Ann: Evolution Secures Full Ownership of Ernest Henry, page-19

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Exised

6,108 Posts.

2819

17/11/21

21:37

Post #: 57654263
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Originally posted by Turbot: ↑

@Exised

The bond is really outstanding, a huge vote of confidence - you don’t get an over-subscribed placement when the rate is only 3% unless your extremely confident of getting your cashola + interest back

plus there’s a hedge there for exchange rate. I remember PLS (lithium miner) a few years getting 20%! That was a worrying time

Re the copper credits if it contributed to lowering gold cost by $100A/Oz in 2022 (and almost double that in 2023), working on last years production figures of 700k ish Oz gold production they’d make an extra $70M in the first year, $140M in the next, slightly less in following years leading to a 5 year payback of whole acquisition (when also accounting for increasing gold production)

one thing I am still a little confused about they have $400M debt already (from memory)?

they say that acquisition cost $1B comes from bond of $200M and the rest from cash. But then next line, debt increases to $1.6B so not sure I’d describe that as coming from cash - what is the terms of this debt (the 400M already existing and the new $800M).

pretty new to EVN so appreciate your thoughts and those of others.

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Might be time to do another EVN writeup once I've digested everything. To be honest I've been a bit lazy on EVN this year. Happens when you reach sleep easy holding and enjoying the compound accretion. The last NAV I have was with the Battle North acquisition. We've had the Mungari EKJV since and now this EH. So will share my sheet once updated.

One thing is for certain, JK has now eliminated all pre-existing counter party risk with his cornerstone assets....
- We now have lots of breathing room in Mungari with the Kundana deal. For a while there we were on a pincer movement from SAR and NST, and could only make a proxy tenement buffer by buying into TBR...that's crowded Kalgoorlie for you.
- He made sure this tenement growth issue never happens to Red Lake and made a preemptive strike on Battle North. Which is a good move seeing BC is now getting crowded too.
- Now he has shored up EH with this deal and now has full control of an asset he Steven Bradbury'd all the gold from. And yes this is related to the Mt Isa complex and will soon be crowded in the future.
- On top of that I'm not sure if you guys noticed that we now have a small beach head in the Vic goldfields with the Mt Carlton and 20% NML deal. With Agnico Eagle and Kirkland Lake merger going ahead and no production synergy between the two on Fosterville, it way we'll have a for sale sign on it soon enough. It's just a stones throw away from that beach head...

Exciting times to be part of the EVN journey. Well I was with JK long before on the Sino Gold journey but that is a story for another time.

Last edited by Exised: 17/11/21

EVN Price at posting: $4.01 Sentiment: Buy Disclosure: Held
34 Upvote

6 Great analysis

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