Riverside Resouces signs option agreement on Cecilia with Fortuna Silver – Caesars Report

Riverside Resources (RRI.V) has entered into an option agreement with…


Riverside Resources RRI Cecilia 3

Riverside Resources (RRI.V) has entered into an option agreement with Fortuna Silver (FVI.TO, FSM) whereby the latter can earn full ownership in the Cecilia project in Mexico’s Sonora state. The agreement is subdivided in three separate milestones. Fortuna can earn an initial 51% stake in the project by completing US$3.75M in work expenditures and making cash payments to Riverside totaling US$150,000. Additionally, Riverside will be appointed as operator and will earn a management fee of 10% over the initial 5 year option period. This indeed means Riverside will make approximately US$375,000 in exploration management fees.

Once Fortuna Silver has established a 51% stake in the project, it can elect to further increase its stake to 80% by spending an additional US$2.25M in work commitments in the subsequent three years (as Fortuna will be the majority owner of the project by then it won’t have to appoint Riverside as operator anymore). In a third stage, Fortuna can increase its stake from 80% to 100% by making a US$5M cash payment to Riveriside and issue Riverside a 2% NSR of which half can be repurchased for $3M.


Disclosure: The author has a small long position in Riverside. Please read the disclaimer.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *