Hochschild could have earnt up to 75% of the project, which Riverside still believed held "excellent" discovery potential.
Riverside said Hochschild had spent about US$1.2 million over 11 months, developed broader technical data and drilled nine holes which helped provide better understanding of the past-producing Santa Rosalia mine area.
"We were pleased with the target generation and exploration phase of the option, and with only a modest (1,500m) programme completed there are plenty of compelling targets that remain untested across a project with historical production history and demonstrated high-grades from surface sampling," president and CEO John-Mark Staude said.
The company believed Central Santa Rosalia, Santa Rosalia Sur and Southern Extension areas held potential and demonstrated "many similar characteristics" to the nearby Mercedes, Santa Gertrudis and Santa Elena mines.
Riverside also has an exploration partnership with BHP in Sonora state and partner-funded exploration at its Cecilia project through an option with Carlyle Commodities.
It has spun out its Penoles gold-silver project in Durango state into Capitan Mining and has other exploration projects in Mexico and Ontario.
Riverside had no debt and more than C$4 million in treasury, according to a presentation this week.
Its shares (TSXV: RRI) lost 10.3% to 17.5c yesterday, representing a fall of 50% year-to-date and capitalizing it at $12 million (US$9.9 million).
Hochschild shares (LSE: HOC) were down 5% to 193.8p, valuing it at £996 million (US$1.4 billion).