mineralisation types (e.g.submarine nodules) may warrant disclosure of detailedinformation.	• Diamond drilling, rock chip and channel samplingpoints have been guided by geological mapping. Thedrill samples from El Palmar were dried, crushed to70% passing 2mm, Split 1000g and pulverised to 85%passing 75microns. A 20g portion of this sample wasused for multi-element analysis (IMS-230) and a 30gsample for Fire Assay Au (FAS-111).
Drillingtechniques	•Drill type (egcore, reverse circulation, open-holehammer, rotary air blast, auger, Bangka, sonic, etc) anddetails (e.g. core diameter, triple or standard tube, depthof diamond tails, face-sampling bit or other type,whether core is oriented and if so, by what method, etc).	• The El Palmar target areas have been drilled withdiamond core.
Drill samplerecovery	•Method of recording and assessing core and chip samplerecoveries and results assessed.	• Diamond core recovery data for the El Palmar drillingprogram was good.
	•Measures taken to maximise sample recovery and ensurerepresentative nature of the samples.	• Core recovery at El Palmar was good.
	•Whether a relationship exists between sample recoveryand grade and whether sample bias may have occurreddue to preferential loss/gain of fine/coarse material.	• No relationship between sample recovery and grade hasbeen established.
Logging	•Whether core and chip samples have been geologicallyand geotechnically logged to a level of detail to supportappropriateMineralResourceestimation,miningstudies and metallurgical studies.	• Drill samples were logged for lithology, weathering,structure, mineralogy, mineralisation, colour, and otherfeatures. Recent logging and sampling for the El Palmarproject were carried out according to Sunstone'sinternal protocols and QAQC procedures which complywith industry standards.
	•Whether logging is qualitative or quantitative in nature.Core (or costean, channel, etc.) photography.	• Drill samples are logged for lithology, weathering,structure, mineralogy, mineralisation, colour, and otherfeatures.
	•The total length and percentage of the relevantintersections logged.	• The drill holes have been logged in full. Drill holelengths are included in the text of the announcement.
Sub-samplingtechniques and	•If core, whether cut or sawn and whether quarter, half orall core taken.	• Half core was used to provide the samples that weresubmitted for assay from the El Palmar drilling.
samplepreparation	•If non-core, whether riffled, tube sampled, rotary split,etc. and whether sampled wet or dry.	• This announcement relates to drill core logging.
	•Forallsampletypes,thenature,qualityandappropriateness of the sample preparation technique.	• Historical drill core samples from El Palmar (drilled byCodelco) were analysed by ACME Labs in Vancouver.Samples were crushed and split with 250 gramspulverized to 200 mesh (Method - R200-250). Analysison drill core was undertaken on a sample split (Method- VAN split pulp).• Surface rocks at El Palmar are historical and were
		collected by 3 different companies. GOEXS.A.samples were analysed at Bureau Veritas Laboratories

ASX ANNOUNCEMENT -

Criteria	JORC Code explanation	Commentary
		in Peru. Lowell Mineral Exploration rocks wereanalysed by ALS Minerals, with sample preparationinvolving fine crushing 70% passing 2mm (MethodCRU-31), crushed sample split (Method SPL-21) andpulverise 1000g to 85% passing 75um (Method PUL-32). Codelco surface rock samples were analysed byACME Labs in Vancouver. Samples were crushed andsplit with 250 grams pulverized to 200 mesh (Method -R200-250)• The sample preparation for the current phase of drillingis carried out according to industry standard practicesusinghighlyappropriate samplepreparationtechniques.
	Quality control procedures adopted for all sub-samplingstages to maximise representivity of samples.	• Sunstone used an industry standard QAQC programmeinvolving Certified Reference Materials "standards"and blank samples, which were introduced in the assaybatches.• Standards (Certified Reference Materials) or analyticalblanks were submitted at a rate of 1 in 28 samples. Fieldduplicates were also taken at a rate of approximately 1in 28 samples.• The check or duplicate assay results are reported alongwith the sample assay values in the final analysis report.
	Measures taken to ensure that the samplingisrepresentative of the in-situ material collected, includingfor instance results for field duplicate/second-halfsampling.	• For diamond core, the routine sample procedure is toalways take the half/quarter core to the right of theorientation line (looking down hole) or the cut line (incases where the orientation line was not reliable).• Once assay results are received the results fromduplicate samples are compared with the correspondingroutine sample to ascertain whether the sampling isrepresentative.
	Whether sample sizes are appropriate to the grain size ofthe material being sampled.	• Sample sizes are considered to be appropriate for thestyle of sampling undertaken and the grainsize of thematerial, and correctly represent the style and type ofmineralisation at the exploration stage.
Quality ofassay data andlaboratorytests	• The nature, quality and appropriateness of the assayingand laboratory procedures used and whether thetechnique is considered partial or total.	• Sunstone uses a fire assay gold technique for Au assays(FAS-111) and a four acid multi element technique(IMS-230) for a suite of 48 elements. FAS-111 involvesAu by Fire Assay on a 30-gram aliquot, fusion andatomic absorption spectroscopy (AAS) at trace levels.IMS-20 is considered a near total 4 acid technique usinga 20g aliquot followed by multi-element analysis byICP-AES/MS at ultra-trace levels.• This analysis technique is considered suitable for thisstyle of mineralisation.
	• For geophysical tools, spectrometers, handheld XRFinstruments, etc., the parameters used in determining theanalysis including instrument make and model, readingtimes, calibrations factors applied and their derivation,etc.	• A handheld pXRF instrument is used on site forverification of anomalous metal values and to assistwith the geological logging and mineral identification.No specific data from this instrument are referenced inthis announcement.
	• Nature of quality control procedures adopted (e.g.standards, blanks, duplicates, external laboratorychecks) and whether acceptable levels of accuracy (i.e.lack of bias) and precision have been established.	• Standards, blanks and duplicates are inserted $\sim$ 1/28samples. The values of the standards range from low tohigh grade and are considered appropriate to monitorperformance of values near cut-off and near the meangrade of the deposit.• The check sampling results are monitored, andperformance issues are communicated to the laboratory
	The verification of significant intersections by either$\bullet$independent or alternative company personnel.	if necessary.• Procedure checks have been completed by theCompetent Person for exploration results for thisannouncement.

- ASX ANNOUNCEMENT -

Criteria	JORC Code explanation	Commentary
Verification of	The use of twinned holes.$\bullet$	• Twin holes have not been drilled in these areas.
sampling andassaying	Documentation of primary data, data entry procedures,data verification, data storage (physical and electronic)protocols.	• Sunstone sampling data were imported and validatedusing Excel.
	Discuss any adjustment to assay data.	• Assay data were not adjusted. Core loss intervals areassigned assay values of zero where present.
Location ofdata points	• Accuracy and quality of surveys used to locate drill holes(collar and down-hole surveys), trenches, mine workingsand other locations used in Mineral Resource estimation.	• Sample co-ordinates are located by GPS and for trenchsamples measured along the length of the trench.
	Specification of the grid system used.$\bullet$	Ecuador projection parameters:$\bullet$
		ValueParameter
		Reference EllipsoidInternational 1924
		Semi Major Axis
		Inverse Flattening (1/f)
		UTM Zone -17S (DatumType of ProjectionPSAD56)
		Central Meridian:$-81.0000$
		Latitude of Origin0.0000
		Scale on Central Meridian0.9996
		10000000False Northing
		False Easting500000
	Quality and adequacy of topographic control.$\bullet$	· The topographic control was compared againstpublished maps and satellite imagery and found to begood quality.
Data spacinganddistribution	Data spacing for reporting of Exploration Results.$\bullet$	• The drill core samples reported were collected fromdiamond drill holes from the El Palmar targets, and withsample length generally ranging between 0.5-2m.
	Whether the data spacing, and distribution is sufficientto establish the degree of geological and gradecontinuity appropriate for the Mineral Resource and OreReserve estimation procedure(s) and classificationsapplied.	• The data from these samples does not contribute to anyresource estimate nor implies any grade continuity.
	Whether sample compositing has been applied.٠	• No sample compositing was done.
Orientation ofdata in relationto geologicalstructure	Whether the orientation of sampling achieves unbiasedsampling of possible structures and the extent to whichthis is known, considering the deposit type.	• Drilling orientations were appropriate for theinterpreted geology providing representative samples.· Trench orientations and rock chip locations wereappropriate for the interpreted geology providingrepresentative samples.
	• If the relationship between the drilling orientation andthe orientation of key mineralised structures isconsidered to have introduced a sampling bias, thisshould be assessed and reported if material.	• No sampling bias is expected at this stage.
Samplesecurity	The measures taken to ensure sample security.$\bullet$	• Sunstone sampling procedures indicate individualsamples were given due attention.• Sample security was managed through sealedindividual samples and sealed bags of multiplesamples for secure delivery to the laboratory bypermanent staff of the joint venture.• MS Analytical is an internationally accreditedlaboratory that has all its internal procedures heavilyscrutinised in order to maintain their accreditation. MS

Criteria	JORC Code explanation	Commentary
		Analytical is accredited to ISO/IEC 17025 2005Accredited Methods.
Audits orreviews	•The results of any audits or reviews of samplingtechniques and data.	• Sunstone's sampling techniques and data have beenaudited multiple times by independent miningconsultants during various project assessments. Theseaudits have concluded that the sampling techniquesand data management are to industry standards.• All historical data has been validated to the best degreepossible and migrated into a database.

TABLE 1 – Section 2: Exploration Results

Criteria	JORC Code explanation	Commentary
Mineraltenement andland tenurestatus	•Type, reference name/number, location and ownershipincluding agreements or material issues with thirdparties such as joint ventures, partnerships, overridingroyalties, nativetitle interests,historicalsites,wilderness or national park and environmentalsettings.	•The El Palmar property is located in Imbabura provinceand is held by an Ecuadorian registered company'GOEX'. Due diligence to date show that there are nowilderness areas or national parks or areas ofenvironmental significance within or adjoining theconcession area. There are no native title interests.•Sunstone and GOEXhave entered into a StagedAcquisition Agreement where Sunstone may earn up to100% based on defined milestones.
	•The security of the tenure held at the time of reportingalong with any known impediments to obtaining alicence to operate in the area.	•The El Palmar exploration concession was granted in2003 and is held 100% by GOEX.•Sunstone owns 70% of GOEX
Explorationdone by otherparties	•Acknowledgment and appraisal of exploration by otherparties.	•The historic exploration at El Palmar was completed byvarious groups over the period 1990's, 2007-2008, 2011-2012 and GOEX (2012 to 2020). Most of the readilyavailable historic data has been acquired and compiledinto databases and a GIS project. Exploration by otherparties has included stream sediment surveys, geologicalmapping, rock chip sampling, some local soil sampling,channel sampling and limited diamond drilling (3 holes).
Geology	•Deposittype,geologicalsettingandstyleofmineralisation.	•The deposit style being explored for includes intrusionrelated and stockwork hosted porphyry gold-coppersystems plus epithermal gold-silver-polymetallic veins.The setting at El Palmar is a volcanic arc setting ofEocene age intrusions.
Drill holeInformation	•A summary of all information material to theunderstanding of the exploration results including atabulation of the following information for all Materialdrill holes:a. easting and northing of the drill hole collarb. elevation or RL (Reduced Level – elevation abovesea level in metres) of the drill hole collarc.dip and azimuth of the holed. down hole length and interception depthe.hole length.•If the exclusion of this information is justified on the	•Details of the samples discussed in this announcementare in the body of the text.•See Figures 1-4 for the location of previous drilling atEl Palmar.•Information included in announcement.
	basis that the information is not Material and thisexclusion does not detract from the understanding ofthe report, the Competent Person should clearlyexplain why this is the case.

- ASX ANNOUNCEMENT -

Criteria	JORC Code explanation	Commentary
Dataaggregationmethods	• In reporting Exploration Results, weighting averagingtechniques, maximum and/or minimum gradetruncations (e.g. cutting of high grades) and cut-offgrades are usually Material and should be stated.	Weighted averages were calculated over reportedintervals according to sample length.• No grade cut-offs were applied.
	Where aggregate intercepts incorporate short lengths$\bullet$of high-grade results and longer lengths of low-graderesults, the procedure used for such aggregationshould be stated and some typical examples of suchaggregations should be shown in detail.	Aggregating of intervals represent broad intervalsconsistent with porphyry gold-copper mineralisedsystems.
	The assumptions used for any reporting of metal$\bullet$equivalent values should be clearly stated.	Metal equivalents are presented with the calculationformula, and assumptions of metal prices and recoveriesare included in the text. Preliminary metallurgy from ElPalmar is delivering results similar to those reportedfrom Bramaderos. Both projects are gold rich porphyrygold-copper deposits.
Relationshipbetweenmineralisation	If the geometry of the mineralisation with respect to the$\bullet$drill-hole angle is known, its nature should bereported.	The geometry of the mineralisation relative to the drillholes is not completely known at this stage ofexploration
widths andinterceptlengths	• If it is not known and only the down hole lengths arereported, there should be a clear statement to thiseffect (e.g. 'down hole length, true width not known').	True widths of mineralised lodes are not known at thisstage.
Diagrams	• Appropriate maps and sections (with scales) andtabulations of intercepts should be included for anysignificant discovery being reported. These shouldinclude, but not be limited to a plan view of drill holecollar locations and appropriate sectional views.	See Figures 1-4 and 6-7 for maps showing distributionof samples.
Balancedreporting	• Where comprehensive reporting of all ExplorationResults is not practicable, representative reporting ofboth low and high grades and/or widths should bepracticed to avoid misleading reporting of ExplorationResults.	Figures 1-4 and 6-7 above shows the currentinterpretations of geology.
Othersubstantiveexplorationdata	• Other exploration data, if meaningful and material,should be reported) including (but not limited to):geological observations; geophysical survey results;geochemical survey results; bulk samples $-$ size andmethod of treatment; metallurgical test results; bulkdensity, groundwater, geotechnical and rockcharacteristics; potential deleterious or contaminatingsubstances.	Figure 1-4 and 6-7 above shows various datasets that arebeing used to identify target areas and to guide currentand future drilling.
Further work	• The nature and scale of planned further work (e.g. testsfor lateral extensions or depth extensions or large-scale step-out drilling).	The planned exploration program is outlined in theannouncement.
	• Diagrams clearly highlighting the areas of possibleincludingmaingeologicalextensions.theinterpretations and future drilling areas, provided thisinformation is not commercially sensitive.	See Figures 1-4 and 6-7 which show areas for furtherexploration.