Recently, The Deep Dive had the pleasure of sitting down with John-Mark Staude, CEO and President of Riverside Resources (TSXV: RRI) (OTC: RVSDF). Within, we were able to pick John-Mark’s brain on the future of Riverside, how they intend to create value for shareholders, while also addressing the recent successful spinout of Capitan Mining (TSXV: CAPT).
Here’s the result of that discussion, in the form of a classic Q&A period.
1. What is the overall mandate for Riverside Resources?
Riverside mandate is to deliver exceptional value to shareholders with relatively less risk by using partners to fund and de-risk assets that Riverside owns or controls. Riverside works to retain royalties on projects and progress these with partners thus limiting the share dilution and providing the value from upside of discovery and development.
2. The most recent spin out, a silver-gold district in Mexico, is called Capitan Mining, when will that begin trading?
Capitan Mining will begin trading the second week of September with a strong cash position of over $3.8M and a business plan of development where Riverside retains a 1% NSR.
3. Usually Project Generators (PG) sign deals with other companies, where there is a commitment to spend money, in many cases the companies do not earn in and instead return the property to the PG. Does this gold market change how you negotiate for sales of your projects?
The current environment with gold trading at all-time highs has provided Riverside an opportunity to solidify great option and JV deals with major partners. Majors are looking for quality projects, in mining friendly jurisdictions, where there has been recent or historical success.
Our partnership agreement with Hochschild is a great example of this. Riverside’s Los Cuarentas Project is 17 km from SilverCrests’ Las Chispas Project in Sonora, Mexico, where this discovery project has catapulted SilverCrest as one of the top Jr. Mining Companies in the industry over the last 2+ years.
Riverside identified the Los Cuarentas Project, acquired it last year (mid 2019), and was able to solidify an excellent 8-year option agreement with the potential for a $31M upside. Certainly, the current gold price has definitely been a catalyst, but as you may know, it always comes down to exploration results and that is where we are heading now.
4. Where is Riverside looking for their next projects? How do you source these?
Our project pipeline is driven by a combination of planned expansion as well as projects that come our way opportunistically and through our ideas and data integration. Our projects in Ontario, Canada for instance are part of an expansion strategy that is enabling better exposure to multiple jurisdictions.
Riverside has currently staked a large land package (an entire belt!), called the High Lake Greenstone belt, in western Ontario, Canada to expand on our gold portfolio of projects in Ontario. We like the prolific high-quality geologic terrane and also the excellent access making this a great place to discover the next large gold mine in Canada. Ontario produces more gold than any other province in Canada and the greenstone gold we have at High Lake has excellent geologic potential, so we are delighted to have this and also properties in the Geraldton Greenstone Mining Belt.
5. Do you see Riverside doing any spinout transactions similar to Capitan Mining any time soon?
Our approach to spinouts is that they should create demonstrable value for our shareholders. As such, the decision to spin out a project is taken with much consideration and due diligence. The Capitan Mining spin-out met these criteria and was a success for our shareholders as each Riverside holder received a proportionate share of the new company. That is a great value!
If an opportunity like the CAPT.V spin out arises again our team will go through our due diligence process. Beyond spinouts, we have other levers for value creation, including through our partnerships. We are strongly focused on our current partnerships: BHP, Los Cuarentas and Cecilia and are also moving ahead with our Canadian gold projects for new partnership opportunities.
6. What separates Riverside from the other project generators on the junior market?
Three key items that separate Riverside from other Prospect Generators are longevity, experience and focus on business value for shareholders. Riverside has a great team of technical experts in the jurisdictions that we work in. In Canada we have Freeman Smith (VP Exploration) who has a long-standing history working in Ontario and has an excellent understanding of the geology in that entire region.
Riverside’s President & CEO John-Mark Staude has been working in Mexico for over 25 years. He has worked with the major mining companies Kennecott (Rio Tinto), BHP, Teck, and has been involved in various discoveries along with the Mexico-based team for Riverside.
That experience has included building a mineral database of over 75,000 occurrences and 23 data layers and this is one of the aspects that separates Riverside from our Project Generator peers. Riverside focuses on the business aspects of mineral exploration and how this can translate to value for the company and convert to the shareholders.
7. Lastly, what is your near-term target on the price of gold?
With the current worldwide financial environment, we believe that this is the beginning of a strong upward and sustained gold price trend. With so much uncertainty, a US Presidential election, and the possibility for continued economic deterioration due to COVID-19, we foresee “real interest rates” remaining deeply into negative territory in the United States. As a direct result of this, gold certainly seems to be the commodity with the highest upside potential in the near term while continuing to see strong performance in the future.
FULL DISCLOSURE: Riverside Resources is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Riverside Resources on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.