Riverside’s Los Cuarentas Ready to RollBy Alejandro Ehrenberg | Thu, 07/02/2020 - 17:49
Riverside Resources announced that it has entered into a definitive option agreement with Hochschild Mining plc’s Mexican subsidiary. The option agreement concerns Riverside's fully-owned Los Cuarentas gold-silver project in Sonora. Los Cuarentas will now move ahead immediately with a robust exploration program.
"We are delighted to partner again with Hochschild Mining in Sonora, Mexico. We both see significant discovery potential at Los Cuarentas and our team is keen to get going in the field with safe, cost-effective exploration work to test a series of drill targets in short order," Riverside's President and CEO John-Mark Staude.
Riverside explained that, on the first phase of the earn-in option, Hochschild can earn-in an undivided 51 percent by incurring US$8 million in exploration expenditures over five years. Upon completion of Phase 1 obligations, Hochschild can elect to form a 51:49 joint venture. On the second phase, Hochschild can elect to earn an additional 24 percent by incurring a further US$3 million in exploration expenditures and delivering a completed feasibility study. Upon Hochschild completing Phase 2 earn-in, Riverside will have the option to sell its interest in the project to Hochschild for US$20 million, while retaining a 1 percent net smelter royalty.
The intention of the program is to move rapidly toward drill testing and build upon the targeting work that Riverside has completed to-date, the company said. Riverside will act as the project operator for the first two years of the agreement, with the option to extend for an additional year at Hochschild's request. As operator, Riverside will be entitled to collect 10 percent administration fees on contracts of less than US$100,000 and 5 percent on contracts or more than that amount. It will also manage the exploration program.
As described by Riverside, Los Cuarentas hosts historical mine workings and multiple know veins, as well as multi-gram gold sampling at surface with no known drilling. It is a former near surface underground gold mine that has features similar to nearby low sulfidation epithermal gold-silver operations of Premier Gold Mines, Silvercrest Metals and First Majestic Mining. Los Cuarentas is located in northeastern Sonora. The project produced in excess of an estimated 100,000oz of gold from historical mine operations during the 1950s.
In an interview with Mexico Business News, Staude remarked: “Two of the ways we measure success are share price and also business growth. Share price is in part based upon our work but also largely affected by the overall market conditions, as well. 2020 has really shown this with the COVID-19 virus and tremendous changes which for us we measure success by surviving and growing our business. The second measure for us is discovery and we do this through partner work (including joint ventures) in Mexico plus our sole funded work. As we move forward, we have projects that fill a nice pipeline for discovery. The coming year will be exciting times for Riverside.”