The new resource features an indicated resource of 65 million tonnes grading 1.01 grams per tonne gold containing 2.11Moz and an inferred resource of 46.2Mt grading 1.31g/t containing 1.94Moz.
Revival said the new estimate increased the open pit heap leachable gold by 49% while open pit mill resources gold increased 58%.
The company also highlighted how drilling at the Joss zone over the past two years increased resources in the area and supports a more robust cut-off grade of 2.2g/t for the underground mill component with the average grade up 39% to 3.05g/t.
"Today's 56% growth in Indicated Resources and 19% increase in Inferred Resource represents an impressive step forward in both the size and quality of resources at Beartrack-Arnett. … Today's news bodes well for work already underway on a PFS to resume gold production utilising existing infrastructure and it builds on Revival Gold's understanding of additional potential future development alternatives," said Revival Gold president and CEO Hugh Agro.
Paradigm Capital precious metals analyst Don Blythe said the resource update was, "generally positive" in a research note adding that, "the higher underground cutoff and subsequent higher average underground grade are both more robust than the prior resource estimate."
The company plans to drill 7,000m this year when exploration resumes later this month as it works towards completing a pre-feasibility study (PFS) towards year end or in early 2023.
Revival issued a preliminary economic assessment (PEA) in November 2020 which focused on a first phase heap leach development at Beartrack-Arnett with annual average production of 72,000oz over an initial seven-year mine life in a 12,000 tonnes per day operation following a $100 million initial capital investment.
The PEA outlined a production scenario for oxide and partially oxidised mineralisation amenable to recovery using standard cyanide heap leach processing. At the time, this material represented less than one third of the mineral resources.
The PEA did not incorporate the potential exploitation of the Beartrack-Arnett sulphide resource which could be processed by a second phase mill project and take advantage of the brownfield infrastructure including a powerline, ADR plant, solution ponds and water treatment plant from when Meridian Gold operated the mine a couple of decades ago.
Revival Gold now faces the dilemma of navigating its PFS, due around year end, which will focus on the heap leach restart opportunity and include some of the 1.7Moz open pit mill resource.
Idaho peer Integra Resources found out that the market can be hard to please in February when it released a PFS on its DeLamar gold-silver project, which received a lukewarm reception from investors.
Integra advocated a two-stage 35,000tpd heap leach and 6,000tpd mill operation to produce 110,000oz/y of gold equivalent for 16 years following initial capex of C$282 million with a conventional mill. Its 2019 PEA was for 124,000oz/y gold-equivalent costing C$213 million with a 27,000tpd heap leach facility complemented by a 2,000tpd milling facility.
Subsequently, in April, Integra said it would advance permitting and development of the simple, low-cost heap leach stage as a stand-alone mine project capable of producing an average of 136,000oz/y, which the market seemed to like even less given it meant smaller total potential.
For now, Revival is leaving the mill option as future upside as incorporating a mill would increase the overall capex although it would mean there is a bigger prize. In addition to a mill being able to recover both oxide and sulphide resources, a mill would also recover more gold from the oxide and transitional material than a leach pad would.