Ann: December 2019 Quarterly Report, page-18

Yes like all midteir Goldie’s (on a global scale basis) Klein is now faced with having to go the M&A route for growth. That means he has to sell non tier 1 assets and buy bigger lower cost ones. Mate that’s a very tough gig. At the bottom of that global tier 1 club competing with the very big boys.

EVN was a merger of 4 decent tier 3 gold mines in QLD, Pajingo/Mt Carlton and Cracow/Mt Rawdon. They raped them for years, then when gold price held up for longer than the 2 year cycle they were behind in exploration and development.

Costs going up and grade going down hence AISC up and profit down. Not a good look for ASX shareholders. What to do?

Sold Pajingo to Minjar, who are now spending $80mill on Vera Nancy 2.0. Buy into Ernest Henry for its gold credits.

Now what? Cowral.

Next, some real big rolls of the dice and here they are.

Next? Can’t sell Mt Rawdon as would have to give it away less that rehab cost.

Maybe sell Mt Carlton or Cracow? Current cash cows but have problems due to prior rape and pillage. Might get a buck but again rehab etc zeroes it out in the deal.

This happens time and again to all sorts of companies when that choice is made to turn your back on what made you great and try to rub shoulders with the big boys at global conferences.

Oops.

When you leave easy street in Australia for overseas the risk quadruples. Nobody likes an interlocking expat. They make it fail if they can.

This is why I started the talk on NST merger with EVN.

The BODs prime job is to increase shareholder value. If they had stuck to properly managing the 4 original mines in the LT and regional M&A of more local mines they would t be in current decline.

Ego ego ego