I now know as much as you guys re where the value is for EVG.
All of the detail is now out there and we can simply add the sum of the parts to work out what EVG may be worth and then add the most recent 'blue sky'.
So here goes:
$36m - repayment of LL capital investment $50m - value of LL gold plant at end of LL project (high end) $163m - LL profit to EVG incl. mgmt fees (over 6.5yrs) $30m - Exercise of 200m Dec-11 Options @ 15c $10m - EVG overhead charges for Azuay Project $234m - EVG NPAT for Azuay Project (over 10yrs) -------------------------------------- $523m - Total cash flow back into EVG -------------------------------------- $0.74 - per fully diluted share (700m) --------------------------------------
However, in terms of 'blue sky' we need to add:
SAN GERARDO
(1) 2200ha - 3 x size of Pinglio and Papercorp
(2) 5 x cooperative mines already operating on tenement (using 19th Century techniques) with grades 5-20g/t - leases expire in 2014
(3) Highly prospective area surrounded by projects with 15m oz NI 43-101 compliant (JORC equivalent)
(4) "expect at least as much gold as Pinglio & Papercorp" [my comment - likely to be a whole heap more!]
(5) 100% EVG owned and no gold plant needed
------------------------------ $438m - Possible value to EVG* ------------------------------ $961m - Total [LL, Azuay, San Gerardo] ------------------------------ $1.37 - per fully diluted share (700m) ------------------------------
* Assume same oz as Pinglio & Papercorp, same operating costs, same total project profitability ($360m) but without the need for a gold plant ($77.5m)
NORTHERN PERU
(1) Announcement 24/11/10
"..the Company would increase its focus on identified opportunities for the application of the Albion Oxidation Process in Northern Peru"
(2) Tangible strategy to establish EVG's 4th project in its 3rd country within a reasonable timeframe. --------------------------- $ ??? - Just keep adding numbers... ---------------------------
Including Blue Sky and the ability to establish itself in a new gold region with capital/ expertise/ infrastructure/ leases/ etc EVG could become a monster, continually recycling cash flow into developing new operations in differing regions of Latin America.
Everybody is focusing on West Africa at present, wait till they turn their eyes to what EVG is quietly doing in Latin America.
Have a great weekend.
Cheers John
EVG Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
