Esperanza Enters into Agreement with Pan American Silver to Acquire Three Advanced Gold Projects, Pan American Invests $35

Esperanza Enters into Agreement with Pan American Silver to Acquire Three 
Advanced Gold Projects, Pan American Invests $35 Million and
Provides a $15 Million Standby Credit Facility to Esperanza 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/25/13 -- Esperanza
Resources Corp. (TSX VENTURE:EPZ)(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 
Pursuant to the Agreement, the Company will acquire the following
advanced stage gold properties from Pan American;  


 
--  The La Bolsa gold project in Sonora, Mexico

 
The La Bolsa gold project is a permitted oxide gold deposit located
in northern Sonora, Mexico. La Bolsa is currently engineered for
construction as an 8,500 tonne per day conventional open-pit mine
with low cost heap-leach processing capable of producing over 40,000
ounces of gold per year at robust economics. The known mineralized
deposit at La Bolsa remains open, both down-dip and along strike with
additional prospective targets within the existing claim blocks. 


 
--  The Pico Machay gold project in Huancavelica, Peru

 
The Pico Machay gold project is an epithermal gold deposit located in
the Department of Huancavelica in southern Peru. Metallurgical
testing to date has confirmed that gold in the oxide and mixed zones
is expected to leach readily and studies to date have indicated the
deposit is conducive to the establishment of a low capital and low
cost heap leach operation. 


 
--  The Calcatreu gold project in Rio Negro, Argentina

 
The Calcatreu gold project is a high-grade epithermal gold and silver
deposit located in the province of Rio Negro in Argentina. A 2007
study on the project contemplates mining gold and silver bearing ore
from open-pit mines and treating it in a conventional crushing,
grinding, and carbon-in-leach process plant. The project is highly
prospective with the primary resource bearing vein system remaining
open down dip and the structure hosting it remaining open along
strike with multiple un-drilled vein targets existing within the
overall land package. 
The consideration to be paid to Pan American for the Acquisition will
be 50,900,000 common shares and 10,000,000 warrants (each a
"Warrant") of Esperanza. Each Warrant will entitle Pan American to
purchase an additional common share of Esperanza at a price of $1.80
for a period commencing on the date of issuance and expiring on May
24, 2017. 
Private Placement Financing 
The Company has also arranged a non-brokered private placement
financing with Pan American for 20,600,000 Common Shares 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. Gross proceeds
from the Offering will total $35,020,000. 
The net proceeds from the sale of the Common Shares will be used
primarily to advance the Company's gold projects and for general
working capital purposes. 
Standby Convertible Facility 
Pursuant to the Agreement, the Company and Pan American have
committed to enter into a $15,000,000 standby convertible credit
facility. Upon execution, the Company will have up to 24 months to
draw on the Standby Facility from Pan American and the Standby
Facility itself will have a total term of three years. Additional
terms of the Standby Facility will be determined in the context of
the market in due course. 
Additional Transaction Terms 
The Agreement will also provide for additional terms of the
Transaction which include: 


 
--  Provided that Pan American's shareholdings of Esperanza are equal to or
    exceed 10% of Esperanza's outstanding common shares, Pan American being
    entitled to two nominees for election to the Board of Directors of
    Esperanza;
 
--  The granting by Pan American to Esperanza of certain investor rights in
    respect of its shareholdings in Esperanza, including certain rights of
    orderly dispositions of shareholdings; and
 
--  Esperanza granting to Pan American certain qualification rights in
    respect of Pan American's shareholdings in Esperanza.
 
--  Pan American shall be entitled to a Right of First Refusal in respect of
    any silver stream, silver royalty or silver based off-take transactions
    contemplated by Esperanza, provided Pan American continues to hold a 10%
    or greater interest in Esperanza. 

 
Closing of the Transaction 
The parties will negotiate and execute subsequent definitive
documentation in respect of the Transaction. The Transaction,
including the Offering, is expected to close during the second
quarter of 2013 and is subject to certain conditions including, but
not limited to, the closing of the Acquisition, receipt of all
necessary regulatory approvals, the approval of the shareholders of
Esperanza and the approval of the TSX Venture Exchange. 
The Transaction has been endorsed by the board of directors of both
Esperanza and Pan American and will be subject to the approval of the
shareholders of Esperanza at an annual and special shareholder
meeting of Esperanza called to consider the Transaction, among other
items. 
The board of directors of Esperanza has unanimously determined that
the proposed Transaction is fair and in the best interests of the
Company and its shareholders and will recommend that shareholders
vote in favor of the proposed transaction. Haywood Securities Inc.
has provided an independent fairness opinion to the board of
directors of Esperanza to the effect that the Transaction is fair,
from a financial point of view, to Esperanza. Stikeman Elliott LLP
acted as legal counsel to Esperanza. 
Change in Management 
Esperanza also reports that Laurence Morris has resigned from the
role of Chief Operating Officer of the Company. The Company would
like to thank Mr. Morris for his efforts and wish him well in his
future endeavors. The Company is in discussions with qualified
candidates and expects to fill the vacancy shortly. 
Conference Call 
Esperanza will host an investor conference call set to begin at 11:30
AM Eastern Standard Time today, February 25, 2013 to discuss the
Transaction. The call can be accessed by dialling 1-866-226-1793
(toll free) or 1-416-340-2218. The call will be available for replay
approximately one hour after the completion of the conference call by
dialling 1-800-408-3053 (toll free) or 1-905-694-9451 (Passcode
3242298) until March 11, 2013. 
About Esperanza  
Esperanza is a precious metals exploration and development company
focused on advancing its principal property, the wholly-owned
Esperanza gold project (formerly referred to as the Cerro Jumil gold
project) in Morelos State, Mexico. Information regarding the Company
and the Esperanza gold project is available on the Company's website
at www.epzresources.com and under the Company's profile at SEDAR
(www.sedar.com). 
William Pincus, M.Sc.,C.P.G. and Chairman of Esperanza is the
"Qualified Person", as that term is defined in National Instrument
43-101 - Standards of Disclosure for Mineral Projects responsible for
the contents of this news release. 
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. For additional information with
respect to the assumptions and parameters to the technical
information disclosed herein refer to the following technical
reports: (i) "Preliminary Economic Assessment Update 2011 Cerro Jumil
Project, Morelos, Mexico" dated September 2011 and Amended in January
2012, and "Cerro Jumil Project, 2012 Mineral Resource Estimate" dated
October 26, 2012, both of which can be found under the Company's
profile at www.sedar.com; (ii) "Technical Report La Bolsa Project
Pre-Feasibility Study" dated January 10, 2011, which can be found
under the profile of Minefinders Corporation Ltd. at www.sedar.com;
(iii) "Calcatreu Gold Project" dated April 5, 2007, which can be
found under the profile of Aquiline Resources Inc. at www.sedar.com;
and (iv) "Independent Technical Report and Resource Estimate Pico
Michay Gold Deposit Huancavelica Province Peru" dated July 14, 2011,
which can be found under the profile of Treasury Metals Incorporated
at www.sedar.com.  
This news release does not constitute an offer to sell or a
solicitation of an offer to sell any of the securities in the United
States. The securities have not been and will not be registered under
the United States Securities Act of 1933, as amended or any state
securities laws and may not be offered or sold within the United
States or to U.S. persons unless registered under the United States
Securities Act of 1933 and applicable state securities laws or an
exemption from such registration is available. 
Forward Looking Statements 
Certain statements and information contained in this press release
constitute "forward-looking statements" within the meaning of
applicable U.S. securities laws and "forward-looking information"
within the meaning of applicable Canadian securities laws, which we
refer to collectively as "forward-looking statements". The United
States Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. Forward-looking
statements are statements and information regarding possible events,
conditions or results of operations that are based upon assumptions
about future economic conditions and courses of action. All
statements and information other than statements of historical fact
may be forward-looking statements. In some cases, forward-looking
statements can be identified by the use of words such as "seek",
"expect", "anticipate", "budget", "plan", "estimate", "continue",
"forecast", "intend", "believe", "predict", "potential", "target",
"may", "could", "would", "might", "will" and similar words or phrases
(including negative variations) suggesting future outcomes or
statements regarding an outlook. Forward-looking statements in this
and other press releases include, but are not limited to statements
and information regarding: the transactions (the "Transaction")
contemplated in the binding letter agreement between the Company and
Pan American Silver Corp. ("PAS"), the closing of the Transaction,
Company's exploration and development plans, including anticipated
costs and timing thereof; the Company's plans for growth through
exploration activities, acquisitions or otherwise; the granting of
stock options, and expectations regarding future maintenance and
capital expenditures, and working capital requirements. Such
forward-looking statements are based on a number of material factors
and assumptions and involve known and unknown risks, uncertainties
and other factors which may cause actual results, performance or
achievements, or industry results, to differ materially from those
anticipated in such forward-looking information. You are cautioned
not to place undue reliance on forward-looking statements contained
in this press release. Some of the known risks and other factors
which could cause actual results to differ materially from those
expressed in the forward-looking statements are described in the
section entitled "Risk Factors" in our Annual Report on Form 20-F
filed with the U.S. Securities and Exchange Commission, which is
available at www.sec.gov and is filed on SEDAR at www.sedar.com. The
Company undertakes no obligation to update or revise any
forward-looking statements included in this press release if these
beliefs, estimates and opinions or other circumstances should change,
except as otherwise required by applicable law. 
Neither the 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. 
Contacts:
Esperanza Resources Corp.
Simon Venhuizen
Director, Investor Relations
604-336-8194 or Toll Free:  1-866-890-5509
simon@epzresources.com
www.epzresources.com