Evolution Mining Announces Significant Increase In Mineral Resource

Industry News

& Articles

Evolution Mining Announces Significant Increase In Mineral Resource, Up 2%

Facebooktwitterlinkedin
  • Ernest henry copper Mineral Resource estimate up 28 percent to 1.13 million tonnes
  • Ernest Henry gold Mineral Resource estimate up 24 percent to 2.07 million ounces
  • Ernest Henry accounts for 48 percent of Evolution’s estimated FY23 annual gold production
  • Significant industry inflation and COVID related staff shortages are impacting production costs
  • FY22 cost of gold production was $95 per ounce above the midpoint of AISC guidance
  • Evidence that FY23 cost guidance can be achieved in a high inflation environment needed before sustained positive sentiment returns to Evolution.

Evolution Míning (‘Evolution’ or the ‘Çompany‘) owns and operates five wholly-owned mines in the safe jurisdictions of Canada and Australia, including the Ernest Henry mine, previously operated by Glencore. A significant by-product of the Ernest Henry mine is copper and to a lesser extent, silver. This by-product revenue assists in the reduction of all in sustaining costs of production at this mine.

Evolution seeks to own a portfolio of high-margin assets, by acting counter-cyclically to acquire assets at attractive valuations from motivated sellers. The Company’s consistent and clear strategy is to prioritise margin over ounces produced, from sites with an average mine life of at least 10 years. The production weighted average mine life across the portfolio is currently 14 years.

Increased Mineral Resource at Ernest Henry

Evolution has announced a 28 percent increase in the Mineral Resource estimate of copper to 1.13 million tonnes and a 24 percent boost of gold to 2.07 million ounces at its flagship mine, Ernest Henry. This increased Mineral Resource estimate has improved the mine life extension potential which is currently being assessed under a Mine Extension Pre-feasibility (PFS) study due for completion by December 2022. The PFS so far includes 30 kilometres of new drilling from 119 drillholes up to 31 May 2022. The mineral system remains open at depth and so there is potential for further resource additions following the completion of more drilling, which has the potential to extend the mine life beyond 2031.

About Ernest Henry

Ernest Henry is a world class asset located 38 kilometres north-east of Cloncurry, Queensland. Evolution acquired an economic interest in Ernest Henry in November 2016 from Glencore under a joint venture agreement that delivered 100 percent of future gold and 30 percent of future copper produced. Evolution transitioned to 100 percent ownership of Ernest Henry in January 2022.

The drilling success and potential mine life extension builds on an already impressive mine site that cost $1.9 billion to acquire and has returned over $1.5 billion of net mine cash flow. Ernest Henry annual gold equivalent production is about 350,000 ounces, representing 48 percent of Evolution’s 720,000 ounces of production guidance for FY23. The mine site generated $435 million of net mine cash flow in FY22, also being 48 percent of Evolution’s total FY22 operating mine cash flow of $893 million.

Looking Ahead

The updated Mineral Resource and Ore Reserve Statement has revealed a broader mineralised zone than currently modelled at Ernest Henry. Evolution maintains a strong balance sheet that includes around $900 million of liquidity with cash of $572 million. This has enabled the Company

to pay $1 billion in 18 consecutive dividends to June 2022.

Although Evolution is one of the lowest cost global gold producers, like many miners, it is facing significant industry inflation costs and COVID related staff absenteeism. Cost of production, as measured under the All-in Sustaining Cost (AISC) convention, came in at $1259 per ounce for FY22. This compares to the original guidance range of $1,135 - $1,195 per ounce, a difference of $95 per ounce.

Evolution has guided the market to FY23 AISC of $1,240 per ounce. The market will be looking for evidence that this cost guidance can be achieved in a high inflation environment for sustained positive sentiment to return in the months ahead.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at l.mosmann@kosec.com.au.

Comment on this company

Latest Stories

OZ Minerals Share Price Jumps 33 Percent On $25 BHP Takeover Bid

The OZ Minerals (OZL) board have quickly and firmly rejected BHP’s……

Orica Raises A$650M At $16 A Share For $350M Axis Mining Acquisition

Orica has raised A$650 million by way of a share placement of 40.6 million……

Appen Drops 28% on 69% Decline In Underlying EBITDA For First Half

Weaker than anticipated digital advertising demand and a slowdown in spending……

More for you

US Fed & Jerome Powell Announce A 0.75% Increase In Fed Funds Rate

In a brief 313-word statement The Federal Reserve Chairman……

Westpac Goes Digital With Plans For A 10-Minute Mortgage Approval

In a market update today, Westpac will offer homeowners a……

Perseus Mining Falls Despite Posting Record Gold Production In June Qtr

Perseus’s three operating gold mines combined to produce……

OZ Minerals See’s Higher Costs On Staff Absenteeism & Lower Copper Output

Oz Minerals has reported that the impact of COVID absenteeism, flooding……

Newcrest Mining Delivers Higher Gold Production At Lower Cost In June Quarter

Higher gold production in the June quarter of 637koz has seen a continuation……

Iluka Jumps 7% On Higher Mineral Sands Production & Sales In June Quarter

Iluka has released details of increased production volumes and higher sales……

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

Disclaimer
KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

Fees
As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

Privacy
You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.

CLAIM YOUR FREE E-BOOK &
7 DAY ACCESS TO LOTUS BLUE

STOCK MARKET SUCCESS

KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.

CLAIM YOUR FREE E-BOOK WHEN YOU LOGIN TO LOTUS BLUE INVESTMENT PORTAL

Latest TV Commercial