Hi guysEVG is becoming more undervalued by the day now that gold...

Hi guys

EVG is becoming more undervalued by the day now that gold is not only rising in USD but also AUD.

It also appears that the stag selling is nearly over.

Some quick and nasty number crunching:

Keeping profits in USD from the recent 10/11 presentation:

Presentation stated: $16.7m annual profit (ave) @ $900oz

INITIAL project life 6.7 years

60koz is attributable to EVG (92.5% of project)

Now that POG is ~$1,200oz

Adds $18m USD per year to profit (ie 60koz x $300)

$30m capex spent by EVG will also be repaid by project

Thus LL has fundamentally changed NPV to EVG:

Annual profit now USD = $34.7m
Total project profit (initial 6.7 year life) = $232.4m
Plus capex return = $30m

Total cashflow back to EVG over initial project life = $262.4m USD

NPV of the INITIAL life of the LL project using a 12% discount rate is now USD $155m !!! Market cap? AUD $27m

Add:

- Possible further increases in POG
- 3 x additional projects (Venezuela, Ecuador, Peru)
- Additional life from LL project servicing small neighbouring mines

Risks:

- Construction and commissioning delays at LL
- POG
- Sovereign risk

Given that:

- Lowest cost quartile globally
- Construction started
- LL project fully funded
- Macro gold outlook


IMO still a very undervalued company with massive upside.

Cheers
John