Riverside and Guerrero ink definitive option deal for Chapalota

Riverside Resources (CVE:RRI) and Canada-based Guerrero Exploration announced Thursday they signed a definitive option agreement for the Chapalota project in Sinaloa, Mexico.
In order to acquire a 60% interest, Guerrero must issue Riverside 1.25 million Guerrero shares, make total cash payments of $200,000, and incur $4.0 million in exploration expenses on the project within a three year period.
After this, Guerrero can earn an additional 10% interest in the property by paying a further $500,000 and incurring another $1.5 million in exploration expenses over one year.
Currently, a drilling program at the Leona target is progressing, with additional holes now underway. Riverside and Guerrero began a 2,000 metre core drilling program earlier this month, with the aim of testing several geochemical and geophysical anomalies identified in prior exploration campaigns.
The geochemical anomaly discovered through soil and rock chip sampling defined a broad target area of 5 kilometers by 3 kilometers, Riverside said.
"Core drilling is an exciting step for the Leona Target at the Chapalota project," said president and CEO of Riverside, John-Mark Staude.
"The surface gold assays combined with IP conductivity and resistivity at the Leona target makes this one of five primary target areas on the 90 square kilometer property."
In addition, the company said that previous small scale mining in the region is an indication that mineralization may be found at depth.
If Guerrero chooses not to take up the additional option, Riverside and Guerrero will form a joint venture, with each company holding a 40% and 60% stake, respectively.