Evolution reports record net profits – Creamer Media’s Mining Weekly

PERTH (miningweekly.com) Gold miner Evolution Mining has reported record statutory net profit for the 2021 financial year ended June, despite a 4% decline in revenues.

Statutory net profits after tax for the full year reached A$345.3-million, up from the A$301.6-million reported in the last financial year, while underlying net profits after tax declined from the A$405.4-million in 2020 to A$354.3-million.

Earnings before interest, taxes, depreciation and amortisation declined from A$1.02-billion to A$914.2-million.

Gold production during the full year also declined from 680 788 oz, down from the 746 463 oz produced in the previous financial year, resulting in revenue declining from A$1.94-billion to A$1.86-million in the same period.

Total gold sold equalled 677 150 oz, which included deliveries into the Australian gold delivery commitments of 100 000 oz at an average price of A$1 829/oz and Canadian hedge book of 40 000 oz at an average price of C$2 272/oz. Evolution noted that the remaining 537 150 oz were sold in the spot market comprising 456 001 oz delivered at an average price of A$2 474/oz and 81 169 oz delivered at an average price of C$2 361/oz.

Copper revenue achieved was a record with a 26% increase from the prior year to A$236.9-million, driven by a 33% increase in copper price of A$11 172/t partially offset by a 5% decrease in production to 21 361 t.

I am proud of Evolutions achievements during 2021 amid the challenging backdrop of the Covid-19 pandemic. Our teams have risen to the challenge to deliver a record net profit and maintain our sector leading margins. The fully franked final dividend of 5c per share is our seventeenth consecutive dividend, with A$943-million in dividends paid to shareholders since our maiden dividend in 2013, said executive chairperson Jake Klein.

We continued to upgrade the quality of the portfolio with our commitment to develop the Cowal underground mine, and district consolidations completed at both Red Lake and Mungari to further enhance those cornerstone operations. Evolution is well placed to deliver an exceptional, high margin growth pipeline.

Evolution recently approved the A$380-million development of the Cowal underground mine, New South Wales, subject to the receipt of final regulatory approval.

During the ramp-up phase, the underground mine would produce between 0.04-millionand1.1-million tonnes of ore between 2022 and 2024, increasing to between 1.6-million and 1.9-million tonnes during its peak operation between 2025 and 2031, winding down to between 0.9-million and 1.25-million tonnes between 2032 and 2038.

The company also approved a clear and defined programme that accelerates the restoration of its Red Lake mine, in Ontario, to a premier Canadian gold mine with the goal of producing 350 000 oz of low-cost gold ayear by 2026.

In May, Evolution completed the acquisition of all of the outstanding shares of Battle North Gold at a price of C$2.65 a common share in cash for a total consideration of about C$343-million.

Battle North Gold's key asset is the Bateman mill which is located 10 km from Evolutions existing Red Lake operations. The additional processing capacity from the new Bateman mill will accelerate the ability to achieve in excess of 350 000 oz/y from Red Lake. In addition, the expansion of Evolution's footprint in the region provides an opportunity to build on itstrack record as a safe and sustainable operator for the long-term benefit of a broad range of stakeholders.

Furthermore, Evolution earlier this week settled the A$400-million acquisition of fellow-listed Northern Stars Kundana assets, which includethe Kundana operations, a 51% interest in the East Kundana joint venture, full interest in certain tenements making up the Carbine project, and a 75% interest in the West Kundana joint venture.

These operations are some 8 km from Evolutions Mungari operations, and representa strategic opportunity to consolidate the region, optimise existing infrastructure, and capture significant operational synergies.

Looking ahead at 2022, Evolution has set a group gold production target of between 700 000 oz and 760 000 oz, at an all-in sustaining cost of between A$1 220/oz and A$1 280/oz.

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Evolution reports record net profits - Creamer Media's Mining Weekly