Evolution chair upbeat, despite A$24m FY loss

JOHANNESBURG (miningweekly.com) – Gold miner Evolution Mining swung to a full-year loss of A$24.35-million in the year ended June 30, from a profit of A$100.12-million the previous year, after one-off acquisition costs, integration costs and impairments.

Despite reporting a loss, executive chairperson Jake Klein reported on Wednesday that 2016 had been a “transformational” year for Evolution, with the group delivering a strong financial outcome from a portfolio of seven assets.

The company reported record underlying net profit of A$226.88-million, compared with A$106.05-million in 2015, on the back of record production and record low costs. Production for the year increased by 84% to 803 476 oz, despite the average grade processed decling by 9% to 1.77 g/t. This was largely achieved as a result of the first year of inclusion of the Cowal and Mungari mines, which contributed 29% and 17%, respectively, of the group’s total production.

All-in sustaining costs (AISC) decreased to A$1 014/oz, from A$1 036/oz the previous year, while all-in costs reduced 12% to A$1 134/oz.

The completion of the acquisition of the Cowal mine, in New South Wales, and the Mungari mine, in Western Australia, had a significant and immediate impact on reducing group costs and increasing cash generation.

“The Cowal mine is one of Australia’s most attractive gold assets and its large-scale, long-life and low-cost profile provide a strong strategic fit with the group’s long-term objective of pursuing value accretive acquisition assets . . .,” the company stated in its 2016 financial report.

Revenue for the year doubled to A$1.33-billion, from A$665.96-million, largely owing to the inclusion of the new mines.

“We are committed to maintaining this focus and to continue to deliver strong results. The three-year guidance we recently released indicates that the performance we achieved in the 2016 financial year is not only sustainable, but should get even better,” said Klein.

Evolution on Tuesday announced the sale of its Pajingo mine, in Queensland, to an emerging Chinese miner for up to A$52-million.

As a result of the sale, Evolution’s guidance for the 2017 financial year-end was reduced by about 60 000 oz to between 745 000 oz and 800 000 oz at an AISC of between A$970/oz and A$1 030/oz.