Evolution Mining

EVN

June 19, 2021 FAT-AUS-1018
4.73
Speculative
high

3Q21; gold production off for the quarter

Evolution Mining has released its March quarter 2021 activities update, revealing a weak operational performance for the quarter. Evolution reported lower headline gold production for the quarter, but silver and copper production rose. Operating costs came in on the high side for the March quarter. A fall in the gold price delivered lower cash flow numbers, but the balance sheet remained in good shape. Production guidance for 2021 remained unchanged, while Evolution expects to see costs improve over the remainder of 2021.

Gold production for the March quarter came in lower, with the following chart showing quarterly gold production:

Source: Evolution Mining

Production fell 2.5% year-on-year (yoy), to 161,316 ounces of gold, with four of five continuing mines in Cowal, Mt Carlton, Mungari and Mt Rawdon all contributing headwinds with lower production results. Ernst Henry ran against the trend, to report higher numbers. Overall, we consider the result was average, with 2021 guidance unchanged and the expected improvement to costs over the remainder of the year being the key positive influences.

Gold production, according to Evolution, is tracking 2021 guidance numbers with the forecast remaining unchanged in the range of 670,000 to 730,000 ounces of gold.

Evolution’s biggest producer in its Cowal mine, was a key contributor after reporting a fall in gold production for the quarter. The following chart shows quarterly gold production for the Cowal mine:

Source: Evolution Mining

Cowal printed a 14.4% fall yoy, to 51,823 ounces of gold. Driving the result was a fall in the milling gold grade while gold recoveries improved. Milling gold grades fell to 0.90 grams per tonne (g/t) gold from 1.15g/t from a year earlier, while gold recoveries improved to 83.5% from 81.1%. The mine operated as expected over the quarter.

Mt Carlton, Mungari and Mt Rawdon all reported yoy falls of 8.9%, 16.8% and 27.4%, to print gold production numbers of 12,117 ounces, 27,226 ounces and 11,930 ounces, respectively. These sites operated as expected for the March quarter and are expected to deliver their full year targets.


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