Bauxite - Option Agreement

Goldstone Resources Ltd
09 September 2005



GOLDSTONE RESOURCES LTD

AGREEMENT CONCLUDED WITH MAJOR OVER BAUXITE INTERESTS


The Directors of GoldStone Resources Ltd ('the Company' or 'GoldStone') are
pleased to report that an option agreement pertaining to the Company's bauxite
interests in Guyana has been concluded with BHP Billiton ('BHP Billiton').


The salient terms of the agreement are as follows:


GoldStone has granted to BHP Billiton the sole option (the 'Option') to require
GoldStone to apply for prospecting licences to explore for bauxite (the 'Bauxite
Prospecting Licences') over all the areas (comprising Kamarang, Kopinang and
Parish's Hill) described in the bauxite reconnaissance permission ('the Bauxite
Permission') granted to GoldStone on 7 September 2005 by the Guyana Geology and
Mines Commission, particulars of which are described below.


In consideration for the Option, BHP Billiton will pay a fee of US$100,000 to
GoldStone (the 'Option Fee') on 8 September 2006 provided that BHP Billiton has
not withdrawn from the agreement before this date.


BHP Billiton may exercise the Option before 7 June 2007 (the 'Option Period') in
which event GoldStone is required to transfer all the Bauxite Prospecting
Licences to BHP Billiton (the 'Transfer').


BHP Billiton has the right to withdraw from the agreement before the Transfer if
less than half of the Bauxite Prospecting Licences are granted.  After the
Transfer has been effected, BHP Billiton has the right to withdraw from the
agreement entirely but has to re-transfer the Bauxite Prospecting Licences back
to GoldStone for consideration of US$10 per Bauxite Prospecting Licence and cede
the ownership in all the exploration information gained by BHP Billiton to
GoldStone without consideration.


In addition to the Option Fee and the monthly management fee described below,
BHP Billiton will make the following payments in consideration of the transfer
of the Bauxite Prospecting Licences:


 A. US$100,000 upon Transfer;
 B. US$200,000 on the 1st anniversary of the Transfer;
 C. US$1 million on the 2nd anniversary of the Transfer;
 D. US$3 million on the 4th anniversary of the Transfer; and
 E. US$8 million on the 7th anniversary of the Transfer.


If BHP Billiton withdraws from the agreement after the payment of payment C or
transfers all the Bauxite Prospecting Licences pertaining to the Kamarang and
Kopinang areas back to GoldStone, then BHP Billiton will be released from making
payments D and E.


BHP Billiton and GoldStone will co-operate to undertake an initial programme of
reconnaissance exploration (the 'Initial Exploration') for bauxite during the
Option Period with the objective of identifying areas with the best potential
for economic bauxite and to assist BHP Billiton in evaluating whether to
exercise the Option.  BHP Billiton shall fund all the costs of the Initial
Exploration programme and any exploration undertaken thereafter.  The costs of
the Initial Exploration programme will not be less than US$400,000.  The Initial
Exploration will not involve the acquisition by BHP Billiton of tangible
depreciable property.


Should exploration be carried through to feasibility stage, it is anticipated
that total expenditure on exploration prior to feasibility studies by BHP
Billiton may require an amount of up to US$10 million.


During nine months of the first year of the Option Period GoldStone will provide
in-country logistical support.  BHP Billiton will reimburse GoldStone for the
actual costs of such support and the incidental costs (including the yearly
fees) of maintaining the Bauxite Permission.  BHP Billiton will also pay
GoldStone a management fee for the logistical support during the first year
totalling US$100,000.



Bauxite Permission


The Bauxite Permission to conduct geological and geophysical surveys for bauxite
and associated minerals has been granted to the Company by the Guyana Geology
and Mines Commission.


This permission is necessary to further the objectives of the agreement with BHP
Billiton to conduct further exploration for bauxite in Guyana.  As a result of
the grant of the Bauxite Permission, the Company has extracted its bauxite
interests and rights from its current reconnaissance permission for gold, which
expires in mid December 2005.


The Bauxite Permission covers 4,100 square miles of land in the Kamarang,
Kopinang and Parish's Hill areas, all of which are known for their bauxite
potential.  The area where the Company has previously conducted bauxite
exploration is included in the Bauxite Permission area.


The salient terms of the Bauxite Permission are as follows:


The Bauxite Permission has been granted for two years, but the Company has the
right to surrender all its rights at any time without recourse provided that it
has paid the first year's fees.  The Company is obliged to make two annual fee
payments ($22,000 in the first year and $25,000 in the second year) in order to
retain the Bauxite Permission.


The Bauxite Permission area is reserved for GoldStone for the duration of the
Bauxite Permission to apply for 20 Prospecting Licences, with the exception of
places that are the subject matter of grants and pending applications on or
before 16 May 2005.


Nico van der Hoven, Chief Executive of GoldStone, reports: 'Given the new two
year permission, obtained specifically for bauxite exploration, and the
substantial amount of exploration work still to be undertaken on this potential
resource, we believe that the agreement with BHP Billiton has secured both the
required expertise and financial resources to maximise this asset's potential
for the benefit of the Company's shareholders.'




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