Evolution Mining: Annual Mineral Resources and Reserves Update; Quarterly Update


Evolution Mining Limited (ASX: EVN) is an ASX listed metals and mining company with a special interest in gold. The company has five projects with 100% interest namely; Mt Rawdon, Mt Carlton and Cracow in Queensland; Cowal in New South Wales and Mungari in Western Australia.

On 17th April 2019, the company released its annual mineral resources and ore reserves statement as at 31st December 2018. It has used continuing and conservative gold price assumption of A$1,350 per ounce (US$980/oz) and a copper price assumption of A$6k per tonne (US$4,350/t) for the estimation of group ore reserves.

Group Mineral Resources

The group mineral resources were estimated to be at 14.73 million ounces of gold and 982k tonnes of copper as at 31st December 2018, both of which are higher than the previous estimates of 14.24 million ounces of gold and 946k tonnes of copper as at 31st December 2017.

Additions in the group’s mineral resources estimates prior to the mining depletion are;

  • A total estimate of 1.64 million ounces of gold at Cowal included 808k ounces of additional gold to the underground resource after the discovery of the Dalwhinnie lode and GRE46 extensional drilling.
  • Another 386k ounces of gold at the site was included due to the addition of E41 open pit.
  • 91k ounces of gold at Mungari, 43k ounces of gold at Cracow, 54k ounces of gold at Mt Rawdon were added.
  • 76k tonnes of copper at Ernest Henry (due to a change in reporting) were also included.

Decreases in the group mineral resources estimates prior to the mining depletion are;

  • 294k ounces of gold was reduced from the estimate due to a change in reporting standard. Previously the company included 100% of the gold resource below the 1,200RL which is now reduced to 49%.
  • 117k ounces of gold was reduced at Mt Carlton due to a reduction in the potential to optimise the open pit resource.

Group Ore Reserves

The group ore reserves were estimated at 7.46 million ounces of gold and 538k tonnes of copper as at 31st December 2018. The gold estimate is higher than the estimate as at 31st December 2017 which was reported at 7.05 million ounces. The gold estimate has been accounted for mining depletion of 902k ounces of gold. Whereas the copper estimate is lower from the previous estimate of 564k tonnes of copper.

Additions in the group ore reserves estimate prior to mining depletion are;

  • 1.13 million ounces of gold at Cowal due to the inclusion of the E41, E46 and Galway-Regal open pits.
  • 25k ounces of gold at Mt Carlton, 44k ounces of gold at Cracow, 24k ounces of gold at Mt Rawdon.

Decreases in the group ore reserves estimate prior to mining depletion are;

  • 59k ounces of gold at Mungari due to new drill data which led to an improved understanding of regional ore reserves.

On 1st April 2019, the company announced that it is entering in a joint venture with Enterprise Metals for the Murchison Project.

The company also released its March 2019 quarterly report wherein all the quarter wise highlights of production and sales summary was released.

Source: Company’s official announcement released on ASX

 Financial Performance and Guidance

 The financial performance of the company stood strong with group generating operating mine cash flow of A$168.3 million and net mine cash flow of A$107.8 million. The bank debt has also been reduced from A$330.0 million to A$25.0 million. FY19 Guidance for gold production is 720k – 770k ounces at an AISC of A$850 – A$900 per ounce.

Technical view

On the technical front, the company has a market capitalisation of A$5.8 billion with 52-week high and low of A$4.080 and A$2.605 respectively. The stock is trading down by 2.2% at A$3.345 with an intraday low of A$3.305 as of 17th April 2019 (AEST: 01:25 PM). In the last six months, the stock has delivered a return of 12.8%, and the YTD return stands at negative 6%.


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