Update: Evander grade nadir portends future growth
Already down from FY13’s 7.8g/t to 6.2g/t in H114, we estimate a further decline in underground grades at Evander to 4.2g/t in H214. However, face grades are already reported to be improving and mined grades should improve markedly once mining crews are moved from existing operations to the new 25 Level workings from February 2015. In the near term, we forecast an underground grade of 4.75g/t in H115 and 5.75g/t in H215. However, thereafter we estimate that it will rise to in excess of 7.5g/t in FY16, when management is targeting group-wide output of 225,000oz. In this respect, we calculate that the effect of a 7.2g/t underground grade in H214 alone would have been to improve FY14 EPS by c 0.7p (assuming a 36% marginal tax rate), or 1.4p on an annualised basis.
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