Riley Resources Corp.
TSX VENTURE : RLY.P

October 14, 2016 13:13 ET

Riley Resources Enters Into Agreement With MSM Resource LLC for Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 14, 2016) - Riley Resources Corp. (TSX VENTURE:RLY.P) ("Riley") is pleased to announce that it has entered into an exploration and option agreement (the "Agreement") with MSM Resource L.L.C. ("MSM"), dated October 13th, 2016 pursuant to which Riley has been granted a 5-year option to acquire MSM's undivided interest in the East Manhattan Wash (the "Property"). The proposed transaction constitutes an arm's length qualifying transaction (the "QT") to Riley and is subject to the approval of the TSX Venture Exchange ("Exchange"). Upon Exchange approval of the QT, Riley will become a Tier 2 TSX Venture Exchange mining issuer.

MSM is a Nevada corporation that is wholly owned and controlled by Alan Day of Reno, Nevada for the purpose of mineral exploration.

Pursuant to the terms of the Agreement, in order to earn MSM's interest in the Property, Riley must:

  1. pay to MSM lease payments in the aggregate of $57,500 ($5,000 in year one, $7,500 in year two, $10,000 in year three, $15,000 in year four and $20,000 in year five);

  2. spend an aggregate of $550,000 on the Property in work commitments ($50,000 in years one and two, $100,000 in year three, $150,000 in year four and $200,000 in year five). The $50,000 to be spent in year one is a firm commitment of Riley;

  3. pay to MSM an additional lump sum payment of $200,000 within 5 years from signing the Agreement; and

  4. grant MSM a 3% net smelter return royalty on the Property.

Private Placement

In conjunction with the QT, Riley also, subject to Exchange acceptance, announces a non-brokered private placement (the "Private Placement") of up to 3,500,000 common shares at a price of $0.075 per common share, for total gross proceeds of up to $262,500. Net proceeds from the Private Placement will be used for the expenditures on the Property noted above and working capital requirements.

There are currently 7,050,001 common shares of Riley issued and outstanding.

The Property

The Property is located in Nye County Nevada and is comprised of 6 unpatented lode mining claims controlled by MSM. The exploration work to date has included prospecting, drilling and assaying.

MSM has completed in excess of $100,000 of exploration activity on the Property and a National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") compliant Technical Report in compliance with the guidelines of NI 43-101 has been commissioned by Riley and will be filed within 45 days of this press release.

Sponsorship

Riley will be making application to the Exchange for a waiver of the requirement to obtain a sponsor for the QT.

Corporate

It is anticipated that upon completion of the QT, the corporate name and directors of Riley will remain the same. As Mr. Todd Hilditch, Chief Executive Officer, Chief Financial Officer and Director of Riley is not a control person of either MSM or Riley, the QT will constitute an arm's length QT for the purposes of Exchange policies and will not be subject to shareholder approval.

The current directors of Riley are: Todd L. Hilditch, William Lamb, Cyndi Laval and Bryan McKenzie.

Cautionary Statements

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. The TSX Venture TSXV Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

ON BEHALF OF THE BOARD

Riley Resources Corp.

Todd Hilditch, CEO, CFO and Director

Contact Information

  • Riley Resources Corp.
    Todd Hilditch
    CEO, CFO and Director
    604-443-3831