Value Microcaps Junior Miners

[dr_airtime]

EDV.TO - a few thoughts...

..owned EDV off and on of course and have been following along with Bob. Haven't taken a look in a while but here are a few points.

- Backed and owned by big investors also involved in Endeavour Financial - a resource merchant bank based in Bahamas (tax reasons only), but regularly helps Canadian mining companies get non-equity financing. One-degree or less of separation. Here are some examples of End. Fin assisting some of the better names in the business on debt mandates:

Current arranger

http://www.marketwired.com/press-release/lundin-gold-appoints-endeavour-financial-as-financial-advisor-tsx-lug-2029878.htm

Fairness Opinion

http://www.lydianinternational.co.uk/news/2015-news/287-

+ one more recent one I can't remember....

- EDV has USD 161M of net debt @ Sep-30 (long term debt + finance lease obligations less cash from Sep-30 BS less USD 63M contributed by La Mancha from transaction close in December). I have always assumed this isn't a problem because of the big Vancouver backers and the involvement of Endeavour Financial who I assume helped arrange. Main facility is a senior secured revolver of USD 350M size. It was renewed in 2015 and there are no principal repayments until September 2018 when 87.5M is due with equal payments every 6 months. Endeavour will have to build up cash on their balance sheet once getting Hounde into production. Market will need to believe this and higher gold prices will help immensely.

- I have ~590M shares (including 170M issued to new strategic investor) before consolidation so 59M after. I checked this and Google finance looks wrong listing 41M shares. I could be wrong here though. My MC below is conservative therore as potentially overestimated. With CAD 6.75 share price and 0.75 FX that is MC of USD 298M. Enterprise Value is therefore USD 459M. Compare that to Semafo with about a USD 725M EV who has less than 50% of EDV's P&P reserves (2.2M vs. 4.5M) about 60% of EDV's production and actually less M&I resources (6M vs. EDV's 8M) and EDV is looking pretty good. M&I includes P&P in that example.

- Pg. 6 of latest presentation. Next mine after Hounde is Ity CIL (1.4M P&P LOM produced ounces) from the recent presentation with ~US 250M in capex and production of 2019. They will have to deliver on the build up of cash at Hounde in order to convince lenders to refinance so they could make a construction decision in 2018 for this .