Riverside Resources Signs Option Agreement With CLI Resources for Sugarloaf Peak Gold Project, Arizona
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/28/11 -- Riverside Resources Inc. ('Riverside' or the 'Company') (TSX VENTURE: RRI)(PINK SHEETS: RVSDF)(FRANKFURT: R99) is pleased to announce that CLI Resources Inc. ('CLI') and Riversides Resources Inc. have entered into an option agreement whereby CLI can acquire a 100% interest in the Company's Sugarloaf Peak Project in Arizona (the 'Property'). In order to exercise the option CLI must issue Riverside an aggregate 13,600,000 CLI shares, make total cash payments of $1,750,000 to Riverside, and incur $5,500,000 in exploration expenditures on the Property within 36 months of the agreement. The issuance schedule of CLI common shares will be such that Riverside will maintain a significant ownership interest in CLI Resources' issued and outstanding shares. CLI must complete a National Instrument 43-101 compliant independent resource estimate on the Sugarloaf Peak Project within two years and a preliminary independent scoping study within three years of the agreement to fulfill the closing of the option. The independent resource estimate and preliminary scoping study requirements are both subject to an acceleration clause as detailed in the Additional Agreement Terms section below.
Riverside advanced the project through initial drilling and is pleased to now see the project de-risked and advanced by working with a partner that will take on major drilling and exploration campaign to test the depth, width, and grades of this large epithermal gold district. CLI will complete metallurgy and move the asset forward toward a compliant 43-101 resource, and immediately take over responsibility for payments to underlying owners such that Riverside would own the project outright should CLI not complete the full option agreement. Riverside will retain 100% interest until earn-in is complete and will hold a major interest in the asset through ownership in the new company should CLI complete earn-in.
'This agreement is another excellent step for Riverside as the Company continues to leverage the strength of its portfolio to unlock value and advance several assets simultaneously. Riverside recently announced a multi-asset JV deal with firm drill commitments in Durango, the commencement of a JV work program in Guerrero, and now the Company has delivered a major deal to advance Sugarloaf Peak,' stated John-Mark Staude, President and CEO of Riverside Resources Inc. 'Sugarloaf Peak has a large low grade gold concentration and we are delighted to partner with CLI as they will put the financial resources forward to explore and expand the gold resource and bring it to a NI 43-101 compliancy' comments Staude.
Property Details and Planned Exploration:
The Sugarloaf Peak Project covers over 10 km2 located west of Quartzsite, Arizona. Intermittent drilling and small-scale placer gold and lode gold mining occurred on the property during the 1950's and through to the 1990's. The Project is the subject of an historic, non-National Instrument 43-101 compliant mineral resource. In 2009, Riverside completed a drill program on the Property that substantiated a portion of the historic data, while testing the geologic model to twice the depth of previous gold exploration. Drilling targeted the southern portion of a 4 km2 surface gold anomaly and left vast areas still open, which will now be the focus of exploration by CLI. Riverside completed five angled diamond core drill holes on the property for a total of 1,125 meters to a maximum true depth of 200 meters in any one hole. The core is now available for CLI to begin metallurgical work as well as target the next phase of drilling.
Previous exploration work by Riverside produced surface assay results from less than 0.005 g/t to more than 6 g/t gold. The new work by CLI will seek to find this type of higher grade gold in feeder structures through an extensive drill campaign. The planned drilling by CLI could more than quadruple the historic drill testing, and combined with a scheduled aeromagnetic survey and proposed IP program this future work has the potential to outline a much larger system in multiple directions.
Additional Agreement Terms:
Cash payments, share issuances, and exploration expenditures are to be made in accordance to the following schedule:
----------------------------------------------------------------------------
Exploration
Date Cash Payment Share Issuance Expenditure
----------------------------------------------------------------------------
Effective Date(1) 4,300,000
$250,000 Common Shares n/a
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Earlier of (a) four months
after the Effective date
and (b) completion of an
aggregate of $3,000,000 4,300,000
in financing n/a Common Shares n/a
----------------------------------------------------------------------------
First anniversary of 2,500,000
Effective Date $250,000 Common Shares $2,000,000
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Second anniversary of 1,000,000
Effective Date $500,000 Common Shares $3,500,000
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Third anniversary of 1,500,000
Effective Date $750,000 Common Shares n/a
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TOTAL 13,600,000
$1,750,000 Common Shares $5,500,000
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1. The Effective Date is the date of the execution of a definitive
agreement (the 'Definitive Agreement') in respect of the Option.
2. All payments and work up until the first anniversary of the Effective
Date are Firm Commitments.
In order to exercise the Option, CLI must also incur exploration expenditures and make outstanding cash payments on behalf of Riverside to the underlying concession holder. Any cash payments paid by CLI in respect of the underlying option agreement shall be applied against the company's exploration expenditure requirements under the agreement.
At any time after the first anniversary of the effective date and provided CLI has made the requisite cash payments, share issuances and exploration expenditures, CLI may elect to accelerate the exercise of the option by making a cash payment to Riverside of $1.5-million and issuing Riverside common shares with a total value of $2-million. In the event that on or before the first anniversary of the effective date CLI issues common shares at a price of less than 30 cents per common share (other than a permitted financing), then to exercise the option, in addition to making the requisite cash payments, common share issuances and exploration expenditures on or before the first anniversary of the effective date, the company must exercise the acceleration option after but not later than 30 days from the first anniversary of the effective date. Until the earlier of the exercise of the acceleration option, the second anniversary of the effective date and the company raising a total of $8-million in financing, Riverside shall have the right of first refusal to participate in any financing of the company involving the sale of common shares or securities convertible into common shares to the extent required for Riverside to maintain, but not exceed a 19-per-cent interest in the issued and outstanding common shares of CLI.
In addition, it is anticipated that CLI will change its name to Choice Gold Inc. and reconstitute its board of directors in conjunction with the announcement of this option agreement. Complete details of this option agreement are available on SEDAR.
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 $3,000,000 in the treasury and fewer than 26,000,000 shares issued. Riverside anticipates more than 15,000 meters of drilling on the Company's projects in the coming months by its partners. 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.
The scientific and technical data contained in this news release were prepared under the supervision of Locke Goldsmith, P. Eng., P. Geo., 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.
ON BEHALF OF RIVERSIDE RESOURCES INC.
Dr. John-Mark Staude, President & CEO
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.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Riverside Resources Inc.
Joness Lang
Manager, Corporate Communications
(778) 327-6671
(778) 327-6675 (FAX)
info@rivres.com
www.rivres.com
Riverside Resources Inc.
Kaley Reid
Corporate Communications
(778) 327-6671
(778) 327-6675 (FAX)
info@rivres.com
www.rivres.com