Riverside Resources (RRI.V) has been quiet for several months but released two excellent updates this week. On Monday, Riverside announced an update on the work program with BHP (BHP) where both companies are looking for large copper deposits in Mexico’s Sonora province. Time sure does fly as it has been a year since the initial agreement with BHP has been signed, so we were due for an extensive update.
Now the first year has been completed, Riverside has provided a superficial overview of where the joint venture stands at. Five projects have been retained as part of the asset portfolio in the Project Generation Phase and those projects are now being advanced to see if they meet the criteria to become a ‘defined project’ and to leave no stone unturned, BHP has increased the exploration budget by almost 50% to US$720,000.
We will discuss the BHP joint venture into more detail shortly, but the most important news of the week was Riverside attracting Hochschild Mining (HOC.L) as a joint venture partner on the Los Cuarentas project in Mexico. We provided an extensive update on Los Cuarentas earlier this year (which you can re-read here) outlining the reasons why the project seems quite interesting, and it’s exciting to see Riverside attracting a well-respected mining company to spend some dollars on the project.
Hochschild can earn an initial 51% interest in the project by spending US$8M on exploration expenditures during an initial 5 year period. If Hochschild completes this earn-in deal, a 51/49 joint venture will be formed wherein Hochschild can earn an additional 24% by spending US$3M on exploration and completing a feasibility study where after the Cuarentas ownership will revert to a 75/25 ratio at which point Hochschild can buy Riverside’s 25% stake for US$20M in cash and issuing a 1% NSR.
We will shortly discuss both the BHP joint venture and Hochschild agreement in more detail as we are also anticipating to learning the final date for the spinoff of Capitan Mining which will hold the Peñoles gold-silver project in Mexico. As a reminder every share of Riverside Resources will entitle you to receive 0.2767 shares of Capitan Mining (so 10,000 shares of Riverside Resources will get you 2,767 shares of Capitan Mining) once the spinout becomes effective (expected in July).
Disclosure: The author has a long position in Riverside Resources. Riverside is a sponsor of the website.