Evolution Mining Limited Tables September Quarter Results

Evolution Mining Limited (ASX: EVN) has announced 200,218 ounces gold production at an All-in Sustaining Cost (ASIC) of $885 per ounce, for the three months ended 30 September 2018.

In its September quarter result, Evolution posted net mine cash flow of $129.3 million, down from $136.0 million in June quarter, including operating mine cash flow of $196.9 million.

The latest progress in regulatory approval includes Board’s consent to underground mine development of higher-grade Link zone at Mt Carlton. Market sentiments got remarkably bullish on Board’s approval as EVN share price jumped 6.273% to trade at $0.170 as on 11 October 2018. 

The group informed that copper-gold deposit Ernest Henry has delivered a standout operating performance with production reaching 25,638oz of gold and 5,557t of copper at an AISC of A$(617)/oz, generating net mine cash flow of A$53.8 million. It is in comparison to 24,202oz and 5,172t of copper produced in June quarter at an AISC of (823)/oz.

The key driver of Evolution’s organic growth, Cowal operations have shown significant progress during the quarter. In September 2018, the group has clutched the regulatory approval to increase their production throughput at Cowal from 7.5Mtpa to 9.8Mtpa while Float Tails Leach project has been reported to be on track to reach commissioning by the end of this calendar year.

In July 2018, Evolution inked an agreement with Norton Gold Fields, to affect the change in ownership of Castle Hill gold deposit. The change has involved termination of Norton Gold Field stakes in Castle Hill, making Evolution the 100% owner of this project with Ore Reserves of 236,000 ounces which will result into material extension to the operating life at Mungari. It comes at a cost of A$12 million upfront cash payment to Norton with an A$3 million payable six months at the close of transaction. 2% net smelter return royalty will also be provided by Evolution over the first 38,000 ounces of gold production from Castle Hill project.

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Group’s cash balance has reduced from $323.2 million at the end of June quarter to $296.8 million at the end of September quarter due to heavy dividend payment to shareholders. A total of A$67.7 million for the FY18 final full franked dividend of 4 cents per share was paid to shareholders during the quarter. Group’s capital expenditure was $67.7 million for September quarter compared to previous quarter’s $85.9 million.

Moreover, looking into full year results for fiscal 2019, the group has previously forecasted the gold production to range between 720 to770 koz at an AISC of $850 to $900 per oz. On its 2018 investor day, it has presented the outlook for FY20 and FY21 as well. For FY20, it expects 720 to 770 koz gold production at $850 to $900 per oz AISC and for FY21, the gold production is expected to be between 700 and 750koz at AISC of $870 to $920 per oz.

On the release of 2018 September quarter results, EVN’s share price slipped by 1.329% to close at $2.970 on 15 October 2018. The stock has seen a performance change of +33.19% over the past one year.

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