This broker report is pretty comprehensive. The PFS IRR was 57%. This will be higher in the DFS with the introduction of an ore sorter to improve costs and annual throughput as well as the soon to be anounced resource upgrade. The CAPEX will be less than 40m (including the ore sorter).
The already low AISC will likely dip below the magic $1000 with the inclusion of the ore sorter (forecast to be $980).
The Base case post-tax is valued at 62c per share. This includes anticipated dilution for converted options and a $5mil raise; an 8% discount rate and a solid 40% risk on Rosthay and a whopping 70% risk on exploration value. Note the assumptions in the report of $1200/oz and USD 75c / 1 AUD are a further 9.4% discount in real terms to today's price (25th April 18)!
The Bull case is valued at $1.21 per share!
People are not seeing this clearly. EGA is meat and potatoes no-brainer. The share price should rally to 40c based on a cautious outlook. If the resource upgrade is as expected, it should climb higher.
EGA Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
