Amid a combination of economic shifts and geopolitical tensions, gold prices are reaching unprecedented highs after breaching the psychological benchmark of $2600.
Hovering around record highs, it has been influenced by the U.S. Federal reserve’s policy decisions last week. The recent rate cut has raised the expectations of further reductions making gold an increasingly attractive investment. Also serving as a hedge against economic uncertainties, Gold Stocks are growingly favoured as portfolio addition. Some large cap gold stocks that came into focus are
Evolution Mining Limited (ASX: EVN)
Evolution Mining Limited reported outstanding financial results for FY24, delivering growth across different metrics.
Group EBITDA more than doubled, surging by 69% to $1,428.3 million, and underlying EBITDA increased by 67% to $1,513.4 million. The EBITDA margin further expanded to 47%, a 24% increase from the previous year, indicates strong cost management and profitability.
The statutory profit after tax was up by 158% to $422.3 million, from $163.5 million in FY23. Underlying profit after tax reported a notable increase of 135%, reaching $481.8 million from $205.0 million. This growth profile is indicative of the company's strategies –highly effective driving higher returns.
Operating mine cash flow witnessed growth, up by 63% to $1,541.2 million, while net mine cash flow increased by an impressive 1,533% to $583.1 million, reflecting enhanced cash generation capabilities. The robust cash flow profile growth is crucial for funding future growth and maintaining financial flexibility.
Group EPS increased 147% to 22.0 cents, and the final dividend was by 150% to 5.0 cents per share, enhancing investor confidence and attractiveness.
The company's successful expansion and operational efficiency was clearly noticed with the achieved gold price growth by 23% to $3,190 per ounce, and the achieved copper price increment by 9% to $13,657 per tonne. This growth is important for sustaining long-term revenue and profit increases. Gold production increased by 10% to 716,700 ounces, and copper production grew by 43% to 67,862 ounces, despite a slight rise in all-in sustaining costs (AISC) to $1,477 per ounce.
Evolution Mining Limited has delivered impressive financial performance from 2018 to 2024, showcasing robust growth and operational efficiency. The company’s solid market confidence and business scale expansion can be noticed via its enterprise value that has increased from $6.02 billion in 2018 to $9.76 billion in 2024. Profitability has been a standout, with gross margins improving from 27.66% to 32.47% and operating margins rising from 25.39% to 30.25% over the same period.
Evolution Mining's robust financial performance and strategic growth initiatives offers it with a solid footing and promising future prospects.
Capricorn Metals Limited (ASX: CMM)
On 1 August 2024, Capricorn Metals Ltd’s (ASX: CMM) wholly owned the Karlawinda Gold Project (KGP) reported an Ore Reserve Estimate (ORE) that has increased by 15% to 1,428,000 ounces of gold from 1,247,000 ounces, an increase of 333,000 ounces (27%) after accounting for mining depletion. This increment resulted in group ORE which has increased to 3.3 million ounces. KGP Mineral Resource Estimate (MRE) has increased by 1% from 2,228,000 ounces in Q3 to 2,252,000 ounces an increase of 176,000 ounces (8%) after accounting for mining depletion.
Capricorn has initiated an expansion study for the Karlawinda operation, aiming to enhance its capacity. The scope of this study includes increasing the current throughput from 4.5 million tonnes per annum (mtpa) by an additional 2 to 2.5 mtpa. CMM has already begun addressing several key focus areas of the expansion study, aiming to complete the analysis by the end of Q2 FY25. Once the study outcome delivers a positive Final Investment Decision (FID), the company plans to proceed swiftly with permitting and execution. This expansion is intended to boost production efficiency and potentially extend the operational life of the mine. Additionally, the company has progressed along its MGGP project during the quarter and has reported an increased ore reserve estimate of 61.6 million tonnes at 0.90 g/t gold for 1.83 million ounces. Continues with the infrastructure development activities and installation of 400 accommodations and remains well on schedule with completion expected in CY24. Issued tender packages for mining services, power supply, and process plant design contracts during the quarter.
The quality of the orebody, combined with Capricorn’s strategic initiatives has transformed the deposit into a highly successful, low-cost gold mining operation. The mining operation maintains a favorable low stripping ratio of 4.6, compared to 4.0 in the previous year, indicating a manageable level of waste removal relative to ore extraction. This low ratio suggests efficient waste management and potentially lower costs. Additionally, the pre-expansion life of the mine exceeds 13 years, highlighting a long-term, stable operation with significant Future Potential.
Source: Company’s Report
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