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Revolution Agrees to Acquire 100% Interest in Lake Shore Gold's Mexican Portfolio

Revolution Resources Corp. is pleased to report that the Company has entered into a purchase and sale agreement (the "New Agreement") with Lake Shore Gold Corp. ("Lake Shore Gold") to acquire 100% of Lake Shore Gold's interests in the Mexico property portfolio, which consists of the Universo property, Montaña de Oro, La Bufa and Lluvia de Oro properties totaling over 400,000 hectares in two historic mining regions of Mexico.

Revolution's President and CEO, Aaron Keay, stated: "We believe this arrangement makes sense for both Revolution and Lake Shore Gold. The acquisition of a 100% interest in the property portfolio gives us flexibility to form strategic partnerships with third parties to advance these highly prospective gold and silver regions in Mexico, while significantly decreasing our financial commitments."

Tony Makuch, President and CEO of Lake Shore Gold, commented: "With this transaction, we are positioning these properties with a very strong and experienced group who can accelerate the time from concept to discovery, and unlock value for both Revolution and Lake Shore Gold shareholders."

Under the terms of the New Agreement, Revolution is no longer required to exercise its existing option (see Revolution's news releases dated September 15th, 2011 and July 26th, 2012), and on closing will immediately acquire the subsidiary of Lake Shore Gold that holds 100% of its rights, title and interest in the Mexico properties, subject to certain net smelter return royalties ("NSR"). The consideration payable by Revolution under the New Agreement is:

20,000,000 common shares of Revolution, issuable on closing; subject to certain sale restrictions as described below.

the grant to Lake Shore Gold of the following royalty interests:

  •        a 2% NSR on the Universo property;
  •        a 3.5% NSR on the properties comprising the Montaña de Oro project forming part of the Montaña de Oro property;
  •        a 2.5% NSR on the properties comprising the La Bufa project forming part of the Montaña de Oro property; and
  •        a 2.0% NSR on the properties comprising the Lluvia de Oro project forming part of the Montaña de Oro property,

Subject in each case to certain rights of Revolution to repurchase a portion of the NSR; and

  •   on or before December 31, 2017, CDN$5,000,000 in cash or common shares valued at the greater of $0.20 and a five day volume weighted average trading price.

In addition to the applicable four-month hold period under Canadian securities laws, Lake Shore Gold has agreed to certain restrictions on the transfer of shares issued to it under the New Agreement for a period of 18 months following the date of issuance. The New Agreement also contains a standstill provision that prohibits Lake Shore Gold from acquiring additional shares and taking certain other actions without Revolution's consent for 18 months following the closing date.

In addition, on closing and through 2014, Lake Shore Gold will have the right to at least two nominees to the board of directors of Revolution and Lake Shore Gold will continue to have rights to appoint one or more nominees depending on its level of ownership for so long as Lake Shore Gold holds at least 5% of the outstanding Revolution shares.

Completion of the transaction is subject to acceptance of the Toronto Stock Exchange, which Revolution anticipates will involve approval of the shareholders of Revolution by ordinary resolution. Assuming no Revolution shares are acquired by Lake Shore Gold or issued prior to closing, the 20,000,000 common shares issuable by Revolution to Lake Shore Gold on closing will result in Lake Shore Gold holding a total of 26,713,740 Revolution shares or 22.7% of the outstanding Revolution shares.

Source: http://www.revolutionresourcescorp.com/

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