EVOLUTION MINING LIMITED New quarterly records set for the following key Group metrics:
Gold production of 220,971 ounces
All-in Sustaining Cost (AISC)1 of A$786 per ounce (US$620/oz)2
Operating mine cash flow of A$210.4 million
Net mine cash flow of A$158.3 million
Continuing to improve portfolio quality
Divestment of Edna May gold mine materially improves portfolio quality
Group pro-forma quarterly AISC reduces to A$694 per ounce (US$548/oz) excluding Edna May
Cowal - a cornerstone asset
Stage H project on schedule and on budget
Contracts awarded for Float Tails Leach Project to increase gold recovery by 4 - 6%
Debt repayments of A$40.0 million reduced net debt to A$342.0 million and gearing3 to 13.6%
Discovery successDiscovery of significant new zone of mineralisation at Cowal E41 West: 139m grading 1.17g/t from 269m
Mungari Regional drilling continues to return high-grade results
Resource definition drilling at Cracow likely to support resource additions and mine life extensions
Consolidated production and sales summary4Units
Dec 2016
qtr
Mar 2017
qtr
Jun 2017
qtr
Sep 2017
qtr
Gold produced
oz
217,812
202,926
218,079
220,971
Silver produced
oz
263,183
266,359
277,676
290,812
Copper produced
t
3,501
5,419
5,691
5,922
C1 Cash Cost
A$/oz
585
599
567
558
All-in Sustaining Cost
A$/oz
900
840
825
786
All-in Cost5
A$/oz
1,068
1,009
1,028
965
Gold sold
oz
198,782
193,431
219,253
221,158
Achieved gold price
A$/oz
1,603
1,600
1,650
1,604
Silver sold
oz
268,563
264,229
281,479
280,181
Achieved silver price
A$/oz
22
23
23
21
Copper sold
t
3,507
5,374
5,722
5,860
Achieved copper price
A$/t
7,561
7,745
7,559
8,381
Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense. Calculated on per ounce sold basis
Using the average AUD:USD exchange rate for the September 2017 quarter of 0.7894
Unaudited gearing as at 30 September 2017
Production relates to payable production
Includes AISC plus growth (major project) capital and discovery expenditure. Calculated on per ounce sold basis
Cowal: 70,140oz at an AISC of A$712/oz generating net mine cash flow of A$53.2M
Ernest Henry: 23,682oz at a record low AISC of A$(614)/oz producing net mine cash flow of A$52.4M
Mt Carlton: 29,994oz at a record low AISC of A$429/oz producing net mine cash flow of A$23.8M
Group gold production for the September 2017 quarter was a record 220,971 ounces (Jun qtr: 218,079oz). AISC declined to a record low of A$786/oz (Jun qtr: A$825/oz). Using the average AUD:USD exchange rate for the quarter of 0.7894, Group AISC equated to US$620/oz - ranking Evolution as one of the lowest cost gold producers in the world.
In the September 2017 quarter Evolution delivered record operating mine cash flow of A$210.4 million, up almost 5% despite a 2.8% decrease in the achieved gold price (Jun qtr: A$200.4M). Record net mine cash flow, post all capital, was A$158.3 million (Jun qtr: A$137.1M).
In anticipation of the cash settlement component for the Edna May sale, in addition to the continued strong group cash flow, Evolution elected to make an early debt repayment of A$40.0 million during the quarter. This was directed to the remaining balance in the Senior Secured Term Facility B. As at 30 September 2017, gross debt outstanding under the Senior Secured Syndicated Term Facility D was A$395.0 million. Net debt was reduced to A$342.0 million. The Group cash balance increased to A$50.1 million (30 Jun 2017: A$37.4M).
Standout operational performances for the quarter:
Drilling at Cowal E41 West intersected a new and significant zone of mineralisation outside of the existing Mineral Resource, to the south and at depth. Best intersection: 139m grading 1.17g/t from 269m (E41D2802).
At Mungari, drilling at the Lady Agnes target tested the strike extent of a 200m long mineralised zone and returned a number of high-grade intersections. Successful follow-up drilling at regional resource targets intersected further high-grade mineralisation in the footwall lode at Burgundy, confirming continuity of mineralisation up-dip. Resource definition drilling beneath the White Foil pit extended the quartz gabbro host to the north and returned multiple significant intersections.
Resource definition drilling at Cracow confirmed and extended high-grade mineralisation at Killarney and Imperial which is likely to support resource additions in these areas.
Contracts were awarded during the quarter for the Cowal Float Tails (Dual) Leach Project which is expected to increase recoveries by 4 - 6%. The Cowal Stage H project is progressing on schedule and on budget.
The sale of the Edna May gold mine to Ramelius Resources Limited (ASX: RMS) was successfully completed on 3 October 2017. Evolution has received the A$40.0 million in upfront cash payment from Ramelius. The sale agreement also includes up to A$50 million of contingent payments. The structure is described in the ASX announcement released on 18 September 2017 titled Agreement to Divest Edna May Gold Mine.
Evolution invested A$2.5 million for a 15.1% cornerstone shareholding in Riversgold Limited (ASX: RGL) which listed on the ASX on 10 October 2017. Riversgold is a gold-focused exploration company led by Doray Minerals founder Allan Kelly and former Sirius Resources Executive Director Jeff Foster. Initial projects in the portfolio include properties located in Western Australia, South Australia, Alaska and Cambodia.
During the quarter the Board approved a change to Evolution's dividend policy to, whenever possible, paying a half-yearly dividend equivalent to 50% of the Group's after-tax earnings. On 29 September 2017 Evolution paid a fully franked dividend of 3 cents per share totalling A$50.7 million.
Ms Andrea Hall was appointed as a Non-Executive Director of the Company and a member of the Audit Committee effective 1 October 2017. With a strong background in financial services and extensive experience on a diverse range of boards Ms Hall will make a valuable contribution to Evolution's Board.
Group AISC (A$ per ounce) Operating mine cash flow (A$M)210.4 | ||
200.4 | ||
169.3 | 170.3 | 166.5 |
1,060
900
840 825
786
FY17 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY18 Q1
FY17 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY18 Q1
FY18 Guidance
Following the sale of Edna May, Evolution revised its FY18 gold production guidance to 750,000 - 805,000 ounces at an AISC of A$820 - A$870 per ounce. Costs in the September quarter were below the full year guidance due to better than expected grades at Cowal and Mt Carlton, a higher than forecast copper price which significantly lowered Ernest Henry's costs, and lower capital expenditure at Cowal which, as originally planned, will increase in the remaining quarters as project activities fully ramp up.
As a result of the sale of Edna May, December 2017 quarter production is expected to be 180,000 - 190,000 ounces of gold. However, total operating mine cashflow is expected to remain similar to the September quarter provided commodity prices remain at current levels.
Cracow
Mt Rawdon
23,682
30,353
23,398
21,766
Edna May
Mt Carlton Cowal Mungari Ernest Henry
Sep 2017
qtr ounces
70,140
21,639
29,994
Group safety performanceGroup total recordable injury frequency rate as at 30 September 2017 was 7.3 and the lost time injury frequency rate was 0.65. One lost time injury occurred during the quarter when an individual at Mt Carlton suffered an ankle injury. During FY18, focus will be on improving the safety culture at each operational site with key actions captured in site Safety Improvement Action plans during the quarter.
As at 30 Sep 2017 | LTI | LTIFR | TRIFR |
Cowal | 0 | 0 | 5.5 |
Mungari | 0 | 0 | 10.5 |
Mt Carlton | 1 | 2.1 | 10.5 |
Mt Rawdon | 0 | 0 | 6.8 |
Edna May | 0 | 1.6 | 7.8 |
Cracow | 0 | 0 | 8.6 |
Group | 1 | 0.65 | 7.3 |
LTI: Lost time injury. A lost time injury is defined as an occurrence that resulted in a fatality, permanent disability or time lost from work of one day/shift or more
LTIFR: Lost time injury frequency rate. The frequency of injuries involving one or more lost workdays per million hours worked. Results above are based on a 12-month moving average
TRIFR: Total recordable injury frequency rate. The frequency of total recordable injuries per million hours worked. Results above are based on a 12-month moving average
September 2017 quarter and year to date production and cost summary1September Qtr FY17 | Units | Cowal | Mungari | Mt Carlton | Mt Rawdon | Cracow | Ernest Henry | Group excluding Edna May | Edna May | Group |
UG lat dev - capital | m | 0 | 217 | 0 | 0 | 533 | 238 | 987 | 0 | 987 |
UG lat dev - operating | m | 0 | 333 | 0 | 0 | 683 | 1,318 | 2,334 | 0 | 2,334 |
Total UG lateral development | m | 0 | 550 | 0 | 0 | 1,215 | 1,555 | 3,320 | 0 | 3,320 |
UG ore mined | kt | 0 | 135 | 0 | 0 | 128 | 1640 | 1,903 | 0 | 1,903 |
UG grade mined | g/t | 0.00 | 4.50 | 0.00 | 0.00 | 5.85 | 0.57 | 1.21 | 0.00 | 1.21 |
OP capital waste | kt | 0 | 2040 | 989 | 1,087 | 0 | 0 | 4,116 | 0 | 4,116 |
OP operating waste | kt | 641 | 332 | 153 | 1,141 | 0 | 0 | 2,266 | 1,294 | 3,561 |
OP ore mined | kt | 2,267 | 28 | 206 | 1,037 | 0 | 0 | 3,537 | 1,130 | 4,667 |
OP grade mined | g/t | 1.21 | 2.71 | 7.03 | 0.86 | 0.00 | 0.00 | 1.46 | 0.86 | 1.31 |
Total ore mined | kt | 2,267 | 163 | 206 | 1,037 | 128 | 1,640 | 5,440 | 1,130 | 6,570 |
Total tonnes processed | kt | 1,867 | 437 | 205 | 795 | 128 | 1,676 | 5,108 | 646 | 5,754 |
Grade processed | g/t | 1.42 | 2.32 | 5.87 | 0.98 | 5.93 | 0.57 | 1.44 | 1.11 | 1.41 |
Recovery | % | 82.2 | 93.2 | 91.2 | 87.3 | 95.6 | 79.5 | 86.8 | 93.5 | 87.3 |
Gold produced | oz | 70,140 | 30,353 | 29,994 | 21,766 | 23,398 | 23,682 | 199,332 | 21,639 | 220,971 |
Silver produced | oz | 83,953 | 8,132 | 125,185 | 37,025 | 10,245 | 17,897 | 282,437 | 8,375 | 290,812 |
Copper produced | t | 0 | 0 | 591 | 0 | 0 | 5,331 | 5,922 | 0 | 5,922 |
Gold sold | oz | 70,557 | 31,123 | 26,539 | 23,192 | 23,434 | 23,410 | 198,255 | 22,903 | 221,158 |
Achieved gold price | A$/oz | 1,596 | 1,603 | 1,617 | 1,594 | 1,593 | 1,622 | 1,602 | 1,615 | 1,604 |
Silver sold | oz | 83,953 | 8,132 | 114,555 | 37,025 | 10,245 | 17,897 | 271,806 | 8,375 | 280,181 |
Achieved silver price | A$/oz | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 21 | 21 |
Copper sold | t | 0 | 0 | 529 | 0 | 0 | 5,331 | 5,860 | 0 | 5,860 |
Achieved copper price | A$/t | 0 | 0 | 8,538 | 0 | 0 | 8,365 | 8,381 | 0 | 8,381 |
Cost Summary | ||||||||||
Mining | A$/prod oz | 190 | 481 | 66 | 461 | 432 | 303 | 678 | 340 | |
Processing | A$/prod oz | 334 | 270 | 259 | 490 | 218 | 304 | 595 | 333 | |
Administration and selling costs | A$/prod oz | 99 | 135 | 196 | 116 | 131 | 157 | 127 | 154 | |
Stockpile adjustments | A$/prod oz | (38) | (1) | (31) | (97) | 11 | (27) | 49 | (20) | |
By-product credits | A$/prod oz | (26) | (6) | (230) | (36) | (9) | (1,899) | (275) | (8) | (249) |
C1 Cash Cost (produced oz) | A$/prod oz | 560 | 879 | 260 | 933 | 782 | (855) | 462 | 1,441 | 558 |
C1 Cash Cost (sold oz) | A$/sold oz | 556 | 857 | 294 | 876 | 781 | (865) | 464 | 1,362 | 557 |
Royalties | A$/sold oz | 47 | 40 | 125 | 81 | 80 | 147 | 76 | 68 | 75 |
Gold in Circuit and other adjustments | A$/sold oz | 6 | 43 | (92) | 57 | 3 | 4 | 70 | 10 | |
Sustaining capital2 | A$/sold oz | 95 | 114 | 88 | 51 | 188 | 104 | 104 | 70 | 100 |
Reclamation and other adjustments | A$/sold oz | 9 | 4 | 13 | 18 | 5 | 8 | 18 | 9 | |
Administration costs3 | A$/sold oz | 37 | 34 | |||||||
All-in Sustaining Cost | A$/sold oz | 712 | 1,059 | 429 | 1,083 | 1,056 | (614) | 694 | 1,588 | 786 |
Major project capital | A$/sold oz | 105 | 303 | 179 | 172 | 47 | 0 | 135 | 134 | 135 |
Discovery | A$/sold oz | 3 | 218 | 18 | 0 | 39 | 0 | 49 | 0 | 44 |
All-in Cost | A$/sold oz | 821 | 1,580 | 626 | 1,255 | 1,142 | (614) | 878 | 1,723 | 965 |
Depreciation & Amortisation4 | A$/prod oz | 382 | 553 | 418 | 470 | 334 | 1,244 | 520 | 287 | 497 |
All metal production is reported as payable. Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely the cost of Ernest Henry's operation
Sustaining Capital includes 60% UG mine development capital. Group Sustaining Capital includes A$0.99/oz for Corporate capital expenditure
Includes Share Based Payments
Group Depreciation and Amortisation includes non-cash Fair Value Unwind Amortisation of A$49/oz in relation to Cowal (A$70/oz) and Mungari (A$197/oz) and Corporate Depreciation and Amortisation of A$0.96/oz
Evolution Mining Limited published this content on 16 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 15 October 2017 22:04:03 UTC.
Original documenthttps://evolutionmining.com.au/wp-content/uploads/2017/10/171016-Sep-2017-Quarterly-Report_Final1-1.pdf
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