Hugh Agro: Revival Gold's Path to U.S. Gold Production

0:17Trevor Hall: All right, everybody, welcome back into Mining Stock Daily, getting back into some regular scheduled programming here from my office in Denver back from a couple of weeks trips. And yes, I'm here for a week and then back on the road once again. So we're going to try to get as much of these corporate updates in this week as possible. And we're going to kick things off my Monday off with Revival Gold. They do trade on the Venture Exchange with RVG and on the OTCQX with RVLGF. The company published really a big kind of development corporate update from the Merkur Gold Project in Utah this morning.

0:56Trevor Hall: So we're going to break into this along with other news items the last couple of weeks with CEO Hugh Agro. So Hugh, good to see you. It's been a little while, but I think everybody's kind of been busy with a lot of travel, a lot of marketing and conferences, and obviously a lot of work on the ground. Yeah, you bet, Trevor. But it's really nice to be back with you. So you talked about Merkur quite in depth this morning in this release. Give us the headline of what you're communicating with listeners. Well, as we were talking about off air, I just don't believe there's very many projects out there that are close to a year away from being permitted in the United States with production of scale and a lot of exploration to follow.

1:43This is a rare opportunity and we are making a lot of headway with the development and permitting steps announced this morning.

1:51Trevor Hall: What are some of the key headlines you think it's really important for people to understand where you're at with Marker today? We've completed 24 kilometers of infill drilling on the resource, which will lead to, of course, an updated resource for the project. We're moving inferred material into measured and indicated. We're bolstering our metallurgical model with 13 columns testing. Another 11 to be started already as we follow up on the 18 that were started earlier this year. We've got our mine planning and site optimization studies well in progress here with WSP on mine planning. Capus Cassidy doing the metallurgy and the economics.

2:44Respect doing the resource. Stantec making fantastic progress on our baseline studies in all the different disciplines related to moving this project forward. And we've started our NOI, Notice of Intent, drafting. All of these things are going to culminate in the first quarter next year when we expect to formally file the NOI, publish a completed PFS. And we're looking at, as I said on the outset, about a year to complete permitting at Merkur through the state process. We're on private ground. We've got a significant amount of infrastructure to redeploy, which saves us time and money and permitting aggravations.

3:33This is a rare project, and it's one that we're advancing promptly towards a production decision in 2028.

3:42Trevor Hall: We can kind of get into the weeds here a little bit, Hugh, but there was some kind of engineering changes that were mentioned specifically moving the heap leach pad from West Merker to Main Merker. Can you walk us through the decision in those trade-offs? PEA had us put that leach pad down in the West Merker area. The advantage to moving it up to the main Merker area is it reduces cycle times on the trucks. It will probably allow us to reduce the amount of fleet that we need. And it's just going to make for a more efficient operation. The disadvantage is that there's less room for expansion up there.

4:21but as we look at things this this project's going to continue for you know many many many many years to come remember gold and silver have been mined at the Merker site since the 1870s I expect there'll be a another hundred years in the future here and people will still be mining on this site and we can plan around a future leech pad locations you know down the road but In the meantime, for the 10 years of mine life that we're looking at in the plan for this immediate phase of work, we've got sufficient room up in the main Merkur area, and it will reduce cycle times and it will reduce, in all likelihood, the fleet requirements for the operation.

5:07So that's an optimization that only comes from fine-tuning the data and, you know, all data, including costs and geotechnical information to optimize on that. And this is just one of the things that takes place behind the scenes as we optimize from PEA to PFS. Lots of other details in that news release to chat through if you like, Trevor. But all of this directed at building a better plan, a more deliverable plan in each phase of subsequent engineering.

5:42Trevor Hall: Just to follow up on that, I mean, you mentioned a potential smaller fleet. Could we potentially be seeing or hint towards a lower CapEx in the PFS than originally anticipated in the PEA? I think as, you know, the audience will know, generally CapEx creeps up as you do more engineering and find out more about these projects. and certainly in an inflationary environment we're in today, and we're talking about energy here, so fuel oil, but also the inflationary impacts on staffing costs, those things are going to come to bear. And I would not count on a lower capital, but at the same time, there are opportunities.

6:23We mentioned in our press release that we had Rocky Mountain Power Out looking at the power line. our general manager Tim Barnett is right on top of these things because of course these are opportunities for us and and what we learned in that process is that there isn't a lot of work that needs to be done to upgrade that you know complete the maintenance steps on that power line for use in the operation including the switchgear which you know is a long lead time item but what we have is sufficient for another 10 years of operation and that's a 10 million dollar piece of equipment there the transformer and switch gears so that's a um that's an item that was in the PEA and that uh will not be in the PFS but you know on the flip side we're going to have higher energy costs we are going to have higher uh labor costs and those things will will take the capital uh number up so on balance I'm not expecting a reduction in the overall capital for the project.

7:23But again, you know, uh, we're in the, in the lowest third of all capex per ounce of gold production in the industry. And remember that this is in the United States, uh, without the need for a camp, so relatively low risk. And so as we progress forward from the PFS, uh, I think we're going to have this number nicely nailed. Uh, it's not something that's going to be subject to, uh, some blowout on, on earth moving or road building or power line construction or camp requirements because we have none of those to do.

7:57Trevor Hall: I'm glad you answered that because it was kind of brought up about the inflationary costs to produce from some of the major gold producers, Newmont, Agnico, Q3 2025 versus Q3 2026. They're all in sustaining costs up 25 % throughout the year. That's pretty significant. But we also are aware of those challenges with energy costs, labor costs, obviously, royalty costs. And so as we continue to watch these volatile inputs, how do you go about kind of balancing those and working with the consultants to when this PFS is in place that you show some sort of stability within those input costs, uh, and knowing, not necessarily knowing where that inflationary environment might be once this PFS is, uh, you know, is published here, Hugh.

8:54Trevor Hall: I mean, that's a lot to ask, I realize, but you know, how is, how do you balance, how do you balance the unknown, uh, with input costs, uh, in an environment that we're facing today? Well, it starts with having a team of consultants and leadership on the operator's side. So in our case, this is John Meyer, our EVP, Engineering and Development, who have been through this before, who know the risks and the challenges with coming up with numbers without sufficient data, which is essentially what happens at a PEA stage. At a PEA stage, you've got, you know, plus or minus 35 % on all your input variables.

9:37And as you move through to PFS and FS, you start narrowing in on the data that's required to be able to tighten some of those assumptions. but again it starts with having the experienced people doing the work in the first place cognizant of where things can run out of out of expectation and and and doing one's best to have reasonable numbers we can't you know we can't pad these things such that you know we don't put pressure on the engineers and consultants to come up with their best work and and and put the time and effort in to find the best solutions. But at the same time, we have to be cognizant of the fact that we are in an inflationary environment.

10:24We do not have all of the data. And so we've got to take account for that in our early engineering works as we move towards the more detailed information available to fine tune the studies and the estimates. And that is why we won't skip the steps of doing PFS and FS. Some people have asked me, you know, why wouldn't you just go to an FS? You're on a site that's already got its power, it's got its roads, it's got its office buildings. We already have produced gold from heap leach here on this site before. Why bother with the PFS? And the reason we bother with the PFS is because it's another iteration in the studies and with the data to fine tune and optimize.

11:07And I expect we're going to have, you know, a couple other the things we're going to optimize when we move from pfs to fs um and uh that's that's that's a a natural and good thing because every plan is just a an excuse to do a better plan and even when we're in operation you know i expect that our team will be finding things to improve on the overall mine plan and operation and mine life in fact tim barnett is a specialist our general manager in the process area and at fine-tuning processes. So there's going to be some really interesting opportunities around that. We don't want to be so perfect going into the FS that we've spent an extra year navel-gazing on the assumptions, but at the same time, there's going to be an opportunity to fine-tune and improve even after we're in operation.

12:03Yeah.

12:04Trevor Hall: Okay. I do want to hit one more point here from this morning's news release, and that was on the metallurgical column leach testing program that you also highlighted. Hugh, I'll be the first one to admit this is well beyond my pay grade. And so you're going to have to walk this through with me, hold my hand through it all. But you did mention the test work, cement agglomerated columns yielded higher leach recoveries when compared to unagglomerated columns. Why is this important? What does this mean for the future of the processing in the flow sheet? What that PFS might look like for Merkur? Okay, we'll start with the assumption in the PA, which is an average 75 % recovery from heap leach.

12:53That was based on the column work that we'd done previously. We got well into the 80 % recovery in oxide material. Lower in the refractive materials, of course, those that are resistant to cyanidation. and taking into consideration the body of the resource, we use 75 % recovery. Of course, going into the PFS, we want to fine-tune our assumptions and our approach. We undertook 18 columns. You will remember that in August, we put out initial results from that work. Some people ask me why we did so much material in the refractory category, that is carbonaceous or sulfide. And the reason is that we didn't have a lot of that information to be able to fine-tune all of our assumptions as we move into the refractory material in the open pit.

13:52We want to be sure that we understand where to cut that pit off. Just as an aside, there's a whole other phase to this project, which I think is going to come down the road around milling some of that high-grade carbonaceous material. And certainly that's what Barrack did in the past. But our focus, as you know, is in the top 100, 150 meters of surface and the oxide heat bleach. But we still need to know where that boundary is and how those materials perform in the refractory category. So roll forward to this news release. one of the things that we noticed in our 18 columns from this year was that the agglomerated columns performed very well.

14:42And the reason is obvious to the technical folks. Of course, agglomeration does enhance the recoveries in leaching. There's a cost to doing that though, and there's a trade-off as to how much, if any, one wants to do. And you recall that in the PEA, we assumed no agglomeration. We assumed a half-inch crush. And we're evaluating presently the possibility of maybe introducing some agglomeration and potentially running a course of crush on the material. And those things are, you know, we need lots of data to be able to establish clear parameters around those things, but they may be value enhancing to the overall plan.

15:33Hence the reason why even before going into the PFS, we've initiated another 11 columns on the material. And it's specifically to look at agglomeration and look further at the crest size as an opportunity to enhance value in the PFS.

15:49Trevor Hall: Okay, very good. Thank you for that. I appreciate that. Like I said, obviously not a metal artist. We have, you're right to, you know, it is a complicated subject. We've got some really cool work going on. Kappus Cassidy, we've got an expert outside advisor helping us with Kappus Cassidy's work alongside of John Meyer internally. And then we've brought in another group out of actually Perth, Australia, to help us with correlating all the various data. We've got over 14 ,000 cyanide-soluble assay data points, all of these columns. And, of course, the geological database, leco testing, all sorts of other things to correlate around.

16:45And it's a very, very cool process underway right now to optimize because of course we have a resource model, but we also have a geological metallurgical model. And, um, and it's the intersection of those two things that leads to grade and recovery optimization. Yeah, yeah.

17:04Trevor Hall: So obviously, wrapping up 2026, but looking ahead to Q1 2027, you're really trying to put a stamp here, not only a new mineral resource estimate, along with this preliminary feasibility study, you're intended to get out sometime in Q1 next year, but also potentially filing the notice of intention to revise Merkur's mine operating permit. So a lot happening, a lot on your plate beginning of 2027. Can you give us, you know, that permitting clock? What's a realistic timeline for an approved permit to get this thing going? Are we looking at 2028 for construction? We are. And look, the work that precedes the NOI has preceded very nicely here.

17:56and we list out all the various different work streams and all of those materials, all of those work streams, the field work has been completed. We're in draft or final reports in support of the NOI and there are no red flags showing up here, not on the cultural side, not on the water side, not on the air or noise side, not on the wildlife side. it's a very good place to be rebuilding a mine. And of course we start from the framework, as you alluded, with already a LMO, large mine operating permit in place at Merkur, which will be revised as part of our permitting process. So that next step is of course to complete all of those baseline studies, get the NOI wrapped up and into the Department of Oil, Gas, and Mining, DOGUM, in Utah for review.

19:02And we understand from the officials there and from the protocols that we should expect about 12 months to complete permitting. And that's including the required comment periods. That's including any work we need to do around revisions or additional data. So there's allowance in there for that. We will have a more comprehensive project schedule along with the PFS, and that will take into consideration all the construction readiness activities, the financing-related activities, the team and the pre-orders and all of those good things. So expect that early next year. But we are on track for a 2028 construction decision.

20:01You'll know that we filed a$200 million Canadian shelf prospectus a few weeks ago. This puts us in position for doing the construction financing in 2028. We'll kick off a formal debt process with the PFS in probably the March-April timeframe. And look, this is a domestic project with high margins, lowest quartile ASIC costs in the industry. I think this is something that's going to attract a lot of attention. and we're looking forward to having more details out on the schedule. But broadly speaking, we're on track for 2028 start of construction.

20:49Trevor Hall: Very good. All right. Before we let you go, can we quickly pivot to BearTrack, Arnett, and the Joss drilling? Because it's been a while. I think it's almost been a month or more, Hugh, since you've been on the pod. And actually since that time, since we last spoke, those two wedge holes that we last spoke about that were pending at the time actually had been published. Those results were 2.2 grams per ton over 49 and a half meters. Then there was another 4.3 grams per ton over 21.6 meters. And they're a little bit shorter, higher grades as well in that. And last time we chatted, you said that you could possibly see Josh jumping ahead in the BearTrack Arnett kind of mine cycle and maybe looking at that first rather than the open pit heap leach plant.

21:41Trevor Hall: Just kind of curious, if we look back at those drill results, where are you at in that thinking and how you process the mine development at BearTrack Arnett? It's a really exciting project. And while Merkur is our focus because it will take us to free cash flow on a relatively prompt timeline. The exploration potential at BearTrack Arnett, already 4.6 million ounces of gold. And as you've mentioned, we've hit again with all eight pierce points in the program this year at BearTrack Arnett, including with wedge holes showing continuity. this too is an exciting project and one that's got a a long life in front of it it would not be a surprise to most of the geologists who've been up to bear track or net to see that project grow from you know where it is right now to perhaps you know 50 percent or even double the size it is today based on the open strike they the the kind of mineral system we're in there uh, orogenic gold system and the possibility for underground mining.

22:57And so the, uh, we've published these results. Um, they're spectacular. Some of our, um, most exciting gram thickness intercepts to date over 400 gram meters, uh, in, in the Joss zone. And, uh, this of course makes for really attractive possibilities on mining. Presently what we're doing is an internal assessment of the geological model and updating of the geological model We've brought in a group who are specialists in underground mining at INGCOM to help us with mining shapes, costs and approach And we're also doing a series of metallurgical testing to follow up on the prior work We think we can get to a 60 or perhaps even 70 gram con in this material, which is really important to lowering the costs to get into production and give us the opportunity for a concentrate shipment operation.

23:59And furthermore, you know, the team is already now well underway with preparations for the next phase of drilling with an upgrade and expansion of our core logging and storage facilities at site. and the preparation of drill roads and drill pads. So we are moving ahead here to position ourselves for a 2027 drill program. Watch this space. In the meantime, a lot of work going along on the engineering side as we look to bolster our confidence in the basis case and the investment opportunity. As I look at BearTrack Arnett and the Joss deposit, it. This is the kind of thing that really catapults a company like Revival Gold from, you know, the sort of medium cap space to the potential big cap space.

24:53It's really that exciting.

24:54Trevor Hall: Okay, Hugh, thanks so much. Good to connect with you. It has been too long, but I'm sure you and I will be chatting a few times before the end of the year. A lot happening there on the ground, both in Utah and in Idaho. Once again, Revival Gold Trades on the Venture Exchange with RVG and on the OTCQX with RVLGF. Hugh, have a great rest of your week. We'll talk to you soon. You bet, Trevor. Thank you. The information presented should not be considered investment advice. Mining stock daily and affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein.

25:29Trevor Hall: Please do your own research or speak with a licensed financial representative before making any investment decisions.