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Riverside Resources is a project generator with a portfolio of early-stage exploration assets and royalty interests across North America, currently focused on spinning out its Blue Jay subsidiary and advancing its Cecilia gold-silver project in Mexico through a joint venture with Fortuna Silver. This conversation critically examined the mechanics of the Blue Jay spinout, the geological and structural model at Cecilia, the funding status and strategic outlook for both entities, and broader issues such as royalty portfolio management, cash preservation, marketing strategy, and the risks associated with junior market sentiment and spinout dilution.
TL;DR
- 1. Riverside shareholders will receive one Blue Jay Resources share for every five shares held, with the spinout and listing process expected to complete within a few months.
- 2. The Cecilia project has advanced to a decision point for Fortuna Silver, with Phase 1 drilling confirming mineralized structures but further progress contingent on intersecting economic grades.
- 3. Riverside has approximately C$4 million in cash, no debt, and continues to fund operations largely through partner contributions rather than equity dilution.
- 4. Blue Jay intends to initiate drilling in 2024 following its listing, focusing on banded iron formation-hosted gold targets using a data-integrated exploration approach.
- 5. Both CEOs acknowledged that success depends on demonstrating grade and scale in upcoming drill programs, while managing investor expectations and market volatility.
What Have You Done for Shareholders Lately?
Riverside Resources CEO John-Mark Staude focused his opening remarks on the imminent spinout of Blue Jay Resources.
Staude described this as a rare opportunity, noting that previous spinouts like Capitan Silver have performed well post-distribution.
John-Mark said the ex-dividend date was expected within weeks. While Staude positioned this as a major value proposition, the framing was promotional and lacks critical comparison to broader shareholder return metrics.
Are They Happy with the Cecilia Results?
Cecilia is currently under option to Fortuna Silver Mines, which funded a $750,000 Phase 1 exploration program.
According to Staude, five initial drill holes intersected mineralization and were sufficient to warrant follow-up work. Fortuna’s next decision is whether to proceed to drilling. Riverside already holds drill permits and claims it is ready to mobilize if Fortuna advances.
Staude expressed optimism but did not provide details about grades or widths intersected, nor whether the results met internal economic thresholds.
Why Do They Believe It’s a Multi-Feeder System?
Staude claims that structural mapping and modeling suggest multiple feeder zones trending NW (San Jose) and NE (Agua Prieta). These are interpreted based on surface mapping, some drilling, and Leapfrog modeling.
However, the technical evidence supporting the presence of multiple feeders is inferred rather than confirmed. Staude referred to this as a “sharpshooter” approach.
Are the Feeder Zones Connected?
Staude believes the feeder structures are separate but derive from a common magmatic plumbing system.
He states the system is large and compares it conceptually to Yanacocha, though that reference is largely illustrative rather than empirically justified. He emphasizes the 80 km2 project footprint and references various named zones, but the structural connection among them remains speculative at this stage.
How Deep Do They Have to Drill?
Staude suggests that boiling zones are preserved between 500 m and 1,000 m, with fluid inclusion data supporting this interpretation.
The topographic advantage allows shorter drill holes due to elevation differences. He claims the epithermal system is young (approx. 18 Ma), but no direct geochronological evidence was cited. Assertions of preservation are promising but remain unverified beyond internal observations.
Are the Geophysical Studies Helping?
According to Staude, magnetics and IP have had limited utility.
The rocks are weakly magnetic, and the system appears to be low-sulphidation, limiting IP effectiveness. He stated that the next step is drilling rather than additional geophysics, implying confidence in current geological models.
What Are Comparables to Cecilia?
Staude compared Cecilia to several epithermal gold systems: Mercedes, Santa Elena, Las Chispas, and Yanacocha.
These analogies are based on structural and lithologic similarities such as domes, rhyolite flows, and epithermal alteration. However, none of these comparisons were substantiated by geochemical or economic data. Staude emphasized the presence of multiple dome centers and suggested that scale potential makes the project suitable for majors, though such claims remain speculative at the current stage of exploration.
How Much More Will They Have to Drill?
Riverside has drilled more than 30 holes at Cecilia historically. Staude believes three to four new holes per target will help resolve geometry and structure. He emphasized that current drilling is about determining scale and continuity rather than defining a resource. However, without more detailed information on past intercepts, it’s difficult to assess how close the project is to resource delineation.
Will Fortuna Keep Spending Money on This Project?
Fortuna has spent roughly US$1.3 million of a US$5.5 million earn-in requirement.
John-Mark anticipates another $800,000 may be spent by year-end. Whether the partner continues depends on Phase 2 results. Riverside retains a 100% reversion clause if Fortuna withdraws.
What Would They Consider Success in Phase 2 Drilling?
Success, according to Staude, hinges on encountering grade.
He stated that 1–2 g/t Au would meet expectations for Fortuna; anything under 0.5 g/t would be insufficient. He referenced historical grades of 6–10 g/t but provided no detail on intercept lengths or contexts. The goal now is to test structure-confirmed zones for economic grades.
When Will They Be Drilling?
John-Mark expects drilling to occur within calendar 2025, assuming Fortuna commits. Permits are in place and drill readiness is asserted, though a formal plan has not been published.
Did Drilling Go as Planned in the Past?
Logistics for past campaigns were described as smooth. Staude praised his in-country team and noted long-standing relationships in Mexico. No significant challenges or cost overruns were mentioned.
Will They Be Marketing Over the Summer?
Riverside budgets 17% of expenditures for marketing. Staude downplayed the impact of constant conference attendance, stating that tangible results matter more. He highlighted the company’s European shareholder base and claimed ongoing IR activity.
How Much Money Do They Have Left?
The company holds approximately C$4 million in treasury, with no debt or outstanding warrants. Partner contributions and share-based payments are helping maintain the balance. Upcoming payments from Union and other partners are expected to keep the burn rate manageable.
Will They Be Raising Capital Anytime Soon?
No immediate raise is planned.
John-Mark said they would consider it opportunistically. The recent Blue Jay spinout was framed as a value-generating move, though the actual return to shareholders remains to be seen.
What Else Happens This Year?
Fieldwork in British Columbia is planned, focusing on rare earth elements and gold. Staude believes BC is a strategic jurisdiction for critical metals given current geopolitics. No budgets or partner commitments were disclosed.
What’s the Timeline for Listing Blue Jay?
Blue Jay CEO Geordie Mark anticipates the spinout completing in May, with listing to follow within two to three months. The exact record date was not finalized at the time of interview.
What Work Is Happening at Blue Jay?
No material work is permitted prior to listing due to NI 43-101 constraints. Surface work and desktop modeling are underway, but drilling is on hold to avoid triggering requalification of the technical report.
Will Blue Jay Drill in 2024?
Yes.
Mark confirmed 2024 drilling plans, targeting shear zones and banded iron formations. He stressed a data-driven approach integrating geochemistry, magnetics, LiDAR, and structure. All-in drill costs are estimated at $300/m due to proximity to infrastructure.
Do They Know the Listing Price?
Seed round closed at $0.40, with a proposed listing price of $0.50.
Founders were in at $0.20. Final price will depend on market conditions.
How Do They Manage the Risk of a Spinout Dump?
Mark acknowledged the risk of early selling and outlined a plan involving staged news catalysts and multi-platform marketing. Rick Rule’s participation in early rounds was highlighted as a credibility signal, but it remains unclear whether this will counteract early liquidity pressure.
What Keeps Them Up at Night?
Mark pointed to macroeconomic volatility, particularly the gold price and investor sentiment.
Staude emphasized the disconnect between metal prices and junior equity valuations.
Both are optimistic but wary of market inertia.
Riverside Resources interview with CEO, John-Mark Staude
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