ll = cash cow azuay = company maker

Hi guys,

It's great to see so many new EVG investors joining us on the threads :)

Today's news is excellent for all of us holders and indicative of things to come over the next 3-5 years.

On the back of a positive macro outlook for gold, EVG's development should make many of us some serious money. As previously discussed in post 5831161, I think that there was at least 14-bags for EVG (at 8c).

That post did not take into account today's announcement for the Option of San Gerardo (So there may still be 14 bags in it).

For background reading check out post 5831161. Otherwise some thoughts below re Azuay:

BACKGROUND

Ecuador has, up until recently had some very shabby mining regulations and practices. Basically small holders have been using 19th century techniques to extract gold and causing all sorts of environmental problems. For example, miners would often use mercury to extract gold at small 'process sites' near rivers and then dump the tailings in piles that would, every time it rained, leach poisons into the waterways.

This became a major issue with polluted waters killing fish, becoming unsuitable for drinking and even creating international tensions between Ecuador and Peru as the river systems migrated from Ecuador into Peru.

Mining laws were recently tightened and regulations put in place restricting miners from continuing their practices.

They now need 21st century technologies and capital to remain mining - enter EVG. With the capital and expertise EVG can partner with landowners (or buy the mining leases) and build regulation compliant plant(s) that will treat the ore in an environmentally responsible way.

EVG will benefit from the known mineralized resource wealth of Ecuador through providing capital and expertise to extract the gold.

PINGLIO AND PAPERCORP

These are two very exciting veined systems that provide higher than average g/t and as has been confirmed by the scoping study "teaser" can be extracted cheaply at USD$395 per oz - which is within the lowest cost quartile globally.

The required plant can be built for less than LL and will extract > twice the oz of gold than LL - just from the Pinglio and Papercorp properties.

As has also been hinted at, the 1m oz initial target could be greatly increased once a drilling campaign and JORC has been conducted.

Whilst we wait for the scoping study to confirm the NPV (only a couple of weeks away) I think that an NPV per share could conservatively be in the range of 35-45c per share.

This is based on >2x oz target compared to LL; similar operating costs per oz; much lower Government cut of the project revenues.

We also have a very realistic and timely process to make this project a reality - ie this is no iron ore deposit in the middle of nowhere that will require >1 billion in capital and a decade to develop.

SAN GERARDO

This property was 'shoulder tapped' by the mining consultants undertaking work for EVG at Pinglio and Papercorp.

It is mineralised, being mined currently using small scale techniques and can be expanded using EVG's capital and expertise.

It will also provide additional scale and longevity to any processing plant built for Pinglio and Papercorp.

Where Pinglio and Papercorp could yield 1.5m oz, San Gerardo could be massive!

In talking to BJ, San Gerardo will either be a dud, or worth 100's of millions to EVG... I am guessing it will turn out to be the latter!

EVG has the rigs for Pinglio and Papercorp and will then aggressively drill San Gerardo.

This is a great opportunity to have a crack at a property with massive potential for bugger all money (drilling whilst under option for only $300k).

Also of note, San Gerardo will be 100% owned by EVG without any profit share required.

POSSIBLE NPV

LL has recently had its NPV per share upgraded to 31.5c (my estimates are a lot higher using spot prices). My guess is that Pinglio and Papercorp will add a further 35-45c per share. This project will be developed within a couple of years.

This takes the total NPV per EVG share to 66.5 - 76.5c.

San Gerardo could then add significantly to this.

We are also significantly derisked in respect to LL and the cashflow from LL along with the Dec-11 Options will provide the capital required to build the Azuay plant - we wont have to bend over for the banking blood suckers this time :)


WHAT'S NEXT

A further series of announcements will continue to flow from EVG over the coming months, including;

1. JV partner exit from LL
2. Progression of construction at LL
3. Scoping study (detailed) for Pinglio and Papercorp
4. Drilling results from Pinglio and Papercorp

In BJ's opinion there is no reason why our share price should not be in the early 20's within the 1st Quarter of next year.

Hold on and, IMO, don't be tempted to sell too early.

Cheers
John