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Evolution Mining Limited (ASX:EVN) has released its quarterly report for the period ending 31 December 2018. The report shows that the operations of the company were on track.
The December 2018 quarter saw Evolution continue to invest in mine life extensions and production growth with the approval of major development projects at Cowal (Plant expansion, GRE46 underground decline, and exploration drilling) and Mt Carlton (Underground mine development and plant upgrade). Despite the elevated levels of investment, all operations maintained their positive cash flow generation after meeting their operating and capital needs. Evolution sold 188,534 oz of gold at an average gold price of A$1,730/oz (Sep quarter: 196,021 oz at A$1,662/oz).Â
Deliveries into the hedge book totalled 37,500oz at an average price of A$1,686/oz with the remaining 151,034oz of gold delivered on spot markets at an average price of A$1,740/oz. Evolution generated operating mine cash flow of A$191.1 million which was slightly down on the September 2018 quarter of A$196.9 million due to lower gold and copper sales offset by higher realized metal prices. Net mine cash flow of A$108.5 million was A$20.8 million lower than the prior quarter (Sep quarter: A$129.3M) due to the planned ramp-up of capital investment programs. Most of the A$82.6 million investment capital related to major projects (A$51.0M) with the balance invested in sustaining capital (A$31.6M).
Significant capital expenditure items comprised of: Cowal Stage H development, Float Tails Leach project and E46 land acquisition costs (A$33.3M); Cracow Underground mine development (A$3.1 million); Mt Carlton capital waste stripping (A$6.7M) and Underground mine development (A$1.1M); Mt Rawdon capital waste stripping (A$5.2M); and Mungari Underground development (A$1.5M). Sustaining and significant capital investment remains on track to be within full year guidance ranges of A$105 â A$130 million and A$165 â A$200 million respectively.
Mt Carlton delivered improved financial performance with A$20.9 million in net mine cash flow (Sep quarter: A$16.6M) despite increasing investment on the recently approved underground mine development. Ernest Henryâs net mine cash flow of A$54.3 million was higher than the prior quarter (Sep quarter: A$53.8M) with increased gold and copper prices. Cracow (A$11.4M) net mine cash flow doubled the September performance due to higher gold sales and lower capital spend (Sep quarter: A$5.7M).
The Group cash balance at 31 December 2018 increased to A$313.6 million (30 Sep 2018: A$296.8M) after making an A$20.0 million scheduled debt repayment and A$53.3 million of tax payments. Evolutionâs hedge book as at 31 December 2018 stood at 475,000oz at an average price of A$1,816/oz. During the quarter, the Company took advantage of the elevated Australian dollar gold price to hedge a further 300,000oz of production at an average price of A$1,871/oz for quarterly deliveries between July 2020 and June 2023.
The company expects full year AISC to be at the top end of the A$850 â A$900 per ounce. Year-to-date to 31 December 2018, the lower than planned achieved copper price has increased Group AISC by $11 per ounce.
The share prices of EVN are trading at A$ 3.710, down by 4.13% as at 3:10 pm, 24th January 2019.
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