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Revival Gold (TSX-V: RVG) CEO Hugh Agro on Game Changing Transaction to Acquire the Beartrack Mine

September 11, 2017

Gerardo Del Real: This is Gerardo Del Real, with Resource Stock Digest. Joining me today is President and CEO of Revival Gold (TSX-V: RVG), Mr. Hugh Agro. Hugh, how are you?

Hugh Agro: I'm very good today. Thanks, Gerardo.

Gerardo Del Real: I imagine you have to be excited. You had some pretty important news, what I call a game changing transaction. The headline reads, “Revival Gold Announces Agreement on Former Beartrack Mine and $10 Million Brokered and Non-Brokered Private Placement.” Let's start with Beartrack. Can we tell me a bit about the history of the property and what made it so attractive to you?

Hugh Agro: Big step forward for us, so we are very excited today. As I said to you when we last spoke, we have a lot on the go. This is the culmination of a lot of work, but Beartrack is a former producing mine. It was in the Meridian Gold portfolio back in the '90s. As an operator, produced about 100,000 ounces a year, from a heap leach operation, mining oxides at surface.

It's been sitting quietly in the Yamana Gold portfolio for the last number of years. A little bit of work was done on it in 2012 and 2013, but the big gold companies have been very shy to spend on exploration. We got an opportunity here, in this deal, to go back in there and we're very excited about it.

Gerardo Del Real: Excellent. Now, you mentioned that, of course, it's a past producing property. Can you talk to me about some of the synergies with Arnett Creek, which is obviously right up the road. I know there's a lot there.

Hugh Agro: Yeah. The first synergy is in the people. On our team, we have a number of people who were previously with Meridian Gold. In effect, we have the former site manager for the Meridian Beartrack mine, and chief engineer, and general manager working for our group, as general manager based out of Salmon, Idaho. We've got another fellow who was VP Corporate Development with Meridian Gold, and of course Wayne Hubert involved in the business. So there's a lot of synergy from a people point of view, in terms of having that deep institutional knowledge on the asset.

As you've pointed out, it's right next door to what we've got at Arnett Creek, about 4 miles away. In fact, the property positions are contiguous, so we now have about 9,400 acres, and this is a really great position to be in, from a people and from an asset point of view.

Gerardo Del Real: Excellent. Now, like Arnett Creek, Beartrack has a historic resource. Now, I should mention it's not 43-101 compliant, but it was a very rigorous drilling, or several very rigorous drilling campaigns, that led to establish that resource. It's a resource of 1.299 million ounces of gold. Can we talk a bit about the historic resource and what the plan is to actually get it 43-101 compliant?

Hugh Agro: The great thing about these brownfield sites is, particularly the ones that were operated in the late '90s and shut town in a sub $300 gold price environment, is that they tend to have lots of resources around them, which at the time weren't exploitable, but in the current gold market, and with the scarcity of big projects out there, these things make a lot of sense today.

1.3 million ounces, close to surface, in oxides, and sulfides, and mixed sulfides, we'll need to do a lot of work to turn that into something that's 43-101 reportable. We're certainly doing a lot of exploration along the 5 kilometer strike length of mineralized potential. Then what's also got us excited is the potential at depth here at the Beartrack. I mentioned earlier that Yamana had done a limited amount of drilling, back in 2012, 2013. One of the intercepts at depth was 28 meters of 24 grams per tonne gold equivalent. That's not a true thickness. That's a down hole thickness of 28 meters, but very impressive grades. The deposit's open at depth. It's open in the southwest, and as I indicated earlier, a 5 kilometer strike length, so lots of potential on this brownfield site.

Gerardo Del Real: Impressive, impressive. And I should add that the mine, the Beartrack mine, when it was in production, had achieved a life of mine recovery of approximately 87%. I know you mentioned, obviously, a lot of the team is experienced with Beartrack. They know the property well. That's got to bode well for future exploration, as you work towards developing and establishing a resource.

Hugh Agro: An example of that is, you know in the permitting process here. We're very excited and in very good dialog with the US Forest Service. We expect to be in drilling this month. This is just an example of how quickly we can move, given the experience of the team, and the familiarity with the asset, and the fact that it's such a well-developed site.

You talk about synergy. In this situation, we've got growth. We've got an 11,000 square foot fully winterized core logging and storage facility. We've got power to the site, drill water availability, all these things, which will make for a smoother transition for us, and quicker results for the market.

Gerardo Del Real: Excellent. I love the way the deal was structured. It will allow shareholders to have exposure to the upside if you're successful in outlining the type of resource that you want to outline, but on the off chance, because some of it will be exploration, despite the fact that it's a brownfield property, you also structured the deal in a way that will make it to where if you don't like what you see, you don't have a huge commitment up front. Can we talk a bit about how the deal was structured, because, I thought it was brilliant.

Hugh Agro: Sure. It's an interesting arrangement. Over the course of the next four years, we pay a subsidiary of Yamana Gold $250,000 cash, deliver 4 million shares of Revival Gold, and we spend $10 million in exploration. We also pick up some remediation costs in years three and four of the earn-in. On election, we have the option to acquire 100% of the company that owns the Beartrack property, and in three years' time after that, so seven years from today, we pay either $6 an ounce of resource or $15 an ounce of reserve in the ground, the greater of either of those.

It is, as you point out, a very low risk, high reward opportunity for Revival Gold. For very little money out the door, we're in exploring, and we have a four year period to decide if this is something we want to take on in earnest. As I mentioned earlier, with the team we have, I think we're very hot on the track to the targets that warrant follow up. With the financing we've announced, we'll be funded for the next couple of years to do that.

Gerardo Del Real: Excellent. Let's talk about the financing. I know it's anticipated to bring in approximately $10 million Canadian, in a combination of a brokered and non-brokered private placement. Can we talk a bit about the terms there?

Hugh Agro: Sure. It's a $0.60 unit offering, a share and a half warrant exercisable at $0.90 for two years. We've got PI Financial and Medalist Capital leading the brokered portion, and the non-brokered portion is going largely to our existing shareholders, who are highly supportive of the Revival Gold team, and really have been instrumental in getting us to the point we're at today, and support for future growth.

Gerardo Del Real: In the interest of full disclosure, I'll definitely be writing a check for Revival. I'm excited about the project. I love the team in place. I'm looking forward to visiting the project next month. Is there anything else that you'd like to add, Hugh? Again, congratulations on what I think is going to prove a very, very accretive acquisition for shareholders in Revival Gold.

Hugh Agro: Well, what can I say but nothing more than I'm writing a check, too. This is exciting stuff. We're in a great gold market, and these two projects together give us a super land position, and 1.5 million ounces of historic resource, that's a great starting point for Revival Gold. With a $15 million market cap today, lots of upside.

Gerardo Del Real: Excellent. Well, I look forward to having you back on. I know you mentioned you want to get drills turning as soon as possible, so as soon as you announce the actual targets and the drilling program, details of the drilling program, I'd love to have you back on to explain that to everybody.

Hugh Agro: You'll hear from us. That's for sure.

Gerardo Del Real: Hugh Agro of Revival Gold. Thank you very much, Hugh.

Hugh Agro: Okay. Thanks, Gerardo.

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