Some key differences between EVN and EVR (besides the fact they...

Some key differences between EVN and EVR (besides the fact they have just one different letter in their ticker symbol) -

1. EVR's AISC are much higher (EVN has a significant operating margin at the current USD POG while EVR is pretty slim, especially when the cost of servicing its debt and exploration are taken into account).

2. EVN is in a much safer political jurisdiction, hence warrants a premium just for that factor

3. Total tax take in west Africa is higher, when including the 10-20% free carried interest by the govt in the mines (but generally subject to an offset in terms of a tax free holiday period)

4. EVN pays a dividend, EVR has never paid a dividend and will not until they have at least built their next mine and paid down their increased debt;

5. So far EVR's 3 mergers have done nothing for the share price while EVN's mergers have generally provided a boost. The Pharaoh got a gift when he did his deal with EVR, which is why he is called the Pharaoh - they will probably continue to do crappy deals for shareholders cause they wanna grow the company (actually the deal with Avion was probably good, but the market did not see the value in it, IMO, cause of the cost of upgrading the Mali operations)

6. EVN uses hedging in a constructive way while the CEO of EVR lives in lalaland thinking things should be valued in terms of ounces of gold (see the EVR reports for his misguided notions) and only has legacy hedges from the merger with an Oz miner (not sure if all these hedges have now been cleared).

7. EVN and EVR both have significant debt (in the case of EVR they will take on more to build Hounde), but EVN's large operating margins can easily take care of this at the current gold price while EVR will take much longer to clear it - in fact they should not build Hounde until the gold price is over USD1200 (why run down your gold reserves in a low gold environment) but the CEO is pushing for it now, and the new mine acquired via the latest merger will need several $100m to develop the next stage in the next 2 years.

I would hate RSG to merge with EVR. EVR has a lot of potential but the management is stuffing up strategically. EVR is probably cheap at the current gold price if there is a recovery.

As I have said before, a RSG/PRU merger would make a lot of sense - we would get a 500k+ ounce producer with the potential to add another 180k ounces at Bibiani and the Ivory Coast project plus a lot more given the prospectivity of their tenements. PRU's cash stash would derisk RSG's current work program, thereby providing a safer pathway to growth and share price appreciation for all shareholders.

loki (we need to see through the final stages of the gold/commodities bloodbath this year.)