Revival Gold (RVG) - Technical Analysis & Due Diligence

Revival Gold is a growth-focused gold exploration and development company. The company is advancing the Beartrack-Arnett Gold Project located in Idaho, the United States. Beartrack-Arnett is the largest producing gold mine in the State of Idaho and hosts a multi-million-ounce gold resource. The project benefits from existing infrastructure including roads, a hydropower line, and an existing ADR (Absorption, Desorption, and Refining) gold processing facility. 

Merlin Marr-Johnson caught up with Hugh Agro, President, and CEO, Revival Gold. He previously Co-founded Carbon Arc Capital Investments Inc., a private equity-backed investor in mining and metals. He previously served as an Executive Vice President of Strategic Development at Kinross Gold Corp. Hugh has also worked in Senior Executive roles at Placer Dome, Senator Capital Partners, and investment banking with Deutsche Bank's Global Metals and Mining Group. Additionally, he has served on the Board and Audit Committees of Victoria Gold Corp., Chantrell Ventures, and Americas Silver Corp. His educational credentials include a Bachelor of Science degree in Mining Engineering from Queen's University and an MBA in Finance from UBC and London Business School. 

Company Overview

Revival Gold is a gold exploration and development company. It owns 100% interest in Meridian Beartrack Co. and Arnett Creek Gold Project. The company also holds a 51% interest in the Diamond Mountain Phosphate Project in Uintah County, Utah. The company was founded in 2008 and is headquartered in Toronto, Canada. It is listed on the Toronto Stock Exchange (TSX-V: RVG) and the OTC Markets (OTCQX: RVLGF). 

Revival Gold (RVG) - Technical Analysis & Due Diligence

The Beartrack-Arnett Gold Project

Revival Gold is advancing the Beartrack-Arnett gold project. The company has grown this project from nil to a 3Moz gold resource. It recently posted high-grade results for the Joss area within the deposit. 

The Beartrack-Arnett Gold Project is spread across a land area of 5,800 hectares. The right side of the property is called the Beartrack, while the left side is known as Arnett. This land was consolidated 4 years ago by the company through a series of transactions dating back to the first governor of the State of Idaho and his descendants. 

The Beartrack-Arnett project is a brownfields site located in a mining-friendly jurisdiction. Idaho is ranked number 1 globally in terms of policy and top 10 in the world as a place to invest in exploration and mining by the Fraser Institute. Idaho has a mining heritage that spans 150 years.

Revival Gold (RVG) - Technical Analysis & Due Diligence

1Moz gold has been mined Placer and Hard Rock Mining from the drainage systems in this area. The project features a major trend, the Panther Creek Sheer Zone. This trend outlines the footprint of the existing 3Moz resource along with the Haidee satellite deposit. 

Revival Gold has found mineralization spanning over 5km and trending 600m at depth. The Ward's Gulch area features high grades of 71g over 10m. The company is currently focused on the Joss area that has a 1km strike length with very high grades. The Joss area is part of the project's underground phase. 

The project has a heap leach phase where the material is recovered from Beartrack and the Haidee satellite deposit, the highest point of the infrastructure. The company is expecting to uncover additional prospects through drill operations. The new discoveries would serve as supplemental feed for the plant. 

Revival Gold (RVG) - Technical Analysis & Due Diligence

Historic Mining Activity

The Beartrack region has seen historic mining activity dating back to the late 1800s and early 1900s. This deposit features 2 existing underground mines. The first modern mining operation carried out at Beartrack was by Meridian Gold in the 1990s. This was the largest past-producing mine in the State of Idaho and was under operation up to the year 2000. The average grade during historic mining operations was 1g/t gold fire assay total gold content. Revival Gold is aiming at a 0.9g/t grade for its restart plan. 

The operation was shut down in 2000 when the gold price dropped below $250/oz. A major reason for Meridian Gold to halt operations was the discovery of El Peñòn in Chile. The Chilean asset also benefited from lower labor and power costs along with faster permitting. 

The historical mining has facilitated Revival Gold through the provision of extensive datasets on underlying geology along with the existing infrastructure that can be redeployed. The region has seen a lot of mining activity in recent times. Phase 1 of the company's operation comprises an open-pit mining project for heap leach gold production. Revival Gold has collated the historic mining data and is working with Mira Geosciences to employ AI (Artificial Intelligence) tools along with 3D work on existing datasets. 

Drill Results

The long section through the main Beartrack trend features $1,400 pit shells for resuming the production at Beartrack-Arnett. This region makes up the company's current resources. The historic pits are located within the existing topology and are spread along the north pit and the south pit. 

The drill intercepts feature grades of 110m of 4.3g and within the Main Sheer Zone. The company has also found 12g over 14m and 9g over 12m. The Main Sheer Zone has a significant expansion potential at depth with higher grades. 

The deposit is an orogenic gold system that is commonly known for being large in scale and extending at depths. The deposit is open in all directions with 2 pits along with underground potential. It has similar features to the Agnico-operated Kittilä operation in Finland. 

The Recovery Process

The deposit's core is located within the Main Sheer Zone. It is brecciated and the company anticipates that the Zone has been through at least 2-3 mineralizing events. The company has found grades of 19g over 5.3m, and 4.3g over 11m within the core. As the gold reserves are associated with arsenopyrite, the extraction isn't possible through direct cyanide leaching. To recover gold, the company would need to mill the material and oxidize it first. This process is currently being developed with Wood PLC, RPA, and the company's metallurgical test team at SGS. 

The testing process involves placing a 20,000t a day supply through a mill to produce a 3,000t concentrate. Following this, the concentrate is pressure oxidated to oxidize the material. Next, the residue and tailings are leached to achieve a 94% recovery. 

Revival Gold has carried out 2 phases of metallurgical test work to develop the flowsheet with a 0.6g/t cut-off grade for its current resource. The company has been working at the Beartrack-Arnett Gold Project for the past 2 years and has carried out 2 seasons of drilling. The company has also done a lot of optimization work to bring down the mill's scale and improve recoveries. The company plans to carry out extensive drilling in the future. The deposit is open in all directions. 

Based on the recent drill results at the Joss zone, the company anticipates that the deposit has significant expansion potential at higher grades. It is working towards managing a similar throughput with a smaller mill size and lower capital, leading to improved project economics. 

Revival Gold is looking to take advantage of the oxide and transition materials, processing them through the mill, leading to a 200,000oz yearly production for a mine life of 15-20 years based on the internal conceptual models. 

The Beartrack-Arnett Gold Project features 2 trends of mineralization, one at a low angle and the other at a steeper angle. This insight into the mineralization vectors enables the company to target resource growth. Based on the summary results from the AI work, the company found the main mineralized trend that features the bulk of the resource. These areas are marked as a high priority for exploration. A large number of identified high-prospect targets are currently unexplored. 

The drill results from Beartrack's south pit area show a continued 1.5km-1.7km trend that starts from the top of the deposit all the way to the Joss zone. According to the assay results, the grades are 5g and higher with several open targets. The company plans to drill and expand these deposits in the future. 

The company has extensive drill data for the north and south pits. It currently has 18 holes in the Joss area with average grades of 7.4g/t gold featuring a 5m drill width in the core and 40m halo beyond the core. The company's exploration pursuits are guided by the General Manager from the 1990s operation at the Beartrack-Arnett Gold Project. 

Revival Gold (RVG) - Technical Analysis & Due Diligence

Ongoing Operations

Revival Gold is currently looking to advance the project's exploration and development throughout the next year. By 2022 end, the company plans to analyze the markets and make a decision to enter production. Following this, the company will either continue exploration or carry out the project in 2 phases. Based on current gold prices, the existing resource has the potential to generate $50M in free cash flow. 

The company is chasing value creation rather than gold results. It is looking for sensible grades that would justify the feasibility of permitting and exploration. Based on the drill results, the company plans to go ahead with an underground mining operation in the Joss area. This will enable the development of a critical mass for the deposit. 

Based on a 72,000oz yearly production capacity, the company is looking to generate about $50M in free cash flow. The company plans to optimize these metrics further through exploration and mine planning. It is currently running column tests to improve recoveries and is looking to bring the pit slopes up, as a value add-on for the project. 

The heap leach is planned for 1Moz gold out of the 3Moz resource. The company considers the sulphide reserves as an additional opportunity. It anticipates that the project has a significant potential for resource growth. 

Revival Gold plans to explore high-prospect targets at Joss, including Haidee and Roman's Trench. The company has also identified additional targets through AI research. The company plans to publish the economics of the mill phase once the immediate exploration potential has been exhausted. Based on the resource analysis carried out by Wood PLC, the resource has significant expansion potential. 

As per the PEA (Preliminary Economic Assessment) carried out on the heap leach, the expected mine life is 7 years. However, based on the current reserves and the exploration potential, the company anticipates that the mine life can expand up to 10 years. The company has multiple targets that it plans to add, supplement and build as part of the project. 

Revival Gold (RVG) - Technical Analysis & Due Diligence

Extraction Methodology

The Beartrack-Arnett features a mixed zone between oxides and sulphides along with a transition zone. Due to this, the company has defined a cyanide-soluble grade and a fire assay grade for each block in its resource model. This enables the company to send each block in the model to either heap leach or mill-based process for ideal economic returns. 

The 30Mt phase 1 heap leach plan features 20Mt oxide with the remainder consisting of transition and sulphide. These factors are taken into account by the company while treating material in the leach pad. 

For material extraction, the company is currently employing a 2-stage crush process with a 2-inch size. It is looking to reduce the size further to 1.5 inches. This can be achieved through the same equipment, and potentially offer higher recoveries. The company currently has 13 column tests under leach for running tests. These tests are cost-accounted for both fully-lined leach pads and fully-lined waste rock facilities. 

A major reason for this process is the permitting challenge for water in the United States. The company is looking to demonstrate a first-class approach towards leaching and waste rock storage in its economic plan. As the company has team members with 3 decades of water management experience at the plant, this process is made remarkably simpler. 

The hydropower supply in Idaho makes it a carbon-friendly mining operation. This also helps the company build up its ESG plans (Environmental, Social, and Governance). The company has a strong focus on a robust ESG-component for their project. 

Cash Position

Revival Gold has a $30M market cap. It has a $150M NPV (Net Present Value) for the PEA and a project CapEx (Capital Expenditure) of $100M for heap leaching. The IRR (Internal Rate of Return) for this project is 38%. Currently, the company is operating at a 0.3 NPV on the heap leach. It currently has a 40% institutional shareholder base, while the management owns 11% of the company. 

The company had $3M in cash flow during Q3 2021. Revival Gold currently has 71M outstanding shares. It is looking to carry out exploration while ensuring minimum dilution for the shareholders. 

Revival Gold (RVG) - Technical Analysis & Due Diligence

Targets 2021 and Beyond

Revival Gold plans to carry out exploration while advancing the heap leach PFS (Preliminary Feasibility Study) planned at the end of 2022. A resource update is planned for release shortly, featuring 2 years of drilling operations. Wood PLC is carrying out the resource update. Additionally, the company plans to narrow its drill program around March 2022 based on the resource update results. 

Revival Gold (RVG) - Technical Analysis & Due Diligence

A capital raise is planned in the future, but not urgent. The company is looking to post the remainder of its drill results by March 2022. The company is also working on the supplemental baseline environmental data for the Beartrack-Arnett project. It is engaged with the regulators and is looking to develop a plan of operations. By 2022 end, the company is looking to either initiate the first phase of the heap leach project or expand exploration for a larger leach and mill phase project.

Revival Gold (RVG) - Technical Analysis & Due Diligence

To find out more, go to the Revival Gold Website

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