Ann: Red Lake Acquisition Investor Presentation, page-40

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Sparrow2009

288 Posts.

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27/11/19

16:59

Post #: 41666859
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Originally posted by Exised: ↑

At a PE of 21.50 she is now well priced. In the 4 years that I've held this a PE in the low 20s have been the norm when it comes to a bottom of the trend line SP. In the numbers alone this one is one of the better M&A deals in recent history. List sorted from less expensive to most expensive below...
- PNR + CNG : $39/oz at 2.2Moz
- SAR + BGH : $57.88/oz at 0.660Moz
- EVN + Red lake : $85.71/oz at 7.0Moz
- NST + POGO : $86/oz at 4.1Moz
- AMI + PEAK : $116/oz at 1.2Moz
- NST + EAR : $140/oz at 1.8Moz
- SAR + Super Pit : $297.29/oz at 3.7Moz
- SBM + Atlantic : $455/oz at 4.3oz

Regardless I wish the asset was in Australia though but it doesn't matter that much as Jake and Co have a habit of over delivering. The question is at what premium is the market going to put on EVN once this asset is acquired. As Red lake is a fixer upper, I would really hope that the SP don't run too hard like the NST + POGO deal did and suffer the subsequent impatient investor syndrome thereafter.

It is a good deal but investors temper their expectations in the short term. If you listen to any of Jake presentations, EVN is in it for the long term, they are building a Goldie that will profit through golds cyclical nature. That can only really be achieved with a slow and steady approach.

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I think you got the SAR superpit numbers out a bit. 50% of 7.3moz reserves plus 11.7moz resource = 9.5moz and puts it around $115/oz.
Also have a look at the fine print In the evolution presentation, see highlighted on attached image:
Don't know why no one has not commented or factored it in that the 2.1moz is in fact prob closer to 1.2-1.4moz.
Not to mention the conversion of Ni43 compliance to JORC which will have an unknown effect..Positive/negative, who knows?

EVN Price at posting: $4.10 Sentiment: Hold Disclosure: Held
3 Upvote

1 Great analysis

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