SUNSTONE METALS LTD — Capital/Financing Update 2023

Mar 15, 2023

16 MARCH 2023

El Palmar gold-copper discovery, northern Ecuador

Drilling starts at large T2 porphyry target

Copper and gold intersected in the T1 and T5 porphyry targets adjacent to T2, and an epithermal gold-silver system at the Tituana target

Key Points

• Drill hole EPDD026 has commenced at the T2 target at El Palmar and is now at a depth of 300m; Target zone expected to be reached within a fortnight
• Trace chalcopyrite and molybdenite have been identified from 190m downhole in EPDD026
• At the T5 target, drilling has intersected porphyry mineralisation, including;
  • o 60m at 0.25g/t gold and 0.13% copper from 100m (EPD025).
• 3-D geological model defining new targets at T1 target; This work follows from assay results reported in EPDD021 that returned:
  • o 867m at 0.26g/t gold and 0.1% copper from surface, including:
    • 24m at 0.39g/t gold and 0.19% copper from 45.5m; and
    • 11.3m at 0.81g/t gold and 0.2% copper from 501m
  • o The definition of vertically extensive mineralisation at T1 and the increased confidence in the geometry of higher-grade domains is significant for the next drill program at T1
• The results from T1 and T5 are considered highly promising because:
  • o They are close to the large, compelling T2 target
  • o They support the current interpretation of the El Palmar geology and the potential for a significant porphyry discovery
  • o They reinforce the concept of a cluster of porphyry systems near the regionally significant Toachi fault, a control on the mineralisation at the giant Cascabel copper-gold deposit 65km away
• Dating of the intrusives associated with the El Palmar mineralisation show they are the same age as the Alpala deposit at Cascabel
• Assay results have been received from three of the 11 planned holes at the Tituana epithermal target. Tituana has had no previous drilling. The results confirm the presence of an epithermal gold-silver-base metal system in multiple veins that remain open, and include grades up to 1.7g/t gold and 12g/t silver over 0.5m from 36.1m in TTDD001, and 1g/t gold, 21g/t silver and 2% zinc over 0.9m from 122.2m in TTDD003.

Sunstone Metals Ltd (ASX: STM) is pleased to announce that drilling has started at the highly compelling T2 porphyry target within its El Palmar porphyry gold-copper discovery in northern Ecuador and highly encouraging results have been received from drilling at T1 and T5, both adjacent to T2, and the Tituana epithermal target.

T2 is a large porphyry copper-gold target which measures 1km long x 450m wide (Figure 1, 2 and 3). It is part of a cluster of at least five porphyry systems that measures 2.6 x 1km (Figure 1).

Drilling has already established that the T1, T2 and T5 porphyry targets are mineralised. T3 and T4 are yet to be drill tested.

The T2 target is bound by the regionally-significant Toachi Fault zone and is associated with orthogonal structures – a scenario strongly similar to the 3 billion-tonne Alpala copper-gold porphyry deposit, 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.

Sunstone Managing Director Malcolm Norris said: "We have two drilling rigs operating at El Palmar. One is testing the Tituana epithermal target where we have intersected very encouraging mineralisation across multiple vein systems, and the other has commenced drilling at the large T2 porphyry copper-gold target where we are seeing some trace levels of mineralisation and encouraging alteration. We expect to be in the main T2 target zone within a fortnight.

"At Tituana, assays have been received from the first three holes of an 11-hole program. The results confirm the presence of an epithermal gold-silver-base metal system in multiple veins. Visual results from recently completed holes suggests that mineralisation extends over 200m of strike but is open to the north and south".

T2 drilling progress

Drilling at Target T2, located east of the El Palmar T1 porphyry system (Figures 1, 2, and 3), commenced in early March and is now at a down-hole depth of 300m. The first of 2 planned drill holes is expected to be completed in late March, with assays following in late April. The upper part of the hole shows evidence of mineralisation consistent with adjacent hole EPDD024 (Figures 2 and 3). Trace chalcopyrite and molybdenite have been identified from 190m downhole.

The T2 target has been defined at surface through rock chip and soil sampling delivering a coherent goldcopper-molybdenum anomaly coincident with an extensive alteration cap and some stockwork veining. The target now being tested is a geophysical anomaly that plunges to the south from the surface mineralisation, where it expands and intensifies southward for a further 800m. The target abuts the regional Toachi Fault zone. The structural scenario at T2 is very significant and can be compared to the nearby Alpala copper-gold porphyry deposit at the SolGold Cascabel Project.

T1 assay results and 3-D model development

Drill hole EPDD021 (Figures 1 and 4, Table 1) was drilled into the T1 target. It intersected 866.6m at 0.26g/t gold and 0.1% copper from surface, including 24m at 0.39g/t gold and 0.19% copper from 45.5m, and 11.25m at 0.81g/t gold and 0.2% copper from 501m. This result confirms the significant vertical extent of mineralisation at T1 which requires follow-up drilling.

3-D geological modelling (Figure 4) is being undertaken at T1 based on the 21 drill holes completed to date and follow-up drilling has been planned to target mineralisation in the down plunge and lateral extent of interpreted NNW trending mineralised domains.

T5 confirmed porphyry gold-copper mineralisation

Hole EPDD025 has been completed and assay results returned 60m at 0.25g/t gold and 0.13% copper, within a broader 133m mineralised interval from 69m of 0.19g/t god and 0.11% copper.

This is the first hole into this target (previous hole EPDD013 skimmed the underside of the target) and followup drilling will test the area below this drill hole (Figure 5).

Tituana Epithermal Gold Targets preliminary results

Drilling at the Tituana epithermal gold target in the northern part of the El Palmar concession (Figure 1) has intersected an epithermal system with mineralisation in multiple veins. This is a very promising start to drilling at Tituana. Assay results from holes 1, 2 and 3 are shown in Table 2.

Visual assessment of holes 6 and 7 suggest improving mineralisation to the north based on the presence of galena and sphalerite which are often associated with gold and silver in these epithermal systems.

The Tituana target is located on a NNE-trending structure, which may link to the south to the main El Palmar porphyry system – a common scenario in porphyry and epithermal systems (Figure 6). The target exhibits coincident path-finder elements zinc and arsenic anomalies in soil sampling. Trenching has returned results of up to 6.7g/t gold. Rock chip sampling has yielded a >85m-long (and open) zone from which 101 surface samples averaged 1.2 g/t Au, 25 g/t Ag and 0.16% Cu, with peak values for these elements being 6.47 g/t Au, 225g/t Ag and 0.78% Cu.

Drill Hole	TargetArea	EOH(m)	From(m)	To (m)	Interval(m)	Au (g/t)	Cu (%)	Mo(ppm)	Ag(g/t)
EPDD021	T1	876	5.45	872.00	866.55	0.26	0.10	1.9	0.5
incl.			45.50	69.50	24.00	0.39	0.19	1.8	0.7
and incl.			425.00	513.25	88.25	0.39	0.11	1.8	0.5
incl.			437.00	449.00	12.00	0.42	0.13	3.6	0.5
incl.			501.00	512.25	11.25	0.81	0.20	1.3	0.7
and incl.			576.10	597.65	21.55	0.29	0.11	1.8	0.4
and incl.			629.00	635.00	6.00	0.29	0.10	1.5	0.4
and incl.			650.50	756.00	105.50	0.20	0.12	1.5	0.5
and incl.			800.00	840.00	40.00	0.19	0.12	1.0	0.7
and incl.			868.00	872.00	4.00	0.26	0.13	2.0	0.3
EPDD025	T5	310	0.00	32.20	32.20	0.18	0.04	4.9	0.3
			69.00	202.00	133.00	0.19	0.11	5.2	0.6
incl.			100.00	160.00	60.00	0.25	0.13	3.2	0.6
			210.60	214.10	3.50	0.27		9.5	1.7

Table 1: Mineralised porphyry intervals in holes EPDD021 (T1) and EPDD025 (T5)

Drill Hole	EOH(m)	From(m)	To (m)	Interval(m)	Au(g/t)	Cu (%)	Ag (g/t)	Pb (%)	Zn (%)
TTDD001	255	13.30	19.60	6.30	0.22		2.8	0.12	0.17
		34.60	37.10	2.50	0.60		8.3	0.11	0.22
incl.		35.60	37.10	1.50	0.89		10.0	0.11	0.15
		36.10	36.60	0.50	1.75		12.3		0.10
		48.30	48.60	0.30	0.24		10.6	0.38	1.08
		61.30	62.25	0.95	0.37	0.12	16.0
		79.00	79.50	0.50	0.39		5.2	0.29	0.45
		88.80	89.80	1.00	0.49		21.6	0.38	0.72
TTDD002	170	4.50	6.00	1.50	0.18		1.3
		25.50	27.00	1.50	0.33		0.6
TTDD003	212	37.80	39.00	1.20	0.24		1.7
		63.40	65.00	1.60	0.34		19.4		0.11
		113.00	115.00	2.00	0.31		0.6
		122.20	125.65	3.45	0.45	0.14	11.4	0.47	1.91
incl.		122.20	123.10	0.90	1.05	0.15	21.3	0.82	1.97

Table 2: Mineralised epithermal intervals in Tituana holes 1 to 3

El Palmar is located in northern Ecuador in the same regional structural belt that hosts the 2.66Bt Alpala copper-gold deposit grading 0.25g/t gold and 0.37% copper, and the 0.53Bt Tandayama-America deposit grading 0.19g/t gold and 0.24% copper, within the Cascabel project (Figure 7; see also www.solgold.com.au for MRE details), and in the vicinity of the 1Bt Llurimagua copper-molybdenum porphyry deposit grading 0.89% copper and 0.04% molybdenum.

Sunstone is also active at its southern Ecuador Bramaderos project where drilling with one drill rig is in progress at the Limon target.

Figure 1: El Palmar project showing porphyry cluster capturing targets T1, T2, T3, T4 and T5, and epithermal target areas in the north, of which only Tituana has been drilled to date.

Figure 2: North-South section through the T2 target, showing outcropping porphyry stockwork near the collar of holes EPDD022/023 in the area of anomalous copper, gold and molybdenum in soils and coincident with a large area of weakly conductive material. This conductive body expands and strengthens southward and extends 800m south of the 767m-long intersection in hole EPDD024 that cuts the conductive body orthogonally. EPDD026 has commenced drilling and will be in the main target zone within the next couple of weeks.

Figure 3: Cluster of porphyry targets T1 (El Palmar), the large T2 target currently being drilled, plus porphyry targets T4 and T5. To date T1, T2, and T5 are mineralised.

Figure 4: 3-D inclined view of targets T1 and T2 showing areas of mineralisation from 21 drill holes in T1 and specifically in EPDD021, the close spatial relationship between T1 and T2, and the modelled extension of T2 to depth currently being tested with hole EPDD026. Target T5 is also shown in the foreground.

Figure 5: Cross section through EPDD025 at the T5 target showing gold-copper mineralisation within the syn-mineral diorite and the host sequence of sedimentary rocks. Another hole is planned to test the depth extent of the syn-mineral diorite.

Figure 6: Soil zinc anomalism that defines the broader Tituana epithermal target environment, and controlled by NNEtrending structures that are currently being drill tested.

Figure 7: Location of the El Palmar project relative to the giant Llurimagua, Alpala and Tandayama-America (Cascabel project) porphyry deposits, and the Toachi fault system.

Figure 8: 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) (PSAD56Grid) (degrees)	EOH (m)
EPDD021	746771	10030410	-80	345	876
EPDD022	747059	10030657	-30	142	494
EPDD023	747059	10030657	-67	142	645
EPDD024	746937	10030280	-60	63	791
EPDD025	746851	10029777	-40	16	310

Table 2: 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 and development projects in Ecuador and Scandinavia. The portfolio comprises:

1. The Bramaderos Gold-Copper Project where Sunstone owns an 87.5% interest with Cornerstone Capital Resources, a subsidiary of SolGold, holding 12.5% (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 is 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)

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 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 assays 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 (eg core, 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 samples.
	•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 werecollected 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 "Niton" XRF 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.	• 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.$\bullet$	• 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:
		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.	• The drill core samples reported were collected fromdiamond drill holes from the El Palmar targets, and withsample length generally ranging between 0.5-2m.• The data from these samples does not contribute to anyresource estimate nor implies any grade continuity.
	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.
	Whether sample compositing has been applied.$\bullet$	• No sample compositing was done.
Orientation ofdata in relationto geologicalstructure	Whether the orientation of sampling achieves unbiased$\bullet$sampling 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.	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.

Criteria	JORC Code explanation	Commentary
		MS 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.These audits have concluded that the samplingtechniques and data management are to industrystandards.•All historical data has been validated to the bestdegree possible 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 Au-Cu systemsplus epithermal gold-silver-polymetallic veins. Thesetting at El Palmar is a volcanic arc setting of Mioceneor Eocene 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 historical 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 metalequivalent values should be clearly stated.	Metal equivalents are not presented.$\bullet$
Relationshipbetweenmineralisation	• If the geometry of the mineralisation with respect to thedrill-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) and$\bullet$tabulations 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 1-5 for maps showing distribution ofsamples.
Balancedreporting	Where comprehensive reporting of all Exploration$\bullet$Results is not practicable, representative reporting ofboth low and high grades and/or widths should bepracticed to avoid misleading reporting of ExplorationResults.	Figures 1-5 above shows the current interpretations ofgeology.
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 1-5 above shows various datasets that are beingused to identify target areas and to guide current andfuture 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 possibleincludingthemaingeologicalextensions,interpretations and future drilling areas, provided thisinformation is not commercially sensitive.	See Figures 1-5 which show areas for furtherexploration.