Evolution Mining Shares Tumbled On ASX Despite Receiving Approval For GRE46 Exploration Decline

  • Oct 26, 2018 AEDT
  • Team Kalkine
Evolution Mining Shares Tumbled On ASX Despite Receiving Approval For GRE46 Exploration Decline

On 26 October 2018, Evolution Mining Limited (ASX: EVN) announced that its Cowal Gold Operation near West Wyalong in NSW has received regulatory approval from the NSW Department of Planning and Environment (DP&E) to initiate construction of the Galway-Regal-E46 (GRE46) exploration decline. Following this news, the share price of the company decreased by 2.194 percent as on 26 October 2018.

The Galway-Regal-E46 (GRE46) exploration decline is being developed to conduct further resource definition and discovery drilling. In addition, the approval will also facilitate further drilling and delineation of the recently discovered high-grade Dalwhinnie Lode. The development is expected to start early in the March 2019 quarter and it is expected that will involve capital expenditure of around A$20 – A$22 million over FY 2019 and FY 2020. Additionally, it is expected that there will be a further investment of A$6 – A$7 million on underground drilling.

In the recently released quarterly production report, it was revealed that the September FY 2018 Quarter’s production of the company was less as compared with the record-breaking September 2017 quarter but Cowal was noted by the company for its strong financial performance. 

In FY 2018, Evolution reported a record statutory net profit of A$263.4 million which was achieved on the back of a record operating cash flow of A$811.8 million and net mine cash flow of A$539.94 million. Due to the strong cash generation, the company was able to reduce net debt by A$325.8 million during the period to A$71.8 million. The continued increase in cash generation of the business saw a total of A$109.9 million in fully franked cash dividends paid during the year based on Evolution’s dividend policy of a payout ratio of 50% of after-tax earnings.

Cowal delivered reliable, low-cost production with 257,951 of gold produced at an AISC of A$877 per ounce. Mt Carlton also performed well this year with a production of 112,479 ounces at an AISC of A$535 per ounce. Ernest Henry, in its first full year in Evolution’s portfolio, made a strong contribution by producing 95,209 ounces of gold at an AISC of A$(641) per ounce to generate net mine cash flow of A$219.2 million.

The company is focused on delivering on a strategy of upgrading the quality of asset portfolio continued with the sale of the Edna May operation in September 2017 for an upfront payment of A$40 million and a contingent payment of up to an additional A$50 million. The company is focused on prioritizing margins over production growth and it is expected that the Group gold production in FY 2019 will be around 720,000 – 770,000 ounces at an AISC in the range of A$850/oz – A$900/oz.

In the last six months, the share price of the company increased by 1.27 percent as on 25 October 2018, traded at a PE level of 20.490x. EVN’s shares traded at $3.120 with a market capitalization of $5.41 billion as on 26 October 2018 (AEST 4:00 PM).


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK