Marvel Gold Ltd (ASX:MVL) is off to a strong start in its new iteration as a pure-play gold company with its 31% holding in newly listed graphite spin-off Evolution Energy Minerals Ltd (ASX:EV1) valued at A$25.5 million.
Evolution Energy holds Marvel’s former asset the Chilalo Graphite Project in southeast Tanzania and that company’s listing on November 16 sees MVL become solely focused on gold in West Africa, a world hotspot for the precious metal.
Chilalo boasts a mineral resource of 67.3 million tonnes at 5.4% total graphite content for 3.66 million tonnes of graphite.
EV1 investment
On completion of the EV1 spin-out and IPO, Marvel was issued 50 million Evolution shares and cash consideration of up to A$2 million.
At the close of trading on Thursday, November 25, the EV1 share price was A$0.51 per share, a 155% premium to the IPO price of A$0.20 per share.
Based on this price, Marvel’s holding of 50 million shares in EV1 is valued at $25.5 million, which equates to a valuation of $0.043 per Marvel share.
It results in an enterprise value for Marvel after subtracting cash and this listed investment of A$11 million or A$11 per resource ounce.
Marvel is now assessing options with respect to the Evolution Energy investment to ensure that value is maximised for shareholders.
The company's securities have been as much as 25.8% higher intraday to A$0.088, which represents a new high of more than 18 months.
EV1 shares today have traded in the range of A$0.495 to A$0.53 and closed at A$0.50.
