Revival Gold (TSX-V: RVG) CEO Hugh Agro on the Oversubscribed $13 Million “Catalytic” Investment into the Beartrack-Arnett Gold Project in Idaho
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Revival Gold (TSX-V: RVG)(OTC: RVLGF), Mr. Hugh Agro. Hugh, how are you today?
Hugh Agro: Excellent, Gerardo. Thank you for having me.
Gerardo Del Real: You had some news two days ago, announcing a $10 million bought deal financing. I think that was after market on the 20th. The morning of the 21st I woke up and that bought deal financing had increased to $13 million. I joked with you off air that that's likely the quickest $3 million you've ever come across, and I know you likely had to turn down more.
First and foremost, congratulations on getting this to the finish line. Frankly, you and I had conversations earlier in the year where I felt that Revival Gold's stock was underperforming, and there was a lot of opportunity there. The company and the stock has performed extremely well, I still believe there's a lot of opportunity there. First and foremost congrats, Hugh.
Let's talk about the financing, then let's talk about what you're going to do with it.
Hugh Agro: Thank you, Gerardo. By no means are we at the finish line. This is almost a new beginning for us. Your subscribers and your listeners have been following this story for a while. They understand that there's a lot of value at Beartrack-Arnett. I think the broader audience is starting to catch on, but there's a lot further to go here.
The bought deal was over two times subscribed. We did wind up cutting back a lot of folks. We're seeing some volume in the market right now, as guys want to catch up. That's good for the stock and it's good for our current shareholders, but I think there's also some really good trading opportunities here for incoming investors. The value proposition is very strong.
Gerardo Del Real: Well said. You have 3 million ounces, as it stands, across all categories. I've gone on record saying that I believe you'll, in short order, work your way towards 5 million. Are there opportunities now, with the balance sheet being topped off, out there in the market that you still feel could present value? Which is a long way of asking, are you still on the M&A trail which we discussed in the past? Is that still a focus, or is the focus strictly on Beartrack and Arnett?
Hugh Agro: I don't think our game plan or our strategy changes as a result of topping up the cash to continue our program and build on our asset at Beartrack-Arnett. We have an active corporate development process underway. We look at a lot of different things that allows us to know when we see good value. It's all relative. As I said earlier, I think we've got tremendous value in Beartrack-Arnett.
Our stock price has performed in line with our peers. One thing I think that differentiates us is that we have not issued the same number of shares to get to the same place. That is to say, we've got a lower market cap and a lower market cap per ounce of gold in the ground. I think that underpins value. It speaks to the quality of our team and the work that they've done delivering ounces onto our resource at less than $5 an ounce. Market cap sitting at somewhere around $16 an ounce. I think there's a lot of upside in the stock from here.
Getting back to your question though, Gerardo, we won't change our strategy. We're going to continue to move forward on Beartrack-Arnett as the priority, but we'll certainly have our eyes out looking for opportunities. I think this is a great time to be investing in the gold space, both as investors and as corporates.
Gerardo Del Real: I also think it's a great time to look at companies that have significant infrastructure advantages because the bottom line, Hugh, is that gold is sitting here at $1,864 as I speak. There's a lot of companies that, if this bull cycle lasts three or four years, they simply will not be able to get up and running to catch the sweet spot of that cycle.
One of the big distinguishing features of your project is the infrastructure advantage. Can you speak to that a bit?
Hugh Agro: Great point. It certainly allows us to fast track Beartrack-Arnett. You know that we're underway with a PEA on the heap leach component of the existing resource there. We've got a big mill resource which will continue to grow. But in the nearer term, there's the prospect of putting the heap leach operation back into production. We're working on that. We'll have the PEA complete by the end of the year.
Alongside of that, we'll have more details in terms of permitting timelines and steps that are required. We can take advantage of the existing footprint, not just the existing infrastructure, but the existing footprint of the plan of operations on the site, which will allow us to move permitting more quickly in that area. We'll obviously work on strategies to move the project forward as quickly as possible and, as you say, make the best use of this gold environment. I don't think we're going to see a downturn anytime soon, but it would sure be nice to be producing cash for our shareholders sooner rather than later.
The financing we've just done is going to allow us to unlock a lot value in the project. We're busy at the moment putting together ramped up plans for drilling this year and all of the technical work and details around moving the project forward. This is a catalytic investment into the business. I think it'll be very rewarding.
Gerardo Del Real: Hey, Hugh, who could have known a couple of years ago that all those ounces on the leach pad could be profitable one day?
Hugh Agro: Of course, we don't have any of the ounces in the historic leach pad in the resource. They don't meet 43-101 requirements. But I think that was one of your first observations walking the property, looking over at that hillside of leach pads. It is something that we think about in the context of the mill project. Certainly, $1,800 gold and above makes it pretty appealing.
Gerardo Del Real: Absolutely, a lot to like. How's the PEA coming along, Hugh?
Hugh Agro: We're making really good progress. Wood PLC are the engineer contractors. We've had them out to site, as well as some of the support engineers on the infrastructure at Beartrack. The mine planning steps have been completed. We've got cost estimates. We're also working on updated operating parameters around metallurgy and recoveries, and so on.
The next step for the team is to advance the permitting timelines and steps, processes, work on putting together the financial model and optimizing that. We're making really good progress with all of those steps. Then we'll roll into putting the report together. It'll be an updated technical report, which will include the existing resource, which was done by RPA. It'll include the summary of the PEA and the results of the economics on that. We'll have that all completed by end of year.
Gerardo Del Real: I've said repeatedly that I believe there's at least 5 million ounces at the project there. When can we anticipate seeing drills turning there again, Hugh?
Hugh Agro: The team has been mobilized to site, actually we mobilized the team to site a couple of weeks ago. They're prioritizing targets. We're working on the drill contract as we speak. We should be able to have the rigs out on site in August. We'll be drilling on an expanded program. We'll have details of that out next month as well.
Priority targets for us will be at Haidee where we have oxide material open in all directions. Secondarily, we want to continue to expand on the big system at Beartrack proper. We'll be drilling in the Rabbit area, which is 2.5, 3 kilometers south of the footprint of the existing resource, a big step out. You remember, 2018, we stepped out about a kilometer south of the footprint of the resource down to Joss. We added resource along that corridor and scope for more. We're stepping out again quite a bit further.
It's a very exciting time to be drilling here. We're really looking forward to getting those holes. All permitted, ready to go, team onsite, contractor on the ready. We'll have results this year from Rabbit.
Gerardo Del Real: Hugh, congrats again on getting the financing across the finish line. A lot left to do in the second half of this year. Thank you for your time. I can't wait to have you back on. Hopefully, as you announce the drill targets and, hopefully, with a gold price approaching or breaching all-time highs here in US dollars. Thank you again, Hugh,
Hugh Agro: You bet, Gerardo.