Riverside Signs US$2,000,000 Strategic Funding Agreement With BHP in Sonora, Mexico
Riverside Signs US$2,000,000 Strategic Funding Agreement With BHP in
Sonora, Mexico
VANCOUVER, British Columbia, May 16, 2019 -- Riverside Resources Inc. (“Riverside” or the “Company”) (TSX-V: RRI)
(OTCQB: RVSDF) (FSE: R99), is pleased to announce the signing of a two-year, US$2,000,000 Exploration Financing
Agreement with BHP Exploration Chile SpA (“BHP”) for the funding of generative exploration in the copper producing belt of
Mexico (the “Program”). The Program will focus on identifying and developing exploration opportunities leading to the discovery
of new large copper deposits within an Area of Interest (“AOI”) using Riverside’s technical knowledge base of copper systems
and strong generative exploration team strategically based in Hermosillo, Sonora. BHP and Riverside will pool their data,
including decades of historical work into an integrated database. Riverside can now leverage geophysical, geochemical and
geological technical platforms into a new targeting synthesis to complete tenure acquisitions.
BHP will fund US$1,000,000 on an annual basis for a minimum of two (2) years for generative grass-roots exploration within
northeastern Sonora in the region of many copper deposits and some very large copper operations (Figure 1). The exploration
area being explored is in the central part of the Laramide Copper Belt that continues northward into Arizona and New Mexico,
hosting numerous large, Tier 1 copper deposits. For example, the third largest copper mine in the world, the Buenavista del
Cobre Operations in Cananea, is located within the AOI.
Properties that are identified and deemed to be of interest will become Defined Projects (“DPs”), which will move to a second
phase of the Program whereby BHP would fund up to an additional US$5,000,000 of exploration work and make success fee
payments to Riverside on a per project basis (see “Exploration Funding Agreement” below).
Riverside’s President and CEO, John-Mark Staude, stated : “We are delighted to combine the financing support of a major
world copper leader with our in-country Mexico expertise to pursue exploration activities and advance promising projects. The
two-year Program helps Riverside expand our copper exposure, while still conserving capital for our other self-funded
initiatives.”
http://www.globenewswire.com/NewsRoom/AttachmentNg/b3d9a77d-b16a-4394-a060-59a125d8a7f6
Figure 1: Region of Copper Belt of Mexico and Riverside-BHP Generative Program
Exploration Funding Agreement
Overview:
The two-year, US$2,000,000 Exploration Financing Agreement was signed on May 15, 2019. The Program will target projects
containing primarily copper, with the objective of advancing quality copper prospects through three (3) distinct stages: Project
Generation Phase, Project Operation Phase and Joint Venture Stage.
Project Generation Phase (I):
During the Project Generation Phase, Riverside will act as the operator and earn a monthly fee plus 10% on internal activities
and 5% on third party external contractor work with an estimated ~US$85,000/month for generative work. Riverside’s technical
team will carry out generative exploration and work up targets with the aim of moving prospects toward the Project Operation
Phase (II).
Project Operation Phase (II):
A prospect that is advanced to the Project Operation Phase will become a DP and will trigger a success fee of US$200,000
payable to Riverside for each prospect so advanced. Riverside can earn a bonus of an extra US$200,000 if at least three
projects are progressed to DP making a total of US$800,000 in DP success fees. BHP will fund up to US$5,000,000 for drilling
and further exploration on each DP, having the option to become the operator of such DP. Riverside has the option to
contribute between 10% and 20% of the exploration expenditures (“ Riverside’s Contribution to Expenses ”) during this
phase, with BHP funding the balance (80-90%) should Riverside elect to participate. BHP may discontinue funding with
respect to a specific DP at any time in which case Riverside would be entitled to 100% interest in the project and depending
on the funds expended to date, BHP may retain a net smelter returns royalty interest.
Joint Venture Stage (III):
BHP may elect to advance a DP to the Joint Venture Stage, at which time title to the project would be transferred to a joint
venture company and the parties would enter into a formal joint venture partners’ agreement. If Riverside’s cash contribution
reaches a minimum of 10% in Phase (II), the Company’s deemed initial interest in the joint venture company will be 20%. If
Riverside’s Contribution to Expenses to a DP is less than 10%, Riverside will have no interest in the Joint Venture. For each
DP that is advanced to the Joint Venture Stage, Riverside will be entitled to a success fee of US$1,500,000 if Riverside’s
Contribution to Expenses to a DP is at least 10% and US$300,000 if it is less than 10%. At the point of Joint Venture
formation, with respect to a DP in which Riverside has at least a 10% interest, (a) Riverside may sell its interest earned as a
result of its Contribution to Expenses to BHP at the rate of US$100,000 for each 1% interest sold; and (b) BHP may purchase
the difference between 20% and Riverside’s actual Contribution to Expenses at the rate of US$300,000 for each 1% interest
purchased.
Operational Details:
A Technical Committee (“TC”) will be formed to approve Work Programs and Budgets during Phase (I) and (II). The TC will have
two representatives from each of BHP and Riverside with equal voting powers for both groups for DP’s operated by Riverside.
For DP’s operated by BHP, BHP will have the casting vote on the TC.
About Riverside Resources Inc.:
Riverside is a well-funded exploration company driven by value generation and discovery. The company has no debt and fewer
than 63M shares outstanding with a strong portfolio of gold-silver and copper assets in North America. Riverside has extensive
experience and knowledge operating in Mexico and leverages its large database to generate a portfolio of prospective mineral
properties. In addition to Riverside’s own exploration spending, the Company also strives to diversify risk by securing joint-
venture and spin-out partnerships to advance multiple assets simultaneously and create more chances for discovery. Riverside
has additional properties available for option, with more information available on the Company’s website at www.rivres.com.
ON BEHALF OF RIVERSIDE RESOURCES INC.
"John-Mark Staude"
Dr. John-Mark Staude, President & CEO
For additional information contact:
John-Mark Staude
President, CEO
Riverside Resources Inc.
Phone: (778) 327-6671
Fax: (778) 327-6675
Web: www.rivres.com
Raffi Elmajian
Corporate Communications
Riverside Resources Inc.
Phone: (778) 327-6671
TF: (877) RIV-RES1
Web: www.rivres.com
Certain statements in this press release may be considered forward-looking information. These statements can be identified
by the use of forward-looking terminology (e.g., "expect”,” estimates", "intends", "anticipates", "believes", "plans"). Such
information involves known and unknown risks -- including the availability of funds, the results of financing and exploration
activities, the interpretation of exploration results and other geological data, or unanticipated costs and expenses and other
risks identified by Riverside in its public securities filings that may cause actual events to differ materially from current
expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of
the date of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.