cnw


Shares Issued

Premier Gold Mines Limited: 104,710,658

Goldstone Resources Inc: 104,633,605




THUNDER BAY AND TORONTO, ON, June 21, 2011 /CNW/ - PREMIER GOLD MINES LIMITED (TSX: PG) and GOLDSTONE RESOURCES INC. (TSX: GRC) (PINK SHEETS: GRSZF) jointly announced today that they have
entered into a definitive agreement whereby Premier will acquire, by
way of a plan of arrangement (the "Arrangement"), all of the
outstanding common shares of Goldstone. Under the Arrangement, each
Goldstone shareholder will receive 0.16 of a Premier share plus $0.0001
in cash for each Goldstone share held.


Transaction Highlights - Premier



Consolidates 100% ownership of the Hardrock Project that is host to a
multi-million ounce NI 43-101 compliant resource estimate






Increases Premier's measured and indicated gold resource by 1,171,740
ounces and inferred resource by 613,410 ounces






Adds extensive property holdings in the Geraldton-Beardmore Greenstone
Belt, including the Brookbank Deposit that is host to a NI 43-101
compliant mineral resource estimate of 424,400 ounces indicated (at 9.7
g/t gold) and 276,600 ounces inferred (at 7.9 g/t gold) utilizing a 3.4
g/t Au cut-off grade






Secures for Premier additional open pit resource potential proximal to
Hardrock through the acquisition of the Key Lake Project, where recent
drilling by Goldstone has returned a number of significant intercepts
including 3.17 g/t Au across 44.0 metres (m) and 2.28 g/t Au across
42.7 metres






Consolidates the underexplored Beardmore-Geraldton district, including
the past producing Leitch Gold Mine that produced 847,900 ounces of
gold at an average grade of 31.5 g/t Au, and geologically strategic
land holdings with a combined strike length of more than 50 kilometres






Attractive acquisition with minimal dilution to Premier of approximately
13.8%.



"This acquisition will secure for Premier 100% ownership of one of
Canada's fastest growing gold deposits" stated Ewan Downie, the
President and Chief Executive Officer of Premier. "Our substantial
combined land holdings in the district provide an excellent opportunity
to define multiple deposits with considerable production potential in
addition to terrific exploration opportunities in this re-emerging gold
camp."


Transaction Highlights - Goldstone



Offers shareholders an immediate premium and enhanced capital markets
profile






Through an all-share deal, shareholders retain ongoing exposure to
Goldstone's assets and prospects and gain participation in Premier's
diversified gold properties and growth potential






Premier's technical expertise and financial capability will be applied
to enhance the value of Goldstone's assets






Shareholders will benefit from significantly enhanced trading liquidity
upon receiving Premier shares.



Philip Cunningham, Chairman and Interim Chief Executive Officer of
Goldstone stated: "I strongly believe this is a win-win transaction for
shareholders of both companies, extending the working relationship
established through our successful Hardrock Project joint venture."


"Effectively, shareholders of Goldstone will participate in the
continued advancement of Goldstone's assets, while also gaining a
position in Premier's exciting growth portfolio," said Mr. Cunningham.
"As the largest Goldstone shareholder, I fully support this transaction
and look forward to being an active Premier shareholder."


Terms of Offer



Goldstone shareholders will receive 0.16 of a Premier common share plus
$0.0001 in cash for each common share of Goldstone






Represents a 27.3% premium based on the 30-day volume weighted average
prices of each company






Transaction unanimously approved by the Boards of Premier and Goldstone






Directors of Goldstone holding approximately 13.5% of the common shares
outstanding have entered into voting agreements in support of the
Arrangement






$3.25 million break fee; and Premier retains the right to match any
superior proposal






Goldstone's optionholders will receive replacement Premier options and
Goldstone warrants will remain outstanding in accordance with their
terms.



The acquisition of Goldstone by Premier will be effected by way of a
court approved plan of arrangement under the Business Corporations Act (Ontario). The number of Premier shares to be issued will be
approximately 16,741,377 based on Goldstone's currently outstanding
common shares. All outstanding Goldstone options will, on the effective
date of the Arrangement, be exchanged for Premier options. All
outstanding Goldstone warrants will remain outstanding in accordance
with their terms and will, in effect, be exercisable to acquire 0.16 of
a Premier common share plus $0.0001 in cash for each such warrant
exercised. The transaction is expected to close in August, 2011 and
upon closing Goldstone shareholders will own approximately 13.0% of
Premier shares on a fully diluted in-the money basis, or approximately
13.8% (approximately 17,640,417 Premier shares) on a fully-diluted
basis.


The Arrangement will be subject to, among other things, the approval of
the Toronto Stock Exchange, court approval and the favourable vote of
66 2/3% of the votes cast by holders of the Goldstone common shares.
Goldstone will postpone its previously announced annual meeting so that
shareholders may consider the Arrangement at the same meeting. As a
result, Goldstone will hold an annual and special shareholders' meeting
at 10:00 a.m. on August 8, 2011, in Toronto. The record date for the
meeting will be July 4, 2011. Goldstone anticipates that the management
information circular for the meeting will be mailed on or about July 5,
2011.


Goldstone's financial advisor has provided an opinion as to the fairness
of the transaction, from a financial point of view, and the Goldstone
Board unanimously recommends that its shareholders vote in favour of
the Arrangement. Directors of Goldstone have also entered into voting
agreements with Premier under which they have agreed to vote their
Goldstone shares, representing approximately 13.5% of Goldstone's
outstanding common shares, in favour of the Arrangement. In the event
that the Arrangement is not completed, Goldstone has agreed, under
certain circumstances, to pay Premier a termination fee equal to $3.25
million. Goldstone has also provided Premier with certain other
customary rights, including a right to match competing offers.


Goldstone has waived the application of its shareholder rights plan to
the entering into of the Arrangement Agreement by Premier.


Goldstone securityholders and other interested parties are advised to
read the materials relating to the proposed Arrangement that will be
filed by Goldstone with applicable securities regulatory authorities in
Canada when they become available. Anyone may obtain copies of these
documents when available free of charge under Goldstone's profile at sedar


This announcement is for informational purposes only and does not
constitute an offer to purchase, a solicitation of an offer to sell
shares or a solicitation of a proxy.


Premier's financial advisor is Canaccord Genuity Corp. and its legal
advisors are Fraser Milner Casgrain LLP in Canada and Dorsey & Whitney
LLP in the United States. Goldstone's financial advisor is Primary
Capital Inc. and its legal advisor is McMillan LLP.


Ewan Downie and Philip Cunningham will host a conference call to review
this important transaction for Premier and Goldstone, and they invite
analysts and investors to participate in the conference call.




Date: June 22, 2011

Time: 10:00 am, Eastern Time

Dial in Number: 1.807.623.5005 or 1.866.384.4004

Participant Code: 5583431


About Premier


Premier Gold Mines Limited is a well financed Canadian-based mineral
exploration and development company with several projects and deposits
in Northwestern Ontario, Nevada and Mexico. In the Red Lake gold
mining camp, two are operated in joint venture with Red lake Gold
Mines. The company also owns strategic projects located in the heart
of the Carlin Trend, Nevada and along strike from Goldcorp's
Musselwhite Gold Mine in Ontario.


Premier Gold Mines Limited cordially invites all shareholders to its
Annual General Meeting of Shareholders, at 4:00pm, Thursday June 29,
2011, at the Toronto Board of Trade. Following the formal meeting, a
presentation will be given at 4:30pm by President and CEO Ewan Downie,
VP-Exploration Tim Twomey and Executive Vice-President Stephen
McGibbon, providing a comprehensive corporate exploration and
development update. This presentation will highlight your Company's
substantial recent successes, and will provide guidance on Premier's
future plans and initiatives.


About Goldstone


Goldstone Resources Inc. is a gold exploration and development company
operating in the historically significant Geraldton-Beardmore camp of
Northwestern Ontario and focused on gold exploration and deposit
delineation at its Key Lake, Brookbank, Northern Empire and Leitch-Sand
River gold properties, and as a partner in the Hardrock Project joint
venture with Premier Gold. Goldstone's 100%-owned NI 43-101 compliant
resources at Brookbank total 424,000 indicated uncut and 276,600
inferred uncut, using a cutoff grade of 3.4 g/t au. The
Geraldton-Beardmore camp is host to several past producers in a
district that has historical production of more than 4.1 million ounces
of gold from high grade ore-and to Goldstone's fully permitted,
expandable 200-TPD Northern Empire mill.


Cautionary Note Regarding Forward-Looking Statements


Certain information contained in this news release, including any
information relating to Premier's and/or Goldstone's future financial
or operating performance may be deemed "forward looking". All
statements in this news release, other than statements of historical
fact, that address events or developments that Premier/Goldstone
expects to occur, are "forward-looking statements". Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words "expects", "does not
expect", "plans", "anticipates", "does not anticipate", "believes",
"intends", "estimates", "projects", "potential", "scheduled",
"forecast", "budget" and similar expressions, or that events or
conditions "will", "would", "may", "could", "should" or "might" occur.
All such forward-looking statements are based on the opinions and
estimates of the relevant management as of the date such statements are
made and are subject to important risk factors and uncertainties, many
of which are beyond Premier/Goldstone's ability to control or predict.
Forward-looking statements are necessarily based on estimates and
assumptions (including that the Arrangement will be completed
successfully on the terms agreed upon by the parties and that the
business of Goldstone will be integrated successfully in the Premier
organization) that are inherently subject to known and unknown risks,
uncertainties and other factors that may cause actual results, level of
activity, performance or achievements to be materially different from
those expressed or implied by such forward-looking statements. In the
case of Premier, such factors include, the inability of Premier to
maintain its interest in its mineral projects or to obtain or comply
with all required permits and licences, risks normally incidental to
exploration and development of mineral properties, uncertainties in the
interpretation of drill results, the possibility that future
exploration, development or mining results will not be consistent with
expectations, uncertainty of mineral resource estimates, joint venture
risk, changes in governmental regulation adverse to Premier, First
Nations consultations, environmental risks, economic uncertainties, the
inability of Premier to obtain additional financing when and as needed,
dependence on a small number of key personnel, competition from other
mining businesses, the future price of gold and other metals and
commodities, fluctuations in the international currency markets and in
the rates of exchange of the currencies of Canada and the United
States, title defects and other related matters. In the case of
Goldstone, such risks include, among other risks, the approvals of
regulators, availability of funds, the results of financing and
exploration activities, the interpretation of drilling results and
geological data, or unanticipated costs and expenses. In addition,
there are risks and hazards associated with the business of mineral
exploration, development and mining, including environmental hazards,
industrial accidents, unusual or unexpected formations, pressures,
cave-ins, flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance to cover these risks) as
well as "Risk Factors" included in Premier's and Goldstone's continuous
disclosure documents filed on and available at http://www.sedar.com/">www.sedar.com.