Revival Gold To Acquire Private ExploreCo Ensign Minerals For $23.0 Million In Shares
Revival Gold (TSXV: RVG) is set to turn its focus to Utah, announcing this morning that it has agreed to acquire Ensign Minerals, a private company with a focus on its Mercur Gold project in the state.
The transaction will see Revival issue 61.4 million shares to acquire the company, which ascribes a valuation of roughly $23.0 million to Ensign based on the most recent share price.
The Mercur Gold project is found 57 kilometres to the southwest of Salt Lake City, comprising of claims that cover 6,255 hectares. 2.6 million ounces of gold are said to have been mined from the region historically, 1.5 million of which came from Mercur, which was previously operated by Getty Oil Company and Barrick Gold.
It is unclear however how much of the project Ensign actually owns. The company entered into an option agreement with Barrick Gold in 2021, which stipulates that for US$20 million in cash, or at the discretion of Barrick potentially shares, Ensign could acquire Barrick’s interest in the region. The agreement expires in January 2026, and outlines that $5 million is due on the exercise of the option, with the remainder due in equal payments on the first, second, and third anniversary of entering production. But the information provided does not outline what level of interest Barrick has elected to option off.
A number of other claims in the region have also been acquired through various assignment and option agreements to bring the total holdings to 6,255 acres worth of mineral rights across patented, unpatented, fee land tax, mill site, and metalliferous minerals leases and claims.
That being said, the property holds a resource estimate of 2.5 million ounces of gold in the measured and indicated category, and a further 3.8 million ounces in the inferred category.
However it should be noted that Ensign in January saw Taura Gold (TSXV: TORA) walk away from a proposed reverse takeover transaction with Ensign, whom at the time said that it was related to “an issue .. concerning the topographic information that was used in the estimated of the Mercur Inferred Mineral Resource estimate,” for which the parties had “different perspectives on its effect on the resource.”
The transaction as a whole, as claimed by Revival, will create “one of the largest, pure gold, development companies in the US,” while shortening the estimate timeline to heap leach gold production for the company. The combined is currently targeting combined production of 150,000 ounces per year between Mercur and its Beartrack-Arnett property, however a timeline for achieving that goal was not provided.
Revival is currently targeting the release of a preliminary economic assessment in as little as 12 months time, with the goal over the next year to be the advancement of metallurgy and the optimization of the geological model.
As part of the transaction, Revival is set to raise $7.0 million in new funding via the sale of subscription receipts, the pricing for which has yet to be finalized. The offering its to be lead by Paradigm Capital and BMO Capital Markets.
Revivaly Gold last traded at $0.375 on the TSX Venture.
Information for this briefing was found via Sedar, and Revival Gold. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
