Evolution production hits 800 000-oz mark

JOHANNESBURG (miningweekly.com) – Australian gold miner Evolution has reached the 800 000-oz production mark, boosted by the acquisition of two mines in the 2016 financial year.

The ASX-listed gold company produced 803 476 oz in the 12 months ended June, in the mid-range of its upgraded guidance of 770 000 oz to 820 000 oz, and representing an 84% increase on 2015’s production.

The new Cowal mine, in New South Wales, added 237 940 oz to the group’s production in the year, while the new Mungari mine, in Western Australia, produced 137 193 oz.

The Mt Carlton mine delivered 113 056 oz, Mount Rawdon produced 85 002 oz, Cracow produced 90 626 oz and Pajingo produced 68 630 oz. All four mines are in Queensland. Edna May in Western Australia, produced 71 028 oz in the 2016 financial year.

The group’s average C1 cash costs and all-in sustaining costs (AISC) were in line with its guidance, with C1 cash costs of A$722/oz and AISC of A$1 014/oz.

In the June quarter, Evolution produced a record 216 644 oz, compared with the March quarter’s production of 208 963 oz. Average C1 cash cost was A$732/oz, compared with A$752/oz in the March quarter, and AISC was A$1 117/oz, compared with the previous quarter’s A$1 015/oz.

Evolution explained that the higher AISC, compared with the March quarter, was owing to the timing of sustaining capital expenditure on tailings facilities at Cowal, Mungari, Mt Rawdon and Mt Carlton, as well as an increase in resource definition drilling.

In the June quarter, Evolution delivered mine cash flow of A$184.2-million and net mine cash flow of A$119.5-million. This allowed Evolution to make debt repayments of A$115-million during the quarter, in addition to paying one-off acquisition costs of A$20-million. Total debt now comprises A$95-million in the senior secured syndicated revolver facility and A$190-million in the senior secured syndicated term facility.

At the end of June, Evolution had A$17.3-million in cash.

PRODUCTION OUTLOOK
Evolution has reaffirmed its previously announced production guidance for the next three years. The group is forecasting gold production of between 800 000 oz and 860 000 oz in the 2017 and 2018 financial years, which will increase to between 810 000 oz and 870 000 oz in the 2019 financial year.