Evolving Gold (EVG-T; $0.71) announced
it has reached a JV agreement with
Agnico-Eagle (AEM) on its Rattlesnake Hills
project in Wyoming. AEM can earn 70% of
Rattlesnake over seven years by making
payments totaling $12 million, purchasing
$23 million in EVG stock and expending $41
million on the project including completion of
a feasibility study. This is a strong sounding
agreement though most of the terms are not
spelled out, other than this year’s minimum
exploration expenditure of $3 million. It
makes sense at this stage to bring in a company
with Agnico’s development and mine
building experience.
This deal allows EVG to concentrate on its
Nevada projects that are clearly management’s
main focus. It also means Nevada
will have to carry the bulk of the company’s
valuation and provide the upside potential
going forward. The Nevada projects can do
this if they are successful, but Evolving will
have to deliver good results to add to its current
market value. The company has made
two discoveries there and continues to drill.
Given good early results and the high value
placed on exploration success in Nevada we
think it’s worth staying around for the next
sets of drill results from Humboldt and Carlin
or accumulating below this price for same.
More assays are expected during the next 4-
6 weeks.