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Evolution Mining Announces Record Production for March Quarter

Evolution Mining Announces Record Production for March Quarter
The company produced 208,963 ounces at an All-in Sustaining Cost (AISC) of A$1015 per ounce. Evolution also achieved record operating mine cash flow of $154.9 million and net mine cash flow, after all sustaining and major capital, of $105.8 million.
Apr 08, 2016 By Kaivalya Kandarpa Tags: EVN

Local gold miner Evolution Mining (ASX:EVN) announced to the market that it achieved record gold production and net mine cash flow during the March 2016 quarter.

The company produced 208,963 ounces at an All-in Sustaining Cost (AISC) of A$1015 per ounce. Evolution also achieved record operating mine cash flow of $154.9 million and net mine cash flow, after all sustaining and major capital, of $105.8 million.

The company paid $80 million in early debt repayments during the quarter and an interim dividend cash payment of $12.1 million.

Evolution Mining's cash balance as at 31 March 2016 was $35.3 million and total group debt has been lowered to $400 million. This debt comprises of $130 million in the Senior Secured Syndicated Revolver Facility and the remaining $270 million in the Senior Secured Syndicated Term Facility.

During FY15, Evolution generated $137.8 million cash flow for $168.2 million capital expenditure. However, the company generated $308.6 million in cash for $135.5 million expenditure in 2016 (YTD).

Commenting on the results, Evolution’s Executive Chairman, Jane Klein said: “This outstanding result demonstrates the quality of Evolution’s asset portfolio. We are consistently making positive inroads on our cost profile and generating very strong free cash flow. This has allowed us to aggressively reduce debt with a total $207 million in debt repaid in the past seven months”

Forward Sold 150,000 Ounces of Gold for $1,764 per Ounce

In February, the gold miner announced that it has sold forward 150,000 ounces of gold at an average price of $1,764 per ounce with deliveries scheduled out to 30 June 2020. This transaction comprises of 50,000 ounces of gold set to be delivered in FY17 while the remaining 100,000 ounces will be delivered during the July 2018 to June 2020 period.

Evolution’s Finance Director and Chief Financial Officer, Lawrie Conway commented on the transaction: “We continue to see hedging as a tool to actively manage our balance sheet. The hedging in FY17 relates to the recently approved Stage 1 underground development at Edna May and aligns to our position that each asset is to be cash positive even during major project expenditure associated with future production. The hedging in FY19 and FY0 takes advantage of the current strong gold price.”

EVN is up 13% year-to-date and closed at $1.57 on 07 April 2016.

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Kaivalya Kandarpa Author: Kaivalya Kandarpa Apr 08, 2016

Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.

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