Rio Verde Minerals Corp.

Rio Verde Minerals Corp.

December 13, 2010 14:32 ET

Rio Verde Minerals Announces Closing of Acquisition of Potash and Phosphate Assets in Brazil and CAD$5.8 Million Private Placement Equity Financing

TORONTO, ONTARIO--(Marketwire - Dec. 13, 2010) - Rio Verde Minerals Corp, ("Rio Verde" or the "Company", unlisted), a privately held company, is pleased to announce that it has completed the acquisition of Gentle Bloom Investments from Talon Metals Corp. ("Talon") (TSX:TLO), thus acquiring all of Talon's rights in the Sergipe Potash Project, for approximately 26.6 million shares of Rio Verde. Rio Verde is also pleased to announce the completion of the acquisition of Sound Investments Enterprises Inc. and with it the mineral rights to a portfolio of phosphate exploration assets in Brazil, for approximately 8.9 million shares of Rio Verde. 

Concurrent to the potash and phosphate acquisitions, Rio Verde is pleased to announce that it has also closed a private placement equity financing of $5,767,500 through the issuance of 11,535,000 common shares at an issue price of $0.50 per common share. Subsequent to the offering, Rio Verde has 49,307,677 common shares issued and outstanding. A second tranche of the equity financing for an approximately additional $3,000,000 of the Company's common shares at the same price and conditions offered in the first tranche is anticipated to close approximately within a week from today's announcement.

With this financing, Rio Verde is able to commence the next stage of the exploration program at the Sergipe Potash Project, including drilling and geophysics, as well as exploration on the priority phosphate targets, while actively assessing partnerships and acquisition opportunities to advance and add to its portfolio of projects. Rio Verde intends to complete a "going public" transaction through the listing of its shares on a recognized exchange in Canada. 

Potash Assets

The Sergipe Potash Project is located on the Northeastern coast of Brazil, near the coastline city of Aracaju, the state capital of Sergipe. This project has a comprehensive historical technical database, with both geophysical and drilling data, and has access to excellent infrastructure and transportation to Brazil's potash consumers. The project's location in Sergipe has significant advantages from a logistical, environmental and access perspective relative to most potash projects at this stage in Brazil. Additionally, this project is on the same geological formation as Brazil's only operating potash mine, Taquari-Vassouras, held by Vale.

The Sergipe Potash Project comprises 76 exploration licences, in 12 separate land holdings, over a total area of 107,987 hectares. In addition, Rio Verde has 4,982 hectares under application for exploration licences. Together this area totals 112,969 hectares.

Seven potash drilling ready targets have been identified at Sergipe Potash Project by the previous operator, following an extensive remodelling of the geology of the Sergipe basin, based on approximately 234 line kilometres of 2D seismic data, and the acquisition of geological data from of 286 historical oil wells in the area. A priority target to be tested in the upcoming drilling campaign will be an area in which sylvinite mineralization has been identified at depths of approximately 1,150 metres, and includes five sylvinite seams varying in widths from 2.2 to 10.0 metres, with a cumulative sylvinite width for all seams of 26.6 metres.

A Status Report commissioned by Talon Metals to Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH ("Ercosplan") and completed in April 2010 concluded that the Sergipe Potash Project has the potential to delineate through further drilling, potash mineralization on a scale comparable to other current large potash projects elsewhere in the world, while noting the early stage status of exploration. In particular, Ercosplan concluded that the Sergipe Potash Project has the potential to be comparable in size to the mineralization at the nearby Taquari-Vassouras mine operated by Vale. Based on the available data from existing drill holes and geological modeling, Ercosplan estimated the order of magnitude of exploration target sizes that may be anticipated within Talon's properties, subject to further successful drilling. These estimates included up to approximately 450 million tonnes of sylvinite mineralization and up to approximately 1.1 billion tonnes of carnallitite mineralization (please see note on page 3).

Phosphate Assets

Rio Verde's phosphate portfolio is comprised of several exploration projects across Brazil, with the majority located in the country's Northeastern region. The most advanced targets are at surface with known mineralization at economic grades and with some level of previous work, including geophysics and sampling indicating the ability to host economic phosphate deposits. Rio Verde plans to advance these projects quickly through focused exploration on high grade targets near the surface, on or near infrastructure. Rio Verde holds a total area of approximately 600,000 hectares in land titles.

Potash Drilling Program

Rio Verde has taken over the drilling contract signed by Talon and plans to commence drilling at the Sergipe Potash Project. Environmental Licence has been granted, drilling equipment has been mobilized to site, and an initial [4,500] metre drilling program (5 holes) should start imminently, with the view to completing an initial National Instrument 43-101 ("NI 43-101") mineral resource estimate in 2011.

Rio Verde Team

Rio Verde is assembling a strong management team with an exceptional board in order to deliver value to its investors. The Board is comprised of David Beatty, Chairman (CEO of Rio Novo Gold, Vice-Chairman of Vertichem); Warren Newfield, Director (Chairman of Tau Capital, Founder of AfriOre); Stuart Comline, Director (CEO and President of Talon Metals Corp.); Luis Mauricio F. de Azevedo, COO, Director and General Counsel (partner at FFA Legal Support for Mining Co); and Julio Carvalho, Director (President and Director of Rio Novo Gold Inc.). Rounding out the team, management includes President & CEO Stephen Keith (Ex-Director, Mining Group, Westwind/ TWP Canada); Alex Penha, VP Corporate Development (GM Corporate Development at Rio Novo Gold, Director of the Brazil-Canada Chamber of Commerce); and COO Luis Azevedo. An experienced exploration team is also being assembled in order to focus the company on the ground in Brazil.

About Rio Verde

Rio Verde Minerals Corp. is a private company concentrating on the exploration and development of fertilizer projects in Brazil, focused on becoming the leading Brazilian fertilizer mining and development company. Selecting assets that are near infrastructure, with known mineralization, in regions without significant social or environmental issues, Rio Verde plans to fast track the best projects to development to create stakeholder value. Rio Verde intends to complete a "going public" transaction through the listing of its shares on a recognized exchange in Canada.

Rio Verde holds one potash project and a portfolio of phosphate projects in Brazil. Potash and phosphate fertilizers have favourable supply and demand dynamics, and Rio Verde has a significant cost advantage by being based in Brazil, which imports about 90% to 50% of its potash and phosphate needs respectively. Rio Verde intends to fast track potash exploration to establish a Canadian National Instrument 43-101 resource estimate in 2011.

Qualified Person

Mr. Paulo Ilidio de Brito (Member: AusIMM), who is a "qualified person" within the meaning of National Instrument 43-101, has reviewed and approved the technical information included in this news release.

Note: The potential quantity of potash referred on page 2 of this press release is conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. The basis on which the potential quantities of target mineralization disclosed has been determined based on sylvinite and carnalitite logged in drill holes or identified in down hole geophysical logs and applying an area of influence of 1,500 metres around the individual mineralized drill holes within the Talon properties. No grades have been provided as no independent reassaying of the core has been undertaken and therefore the estimated quantities do not represent a reliable mineral resource in accordance with international practice. Further drilling and assaying is required to confirm the historical data.

Forward-Looking Statements

This press release contains forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding the estimation of mineral resources, exploration results, potential mineralization, potential mineral resources and mineral reserves) are forward-looking statements. Forward-looking statements are often identifiable by the use of words such as "anticipate", "believe", "plan", may", "could", "would", "might" or "will", "estimates", "expect", "intend", "budget", "scheduled", "forecasts" and similar expressions or variations (including negative variations) of such words and phrases. Forward-looking statements are subject to a number of risks and uncertainties, many of differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure to establish estimated mineral resources, the possibility that future exploration results will not be consistent with the Company's expectations, the price of potash and phosphate, changes to regulations affecting the Company's activities, including tax and trade laws and policies; delays in obtaining or failures to obtain required regulatory permits and approvals from government authorities; delays in commencing the Company's proposed drilling program, exploration costs varying significantly from estimates; uncertainties relating to the availability and costs of financing needed to complete exploration activities and demonstrate the feasibility of the Company's projects; the success of future exploration and development initiatives; and other risks involved in the mineral exploration and development industry. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.

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