Rio Verde Minerals Development Corp.

Rio Verde Minerals Development Corp.

August 30, 2011 07:30 ET

Rio Verde Minerals Announces Second Quarter 2011 Results and Provides Update on its Sergipe Potash Project

TORONTO, ONTARIO--(Marketwire - Aug. 30, 2011) - Rio Verde Minerals Development Corp. (TSX:RVD) ("Rio Verde" or the "Company") has filed its interim operational and financial results for the second quarter ending June 30, 2011. The Company has also filed interim financial statements and accompanying Management's Discussion and Analysis for Rio Verde Holdings Inc. (formerly Rio Verde Minerals Corp.), the Company's wholly-owned subsidiary which was acquired pursuant to the plan of arrangement (the "Arrangement") described below. Interim Financial Statements and the accompanying Management's Discussion and Analysis ("MD&A") for both Rio Verde Minerals Development Corp. and Rio Verde Holdings Inc. have been filed on SEDAR. The Company is pleased to provide a general overview of some important milestones to date and an update for its ongoing work program at the Sergipe Potash Project ('Project").

During the second quarter of 2011, Rio Verde Holdings Inc. incurred a net loss of CDN$748,172 (CDN$0.01 per share). Among the factors that contributed to a net loss in this period were non-exploration expenses, such as legal fees, audit and accounting charges, and office and administration charges. In the period, capitalized acquisition and exploration expenses of the Sergipe Potash Project and the Phosphate Project amounted to CDN$2,076,717.

As at June 30, 2011, Rio Verde Holdings Inc. had working capital of CDN$14,796,598. As of the date of this press release the Company's cash position is approximately CDN$12 million. In addition to its working capital position, the issuance in July 2011 of the warrant and broker warrant components of the June 27, 2011 private placement of subscription receipts by Rio Verde Minerals Corporation allows for an additional CDN$14,811,350 in gross proceeds to the Company to be raised in the event that all of the warrants are exercised.

Corporate Development Highlights

  • In June and July 2011, Rio Verde Minerals Corp. closed two rounds of financing for approximately CDN$10.8 million and CDN$560,000 of gross proceeds respectively. This financing was in addition to the CDN$10 million raised in a private equity placement in December 2010, for a total of about CDN$21.3 million raised by Rio Verde since inception.

  • On July 28, 2011, Rio Verde completed the plan of arrangement involving Rio Verde Minerals Corp., EM Resources Inc., EM Subco (BVI) Inc. and Talon Metals Corp, as announced in the August 2, 2011 press release.

  • On August 3, 2011, Rio Verde commenced trading on the Toronto Stock Exchange under the symbol RVD.

  • On August 4, 2011 Rio Verde entered into a definitive share purchase agreement to acquire 100% of the operating interest in Fosfatar Mineração Ltda., a private company with phosphate assets in the north and northeastern regions of Brazil. Rio Verde intends to commence production at the Fosfatar Phosphate Project in 2012.

Sergipe Potash Project Update

The work program at Rio Verde's Sergipe Potash Project is progressing on schedule. The Company has contracted a new driller, SONDAR Mineração, Perfuração e Sondagem Ltda, that has proven experience in the Sergipe basin, and drilling has commenced on the project's first target, the Sergi Target. At this target, Rio Verde is twinning an old Petrobras hole located 115m away, which had previously demonstrated potash mineralization of up to 33m. The initial program consists of drilling 4,050m, split into 3 holes of 1,350m each, with each hole taking approximately 90 days to be completed and analyzed. Results from the first drill hole are expected in October 2011, and the Company's first potash resource is anticipated within the next nine months.

The Sergipe Potash Project is located in the development-friendly state of Sergipe, in an area with established infrastructure, and is adjacent to Brazil's only producing potash mine, Vale's Taquari-Vassouras mine. Rio Verde has identified 7 potash drill-ready targets which were selected following an extensive remodeling of the geology of the Sergipe basin, based on approximately 234 line km of 2D seismic data, and the acquisition of geological data from 286 historical oil wells in the area.

About Rio Verde

Rio Verde Minerals Development Corp. (TSX:RVD) is a publicly traded company focused on the exploration and development of fertilizer projects in Brazil. The Company's goal is to become the leading Brazilian fertilizer mining and development company by selecting prime assets that are near infrastructure, with known mineralization, in regions without significant social or environmental issues. The Company plans to fast-track the best projects to development to create stakeholder value.

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% of its potash and 50% of its phosphate needs. Rio Verde's near-term primary objective is to focus its potash exploration on establishing a Canadian National Instrument 43-101 resource.

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 which 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.

Contact Information

  • Rio Verde Minerals Development Corp.
    Stephen Keith
    President & CEO
    +1 (416) 368-8288

    Rio Verde Minerals Development Corp.
    Alex Penha
    VP Corporate Development
    +1 (416) 368-1573