In a Nov. 21, 2018, research note, Analyst Don Blyth reported that Paradigm Capital initiated coverage on Revival Gold Inc. (RVG:TSX.V), an advanced-stage explorer/developer, with a Speculative Buy rating and a CA$1.85 price target. In comparison, the stock is trading today at around CA$0.68 per share.
The company intends to define sufficient resources at the former producing Beartrack mine and the neighboring Arnett property to restart operations there, first using a heap-leach method and then transitioning to a milling setup to capitalize on the nonoxidized mineralization, Blyth explained.
He outlined the reasons why Revival makes a good investment.
First, he noted, the Beartrack project being a brownfields one is advantageous as it "generally has less risk than a new greenfields discovery and a shorter timeframe to development and operation."
Second, Revival is approaching Beartrack conservatively by optioning it rather than buying it at first, allowing it to "prove up its concept before taking on the liabilities that come with the reclamation/monitoring of past mining activities at the site." With the deal, the company essentially really only needs to adhere to the four-year, earn-in schedule. The downside comes at the end of that period when Revival, to purchase the asset, must make a cash payment in proportion to the amount of gold it has found on the property.
Also attractive is that in a little over a year's time, Revival is already two-thirds of the way to achieving its initial goal. Gold mineralization continues to grow at Beartrack, and the company has begun drilling at Arnett. "Following the inaugural resource estimate, we believe that Revival is well positioned to achieve its conceptual goal of defining 3 million ounces by its next resource estimate, tentatively in Q4/19, after which we expect the project to move along the development path," Blyth indicated.
Finally, Revival is led by a "talented team" with "plenty of horsepower for its size, including both strong geological and operational talent. . .as well as market-savvy individuals with successful track records," noted Blyth. Also, the company has a strategic investor in Orion Mine Finance.
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Disclosures from Paradigm Capital, Revival Gold Inc., Initiation Report, November 21, 2018
The analyst (and associate) certify that the views expressed in this report accurately reflect their personal views about the subject securities or issuers. No part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations expressed in this research report.
Analysts are compensated through a combined base salary and bonus payout system. The bonus payout is determined by revenues generated directly or indirectly from various departments including Investment Banking, based on a system that includes the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and investment guidance and client feedback. Analysts are not directly compensated for specific Investment Banking transactions.
Paradigm Capital Inc. expects to receive or intends to seek compensation for investment banking services from the subject companies in the next 3 months.
