Gerardo Del Real: Good morning, Hugh, and thank you for taking the time to meet with me today. There’s obviously a ton going on with Revival Gold right now. Let’s start with the resource update that came out in late 2020...

Hugh Agro: Thanks for having me, Gerardo. It takes a lot of expertise to do this kind of work and it's something that we've been busy at for a number of months here now. We've got a super explorationist in Steve Preismeyer, our VP of Exploration. Our General Manager, Pete Blakeley, former General Manager for the operation at Beartrack. So a lot of in depth knowledge and an understanding.

At the board level we've got folks like Wayne Hubert, our Chairman who's done it before and with Andean Resources. Don Birak, Idaho resident and a long-time and well-regarded explorationist across the Cordilleran. This kind of guidance and strategic leadership is what makes all the difference for Revival Gold.

Then we've got the input of our consultants, Roscoe Postle Associates, a really well-regarded firm that did this resource update and all the analysis behind it, including on the metallurgical side with input from SGS and from John Marsden. A really good team and thank you for recognizing the efforts of the team and of the work that's come from it.

Yes, there's lots of detail there and we are very methodical. But as we know in the mining industry, there's lots of things that can go wrong so you want to make sure you've covered all the bases. I think we've done that with this release.

3 million ounces is the resource number. But if you kind of dig down into it a little further, you can see that we've got a big quantity of leachable material in the order of 600,000 ounces. That's the relatively quick opportunity for us to potentially produce gold from this project. And then in the longer term, we've got this large and growing mill resource, which puts us on really a different level in terms of the scale of the project. And recognizing that there's only five gold mines in all of the United States that produce more than 300,000 ounces a year, this is important. And the scale that we've developed and that we're looking at and conceptualizing for Beartrack and the mill scenario puts us in that league.

Gerardo Del Real: Congrats on the big increase in gold resources. You also announced a preliminary economic assessment (PEA) on just a portion of the project with fantastic results.

At $1,950 per ounce gold, the PEA showed a $200 million net present value (NPV) and 49% internal rate of return (IRR). Again, I have to advise this is step one. This only takes into account a small part of the overall resource. Can you provide some context for us, Hugh?

Hugh Agro: 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.

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.

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.

Gerardo Del Real: Tell me about that potential to expand the resource. You drilled an expanded 10,000 meter campaign last year (highlights here). This year, you just kicked off a 5,000 meter summer drill program at the high grade Joss area. Can we go over the details?

Hugh Agro: As you know, we've got about 850,000 ounces of our 3 million ounce resource in the PEA for the heap leach phase of this operation. But this drilling that we're doing in the Joss area, which is a high-grade target at Beartrack-Arnett, is catalytic to our longer-term plans for this project — the mill project.

That's a project which would produce something in the order of 200,000 - 300,000 ounces [of gold] a year under the currently contemplated production rate that our consultants are using in the resource 43-101.

It's a project of scale that is really exciting to the market, especially, as you point out — in a rising gold price environment. Joss is about three quarters of a mile in strike. We've got 14 drill holes into it so far. And we're going back in to continue to expand on strike and to add to the understanding of that mineralized body.

In June, we’ll add a second rig that's focused on the Haidee target where we have oxide resources on-surface in an open pittable situation; open in all directions. And to add to some of the earlier metrics that you were mentioning, every year of free cash flow from our first phase project equates to our current market cap.

So as we add additional years to the mine life in the oxides — which are open in all directions — we are going to continue to multiply the value opportunity for our shareholders today.

Gerardo Del Real: The most recent PEA (Preliminary Economic Assessment) envisions a seven-year mine life, initially. We know that's going to grow. But an initial seven-year mine life at an all-in sustaining cost [AISC] of $1,057 per ounce of gold. The margins there, of course, approximately $843 per ounce of gold. That doesn't include any of the other components that we chatted about.

You have a cash balance as of March 31 of approximately C$7.4 million. And something that I love, Hugh, is you have skin in the game! You're not one of these CEOs that says you're undervalued and then does not act it. How many shares do you currently own of Revival Gold, personally?

Hugh Agro: Gosh, I'm over 4 million at this point; most recent purchase was C$0.66 a share in April. I think we've got tremendous value. We've got a team that's driving hard on all fronts efficiently for shareholders. And the risk/reward potential on Revival Gold is outstanding.

So yes, I'm long. And yes, I'm a believer… but for good reason. And I've been in this business for 30 years. I think we've created something here with Beartrack-Arnett in its modern edition, which is going to have reverberations in the US mining scene. It'll be, in my view, one of the top six gold producing assets in the United States. And at just the time when other parts of the world are falling apart.

Even some of the traditionally more comfortable places to be like Chile and Peru have gotten a lot more difficult; Mexico, very difficult. We're seeing expropriations in some of the European and Middle East and Southeast Asian countries. This is a project that's coming in at precisely the time when people want to come back to the United States and Canada for good opportunities to feed ‘Made in America.’

Gerardo Del Real: You have grade; you have margin; you have the team; you have exploration upside; you have infrastructure; you have a solid cash balance. The drills are turning; insider ownership. You have analyst price targets near C$2.00 while your shares trade close to C$0.70. Did I miss anything, Hugh?

Hugh Agro: Great value proposition with these catalysts. So yeah, great to have the audience getting this information today. I couldn't be more excited about the potential of Revival Gold than I am at this time.

Gerardo Del Real: Agreed. To make money in this business, it's buy-low and sell-high. This is the buy-low portion of the sell-high equation everybody. Mr. Agro, thank you so much for your time. I appreciate it!

Hugh Agro: Gerardo, a pleasure!

The Opportunity

Revival Gold remains largely undiscovered by Wall Street and undervalued as well — giving investors a timely opportunity to get involved in RVG at this exciting development stage.

The company’s roughly 71.2 million outstanding shares are currently trading around C$0.70, giving it a market cap of just C$47 million. 

The chart (below) reveals that Revival Gold is trading at the low end of the spectrum relative to the current amount of measured and indicated gold it controls.

That means RVG could trade much higher in the near-term.

Specifically, as Revival Gold continues to add significant gold ounces by way of the drill – while simultaneously advancing its Beartrack/Arnett project toward production – it seems inevitable that the stock will undergo a substantial rerating to the upside in order to compare more equally with its peer group. 

I have no doubt that major US miners are keeping a close eye on Revival Gold and its pending mine restart at Beartrack.

It’s the kind of brownfield operation that could have large implications across the gold sector as mining firms seek to reignite other past producing mines across North America and globally in the current $1,900+ per ounce gold market.

As a formerly producing mine, Beartrack offers numerous valuable advantages over the typical greenfield exploration project, including a maiden two million ounce gold resource, an 11,000 sq ft core facility, leach ponds, and existing power and water. And the property lies just 10 miles from the town of Salmon, Idaho, making for an easy drive with roads all the way into the main project area. 

At Beartrack/Arnett, we already know the gold is there! And analysts are starting to pay attention:

With the 3 million ounce resource and the potential for Revival to add significant gold ounces at Beartrack/Arnett, renowned research analytics firms Paradigm Capital and Beacon Securities recently put out price targets of US$1.85 and US$2.00 per RVG share, respectively.

Those price targets are up to TRIPLE what Revival Gold currently trades…and they may prove conservative.

Learn more about Revival Gold and sign up to its investor list by clicking here.

And click here to get real-time updates from the company on their Twitter feed.

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— Resource Stock Digest Research