Principal Terms of the
Option/JV Agreement and Royalty Agreement

Sunstone Metals has the right to earn an initial 51% interest (the "First Option") in the mineral rights to the Bramaderos concession by incurring exploration and related expenditures on the property:

(i) on or before the first anniversary of receipt of drilling permits, incurring committed expenditures on the Property in the amount of US$1,500,000; and
(ii) on or before the third anniversary of the date of the LOI, incurring further optional expenditures on the Property in the amount of $1,900,000.

Sunstone has a further option (the Second Option) to elect to acquire an additional 19% interest in the Property (for a cumulative total of 70%) by funding the expenditures for the completion of a feasibility study and the payment of the greater of $250,000 or $1.00 (One Dollar) per ounce of AuEq (gold equivalent) classified as "Measured and Indicated Resources".

Upon the Second Option Exercise Date, Sunstone has the right to acquire an additional 10% interest in the Property (for a cumulative total of 80%) (the "Third Option") by: (i) providing 100% of the costs to achieve commercial production as a loan carry or (ii) arranging limited recourse project financing in an amount sufficient to achieve commercial production.
Approximately 2/3 of the Bramaderos concession surface area is subject to an underlying 2% net smelter returns royalty (NSR) in favour of a third party (the 2% NSR). A $50,000 annual advance royalty is payable on and after the first anniversary of the delivery of a Positive Feasibility Study. One-half of the 2% NSR may be purchased for $3 million, leaving the holder of the NSR with a 1% NSR.