Acquisition of La Maria Property Update
Rio Grande Mining Corp.
Suite 200 – 551 Howe Street Vancouver, BC, V6C 2C2 Tel: (604) 683-8610 Fax: (604) 683-8605
FOR IMMEDIATE RELEASE April 26, 2012
ACQUISITION OF LA MARIA PROPERTY UPDATE
Vancouver, BC, April 26, 2012: Rio Grande Mining Corp. (RGV - TSX-V) (“Rio Grande” or the “Company”) is pleased to provide the following update. The Company continues to move forward with its acquisition of all the issued and outstanding securities of Tru Vision Corp. (the “Transaction”). Tru Vision Corp. (“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 that owns the La Maria Gold Project (the “Property”), located in the Department of Antioquia, Colombia, 18 kilometres south-southwest of the town of Segovia. Highlights of the sampling program done on the Property include 649.50 g/t au, 598.6 g/t au and 197.60 g/t au (see the Company’s News Releases dated September 29, 2011 and February 23, 2012 for particulars of the sampling, including a table summarizing sample results).
On April 3, 2012, Tru Vision and the optionors of the Property (the “Optionors”) amended the Option Agreement (the “Amended Option Agreement”) to extend the payment obligations thereunder. The original payment of US$500,000 plus interest due April 18, 2012, was split into a payment of US$150,000 plus interest due April 18, 2012 (paid) and a payment of US$350,000 plus interest due June 18, 2012. The original payment of US$500,000 plus interest due September 18, 2012 was extended to December 1, 2012.
The following is a schedule of payments and share issuances due to the Optionors under the Amended Option Agreement, which obligations the Company has agreed to assume on closing of the Transaction:
1) On or before June 6, 2011, payment of US$100,000 (paid by Tru Vision);
2) On or before August 31, 2011, payment of US$150,000 (paid by Tru Vision);
3) On or before October 15, 2011, payment of US$600,000 (paid by Tru Vision);
4) On April 18, 2012, payment of US$150,000 plus interest (paid by Tru Vision);
5) On June 18, 2012, payment of US$350,000 plus interest;
5) On December 1, 2012, payment of US$500,000 plus interest;
6) On or before December 18, 2012, issuance of 2,000,000 common shares;
7) On April 18, 2013, payment of US$1,500,000 plus interest;
8) On or before December 18, 2013, issuance of 3,000,000 common shares; and
9) On April 18, 2014, payment of US$3,000,000 plus interest.
Interest at a rate of one percent (1%) per month shall be calculated and paid on any renegotiated balances. US$20,000 in interest was paid by Tru Vision on April 18, 2012.
The Amended Option Agreement also requires the following exploration expenditures:
1) US$100,000 on or before June 2, 2011 (completed by Tru Vision);
2) US$600,000 on or before December 18, 2012;
3) US$1,800,000 on or before December 18, 2013;
4) US$2,000,000 on or before December 18, 2014; and
5) US$2,000,000 on or before December 18, 2015.
Upon completion of the Transaction and terms of the Amended Option Agreement, the Company will own, through Tru Vision and its subsidiaries, all the issued and outstanding shares of El Porvenir, which holds the license to the Property, subject to a 2% Net Smelter Return royalty in favour of the Optionors. 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 Amended Option Agreement. All information regarding Tru Vision has been provided to the Company by Tru Vision.
The Transaction and all matters relating thereto are subject to a number of conditions including completion of financings to satisfy TSX Venture Exchange requirements and final acceptance 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 Transaction, (ii) Tru Vision intends to fulfill its obligations under the Amended Option Agreement, and (iii) upon fulfillment of Tru Vision’s obligations under the Amended Option Agreement, Tru Vision will own, through its subsidiaries, all of the issued and outstanding shares of El Porvenir. 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 of the Transaction, Amended Option Agreement and/or the financings 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 complete the Transaction; (ii) the inability of the Company to satisfy TSX Venture Exchange conditions, (iii) the inability of Tru Vision to satisfy its obligations under the Amended Option Agreement, (iv) fluctuation of mineral prices; (v) a change in market conditions; and (vi) the refusal of the TSX Venture Exchange to accept the 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.