Maurice Jackson: Joining us for a conversation is Dr. John-Mark
Staude, the president and CEO of Riverside
Resources Inc. (RRI:TSX.V; RVSDF:OTCQB), where knowledge is golden. Dr.
Staude, welcome to the show, sir.
John-Mark Staude: Thank you, Maurice.
Maurice Jackson: We brought you on today to highlight some of
Riverside Resources successes of last year and the company's outlook for
2019. But before we begin, for first time listeners who is Riverside
Resources?
John-Mark Staude: Riverside is a prospect generator. We've been working for 12 years,
finding projects and finding partners through the prospect generator
business. We've been able to expose ourselves to great upside while limiting
the downside risk.
Maurice Jackson: You referenced that you are a prospect generator. There's a lot of ambiguity regarding
prospect/project generators, therefore speculators often overlook them in
their portfolio. What type of competitive advantages does a shareholder have
with a project generator over traditional exploration companies?
John-Mark Staude: I think the first thing is you've got a tight
share structure, key that other people are spending the money. The second is
you get a lot of shots, multiple different projects going simultaneously.
Third is you don't have the management teams that have to continually go back
and refinance, so they can be focused on discovery for the shareholders.
Those three things make prospect generators one of the better ways to invest
in mineral exploration.
Maurice Jackson: Let's revisit 2018 and share some of the successes
of Riverside Resources that will serve as catalysts for 2019.
John-Mark Staude: I think the first thing was that we were able to
leverage off of our previous work on copper, so that in 2019 we'll be able to
generate new big strategic alliances. I think the second thing was we signed a letter of intent with Sinaloa Resources, and
now in 2019 we'll have the definitive agreement and the go forward drill
program. I think a third thing was the work that we did on Cecilia. High-grade gold mineralization, very good
geology. Now in 2019 we can see drilling. So we have lots of catalysts in
2019. We're really excited about this coming year.
Maurice Jackson: Speaking of 2019, let's discuss the outlook for
this year. What is new and what does Riverside Resources have planned this
year?
John-Mark Staude: I believe one of the key things is a new
strategic alliance. Getting a strategic partner will be awesome, and I think
we have that in our sights. I think the second thing will be drilling. We
have now got a definitive agreement progressing with Sinaloa Resources, and
we'll have additional new assets added into the portfolio. We'll also
diversify beyond Mexico. We've done well in Mexico, but we've also been
successful previously in porphyry coppers in Canada and large gold systems in
Arizona, and I think in 2019 we'll again see us diversify beyond Mexico to
capture great new opportunities.
Maurice Jackson: I want to expand further on the value preposition
of Riverside Resources here. Germane to this discussion are the prices of
gold, silver and copper. Twofold question. What are some of the catalysts you
see that will change these prices, and what type of impact can we expect that
this will have on Riverside Resources?
John-Mark Staude: One of the catalysts we see now is some of the
uncertainty around trade and some of the uncertainty particularly in the gold
price and with this gold price we actually see that has been rising up; that
for us is excellent. We have gold assets in the ground, and gold potential to
grow. So I think the gold will be a really key way to do this.
Maurice Jackson: Let's be a little bit more specific for current
and prospective shareholders. What type of competitive advantages does
Riverside Resources have in the natural resource space included in this discussion
with the prices moving?
John-Mark Staude: One of the competitive advantages we have is
knowledge. We have knowledge, we have been able to find gold. We've been able
to find copper. We've been successful. We've worked in this region and made
discoveries that have then been built into mines. That's a competitive
advantage. The second is we're all running. We're in the position, we didn't
have to stop during the downturn times. We've been able to continually keep
the same strong technical people. I know, Maurice, you've actually been out
to site, other people come out to site. We can really demonstrate out on site
the great development and ease to do the work. I think our turnkey ability
has been shown by strategic alliances we've done in the past, and many
projects we've been able to turn over. So in 2019, that creates great chance
for catalyst rising gold prices, with potentially rising copper prices, with
copper demand from electric cars, other copper usage. Riverside's in an
awesomely great position.
Maurice Jackson: Speaking of site visits, yes, I was there in April
2018 at the Cecilia, and I noticed there a lot of the intangibles that don't
show up on the balance sheet. Could you share some of those with us?
John-Mark Staude: I think one of the ones is relationships. When
you come out to the site you can see how well we get along with the local
people. I think the second is ease of access, you can see that we have the
gate keys, we have the ease to get to the projects, paved roads into the
area's infrastructure. It's so easy to look at a map, but in reality when you
go out and see that you can drive on paved roads, when you have power lines,
when you have water, when you have all of that stuff. I think the other
intangible is our team. When you can see that we have the people in the back
of our company that do the work for many other supporting groups, can really
do a good work. Riverside has a sought-after team. I think those are in some
of the intangibles that really make Riverside unique.
Maurice Jackson: Speaking of your team, a lot of them are seasoned
in their tenure. Talk to us about how many years they've been with Riverside.
John-Mark Staude: Riverside's been going 12 years and some of them
been going with us ever since the beginning. Many of them have worked with me
before Riverside. I used to work at Teck Resources, prior to that at BHP, and
even prior to that back in the 1990s at Magma Copper, and some of these
individuals that work with me today worked with me back then. We've been
friends up to 30 years, and we've been able to be involved and we therefore
we know we have trust, we know what we can count on, and we know we have the
skills that deliver excellent projects, and the excellence to trust in what
we're doing.
Maurice Jackson: Speaking of Mexico, there's a new president. What
type of impact do you foresee the new administration having on Riverside
Resources?
John-Mark Staude: It's interesting, we were a bit concerned
initially, back when the elections happened, hearing about socialist
different movements and things, but really interesting, since December 1st
when he's been elected, it's actually been pro capitalism, pro-development.
There continue to be noises going back and forth about different issues, and
they'll have to get settled out. But we're actually quite positive about the
new president AMLO, and we're also quite president about his words and
efforts that he says towards helping develop favorability towards
investments. So, we actually see that this new administration will be able to
be a good push for the mining industry. We're pretty pleased with what's
happening now.
Maurice Jackson: Switching gears slightly, to make the Riverside
Resources project portfolio come to fruition, joint venture partners have to
be willing to commit to projects. What is their current level of commitment
that Riverside Resources is seeing right now?
John-Mark Staude: Right now, the first thing is the really big
strategic alliance we have coming. Second is a drill program and funding with
Sinaloa Resources. We'll come up with the news release coming out quickly
here as we finalize the definitive agreement, which we've not yet finalized,
but we'll get that done, and that'll actually be a major program. We'll also
find that we have work on the copper, gold and silver assets, and we're
working on spinning out our transaction for one of our other properties. So,
we actually see quite a few number of flows of capital coming in, and quite a
few catalysts in 2019 due to the partner spending.
Maurice Jackson: You touched on it briefly, how does amalgamation
fit into this narrative, and how realistic is the proposition of
amalgamation?
John-Mark Staude: So at this point what we're talking about is
actually taking one of our assets into another company. We've been working on
it now. Two aspects, one is the capital and the other is the other party, the
ability and interest to be able to carry it forward. We're working on that
now, and I think it's fairly realistic to do. It's not something that we've
put all of our eggs into, but it would be a great step for Riverside to give
our shareholders another set of shares, another strategic way of increasing
shareholder value. I think we have the right team on the other side. This
will be a really exciting transaction going forward.
Maurice Jackson: John-Mark, what do you see as the biggest
challenge for Riverside Resources, and how would you mitigate that situation?
John-Mark Staude: One of the big challenges is getting more
partners in Mexico, and the way we're mitigating it is by doing work again
outside of Mexico, and by doing that we have our skills and we have Freeman
Smith, our Vice President, Exploration, lives in Vancouver, knows the
Canadian portfolios and Canadian assets, and we live in Vancouver, Canada, so
it really fits for us to be able to diversify. That diversification really
helps our shareholders as well. It helps us being in Mexico, and leveraging
off of our knowledge in other places as well, using our skills. We're in a
great position for 2019.
Maurice Jackson: Let's touch on the capital structure here briefly.
John-Mark, Riverside has a proven record of being a good steward of capital.
Remind us how many shares outstanding there are, enterprise value, and where
does the company stand financially?
John-Mark Staude: Riverside has almost 45 million shares out, after
going for 12 years. That's remarkable. Financially, we have $1.5 million
cash, and the market is actually very low right now. So myself, I'm buying
more shares. We're at a low in the market conditions right now, and I think
there's great upside right now. Our enterprise value is only $5 million. Our
market cap is $7 million. We're in a good situation to have a good leverage
to the upside now.
Maurice Jackson: Last question. What did I forget to ask?
John-Mark Staude: Well, you always ask great questions. I think one
of the other things is what do we actually see in the next news release? I
think the next news release for us will be the signing of a deal. Signing of
deals is great. Those are the momentum steps that we like. Also, the addition
of a new asset. We're excited by that. So I think we have two new things
coming on, short term, that will really make a difference for Riverside.
Maurice Jackson: Dr. Staude, for someone listening that wants to
get more information on Riverside Resources, please share the contact
details.
John-Mark Staude: We're at www.rivres.com, or give us a call at (778) 327-6671.
Maurice Jackson: As a reminder, Riverside Resources trades on the
TSX, symbol RRI, and on the OTCQB, symbol RVSDF. As reminder,
Riverside Resources is a sponsor of Proven and Probable, and we are proud
shareholders of Riverside Resources for the virtues conveyed in today's
message. And last but not least, please visit our website, provenandprobable.com,
where we deliver mining insights and bullion sales. You may reach us at contact@provenandprobable.com.
Dr. John-Mark Staude of Riverside Resources, thank you for joining us
today on Proven and Probable.
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