Hard Rock on EVG

Evolving Gold (EVG-V, EV7-F, EVOG-Qbb; halted at $0.77 on V) was halted part way through the trading
day and delivered a pair of releases too late to have the halt removed for today’s trade. The halt was to
announce a very significant discovery hole from the company’s Carlin joint venture. Drill hole CAR007 cut a
total of six separate gold bearing intersections over 422 metres of core length, beginning 759 metres down
hole. Of these four with an aggregate length of 26 metres contained very significant numbers, and each of
these four included an ore quality section for underground mining. The best of these was 4.6 metres @ 31
g/t (1 oz/ton) gold that included 3 m of 44.6 g/t. A second section returned 3 m of 14.1 g/t gold that
included 1.5 m of 24.9 g/t gold, and two longer sections averaging 5.5 g/t and 7.4 g/t respectively included
sections of 3 m @ 12.7 g/t and of 3 m of 23.7 g/t gold. This is an outstanding result, and the best set of
intersections we have noted from deep Carlin testing in this cycle. EVG plans to drill several off-set holes to
better orient itself with the system. These are the tenor of results needed to seriously consider putting
together a resource at this depth, and are in keeping with deep deposits elsewhere in the trend that have
become producing ore bodies.
The second release was in the odd category, announcing that Board member Daniel Wolfus is suing the
company, in California, for approximately $300,000 he alleges is due him as fees from the last private
placement. This is odd because TSX Venture exchange policy specifically prohibits management or
members of a Board of Directors from collecting finder’s fees of this kind. We don’t know Mr Wolfus but note
from the company’s bio page his background is in investment banking, which is an area were fees of this
sort are of course bread and butter items. Whether this is a cross jurisdictional misunderstanding or
something else is unknown, but as noted it seems like an odd thing for the Director of a Canadian company
to be doing. We don’t expect this oddity to overshadow the new results from the Carlin JV. EVG has been
drifting lower since its set of final results from the Rattlesnake Hills project, and we expect this discovery
hole from Nevada to turn its market around, and think that turn could be rapid in a rising gold market. At this
price level our outlook is speculative buy on EVG.