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.
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.
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.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.