Gold miner Evolution has lifted production and cut costs in the September quarter, helped by a strong performance at its Cowal mine in NSW and Ernest Henry and Mt Carlton mines in Queensland.
Evolution is the country’s second biggest gold miner after Newcrest and it told the AX yesterday it lifted September quarter gold production 1.3% from the June quarter to 220,971.
It was also up nicely from the 205,307 ounces in the September 2016 quarter. And the company said it had cut its all-in sustaining cost (AISC) to a record low of $786 an ounce from $825 an ounce in the prior quarter.
Evolution rose 1.7% yesterday to $2.30.
The company on Monday said operating mine cash flow during the September quarter rose nearly 5% to $210.4 million, despite a 2.8% drop in its realised gold price.
Evolution earlier this month completed the sale of its Edna May mine in WA to Ramelius Resources for up to $90 million.
The mine, which produced about 8% of the group’s total gold output, had been the least profitable of its portfolio of seven gold mines. Following the sale, Evolution revised its full-year production guidance downward from 820,000-880,000 ounces to between 750,000 and 805,000 ounces.
The company on Monday said it expects December quarter production to be in the range of 180,000 to 190,000 ounces. The firm says it repaid $40 million of debt over a quarter, cutting net debt to $342 million.
"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,” Evolution said.
The Cowal mine produced 70,140 oz at an AISC of $A712/oz generating net mine cash flow of A$53.2 million and the Ernest Henry produced 23,682oz at a record low AISC of $A614 oz producing net mine cash flow of $A52.4 million. The Mt Carlton mine produced 29,994oz at a record low AISC of $A429 an oz producing net mine cash flow of $A23.8 million.
Evolution revealed it had invested $A2.5 million for a 15.1% cornerstone shareholding in Riversgold Limited (RGL) which listed on the ASX on on October 10. 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, according to Evolution.
During the quarter the company’s 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 September 29 Evolution paid a fully franked dividend of 3 cents per share totalling $A50.7 million.
