Here's an interview your humble scribe did last week with John-Mark Staude, Pres/CEO of junior exploration play Riverside Resources (RRI.v) and first published in IKN76 last weekend. So with no further ado.....
Riverside Resources (RRI.v): An interview with John-Mark StaudeTracking down Riverside Resources’ (RRI.v) head man John-Mark Staude and keeping him in one place long enough to answer a few questions isn’t as easy as you’d imagine, but your author finally got his Q&A session with this workaholic and genuinely nice guy late last week. Here’s the result for your reading pleasure.IKN: Riverside stock has been on quite a run recently, John-Mark. To what do you put this run down to? Is it the general market atmosphere for juniors or is there something more company-specific?John-Mark Staude: We believe that Riverside has been and is still significantly undervalued in the marketplace because we have a portfolio of strong assets and the marketplace in the short term values single asset, "go for it all" drilling explorers. We appreciate that approach but have been able to maintain a very tight share structure and converted our capital into ownership of precious metal assets. As exploration is done by us and our partners on our Mexico properties including anticipated drill results from Libertad, recent high grade Ag results from Clemente and early this coming week new gold results from Chapalota projects we hope to continue to see strong gains in share price coincident with de-risking, adding value to our properties.The general market atmosphere has been very good, with particularly realization that gold needs to rise relative to the US dollar. Riverside has nearly 2 M Oz of gold in the ground at our 1,200,000 ounce gold resource that was drilled and estimated prior to the Toronto Stock Exchange’s rule 43-101 and is a non-43-101 inferred resource and secondly with the Capitan gold body where we have a volume of mineralized material that is still wide open and summarized in the filed 43-101 report. Riverside has 24.5M shares issued and is trading around US$1.00 which makes for a ~$25,000,000 market capitalization. Riverside has $3,000,000 in cash so the current Enterprise Value is $22,000,000. With gold now over $1350 and other insitu values exceeding $30 / oz the fact that just Sugarloaf at just $18/oz explains the full market cap of Riverside. Riverside has other open-pit style gold bodies and targets, drill results coming, exploration by partners, two strategic alliances that fund at least over $1,000,000 in exploration each year with no dilution to Riverside shares.The two precious metals assets alone indicate in-situ value for Riverside at $20/oz of a market value of between ~$30-60M. This doesn’t even take into account the Company’s ten other value driving projects and initiatives. So we believe the market rise is both the overall market and also realization of the ounces Riverside has but still we are far from valued compared to with our asset base.Then the other 100% owned assets in Mexico plus the newly drilled gold body at Libertad and the high grade silver at Clemente combine to give Riverside an exceptional portfolio and at a relatively low market cap; thus we see good upside potential right now.IKN: Your new big partner is Cliffs (CLF). Can you update us on how things are going in the JV?JMS: The Strategic Exploration Alliance with Cliffs is going well with Riverside now having identified targeted properties and in the field following up on locations that Riverside has generated from our proprietary 44,000 mineral location integrated database. The database provides a unique tool to rapidly launch this major generative program and now Riverside’s technical team is in the field, in fact I am conducting this interview right now from the Cliff’s field program as we are working as a team to highlight priority targets for the coming two month push.IKN: Is there any news regarding Sugarloaf Peak coming up, or are the RRI efforts now largely aimed at your Mexican operations and assets?JMS: Sugarloaf Peak is now on an joint venture asset capitalization track for Riverside where we have added value, shown already a double from the near surface now down to 200m open pit depth and with gold above $1300 this project looks increasing interesting. Riverside has focused this year on value, making a discovery and making some money along the way in Mexico. By making money we have limited the need for large financings and our capital is best spent in Mexico on our high quality Tajitos open pit gold asset plus having discovered new high grade silver areas in Mexico.We expect to have news out from Sinaloa and Durango Mexico as projects have been advanced and now Riverside has at least 8 drill targets so we are in a very strong position for joint ventures and going forward ourselves.IKN: So what, in your opinion, should be regarded as the company’s current flagship asset or project?JMS: Our current flagship where we are spending our own money is the Tajitos gold project because it is in the exact right location among the large open pit gold systems of western Mexico and because we have high grades up to 1 ounce per ton and drill targets ready to go on the property. Riverside has successfully moved from drilling up a mineralized block at Capitan in Durango then a large gold inferred resource of Sugarloaf Peak in Arizona and now has worked up Tajitos. We realize that it takes a bit of thinking to appreciate having three large good gold assets and will be unlocking the value for shareholders over the coming 90 days with a significant push on deals and delineating the gold bodies.IKN: You’re very much regarded as Mexico experts, John-Mark, but are there plans to expand into other LatAm countries? I ask this, because when we met for breakfast you just happened to be in Peru. Was that purely by chance or are there plans afoot?JMS: Riverside looks for great opportunities and we are not bound by a country. My being Peru was for a growth opportunity and we will continue to rapidly go after assets, deals, alliances with a primary focus toward Latin America. The Arizona asset was an example as it came across my desk and we immediately moved and acquired it. This one asset substantiates our company value and is not even our lead asset now that we have high grade open pit gold in Mexico. As I have worked in over 20 countries and lived in different parts of Latin America we actively on the prowl.IKN: What’s the current cash position and approximate burn rate at RRI? Are you planning to spend more aggresively and accelerate programs thanks to the current bullishness in the metals markets?JMS: Riverside is well-funded with a current cash position of approximately $3M in the treasury, and a historic burn rate of ~$1.5M per year. We are more aggressively working to get deals done, help others who have raised money to access our projects and make discoveries and drill up our projects. We brought in temporary business development people to specifically help increase the deal flow and we ourselves have already included in our annual budget drilling and could be more aggressive based on results. We are pleased with Clemente, Tajitos and now Chapalota. Yes, Riverside has a set of very good assets and we will deliver deals that expose our shareholders to at least 6 advancing projects in the coming 3 months. It is exciting for Riverside and we are in action to leverage off the bullishness in the metals markets.IKN: Thanks again for your time, I know what a busy guy you are. Any last words for IKN readers?JMS: Yes, a final plug for our Youtube videos. Riverside through our YouTubeVideos, www.youtube.com/user/RiversideResources and our website www.rivres.com aim to continually provide information that can help investors and people interested in the exploration business. We hope readers will contact us via email info@rivres.com or call us 1-877-RIV RES1 (or 1 778 327 6671 x 333) to find out more. We truly aim to share ideas as we stand for “knowledge is golden” and are working to convert ideas into value for shareholders.End