Evolution Mining Limited (ASX: EVN) released its FY19 operating results and FY20 guidance today.
Evolution Mining was formed in November 2011 and is one of Australia’s largest gold miners. It owns five mines, being Cowal in New South Wales, Cracow, Mt Carlton and Mt Rawdon in Queensland and Mungari in Western Australia. Evolution also has a stake in the Ernest Henry copper-gold mine that will deliver 100% of future gold and 30% of future copper and silver produced from an agreed life of the mine area, outside of the life of the mine area Evolution will have a 49% interest in future copper, gold and silver production.
Evolution’s FY19 Operating Results And FY20 Guidance
The Evolution Mining share price fell 2.3% today in response to the company’s preliminary FY19 numbers.
Following on from the completion of the June 2019 quarter, the gold miner has been able to release some production, costs and cash flow numbers.
In the June 2019 quarter the company achieved gold production of 194,866 ounces with an all-in sustaining cost (AISC) of $915 per ounce, generating operating mine cash flow of $217.4 million and net mine cash flow of $154.4 million.
Evolution’s FY19 Numbers
For the whole year Evolution produced 753,001 ounces of gold compared to guidance of 720,000 to 770,000 ounces, so it was a bit higher than the mid-point of the guidance.
The company’s all-in sustaining cost of production was $924 per ounce against guidance of $850 per ounce to $900 ounce, so the costs were a bit higher than expected due to delays, the inability to extract higher-grade ore at Mt Rawdon, higher royalties, lower by-product credits (copper) and higher share based payments.
Overall, the company achieved operating mine cash flow of $773.6 million and net mine cash flow of $500 million.
FY20 Guidance
The company is forecasting FY20 group gold production of 725,000 ounces to 775,000 ounces of gold with an AISC in the range of $890 per ounce to $940 per ounce.
Evolution said that its investment in sustaining capital in FY20 is forecast to be between $90 million to $130 million.
Management Comments
Evolution Mining Executive Chairman Jake Klein said: “The outstanding cash generation of our business reflects the quality of our portfolio, moving us to a net cash position at the end of the year.
“We are determined to remain focused on margin and operating efficiencies which is reflected in our guidance for FY20. This will ensure we maintain our position as one of the lowest cost gold producers in the world and continue to generate superior returns for our shareholders.”
Is Evolution A Buy?
If you’re a long term shareholder of Evolution Mining then it’s good times with the gold price quite high. However, it’s very hard to say where the gold price will go, which is why I’d rather wait until the gold price drops back again.
I much prefer the idea of investing in reliable ASX shares in the free report below that can generate ongoing profit growth which don’t rely on commodity prices.
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