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Riverside Resources To Spin Out Ontario Assets Into New Entity

FULL DISCLOSURE: Canacom Group is long the equity of Riverside Resources.

Riverside Resources (TSXV: RRI) is planning on spinning out certain of its Ontario assets into a new entity, while remaining focused on its diverse portfolio of projects in both Canada and Mexico.

The spin-out, referred to as Blue Jay Gold Corp, will see the subsidiary holding Riverside’s Pichette, Oakes and Duc projects in Ontario spun out to shareholders by way of a share capital reorganization. Riverside is to maintain a 2% net smelter return royalty on the projects, which is uncapped.

Under the definitive agreement in place with its subsidiary, Riverside shareholders are to receive one share of Blue Jay Gold for every five shares of Riverside currently held. The new company is to be led by Dr Geordie Mark, whom has been named as the founding CEO of the company. Robert Scott is to serve as CFO, while Freeman Smith has been named as VP of Exploration. Blue Jay’s board of directors meanwhile is to consist of John-Mark Staude, Geordie Mark, and one or more additional directors.

READ: Riverside Options Out La Union For $5.5 Million In Expenditures, 19.9% Stake In Exploration Junior

“We are thrilled to announce the spin-out of Blue Jay Gold Corp., which represents another exciting milestone in Riverside’s strategy to unlock value for our shareholders. Through this share distribution, Riverside shareholders will directly own a stake in Blue Jay Gold and its promising Ontario gold assets, while we retain a 2% uncapped Net Smelter Return (NSR) royalty. This transaction provides shareholders with direct benefits by granting them ownership of Blue Jay’s common shares, allowing them to participate in Blue Jay’s exploration upside and further development potential, while Riverside retains long-term exposure to the success of these high-grade gold projects,” commented John-Mark Staude, CEO of Riverside.

The spin-out is expected to allow for the continued development of the Ontario projects at an accelerated pace, while providing shareholders with enhanced flexibility for their investment strategies. Riverside meanwhile will retain its current projects in Mexico, as well as its Canadian projects that are found outside of Ontario.

The spin-out transaction remains subject to shareholder approval, with a meeting currently scheduled to occur on March 31.

Blue Jay Gold is expected to list on the TSX Venture following the completion of the tranaction.

Riverside Resources last traded at $0.13 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.

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