Within two weeks we will have the Quarterly report which will provide some clarity on four issues, being (i) current status regarding extended production test at RGN1 (due to commence in Q3/2017, so we should probably have some further detail provided in the text), (ii) water issues at Red Gully (there have been some remedial works and the approval of extended dams by the looks of it, with production expected to be roughly in line with the previous quarter), (iii) farmin talks (which, as we know, are yet to be finalised - otherwise we would have heard - yet, as we can deduce, are still ongoing - otherwise we would have heard), and (iv) a general timetable update (which will, of course, be impacted by the state of famin talks).
The market has interpreted the silence and assumed the worst, hence the slide in the share price over the recent weeks/months. New buyers are careful to attempt catching the falling knife, so support has been minimal. So it will be interesting to see if EGO preempts the Quarterly (with news) or simply plays a dead hand by the 31st.
Current Market Cap is around $14 million, which, once including debt and net cash, puts economic value at around $28 million. Most recent valuation - which was risked - was higher than that; but until Empire sorts out RG, RGN1 and the farmin we will not see any sort of significant recovery in share price.
Kit
EGO Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
