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Apr. 13, 2011 (Filing Services Canada) -- Mexigold Corp. (MAU - TSX Venture), announces that, further to its news release dated February 10, 2011, it has entered into a definitive option agreement (the "Agreement") dated March 18, 2011, subject to regulatory approval, with Riverside Resources Inc. ("Riverside") to acquire up to a 75% interest in three drill ready exploration properties (the "Catrina", "Escondida" and "Pedernal" properties) located in Durango-Zacatecas, Mexico (the "Durango Properties"). Riverside is the 100% registered and beneficial owner of the Durango Properties, comprising an area of over 76,000 hectares. The Durango Properties are strategically located in the rich producing Mesa Central region of Mexico.
Terms of the Option
In consideration for the Company's acquisition of a 75% undivided interest in the Durango Properties (the "Option"), the Company must meet the following obligations:
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Due Dates Cash Payments Shares(1) Exploration
Expenditures
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On approval of the $50,000 (of 200,000 Nil
Agreement by the which $25,000
TSX Venture Exchange has been paid)
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6 months from the Nil 200,000 $200,000
date of the Agreement
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12 months from the $100,000 400,000 $1,000,000
date of the Agreement
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24 months from the date $150,000 600,000 $1,000,000
of the Agreement
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36 months from the $200,000 1,200,000 $1,800,000
date of the Agreement
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Totals $500,000 2,600,000 $4,000,000
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The share issuances indicated assume a minimum value of $0.50 per share. In the event that at a share issuance date or the hold period expiry date, the market value of the common shares (calculated as the 30-day volume weighted average) is less than $0.50, then the number of shares to be issued on that date or the number of shares becoming free on that date, shall be adjusted to equal the number that results when the original number of shares contemplated above is multiplied by $0.50 and the resulting number is divided by the actual market value at that date.
The Durango Properties
The Durango Properties are located in the States of Durango and Zacatecas, Mexico. The Durango Properties are comprised of the "Catrina", "Escondida" and "Pedernal" mining claims covering over 76,000 hectares.
Extensive groundwork has been conducted by Riverside's geologists identifying multiple drill ready targets.
Riverside completed the development of a strategic portfolio of five drill-ready, gold-silver projects (including the three in which the Company will be earning an interest) in the Mesa central region of Durango-Zacatecas, Mexico. All of these projects were developed through a completed exploration alliance with Kinross Gold Corp., the culmination of 2-1/2 years of generative exploration and targeting through the Riverside-Kinross Exploration alliance and include the top projects out of more than 220 anomalous areas that were evaluated.
The Catrina Gold Project is comprised of over 14,000 hectares and located within the prolific gold-silver belt of the Mesa Central Region in Durango. It is in close proximity to numerous present and past producing gold and silver mines, such as the Penoles Mining Camp and the Kilometer 66 mine. Riverside's exploration program on the Catrina property identified four principal target zones by using IP surveys. A first phase 10 hole 2,600 meter drill program has been designed to test geology and geochemistry of the system. Geochemistry of the alteration zone shows a strong gold anomaly extending over an area of more than 3 km2. The geophysical IP response at Catrina is comparable in scale to the Camino Rojo and Penasquito projects which also have similar trace element geochemistry (gold-silver-zinc-lead). The combination of a strong geophysical IP response, regional magnetic highs associated with intrusions, encouraging geochemistry, and thin cover makes the Catrina Project a high-priority target moving forward.
The Escondida Gold Project is comprised of over 37,000 hectares in Northern Zacatecas, situated within a NW trending structural corridor hosting mines such as Castillo, San Sebestian and Miguel Auza. Riverside completed an initial exploration program on the property that included detailed mapping, sampling, structural analysis and IP geophysics. Two east-west striking mineralized trends were identified at Escondida within a 2.1 km by 1.3 km zone defined as the primary drill target area. These mineralized structures were identified through a geophysical IP survey with the target area remaining wide open in multiple directions. The outcropping, cross cutting mineralized structures and projection undercover show many similarities to the nearby Valenciana and San Jose de Reyes mining districts. Several target areas have been delineated for immediate follow up. The Escondida project is immediately north of Silver Standard Mines' Valenciana district and south of Penole's San Jose de Reyes Mine. A first phase 10 hole 2,500 meter drill program has been recommended.
The Pedernal Gold Project is comprised of over 24,000 hectares, located 60 kilometres north of the town of Rodeo, and immediately west of the Penoles District in northern Durango State. The Pedernal project contains an extensive network of veins with strong alteration and indications of an upper part of an epithermal/porphyry style system. Recent exploration by Riverside identified four principal northwest trending mineralized zones with up to 3.5 km of continuous veining and total vein strike lengths of up to 12 km. Individual veins at surface have a true thickness of up to 6 meters with contiguous zones showing up to 30 meters in thickness in vein clusters. The prospect covers a broad zone comprising an extensive network of silica veins and breccia zones. The introduction of high-level epithermal silica with anomalous gold values is seen in a series of sub-parallel vein/structure systems forming silica ledges. The silica ledges and epithermal vein textures coupled with finely disseminated sulphides and anomalous gold values make this area highly prospective. A first phase 4 hole 1,000 meter drill program has been recommended to test the potential depth of the system.
John Harrop, P. Geo, FGS, is the Company's Qualified Person and has reviewed and takes responsibility for the technical contents of this news release.
Mexican Subsidiary
The Company announces that it has incorporated a Mexican subsidiary (Mexigold Resources S.A. de C.V.) through which it will earn up to 75% interest in the Durango properties and through which it will conduct exploration activities.
Private Placement
The Company announces that it has arranged a private placement of up to 10 million units at a price of $0.32 per unit ("Units"). Each Unit consists of one common share and one share purchase warrant which will entitle the holder to purchase an additional common share at a price of $0.50 per unit for a period of two years (a "Warrant"). A portion of the private placement will be brokered and the Company has retained Jordan Capital Markets Inc. as its agent in this regard. A finder's fee of 7% in cash is payable on the private placement. The brokered portion of the private placement also includes 10% Agent's warrants having the same terms as the private placement Warrants.
The Agreement and the private placement are subject to TSX Venture Exchange approval.
ON BEHALF OF THE BOARD OF DIRECTORS
"Peeyush Varshney"
Peeyush Varshney, LL.B.
President & CEO
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.
Contact: Investor Relations
Phone (604) 684-2181
info@mexigoldcorp.com
Suite 2050-1055 W. Georgia St., PO Box 11121
Vancouver, BC Canada V6E 3P3
Phone (604) 684-2181
Fax (604) 682-4768
To view this release as a web page, please click on the following link:
http://www.usetdas.com/pr/mexigold04142011.htm
Source: Mexigold Corp. TSX-V (MAU) www.varshneycapital.com
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