what do others think, page-7

Hi Capman and other followers of EVG ---

One more post on EVG and then hopefully no more --- interesting break in upwards direction last week and then with volume confirmation on Friday.

The 2 questions posed in my last post were answered first by the stronger market and secondly by the announcement re China. So……..

Estimated average EVG after Tax profit from:
Las Lagunas: Dec 2008 -------- AU $ 9.7 million/year *(July 07 presentation)
Trujillo: Dec 2009 -------- AU $10 million/year *(July 07 presentation)
Shandong: July 2010 -------- AU $10 + million/year ** (July 07 presentation)
Total estimated after tax profit: AU $30 million/year after 2010

Project Income based on Gold Price of US $600/ounce, Silver Price of US $11.75/ounce and A$ = US $ 0.75 (Gold Price A$800)

Operating Costs: US $237/ounce @ Las Lagunas

* (p.6 July 07 presentation)
** (p.31 July 07 presentation) Shandong plant will be of similar size to Las Lagunas but with higher profits accruing to EnviroGold.


Potential/Planned Production: 200/230,000 oz Au. (net to EVG: 150,000 oz)
Potential/planned Resource: 1.6 million oz. (net to EVG: 1.2 mil oz)
330 million shares fully diluted and all projects fully funded.


Market Cap/ oz prod: reasonable valuation $1500 to $2000 = MC of $225/300 million.
Market Cap/oz Resource: reasonable valuation $150 to $200 = MC of $180/240 million.
PE ratio: reasonable figure 8 to 12 on A$30 million profit = MC of $240/360 million


On above measures suggest the potential for a 3.5 to 6.5 fold increase in the share price --
This does not allow for new projects, increased gold prices and the proven entrepreneurial skills of Brian Johnson.
--- EnviroGold is an industrial company established specifically to recover gold and silver, so it could be argued that PE ratio is a more effective measure of value.


All the above figures are derived from information published by EVG --- they involve generalizations and assumptions on my behalf --- and are simply my thoughts.
--- I imagine outcomes could be far better or worse than they suggest.

Notice I have adjusted the Production and Resource figures from total project numbers --- to the number net to EVG. To the best of my knowledge this correctly reflects the situation.

Finally --- I have bought some EVG --- but have no idea of what the final outcome of this investment will be --- regards cy7