Riversgold’s Saint John Project Faces Uncertainty as AIS Takes Majority Stake
Riversgold Limited has partnered with Canadian AIS Resources to advance its Saint John Project, enabling AIS to earn up to 75% by funding exploration and drilling over four years while Riversgold retains a 25% free-carried interest.
- AIS Resources to earn up to 75% interest in Saint John Project
- AIS commits C$4.4 million over four years for exploration and drilling
- Riversgold retains 25% free-carried interest until decision to mine
- AIS issues 2.86 million shares to Riversgold upon signing
- Riversgold focuses on Northern Zone project in Western Australia
Strategic Partnership for Canadian Exploration
Riversgold Limited (ASX, RGL) has taken a significant step to advance its Saint John Project in New Brunswick, Canada, by entering into a farm-out agreement with Canadian-listed AIS Resources Limited (TSXV, AIS). This deal allows AIS to earn up to a 75% interest in the project through staged exploration and drilling commitments over the next four years.
Under the terms, AIS will initially issue 2.86 million shares to Riversgold at C$0.05 per share, providing immediate value to Riversgold shareholders. AIS must then spend C$400,000 in the first year on early exploration activities, including drone-based MobileMT and induced polarization surveys, alongside 1,000 metres of drilling. A further C$1 million in drilling is required in the second year to earn a 51% stake.
Aggressive Exploration and Development Commitments
To increase its interest to 75%, AIS must invest an additional C$3 million in drilling and early development work during years three and four. This structured earn-in arrangement effectively transfers the financial and operational burden of advancing the Saint John Project to AIS, while Riversgold retains a meaningful 25% free-carried interest through to a decision to mine. This means Riversgold will not have to contribute to exploration costs until the project reaches a development milestone.
Riversgold’s Executive Chairman, David Lenigas, highlighted the strategic rationale behind the partnership, noting that AIS, as a Canadian company, is better positioned to expedite exploration and development activities on the ground. Meanwhile, Riversgold can concentrate its resources and expertise on its Northern Zone porphyry gold project near Kalgoorlie in Western Australia.
Balancing Risk and Opportunity
This farm-out agreement reflects a common approach in the mining sector, where junior explorers leverage partnerships to share risk and capital requirements. For Riversgold, the deal preserves upside exposure to the Saint John Project’s potential while mitigating near-term expenditure. For AIS, the agreement offers a pathway to a significant stake in a multi-commodity project with gold, copper, silver, and antimony mineralisation.
Investors will be watching closely as AIS begins its planned geophysical surveys and drilling campaigns, which will be critical in defining the project’s resource potential. The success of these activities could materially impact the valuation and future development timeline of the Saint John Project.
Bottom Line?
As AIS commits to an aggressive exploration program, Riversgold’s retained interest keeps it poised for future upside without immediate capital risk.
Questions in the middle?
- Will AIS meet its exploration and drilling expenditure targets on schedule?
- What are the initial results from AIS’s planned geophysical surveys and drilling?
- How will Riversgold balance its focus between the Saint John Project and its Northern Zone project?
