Evolution swings from loss to record profit

PERTH (miningweekly.com) – Gold miner Evolution Mining has reported record net profit of A$217.6-million for the 2017 financial year, compared with a net loss of A$24.3-million in 2016, on the back of higher sales revenues and lower group all-in sustaining costs (AISC).

“In the 2017 financial year, we continue to deliver on our business strategy of improving the quality of our asset portfolio to build a business that prospers through the cycle. An ongoing focus on lowering costs, together with the acquisition of an economic interest in Ernest Henry copper/gold mine and the divestment of Pajingo, saw Evolution achieve another year of record high production and record low costs which contributed to a strong underlying net profit of A$206.6-million,” said Evolution executive chairperson Jake Klein.

Sales revenue for the year ended June increased by 11% to A$1.47-billion, while earnings before interest, taxes, deprecation and amortisation rose by 17% to A$713.9-million.

Group gold production for the year increased by 5%, to a record 844 124 oz, with gold sales reaching 817 323 oz.

Meanwhile, operating costs for the year increased to A$719.7-million, compared with the A$674.2-million spent in 2016, largely as a result of the first year of inclusion of the Queensland-based Ernest Henry operation, which accounted for operating costs of A$64.1-million. This was offset by A$47.3-million following the sale of the Pajingo operation, also in Queensland, earlier this year.

The group’s AISC reached record lows of A$907/oz, an 11% decline from the 2016 financial year.

Looking ahead, Evolution expected gold production in 2018 to reach between 820 000 oz and 880 000 oz, while C1 cash costs were expected to be in the range of between A$590/oz and A$650/oz. AISC were forecast at  between A$850/oz and A$900/oz.

“We expect the 2018 financial year to be another strong year for Evolution,” said Klein.

“These results and robust outlook have enabled us to further increase the final dividend to a fully-franked 3c a share under the new dividend policy for a payout ratio of 50% of after tax earnings.”