Whilst price for gold and silver is strong at present, production is not set to commence for another 15 months (Jan-11).
As we have all found out, this can be a very long timeframe as far as investing is concerned (GFC) and the Ag and Au prices will move around between now and then.
The outlook does look good however in the immediate future for Au and Ag given the 1-3 outlined in a previous post.
Re BJ buying the options. I can't see the heads being +25c by Dec-09.
It would take something from complete left feild to achieve this - and if BJ is buying options now with knowledge of any 'left feild' event it should be disclosed.
EVG is not a 'discovery' gold explorer, thus there simply can't be a massive upside suprise. Just steady ticking-off-the-boxes to production. And the numbers have been well flagged.
BJ COULD make a truckload if the SP got to, say 30c prior to maturity date. But he would need a lot of funding to do it.
For example he can either buy 1 share at 8c now or 16 x 0.5c options for the same money.
Upon maturity, however (if the options were in the money) he would need to find 16 x 25c = $4.00 for each 8c he is investing now.
So, 8c investment now, plus $4.00 = $4.08 for every 16 option parcel.
He has 38,488,200 31/12/09 options to-date.
This would require him to spend $9.6 mill upon striking the options. A big risk, unless you were certain that the SP would either continue going up or the SP was a lot, lot higher than 25c upon strike date.
Using the inputs above (SP buy price 8c, options 0.5c, SP on strike date 30c) BJ would make:
If he bought 8c shares $529k profit (no risk in terms of time frame) If he bought 0.5c options $1.7 mill (big risk on the oppies with 31/12/09 strike date)
Thus without a ST catalyst
I would imagine that the options may well be extended past the Dec-09 maturity date by Board approval.
Long term, this could well be BJ's strategy to gain control over his company.
I admit I don't have a clue what he's doing. It just seems inconceivable with all info we have and steady progression to production that SP will be > 3 fold higher in less than 90 days.
I still see good times ahead. Just not a +300% gain in <90 days.
Intriguing
Cheers John
EVG Price at posting:
8.5¢ Sentiment: Buy Disclosure: Held
