Ann: Operations Update, page-58

First 58 Last

Share
Profile

Follow
Un1qu3Nam3

6,266 Posts.

1199

10/01/20

16:10

Post #: 42324103
Share

Originally posted by loki01 ↑

There are a few reasons why the share price is going down this badly -

1. Todays negative announcement from EVN;
2. POG has been retracing off its highs and the major gold ETFs got hit last night in north America;
3. Fear that the POG will retrace a fair bit more of its recent run from USD1450;
4. It will take time and more money to turn Red Lake around, once EVN becomes its owner;
5. The market has become rather unforgiving to mid tier producers that do not perform (eg SBM and RSG), and are taking a show me the money approach;
6. Once the Red Lake transaction is complete EVN will take on significant level of debt (around $600m, but net debt will be less than that);
7. The better mid tier goldies were over-valued and retraced to fair value, so that is where RVN is back to now;

I put a toe into the EVN waters and bought 13k shares at $3.39 recently, and two more such amounts at an average $3.69 to get the benefit of the expected run up in gold. However, I had concerns with the way the gold price was extending while a major shareholder was selling so I sold 26k shares, and am now wondering if perhaps EVN could head down to $3.00 and I should now get rid of my remaining shares.

This announcement is not the end of the world for EVN. Once Jake has Red Lake humming in 18-24 months time and repaid the debt then EVN's fair value should be over $4.00. But that is a long time to wait, unless goldies go for another trot, so perhaps its best to exit now.

loki

Expand

Well, that's one side of the ledger. Let's not ignore the very large income stream and very high profit margin. EVN is minting it.

EVN Price at posting: $3.58 Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

SWP

Swoop lobs $18M offer at microcap telecom Vonex – in which it holds 19.9%

IRX

InhaleRX snags $38.5M in funding from VC biotech funder Clendon

TLG

Talga Group wins key permit for flagship graphite mine in Sweden

MTH

Mithril's drilling in Mexico picks up silver at 997g/t, gold at 28g/t

SNX

Sierra Nevada raises $2M for silver exploration at Blackhawk

Week 42 Wrap: HotCopper's top picks; new ASX 200 record; world yawns at war

M4M

Macro, Norden set up transport solutions initiative for West Pilbara

What's causing the cost-of-living crisis, and how to navigate it

NVU

Nanoveu surges 10% after benchmark testing for new AI chip begins

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint