Stans Energy Reports Temporary Work Stoppage at Kutessay II

Robert Mackay, President and CEO of Stans Energy Corp. (TSX-V: HRE, OTCQX: HREEF), (“Stans” or the “Company”), reports that, on September 10th, the Kyrgyz State Geological Agency (hereinafter Agency) formally ordered the Company to suspend the ongoing field work at Kutessay II through to September 30, 2012, citing reasons that the Company had failed to submit a firm proposal for the gratuitous transfer of a percentage of ownership of ‘Kutisay Mining LLC’, a subsidiary of Stans Energy Corp., to the Kyrgyz Republic State Property Management Fund, by July 31, 2012.

The decision of the Agency was non-unanimous, but was passed despite the fact that there is no current law requiring Stans to gratuitously transfer any set percentage of its business to the State Property Management Fund. Stans had submitted a non-numerical public/private partnership proposal on July 31st, 2012. (Please refer to Stans’ June 18th, 2012 press release for information regarding the said license and details of the public-private partnership negotiations).

In accordance with Stans Energy’s License obligations, on July 16, 2012, the company submitted a letter to the Director of the State Agency on Geology and Mineral Resources under the Government of the Kyrgyz Republic, requesting a meeting to discuss the parameters and terms of the proposed public/private partnership. Stans did not receive any response, and therefore, on July 27th, 2012, Stans sent another request, addressed to the same Director, to negotiate a public/private partnership. With no response from the Agency, on July 31st, and then again on August 29th, 2012, Stans delivered letters to the Deputy Director of the State Assets Management Fund, containing a proposal for a public/private partnership without any numerical gratuitous transfer of ownership, and requesting the Agency’s opinion of the proposal. Prior to this work stoppage order, the officers of the company had not been given the opportunity to meet with the said Agencies to discuss the gratuitous transfer of a percentage of ‘Kutisay Mining LLC’. This unexpected work stoppage order is the first official communication from either Government Agency regarding this issue within the licensing agreement, since the licensing agreement was signed. The Company has ensured all necessary measures for proper performance of its obligations with the degree of care and prudence required by the nature of the obligation and by the conditions of the transaction being negotiated. In response to the actions of the Agency, Stans will undertake legal action to ensure the parameters of License Agreement #3 are followed by both parties.

In the interim, Stans Energy remains on track to implement its plan of infrastructure improvements, as they are not affected by the current work stoppage. The Company has been forced to halt its 2012 exploratory drilling program, which had been proceeding ahead of schedule, after completion of nine of the ten planned diamond drill holes.

Robert Mackay, President and CEO explains, ”If we can, we will try to resolve this issue as soon as possible outside of the Kyrgyz court system. It is my hope that Stans will be able to negotiate a public/private partnership that will benefit all stakeholders involved, as well as the Government of Kyrgyzstan. I will be flying to Kyrgyzstan this week to join other members of Stans Energy management already in Kyrgyzstan to request a meeting with the Agency, and the State Assets Management Fund, with the hope that we may negotiate a mutually beneficial deal in good faith. I apologize to our shareholders for the delay in this press release, but we received unofficial word of this notice on Friday morning, and we needed to get all the facts from our legal counsel before making a statement.”

Rodney Irwin, Chairman of Stans Energy Corp., and Honorary Counsel to the Kyrgyz Republic in Canada stated, “The Board of Directors, and Stans’ Board of Advisors will do everything we can to aid management with this issue. We will continue to promote the benefits of restarting Kutessay II, both to the local community of Aktyuz, and the people of Kyrgyzstan. We are committed to furthering and improving relations between all stakeholders involved and to demonstrate to the global investment community the positives of investing in Kyrgyzstan.”

About Stans Energy
Stans Energy Corp. is a resource development company focused on progressing Heavy Rare Earth (HRE) properties in areas of the Former Soviet Union. In December 2009, Stans acquired a 20-year mining license for the past-producing Kutessay II rare earth mine from the Kyrgyz Republic. On May 26, 2011 Stans completed the purchase of the Kashka Rare Earth Processing Plant (KRP) the same plant that previously refined REEs historically from Kutessay II. The KRP was the only hard rock plant to produce all rare earth elements outside of China, producing 120 different metals, alloys, and oxides. For over 30 years, Kutessay II produced 80% of the rare earth metals for the former Soviet Union.

We seek safe harbour.

Contact Details
Robert Mackay
President & CEO
robert@stansenergy.com
647-426-1865

Jonathan Buick
Investor Relations, The Buick Group
jbuick@buickgroup.com
416-915-0915

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