TORONTO, March 4, 2013 /PRNewswire/ - Riva Gold Corporation (TSX-V: RIV) ("Riva" or the "Company") announces today that it has entered into a letter of intent with Wildcat Silver Corporation ("Wildcat") providing for the acquisition by Wildcat of all of the outstanding common shares of Riva in consideration for 4.7 common shares of Riva for one common share of Wildcat. This represents a price of C$0.17 per Riva common share, which is based on the volume weighted average price of the Wildcat common shares for the 20 trading days ending March 1, 2013.
"We are pleased to be able to bring this transaction to our shareholders," commented Richard Warke, chairman and CEO of Riva Gold. "Riva has been assessing strategic alternatives for the last year and we believe this represents the best opportunity for the Company's investors to participate in the significant potential of the Hermosa project, one of the largest undeveloped silver deposits in the USA."
Wildcat has an 80%-interest in the Hermosa silver project located in Santa Cruz, Arizona. The project has a preliminary economic assessment which estimates average annual production of over 15 million ounces of silver for the first five years and a 16 year mine life. Metallurgical testwork is currently focused on optimizing silver recoveries and the economic recovery of the remaining by-product metals is underway. This work will be included in the pre-feasibility study expected to be completed by mid-2013.
Riva has a cash balance of approximately C$8.1 million and currently does not hold any mineral properties. In connection with the acquisition, Riva also agreed to provide a C$1 million secured term loan to Wildcat, subject to any applicable regulatory approvals. Interest payable on the loan is equal to the prime rate plus 4% and the loan matures on December 31, 2013.
The proposed acquisition remains subject to, among other things, the negotiation and execution of a definitive agreement and applicable shareholder and regulatory approvals.
Riva is a Canadian-based mineral exploration company that was focussed on identifying and developing new discoveries. The Company was assessing its strategic alternatives and evaluating potential opportunities with the objective of taking a staged approach to its activities. Riva is continuing to minimize cash outflow. Riva trades on the TSX Venture Exchange under the symbol "RIV".
Wildcat is a Canadian mineral exploration company focused on the development of its 80% owned Hermosa silver project located in Santa Cruz County, Arizona. The project currently has a preliminary economic assessment completed which estimates average annual production of over 15 million ounces of silver for the first five years and a 16 year mine life, making it one of the largest undeveloped silver projects in the USA. Hermosa's measured and indicated mineral resource consists of 194 million tonnes averaging 37.7 grams per tonne silver for a total of 236 million ounces of silver and an inferred mineral resource of 80 million tonnes averaging 30.9 grams per tonne silver for a total of 79 million ounces of silver as announced in the August 9, 2012 press release.
Certain statements contained in this news release, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, but are not limited to, statements or information with respect to: the exploration and development of mineral properties; the Company's future business and strategies; and expectations regarding the execution of a definitive agreement and the ability of the Company to close the acquisition.
Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, that no significant adverse changes will occur to our planned exploration expenditures, that there will be no significant delays of the completion of our planned exploration programs; as to the continuing availability of capital resources to fund our exploration programs; and that the Company will not experience any adverse legislative or regulatory changes. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that any forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks, uncertainties and other factors include, among other things: general economic, market and business conditions; land use rights; adverse industry events; the ability of the Company to acquire additional mineral properties of merit; seasonality and weather conditions; and currency fluctuations.
Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.
Riva Gold Corporation
On behalf of the Board of Directors for Riva:
Richard Warke, Chairman and Chief Executive Officer
Neither 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.
SOURCE Riva Gold Corporation