RRI Signs an Agreement to Option Penoles Gold-Silver Project to Sierra Madre Developments Inc.
March 7, 2011 – Vancouver, BC: Riverside Resources Inc. ("Riverside" or the "Company") (TSX-V: RRI) is pleased to announce that Riverside and Sierra Madre Developments Inc. (TSX-V: SMG) have signed a binding letter of agreement to jointly develop the epithermal, Fresnillo-style silver-gold Peñoles Property (the “Property”). In order to exercise the Initial Option Sierra Madre (“Sierra”) must issue Riverside an aggregate 4,500,000 Sierra shares at a minimum value of $0.50 per share, make total cash payments of $2,850,000 to Riverside and underlying concession holders, and incur an aggregate $3,000,000 in exploration expenditures on the Peñoles Property within 24 months of the agreement. Upon the exercise of the Initial Option, Riverside and Sierra shall be deemed to have formed a joint venture (the “Joint Venture”), with Sierra earning a 51% interest in the Property.
Riverside’s partner, Sierra Madre, will fund the costs at the Peñoles Property for preliminary drill testing at the past producing Jesus Maria and San Rafael silver vein systems, and fund the costs of metallurgical studies and drilling required to calculate an initial resource estimate at the oxidized open pit gold target at El Capitan. Additional exploration including property wide geophysics, surface trenching, sampling of underground workings, and resource drill outs are anticipated to be part of the 2011 program.
“Riverside has completed initial exploration and drilling that began to define an open pit gold body. This partnership with Sierra Madre will aim to quickly progress this asset by testing four vein sets, building on recent trenching by Riverside and working toward potentially defining a NI 43-101 resource on the Capitan Hill zone of the project. Riverside now has eight projects in Joint Ventures and could see up to 15,000 metres of drilling in 2011,” stated John-Mark Staude, President and CEO of Riverside Resources Inc.
The Peñoles Property covers two historic silver mines, Jesus Maria and San Rafael, which produced high-grade at shallow depth but have never been drill tested. This district scale land package of nearly 35,000 hectares also covers a partially defined bulk tonnage gold target known as the Capitan Hill Zone. The Peñoles Property is near recent discoveries at Penasquito (Goldcorp) and Juanicipio (MAG Silver), which are in the same Durango-Zacatecas metalliferous region. Other nearby operations by Toronto Stock exchange listed companies, Endeavor Silver at Guanacevi, Platosa Mine by Excellon, Castillo Mine of Argonaut are each expanding and prospering in the mining friendly region of Durango, Mexico.
Riverside completed a 968 metre diamond drilling program in 2008 which built on earlier drilling by Aurcana and consistently intersected a shallow, gold mineralized body. The drilling program of five holes identified a central gold zone that connects with gold outcrops and suggests broader continuity of gold mineralization still open in multiple directions.
Holes one and two returned gold values across selected intervals of 9.80 metres of 1.07 g/t gold and 9.55 meters of 1.11 g/t gold which expanded from the earlier gold intercepts by Aurcana and has been the subject of a full filed NI 43-101 technical report commissioned by an independent author for Riverside. This report will be updated with more recent exploration information completed by Riverside as the project has been progressed.
The following link to the Riverside website provides additional information regarding the Peñoles Project:penoles-gold-silver-project
Additional Agreement Terms:
Firm Commitments within six months of the Definitive Agreement on the part of Sierra Madre will include payment of $120,000 to Riverside and $200,000 in respect of payments due to underlying concession holders, the issuance of 750,000 Sierra shares, and the incurrence of $750,000 in exploration expenditures required by the first anniversary of the Definitive Agreement. Any deficiency in the Firm Commitment shall be remedied by way of cash payment.
Upon the exercise of the Initial Option, Sierra Madre shall have the option to acquire an additional 19% interest in the Property (the “Additional Option”) by incurring an additional $5,000,000 in exploration expenditures, paying Riverside $100,000 in cash and issuing an additional 1,500,000 shares to Riverside on or before the second anniversary date of the exercise of the Initial Option. Upon the exercise of the Initial Option, provided that Sierra Madre surrenders its right to the Additional Option, Riverside and Sierra Madre shall be deemed to have formed a joint venture (the “Joint Venture”) with both company’s holding 49% and 51% interest respectively.
All share issuances indicated within this option agreement assume a minimum value per share of $0.50. In the event that at a share issuance date the market value of Sierra Madre Common Shares (calculated as the 30-day volume weighted average) is less than $0.50, then the number of shares to be issued to Riverside shall be adjusted to compensate. Complete agreement terms will be filed on SEDAR and available at www.sedar.com.
The scientific and technical data contained in this news release has been prepared under the supervision of Mark J Pryor, Pr.Sci.Nat., an independent qualified person to Riverside Resources, who is responsible for ensuring that the geologic information provided in this news release is accurate and acts as a "qualified person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects
About Riverside Resources:
Riverside is a well-funded prospect generation team of focused, proactive gold discoverers with the breadth of knowledge to dig much deeper. The Company currently has approximately $9,000,000 in the treasury and fewer than 32,100,000 shares issued. The Company’s model of growth through partnerships and exploration looks to use the prospect generation business approach to own resources, while partners share in de-risking projects on route to discovery. Additional property information on the Company’s projects can be found on the Riverside Resources Inc. website at www.rivres.com.
ON BEHALF OF RIVERSIDE RESOURCES INC.
Dr. John-Mark Staude, President & CEO
For additional information contact:
Manager, Corporate Development
Certain statements in this press release may be considered forward-looking information. These statements can be identified by the use of forward looking terminology (e.g., "expect”,” estimates", "intends", "anticipates", "believes", "plans"). Such information involves known and unknown risks -- including the availability of funds, the results of financing and exploration activities, the interpretation of exploration results and other geological data, or unanticipated costs and expenses and other risks identified by Riverside in its public securities filings that may cause actual events to differ materially from current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
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