Evolution (ASX:EVN) Share Price Drops 5% After Operations Update


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The share price of Evolution Mining (ASX: EVN) is down around 5% after providing an operations update.

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 Mining Operations Update

Evolution Mining revealed that for the December 2019 quarter the group gold production was 170,890 ounces at an all-in sustaining cost (AISC) of AU$1,069 per ounce. Year to date production has been 362,857 ounces at an AISC of AU$1,040 per ounce.

During the December 2019 quarter the gold miner achieved a gold price of AU$2,091 per ounce compared to the current spot gold price of AU$2,267 as it 9 January 2020.

This led to group mine operating cashflow of AU$233.1 million and net mine cashflow of AU$144 million.

Evolution ended the quarter debt free and with cash at bank of AU$170.3 million after repaying outstanding bank debt of AU$275 million. This is an increase of AU$78.6 million from the 30 September 2019 net cash position of AU$91.7 million.

However, unanticipated losses of ore tonnes in areas that were planned to be mined over the remainder of FY20 are expected to result in an estimated production range of 70,000 to 75,000 ounces for Mt Carlton, the original FY20 guidance was for 95,000 to 105,000 ounces, which will have a negative impact on Mt Carlton’s FY20 AISC which is expected to be AU$1,150 to AU$1,125 per ounce, up from the original guidance of AU$800 to AU$850 per ounce.

FY20 production will be at the bottom of guidance at around 725,000 ounces whilst AISC guidance of AU$940 to AU$990 remains unchanged.