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EVN - Evolution Mining
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Craton
Mostly passive, contrarian.
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From @divs4ever EVN fin. announcement post above:
*Tongue planted firmly in cheek*
GTK EVN has a least one mystic that can confidently read the crystal ball... ?
Seriously though, yes @Miner I did blink and my ears pricked up at that 44c drop coupled with earlier drops late Jan, back then I thought there was bad news afoot as now evident in those bracketed numbers. My buy price (to add to my holding) was not met. Nm, the reduced divvy will still be appreciated.
*Tongue planted firmly in cheek*
GTK EVN has a least one mystic that can confidently read the crystal ball... ?
Seriously though, yes @Miner I did blink and my ears pricked up at that 44c drop coupled with earlier drops late Jan, back then I thought there was bad news afoot as now evident in those bracketed numbers. My buy price (to add to my holding) was not met. Nm, the reduced divvy will still be appreciated.
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'quick and dirty ' ( no profit-taking counted ) is $3.33
allowing for the sell-downs about 74 cents ( sometimes it just makes sense to reduce a little )
i usually just quote 'quick and dirty ' and 'free-carried ' the other way produces some ridiculous figures at times
allowing for the sell-downs about 74 cents ( sometimes it just makes sense to reduce a little )
i usually just quote 'quick and dirty ' and 'free-carried ' the other way produces some ridiculous figures at times
Last edited:
Sean K
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Quarterly out and they're bragging about their group AISC being below $1000, which sounds great on the surface of it. In fact, incredible. However, it doesn't take much to see why. If you take out Ernest H it's not that great. Mr Market agreed this am.
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Hmm! Looks like you don't like the report.
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Red Lake cost appalling but I guess they deem it a work in progress - but is it progressing? They've had it a while now. High capital input to AISC.
They have AIC (All-in Cost) for the group of $1,732 but then a line under that for D&A of $896.
I'm assuming that is additional although I have always thought that AIC included depreciation and amortization, which are real costs even if a bit abstract. Real money has been spent in the past that is accounted for in D&A. If it's additional to their AIC figure, that makes the real AIC to me $2,628/oz and that's with the great negative boost to cost from the Ernest Henry contribution. So they've been making nothing?
BtL was warning about these December Quarterlies regarding costs and Covid - so far DCN and EVN have been poor, hoping NST won't be as bad.
not held
They have AIC (All-in Cost) for the group of $1,732 but then a line under that for D&A of $896.
I'm assuming that is additional although I have always thought that AIC included depreciation and amortization, which are real costs even if a bit abstract. Real money has been spent in the past that is accounted for in D&A. If it's additional to their AIC figure, that makes the real AIC to me $2,628/oz and that's with the great negative boost to cost from the Ernest Henry contribution. So they've been making nothing?
BtL was warning about these December Quarterlies regarding costs and Covid - so far DCN and EVN have been poor, hoping NST won't be as bad.
not held
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maybe i will get that top up price , ( in the low $3 range ) yet
but isn't EVN still working towards their hub and spoke strategy ( hoping to reduce costs, increase plant/staff availability )
( if so , this should not have been totally unexpected )
but isn't EVN still working towards their hub and spoke strategy ( hoping to reduce costs, increase plant/staff availability )
( if so , this should not have been totally unexpected )
Sean K
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I only had a superficial look over it this am and the thing that jumped out was the negative $2000 AISC for EH which completely skews the overall costs. Plus, the real AISC was $1,149 because of $10.6m an ounce in 'by-product credits' which took it negative. So, they're been a bit tricky with the heads up numbers IMO. Cowal and Mungari looks OK.
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Not in EVN, NST is my biggest gold producer holding. Charts of most Oz gold producers looking precarious but a reminder of the approximate price most are getting for their product in AUD. Not accounting for hedging and can't remember EVN's degree of hedging.
10 year AUD gold chart looks pretty solid at this date
10 year AUD gold chart looks pretty solid at this date
Sean K
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Hold both with SSR and NCM as my gold majors. And PMGOLD. Covering the bases really. Gold, uranium, copper, nickel and zinc are the only things I have mid-long term conviction on going forward.
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BUSINESS UPDATE
Following the completion of Evolution Mining Limited’s (ASX:EVN) (“Evolution”) annual planning process, the
Company provides the following update on expected performance for FY22 and outlook for FY23 and FY24.
FY22 Operations Update
In the June 2022 quarter we are expecting production will be 15% higher than the March 2022 quarter at around
170,000 ounces.
The transformation at Red Lake is continuing and we expect production to increase 15% from the March 2022
quarter to produce around 38,000 ounces in the June 2022 quarter.
Production at Cowal was impacted by further wet weather in May which restricted access to the open pit and
Mungari production has been impacted by COVID related staff absenteeism. Since the Western Australian
border opened in early March, over 30% of the workforce (of approx. 500) have been absent for at least 7 days
due to either COVID infection or being deemed a close contact.
FY22 gold production is now expected to be around 640,000 ounces.
FY22 All-in Sustaining Cost (AISC) is expected to be ~$1,250/oz (US$875/oz). The final reported AISC for FY22
will largely depend on the closing copper price for June 2022 which is used to revalue unsettled concentrate
shipments from Ernest Henry. On average there are four months of production that are subject to revaluation.
At the current copper price, this adjustment will negatively impact FY22 AISC. This negative impact will result in
the group AISC being above the guidance range of $1,135 – $1,195/oz (US$795 – US$835/oz).
Sustaining and major capital are both expected to be at the lower end of their guidance ranges (guidance was
$150 – 175 million and $440 - $505 million respectively).
Ernest Henry is on track to deliver over $400 million of mine cash flow for FY22. The integration of the asset has
progressed well. An update of the Mineral Resource model is planned for release in the September 2022 quarter.
This model includes ~42km of additional drilling since May 2021. This will inform the Ernest Henry Extension
Pre-Feasibility Study (PFS) which remains on schedule for completion by December 2022. Drilling results are
expected to extend the copper-gold footprint across the mineralised lenses in the PFS area and below. Further
information on the Mineral Resource model update is included in the presentation titled “Business Update
Presentation” also released today.
The balance sheet is strong with around $900 million of liquidity including $540 million of cash expected at the
end of FY22.
FY23 Guidance and FY24 Group Outlook
Group production for FY23 is guided to increase 12% on the current year to 720,000 ounces +/- 5% and the
outlook for FY24 is expected to increase a further 11% to 800,000 ounces +/- 5%. This will deliver a total increase
of 25% over the two years.
These production levels are lower than our previous plans primarily due to the Red Lake transformation being
achieved a year later than planned. Red Lake production is expected to be 160,000 ounces +/- 5% in FY23,
ramping up to around 200,000 ounces +/- 5% in FY24.
Evolution Mining Limited 2
FY23 Guidance and FY24 Group Outlook (continued)
The FY23 AISC guidance and FY24 AISC outlook is expected to be in line with the current year at approximately
$1,240 per ounce +/- 5% (~US$870/oz). These costs are higher than previously outlined due to industry wide
cost pressures and the lower production at Red Lake. However, this cost level continues to place Evolution as
one of the lowest cost global gold producers.
Sustaining capital is guided to be approximately $190 – $240 million in FY23 with the same outlook for FY24.
This is higher than previously outlined due to the inclusion of capital in FY23 for fleet replacement at Ernest
Henry given the confidence of a mine life extension. The main driver to the change to the FY24 outlook is at
Cowal, due to higher underground mine development rates linked to the latest mine plan. Sustaining capital at
other operations have not materially changed from the previous outlook.
The guidance for FY23 major capital remains unchanged at $530 - $600 million while the outlook for FY24 has
been lowered to $330 – $380 million. The majority of this capital is for development of the Cowal Underground
mine; the transformation of Red Lake; and progressing studies on growth opportunities at Cowal Open Pits,
Ernest Henry Extension, and Plant Expansion at Mungari.
The guidance and outlook for both sustaining and major capital is also being impacted by some investment in
FY22 being deferred or delayed into FY23. This has contributed to capital spend being at the bottom end of
FY22 guidance.
Commenting on the updated outlook, Evolution’s Executive Chairman Jake Klein said:
“Our portfolio is well positioned. Our confidence in the turnaround and potential at Red Lake is growing, the
Cowal underground mine is on budget and schedule and the cash generation and geological upside at Ernest
Henry is outstanding.
Aligned with our strategy, during this period of increasing costs and a challenging labour market all planned
expenditure will be thoroughly assessed and gated with a focus on ensuring we continue to prioritise margins
over volume and earn an appropriate return on capital.
I am confident that Evolution is one of the best positioned gold companies with its high-quality, low-cost portfolio
of assets.”
Evolution Mining Limited 3
Relevant Proportions of Mineral Resources and Ore Reserves underpinning the Production Target
Evolution’s updated Group FY23 and FY24 Outlook for Gold Production comprises 11% Proved Ore Reserves,
80% Probable Ore Reserves, 2% Indicated Mineral Resources and 7% Inferred Mineral Resources.
Cautionary Statement concerning the proportion of Inferred Mineral Resources
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty
that further exploration work will result in the determination of Indicated Mineral Resources or that the production
targets will be realised.
Material assumptions
Material assumptions on which the FY23 and FY24 Outlook is based are presented in ASX release titled “Annual
Mineral Resources and Ore Reserves Statement” dated 16 February 2022 (available to view at
www.evolutionmining.com.au). An AUD:CAD exchange rate assumption of 0.9 has been used for Red Lake.
▪ Gold: $1,450/oz for Ore Reserves, $2,000/oz for Mineral Resources
▪ Silver: $20.00/oz for Ore Reserves, $26.00/oz for Mineral Resources
▪ Copper: $6,000/t for Ore Reserves, $9,000/t for Mineral Resources
All open pit Mineral Resource estimates are reported within optimised pit shells which have been developed
using a $2,000/oz price assumption and take into account forecast mining costs and metallurgical recoveries.
All underground Mineral Resources (except Ernest Henry) are reported within underground mining shapes
(MSOs) using a $2,000/oz price assumption and take into account forecast mining costs and metallurgical
recoveries.
Ernest Henry Mineral Resource estimate is reported above a 0.7% Cu cut-off grade within the interpreted 0.7%
copper envelope. All open pit Ore Reserve estimates are reported within detailed pit designs and all underground
Ore Reserves are reported within mineable underground shapes (except Ernest Henry). Pit designs and
underground mining shapes have taken into account all applicable modifying factors, forecast mining costs and
metallurgical recoveries and have been developed subject to an economic test to verify that economic extraction
is justified. The economic test includes all applicable capital costs and is performed via a sensitivity analysis
using a range of assumed gold prices from $1,450 to $2,200 per ounce and considers a range of financial
metrics including AISC, NPV and FCF. Assets may use different assumptions withing this range during
optimisation or financial modelling stages depending on specific requirements as documented in their individual
statements.
Glencore commodity price assumptions used to estimate the Ernest Henry December 2021 Ore Reserves cutoff grades are: gold price of US$1,300/oz, copper price of US$6,500/t and AUD:USD exchange rate of 0.75.
The material assumptions upon which the Group FY23 Outlook forecast financial information is based are: Gold
A$2,400/oz; Silver A$30/oz; Copper A$12,500/t; and Diesel A$130/bbl. The material assumptions upon which
the Group FY24 Outlook forecast financial information is based are: Gold A$2,400/oz; Silver A$30/oz; Copper
A$12,500/t; and Diesel A$115/bbl.
Competent Persons Statement
The Ore Reserves and Mineral Resources underpinning the Group FY23 and FY24 Outlook have been prepared
by Competent Persons in accordance with the requirements in Appendix 5E (JORC Code).
DYOR
i hold EVN ( and have a top up order in sub $3.20 , gobbled up at the open @ $3.08 )
this will all be about expectations
SEAT-BELTS ON
have an extra top up order in @ $2.60 ( SO FAR )
Following the completion of Evolution Mining Limited’s (ASX:EVN) (“Evolution”) annual planning process, the
Company provides the following update on expected performance for FY22 and outlook for FY23 and FY24.
FY22 Operations Update
In the June 2022 quarter we are expecting production will be 15% higher than the March 2022 quarter at around
170,000 ounces.
The transformation at Red Lake is continuing and we expect production to increase 15% from the March 2022
quarter to produce around 38,000 ounces in the June 2022 quarter.
Production at Cowal was impacted by further wet weather in May which restricted access to the open pit and
Mungari production has been impacted by COVID related staff absenteeism. Since the Western Australian
border opened in early March, over 30% of the workforce (of approx. 500) have been absent for at least 7 days
due to either COVID infection or being deemed a close contact.
FY22 gold production is now expected to be around 640,000 ounces.
FY22 All-in Sustaining Cost (AISC) is expected to be ~$1,250/oz (US$875/oz). The final reported AISC for FY22
will largely depend on the closing copper price for June 2022 which is used to revalue unsettled concentrate
shipments from Ernest Henry. On average there are four months of production that are subject to revaluation.
At the current copper price, this adjustment will negatively impact FY22 AISC. This negative impact will result in
the group AISC being above the guidance range of $1,135 – $1,195/oz (US$795 – US$835/oz).
Sustaining and major capital are both expected to be at the lower end of their guidance ranges (guidance was
$150 – 175 million and $440 - $505 million respectively).
Ernest Henry is on track to deliver over $400 million of mine cash flow for FY22. The integration of the asset has
progressed well. An update of the Mineral Resource model is planned for release in the September 2022 quarter.
This model includes ~42km of additional drilling since May 2021. This will inform the Ernest Henry Extension
Pre-Feasibility Study (PFS) which remains on schedule for completion by December 2022. Drilling results are
expected to extend the copper-gold footprint across the mineralised lenses in the PFS area and below. Further
information on the Mineral Resource model update is included in the presentation titled “Business Update
Presentation” also released today.
The balance sheet is strong with around $900 million of liquidity including $540 million of cash expected at the
end of FY22.
FY23 Guidance and FY24 Group Outlook
Group production for FY23 is guided to increase 12% on the current year to 720,000 ounces +/- 5% and the
outlook for FY24 is expected to increase a further 11% to 800,000 ounces +/- 5%. This will deliver a total increase
of 25% over the two years.
These production levels are lower than our previous plans primarily due to the Red Lake transformation being
achieved a year later than planned. Red Lake production is expected to be 160,000 ounces +/- 5% in FY23,
ramping up to around 200,000 ounces +/- 5% in FY24.
Evolution Mining Limited 2
FY23 Guidance and FY24 Group Outlook (continued)
The FY23 AISC guidance and FY24 AISC outlook is expected to be in line with the current year at approximately
$1,240 per ounce +/- 5% (~US$870/oz). These costs are higher than previously outlined due to industry wide
cost pressures and the lower production at Red Lake. However, this cost level continues to place Evolution as
one of the lowest cost global gold producers.
Sustaining capital is guided to be approximately $190 – $240 million in FY23 with the same outlook for FY24.
This is higher than previously outlined due to the inclusion of capital in FY23 for fleet replacement at Ernest
Henry given the confidence of a mine life extension. The main driver to the change to the FY24 outlook is at
Cowal, due to higher underground mine development rates linked to the latest mine plan. Sustaining capital at
other operations have not materially changed from the previous outlook.
The guidance for FY23 major capital remains unchanged at $530 - $600 million while the outlook for FY24 has
been lowered to $330 – $380 million. The majority of this capital is for development of the Cowal Underground
mine; the transformation of Red Lake; and progressing studies on growth opportunities at Cowal Open Pits,
Ernest Henry Extension, and Plant Expansion at Mungari.
The guidance and outlook for both sustaining and major capital is also being impacted by some investment in
FY22 being deferred or delayed into FY23. This has contributed to capital spend being at the bottom end of
FY22 guidance.
Commenting on the updated outlook, Evolution’s Executive Chairman Jake Klein said:
“Our portfolio is well positioned. Our confidence in the turnaround and potential at Red Lake is growing, the
Cowal underground mine is on budget and schedule and the cash generation and geological upside at Ernest
Henry is outstanding.
Aligned with our strategy, during this period of increasing costs and a challenging labour market all planned
expenditure will be thoroughly assessed and gated with a focus on ensuring we continue to prioritise margins
over volume and earn an appropriate return on capital.
I am confident that Evolution is one of the best positioned gold companies with its high-quality, low-cost portfolio
of assets.”
Evolution Mining Limited 3
Relevant Proportions of Mineral Resources and Ore Reserves underpinning the Production Target
Evolution’s updated Group FY23 and FY24 Outlook for Gold Production comprises 11% Proved Ore Reserves,
80% Probable Ore Reserves, 2% Indicated Mineral Resources and 7% Inferred Mineral Resources.
Cautionary Statement concerning the proportion of Inferred Mineral Resources
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty
that further exploration work will result in the determination of Indicated Mineral Resources or that the production
targets will be realised.
Material assumptions
Material assumptions on which the FY23 and FY24 Outlook is based are presented in ASX release titled “Annual
Mineral Resources and Ore Reserves Statement” dated 16 February 2022 (available to view at
www.evolutionmining.com.au). An AUD:CAD exchange rate assumption of 0.9 has been used for Red Lake.
▪ Gold: $1,450/oz for Ore Reserves, $2,000/oz for Mineral Resources
▪ Silver: $20.00/oz for Ore Reserves, $26.00/oz for Mineral Resources
▪ Copper: $6,000/t for Ore Reserves, $9,000/t for Mineral Resources
All open pit Mineral Resource estimates are reported within optimised pit shells which have been developed
using a $2,000/oz price assumption and take into account forecast mining costs and metallurgical recoveries.
All underground Mineral Resources (except Ernest Henry) are reported within underground mining shapes
(MSOs) using a $2,000/oz price assumption and take into account forecast mining costs and metallurgical
recoveries.
Ernest Henry Mineral Resource estimate is reported above a 0.7% Cu cut-off grade within the interpreted 0.7%
copper envelope. All open pit Ore Reserve estimates are reported within detailed pit designs and all underground
Ore Reserves are reported within mineable underground shapes (except Ernest Henry). Pit designs and
underground mining shapes have taken into account all applicable modifying factors, forecast mining costs and
metallurgical recoveries and have been developed subject to an economic test to verify that economic extraction
is justified. The economic test includes all applicable capital costs and is performed via a sensitivity analysis
using a range of assumed gold prices from $1,450 to $2,200 per ounce and considers a range of financial
metrics including AISC, NPV and FCF. Assets may use different assumptions withing this range during
optimisation or financial modelling stages depending on specific requirements as documented in their individual
statements.
Glencore commodity price assumptions used to estimate the Ernest Henry December 2021 Ore Reserves cutoff grades are: gold price of US$1,300/oz, copper price of US$6,500/t and AUD:USD exchange rate of 0.75.
The material assumptions upon which the Group FY23 Outlook forecast financial information is based are: Gold
A$2,400/oz; Silver A$30/oz; Copper A$12,500/t; and Diesel A$130/bbl. The material assumptions upon which
the Group FY24 Outlook forecast financial information is based are: Gold A$2,400/oz; Silver A$30/oz; Copper
A$12,500/t; and Diesel A$115/bbl.
Competent Persons Statement
The Ore Reserves and Mineral Resources underpinning the Group FY23 and FY24 Outlook have been prepared
by Competent Persons in accordance with the requirements in Appendix 5E (JORC Code).
DYOR
i hold EVN ( and have a top up order in sub $3.20 , gobbled up at the open @ $3.08 )
this will all be about expectations
SEAT-BELTS ON
have an extra top up order in @ $2.60 ( SO FAR )
Last edited:
Sean K
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Anyone see what was so wrong with the report to make it crash 15%? Just some inflationary costs by the looks.
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the guidance !!
and the guess staffing issues will persist while we have virus madness , are my theory
i was expecting the report substance but not the market reaction ( so far )
and the guess staffing issues will persist while we have virus madness , are my theory
i was expecting the report substance but not the market reaction ( so far )
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I am never been a fan of Motley Fool publications even though read occassionally to see their comments.
With EVN I found this one
www.fool.com.au
With EVN I found this one
Why the Evolution (ASX:EVN) share price crashed despite record results
The Evolution Mining Ltd (ASX: EVN) share price is among the worst performing stocks today even as it unveiled its best interim net profit in its history.
www.fool.com.au
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I don't think I took enough notice of the rising costs factor - but BtL finance certainly did, warning of bad news coming out in June Quarterlys and suggesting caution towards diesel and electrical power gobbling producers.
EVN at present down 20%. Spillover effect to other producers especially Northern Star, as is reasonable. Northern Star seems to have broken a big support level.
EVN at present down 20%. Spillover effect to other producers especially Northern Star, as is reasonable. Northern Star seems to have broken a big support level.
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unless EVN starts forward hedging the diesel ( like airlines do with their fuel ) fuel costs are much like a 'piece of string ' ( could go anywhere )
wages should be more predictable ( and controllable )
now plant maintenance ( and repairs ) might be a real can of worms ( if replacement parts are needed )
wages should be more predictable ( and controllable )
now plant maintenance ( and repairs ) might be a real can of worms ( if replacement parts are needed )
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Hope some watchers on EVN have taken a stab on a probable bargain on EVN today when market punished the stock , I suspect there could be something more to come out but on face value, EVN is still a performer for me. The price today has been hovering around $2.67 to $2.7 still and could it reach $2.6 by the COB ?.
Would the chartists call it a falling knife and expecting to fall further ???
Extract from FP within copyright provision.
Latest Price: $2.75 - 18.5%
Shares in Evolution Mining have fallen heavily in morning trading, following a June 2022 quarter and full year trading updates. Evolution Mining now expects 2022 guidance to come in lower than their already downwardly revised guidance for the year. Unit costs on the other hand, are expected to come in above 2022 guidance on the lower forecast production number, with the final realised copper price to play a role as well. Weather events and lingering COVID have had a hand in the lower expected production outcome for 2022.
Evolution Mining is forecasting 2023 gold production to come in higher than its 2022 forecast and expects it will arise again in 2024.
Evolution Mining in the latest update, advised it expected to have a cash pool of A$540 million at the end of its fiscal year of 30 June 2022. We have no concerns around liquidity and the strength of the balance sheet.
Part of the production and unit cost guidance downgrades are beyond Evolution Mining’s control. We take comfort from 2023 and 2024 production outlooks are forecast to rise. Evolution Mining does have the financial firepower to navigate choppy waters while pursuing growth opportunities.
We will provide a full update on Evolutions’ trading announcement in tomorrows’ Aussie report. In the meantime, we continue to recommend Evolution Mining as a buy for Members with no exposure to the shares.
Would the chartists call it a falling knife and expecting to fall further ???
Extract from FP within copyright provision.
Mid-week alert – Evolution Mining (ASX:EVN)
Latest Price: $2.75 - 18.5%
Shares in Evolution Mining have fallen heavily in morning trading, following a June 2022 quarter and full year trading updates. Evolution Mining now expects 2022 guidance to come in lower than their already downwardly revised guidance for the year. Unit costs on the other hand, are expected to come in above 2022 guidance on the lower forecast production number, with the final realised copper price to play a role as well. Weather events and lingering COVID have had a hand in the lower expected production outcome for 2022.
Evolution Mining is forecasting 2023 gold production to come in higher than its 2022 forecast and expects it will arise again in 2024.
Evolution Mining in the latest update, advised it expected to have a cash pool of A$540 million at the end of its fiscal year of 30 June 2022. We have no concerns around liquidity and the strength of the balance sheet.
Part of the production and unit cost guidance downgrades are beyond Evolution Mining’s control. We take comfort from 2023 and 2024 production outlooks are forecast to rise. Evolution Mining does have the financial firepower to navigate choppy waters while pursuing growth opportunities.
We will provide a full update on Evolutions’ trading announcement in tomorrows’ Aussie report. In the meantime, we continue to recommend Evolution Mining as a buy for Members with no exposure to the shares.
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Posted yesterday by BtL finance, more specific company stuff in other videos for subscribers. Couple of cups of coffee/month level subscription price - I have no affiliation, probably shouldn't be posting even these broader discussions.
Reminds that we are probably not so far off buying opportunities in the majors although the charts are crap. Although he has lately been tentatively nibbling at some explorer/developers, e.g PDI, STN, as they are not impacted anywhere near as much by the cost inputs that producers bear.
Reminds that we are probably not so far off buying opportunities in the majors although the charts are crap. Although he has lately been tentatively nibbling at some explorer/developers, e.g PDI, STN, as they are not impacted anywhere near as much by the cost inputs that producers bear.
Sean K
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Looks overdone to me. I've nibbled at this and have with a few goldies thinking longer term gold narrative. Hope we're right... eeeek
