Tuesday, 19 June 2012

Riverside Resources acquires major stake in Guerrero Exploration

Guerrero Exploration (CVE:GEX) and partner Riverside Resources (CVE:RRI) Tuesday announced a deal which sees Riverside become the largest single shareholder in Guerrero.

As part of the deal, Guerrero will own 100 percent interests in the Cerro Azul and Chapalota projects with Riverside receiving $2 million in Guerrero shares.

"This agreement will provide Riverside shareholders with strong upside given that Riverside will now hold such a substantial share position in Guerrero," Riverside Resources' president and CEO John-Mark Staude said.

"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."

Guerrero Exploration's president and CEO David Stadnyk said: "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."

The companies said that 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.

In a statement, both companies said the 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.

Riverside's on-the-ground team in Mexico will assess and advance other properties for 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.

Cerro Azul is located near the highly productive southwestern Mexico, Guerrero Gold Belt. The 2011 work program on the 261 square km property consisted primarily of rock chip and soil samples.

Chapalota is located along the western side of the Sierra Madre Occidental Region of Mexico.

The 91 square km 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.

Regarding board changes, 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 require Guerrero shareholder approval as well as TSX approval.

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