Chapalota Project

Commodity:       Gold, Silver Location:           Sinaloa, Mexico Size:                   91 km² Option:               100% RRI, Available for Option Status:             Completed 2,000 m diamond drill program

The 91 km² Chapalota Gold Project lies along highly productive Western Gold Belt on the western side of the Sierra Madre Occidental Region of Mexico. The Property is located near several past producing mines that are now being redeveloped and expanded. The Property is 50 km to the south of Silvermex’s Rosario deposit, 70 km to the north of Oro Mining’s La Trinidad deposit and 200 km south of US Gold’s Majistral deposit in an abundantly rich mining region of Mexico. Recent work with Guerrero Exploration including IP and soil surveys refined six target areas, two of which have now been drilled. There remain at least four drill target areas and three former mining areas that have not been drill tested on the property.

• Exploration Update:

Riverside and former partner Guerrero Exploration completed a 9 hole, 2,000 m diamond drill program at Chapalota in Summer-Fall 2011. Gold and silver mineralization was intersected at and along strike of both the Leonas and Habas zones. Highlighted intervals from the drill program include:

Drillhole CH-11-02: 1.6 m @ 4.02 g/t Au, 1.5 g/t Ag from 20.3 m, incl. 0.4 m @ 11.4 g/t Au.
Drillhole CH-11-07: 3.0 m @ 11.6 g/t Au, 3.3 g/t Ag from 164.8 m, incl. 0.3 m @ 101.5 g/t Au.
Drillhole CH-11-08: 70.2 m @ 0.05 g/t Au, 11.0 g/t Ag from 0.0 m, incl. 2.6 m @ 52.0 g/t Ag.

During the 2010 exploration program consistent robust gold anomalies were identified using rock chip channel samples, guided in part by previous soil and stream sediment sampling results. These other anomalous zones show potential to become drill targets upon further investigation. The Leona Zone, located at the north end of a structural corridor on the Chapalota Project, particularly, provides a very attractive target for initial drill testing. Previous rock chip sampling along the footwall of the north-south trending structure (similar orientation to other major deposits in the belt) at the Leona Zone returned values up to 5.68 g/t gold, and additional new sampling by Riverside identified the hanging wall and provided a high grade 0.5 metre chip sample of 32.1 g/t Au and 14.3 g/t Ag (RRI12809). Further samples were taken along the immediate extension to the southeast, and returned values up to 3.13 g/t gold (RRI12306) and silver values up to 62.1 g/t (RRI12808)
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• Property Details:

During drilling at the Leonas target, gold was intersected in quartz veining and fault breccia at depth below and along strike 125 m to the south of the outcrop previously reported as returning rock chip assays up to 32.1 g/t Au. A further 900 m to the southeast along the structural corridor drill hole CH-11-07 returned a 30 cm interval @ 101.5 g/t Au from 165.5 m down hole. At the Habas target zone, located 2 kilometers south of Leonas, an interval of deeply weathered, silicified brecciated intrusive returned 70.2 m @ 11.0 g/t Ag with low level Au associated with it.

The assay results from rock samples recently received include higher grades associated with shear zones and through-going fault structures, as well as shear and brittle-ductile fault intersections. Some of the gold highlights from the rock chip channel sampling include 32.1 g/t Au over 0.5m (RRI12809), 5.68 g/t Au over 1.5m (RRI09040), 3.13 g/t Au over 1m (RRI12306), and 2.3 g/t Au over 0.9m (RRI09036).

The previous stream sediment program on the Chapalota Project returned results from < 5 ppb up to 1.0 g/t Au along with lower grades of copper and molybdenum. The gold values appear to be associated with mesothermal orogenic-style quartz veins and are potentially favourable for open pit mining operations. Zones of stockwork quartz veining associated with 10m to 100m wide shear zones, with 100m to 1 km strike extents, are being identified within the main north-west trending structural corridor on the property.

The detailed soil geochemical sampling program previously carried out by Riverside returned encouraging gold values (< 5 ppb up to 3.98 g/t), indicating the presence of a broad north-west trending corridor of anomalous gold, arsenic and molybdenum values. This mineralized trend corresponds to an interpreted north-west trending structural corridor that is approximately 10 km long and 2.5 km wide. This structural corridor has been interpreted by Riverside geologists as a possible broad shear zone with the potential to host a significant orogenic gold system. Highlights from the soil sampling program include 70 samples returning gold values in excess of 0.1 g/t Au (100 ppb) with 14 samples returning gold values in excess of 0.5 g/t Au, including 3.9 g/t, 2.86 g/t and 2.68 g/t Au.
 

• Drill Results:

Riverside, with its former partner Guerrero Exploration Inc., has completed a 2,000 m diamond drill program on the Chapalota Project.

• Option Agreement:

Chapalota was previously under option agreement with Guerrero Exploration Inc. It has since been returned to Riverside Resources and is now available for option.