Revival Gold Acquires Mercur Project, Financing to Advance Two Heap Leach Assets in Rising Gold Market

• Revival Gold is acquiring Ensign Minerals and its Mercur gold project in Utah, accelerating the path to heap leach gold production.
• Mercur has a 1.6M oz resource at 0.6 g/t gold and significant exploration upside. It is on private land, enabling faster permitting.
• The acquisition increases Revival's resource base by 60% to 6.2M oz of gold, with targeted production of 150,000 oz/year between Mercur and its existing Beartrack-Arnett project.
• Revival plans to spend $3.5M each advancing Mercur to a PEA by Q1 2025 and Beartrack-Arnett through permitting and exploration.
• CEO Hugh Agro believes the current high gold price environment will drive capital from producers into explorers and developers with quality U.S. assets like Revival.

Revival Gold (TSXV:RVG) is poised to become a leading U.S. gold developer through its acquisition of Ensign Minerals and its Mercur gold project in Utah. The deal transforms Revival into the third-largest resource holder among its peers, with 6.2 million ounces of gold. More importantly, it accelerates Revival's path to becoming a mid-tier heap leach gold producer.

Mercur Acquisition Rationale

The Mercur acquisition checks several key boxes for Revival. First, it aligns with Revival's strategy of pursuing gold projects in the U.S. with a history of mining and exploration. Secondly, it brings a sizable resource in a favorable jurisdiction, increasing Revival's heap leach resource by over 60% at a cost of just one-third of its market capitalization.

CEO, Hugh Agro, elaborated on the strategic rationale: "It's getting more scale so being at that target 150,000 ounces a year from heap leach, which remember, that's a simpler process to get through than our mill ounces at Beartrack-Arnett. Lots of potential to do that and carry forward our production to higher levels."

Thirdly, the project has clear synergies with Revival's existing team and assets. Mercur mirrors many of the key attributes Revival looks for, including 100% gold mineralization, existing infrastructure, a supportive local community, and a promising exploration pipeline.

Agro emphasized the importance of this strategic fit: "Box number three is around this synergy of operation and having a single team, not two teams, having a single location, not two different countries in different time zones."

Interview with President & CEO Hugh Agro

Mercur Overview and Exploration Potential

The Mercur project comprises over 6,000 hectares of patented mining claims with a rich history of past production. It hosts a pit-constrained inferred resource of 1.6 million ounces grading 6 grams per tonne of gold.

Notably, Mercur sits in the prolific Carlin and Bingham Canyon gold trends of Utah, an area that has produced over 50 million cumulative ounces. "It's not just the legacy Barrick Mercur operation, but it's the other limb of the fold," Agro noted. "This was one of the first identified Carlin-trend type deposits in the western U.S. and we know there's a lot of potential."

Revival sees immense exploration upside at Mercur across its expansive land package. The company plans to digitize a trove of legacy data to build a comprehensive geological model and identify new targets. Agro highlighted the value of this data, equating it to $60 million worth of drilling at today's costs.

Path to Production

Revival aims to leverage Mercur's private land status to expedite permitting and development timelines. Agro explained, "The resource is entirely on private ground, which means the difference between having to go through a federal U.S. permit for permitting, NEPA, or a state agency in Utah, DOGMA."

This dynamic, combined with the project's arid climate and limited water requirements, could allow Revival to begin construction within three years - a rapid timeline compared to most U.S. gold projects.

While Mercur lacks the full processing infrastructure of Revival's Beartrack-Arnett project, it does have key components like road and power access, a transformer station, and mine buildings. These will help derisk and accelerate the development process.

Financial Picture and Capital Allocation

To fund the Mercur acquisition and advance both assets, Revival is raising C$7 million in a coincident financing. Agro outlined the company's capital allocation plans:

"The split, as it turns out, is roughly 50/50. At Mercur, we're going to be marching forward with the PEA by the end of the first quarter of 2025. At Beartrack, the permitting preparations are already underway. We're going to qualify the exploration upside further."

The Mercur acquisition also gives Revival improved financial flexibility. Instead of a large upfront cash payment, the deal is back-end weighted, with initial payments starting in 2026 and production-based payments thereafter. This aligns the cost structure with Revival's development timeline and future cash flows.

Margin Outlook

Like most in the mining sector, Agro acknowledged the inflationary cost pressures facing the industry. However, he expressed confidence in the ability of gold project margins to remain robust.

"If you look back at the last ten years of data and margin on gold projects, it's fluctuated between about 30% and 40% overall," he noted. "We're in that range right now - the upper end of that range - with the gold price at $2,300 gold."

The Mercur acquisition marks a transformational step for Revival Gold, catapulting the company into the ranks of leading U.S. gold developers. By adding a second cornerstone asset in a Tier-1 jurisdiction, Revival has meaningfully enhanced its resource base, exploration upside, and production potential.

CEO Hugh Agro painted a compelling picture of the road ahead: "We are highly focused on high return, near payback opportunities. We now have two assets from which to deliver that. That means we get a better probability of delivering milestones faster."

For investors, Revival presents a unique opportunity to gain exposure to a rapidly advancing gold developer at an attractive valuation.

The Investment Thesis for Revival Gold

• 6.2 million oz resource base valued at just $7/oz, a steep discount to developer peers
• Two highly prospective heap leach assets in Nevada and Utah
• Clear path to mid-tier producer status at 150,000 oz/year production target
• Veteran management team with proven track record of value creation in the gold sector
• Strategic 50/50 capital allocation to deliver steady news flow and de-risking catalysts
• Robust project economics with potential for 50% margins at current gold prices
• Compelling exploration upside across expansive land packages in prolific gold trends
• Favorable permitting outlook on private land holdings in mining-friendly jurisdictions

Key Takeaways and Implications

Revival Gold is embarking on an exciting new chapter with the acquisition of Mercur and a coincident C$7 million financing. The company has solidified its position as a leading U.S. gold developer with the third-largest resource base among its peers.

By executing its two-pronged strategy to advance Beartrack-Arnett and Mercur in parallel, Revival is positioned to deliver a steady stream of catalysts and value creation. Investors can look forward to a PEA at Mercur by Q1 2025, ongoing permitting progress at Beartrack-Arnett, and potential exploration successes at both projects.

With its discounted valuation, impressive resource base, and clear path to production, Revival Gold offers a timely and compelling investment opportunity in a rising gold price environment. As capital flows from producers to developers with quality assets, Revival is well-placed to re-rate towards its intrinsic value.

Macro Thematic Analysis

The gold sector finds itself in a favorable macro environment, with spot prices holding well above $2,300 per ounce. This backdrop is creating record margins and cash flows for producers, which in turn is stimulating an uptick in M&A and investment activity.

Hugh Agro of Revival Gold summarized the opportunity: "The existing producers right now are making scads of money. Every $100 an ounce on a 2-million-ounce-a-year production platform is a couple hundred million dollars. And when boards are thinking about the lives of their companies and having this cash on their balance sheet, it goes into exploration, it goes into sustaining capital, and it goes into M&A. And I think those are going to pick up as we see this $2,300 gold price and more continue."

This dynamic bodes well for well-positioned developers like Revival Gold. As Agro noted, producers are realizing that their growth pipelines are depleted, and they will need to proactively invest in the next generation of mines.

"We're seeing corporates say to us now, 'Look, we are not going to find a 200,000-ounce or 150,000-ounce production platform ready to go in the western U.S. or Canada,'" Agro said. "'We're going to have to be part of making one of those things happen.'"

With its two cornerstone assets, Revival is an attractive partner or target for growth-hungry producers. The company's recent acquisition of Mercur, coincident financing, and path to production should only accelerate its strategic appeal in a consolidating gold sector.