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Tuesday, 02/26/2013 1:20:18 PM

Tuesday, February 26, 2013 1:20:18 PM

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Esperanza Enters into Agreement with Pan American Silver to AcquireThree Advanced Gold Projects, Pan American Invests $35 Million andProvides a $15 Million Standby Credit Facility to Esperanza

Feb 25, 2013 08:49:36 (ET)


VANCOUVER, BRITISH COLUMBIA, Feb 25, 2013 (MARKETWIRE via COMTEX) -- Esperanza Resources Corp. (otcqx:ESPZF) ("Esperanza" or the "Company") today announced that the Company has entered into a binding letter agreement (the "Agreement") with Pan American Silver ("Pan American") whereby:


-- Esperanza will acquire a portfolio of advanced stage gold projects
including the La Bolsa project in Mexico, the Pico Machay project in
Peru, the Calcatreu project in Argentina and related exploration
properties from Pan American for consideration of 50,900,000 common
shares and 10,000,000 warrants of Esperanza (the "Acquisition");
-- Pan American will subscribe for 20,600,000 Common Shares of Esperanza at
a price of $1.70 per Common Share representing a premium of 29% to the
20-day volume weighted average share price on the TSX Venture Exchange
and a 48% premium to the closing price on February 22, 2013 (the
"Offering"); and
-- Esperanza and Pan American have committed to enter into a $15,000,000
standby convertible credit facility (the "Standby Facility" and,
collectively with the Acquisition and the Offering, the "Transaction").



Transaction Highlights


-- Creates a multi-asset, financially strong, growth oriented, gold
development Company fully funded to put its first gold mine into
production.
-- Increases Esperanza's consolidated measured and indicated resource base
to 2.8 million ounces of gold and 28.9 million ounces of silver with
additional inferred resources of 1.1 million ounces of gold and 8.0
million ounces of silver.
-- Greater scale and financial strength with approximately $75 million in
cash and marketable securities and confirmed access to additional
financing.



Greg Smith, President and CEO of Esperanza, commented "This transaction sets the stage for the creation of a significant low-cost, multi-asset, precious metals producer. While the Esperanza gold project remains our flagship asset, the addition of the permitted and build-ready La Bolsa gold project provides an additional option for near-term gold production. Additionally, the Pico Machay and Calcatreu gold projects provide a meaningful pipeline for continued production growth.

Mr. Smith continued, "We are pleased to welcome Pan American as a significant and supportive shareholder. Further, we welcome Geoff Burns, President and CEO of Pan American, Steve Busby, COO of Pan American and Michael Steinmann, EVP Corporate Development and Geology of Pan American to Esperanza's board of directors. The technical and strategic expertise they will bring to Esperanza will be invaluable as we construct our first mine and as we grow our producing asset base."

Geoff Burns, President and CEO of Pan American, commented, "We are extremely pleased to team with Esperanza in creating a significant new gold producer. Our non-core La Bolsa, Pico Machay and Calcatreu gold projects are an excellent strategic fit with the low cost Esperanza project. The combined portfolio clearly has the potential to create a meaningful gold production base, providing a value creating proposition that Pan American can participate in through our shareholding in Esperanza. Esperanza will be a well-funded, multi-asset, gold focused development company with an established market presence and solid management team."

The Acquisition

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