Evolution Mining Limited, continued positive momentum

Team Veye | 28 Oct 2020 ASX - EVN
Evolution Mining Limited, continued positive momentum

Evolution Mining Limited (ASX: EVN)

Quarterly Report – For the period ending 30 September 2020

Evolution Mining Limited (ASX: EVN) on 27 October 2020 provided its Quarterly Report – For the period ending 30 September 2020


Sector leading cash generation

  • Mine operating cash flow of $272.3 million
  • Net mine cash flow of $183.4 million
  • Record net mine cash flow at Ernest Henry ($83.2M) and Mungari ($44.9M)
  • All operations generated positive cash flow post capital
  • Group cash flow of $118.9 million
  • Net bank debt of $180.3 million (30 Jun 2020: $196.4M) post FY20 final dividend of $153.8 million

(Chart source: TradingView)


  • Maintained ‘A’ rating in MSCI ESG rating assessment
  • COVID-19 continues to be proactively managed with no material impact on operations

Operations tracking ahead of FY21 plan

  • Gold production of 170,021 ounces (excludes any contribution from Cracow which was divested on 1 July)
  • All-in Sustaining Cost (AISC) of $1,198 per ounce (US$857/oz)
  • All-in Cost (AIC) of $1,663 per ounce at an AIC margin of $871 per ounce

Exploration drilling results continue to demonstrate resource growth and increasing confidence

  • Red Lake’s Cochenour: 3.35m (1.67m etw) grading 296.6g/t Au from 135.9m (C37230)
  • Cowal’s GRE46: 34m (23.8m etw) grading 5.5g/t Au from 529m (GRUD0186)

Delivering significant organic growth pipeline

  • Red Lake
  • Transformation plan progressing on schedule
  • Initial JORC Code 2012 Mineral Resource estimate of 11 million ounces
  • Six diamond drill rigs currently operating underground to capture further exploration upside
  • Cowal
  • Underground mine development application submitted for regulatory approval
  • Integrated Waste Landform (IWL) Stage 1 completed with first deposition achieved in October
  • Board and regulatory approval received in October to develop Galway exploration decline (Data Source – Company Reports)


Veye’s Take

Evolution’s group cash flow was $118.9 million with a cash at bank balance at 30 September 2020 of $369.7 million (30 June 2020: $373.6 million) after paying $153.8 million in dividends. Bank debt as at 30 September 2020 reduced to $550.0 million post the scheduled quarterly repayment of $20.0 million resulting in net bank debt of $180.3 million. All operations generated positive net mine cashflow during the quarter. This was after a total capital investment of $88.1 million comprising $23.5 million of sustaining capital and $64.6 million of major project capital. Evolution’s operations were performing well and it is ahead of where it had planned to be at the end of the first quarter. The stock is undergoing shallow correction in the short term. It is still trading above its strong support at $5.24 and also 50 MA on monthly t/f. The Latest "Buy" on “Evolution Mining Limited” was given at the price of $3.81 on 9 January 2020. It has already grown by more than 46% in less than ten months until now. Veye maintains a "Hold" on “Evolution Mining Limited” at the current price of $5.57


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