In short: Two past-producing gold mines bought "dirt cheap" that "didn't shut down because they ran out of gold. They shut down because that gold wasn't economic at 250 or 300 dollars an ounce" — then re-engineered and drilled out, so "they made the deposits better than they were when they bought them" and both are "substantially larger as a consequence of drilling and delineation." The governing truism: "the best place to look for gold is in the shadow of a head frame of a gold mine." At $4,500 gold "these assets are very very very cheap." What goes wrong: "they could take their eye off the ball… they could run into permitting difficulties, although at least Mercur is on patented land. Or I could be wrong about the gold price." Beartrack he once owned "and sadly sold it very very very very cheaply." On CEO Hugh Agro: "his background as an engineer makes him much more sober than he might be if his background was as a geologist… he's the right guy for the job he's chosen." Entry discipline attached — a star turn at the symposium moved the price "really dramatically after the conference," so "use good till cancel limit orders… Don't chase this one when it's ripping."
Revival Gold bought two gold mines that had already been mined once and closed. The key distinction Rick draws is why they closed: "they didn't shut down because they ran out of gold. They shut down because that gold wasn't economic at 250 or 300 dollars an ounce." Gold is now around $4,500. The rock that was worthless is now valuable, and it was bought when nobody wanted it.
Since buying, the company has re-engineered both projects and drilled them out, so "they made the deposits better than they were when they bought them" and both are "substantially larger." There is an old industry saying behind the whole approach: "the best place to look for gold is in the shadow of a head frame of a gold mine" — the ground next to a proven mine is the highest-odds place to find more.
Three things could go wrong, in his order: management distraction, permitting (partly hedged, since one project sits on patented — privately owned — land), and being wrong about gold. "If you aren't a believer in $4,500 gold… then you might not want to own these things." One more warning is about you, not the company: CEO Hugh Agro was a hit at Rick's July conference and the share price jumped afterwards, so he tells buyers to place good-till-cancel limit orders at a price they've decided on in advance — "don't chase this one when it's ripping."
23:48They shut down 20 years ago as a consequence of low gold prices. They didn't shut down because they ran out of gold. They shut down because that gold wasn't economic at 250 or 300 dollars an ounce. And then they re-engineered the projects. And they lavished a lot of love, care, and capital on them to drill them out.
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