Evolutions Acquisition of East Kundana JV, page-2

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jogo

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22/07/21

14:10

Post #: 54693170
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Originally posted by goldnerd: ↑

A big recent development in terms of the East Kundana joint venture (EKJV). Summing up:

Evolution paying $400m for Northern Star's entire Kundana package including their 51% EKJV interest.
Northern Star Reserves (as at 31 Mar 2021) for Kundana (100% owned) and the EKJV 51% interest were 289 koz @ 4.1 g/t and 372 koz @ 4.8 g/t respectively with the EKJV constituting 56% or just over half the reserves.
This would put a conservative value on the EKJV of close to A$200m. Rand's share of this would be approximately A$50m or roughly $0.88c a share. Combined with over $100m (conservatively) in cash and gold bullion or $1.75 a share, this would value Rand at just over $2.60 a share.
Immediate benefits to Rand and Tribune from this deal include a new manager of the project and an end to the toxic relationship with Northern Star. Jake Klein in a statement said and I quote: "Finally, we look forward to partnering with Rand and Tribune at the EKJV as we seek to optimise the value ofthis operation for the benefit of all shareholders.” (the bold was added by me)
Evolution's Mungari plant will have its processing capacity upgraded and is just 8 km away (formerly ore was being transported 50 km+) which will mean transportation cost savings which is timely given the increased cost of mining as the project matures. Additional costs savings are expected with better efficiencies at the Mungari plant.

The EKJV is not without its risks as the project matures and seismic activity creates challenges going forward but it is hard not to believe that Evolution wouldn't have made an offer to Rand and Tribune for their share of the project which reflects a similar value to what Northern Star was offered. We will have to wait and see what happens going forward. With Evolution a major shareholder of Tribune and now managing the EKJV, the probability of a deal being done going forward increases substantially for mine.

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Just because EVN picked up the parcel of shares from a sale forced by ASIC need not make them good friends.
Why would TBR accept an offer from EVN which is the same as NST's when they turned NST down several years ago, leading to the bad blood with NST?
RND Price at posting: $1.52 Sentiment: None Disclosure: Held
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Evolutions Acquisition of East Kundana JV, page-2

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