I agree that to value EVG it is more appropriate to value each project on a discounted cashflow basis as opposed to a nominated PE.
I have done an NPV using a discounted cashflow approach for LL and used a discount rate of 12%. It is quite quick and nasty, not taking into account the marginal increases in Govt royalties, but at $1,200oz the NPV is now USD $155m (including the capex return).
This will obviously reduce if a higher discount rate is used and increased Govt royalties are included, but provides a good illustration at just how undervalued EVG is based just on the known life of ONE of their projects (approx 1/6).
Also note that it is highly likely that the LL project will be extended well beyond the initial 6.7 year life via creating JV's with nearby small mines processing their refractory ore/ tailings.
Let's see what happens today. Here's hoping it doesn't drop too much (I have my fill for EVG - 10% of portfolio) and I just get grumpy when it drops too much :)
Cheers John
EVG Price at posting:
9.2¢ Sentiment: Buy Disclosure: Held
