just after the freefall to below 0.20, and really nothing has changed. In 25 years of assay watching, I had never seen intersections that were so thick, albeit with modest grades. My other pick was T.KGN which has done even better.
Any intercept over 100 meters has to be checked out, and last year these guys had pulled 2 cores that were just under 200 meters grading 2.5 plus grams per ton. Toss in the fact that when they had these great hits last year they were able to cash up, and this was simply one of those no brainers - it was trading below cash when it was under 0.20! I peeled off 1/3 of my position on wednesday in the $1.00 range so my current cost base is negative - still love the deal but you have to sell into rally's when dealing with venture capital.
Going forward this looks very good. My sources tell me that the good news has just begun, and this stock could easily trade above $2.00 before the summer is out. WRT evaluation, it's still way too early to tell, but in general, the market these days is evaluating juniors at about $25-$40 per in situ ounce, hence if you take our current cap of around $85mil and you subtract our $16 mil cash on hand, the market has given us an enterprise valuation of about $70 mil which would imply the market has us priced at about 2-2.5 million oz of gold based on the $25-$40 valuation. The big thing here is to understand that before last fall's mewltdown, gold deals typically traded at about $100 per in situ ounce and even though gold has moved up, the junior valuatiuons are still pitifilly low. Imagine if valuations return to the $100 mark, and then imagine if gold breaks out - this alone could propel the stock to over $10.00 if the stars line up. On top of that, with intercepts so thick, it appears that this deposit will by much higher than 2.5 million oz, possibly well over 5 million oz. Somepeople are already talking 10 million oz, but they are a long ways from that at present. I'll say one thing, and that is that it's becoming quite clear that this as a Volcanogenic deposit, so it does have the potential to be huge.
In summary, the upside is dizzying, and this is what all the short sellers and day traders don't understand. They just jump on a deal that has had a run and short it, but this time the market is telling them something different. There would have been a pullback if this was just a fluke or a pump & dump. The nice thing about beng cashed up in this market is that if there is any institutional interest, they have to go into the market and get positioned since there is no need for EVG to finance and dilute. That is why Genuity for example was mopping up paper, and that is why we did not pullback as would usually be the case. We don't have to give into the likes of Cannacord and do a financing at say a 25% discount to market and issue a ton of broker warrants etc.. However, if this stock continues to move up, a moderate non-warrant financing might be in order to appeasse the right institutional groups, the groups that can raise huge money at higher levels and help propel your deal to the next level.
Hang in there longs, and don't be distracted by the bashers and the shorts. I believe that this is one of the few occasions where their tactics won't work - this is cerainly what the market is telling us.
JANDD
