Fortuna Silver options Riverside gold-silver project in Mexico

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Riverside Resources Inc [RRI-TSXV, RVSDF-OTCQB, 5YY-FSE] has granted Fortuna Silver Mines Inc. [FVI-TSX, Lima; FSM-NYSE; F4S-FSE] an option to earn a majority interest in Riverside’s Cecilia Gold Silver Project in Sonora Mexico.

The Cecilia project is a titled and 100% Riverside-owned district-scale gold and silver, low sulfidation epithermal system, located 40 kilometres southwest of the Mexico-U.S. border city of Agua Prieta. It is accessible by a dirt road.

The project covers 60 square kilometres and has over 10 different exploration targets, with at least two nested dome complexes like the domes in Peru at the Yanacocha Mining District and in Bolivia at the Korri Kollo mine, which have produced over 25 million ounces and 5.0 million ounces of gold respectively.

Riverside said the agreement with Fortuna allows the project to immediately move ahead with a robust exploration program and reflects the belief, by both parties, of the potential for rapid discovery of new precious metals deposits.

Under the first option, Fortuna can earn a 51% project interest over 5 years by spending US$3.75 million on work and making US$150,000 in cash payments to Riverside.

Upon completion of the first option, Fortuna may elect to progress with a second option to earn an 80% interest by spending an additional $2.25 million on work over an additional three years.

After completing the second option, Fortuna may elect within 120 days to pay Riverside $5 million in cash and grant Riverside a 2.0% net smelter royalty. Of that, 1.0% can be purchased prior to commercial production for $3.0 million, thereby earning Fortuna a 100% interest in the project.

Meanwhile, Riverside said it will be reimbursed for all annual concession maintenance fees, property taxes, access fees, and any other payments required to maintain the project. As operator Riverside will manage the exploration programs and be entitled to collect administrative fees of 10% on the work programs.

The company said previous exploration, including drilling, has yielded significant gold intercepts, including 37 metres at 1.5 g/t gold, within the rhydacite dome, showcasing the project’s substantial potential at shallow depths, Riverside said in a press release.

Riverside is a well-funded exploration company driven by value generation and discovery. The company has over $6 million in cash, no debt and a portfolio of gold-silver and copper assets and royalties in North America.

Fortuna Silver Mines is a Canadian company with five operating mines in Argentina, Burkina Faso, Mexico and Peru, and Cote d’Ivoire.

The company recently completed the acquisition of Chesser Resources Ltd. in a move that strengthens Fortuna’s presence in West Africa.

Fortuna produced 94,821 ounces of gold and 1.68 million ounces of silver in the third quarter. That amounted to AuEq production of 128,671 ounces, up from 93,454 ounces in the second quarter of 2023.

The consolidated all-in-sustaining costs (AISC) per ounce of AuEq sold was US$1,312, compared to US$1,799 in the second quarter of 2023.

Riverside shares were unchanged at 12 cents and trade in a 52-week range of 20 cents and 10 cents.

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