Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Revival Gold (TSX-V: RVG) CEO Hugh Agro on Progressing Toward a PEA at the Beartrack-Arnett Gold Project in Idaho

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of one of the most compelling speculations in the gold space, Revival Gold (TSX-V: RVG)(OTC: RVLGF), Mr. Hugh Agro. Hugh, how are you today?

Hugh Agro: I'm very good, Gerardo. Thank you for that introduction.

Gerardo Del Real: It's a pleasure chatting. It's been a month or so since we had a chance to catch up. I assume family is well. Everyone's healthy?

Hugh Agro: Yeah, we are and we're really grateful for all the great work that folks are doing on the front line. We're out of the fray and healthy and well, as too are all the employees and contractors with Revival Gold. So we cross our fingers. We're thankful, we're grateful and appreciative of all the frontline workers who are keeping things going.

Gerardo Del Real: I called Revival Gold one of the better speculations in the entire gold space. Let me quantify that. You have a current market cap of approximately $38 million. I could make a pretty compelling argument that the infrastructure advantage you have in place at Beartrack would justify the market cap if that's all that was there. 

You also happen to have a resource base across all categories of approximately 3 million ounces. There are analysts that are calling for possibly 5 million ounces here within the next year or two. I don't think that's unrealistic. 

In fact, I know it's not because you and I have chatted in the past about being able to methodically move towards that. And again, you have a market cap despite all of that of $38 million. So that's the opportunity. You also just announced that you've commenced your PEA on Beartrack and Arnett at the heap leach project which I just referenced there. 

Can we speak to that a bit and then we'll talk about what the second half of this year is going to look like for Revival?

Hugh Agro: Look, Gerardo, we are very excited about the project portfolio we have, the compelling value we offer. The market is coming around as you've pointed out and we think we've got huge optionality here for investors on the 3 million ounces in the ground and the potential for us to leverage that existing infrastructure. 

Job one is the PEA for this year and we don't have any restrictions on being able to complete that work. We think we'll have that all wrapped up by the end of the year. We announced the appointment of Wood PLC as lead consultants. We've got KC Harvey doing the environmental and mine permitting related preparations for that PEA. And we've got a super gentleman by the name of Rod Cooper who is overseeing the effort for Revival Gold on the owner's team. A very experienced engineer who's built, managed, run projects all over the world and is a senior technical advisor to Revival Gold. So we've got the right team, we've got the right sort of work for the current workplace restrictions that are underway, and we've got the right asset for this market.

Gerardo Del Real: Excellent. Let's talk about what you're able to do during the current lockdown. Can you speak to that? I know you've been busy, I know you haven't been sitting at home idly by. Can you share with us what that looks like?

Hugh Agro: Sure. We are working on restricted budgets so that we can stretch our dollars as far as they'll go. We think there's a big re-rating in our stock as the market comes to appreciate these homegrown large gold projects. And so we want to make the most of our capital, but at the same time we can continue to progress planning for drilling. We can continue to progress drill permitting. And that of course is a long lead time item. 

So we want to be progressing our drill permitting plans, not just for this year but for next year and the years after that. So we've got a number of initiatives underway with our team in that regard. And then of course the PEA. One of the real attractions with the team that we've assembled for the PEA is that they have capability in the state of Idaho.

There is no requirement for us to have people on planes. It's relatively simple to drive out to the project site. Our general manager is based in Salmon, Idaho right next door to the project and coordinating with the rest of our team and the consultant group. We will not be held up at all by COVID-19 or the distancing requirements for work. An important aspect of this and looking after folks is priority, but we feel that we're in good shape for the program on the PEA and the work that we need to have done.

Gerardo Del Real: I mentioned the exploration upside. There's a lot of analysts and people including myself that believe Beartrack and Arnett can host at least a 5 million ounce combined resource there. What work is being done to get back to the drill bit and the exploration efforts that were in place prior to COVID-19 and what the new normal is?

Hugh Agro: Yeah, so all of the preparatory steps that we would normally be doing at this time of year are underway. Steve Priesmeyer, our VP of Exploration, is looking after organizing all of the plans around the placement of the drill holes, the orientation, the scheduling of the people, drill contractors and all of that sort of activity, the planning and preparation. We wouldn't normally start drilling until late May, June timeframe normally. This year we've got quite a bit of snow at elevation so things are pushed back a little bit anyway. All of the preparatory steps are being taken right now so that we can get in and have a good drill season this year.

Of course that will depend also on the market. But as you and I were discussing offline, Gerardo, we're in no rush to loot our shareholders. At the current time it just doesn't make sense. We've got a great asset, lots of gold in the ground and lots of leverage for our existing investors and we think the market's turning here and will be more favorable in the months to come. In the meantime, we'll continue to progress the PEA. We'll continue to progress permitting, add value to the project with the desktop work that we can do, set ourselves up for drilling when that makes sense to do.

Gerardo Del Real: Your shares are currently trading at $0.66. There's price targets of over $2 by several analysts. Your peer group average per ounce is right around the $48 per ounce, that's US, level. You're trading, you got 3 million ounces and you have a market cap of approximately $38 million. So folks, you can do the math there. You're trading at maybe 25% relative to your peer group. That's the opportunity. That's if you never find another ounce of gold, which of course is not likely. 

Hugh, anything else that you'd like to add?

Hugh Agro: I think I should address the perhaps the big question, which is why are we trading so inexpensively? And I think the big part of the reason why we trade inexpensively is that we've got a really solid core of shareholders. They're not active traders. They're long-term investors like Orion Mine Finance and others. Management owns a big part of this company. There's no impatience on the part of our big shareholders with what we're doing and how we're building value over the long run. I think that probably means we're less likely to be on the radar screen of some of them are active traders. 

But the other thing is that I think it's a matter that we all face in this industry, which is size really does matter and liquidity begets liquidity. So alongside of our work on building out the value in Beartrack-Arnett, we continue to look at opportunities to grow the business, build out our portfolio. And we think this is a good market to be doing that. Others recognize the importance of those steps and those opportunities to add value inorganically by seeking out like-minded partners. So you can bet we've got a lot of work going on on that front as well.

Gerardo Del Real: And I know you eat your own cooking, which I like. I know there was a financing in late March of $1 million dollars Canadian that I believe yourself and several directors of the company ended up acquiring something like, what, half a million shares. Is that correct?

Hugh Agro: Yeah, that's right. We did $1 million dollar offering and management participated as to about 20% of it.

Gerardo Del Real: I like it. Hugh, I'm looking forward to having you back on soon. Be safe and we'll chat again here in the next bit.

Hugh Agro: Thank you, Gerardo.

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