EVG's operating costs are estimated to be USD $334 per oz. Thus over $1,000 operating profit per oz.
EVG's management overheads are covered also with a 2.5% management fee from the LL project.
The Mac Bank loan is also in USD so we don't have any forex risk re revenue/ profit vs. debt repayments.
This represents only 30% of project gold production.
Whilst it removes upside if the POG increases, it significantly de-risks the project and at least we know that we are now going to make profit (assuming, as cy7 has previously brought up, we construct and commission the plant effectively).
Mac Bank are blood suckers, but when things started going pear shaped we were so far down the rabbit hole we had to keep going, otherwise (I am reliably informed) we would have had NO finance options. BJ has done well here with perservence, IMO.
The last several announcements:
(1) $7.5m initial funding accessed (2) Likilyhood of buying out minority partner (3) Hedging gold at USD $1,355 (USD $105 higher than most recent NPV calculations as per Annual Report) (4) And assumed - if gold is hedged then the $37.5m is accessible (not confirmed yet, just my assumption).
This, IMO, has increased the undervalued nature of EVG shares.
The de-risking events vs. the uplift in share price are not in relation to each other.
At 9.1c, as I write this, the SP does not fully reflect the events, 1-4 above, IMO. We should be in the low teen's at a minimum.
BJ is coming through for us.
I will, however, e-mail BJ about putting a bit of spin into some of these otherwise dry announcements. A new NPV using the hedged gold price and spot prices will wake some potential investors up!
Cheers John
EVG Price at posting:
9.1¢ Sentiment: Buy Disclosure: Held
