Kinross Gold Picks Riverside for Discovery Potential

By : James West

www.midasletter.com

The day after Kinross Gold (KGC) announced a "bought deal" financing for $360 million with UBS Securities Canada, Riverside Resources Inc. ((TSX.V:RRI)) announced that it had entered into a "Precious Metals Exploration Alliance" with Kinross. The partnership came with a CA$1.1 million investment into Riverside's Mexico exploration program and that will see the two companies spending $550,000 over each of the next two years on programs in the Mesa Central region of Mexico.

The Mesa Central Region of Mexico, where this Alliance is to focus, is rich in precious metals. Much of Mexico's silver production which has made it the world's number one producer for over 500 years comes from this region. Additionally, gold has been produced and recent discoveries indicate that the Mesa Central has vast untapped potential for new gold discoveries.

"The Exploration Alliance is a key step forward for Riverside," said CEO Dr. John-Mark Staude. "It is part of our strategy to not have to raise money in the near term, since we are now fully funded for the next three years' programs."

"The area covered by the Alliance is north of Mag Silver's (MVG) Fresnillo high grade silver district, and south of Endeavour Silver's (EXK) Guanacevi silver-gold mining district It's right in one of the sweet precious metal spots of Mexico," said Dr. Staude.

The arrangement sheds insight into the strategy of Kinross management in tough economic times. Whereas major mining companies such as BHP (BHP), Rio Tinto (RTP), Newmont (NEM) and Teck Cominco (TCK) are laying off workers by the thousands to conserve cash, Kinross is deploying capital to junior companies with premium technical talent to leverage their expertise into future discoveries that will provide inventory ounces going forward.

"How are major mining companies going to cost-effectively replenish their reserves? Where are the future ounces going to come from?", Staude asks.

Riverside's Penoles concession is a 350 square kilometer district-scale land package hosting an assortment of deposit types, including the Jesús María silver vein system, San Rafael silver-gold vein system and the El Capitan disseminated epithermal gold system.

Since its IPO in August of 2007, Riverside has built a leading team, acquired many high quality gold projects, funded itself through the participation of A-list mining industry investors, and undertaken 2 drill programs on properties in Mexico and Canada.

Riverside's business model is that of a "project generator". That means Riverside acquires 100% control of prospective projects, and then partners with other mining companies in a joint venture so that the partner spends the exploration dollars to earn its interest in Riverside's property. Riverside then keeps the very best of its projects for its own exploration. In this way, the company's own capital is preserved, its exploration risk is diversified, and the value to its project portfolio is accretive.

Riverside has been able to attract a who's who of the mining investment business.

During the past two years Riverside has financed with the Rick Rule Family Trust which acquired shares for a total ownership position of 10.7% of the outstanding common shares of Riverside, an entity controlled by Lucas Lundin, (Global NR Holding SA), controls 4.6%, and Kinross Gold acquired a 7.0% stake in the company through a private placement.

Besides the alliance with Kinross, the big news of the year for Riverside was the publication of a National Instrument 43-101 report on its historic, non-43-101 compliant, 1.2 million ounce gold deposit at Sugarloaf Peak in Arizona. The historic resource was calculated at an average grade of 0.3 g/t Au, but results from historic drill holes assayed up to 1.5 g/t Au over 150m, which was not used in the historic resource calculation. Sugarloaf Peak is in Arizona in the same region as the active open pit gold producing Mesquite mine and former open pit gold producers of the American Girl, Picacho, Cargo Muchacho and Copperstone mines.

Riverside management has more than 60 years of collective exploration experience and participation in over a half dozen ore body discoveries. CEO John-Mark Staude , a Ph.D. in economic geology, has over 20 years of mining experience in both precious and base metals, having held positions of increasing responsibility with a number of major international mining companies including Kennecott, BHP-Billiton, and most recently Teck Cominco.

At the end of January 2009, Riverside had approximately C$3.2 million in cash on hand and 17,828,500 shares issued and outstanding.

Visit the company's web site at http://www.rivres.com.

Disclosure: James West has no shares or other interest in any of the companies mentioned in this article.

James West

www.midasletter.com

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