Riverside Resources Inc. (TSX-V: RRI) and its partner, Guerrero Exploration (TSX-V: GEX), have agreed to terms on a transaction that will result in Guerrero owning a 100% interests in the Cerro Azul and Chapalota Projects with Riverside receiving $2,000,000 in Guerrero shares. After the transaction is complete, Riverside will become the largest single shareholder of Guerrero.
The Transaction will strengthen the partnership between the two companies, with Riverside having an opportunity to increase its management presence and support through representation on the Board of Directors and Advisory Board. This agreement will facilitate exploration progress and allow Riverside and Guerrero to take strides towards an initial drill program at the Cerro Azul copper-gold project and follow-up on remaining drill targets at Chapalota. Further, Riverside’s on-the-ground team in Mexico will assess and advance other properties within Guerrero’s portfolio. Both companies already enjoy a strong working relationship and believe that this Transaction will leverage the knowledge and resources required to identify valuable opportunities moving forward.
John-Mark Staude, President and CEO of Riverside Resources Inc., commented: “This agreement will provide Riverside shareholders with strong upside given that Riverside will now hold such a substantial share position in Guerrero.” Staude added, “We look forward to working towards drill testing and advancing high quality prospects that will generate value for both Guerrero and Riverside shareholders at a time when it is vital for companies to consolidate ownership and focus on the best chances for discovery.”
David Stadnyk, President and CEO of Guerrero Exploration Inc., commented: “Having Riverside acquire a major control block and adding three of their key executives to Guerrero's Board of Directors and Advisory Board is a major step forward for the company. Given our successful past working relationship and Riverside’s ability to acquire properties and partnerships, this new development will propel Guerrero to the next level. We will leverage off Riverside’s past, present, and future success to better solidify Guerrero’s ultimate goal in finding a resource.”
Cerro Azul is located near the highly productive southwestern Mexico, Guerrero Gold Belt. The 2011 work program on the 261 km² property consisted primarily of rock chip and soil samples, which returned very encouraging copper values (News Release: May 26, 2011). During 2012 several other targets that had already returned encouraging copper values have been further refined.
Chapalota is located along the western side of the Sierra Madre Occidental Region of Mexico. The 91 km² property is 50 km to the south of Silvermex’s Rosario deposit and 70 km to the north of Oro Mining’s La Trinidad deposit. Riverside and Guerrero completed IP and soil surveys defining six target areas on the Project. For more information on the Cerro Azul and Chapalota Projects please visit www.rivres.com.
Further Transaction Details:
Riverside has agreed to transfer its 40% interest in the Cerro Azul Project and its 100% interest in the Chapalota Project in exchange for $2,000,000, payable in shares of Guerrero. The $2,000,000 in shares will be issued at the issue price of a strategic financing of at least $700,000 that Guerrero will conduct at or around time of closing. David Stadnyk will continue to serve as President and CEO and, in addition to having two members of Riverside’s Senior Management (Robert Scott and Howard Davies) appointed to Guerrero’s Board of Directors, John-Mark Staude will be appointed to Guerrero’s Advisory Board. The Transaction will qualify as a change of control, as defined under the rules of the TSX Venture Exchange, and as such will require Guerrero shareholder approval, as well as Exchange approval.
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