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

Revival Gold (TSX-V: RVG)(OTC: RVLGF) CEO Hugh Agro on Approaching Gold Production in Western United States with PEA Just Weeks Away

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Revival Gold (TSX-V: RVG)(OTC: RVLGF) — Mr. Hugh Agro. Hugh, what a day to have you on, sir. We have US$3,030 per ounce gold and another record high in the gold space. How are you today?

Hugh Agro: Very well, and thanks for having me, Gerardo. We’re comfortably above US$3,000/oz gold, I would say.

Gerardo Del Real: Well, look, comfortably above US$3K and looking like it has room to run given all of the geopolitical tension and uncertainty that’s going on around the world. 

What's your take on the gold space? I have to believe that, between the two projects —  one with near-term production capabilities — you have to be getting a whole heck of a lot more phone calls about potential M&A and about potential strategic options. And I don't think it's a coincidence that you just closed a strategic placement with Dundee Corporation. 

How's the environment out there for Revival Gold? And then, let's talk about that strategic placement because I think the timing on it was great on all sides… for shareholders, for the company, and for Dundee, I must say.

Hugh Agro: Yes, none of these things happen overnight. Of course, a lot of preparation has gone into putting this portfolio of gold assets together; now over 6 million ounces of gold in the western United States with a strategic investor that validates what our team has put together over the last seven years. 

And of course, we get the gold price moving as I think we all had expected it to move here over time, which is up, and making these projects a lot more valuable. So yes, we are seeing a lot more interest in this space. 

I think the rollover of the “Magnificent 7” is an important sign. We saw that back in 2000, 2001, 2002 on the last really big turn in the gold price. First, we had to have the broader market roll; that's happened. And I think investors are looking for the next best place, which just happens to be the gold space, which is now generating 50% margins over All-In Sustaining Costs (AISC). 

That makes the gold sector the highest margin generating business relative to anything we see in the S&P 500.

Gerardo Del Real: Tell me about Revival Gold and how it's positioned to take advantage of this as I have been making the case for quite a bit now that Revival remains one of the single-best values in the gold space given the resource space. 

You have a PEA (Preliminary Economic Assessment) coming up that I think is going to be transformational and one that I think is going to really signal to the market the potential for a very profitable operation, especially given the current price environment. 

Where are we with catalysts here for the next six months or so? And then, talk to me about Dundee Corp. coming in because I know that strategic placement was very timely given the environment right now.

Hugh Agro: We're targeting 80,000 to 100,000 ounces a year of gold production from this domestic asset in the state of Utah, which is about an hour from Salt Lake City. We think that this is a project that'll have a 9 to 10 year mine life. We're just in the final strokes of putting together a PEA, which we'll have out at the end of this month or early next month at the latest. 

We're really excited about this project. It is on private ground, which is really important for permitting. We think it's going to be less than three years for the permitting process. We'll have more to say on that. 

And this dovetails really well with investors looking for domestic, low-geographic-risk gold assets in good locations. And you can think about the scale of this business. We're talking about something that'll have revenues generating $250 to $300 million a year at where we're at today in terms of the price of gold.

From a value point of view, Revival Gold, right now, is trading at $7 an ounce in the ground. So if we look at the move in the gold price, today’s move alone is about four or five times that trading multiple in the ground for our ounces of gold. Or put another way, the price of gold today is over 500 times what we're trading at here; almost 500 times is a multiple. So for investors looking for exposure to the gold price who maybe are a little bit late getting to it — there’s still good value in the sector.

Another way to look at this, Gerardo, is that for every thousand shares of Revival Gold held, we have 30 ounces of gold in the ground. Again, that's that leverage that in a rising gold price environment, I think, investors will want to take note of. 

So the catalysts ahead of us are the PEA development and further news out of our exploration and development programs, which, I believe, bode well for the investment in Revival Gold. And the value here is compelling relative to this scarcity of gold projects in good locations for investors to participate in.

Gerardo Del Real: Again, you're targeting — and correct me if I'm wrong — but I believe it's 80,000 to 100,000 ounces of gold per year over a minimum 9 to 10 year mine life. Is that accurate?

Hugh Agro: Yes, that is accurate. And that's just for our Mercur project in Utah. And as you know, we have another 4.6 million ounces of gold in our Idaho project at Beartrack-Arnett. 

Our target production from the two projects combined takes us to over 150,000 ounces a year from open pit heap leach mines. And remember, these are relatively low-risk sites — being brownfields, past-producers — where gold has been successfully produced in the past. And that gives us huge advantages in terms of capital, in terms of permitting, and in terms of the risk of delivery.

Gerardo Del Real: When can we expect that PEA? I know there are lots of eyes on that with people wanting to have some of the economics validated there. What does that look like?

Hugh Agro: We are two to three weeks away from getting those results out. And I will look forward to chatting with you about those, Gerardo. We’re dotting the I's and crossing the T's now, and we’re really excited about this development, particularly given the environment we're in. 

Remember, the gold industry as a whole is producing about 110 to 120 million ounces a year of gold. And we're only finding 10 or 20 million, or, at the most, 30 million ounces per year of gold. So there's a big gap. 

And I think projects like the Mercur project that Revival Gold is developing in Utah and the Beartrack-Arnett project that Revival Gold is developing in Idaho are in the sweet-spot for the current environment and beyond.

Gerardo Del Real: Well, it sounds like you and I will be chatting here in the next several weeks. Thank you again for the update. Congrats again on having not one but two incredible projects that are absolutely going to benefit from record-high gold prices that continue to materialize seemingly every month. Anything to add to that, Hugh?

Hugh Agro: I just would reiterate that we're not in a vacuum here; you and I with our enthusiasm for what Revival Gold and the team of people at Revival Gold have put together. 

We now have the validation from a very astute investor and company-building entity in the space, Dundee Corporation, which has been behind the formation of some real success stories in the precious metals space: Repadre, Sabina, Dundee Precious Metals, and even going back with the Goodman family — the principals at Dundee Corporation — having been part of forming Kinross Gold and even involved in the formation of Barrick Gold.

These are very smart investors. They do a lot of technical due diligence as well as financial due diligence, which is a huge value add for Revival Gold having these folks involved in the business and now a 5% stakeholder alongside you and me.

Gerardo Del Real: The timing could not be better. Hugh, always a pleasure. Chat soon, sir.

Hugh Agro: Thank you, Gerardo.

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