Gold Exploration in Wyoming

SIDDHARTH RAJEEV, Fundamental Research Corp. (06/05/2009)
  • Evolving Gold Corp. ("Evolving Gold," "EVG," "the company") is a Vancouver, British Columbia-based exploration company focused on acquiring and developing gold projects in the western United States.
  • The company's current focus is the Rattlesnake Hills project in Wyoming. Phase I drilling highlights include key intervals of 146.3 meters grading 2.92 g/t Au (Hole RSC-003), and 131.0 meters grading 2.84 g/t Au (Hole RSC-007).
  • Phase II drilling is underway at Rattlesnake Hills with three rigs operating and a planned target of completing 15,000 meters in up to 35 holes.
  • The company is in a strong cash position. Current cash, we believe, is sufficient to fund working capital and exploration for another 24 months.
DCF Valuation: We valued the Rattlesnake property based on our own resource estimate of 0.95 million oz of gold, and a possible production scenario.

Based on our analysis of the company's projects and our valuation of Rattlesnake, book value of the company's other projects ($0.10/sh), and current working capital ($0.17/sh), we initiate coverage on Evolving Gold with a BUY rating, and fair value estimate of $0.70 per share.

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