Mr. Kevin Ma reports

SOUTHSTONE MINERALS ANNOUNCES ARRANGEMENT AGREEMENT FOR GOING-PRIVATE TRANSACTION WITH TERRY L. TUCKER

Southstone Minerals Ltd. has entered into an arrangement agreement dated Sept. 21, 2026, with Terry L. Tucker, the company's executive chairman and interim chief executive officer (the purchaser), pursuant to which the purchaser will acquire, by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia), all of the issued and outstanding common shares of the company that he does not already own.

Transaction highlights

Under the terms of the arrangement, shareholders of the company other than the purchaser will receive cash consideration of 3.75 cents per share, representing aggregate consideration of approximately $1,073,508, payable in respect of 28,626,888 shares. The purchaser currently beneficially owns 4,775,000 shares, representing approximately 14.30 per cent of the company's issued and outstanding shares and will not receive any consideration in respect of those shares. The consideration exceeds the indicated value range of 2.4 cents to 3.4 cents per share calculated by the fairness adviser (as defined below) by approximately 11.6 per cent to 54.6 per cent. All dollar amounts are in Canadian dollars unless otherwise stated. Upon completion of the arrangement, the company will be wholly owned by the purchaser, the shares will be delisted from the TSX Venture Exchange, and the company will cease to be a reporting issuer.

Special committee and board approval

Because the purchaser is an officer of the company and the holder of approximately 14.30 per cent of the shares, the arrangement constitutes a business combination and a related party transaction in respect of which the purchaser is an interested party, within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The board of directors of the company accordingly formed a special committee of independent directors, comprising Kevin Ma (chair) and Neil Budd, to review, negotiate and supervise the arrangement on behalf of the company.

The special committee retained Evans & Evans Inc. as its independent financial adviser and to provide a fairness opinion. The fairness adviser has provided its verbal opinion, which will subsequently be reaffirmed with a written report to the special committee that, as of the date of such opinion and subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by shareholders under the arrangement is fair, from a financial point of view, to shareholders other than the purchaser.

After receiving the unanimous recommendation of the special committee and the fairness opinion and after consultation with its outside legal and financial advisers, the board (with the purchaser having declared his interest and recused himself from deliberations) unanimously determined that the arrangement is fair to shareholders and in the best interests of the company. As the shares are listed only on the TSX-V and are not listed or quoted on any other market, the company intends to rely on the specified market exemption from the formal valuation requirement under MI 61-101, such that no formal valuation of the shares will be obtained or included in the management information circular for the meeting (as defined below). The arrangement is a non-arm's-length transaction.

The company's obligations and circumstances

The aggregate consideration and obligations addressed under the arrangement are expected to be approximately $4,943,000, comprising: (i) the cash consideration payable to shareholders; (ii) parent-level indebtedness; (iii) estimated costs of the arrangement; and (iv) obligations of the company's subsidiaries, which will remain as obligations of those subsidiaries. No creditor of the company is being asked to compromise on any part of its claim. In considering the arrangement, the special committee considered the company's circumstances as disclosed in its continuous disclosure record. The mining right over the Oena diamond mine, held by African Star Minerals Pty. Ltd. (ASM), in which the company holds a 43-per-cent interest and which it consolidates, expires on March 14, 2027, and the application to renew it has not yet been lodged with the Department of Mineral and Petroleum Resources. The assessed cost of rehabilitating the current disturbance materially exceeds the financial provision lodged with the department. The company's most recently filed financial statements disclose a working capital deficiency and a material uncertainty that may cast significant doubt on its ability to continue as a going concern. Revenue in the company's consolidated financial statements is reported on a gross basis and includes 100 per cent of ASM's diamond tender sales, notwithstanding that the contract miner is entitled to the majority share of tender proceeds and that the company holds a 43-per-cent interest in ASM; consolidated revenue is therefore not indicative of the amounts attributable to shareholders.

As the company has previously disclosed, there is no current National Instrument 43-101 technical report or independent mineral resource estimate for the Oena diamond mine. Nothing in this news release constitutes disclosure of a mineral resource or mineral reserve, and no such estimate should be inferred from it.

Meeting and court approval

The arrangement will be subject to, among other things, approval by: (i) not less than 66-2/3rds per cent of the votes cast by shareholders present in person or represented by proxy at a special meeting of shareholders to be called to consider the arrangement; and (ii) a simple majority of the votes cast by shareholders, excluding the purchaser and any other persons required to be excluded under MI 61-101, in each case voting in accordance with the interim order to be obtained from the Supreme Court of British Columbia.

Full details of the arrangement agreement will be included in a management information circular of Southstone in connection with the meeting, which will be filed with applicable regulatory authorities and mailed to shareholders in accordance with applicable securities laws. Pursuant to the terms of the arrangement agreement, the arrangement is subject to customary conditions, including the receipt of applicable regulatory and third party approvals and consents as may be required to effect and complete the transaction, including final approval of the court and approval of the TSX-V.

Assuming that all requisite approvals are received, the purchaser and Southstone expect to close the proposed arrangement shortly after the date of the meeting. Upon completion of the arrangement, no securities of Southstone will be listed on any public market and Southstone will cease to be a reporting issuer under Canadian laws.

Board of directors recommendation and voting support

The arrangement has been unanimously approved by the board (with the purchaser having declared his interest and recused himself from deliberations), after receiving the unanimous recommendation of the special committee comprising entirely independent directors as well as considering the fairness opinion from the fairness adviser. Certain shareholders of the company, holding 6,905,872 shares, representing approximately 20.68 per cent of the issued and outstanding shares on a non-diluted basis, have entered into support agreements with the purchaser, pursuant to which they have agreed, among other things, to support the transaction and vote their shares in favour of the arrangement.

Advisers

Evans & Evans is acting as financial adviser to the special committee. McMillan LLP is acting as legal counsel to the company. Koffman Kalef LLP is acting as legal counsel to the purchaser. No finders' fees were paid in connection with the arrangement.

Shareholders of the company and other interested parties are advised to read the materials relating to the proposed arrangement, including the arrangement agreement, which will be filed by Southstone with securities regulatory authorities when they become available.

We seek Safe Harbor.