In a May 29 research note, PI Financial analyst Brian Szeto reported that Revival Gold Inc. (RVG:TSX.V) announced an NI-43-101 compliant, maiden resource estimate for its flagship Beartrack gold project in Idaho; the resource estimate far exceeded PI Financial's forecast.
The initial resource, based on 458 holes comprising 71,000 meters of drilling, was 2 million ounces (2 Moz) gold at an average grade of 1.22 grams per ton (1.22 g/t). About 61% of the resource is in the Indicated category, and roughly 17% is made up of oxide material. Further, the deposit remains open at depth and to the south.
The base case, Szeto pointed out, assumes a US$1,300 per ounce gold price and a cutoff grade of 0.6 g/t. With a higher cutoff grade of 0.8 g/t, "there are still 1.3 Moz within the resource block model."
The analyst noted that PI Financial views this reported 2 Moz gold resource size as "very positive." He added, "We had been expecting an initial resource of approximately 1 Moz, so the resource announced today is significantly above our expectations." Also impressive, he wrote, is how quickly Revival advanced Beartrack to this stage, in about seven months post acquisition.
Because Revival aims for a 3 Moz resource at Beartrack and Arnett Creek, "this resource means it is well on its way to achieving that goal," Szeto indicated. PI Financial is confident the company will grow the project's resource sufficiently to restart mining operations there.
Szeto reiterated that historically, Beartrack produced 609,000 ounces of gold at 1.34 g/t between 1995 and 2002, when mining was stopped due to low gold prices. Over the period the mine was running, PI Financial determined, the cash cost averaged US$200–250 per ounce but was down to US$140/ounce in the latter days of operation.
For Buy-rated Revival, PI Financial derived a net asset value of CA$3.05 per share and a target price of CA$1.70 per share. Today, the company's stock is trading at around CA$0.85 per share.
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