EVN - Evolution Mining

[Miner]

FULL OWNERSHIP OF ERNEST HENRY – ACQUISITION COMPLETED

Evolution Mining Limited (ASX:EVN) (“Evolution”) is pleased to advise that it has completed the acquisition of full ownership of the Ernest Henry copper-gold mine located ~38km north-east of Cloncurry, Queensland (“Ernest Henry”). The acquisition was via an agreement to acquire 100% of the shares in Ernest Henry Mining Pty Ltd from Glencore. Evolution has paid Glencore A$800 million from available cash on hand with the remaining A$200 million due and payable on 6 January 2023.
Ernest Henry will generate immediate benefits from increased copper production which will reduce Group All In Sustaining Costs (AISC) by around 12% on a full year basis, and cements Evolution as one of the lowest cost gold producers in the world. The operation also has attractive growth potential below the current operating footprint which is the subject of a pre-feasibility study. Commenting on the completion of the transaction, Executive Chairman Jake Klein said: “Acquiring full ownership of Ernest Henry is transformational for Evolution and again demonstrates our track record of identifying and securing opportunities that are both accretive and improve the quality of the portfolio.

Ernest Henry is a world class operation in a Tier 1 jurisdiction which we know well through our previous economic interest investment in 2016. I extend a warm welcome to our new colleagues that join Evolution today.
We look forward to continuing to build on our relationships with the local communities in Cloncurry and Mt Isa, and with the traditional custodians of the land, the Mitakoodi People.” This announcement has been authorised for release to the ASX by the Executive Chairman.

DYOR

i hold EVN

am not sure how EVN calculates ' one of the lowest-cost gold producers in the world ' there are some rivals that run a pretty tight ship

"am not sure how EVN calculates ' one of the lowest-cost gold producers in the world ' there are some rivals that run a pretty tight ship"
probably EVN is taking the copper credit.
In Grasberg (Indonesia) Freeport used to produce gold at a negative price because it is a copper mine on the book.https://en.wikipedia.org/wiki/Grasberg_mine
Olympic Dam produces uranium as a copper mine too,
However, EVN is talking themselves up or considering the cash cost only. With heavy CAPEX going on, their actual AISC would make them lower on the ladder.
Per Kitco, EVN is the 4th lowest. Kirkland is a publicity shy company with lower AISC

Lowest cost gold mining companies in Q3 2021 - report

A roundup of all the mining news in the precious metals sector with a variety of company news, mining sector analysis, newsletter writer insights and executive interviews.

www.kitco.com

 

[divs4ever]

"am not sure how EVN calculates ' one of the lowest-cost gold producers in the world ' there are some rivals that run a pretty tight ship"
probably EVN is taking the copper credit.
In Grasberg (Indonesia) Freeport used to produce gold at a negative price because it is a copper mine on the book.https://en.wikipedia.org/wiki/Grasberg_mine
Olympic Dam produces uranium as a copper mine too,
However, EVN is talking themselves up or considering the cash cost only. With heavy CAPEX going on, their actual AISC would make them lower on the ladder.
Per Kitco, EVN is the 4th lowest. Kirkland is a publicity shy company with lower AISC

Lowest cost gold mining companies in Q3 2021 - report

A roundup of all the mining news in the precious metals sector with a variety of company news, mining sector analysis, newsletter writer insights and executive interviews.

www.kitco.com

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several miners benefit nicely from ' by-products ' ( silver, copper , and other minerals mixed in the ore )

but i notice the old trick of some using 'all-sustaining costs ' (by some ) , ASIC ( by some ) ASIC 3 ( by others ) ( there are important differences on what is included each definition ) ALSO i note some declare costs in $US , and others in $ which could be Australian , US Canadian , or some other local currency ,

important differences to watch for reading the reports ( the Australian dollar is currently buying just over 70 UScents ) and i assume the NZ dollar slightly less than that ( for OGC holders )

 

[mullokintyre]

"am not sure how EVN calculates ' one of the lowest-cost gold producers in the world ' there are some rivals that run a pretty tight ship"
probably EVN is taking the copper credit.
In Grasberg (Indonesia) Freeport used to produce gold at a negative price because it is a copper mine on the book.https://en.wikipedia.org/wiki/Grasberg_mine
Olympic Dam produces uranium as a copper mine too,
However, EVN is talking themselves up or considering the cash cost only. With heavy CAPEX going on, their actual AISC would make them lower on the ladder.
Per Kitco, EVN is the 4th lowest. Kirkland is a publicity shy company with lower AISC

Lowest cost gold mining companies in Q3 2021 - report

A roundup of all the mining news in the precious metals sector with a variety of company news, mining sector analysis, newsletter writer insights and executive interviews.

www.kitco.com

View attachment 136674



View attachment 136673

I worked at the Grasberg mine for a short while when Freeport Macmoran owned it.
Was a very impressive place, those yanks love an engineering challenge, and pulled most of it off very well.
Problem was, they have a firm belief that if it was not invented in the USA, its no good.
Mick

 

[Miner]

I worked at the Grasberg mine for a short while when Freeport Macmoran owned it.
Was a very impressive place, those yanks love an engineering challenge, and pulled most of it off very well.
Problem was, they have a firm belief that if it was not invented in the USA, its no good.
Mick

Ha Ha
I also worked with Freeport but in Canada, Peru and USA.
We did have the Pres, VP and few directors ex PTFI . ? ? ?
So I know what you are saying in PTFI.
Fortunately I was hand-picked from Oz land by FCX and the yanks often asked my opinion being an Australian Miner.
So I was slightly advantaged

 

[mullokintyre]

Ha Ha
I also worked with Freeport but in Canada, Peru and USA.
We did have the Pres, VP and few directors ex PTFI . ? ? ?
So I know what you are saying in PTFI.
Fortunately I was hand-picked from Oz land by FCX and the yanks often asked my opinion being an Australian Miner.
So I was slightly advantaged

So did you ever get to New Orleans headquarters ( or NOLA as they used to call it)?
I was tempted to visit there a few years ago when the wife and I spent a few days in New Orleans, but there was so many tempting things to see and do, we ran out of time.
Got their pound of flesh, working 6 days a week 12 hours a day.
They paid very well, but a ruthless co to work for.
There were two planes a week out of Tembagapura to Cairns, on Wednesdays and Sundays.
So if it got to Wednesday and you were not fired, you were safe till Sunday.
If you got to Sunday and you were not fired, you were safe till Wednesday.
Every 3 months we got a weeks R and R in Cairns all expenses paid.
Still enjoyed it while I was there.
Missus and the kids were not so keen.
Mick

 

[Miner]

So did you ever get to New Orleans headquarters ( or NOLA as they used to call it)?
I was tempted to visit there a few years ago when the wife and I spent a few days in New Orleans, but there was so many tempting things to see and do, we ran out of time.
Got their pound of flesh, working 6 days a week 12 hours a day.
They paid very well, but a ruthless co to work for.
There were two planes a week out of Tembagapura to Cairns, on Wednesdays and Sundays.
So if it got to Wednesday and you were not fired, you were safe till Sunday.
If you got to Sunday and you were not fired, you were safe till Wednesday.
Every 3 months we got a weeks R and R in Cairns all expenses paid.
Still enjoyed it while I was there.
Missus and the kids were not so keen.
Mick

PM me.
Rest of the guys on EVN thread may not enjoy it.
In short my connection in USA office was in Phoenix only and was stationed in Vancouver.

 

[divs4ever]

FY22 HALF-YEAR FINANCIAL RESULTS AND INTERIM DIVIDEND​

Evolution Mining Limited (ASX: EVN) has today reported a statutory net profit of A$90.8 million for the six months
ended 31 December 2021 (“the half-year”) and that it will pay an interim dividend of 3.0 cents per share fully
franked, the 18th consecutive dividend paid since 2013.
Key highlights for the half-year included:
 Statutory net profit after income tax of A$90.8 million (H1 FY21: A$228.7 million)
 Underlying net profit after income tax of A$100.1 million (H1 FY21: A$234.0 million)
 EBITDA of A$393.3 million (H1 FY21: A$514.6 million)
 Strong EBITDA margin of 44% (H1 FY21: 52%)
 Mine operating cash flow of A$396.4 million (H1 FY21: A$531.2 million)
 Net mine cash flow of A$120.4 million (H1 FY21: A$353.9 million) after A$203.7 million of planned
investment in major projects
 Mineral Resources increased 12% year-on-year to 29.6 million ounces (31 December 2020: 26.4Moz)1
 Ore Reserves increased 5% year-on-year to 10.3 million ounces (31 December 2020: 9.9Moz)1
 Gold production of 318,766 ounces at an All-in Sustaining Cost of A$1,381 per ounce2 (US$1,011/oz)3
 Cash position increased to A$1,150.3 million (30 June 2021: A$160.1 million) ahead of the completion
of the Ernest Henry acquisition on 6 January 2022
 Net debt4 of A$449.2 million
 Full year production and cost guidance maintained with business positioned for a very strong second
half of the financial year
Fully franked interim dividend declared based on Evolution’s policy of a percentage of Group free cash
flow, targeting a 50% payout rate per annum
The Directors have declared a fully franked interim dividend of 3.0 cents per share for the half-year (31
December 2020: 7.0 cents per share), an aggregate payment to shareholders of A$55 million. This is the 18th
consecutive dividend paid to shareholders for a total of A$988 million since 2013. The dividend considers the
material lift in cash flow expected in the second half from Ernest Henry and balances capital investment and
balance sheet management with investor returns.
 Dividend amount – 3.0 cents per share fully franked
 Ex-dividend date – 28 February 2022
 Record date – 1 March 2022
 Payment date – 25 March 2022
 Nil Conduit Foreign Income (CFI) component
1 See ASX release entitled “Annual Mineral Resources and Ore Reserves Statement” dated 16 February 2022 for details on Mineral Resources and Ore
Reserves, available to view at www.evolutionmining.com.au
2 AISC (All-in Sustaining Costs) includes C1 cash cost, plus royalties, plus sustaining capital, plus general corporate and admin expense. Calculated on a per
ounce sold basis
3 All USD values in this release have been calculated using the average AUD:USD exchange rate for the half-year of A$0.7319
4 Excluding pre-paid loan fees
Evolution Mining Limited 2
Commenting on the half-year, Evolution’s Executive Chairman Jake Klein said:
“The half-year to 31 December 2021 has been transformational for Evolution. The portfolio has benefitted from
key acquisitions and a significant investment in growth projects at our cornerstone assets, which is supported
by a high-quality Mineral Resource and Ore Reserve base and our business is well positioned to deliver a very
strong second half. Full ownership of Ernest Henry will deliver a material increase in cash flow and financial
performance and was considered when declaring the interim dividend. Evolution’s history of dividend payments
with almost A$1 billion paid since 2013 demonstrates our commitment to maximising shareholder returns.”
ESG performance was recognised with an improved rating from ISS ESG and confirmation of continued
inclusion in S&P Global’s Dow Jones Sustainability Index Australia, ranking Evolution among the top performing
Australian mining companies for corporate sustainability and one of only three gold mining companies in this
category.
Evolution’s FY21 Sustainability Report and FY21 Modern Slavery Statement were published during the period,
and four shared value projects with the Yalka-binbi Girls Academy Program, Galari Agricultural Company,
Kalgoorlie-Boulder Chamber of Commerce and the University of Queensland’s Research for COVID-19 Immune
Response Using Gold were approved.
COVID-19 continues to be a significant focus for the business and the formal crisis management response
protocols remain activated. Whilst the impact to operational performance has not been material to date, positive
cases in the community around Cowal and Red Lake and isolation of close contacts has resulted in up to 15%
of the workforce at those sites unavailable at times during the December quarter.
The Group's total recordable injury frequency (TRIF) was 9.4 as at 31 December 2021 (30 June 2021: 9.6)
The Group recorded a statutory net profit after tax of A$90.8 million for the half-year to 31 December 2021, a
60.3% decrease on the same period prior year (31 December 2020: A$228.7 million). EBITDA margins of 44%
were recorded reflecting the high-quality portfolio and makes Evolution one of the lowest cost gold producers in
the world.
Basic earnings per share was 5.01 cents per share (31 December 2020: 13.39 cents).
The Group's cash balance increased to A$1,150.3 million as at 31 December 2021 (30 June 2021: A$160.1
million). The higher cash balance was due to the proceeds from a US Private Placement in preparation for
completion of the Ernest Henry acquisition which took place on 6 January 2022.
The Group's key operating results for the half-year to 31 December 2021 are as follows:
 Total gold production of 318,766oz at an AISC of A$1,381/oz
 Operating mine and net mine cash flow of A$396.4 million and A$120.4 million respectively
In July 2021, the Group successfully completed a A$400 million fully underwritten institutional placement of
approximately 104 million new fully paid ordinary Evolution shares to institutional investors at a price of A$3.85
per share. The funds raised under the placement were used to fund the acquisition of the Kundana mine and
Carbine project, a 51% interest in the East Kundana Joint Venture (EKJV), and a 75% interest in the West
Kundana Joint Venture (together the Kundana assets). The Group also successfully raised approximately A$68
million under the Share Purchase Plan at A$3.85 per new share in August 2021 with the funds to be used for
general corporate purposes. Both capital issues received exceptionally strong support from the market.
On 13 August 2021, the Group announced that it had received an investment grade credit rating and successfully
priced a US$550 million placement in the United States private placement market. The drawdown of the
inaugural US Private Placement was completed in November 2021, resulting in an increase to cash of A$749.5
million.
On 18 August 2021 the acquisition of the Kundana assets from Northern Star Resources Limited was completed.
The first higher grade ore from Kundana was processed in late August and the first ore processing campaign
for East Kundana (Evolution interest: 51%) was completed as planned in October. Integration activities are
progressing well to bring the operating teams together and to remove duplication of activities.
Consistent with the Group's strategy to continuously seek to upgrade the quality of its portfolio, it was announced
on 5 October 2021 that Evolution had entered into a binding agreement with Navarre Minerals Limited to sell
the Mt Carlton gold mine in Queensland for a total consideration of up to A$90 million. The sale was completed
on 14 December 2021 with Navarre's economic interest in Mt Carlton commencing from 1 October 2021.
On 17 November, the Group announced the acquisition of full ownership of the Ernest Henry operation.
Evolution previously held an economic interest in Ernest Henry which is a large-scale, long-life, copper-gold
Evolution Mining Limited 3
mine located ~38km north-east of Cloncurry, Queensland. An immediate increase in copper production will
reduce the Group's All-in Sustaining Costs and positions Evolution as one of the lowest cost gold producers in
the world. The acquisition was effected via an agreement with Glencore to acquire 100% of the shares in Ernest
Henry Mining Pty Ltd for A$1 billion. To complete the acquisition an initial consideration of A$800 million was
paid to Glencore on 6 January 2022, with the remaining A$200 million due and payable on 6 January 2023. The
transaction was partly funded from a new US$200 million US Private Placement maturing in FY31, at a fixed
coupon of 3.06%, which settled on 14 February 2022.
Today the Company released its annual Mineral Resource and Ore Reserve estimates as at 31 December 2021.
Highlights include a 12% year-on-year increase in Mineral Resources to 29.6 million ounces (31 December
2020: 26.4 million ounces) and a 5% year-on-year increase in Ore Reserves to 10.3 million ounces (31
December 2020: 9.9 million ounces) net of mining depletion of 520,000 ounces. There is excellent potential for
extensions to Mineral Resources and Ore Reserves at Ernest Henry and a Pre-feasibility Study is in progress.
Full details are contained in the annual Mineral Resources and Ore Reserves Statement released to the ASX
and are also available on Evolution’s website www.evolutionmining.com.au.
Dividend payment
The Directors have approved a fully franked interim dividend of 3.0 cents per fully paid ordinary share. The
aggregate amount of the proposed dividend to be paid on 25 March 2022 is estimated at A$55.0 million. The
elevated payout rate for this dividend considers the material lift in cash flow expected in the second half from
Ernest Henry and balances capital investment and balance sheet management with investor returns.
This is Evolution’s 18th consecutive dividend and increases the total amount returned to shareholders, upon
payment of this interim dividend, to A$988 million since August 2013.
This dividend is based on the policy approved by the Board in August 2019 of whenever possible paying a
dividend based on free cash flow generated during a year. The policy targets a payout ratio of around 50% of
cash flow per annum. The Group's free cash flow is defined as cash flow before debt, dividends and any
acquisitions or divestments.
The Board has confirmed that Evolution is in a sound position to meet its commitment under this policy to pay a
fully franked interim dividend for the current period of 3.0 cents per share on 25 March 2022.
Full details of the FY22 Half-Year Financial Results are available in the Appendix 4D released to the ASX today
and are also available on Evolution’s website www.evolutionmining.com.au.

DYOR

i hold EVN ( and have a top up order in sub $3.20 )

this will all be about expectations

SEAT-BELTS ON

 

[Sean K]

I'm not sure how this slide can be titled 'highlights'. Unless this has already been factored in. If not, this stock will be crumpled today.

 

[Sean K]

The only real positive thing I can see in this slide pack is the resource growth.

 

[divs4ever]

i bought my first parcel @ 74.5 cents in March 2015 ( so for a gold miner it is doing OK .. aka paying some divs )

but i suspect this has been partially factored in .. but time will tell

but to me this was partly expected i could see them angling at the hub and spoke strategy to reduce costs ( not so exciting to the average shareholder )

 

[Miner]

Only 3 pc fall

 

[divs4ever]

time will tell , but yes it could have been worse ( or better for folks like me planning to buy the dip )

 

[Sean K]

Jake Klein just did a 15min interview on CNBC about the results and the pre-amble from the hosts was that the reduced earnings were well known to the market. I must have missed that telegraph. He didn't seem phased about it (of course) and was all talk about the growth prospects but nothing about getting back to 2021 earnings. Talked up EH and the copper by-product to work into earnings this year. So, those number mostly factored in. Bit of a shock to me though.

 

[divs4ever]

down still . more than 2% looks like several missed that memo

but i did guess it would be less than stellar

 

[mullokintyre]

Given gold fell in US market last night, plus the AUD/USD pair went in the other direction, it is no surprise that EVN went down like quite a few others.
NST, SLR and PRU all down 2%.
TIE is my only goldie that went up ( so far).
Mick

 

[divs4ever]

KRM and OZL ( which was more of a gold play when i bought in ) are up for me in that space

but sadly nothing down enough to tempt me to buy extra

 

[Miner]

EVN price is now up.
Market already factored in to the price, much before the result was announced

 

[divs4ever]

i guess that means i don't buy ( extra ) today

oh well , there is always next year ( i normally resist chasing ) i bought the last parcel @ $3.72 in September 2021

 

[Sean K]

EVN price is now up.
Market already factored in to the price, much before the result was announced

Mr Market is a miraculous, slippery, enigmatic and mystical beast.

 

[Miner]

i guess that means i don't buy ( extra ) today

oh well , there is always next year ( i normally resist chasing ) i bought the last parcel @ $3.72 in September 2021

Looks like Fat Prophets or Motley Fool saying - they always have a purchase at a very low price but also bought at a much higher price.
None of my business but @divs4ever I am just curious what is your average price for EVN having bought at 74.5 cents and $3.72 . I liked the management and company's business considering almost committed to join EVN at a decision making role only mid last year . But I have sold out with a profit of only 20% before they started to dwindle down. Would return again however.

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