Riva Gold to be acquired by Wildcat Silver
Tuesday, Mar 05, 2013
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.
SOURCE Riva Gold Corporation