Common Stock: Revival Gold (TSXV:RVG)
Current Market Price: $ 0.79 CAD
Market Capitalization: $ 56.2 million CAD
**Note: All values in this article are expressed in Canadian Dollars (CAD) unless otherwise noted.
Revival Gold Stock – Summary of the Company
Revival Gold is a gold exploration company focused on the acquisition, exploration, and development of precious metals properties. They own exploration stage properties located in Utah and Idaho in The United States. Their Beartrack-Arnett property hosts the largest past producing gold mine in the state of Idaho. Revival Gold was founded in 2008 and is headquartered in Toronto, Canada.
Revenue and Cost Analysis
Revival gold does not have any properties that are currently producing and therefore does not have any revenue. The company consistently runs a net loss and is likely to continue to do so for the foreseeable future.
The company had a net loss of $5.5 million for the fiscal year end June 2020, a decrease from $7.3 million in the previous year. Their largest expenses were exploration related, which totaled $ 3.2 million and $ 5.1 million in 2020 and 2019 respectively.
Revival Gold – Royalty and Streaming Agreements
Certain claims on the company’s properties are subject to net smelter royalty’s ranging from 1% to 2%.
Revival Gold – Mineral Resources
The Beartrack-Arnett property has indicated resources totaling 1,356,000 ounces of gold.
Balance Sheet Analysis
Revival gold has a simple but sound balance sheet. Their asset base is sound with sufficient liquidity and their liability levels are low with no long term liabilities as of the fiscal year end June 2020. However it is worth noting the company will need to raise additional capital in order to continue advancing their projects.
Revival Gold – Debt Analysis
As of the fiscal year end June 2020 the company does not have any debt outstanding.
Revival Gold Stock – Share Dynamics and Capital Structure
As of November 2020 the company has 71.2 million common shares outstanding. In addition they have 4.8 million options and 9.5 million warrants outstanding. Fully diluted shares outstanding is around 85.5 million shares.
Revival Gold has a dilutive capital structure. Investors should carefully consider the effects of dilution before investing.
Revival Gold Stock – Dividends
The company does not currently pay a dividend and is unlikely to do so for the foreseeable future.
Management – Skin in the game
Insiders at Revival Gold have been net buyers of the company’s stock in the recent past. This is generally viewed as a bullish signal by investors.
Revival Gold Stock – 3 Metrics to Consider
Debt to Equity Ratio
Total Liabilities/Total Share Holder Equity
$ 618 thousand / $$ 6.9 million = .09
A debt to equity ratio of .09 indicates that Revival Gold uses very little debt in its capital structure and relies almost entirely on equity financing to fund itself.
Working Capital Ratio
Current Assets/Current Liabilities
$ 1.2 million / $ 618 thousand = 1.9
A working capital ratio of 1.9 indicates a sufficient liquidity position. Revival Gold should not have a problem meeting its near term obligations.
Price to Book Ratio
Current Share Price/Book Value per Share.
$ 0.79 / $ 0.08 = 9.8
Based on fully diluted shares outstanding Revival Gold has a book value per share of $ 0.08. At the current market price this implies a price to book ratio of 9.8, meaning the company’s stock currently trades at a significant premium to the book value of the company.
Gold Market – Economic Factors and Competitive Landscape
Gold mining is a highly competitive, capital intensive business. The company will need to compete fiercely for both new projects and capital. However, given the current economic environment of global money printing and zero or negative interest rates, it would appear gold companies are poised to benefit from a strong economic tailwind.
Revival Gold Stock – Summary and Conclusions
Revival Gold is a decent investment opportunity. The company’s Beartrack-Arnett property hosts what was previously the largest gold mine in Idaho, a solid gold mining jurisdiction. The company is in a sound position financially and continues to actively explore the property. However they will need to raise additional capital to continue advancing the project and they already have a relevant amount of dilutive instruments outstanding.
I will need to understand more about the property and why the mine was shut down in the past before making an investment decision. Although I am intrigued by Revival Gold stock and its relatively low valuation compared to its indicated resource estimate, for now, I would prefer to allocate to better funded exploration projects such as O3 Mining and Orefinders. I will leave Revival Gold stock on my watchlist, and reconsider investing should the company make positive advancements on their projects.
Disclaimer
This is not investment advice. Nothing in this analysis should be construed as a recommendation to buy, sell, or otherwise take action related to the security discussed. If I own a position in the security discussed, I will clearly state it.
This is not intended to be a comprehensive analysis and you should not make an investment decision based solely on the information in this analysis. I hope this serves as a useful starting point for a more comprehensive analysis, and hopefully draws attention to aspects of the company that were overlooked or merit further investigation. This is by no means intended to be a complete analysis. Again, this is not investment advice, do your own research.
