Mr. Rodney Irwin reports

KYRGYZ COURT RULES PREVIOUS LICENCE HOLDER FOR KUTESSAY II HAS NO LEGAL CLAIMS TO LICENCE

The Bishkek City Court has ruled against a Chinese company which claimed ownership of Stans Energy Corp.'s mining licence for Kutessay II. Baotou Hongbo Technology Company Ltd. claimed that it was the legal holder of the mining licence for Kutessay II, that this licence was taken away illegally and without notification. The Bishkek City Court found that Baotau has no valid claims against the licence for Kutessay II, thereby overturning an earlier ruling by the Interdistrict Court of Bishkek.

Baotau Hongbo Technology Company Ltd. brought suit against the State Agency for Geology and Mineral Resources of the Kyrgyz Republic with the intention to reclaim licence rights to Kutessay II. The Interdistrict Court of Bishkek ruled in favour of Baotou Technology Company Ltd., overlooking significant evidence and ignoring several substantive procedural issues. An immediate appeal was filed to the Bishkek City Court by Kutisay Mining LLC and the State Agency for Geology and Mineral Resources of Kyrgyz Republic.

The Bishkek City Court overruled the lower court ruling for several reasons:

• Baotau had no legal basis to petition the courts as it did not acquire the original licence holder, Central Asia Metals Group, until 2013.
• A letter from Baotau to the Kyrgyz government indicated it knew that Central Asia Metals Group licence had been revoked and thus this was the basis for the termination of proceeding under the statute of limitations
• The court found that Central Asia Metals Group failed to comply with its licence agreements from 2008 and it knew by 2010 its licence had been revoked
• Finally, the court concluded that the original trial gravely violated substantive and procedural law that led to an unlawful and unjustified decision, which the court has nullified.

This decision is final and binding; however, Baotau Hongbo Technology Company Ltd. can file an appeal to the Supreme Court within the period of one year. This appeal may only be filed for procedural issues pertaining to this most recent trial at the Bishkek City Court.

The State Prosecutors Office of the Kyrgyz Republic's court action to invalidate the licence issuance for the development of Kutessay II for Kutisay Mining LLC is still before the courts. Stans Energy hopes to be able to provide an update within this quarter on the status of the case.

We seek Safe Harbor.