Evolution Mining (EVN) had a series of good news announcement for the market yesterday – a return to profit, and record profit, a doubling of interim dividend and the decision to push ahead with the more than $260 million worth of spending on the expansion of its Cowal gold mine in western NSW.
The miner declared an interim dividend of 2 cents per share, up from 1 cent in 2016 after increasing its dividend policy to pay out the equivalent to 4% of group revenue every six months.
Evolution shares ended steady on the day at $2.35.
Evolution reported a net profit of $136.7 million for the six months to December, compared to a loss of $15.5 million a year earlier, when its results were impacted by the costs of a rapid expansion program that saw the purchase of new mines, including the Cowal gold mining operation from Barrick Gold Corp.
The company produced 423,120 troy ounces of gold during the half, up from 377,869 ounces in the year earlier period. It produced 531,358 ounces of silver, up from 348,199 ounces, as well as 3,846 tonnes of copper.
Revenue rose 17% from the December, 2015 half year to $711.2 million.
It’s 18 months since the company bought Cowal for $US550 million from Barrick Gold and Evolution has found a way to get a bigger payoff from that deal.
Evolution said two projects at Cowal will increase the mine’s operating life by eight years.
It’s 18 months since the company bought Cowal for $US550 million from Barrick Gold and Evolution has found a way to get a bigger payoff from that deal.
It said its board had given the green light for two extension projects – a cutback at the mine and a processing improvement – which would secure production at the mine until 2032.
When Cowal acquired the mine it had a mining permit until 2024 and 1.56 million ounces of ore reserves.
Earlier this month, Evolution received NSW regulatory approval to mine at Cowal until 2032.
Chairman Jake Klein said yesterday the company was “delighted” with the results of its expansion drilling program which has resulted in the two projects at Cowal, the largest of which, a stripping program, will cost $230 million over four years.
Mr Klein said the company’s record profit result and 50% margin at the EBITDA level reflected “a clear reflection of the quality of Evolution’s asset portfolio and consistent operational performance”.
EBITDA jumped 21% to $345.3 million for the half year.
Evolution hsaid ad cash of $14.5 million and outstanding bank debt of $600 million as at 31 December.
Last month the company confirmed it planned to continue funnelling excess cash toward early debt repayments after its net debt hit $647 million in the December quarter.
