GoldStone announced on 6 May 2010 that the Company entered into a strategic alliance with Bendigo Mining, a midtier Australian gold producer who has also subscribed for 32,704,166 ordinary shares in the Company at a premium of 45% to the closing price of GoldStone on 6 May 2010.  In addition GoldStone has issued non tradable and non transferrable warrants to Bendigo in two tranches. The first tranche of warrants will entitle Bendigo to subscribe for 10,901,389 shares in GoldStone at 8.5 pence per share between 18 and 30 months from the date of issue of the warrants and the second tranche will entitle Bendigo to subscribe for 10,901,389 shares at 11.5p per share between 24 and 36 months from the date of issue of the warrants.

The key benefits of the strategic alliance are that GoldStone gains a long term cornerstone investor with a strong balance sheet prepared to undertake a significant placement in the Company at a material premium to the market price and at a time when the market has not reacted or fully comprehends the speculative appeal and value that GoldStone stock offers. Bendigo will also provide technical support for the development of GoldStone's existing and future projects as the company has extensive underground and open pit gold mining experience and significant health, safety and environment skills. 

Bendigo is an Australian gold producer which produced 36,927 oz of gold during the financial year ending 30 June 2009. It will fund the Placing from existing cash reserves, which totalled A$57.4 million as at 31 March 2010. Bendigo is planning to produce 80,000 to 90,000 oz of gold in the financial year ending 30 June 2010 from its two underground gold mines, the Henty Gold Mine on the West Coast of Tasmania and the Kangaroo Flat Mine in Bendigo, Victoria. The Henty Gold Mine has produced in excess of one million ounces of gold at an average grade of over 11 g/t gold. Bendigo acquired the mine in July 2009 and plans to produce 40,000 to 50,000 oz of gold during FY10. A significant exploration programme has commenced with the aim of increasing the mine's life. The Kangaroo Flat Mine is located in the Bendigo Goldfield, Australia's second largest goldfield having produced some 22 million ounces of gold, to an average depth of 750 metres. Production of around 30,000 to 40,000 oz gold is planned for FY10. Exploration is continuing beneath and along from historic mines on the richest lines of mineralisation within the goldfield. Bendigo's aim is to grow rapidly over the next five years. Bendigo regards West Africa as a key area for gold exploration and mining and believes it to be strategically important to have a meaningful position in this attractive region.

Read more about Bendigo at www.bmnl.com.au and their announcement of the strategic alliance.