Gold

Evolution Mining posts 33% cashflow boost

Thu 21 Apr 22, 3:58pm (AEST)
A collection of gold nuggets against a black background with one specimen in the foreground
Source: iStock

Stocks in article

evn
MktCap:
-
mgv
MktCap:
-

Share article

Key Points

  • Operating mine cash flow $268.9m up 33% QoQ
  • Gold production of 148,787oz quarter ending 31 March
  • Copper production tripled to 13,352tn; shareholder returns $54.9m

Evolution Mining (ASX: EVN) has posted a 33% boost to its cashflow quarter-on-quarter for the period ending 31 March 2022 with gold production at 148,787 ounces at $990/oz. Copper production tripled to 13,352 tonnes during a period of high demand for the commodity increasingly required in energy transition electrification initiatives. The company has also generated $54.9m in shareholder returns in the quarter. 

Gold production was up 67% QoQ with development of over 1,200 metres per month achieved for the sixth month in a row; this was backed by an increase in ore mining by 25% to 243,000 tonnes—including a record 106,000 tonnes for March alone. Gold grade increased 22% to 4.74g/tn. 

US operation free from Australian East Coast floods 

The company expects production to increase to at least 40,000 ounces in the June 2022 quarter.

The company's Red Lake development in Ontario, free from East Australian weather events, is the prize star of this quarter’s results. So too did its WA Mungari acreage evade floods; producing 33,296oz of gold in the quarter. 

However, the company also notes its debt stands at over $1bn at March 31. 

There’s more news in Evolution’s quarterly that isn’t exactly rose tinted—due to freak weather on the east coast, the company’s Mt. Rawdon play has experienced problems as high rainfall impedes access to the core extraction pit underpinning the Rawdon acreage.

Evolution expects a loss of some 20,000oz. The north wall of the pit has been compromised; works are underway to amend the infrastructure. 

If these rainfall events become common, perhaps the company will stand to benefit from its Mt. Rawdon Pumped Hydro project for which a feasibility study is due in June 2023. 

Its Cowal underground development, however, while similarly impacted by the floods, remains on track and on budget, with primary drilling contracts imminent. 

Copper production boost backed by acquisition 

Evolution acquired Ernest Henry in January this year and this asset is the key driver allowing Evolution to triple its copper production through the quarter to 13,352tn. Evolution notes that Ernest Henry’s combined metal production expressed on a gold equivalent basis reflects 95,217oz of materials. 

In the first quarter under Evolution ownership, Ernest Henry produced 17,1833oz of gold and 13,352tn of copper. Copper sales in the quarter were at an average copper price of $14,020/tn.

Process plant shutdown hurts processing 

While the company is currently making major gains on the back of a volatile commodities market, ore mined and processed for the quarter were reduced due to a planned eight day shutdown of a processing plant and crusher in February. 

Gold recovery of 80.9% was achieved and copper recovery of 95.2%. 

A pre-feasibility study on the extension of the Henry Ernest mine is progressing with completion expected for the end of CY2022. 

Additional Murichson target identified in Cue JV 

On the back of its quarterly, Evolution has also noted in a separate release today that its Cue JV with Musgrave Minerals (ASX:MGV) in Murchison, Western Australia, has identified new gold lodes through a diamond drilling campaign. 

The company notes follow up aircore drilling on Lake Austin has extended the company’s mineralised footprint to over 2.1km at West Island and the company perceives new basement targets onsite.

Drilling will progress through the June quarter.

image

Evolution Mining: A three-month share price snapshot.

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

Get the latest news and media direct to your inbox

Sign up FREE