Riverstone
Grants Financing and Option Rights to Teck Cominco
April 29, 2008
Riverstone
Resources Inc. ("Riverstone") (TSXV:RVS,
Frankfurt:3RV) is pleased to announce that it has entered into a
Memorandum of Understanding with Teck Cominco Limited ("Teck Cominco"),
pursuant to which Teck Cominco will subscribe for 3.5 million units of
Riverstone on a private placement basis at a price of $0.60 per unit (the
"Placement"). Each unit will comprise one share and one
share purchase warrant exercisable for a period of two years from the
date of issue to acquire one additional common share at a price of $1.20.
The agreement is subject to certain terms and conditions including TSX
Venture Exchange approval and due diligence by Teck Cominco.
In consideration of the Placement, Riverstone will grant to Teck Cominco
a five year option to earn up to a 51% in the Company's interest in its
Liguidi Malguem ("Liguidi") gold property in Burkina Faso, West
Africa through work expenditures of up to $8 million.
"We are delighted to welcome Teck Cominco as a shareholder and joint
venture partner," said M.D. McInnis, President and CEO of
Riverstone. "Teck Cominco is an acknowledged leader in the mining
industry and this business arrangement will help accelerate the development
of our projects in Burkina Faso. This is Teck Cominco's first venture
into Burkina Faso and we are looking forward to a mutually beneficial
relationship."
Prior to subscription for the Placement, Teck Cominco has agreed, upon
receipt of TSX Venture Exchange approval, to advance to Riverstone
$300,000 as a non-interest bearing loan prior to completion of due
diligence within 30 days. Teck Cominco can elect to extend its due
diligence period from 30 to 45 days by advancing a further $200,000 to
Riverstone. Such advances shall be considered part of the
subscription cost for the Placement. If Teck Cominco does not elect to
proceed with the Placement and Option, the amounts advanced to Riverstone
will be repayable within six months in cash or, at Riverstone's election,
by the issuance of Riverstone shares.
Provided Teck Cominco is satisfied after completing its due diligence,
Teck Cominco would proceed with subscription for the Placement in two
equal tranches of $1,050,000 each. The second tranche will be completed
upon transfer of the permit into Riverstone's Burkinabé
subsidiary. Riverstone will be obliged to spend a minimum of 25% of the
Placement proceeds on an initial work program on the Liguidi property
within 12 months of the initial Placement tranche.
Following the results of the initial work program, Teck Cominco will be
entitled to acquire an initial 35% interest in the Liguidi property by
exercising sufficient share purchase warrants to provide Riverstone with
at least $2 million for general corporate purposes and by incurring an
aggregate of $4 million in expenditures over 3 years, including not less
than $750,000 in year one of the option period.
After acquiring a 35% interest in the property, Teck Cominco will have
the right to acquire a further 16% interest in the property (for an
aggregate 51%) by funding an additional $4 million in expenditures on the
property during the fourth and fifth years of the option.
After earning a 51% interest or, if Teck Cominco elects to cease sole
funding, after earning a 35% interest, the property will be explored and
developed as a corporate joint venture with each party contributing its
pro rata share of expenditures. A party whose interest in the joint
venture falls below 10% due to dilution caused by failure to fund its pro
rata share of expenditures, shall have its interest converted to a 5% net
profits royalty.
After the private placement is completed, Teck Cominco will have a right
to participate in future equity financings of Riverstone on the same
terms as arm's length investors to maintain its percentage shareholdings
on a non-diluted basis until the earlier of termination or formation of a
joint venture.
The entire agreement is subject to TSX Venture Exchange approval. Teck
Cominco is not obligated to proceed with the Placement or to acquire the
Option unless it is satisfied that the Liguidi property meets its
criteria for investment.
Riverstone has earned an 80% interest in the Liguidi property from Orex
Ressources SARL, a Burkinabé private company, and holds its
interest through a joint venture company. Recent work at Liguidi has
resulted in the discovery of several anomalous rock boulder zones up to 1
km in length within a 13 km gold-in-soils geochemical anomaly (see news
release dated February 11, 2008).
ON BEHALF OF THE BOARD
"Michael D. McInnis"
___________________________
Michael D. McInnis, P.Eng.,
President & CEO
For further information contact:
The
TSX Venture Exchange does not accept responsibility for the adequacy or
the accuracy of this release.
Certain statements made and information contained in this news release
and elsewhere constitutes "forward-looking information" within
the meaning of Canadian securities acts. Forward-looking statements are
subject to a variety of risks and uncertainties which could cause actual
events or results to differ from those reflected in the forward-looking
statements, including, without limitation, risks and uncertainties
relating to the interpretation of drill results and the estimation of
mineral resources, the geology, grade and continuity of mineral deposits,
the possibility that future exploration, development results will not be
consistent with the Company's expectations, accidents, equipment
breakdowns, title matters and surface access, labour disputes, the
potential for delays in exploration activities, the potential for
unexpected costs and expenses, commodity price fluctuations, currency
fluctuations, failure to obtain adequate financing on a timely basis and
other risks and uncertainties, including those described under Risk
Factors in each management discussion and analysis. In addition,
forward-looking information is based on various assumptions including,
without limitation, the expectations and beliefs of management, the
assumed long term price of gold, that the Company will receive required
permits and access to surface rights, that the Company can access
financing, appropriate equipment and sufficient labour and that the
political environment within Burkina Faso will continue to support the
development of environmentally safe mining projects. Should one or more
of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those described in forward-looking statements. Accordingly, readers are
advised not to place undue reliance on forward-looking statements.
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