Hard to belife, page-5

Hi Guys,

Just a few counterpoints to consider in regards to EVN.

Based on 420k oz guidance EVN's AISC are running at about $1,090 oz.

On top of this G&A last year was $21m (or another $50 oz). I appears that EVN did incur a lot of consultant costs last year (based on their AR). This is quite unfavourable when compared to RRL and NST on a per oz basis.

In addition, EVN is undertaking c. $75m of capex projects this FY over and above sustaining capex. This is worth noting as EVN has a current net debt position of ($82m) based on their latest Quarterly Report.

Based on these above numbers EVN will be operating on a cash negative basis for FY15 which, given their current net debt creates further balance sheet risk. This assumes current POG holds and there are no material reductions in AISC guidance.

However, from the latest conference call EVN is working hard to reduce opex and have some anticipated gains coming up which may be able lower the AISC above. The capex programme, whilst presenting a cash drain this year will further add to efficiencies in the coming years. I was impressed by the conference call.

Just a heads-up though for those looking to invest in EVN that it would be a good idea to look closely before leaping. I did sell out of EVN in favour of another gold miner based on my view that EVN will damage its balance sheet (increase in net debt position) this year and possibly struggle to maintain it's dividend as a result.

Cheers
John