Categories: Precious Metals
Topics: General Precious Metals

Revival Gold (TSX-V: RVG)(OTC: RVLGF) CEO Hugh Agro on Definitive Agreement to Acquire Ensign Minerals Inc. and Mercur Gold Project, Utah

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Revival Gold — Mr. Hugh Agro. Hugh, it seems like the last couple of times we've spoken, it has been within a backdrop of brand new all-time highs for gold. Today is no exception. 

What a day to be a Revival Gold shareholder and to announce what is clearly a transformative transaction for the company and for shareholders. Congratulations on the news today. I'll let you provide the context because there's a lot to unpack here.

Hugh Agro: Yes, super excited, Gerardo. And super excited to be doing this at a time of rising gold prices and with you guys at Resource Stock Digest on board here. We've put together a transformative transaction for Revival Gold. 

We are acquiring Ensign Minerals / Mercur gold project in Utah. It's a very good fit with our Beartrack-Arnett gold project. Importantly, it is immediately accretive, adding over 60% on a per share basis to our heap leachable resources, which, of course, are those relatively capital-efficient resources to exploit. 

And for just one-third of our market cap, we're taking our total resources to 6 million ounces and our target production from heap leach to 150,000 ounces a year. And again, this is all in the western United States in two projects that are about a six-hour drive from one another… so very synergistic for our team. 

And with gold going where it's going, we're really excited about what this means in terms of leverage for our shareholders, moving more quickly to production, and capitalizing on the excellent US presence that we have at Revival Gold.

Gerardo Del Real: Let's talk about taking advantage of the gold sweet spot. And what I mean by that is, oftentimes, explorers and developers will be sitting on a couple of million ounces of gold, and they’ll make a discovery. But by the time they actually get through the permitting cycle and the development cycle, they've missed the profitable portion of that cycle because, let's be frank, it's a cyclical space. 

I think we're just at the beginning of what's going to be a historic gold bull market. And you accelerating the timeline to potential production, I think, should be really highlighted and appreciated. Can you speak to how this transaction does that for Revival?

Hugh Agro: Well, firstly, the Mercur project we're acquiring is on private land in the United States. That's very important for permitting. And secondly, it's in an area that’s semi-arid, which means there's not a lot of water around to sample tests, to background explore, and for baseline studies. So that too is very beneficial for permitting. 

So those two things, private land and semi-arid location, allow us to move more quickly through permitting. And with the state regulator of Idaho, that's DOGAM (Department of Geology and Mineral Industries) as opposed to the federal agencies and the NEPA (National Environmental Protection Agency) process. And so that's really important for us, and we think we can take this from where we are now to turning a shovel within less than three years.

Of course, at Beartrack-Arnett, we've already moved through the engineering stage; we're at the PFS stage there. It’s a very high return project: 24% after-tax NPV at US$1,800/oz gold. And we know very clearly the timeline for that at about three and a half years.

And really, the driving force there is the requirement to do additional and supplementary baseline data collection. So we'll advance steps on re-permitting at Beartrack but the engineering team will shift over to Mercur and put NAV (Net Asset Value) to the Mercur project and get the engineering works going. And we'll have a PEA by the end of first quarter 2025.

We’ll then move to get into operation and a construction decision and so on and, as you say, to capitalize on this gold price environment. And then, we'll have the Beartrack project following soon after. 

And that's synergistic growth and organic growth from these two brownfields sites where we can take advantage of the existing infrastructure and all of the team experience with these kinds of projects. It's just a wonderful place to be, and we're really excited about what this means for Revival Gold.

Gerardo Del Real: I was online, as I often am in the daytime, just to kind of get a temperature check. And there was a comment made about a director that is shared by both companies. And so I thought I'd play devil's advocate a bit because we're huge on transparency around here and making sure that we try to address the questions that people actually are looking to ask. 

And so can you speak to the approach there and how beneficial or not beneficial it was to have someone that, obviously, is trustworthy enough to you to have on both sides of a transaction? How did that come about… how did that help or hinder the process… what did that look like?

Hugh Agro: Thank you for bringing that up, Gerardo. It's actually a huge opportunity for us here in terms of bringing this to us and giving us comfort with the data and the information and the work that's been done by the team at Ensign. 

Wayne Hubert is currently the non-executive chairman at Revival Gold. I invited him to be on our board originally because of his background with Beartrack-Arnett. He was the first finance director of the mine when it was an operation back in the late-90s to early 2000s. 

And that background and that history of understanding Idaho, having lived in Salmon, Idaho, where our project is located, and having that experience and background with the project makes him a really good fit. 

He went on to a lot of success in the industry beyond the original Beartrack experience. He grew a company called Andean Resources from a C$100 million market cap to its sale to Goldcorp for over C$3 billion. And so he's got a ton of talent.

In addition to being on the board of Revival Gold, he had spent seven years pulling together this portfolio of land in Utah where he lives. And of course, we've talked about it over the years and had started doing due diligence on it from a Revival Gold perspective about three years ago. 

The timing just worked out really well for us, and the opportunity to put the two companies together really crystallized in the last couple of months. Of course, we've done quite a bit of further due diligence since that first trip three years ago. And Wayne, as a director of both companies, had to recuse himself from voting on the transaction for governance reasons. 

But he will be on the pro forma company's board. We will appoint a new independent chairman, Tim Warman, who put together Fiore Gold and sold that to Calibre and has experience with the western United States in developing gold projects. We're also bringing Norm Pitcher onto the board of Revival Gold from Ensign Minerals. He's the former COO at El Dorado Gold… so rounding out our board. 

One of our directors, and one of the founding directors at Revival Gold, Mike Mansfield, is going to step down to make room for Norm. Mike has just done a great job with us and we're really sorry to see him go. But he recognizes that, as part of this transition, we're going to continue to grow the business and prosper through that. 

So Norm joining the board and Wayne Hubert moving aside to have Tim Warman take over as chairman… and all of this is taking place very amicably. This is a win-win transaction for Ensign shareholders. And we're welcoming some really important institutions into Revival Gold, and we’re very excited about how this has all come together. 

And the connection of the people is really what makes it possible. As you know, Gerardo, there are so many things that one has to look at from a due diligence perspective. And knowing that you have good people on the other side is very comforting for me as a shareholder and as the leader of the pro forma Revival Gold.

Gerardo Del Real: Exciting times, Hugh. The infrastructure is top-notch at both projects; jurisdiction is top-notch. The talent and the team are clearly built-to-build. And again, I'll repeat that, it's clearly a team that's been put together and is being put together and complements each other well and is built-to-build. 

And I absolutely believe that once this financing closes, and once people have had a chance to really digest the new profile, that Revival is now an even bigger takeout target because of the potential production profile. Anything to add to that, Hugh?

Hugh Agro: I think you're right, Gerardo. And it's not just the takeover potential, though, that's exciting me about this transaction and what it does in terms of a catalyst… I think it makes us a lot more investable. 

And if there's been a challenge with Revival Gold, I think our market cap has been part of that. The fact that we've got more heap leach component to our overall resources is also an upgrade. And we see a ton of potential here to see the share price increased. 

I do agree with you… the current financing we're doing as part of this transaction needs to be put behind us. We'll get to that here shortly. And look, we keep going from gold price highs to gold price highs, and our shareholders are going to be rewarded in a big way. And with this transaction, I think it has a multiplying effect on that.

Gerardo Del Real: I couldn't agree more. Hugh, congrats again. Excellent work and we'll chat soon. And I'm sure there's going to be lots of news especially given where gold looks to be headed. It appears that it's going much, much higher quickly. So thanks again, Hugh.

Hugh Agro: Thank you, Gerardo.

Gerardo Del Real: Alright, chat soon. 

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