Categories: Precious Metals
Topics: General Precious Metals / Gold Stocks

Revival Gold (TSX-V: RVG)(OTC: RVLGF) CEO Hugh Agro on Positive PEA at Mercur Gold Project, Utah; $752M NPV & 57% IRR at $3K Gold

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of one of the more compelling gold speculations in the entire resource space. I'm happy to have Mr. Hugh Agro from Revival Gold (TSX-V: RVG)(OTC: RVLGF) with me today. Hugh, how are you?

Hugh Agro: It’s good to be with you Gerardo, and happy to hear you pronouncing your name with the right tone to it. Great to be with you.

Gerardo Del Real: Every now and then, I open the door to my Anglo friends to give it a try. Listen, let's get right into it. I couldn't be more excited. We have gold at US$3,100/oz. You recently put out a PEA on your Mercur project; a project, by the way, that’s in Utah, USA. It has an expedited timeline for permitting. It's a brownfields site. 

At US$3,000/oz gold, that project alone — and I'm excluding Beartrack-Arnett, which I love — but Mercur alone has an NPV at today's gold prices of just shy of US$800 million at a 57% internal rate of return.

And here you are trading at about one-tenth of that. You've had a good run the last couple of days. I sent a note out to subscribers yesterday basically saying that this one is simple and it’s easy: buy it and sell it for more later on. Can you talk to me about that PEA and then the upside because I get really excited about the upside. 

Hugh Agro: It is simple. It’s straightforward. And it's really exciting to have these results out for your audience. Gerardo, step back about a year, and you’ll remember that we purchased the Mercur project through the purchase of a private company — a little-known private company that did all of this legwork putting the property position together. 

We came along and were able to fund the effort to complete metallurgical test work, do the engineering, and remodel the geology. And the output in a US$3,100/oz gold price environment, as you described, is pretty spectacular. 

We’re talking almost a hundred thousand ounces a year of potential gold production over a 10-year mine life at US$1,360 AISC costs, which is very competitive relative to our peers — all for a capital cost of about US$208 million. And again, very competitive relative to our peers sitting at about US$220 an ounce of gold production.

This is a really exciting result. And what makes it even more exciting is that our team has been able to come up with a permitting timeline that sits at just two years because of the fact that we're on private ground and because of the fact that we have the infrastructure to benefit the project. 

Again, a really exciting result. It all sums up to that US$750 million NPV at US$3,000/oz gold and that 57% after-tax IRR you were talking about.

Gerardo Del Real: I couldn't be more impressed with the numbers. We're sitting at US$3,160/oz gold. It looks like with the fiscal, monetary, and geopolitical volatility that we have going on that gold is indeed the safe haven of choice. I'll speculate and I'll guess — and I'm doing it with my wallet — that gold is going a lot higher. The leverage here is phenomenal.

I would be not doing my audience a service and a courtesy if I didn't ask about the Beartrack-Arnett project. That project, on its own, in my mind, is worth a whole heck of a lot more than the entire market cap of Revival Gold as it stands. And that's excluding the US$752 million NPV on Mercur. 

Can we speak to Beartrack-Arnett here in a bit? But first, tell me more about the upside at Mercur as it relates to expanding that resource.

Hugh Agro: Well, this is a Carlin-type system. These are the big gold systems that the majors own in Nevada and that are so valuable to those companies. They lead to discoveries like Fourmile and Cortez… these high-grade discoveries at depth. 

And what we know about the Mercur system in particular with 2.6 million ounces of historical production is that it also produces high grades. Almost a million of those ounces were at 7 grams per tonne gold.

We haven't yet pursued the high-grade potential of this deposit. We are focused on open pit heap leach material within 150 meters, call it 500 feet of surface… so very close to surface and very straightforward to mine and relatively low-risk. 

Our geologists are itching to get back out there to do more drilling and to continue to increase the scale of this project. It's a rare find. These kinds of deposits do not generally sit in the hands of a junior for very long. They tend to be very prolific, and we're really excited about the ongoing potential.

Gerardo Del Real: Well, listen, I know that Dundee Corporation recently took a strategic stake in Revival. I think their timing was excellent, and I think they're looking pretty brilliant right now. 

I'm going to assume that mid-tiers are all over you right now. And I know you likely can't comment too much on specifics. But can you talk a bit about the interest and the calls that you're getting and the traffic relative to how it was a year ago? What a difference a year makes.

Hugh Agro: A year does make a difference. I think what we're seeing is a lot more confidence out of the intermediates and the senior gold companies. They're just making a ton of cash flow here, somewhere between 6% and 14% free cash flow generating from the majors and the intermediates in the last numbers I've seen. They're feeling very confident. They’re active, and we invite the interest.

We're happy to have smart geological teams diving into our data. We're busy populating our data data room with all of the details from the PFS out of Mercur. That'll take place over the next month or month and a half. And we'll continue to entertain interest in the project from both corporate and financial partners as we think about next steps for Revival Gold.

You did bring up Beartrack-Arnett. I want to mention that it very much is part of our business going forward. If you aggregate up the NAV on that project's first phase heap leach project with what we have now from Mercur, we're talking about a half a billion dollars worth of NPV at a more modest US$2,175/oz gold price. 

It increases from that half a billion dollars to US$1.2 billion at $3,000 gold. So talk about leverage, talk about ounce exposure. And these are pure gold ounces; it’s not a gold equivalent situation. And it’s all in the domestic United States in a good western location.

We have a ton of leverage here, and not just from exploration at Mercur but also from exploration at our Beartrack-Arnett project, which represents our founding asset in Idaho. But from this gold price pickup, and the exposure that we offer in current mine plans under PFS and PEA in the market now.

Gerardo Del Real: We've waited a long time for this gold bull market. I've personally known you, Hugh, for over a decade. And I've been waiting for you to have the kind of market that we have now for you to do what you do best, which is monetize assets, add value, and negotiate. 

You’re able to do that with the best of them. You and the team obviously have done this before with your background. I'm excited for the company moving forward. I can't wait to see what the rest of 2025 brings. Anything you’d like to add to that, Hugh?

Hugh Agro: We're appreciative of the support and the enthusiasm. And boy, timing is everything here. I think we've done the legwork. We have a lot more work to do; no question about that. But we're starting to see that show up in our share price. And ultimately, that's what we're here for — our investors.

Gerardo Del Real: Hugh, thank you for your time. I look forward to doing it again. We’ll chat soon.

Hugh Agro: Thank you, Gerardo.

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