Rio Verde Minerals Corp.

Rio Verde Minerals Corp.

March 24, 2011 12:14 ET

Rio Verde Minerals Announces MOU with Fosfatar Mineracao Ltda. and Relocation of Sergipe Potash Drill Hole

TORONTO, ONTARIO--(Marketwire - March 24, 2011) - Rio Verde Minerals Corp. ("Rio Verde" or the "Company", unlisted), a privately held company, is pleased to announce that it has entered into a Memorandum of Understanding (the "MOU") dated January 7, 2011 with Fosfatar Mineração Ltda. ("Fosfatar"), a private Brazilian company possessing multiple phosphate assets in the North and Northeastern regions of Brazil. Pursuant to the MOU, Rio Verde will acquire a 100% interest in the Itacupim, Sapucaia, Jandia, Sta Luzia, Cansa Perna, Piriá and Peito de Moça projects (collectively the "Projects"), among other prospective phosphate assets, for a purchase price of up to R$45 million. The acquisition is conditional upon receipt of all required regulatory, board and shareholder approvals, and the negotiation and execution of a definitive agreement (the "Definitive Agreement") between the parties, among other conditions.

The acquisition will be paid out by Rio Verde in two parts with the first instalment being a combination of cash and shares upon signing of the definitive agreement. The second instalment will be paid in shares of Rio Verde payable in two years upon fulfilment of certain conditions. The transaction is predicated on Rio Verde completing a detailed due diligence, which has been underway since the signature date of the MOU, and should be completed by April 2011.

Preliminary analysis indicates that this transaction could add immediate value to Rio Verde, moving the company from pure explorer to producer status, and generating near-term cash flow to be used to self-fund its exploration and development plans. The Company's preliminary timeline estimates that production will commence on its flagship project, the Sapucaia Phosphate Project, in early 2012 at a production rate of 100,000 tpy of phosphate, assuming a positive outcome on the due diligence by Rio Verde.

For the period between the signing of the MOU and the Definitive Agreement, Rio Verde will lend up to R$1.6 million to Fosfatar for the sole purpose of continuing day-to-day business. Rio Verde has the rights to audit Fosfatar's use of this loan and must approve any spending beyond R$50 thousand. Should the Definitive Agreement not be signed, Fosfatar will be required to repay the loan within one year.

It is expected that the acquisition will close concurrently with Rio Verde's Reverse Take-Over (RTO) of EM Resources Inc., projected for May 2011 (see: January 31, 2011 "Rio Verde Minerals Announces LOI on Reverse-Takeover Transaction" Press Release).

Sergipe Potash Project

Rio Verde would like to announce that it has decided to relocate its initial drill hole at the Sergipe Potash Project (see: February 18, 2011 "Rio Verde Minerals Announces Commencement of Drilling at Sergipe Potash Project", Press Release). The drill hole is targeting the Ibura Member Evaporites known to host the targeted potash layers. In this region, it is anticipated that the Ibura Member is at a depth of approximately 1150m from surface. The original hole encountered a cavern at a depth of 280m, at which point it was decided to relocate. The new location is situated approximately 70m away from a pre-existing oil well (closer than the initial drill hole), where significant sylvinite occurrences were previously intercepted. The proximity of the new drill site to the oil well allows for the original plan of twinning the oil well to remain unchanged. This minor relocation will cause minimal additional effort. Rio Verde is looking forward to, and is confident in, the coming results.

About the Fosfatar Project

Fosfatar possesses multiple phosphate assets in the North and Northeastern regions of Brazil, close to both the port city of Belém, in Pará state, and numerous fertilizer consumers. Initial pilot tests by Fosfatar in its flagship project in Pará, the Sapucaia Phosphate Project, indicate the potential to fast-track production of aluminum phosphate at low cost by utilizing a well-tested recovery process used with other minerals. Rio Verde is currently conducting a technical due diligence in the Sapucaia Project to confirm and potentially expand current delineated occurrences (currently non NI 43-101 compliant) and further test the applicable recovery process. 

About Rio Verde

Rio Verde Minerals Corp. is a private company concentrating on the exploration and development of fertilizer projects in Brazil. The Company is focused on becoming the leading Brazilian fertilizer mining and development player, by selecting prime 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 by applying to list 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, a country that imports about 90% and 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.

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.

No stock exchange, securities commission or other regulatory authority has reviewed or approved the contents of this news release or the merits of the proposed transaction.

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