Roxgold Inc.

Roxgold Inc.
Riverstone Resources Inc.

Riverstone Resources Inc.

September 21, 2011 08:14 ET

Roxgold to Acquire Balance of Interests in Its Burkina Faso Projects From Riverstone Resources Inc.

Roxgold Announces Concurrent $18.5 Million Bought Deal Offering

TORONTO, ONTARIO and VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 21, 2011) -


Roxgold Inc. (TSX VENTURE:ROG) ("Roxgold") and Riverstone Resources Inc. (TSX VENTURE:RVS) ("Riverstone") are pleased to announce that they have entered into a binding letter agreement pursuant to which Roxgold has agreed to acquire the remaining interests (the "Interests") in each of its Yaramoko, Bissa West and Solna projects, a group of advanced stage exploration projects in Burkina Faso, West Africa (the "Projects") from Riverstone (the "Transaction").

Under the terms of the agreement, Riverstone will receive total consideration of approximately $33.5 million, comprising $17 million in cash and 16 million Roxgold common shares valued at $1.03 per common share (based on the closing share price of Roxgold common shares on September 20, 2011).

Roxgold initially held an option to earn up to a 60% interest in each of the Projects and recently fulfilled the requirements to earn a 60% interest in Yaramoko. Under the Transaction Roxgold will concurrently (i) be deemed to have exercised its option in respect of Bissa West and Solna (and satisfied the conditions to such exercise) thereby acquiring a 54% interest in Bissa West and a 60% interest in Solna, and (ii) acquire the remaining 40% interest in each of Yaramoko and Solna, and the remaining 36% interest in Bissa West. As a result, upon closing of the Transaction, Roxgold will own 100% of each of the Yaramoko and Solna Projects, and 90% of Bissa West (which is subject to a 10% carried interest in favour of a previous property owner), positioning it to more effectively advance the Projects.

"This acquisition consolidates ownership of our Yaramoko, Bissa West and Solna assets and creates a dominant exploration package in Burkina Faso," says Robert Sibthorpe, Roxgold's President and CEO. "Yaramoko, Bissa West and Solna are unique, high-quality gold projects and Roxgold will continue to aggressively explore the projects with the objective of advancing them towards production. We value our strong relationship with Riverstone and appreciate the important role that the Riverstone team has played in helping to develop the Bissa West and Yaramoko projects into two of the most exciting projects in the region. We look forward to having Riverstone as a significant shareholder of Roxgold, and to our continued relationship with the Riverstone team."

Michael McInnis, President and CEO of Riverstone added: "We are pleased with the value creation potential that we will retain through our equity position in Roxgold. The consolidation of the Projects will facilitate their advancement and the $17 million cash portion of the consideration will place us in a strong financial position to continue to grow and advance our flagship Karma asset. Bob and his team have done a tremendous job advancing the joint-venture to this stage and we look forward to being a meaningful shareholder of Roxgold."

Closing of the Transaction is subject to receipt of applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature. The Transaction is expected to close two businesses days after all conditions to closing have been met.

Upon closing of the Transaction, Riverstone will own approximately 17.0 million Roxgold common shares, representing approximately 19.3% of Roxgold's outstanding shares after giving effect to the Roxgold offering described below. The Roxgold shares issued to Riverstone as part of the Transaction will be subject to a six month contractual hold period (including the four month statutory hold period).

As part of the Transaction, Roxgold has granted Riverstone the right to participate in future Roxgold equity financings to maintain its then current equity position in Roxgold.

Roxgold has paid Riverstone a non-refundable deposit of C$1 million in cash in order to cover certain of Riverstone's expenses related to the Transaction. A termination payment of C$1 million in cash will be payable by Roxgold to Riverstone if the Transaction does not proceed under certain circumstances.

The Transaction has been unanimously approved by the boards of directors of Roxgold and Riverstone.

Roxgold's financial advisors in respect of the Transaction are Cormark Securities Inc. and Toll Cross Securities Inc. and its legal counsel is Lawson Lundell LLP. Riverstone's financial advisor is National Bank Financial Inc. and its legal counsel is DuMoulin Black LLP.


Concurrently with the execution of a binding agreement with Riverstone in respect of the Transaction, Roxgold has entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc. and including Fraser Mackenzie Limited, GMP Securities L.P., PI Financial Corp., and Pope & Company Limited (the "Underwriters") pursuant to which the Underwriters have agreed to purchase 21.8 million subscription receipts ("Subscription Receipts") of Roxgold on a bought deal private placement basis at a price of $0.85 per Subscription Receipt for aggregate gross proceeds of approximately $18.5 million (the "Offering").

In consideration of the services to be rendered by the Underwriters in connection with the Offering, Roxgold shall pay to the Underwriters a cash fee equal to 6.0% of the gross proceeds (the "Cash Commission") realized by Roxgold in respect of the sale of the Subscription Receipts pursuant to the Offering, 50% of which shall be payable at closing of the Offering and the balance shall be payable upon satisfaction of the escrow release conditions. As additional compensation, the Underwriters will be issued broker warrants (the "Broker Warrants") exercisable to acquire that number of Common Shares as is equal to 6.0% of the aggregate number of Subscription Receipts issued pursuant to the Offering. Each Broker Warrant shall entitle the holder thereof to acquire one Common Share at a price of $0.85 per share for a period of 24 months following closing of the Offering.

Upon closing of the Offering, the gross proceeds thereof will be deposited with an escrow agent in an interest bearing account.

Each Subscription Receipt issued in connection with the Offering shall be deemed to be exercised, without payment of any additional consideration and without further action on the part of the holder thereof, for one common share ("Common Share") of Roxgold upon satisfaction of the following escrow release conditions; (i) all conditions to the closing of the Transaction, have been satisfied other than the payment of the cash portion of the purchase price for the Projects; (ii) Roxgold shall have provided the Underwriters with copies of the duly executed transfers of the arrêtés that compromise the Projects in registrable form, copies of the required synthesis reports and expenditure statements, as well as a an opinion in respect of such transfers in a form acceptable to the Underwriters and their counsel, acting reasonably and (iii) Roxgold and Cormark, on behalf of the Underwriters, shall have delivered a joint notice to the escrow agent, confirming that the escrow release conditions have been satisfied.

If the escrow release conditions are not satisfied prior to 5:00 p.m. (Toronto time) on November 30, 2011, the escrow agent shall return to each holder of Subscription Receipts the aggregate offering price of the Subscription Receipts held by that holder plus the pro rata portion of interest or other income earned on the escrowed funds (less any applicable withholding tax). To the extent that the escrowed funds (plus accrued interest) are not sufficient to purchase all of the Subscription Receipts at the offering price, Roxgold will contribute such amounts as are necessary to satisfy any shortfall.

The offering is scheduled to close on or about October 6, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.

The net proceeds of the offering will be used to fund the cash component of the consideration payable to Riverstone in connection with the Transaction and, as to the balance, for continued exploration of the Projects and for general working capital purposes.

The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Act or unless an exemption from registration is available.

This news release contains forward-looking information regarding the anticipated timing of closing of the Transaction and the Offering. This information is based on information currently available to Riverstone and Roxgold and there is no assurance that actual events or results will meet the expectations as expressed herein. Forward-looking information is based on the assumption that all conditions to the Transaction and Offering will be met or waived and all necessary approvals obtained. Since forward-looking information is based on assumptions and addresses future events and conditions, by its very nature forward-looking information involves inherent risks and uncertainties. Actual results relating to, among other things, closing of the Transaction and the Offering, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; delays in obtaining approvals, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the companies; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect the companies' forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on the companies' forward-looking information. Neither of the companies undertakes to update any forward-looking information that may be made from time to time by it or on its behalf, except in accordance with applicable securities laws.

This news release includes certain "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Without limitation, statements regarding potential mineralization and resources and reserves, exploration results, and future plans and objectives of the companies are forward looking statements that involve various degrees of risk. The following are important factors that could cause the companies' actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital.

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.

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