Evolution Mining on track to achieve FY21 Guidance
- Production figures exceeding expectations at 17,021 ounces produced
- Paperwork submitted to expand Cowal site mine.
- Sustainability for future developments remain a key value for EVN
Evolution Mining Limited (ASX: EVN), on the 12th of October updated shareholders on the preliminary September quarter results. Detailed in the update is a summary of activities which coincide with the annual Diggers and Dealers Mining Forum; a large exhibition where miners, brokers, explorers, bankers, investors, financiers and other services meet in Kalgoorlie to stay up to date with the latest in the industry. The company is in the process of updating and developing different projects which will boost production levels in the future. Full results will be available on the 27th of October.
Production figures are in line with the FY21 plan, showing 170,021 ounces of gold produced in the quarter so far. All-in Sustaining Cost (AISC) comes to AUD1,198 per ounce, with All-In Cost (AIC) coming in at AUD1,663 per ounce.
Operating mine cash flow is currently at AUD272.3 million and net mine cash flow sits at AUD183.4 million. Additionally, net bank debt is currently sitting at AUD180.3 million, after the sizeable FY20 dividend of AUD153.8 million.
Production guidance according to the Denver Forum update is between 670 to 730koz and an AISC guidance of US920/oz to AUD1,270/oz. Furthermore, there is a dividend policy of 50 per cent payout of free cash flow.
In addition to the open cut mine at Cowal, the company is developing an underground expansion. Regarding this development; on the 30th of September, EVN submitted the Significant State Development (SSD) application and the Modification 16 Development Application to the NSW Department of Planning, Industry and Environment. Now, a Feasibility Study for the underground mine is progressing to plan.
Should the plan be approved, Executive Chairman Jake Klein expects the expansion will help achieve the FY21 objective of producing 350,000 gold ounces per annum from the development. There is positive sentiment surrounding debt structures which are propelling the company through FY21. Since June 2015, the site has been on a stable uptrend in production levels.
The Red Lake mine is also a development detailed in the Denver Forum release, with CY2020 targets in line with a CY2022 target for greater mine development, with new mine structures to be added. Additionally, the Ernest Henry site is providing great returns, with 87 per cent of invested capital returned.
The company looks to the future, with elements such as climate risks, economic contributions, health and safety, diversity and social responsibility are all factors considered. 74 per cent of their workforce being local to the area, reducing travel emissions, of which 7 per cent are indigenous workers, 62 per cent are female graduate intakes and 17 per cent female. Over AUD3 million was donated to the bushfire and drought relief efforts earlier in the year.
There is a forecast from Evolution Mining that FY21 production volumes will be lower as Cowal processes existing stockpiles and Red Lake is further developed, yet this will be mitigated in the long term by higher production levels.