EVN Snapshot
FY1 | FY2 | |
---|---|---|
Price to Earnings: | 19.87 | 17.70 |
Dividend Yield (%): | 2.69 | 2.98 |
Price to Book: | 3.15 | 2.82 |
Return on Equity (%): | 15.89 | 17.37 |
EV/EBITDA: | 8.40 | 7.56 |
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.
Fat Prophets has made every effort to ensure the reliability of the views and recommendations expressed in the reports published on its websites. Fat Prophets research is based upon information known to us or which was obtained from sources which we believed to be reliable and accurate at time of publication. However, like the markets, we are not perfect. This report is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore discuss, with their financial planner or advisor, the merits of each recommendation for their own specific circumstances and realise that not all investments will be appropriate for all subscribers. To the extent permitted by law, Fat Prophets and its employees, agents and authorised representatives exclude all liability for any loss or damage (including indirect, special, or consequential loss or damage) arising from the use of, or reliance on, any information within the report whether or not caused by any negligent act or omission. If the law prohibits the exclusion of such liability, Fat Prophets hereby limits its liability, to the extent permitted by law, to the resupply of the said information or the cost of the said resupply.
Funds Management – In addition to the listed funds FPC, FPP and FATP, Fat Prophets Pty Ltd manages the separately managed accounts, namely Concentrated Australian Shares, Australian Shares Income, Small Midcap, Global Opportunities, Mining & resources, Asian Share, European Share and North American Share. These SMAs are managed under their own mandates by the fund managers, and this is independent to the research reports.
Staff trading – Fat Prophets Pty Ltd, its directors, employees and associates of Fat Prophets may hold interests in many ASX-listed Australian companies which may or may not be mentioned or recommended in the Fat Prophets newsletter. These positions may change at any time, without notice. To manage the conflict between personal dealing and newsletter recommendations the directors, employees, and associates of Fat Prophets Pty Ltd cannot knowingly trade in a stock 48 hours either side of a buy or sell recommendation being made in the Fat Prophets newsletter. Staff trades are pre-approved by an appointed staff trading compliance officer to ensure compliance with the staff trading policy.
For positions that directors and/or associates of the Fat Prophets group of companies currently hold in, please click here.