FULL DISCLOSURE: Canacom Group is long the equity of Riverside Resources.
Riverside Resources (TSXV: RRI) has successfully optioned out another of its projects under its project generator model. The latest property to be optioned is the La Union project, found in the Sonora State of Mexico.
The property has entered into a letter of intent to be optioned out to Questcorp Mining (CSE: QQQ), under an arrangement that will see Questcorp acquire up to a 100% interest in the project, in exchange for $100,000 in cash, a 19.9% stake in the company, and $5.5 million in exploration expenditures over a four year period.
The La Union project consists of 22 square kilometres of mineral claims found atop a carbonate-hosted gold district that features high grade gold-zinc, with the project seeing past production by the Penoles Mining Company of Mexico. The project features the past producing Union Mine and Famosa Mine, and currently has eight drill ready target areas alongside many small mine workings.
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“To now work with Questcorp to go forward with the exploration program and continued development is an excellent collaboration and fits both companies’ business models. Riverside has extensive operational capacity in Mexico and can rapidly move ahead with Questcorp to unlock the value of La Union Project. Riverside being a significant shareholder of Questcorp with an initial 9.9% on signing the Definitive Agreement aligns our interests to see success for Union and the companies,” commented John Mark-Staude, CEO of Riverside Resources.
Riverside will remain as the program operator for the project during the term of the option arrangement, and will retain a 2.5% NSR royalty on the property.
Completion of the transaction remains subject to certain conditions, including Questcorp successfully raising $1.5 million under a concurrent financing.
Riverside Resources last traded at $0.145 on the TSX Venture.
FULL DISCLOSURE: Canacom Group, the parent company of The Deep Dive is long the equity of Riverside Resources. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
