Rio Grande Mining Corp.
TSX VENTURE : RGV

Rio Grande Mining Corp.

September 25, 2013 08:30 ET

Rio Grande to Acquire Majority Interest in Two Claim Groups on Trend With Patterson Lake South Uranium Discovery

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 25, 2013) - Rio Grande Mining Corp. (TSX VENTURE:RGV) (the "Company") is pleased to announce that it has entered into an option agreement with Canadian International Minerals Inc. ("CIN") whereby the Company has been granted an option to acquire an undivided 75% interest in 15 mineral claims consisting of 18,042 hectares (the "Property"), comprising two claim groups in the Athabasca Region, NW Saskatchewan, located approximately 35 km south-southwest of the Patterson Lake South uranium discovery by the Fission Energy and Alpha Minerals joint venture.

Management is delighted to have successfully targeted and secured claim blocks that it believes are geologically on trend with the discovery at Patterson Lake South ("PLS") and offer shareholders exposure to comparable exploration potential supported by the following rationale:

  • The consensus amongst industry experts is that the recent discovery of high grade uranium at PLS represents a new style of unconformity mineralization occurring at the interface of basement rock and sedimentary cover.
  • The Company's claim blocks cover several topographic features, including lake chains and watercourses, that strike south west from the PLS discovery area which are also coincident with several significant (first derivative) magnetic low structures that also originate in the PLS discovery area.
  • Geological mapping of the claims shows Lower Cretaceous McMurray Formation (referred to as Manville on earlier maps) sedimentary cover. Though younger than the interpreted Devonian (or Elk Point Formation) capping cover at the PLS discovery, it is believed that the overlying McMurray Formation thinly veils the Devonian. These sediments protected the basement from contact with glaciation thus preserving the potential for an unconformity uranium deposit (GSC Map 12-G, 2006).
  • Not to be confused with the Clearwater Sedimentary formation, the Clearwater Domain is a major intrusive system in the Rae geologic province that does not outcrop but has a distinct magnetic and gravity signature (Card, C.D., 2001, SGS) that has been postulated as the heat source for uranium deposits in western Saskatchewan (Darnley, A.G., GSC 1981).

The Company has commenced design and planning of first phase exploration work intended to begin after this winter's freeze up. This program contemplates sediment and radon sampling of lake bottoms within the magnetic low structures as an effective means to assess potential for further exploration and possible drill targets.

The option agreement is subject to the acceptance of the TSX Venture Exchange (the "Exchange"). In order to exercise the option, the Company must make the following payments and share issuances to CIN:

  • $10,000 upon execution of the option agreement (paid);
  • $15,000 and 250,000 common shares upon acceptance by the Exchange;
  • $25,000 upon closing of the next equity financing of the Company;
  • $50,000 and 250,000 common shares within six months of the date of the option agreement.

The Company must also incur the following in exploration expenditures on the Property:

  • $250,000 on or before the first anniversary of the option agreement;
  • $500,000 on or before the second anniversary of the option agreement; and
  • $1,500,000 on or before the third anniversary of the option agreement.

The Property will be subject to a 2% NSR royalty in favour of CIN, of which the Company can purchase up to half (being 1%) in consideration of $1,000,000.

Maps detailing the claim locations can be viewed on the Company's website at www.riograndemining.com.

The technical information in this news release has been reviewed and accepted by Thomas Hasek, P. Eng., a Qualified Person in accordance with NI 43-101.

Additionally, subject to TSX Venture Exchange acceptance, the Company has arranged a non-brokered private placement for total gross proceeds of up to $900,000 as per the following:

  • Up to $600,000 by the sale of up to 6 million units at 10 cents per unit. Each unit will consist of one common share and one transferrable share purchase warrant, where half of the warrants will be exercisable into one additional common share for a period of three years at a price of 15 cents per share, and the remaining half will be exercisable into one additional common share for a period of three years at 20 cents per share.
  • Up to $300,000 by the sale of up to 2.5 million units at 12 cents per unit. Each unit will consist of one flow-through common share and one transferrable share purchase warrant exercisable into one additional non-flow through common share for a period of three years at a price of 20 cents per share.

The shares issued under the private placement will be subject to the required hold period of four months plus one day from the date of issuance. Where applicable, a finder's fee in cash or common shares of the company may be payable in connection with the financing in accordance with the policies of the TSX Venture Exchange.

The proceeds from the private placement will be used for exploration of the Company's mineral properties located in Canada, further property acquisitions and for general working capital.

The Company also announces it has granted an aggregate of 900,000 incentive stock options to directors, officers and consultants of the Company. All of the stock options are exercisable at a price of 12 cents per share for a period of five years. The stock options have been granted under and are governed by the terms of the Company's shareholder approved Stock Option Plan.

For further information, investors and shareholders are invited to visit the Company's website at www.riograndemining.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any state of the United States and may not be offered or sold within the United States or to, or for the account or the benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

On behalf of the Board of Directors,

Robert Findlay, Director

We seek safe harbor.

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.

This News Release may contain forward-looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of exploration and other risk factors beyond its control, and actual results may differ materially from the expected results.

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