Bringing Idaho’s Largest Old Gold Mine Back to Life
by Mike Fagan
Revival Gold (TSX-V: RVG)(OTC: RVLGF) has now made a very significant leap forward in restarting the famed Beartrack Gold Mine located in Lemhi County, Idaho, with the release of a phase one PEA (Preliminary Economic Assessment) on the project.
If you’ve been following our ongoing coverage of Revival Gold, then you already know Beartrack-Arnett is the largest past-producing gold mine (600,000 oz/Au) in Idaho and the second largest known deposit of gold in the state.
You also know it’s an advanced “brownfield project” with easy road access and excellent infrastructure in-place, including an 11,000 sq ft core facility, leach ponds, and existing power and water.
At present, Beartrack-Arnett boasts a current resource estimate of 1.35 million ounces at 1.16 grams per tonne gold indicated and 1.64 million ounces at 1.08 grams per tonne gold inferred for a total of 2.99 million ounces of gold.
Importantly, the newly-released PEA only accounts for the heap leachable portion of the total gold resources at Beartrack, leaving about two-thirds of the project open for further resource expansion and eventual PEA inclusion.
Highlights from the phase one PEA include production of 72,000 ounces of gold per year over an initial 7-year mine life for a total of 506,000 ounces of gold at AISC (All-In Sustaining Cost) of $1,057 oz/Au. Of course, gold is trading far above that price at about $1,880 per ounce.
In response to the phase one PEA, Beacon Securities immediately put out an updated research report with a Buy rating and C$2.00 per RVG share price target. Revival is currently trading at less than half that at C$0.92 per share. Likewise, Paradigm Capital has issued a Buy rating on Revival shares with a C$2.45 price target.
Revival CEO, Hugh Agro, whom you’ll be hearing more from in a moment, commented:
“This PEA supports Revival Gold’s plans to resume meaningful heap leach gold production from Beartrack-Arnett with low re-start capital and robust economics … We also intend to evaluate the potential for a second phase sulfide milling project so that we might fully realize the inherent value of all the gold resources identified at Beartrack-Arnett to-date.”
To that effort, a multi-rig program is in-progress at Beartrack-Arnett with a total of 30 exploration and infill drill holes (4,900 meters) completed… which means, in addition to a very positive PEA announcement, RVG shareholders can expect a steady stream of assay results in the coming weeks.
Our own Gerardo Del Real of Junior Resource Monthly and Junior Resource Trader recently sat down with Revival Gold CEO Hugh Agro for a review of the newly released PEA and a wider look at the overall potential of Beartrack-Arnett.
RVG has the right to acquire a 100% interest in Beartrack and holds a 100% interest in the neighboring Arnett Gold Project.
Revival Gold (TSX-V: RVG)(OTC: RVLGF) CEO Hugh Agro on Newly Released Preliminary Economic Assessment
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Revival Gold, Mr. Hugh Agro. Hugh, how are you this afternoon?
Hugh Agro: Very good. Gerardo. Thank you for having me back.
GDR: Thanks for coming back. The last time you and I chatted, I mentioned that you had teased the first peek at the PEA and the economics surrounding the Beartrack-Arnett Project. I mentioned that there wasn't a lot of month left in November. Sure enough, here we are less than a week later with a very, very robust step one. Let me summarize briefly. Then, I'll let you provide some context if that's okay, Hugh.
You just announced the PEA came in at close to current prices at $1,950 per ounce gold, $200 million NPV, 49% IRR. For the skeptics out there, if you want to take the de-risked price of $1,550 per ounce gold, it's a net present value of $88 million, an after-tax IRR of 25%. Obviously, a lot of room between $1,550 and $1,950 there providing a great, great buffer.
Again, I have to advise this is a step one. This only takes into account a small part of the overall resource. Can you provide some context for us, Hugh? Of course, congratulations.
HA: Yeah. Thank you, Gerardo. First thing is this is a project that's got low risk, is eminently deliverable, and which is, as you say, the starting point for the project. It's only a fraction of the value of the project and the potential of the project, but already you're starting to see 72,000 ounces a year of gold at all-in sustaining costs just over a thousand dollars an ounce, and the return metrics that funding parties will find easy to manage.
It's a great starter project for Revival Gold. It's the first step along the way as we develop out towards the mill scenario and deliver on exploration to come.
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GDR: Let's talk about the pre-production capital. You mentioned the potential funding options that are going to open up to you here in the near future if they haven't already. I've seen some research reports on this morning's news that give you a price target of $2 per share. You're, of course, trading at half that, $1 per share Canadian. Can we talk about the inexpensive CAPEX to get this up and going?
HA: This is one of the benefits of Revival Gold. We've got all this infrastructure on site. We've now been through it fully with the engineering firm, some of the top engineers in the land on heap leach projects. That infrastructure that we have on site gives us a headstart in terms of a redevelopment for a really low cost of capital, a hundred million, very manageable for a company our size.
If you look at us compared to most of the other development projects out there, our capital intensity ranks at the very low end. That makes it a very doable project.
GDR: The infrastructure advantage also provides for a very favorable permitting timeline, which of course is critical if you're going to capture the better parts of this gold bull cycle. Can you explain that a bit?
HA: We're on a brownfield site. We've got lots of baseline data. We've also got the aspects of permitting from the prior operation, the plan of operation. As part of our engineering plan, we managed to keep all of the Beartrack aspects of this project in the footprint of the existing disturbance.
That should make for a much quicker permitting timeline than a greenfield site or even one where we didn't do the heavy lifting to manage ourselves within the current footprint of the site. That's a real advantage for the project as you point out.
GDR: This, of course, only includes the heap leachable portion of the resource. Can you talk about the potential, which you mentioned in the release that you're evaluating for a second phase sulfide milling project?
HA: We've got huge option value here. The resource on the mineralized trend is outlined over about 5.6 kilometers or three-and-a-half miles. We've got double that in terms of potential to expand the resource, but even within the current resource, we're only scratching the surface with the heap leach.
A mill project conceived at the level of production that our consultants, RPA, conceptualized in the resource, would take us to 20,000 tonnes a day or 300,000 ounces a year of gold at our current grade and recoveries. That's a very sizable project. As we work our way forward with this first phase project, we will continue to pursue exploration and continue to advance towards the mill scenario to follow.
GDR: The margins are excellent. Using today's prices, you have approximately $820 in margin with an all-in sustaining cost, of course, of $1,057 per ounce. That's assuming what the study published was a 60% average recovery. Is there an opportunity to optimize that?
HA: We think, yes, that there is an opportunity to improve on what we have here. First of all, by adding oxide leachable material to the resource building on what we have. We're seeing already in the drill results from this year that we will do that.
Also, with further test work, we've assumed a minus two-inch crush for the leach on this operation as it's currently designed. There's no reason why we can't improve on crush size and optimize for better recoveries through more engineering work and detailed study. That'll all follow as we progress towards taking this back into operation, but I think our starting point is a relatively conservative one. One that we certainly think we can improve on.
GDR: In the meantime, you keep finding more gold. Assays are pending. Any feedback there on the turnaround times? I know that the labs in many places are busy. Do you have a ballpark for us on when we can receive the next set of assays?
HA: Yeah. This is the million dollar question. We'll hope to have some out certainly before the end of this year, but I'm afraid a lot of our results aren't going to be coming out until January and possibly into February. Hang onto your seats here, guys. We've got lots of drill results to come. We'll bring them to you as quickly as we can.
GDR: A lot to look forward to, Hugh. Thank you again and congratulations.
HA: Thank you, Gerardo.
Let's get it!
Gerardo Del Real
Editor, Resource Stock Digest For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Resource Stock Digest, Junior Resource Monthly, and Junior Resource Trader. For more about Gerardo, check out his editor page.
