RSD at Beaver Creek Interview Series: Revival Gold's (TSX-V: RVG) Hugh Agro & Diane Garrett
Gerardo Del Real: This is Gerardo DelReal with Resource Stock Digest. Joining me today is the CEO of Revival Gold (TSX-V: RVG)(OTC: RVLGF), Mr. Hugh Agro, and the Non-Executive Chairman, Ms. Diane Garrett. How are the two of you doing?
Hugh Agro: Very good, Gerardo.
Diane Garrett: Excellent.
Gerardo Del Real: Excited to be here at the 2019 Beaver Creek Precious Metals Summit. The setting is beautiful. The tone is very different from last year.
I would love to start with you, Diane. You have a track record of serial success. You've seen bull markets, you've seen bear markets. I would love for you to talk about some of the past cycles, because this most recent bear market has been absolutely brutal.
Diane Garrett: Very much so.
Gerardo Del Real: You've seen both. How does this last one compare to some of the previous ones that you've been involved in?
Diane Garrett: I would have to say that this past bear market is the worst that I've seen in my career. There's been a significant disconnect between the equities and the gold price. We've seen a lot of money escape the sector and it's been very, very difficult to attract new money in. Some of the monies that are coming in are coming mostly into ETFs. We're seeing a very fundamental shift in the way investors want to invest in the space. So it's been one of the more difficult that we've seen.
Gerardo Del Real: With that being said, this sector is a very cyclical sector. And in my relatively little experience – 11 years in this space, right? – I've seen that the longer the bottoming process takes, the more violent the upside is when we finally turn. It looks like we finally have a supportive macro environment.
Can you speak to some of the bull cycles that you've seen and what that looks like when we get in early, before the mainstream really catches on? Because I think that's where we're at now.
Diane Garrett: I think you're right. For forecasting markets, obviously my crystal ball is a little cloudy, so I caution my future statements with that. But this is looking very similar. What you don't want to see in a bull market is a rapid rise in commodity prices. You want to see the gradual increase, a little bit of pullback, then a little bit of increase again, and that's exactly what we're seeing now.
This is very, very similar to what we saw and the end of the 1990s and going into the early 2000s and so we're starting to see a similar type trend. You're absolutely right, the longer and the more painful the bear market is, the more robust and a long is the bull market that soon follows. I think we're setting ourselves up for an exact repeat, if not better than the last bull market that we've had.
Gerardo Del Real: I love it. Hugh, all you've been able to do in a bear market is outline a 2-million-ounce-plus resource across all categories. You're well on your way to 3 million ounces. You're advancing the metallurgical work, which is critical, I believe at this point on the sulfide portion of those deposits.
You've now recently identified near surface oxide ounces at Arnett, which can possibly provide feed as a satellite deposit. Can we talk a bit about Revival and where we're at right now?
Hugh Agro: It is always the case. The money's made on the entry into this business. As Diane pointed out, these are cycles we can't predetermine, but you sure can tell when we hit a bottom. You can feel it, you can see it in the number of investors that are in the space. You can see it in the quality of the people that are in the space. In bull times that all changes. We have everybody and their brother clamoring to get into the space looking for a chair to sit on.
So what we've done with Revival Gold is over the last three years, through a lot of hard work by a lot of people, put together a fantastic investment vehicle for gold. And we've done it at exactly the right time in that bear market.
In terms of our milestones and our achievements through that bear cycle, I attribute that to the team. It starts at the top with our Chairman and the experience and the abilities that she brings to bear, but it runs right through our team. We've got some folks who had a lot of experience with this project and with delivering on assets in tough times.
We've been careful with our money. We spent our shareholder investments judiciously and the results speak for themselves. As you point out, maiden resource in May, 2018. We extended the strike a further kilometer in 2018 through the drilling we did that year. This year we've continued to build on that. We've got RPA underway with an updated resource estimate that will come out first quarter next year. And we're building on the oxide story at Beartrack, which has near-term potential given the infrastructure onsite.
Gerardo Del Real: Let's talk about that infrastructure because that's also critical. It's something that when I was out to site to one of the first things I mentioned, I made a funny comment. I said, "There's your market cap. It's sitting on the leach pads." Hugh recalls. I got a little pushback and this was several years ago, but now that's a part of this story. There is near-term production potential because of the infrastructure advantage that Revival has.
Hugh Agro: It's a big differentiating feature when you think about companies to invest in because the capital hurdle to get these projects going, let alone the permitting hurdle, are the things that stand in the way of smooth progress. In our case we've got a lot of baseline data. We've got a history of an operation that operated very well with no incidents, environmental instances or concerns. We have the experience of that operation and the infrastructure that remains. We've got all that going for us as we think about a restart of that plant at Beartrack.
Gerardo Del Real: Excellent. Diane, I know you're very selective with the teams that you choose to associate yourself with. What excited you about Revival?
Diane Garrett: Well, I love the vision that Revival has. Hugh and I know each other from the past. So I have a lot of time and respect for Hugh.
The model that they're following to go back and look at mines that were and low gold price environments that were past producers that still have a lot of upside potential. That's a model that not a lot of people pick up on and follow. So it's very similar to what I'd done with a former company and I think it's a great model to follow.
Listening to the vision and talking to Hugh and the team and getting to know them, at the end of the day, it all comes down to people. If you have the right people who execute on the right disciplines and stick to their guns in the game of what we're trying to accomplish there, then you're going to be successful. I mean, it's all about the people and they're going to make the assets successful.
The team that Hugh has assembled is some of the best I've seen. The vision, the way they want to methodically go about unlocking the value of this asset is something that I think is a great. It's a great opportunity for the asset, but for the management and the leadership and the vision that they have on the ground and they're executing. It's my pleasure really to be Chairman and watch this and executing on every single goal that they set before them.
Gerardo Del Real: You mentioned that former company, I was following you back then, so I know how that ended. Can we speak about the incredible job that you did taking that from a development-stage asset, raising the capital that you did, to ultimately monetizing it to the benefit of shareholders? What was the exit price on that? Do you recall?
Diane Garrett: It was just shy of $700 million.
Gerardo Del Real: Just shy of $700 million. Hugh, what's the current market cap of Revival Gold?
Hugh Agro: Yeah, $35 million.
Gerardo Del Real: $35 million. I hope everybody got that.
Hugh Agro: And not far off the starting point for remarkable.
Diane Garrett: We were $20 million market cap.
Hugh Agro: I remember. It's really something.
Gerardo Del Real: I recall.
Diane Garrett: A lot of similarities.
Gerardo Del Real: Another testament to the team at Revival is how intact the share structure has been kept, despite the bear market. Many exploration and development companies do an absolutely horrible job of blowing up your share structure during bear markets. When the market turns and we get a more favorable market, it really doesn't benefit shareholders because the share structure is so out of whack.
You've done a brilliant job of keeping that share structure intact. Can you break that down for us briefly?
Hugh Agro: Well, you know it starts with spending wisely. Right? Making sure that what we're doing is geared towards near-term milestones for investors and financing, as we must do, as an exploration development company at progressively higher prices. We'll continue to to do that. It's part of our pedigree, we're owners in the company. Shareholder interests are our top priority when it comes to the company's strategic objectives.
Gerardo Del Real: Hugh, what can we expect in the next several quarters and in 2020? Because I think it's going to be a spectacular 2020.
Hugh Agro: Yeah, it's certainly shaping up to be a really good year for us. We're spending $4.2 million dollars at Beartrack-Arnett this year. We've released the initial results out of our programs at Beartrack-Arnett. We've got another 15 holes to release from the Arnett area over the next 6 to 8 weeks.
As you mentioned earlier, we're doing metallurgical testing both on the mill material at Beartrack and the oxide material at Arnett, so we'll have those results out before the end of the year.
We've run some regional programs to improve our understanding of the exploration targets more broadly on the property position. That includes geophysics, which we released about a month ago, but we're also doing a soil sample program through the property position and we'll have that to help build our understanding of the geology and exploration targets.
We're permitting in and revising permits in four different applications to add to our permitted areas for exploration. We've got some new target areas we want to get into next year and so we're preparing for that.
Finally, we're busy with this resource update I alluded to earlier. We have RPA engaged doing that work for us and we'll have that result out beginning of next year.
Gerardo Del Real: Hugh, Diane, thank you so much. Appreciate it.
Diane Garrett: Thank you. Appreciate it