Rising costs and falling production hit Evolution Mining yesterday with the shares down after the December quarter report revealed the extent of the problems.
The shares dropped 5% after revealing that gold production in the December quarter dropped to 181,996 ounces, against 186,488 ounces in the year-ago quarter.
The shares ended down 4.1% at $3.71.
Like rival Northern Star on Wednesday, Evolution revealed higher production costs over the quarter, with all-in sustaining cost per ounce hitting $973 compared to $784 a year ago and $885 an ounce in the September quarter.
The company said costs “remain on track to be within guidance.” The company said March gold production “is expected to be similar” to the December quarter.
The company blamed unforeseen events for the dip.
“Unanticipated events late in the quarter resulted in lower than expected production and higher costs.
“At Cowal, a stator failure led to unplanned downtime of the SAG mill in December, and at Mungari access to the high-grade Mist zone was restricted. In addition, as reported in the September Quarterly Report, Mt Rawdon is processing ore from low- grade stockpiles. Ernest Henry, Mt Carlton, and Cracow all performed in-line or better than plan,” Evolution said.
“Full year Group AISC is expected to be at the top end of the A$850 – A$900 per ounce guidance range. Year-to-date to 31 December 2018, the lower than planned achieved copper price has increased Group AISC by $11 per ounce.
“If the current copper price remains for the second half of FY19, Group FY19 AISC would be negatively impacted against by A$10 – A$15 per ounce, potentially pushing Group AISC above the top end of guidance.
“Opportunities to mitigate the negative impact of the copper price continue to be evaluated, the company said.
