Private Placement and Forward Share Split
Rio Grande Mining Corp. (RGV-TSX V)
Suite 200 – 551 Howe Street Vancouver, B.C. V6C 2C2 Tel: (604) 683-8610, Fax: (604) 683-4499
FOR IMMEDIATE RELEASE September 13, 2010
PRIVATE PLACEMENT AND FORWARD SHARE SPLIT
The Company is pleased to announce that, subject to regulatory acceptance, it has arranged a private placement in the amount of up to 2,000,000 units of the Company at a price of $0.225 per unit for gross proceeds of $450,000. Each unit will consist of one common share and one transferable share purchase warrant. One warrant entitles the holder to purchase one additional common share at an exercise price of $0.30 per share for a period of up to five years. The proceeds of the private placement will be used for general working capital purposes.
The Company is also pleased to report that the board of directors will seek regulatory approval to sub-divide its outstanding and issued share capital after the completion of the private placement on a basis of two new shares for each existing outstanding share.
On July 7, 2010 the Company reported on its exploration program on its Kechika Property. A total of 1,199 line-kilometres or 99 square kilometres of data were acquired on these four claim blocks using high sensitivity cesium magnetometer (Scintrex CS-3) survey covering more than 7,503 hectares. The survey lines were flown at a 100-metre spacing and tie lines at a separation of 1000 metres. The nominal mean terrain clearance of 70 metres (40 meters for the magnetic sensor) was maintained during the surveying. A GPS navigation system was employed to ensure accurate positioning of the geophysical data with respect to the topographic base maps. From the collected raw data, following products were produced: flight path map, digital elevation model, total magnetic field and calculated first vertical derivative maps. The purpose of this survey was to collect and utilized the data as an exploration tool for locating faults and structurally-controlled lithologies such as Gunsteel Formation (black shale), which is host to the majority of known SEDEXtype lead-zinc-silver deposits and prospects within the Kechika Basin. Similar airborne magnetic survey was also flown in 2008 by the Company on its Yuen North property, located approximately 10 km northwest of the current area, and the results of the survey were found useful in locating either new structures and/or extending the known regional faults, in particular, those bounding the Gunsteel Formation. However, these structures and Gunsteel Formation has yet to be ground-truthed for potentially SEDEX-type base metal mineralization. The 2010 survey has also shown relative good correlation between the known geology and magnetic signatures in the area particularly onto the Akie-Sika North claims where folded and fault-bounded Gunsteel Formation showing good correspondence with the airborne magnetic data.
About Kechika Properties
The Kechika properties of Rio Grande, which include Aikie-Sika, Sika, Bank, Kwad, Akie-Sika North, CT Ext, Del, Erin, New Gun-Pesika, Yuen North and Peskie, are located 400-420 km north-northwest of Prince George together comprising 21,848 hectares as 33 mineral claims. Megastar Development Corporation (“Megastar”), which holds a 100% interest in these properties, has granted to Rio Grande an option to earn up to a 60% interest in these claims.
Geologically, the Kechika properties occur within the Gataga district of the Kechika Trough, which forms the southern-most part of the regionally extensive Paleozoic Selwyn Basin which is one the most significant sedimentary basins in the world for the occurrences of SEDEX-type zinc-lead-silver-barite deposits. The two most significant zinc-lead-silver deposits within the Kechika basin are the Cirque (non-NI 43-101 compliant resource of 40 MT @ 7.8% zinc, 2.2% lead and 48.0 g/t silver) and Cardiac Creek (23.6 MT @ 7.6% Zn, 1.5% lead, 13.0 g/t silver with a cut off grade of 5% zinc – NI 43-101 compliant resource) deposits of Teck and Korea Zinc and Canada Zinc Metals Corporation, respectively.
On Behalf of the Board,
“Jerry A. Minni”
Jerry A. Minni Director & CEO
Neither TSX Venture Exchange not 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.
WARNING: The Company relies on litigation protection for “forward looking” statements. Actual results could differ materially from those described in the news release as a result of numerous factors, some of which are outside the control of the Company.