“Company ”) is pleased to announce that it has entered into a definitive agreement dated
Rio Grande Mining Corp. (RGV-TSX V)
Suite 200 – 551 Howe Street Vancouver, BC, V6C 2C2 Tel: (604) 683-8610 Fax: (604) 683-8605
FOR IMMEDIATE RELEASE June 2, 2011
Vancouver, BC, June 2, 2011: Rio Grande Mining Corp. (RGV - TSX-V) (“Rio Grande” or the “Company”) is pleased to announce that it has entered into a definitive agreement dated May 30, 2011 (the “Share Exchange Agreement”) with Tru Vision Corp., a private British Columbia company (“Tru Vision”), and all of the shareholders of Tru Vision. Under the terms of the Share Exchange Agreement, the Company will acquire all of the issued and outstanding common shares in the capital of Tru Vision (of which there are 13,450,000) from the shareholders thereof in exchange for the Company issuing 8,406,250 common shares, so that the Company will issue one common share to each Tru Vision shareholder for every 1.6 shares of Tru Vision held. Upon closing of the transaction, and assuming the private placement of 7,500,000 units announced February 9, 2011 is fully subscribed, the Company anticipates it will have 37,987,382 common shares issued and outstanding.
Tru Vision, through its wholly-owned subsidiaries, holds an option to acquire a 100% interest (the “Option Agreement”) in El Porvenir Minero S.A.S., a private Colombian company (“El Porvenir”) that owns the ‘La Maria Gold Project’ (the “La Maria Property” or “Property”), which is located in the Department of Antioquia, Colombia, 18-kilometres south-southwest of the town of Segovia. Upon closing of the Share Exchange Agreement, the Company will assume all obligations under the Option Agreement, which include payments and share issuances to the shareholders of El Porvenir (the “Optionors”) as follows:
1. payment of US$100,000 on or before June 6, 2011;
2. payment of US$100,000 upon approval of the transaction by the TSX Venture Exchange;
3. payment of US$650,000 on or before September 1, 2011;
4. payment of US$1,000,000 on or before December 18, 2011;
5. payment of US$1,500,000 and issuance of 2,000,000 common shares on or before December 18, 2012; and
6. payment of US$3,000,000 and issuance of 3,000,000 common shares on or before December 18, 2013.
The Option Agreement also contains the following exploration expenditures, which will be incurred by the Company:
1. US$100,000 on or before June 2, 2011 (completed by Tru Vision);
2. US$400,000 on or before December 18, 2011;
3. US$1,000,000 on or before December 18, 2012;
4. US$2,000,000 on or before December 18, 2013; and
5. US$3,000,000 on or before December 18, 2014.
The Property is subject to a 2% Net Smelter Return royalty in favour of the Optionors.
Upon completion of the terms of the Option Agreement, the Company will, through its subsidiaries, own all the issued and outstanding shares of El Porvenir, which holds the license to the Property. The shares of El Porvenir are currently being held in trust by an escrow agent and will not be released to the Company until the completion of all terms of the Option Agreement.
Upon the closing of the Share Exchange Agreement, Mr. Christopher Verrico, the President of Tru Vision, will become a director of the Company.
The Company will pay a finder’s fee of cash and shares pursuant to the policies of the TSX Venture Exchange to Level 3 Capital Management Inc. for its efforts in introducing the parties to the transaction.
The Share Exchange Agreement and all matters relating thereto are subject to the acceptance of the TSX Venture Exchange. The transaction does not involve any relationship between a Non-Arm’s Length Party and the Company, as that term is defined in the policies of the TSX Venture Exchange.
On behalf of the Board of Directors,
/s/ Jerry Minni President & CEO Rio Grande Mining Corp.
(604) 683-8610
Statements in this press release regarding the Company which are not historical facts are “forward-looking statements” that involve risks and uncertainties. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations and includes the statement that; (i) the parties may close the Definitive Agreement; (ii) the Company anticipates having 37,947,382 common shares issued and outstanding on closing of the transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties such as the risk that the closing may not occur for any reason. Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) the inability of the parties to consummate the Definitive Agreement; (ii) the inability of the parties to complete the financing, as proposed or at all; (iii) fluctuation of mineral prices; (iv) a change in market conditions; (v) the inability of Chris Verrico to act as a new director of the Company; and (vi) the refusal of the TSXV to accept the proposed transaction for any reason whatsoever. Except as required by law, the Company does not intend to update any changes to such statements.
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.