EVR (ASX) Ann: Shareholders Approve the La Mancha Transaction

Originally posted by loki01 ↑

Mainholm

JID is more positive about this deal than me so read his posts here to get another perspective.

You could also read some of my previous posts which indicate my views on EVR.

You need to do some more research on the deal - listen to the related webcast that can be accessed on the EDV website - there were some good questions posed by some analysts, especially about the mine being acquired.

IMO EVR is way undervalued - compare it with BTO for instance and you will get the picture - so I think EVR should either not do this deal and continue going it alone or have done a much better deal, perhaps giving the Pharaoh 15-20% of the company for what he as offered to pay.

EVR is undervalued because its managed is relatively unknown - the BTO mob have very high visibility because they made some smart moves when operating a previous company and sold out for a motza. The other factor holding EVR back is its debt, which it can gradually reduce and that it has not yet fixed up the Mali mine to run at a low cost, but has made giant strides in that direction. They have shown themselves to be astute mine operators by the way they have turned the Ghana operation into a strong profit center despite its low grade orebody and smallish plant and their gradual reduction in total ASIC to a quite reasonable level without much, if any (as far as I can tell) high grading of the mines. They also have a successful geology team and a team that has now built tow mines (Ghana and the Ivory cost - basically from the merger with ADU).

If you were to review the deals made by the EDV CEO since he started his two mergers, (ADU, and then Avion) you will find that had he not done any of them then he would now have two profitable mines (Burkina Faso, BK, and Ivory Coast - they had about USD200m cash on hand to build it) and no debt and only about 120m shares on issue (from memory, but check that) producing around 230k ounces I think the share price would be at least CAD$2 rather than the paltry CAD0.61 now.

I see no point in building Hounde mine (which is why he has got the Pharaoh in, wants his dough to assist) when the gold price is cacking. Why mine more ounces to get not that much for it, and deplete the ore body. They will still have to go into more debt to develop it (which will continue to keep the share price suppressed longer). Plus the CEO will put the Pharaoh in a position to get more of the company cheaply by providing a possible further $70m - what will he ask, another 30% stake!

The way things stand EVR can meet its obligations and gradually pay down its debt. The ASIC is falling and I think they can get it under USD900/ounce soonish, if not there already. Eventually when the gold price recovers they will have very little debt and can fund the Hounde project themselves.

I think EVN was stupid getting the Pharaoh's Oz mines for a 30% stake. The Pharaoh probably does not have the skill set to run these mines himself all that well in the long run but got a top team in EVN to do it for him for a large stake in an expanding operation. It was the subsequent deal to buy the Cowal mine that got EVN's share price moving up.

I have to admit the Pharaoh is an astute deal maker, which is why he is a billionaire.

I got into EVR when ADU merged with EDV, and have been in and out a few times. I am out for good now I think. But perhaps if it got to CAD45 cents and I has access to the TSX then I might buy some shares for a trade. The way the management has done deals is a worry in my opinion.

Have you had a look at GUY on the TSX. It kind of looks interesting.

loki (but the shareholders loved the merger so I am probably wrong)

Expand

Thanks Loki for that broad overview. It provides plenty for me to look at, much appreciated.

I'm just starting to look at some goldies with their mining o/s and operating in USD. I have a feeling that the last big down push is coming on the POG and an inflection point will then be on the horizon. Plenty of time to do some DD though. So your points and tips will steer me to do some more naval gazing on this one.

Cheers

No.	Vol.	Price($)
1	116245	0.8¢

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116245

0.8¢

Price($)	Vol.	No.
0.9¢	3146644	8

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0.9¢

3146644

No.	Vol.	Price($)
1	116245	0.008
10	10773906	0.007
8	16466665	0.006
7	4287033	0.005
16	3699221	0.004

No.

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116245

0.008

10773906

0.007

16466665

0.006

4287033

0.005

3699221

0.004

Price($)	Vol.	No.
0.009	3146644	8
0.010	2429565	6
0.011	1184641	5
0.012	550000	3
0.014	319427	3

Price($)

Vol.

No.

0.009

3146644

0.010

2429565

0.011

1184641

0.012

550000

0.014

319427

(20min delay)
Last 0.8¢		Change -0.001(11.1%)		Mkt cap ! $15.88M

Open	High	Low	Value	Volume
0.9¢	0.9¢	0.8¢	$12.78K	1.525M

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