re: Ann: EVG commences construction on Las La...
BB,
With the POG continuing to look strong I wouldn't think BJ will pre-empt a low ball hedge. He has certainly aligned his interests with ours holding such a large chunk of the company thus I am sure he is making sure his timing is impeccable.
I am reading more and more reports suggesting a near term POG of +$1200oz. With EVG incurring operating costs of $325oz for LL this would be a massive improvement in profitability.
From EVG's own reports, they estimate the profit improvement per year to be +$10m from LL with every $100 rise in gold price. (ie project modelling at $900oz was $20m profit per year, lifting to $30m per year at $1000oz).
Thus, if BJ is able to hedge at $1200oz then LL will provide $40m profit per year, all else being equal. (Pretty crude math I know, but worth some consideration).
With Mac Bank a 6.25% holder of EVG and lending USD $35m to the LL project I would imagine that BJ is seeking/ getting some good strategic advice about gold trends, etc before committing to a fixed price either via a hedge or put option...
Cheers John
EVG Price at posting:
8.7¢ Sentiment: Buy Disclosure: Held
