INDY India Star

RNS Number:5200Y
India Star Energy plc
16 February 2006



India Star Energy plc ("India Star" or the "Company")
16 February 2006


Agreement to acquire strategic stake in platinum group metal company Canadian
Golden Dragon


Highlights

*   Agreement to acquire 15.2 per cent interest in Canadian Golden Dragon
    Ltd ("Golden Dragon") for cash consideration of C$0.63 million at 9 cents 
    per share.

*   In addition, India Star will receive 7 million two year warrants
    exercisable at 13 cents, at India Star's option, taking the total cash
    consideration to C$1.540 million and the interest to 21.9 per cent, on a 
    fully diluted basis.

*   Golden Dragon holds interests in two high grade platinum and palladium
    properties adding to India Star's existing interest in uranium.

*   India Star has gained participation in these two prospects at an
    attractive cost.

Commenting on the interest in Golden Dragon, Chief Executive, Paul Mc Groary,
said:

"The agreed acquisition of an interest in Golden Dragon provides India Star with
access to two late stage opportunities. Both planned programmes to develop these
high quality platinum group metal projects are well advanced."



Enquiries, please contact:


India Star Energy plc
Paul Mc Groary, Chief Executive                       07930 568 160
Smit Berry, Non-Executive Chairman                    020 8656 4648

W.H Ireland
Tim Cofman                                            0121 616 2101



Details



India Star, (AIM: INDY) announces that it has agreed to acquire a strategic
interest in Golden Dragon, a platinum, palladium, gold and base metal
exploration company. Golden Dragon is a publicly quoted company listed on the
Toronto Venture Exchange (TSX-V: CGG), with a market capitalisation of
approximately C$4.1m.



Golden Dragon has acquired and is in the process of developing, its mineral
rights for two high grade platinum and palladium properties in Ontario, Canada.



Information on Norton

The Norton Project is located 130 miles north of Armstrong, Ontario, Canada. The
gabbro ultramafic intrusion characterized by pyroxinite hosted sulphides
contains platinum group metals, nickel, copper and cobalt. This asset has an
audited Canadian NI 43-101 standard report stating it contains 2.5m tonnes of
measured, indicated and inferred resource. The resource is likely to be expanded
toward the northeast, southwest and to depth by drilling.



Information on Seagull

The Seagull property is located 52 km southeast of the Lac Des Iles Mine,
Canada's only primary producing platinum group metals mine. Seagull is within
one of only a handful of North American bodies of rock showing platinum and
palladium concentrations of more than a gram per tonne. The Seagull Intrusion is
a major target in North America for platinum group metal mineralization.

Other assets

Golden Dragon has a significant portfolio of base metal with gold assets
particularly in the Shebandowan camp, Thunder Bay, Ontario where there have been
recent significant discoveries made.



The Investment



India Star will pay a cash consideration of $630,000 to acquire 7 million new
Golden Dragon shares which represents an initial interest of 15.2 per cent. of
the enlarged issued share capital of Golden Dragon. In addition, India Star has
been granted warrants exercisable for an aggregate cash consideration of
$910,000 which if exercised in the next two years will increase the interest in
Golden Dragon to 21.9 per cent, on a fully diluted basis.



India Star has given an undertaking to Golden Dragon that it will not look to
acquire more than 19.99 per cent. of Golden Dragon without shareholder approval.
Golden Dragon will put this motion to the members at the next annual meeting at
which time India Star will abstain from voting on that resolution.






                      This information is provided by RNS
            The company news service from the London Stock Exchange
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