Evolution Mining : September 2020 Quarterly Report
10/26/2020 | 05:15pm EST
QUARTERLY REPORT - For the period ending 30 September 2020
HIGHLIGHTS
Sector leading cash generation
Mine operating cash flow of A$272.3 million
Net mine cash flow of A$183.4 million
Record net mine cash flow at Ernest Henry (A$83.2M) and Mungari (A$44.9M)
All operations generated positive cash flow post capital
Group cash flow of A$118.9 million
Net bank debt of A$180.3 million (30 Jun 2020: A$196.4M) post FY20 final dividend of A$153.8 million
Sustainability
Maintained 'A' rating in MSCI ESG Ratings assessment
COVID-19continues to be proactively managed with no material impact on operations
Operations tracking ahead of FY21 plan
Gold production of 170,021 ounces (excludes any contribution from Cracow which was divested on 1 July)
All-inSustaining Cost (AISC)1 of A$1,198 per ounce (US$857/oz)2
All-inCost (AIC)3 of A$1,663 per ounce at an AIC margin of A$871 per ounce
Exploration drilling results continue to demonstrate resource growth and increasing confidence
Red Lake's Cochenour: 3.35m (1.67m etw) grading 296.6g/t Au from 135.9m (C37230)
Cowal's GRE46: 34m (23.8m etw) grading 5.5g/t Au from 529m (GRUD0186)
Delivering significant organic growth pipeline
Red Lake
Transformation plan progressing on schedule
Initial JORC Code 2012 Mineral Resource estimate of 11 million ounces
Six diamond drill rigs currently operating underground to capture further exploration upside
Cowal
Underground mine development application submitted for regulatory approval
Integrated Waste Landform (IWL) Stage 1 completed with first deposition achieved in October
Board and regulatory approval received in October to develop Galway exploration decline
Consolidated production and sales summary
Units
Dec Qtr
Mar Qtr
Jun Qtr
Sep Qtr
FY20
FY20
FY20
FY21
Gold produced
oz
170,890
165,502
218,104
170,021
By-product Silver produced
oz
137,262
118,224
233,252
164,069
By-product Copper produced
t
5,572
4,832
6,684
5,552
C1 Cash Cost
A$/oz
778
767
761
889
All-In Sustaining Cost1
A$/oz
1,069
991
1,088
1,198
All-In Cost3
A$/oz
1,584
1,584
1,562
1,663
Gold sold
oz
173,408
167,374
218,685
172,759
Achieved gold price
A$/oz
2,091
2,366
2,500
2,534
Silver sold
oz
144,757
118,472
218,239
173,909
Achieved silver price
A$/oz
24
27
24
35
Copper sold
t
5,612
4,801
6,585
5,598
Achieved copper price
A$/t
8,802
8,174
8,192
9,668
Includes C1 cash cost, plus royalties, sustaining capital, general corporate and administration expense. Calculated per ounce sold
Using the average AUD:USD exchange rate of 0.715 for the September 2020 quarter
Includes AISC plus growth (major project) capital and discovery expenditure. Calculated per ounce sold
Evolution Mining Limited Quarterly Report September 2020
1
OVERVIEW
Evolution continues to be recognised for its Sustainability performance, maintaining an 'A' rating in the MSCI ESG Ratings assessment. The Company also ranked among the top five industry leaders globally for 'Health and Safety' and 'Business Ethics'.
Leading safety indicators are trending well with an increase in field safety interactions and a 31% increase in hazard reporting. Group Total Recordable Injury Frequency (TRIF)1 at 30 September was 7.1 (30 June 2020: 6.8). Key initiatives during the quarter to improve safety performance included an increased focus on back to basics, quality field leadership and high-quality focused safety interactions.
As part of Evolution's ongoing Community Investment efforts, two Sustainability Projects were approved during this quarter. These were a Fire Recovery Support project at Red Lake and an upgrade to the Mt Perry Summit Walk at Mt Rawdon.
COVID-19 continues to be proactively managed with no material impact to operations.
Group gold production for the September 2020 quarter was 170,021 ounces (Jun qtr: 218,104oz) at an AISC of A$1,198/oz (Jun qtr: A$1,088/oz). Using the average AUD:USD exchange rate for the quarter of 0.715, Group AISC equated to US$857/oz which places Evolution at the bottom of the cost curve amongst major and mid-tier global gold producers. All-in costs (AIC) of A$1,663/oz resulted in an AIC margin of A$871/oz.
As at 30 September 2020, Evolution had cash in the bank of A$369.7 million and bank debt of A$550.0 million post the cash payment of A$153.8 million for the final FY20 dividend.
Evolution delivered mine operating cash flow and net mine cash flow of A$272.3 million and A$183.4 million respectively (Jun qtr: A$352.1M; A$224.5M). Mine capital investment for the quarter was A$88.1 million (Jun qtr: A$111.5M).
Standout operational performances for the quarter:
Ernest Henry produced 24,569oz at an AISC of A$(515)/oz generating record net mine cash flow of A$83.2 million
Mungari produced 35,370oz at an AISC of A$1,115/oz generating record net mine cash flow of A$44.9 million
On 13 August 2020, Evolution announced its first JORC Code 2012 Mineral Resource estimate at Red Lake of 48.1Mt grading 7.1g/t for 11.0Moz2. This includes 4.3Moz at an average grade of 10.5g/t in Upper Campbell. Work has commenced on the estimation of a maiden JORC Code Ore Reserve which is planned to be released with Evolution's Group Mineral Resources and Ore Reserves Statement in the March 2021 quarter.
On 30 September 2020 a major milestone was achieved for the Cowal underground mine development with the submission of the Significant State Development (SSD) Application and the Modification 16 Development Application to the New South Wales Department of Planning, Industry and Environment. An Environmental Impact Study forms part of the SSD Application and is on public display until 22 November 2020.
Subsequent to the end of the quarter, the Board approved development of the Galway exploration decline which will enable additional drilling to increase underground Ore Reserves and will also be used for future production. The 2,300 metre decline has received regulatory approval. This is another important milestone in growing Cowal's production to over 350,000 low cost ounces per annum.
Drilling at Cochenour, Red Lake, targeting new discoveries returned strong results with the best intersections of 1.27m grading 11.72g/t Au from 265.75m (Thor) and 0.31m grading 627.75g/t Au from 273.95m (Voss). Resource definition drilling is increasing confidence in geological and grade continuity to grow the short to medium term mining inventory at Cochenour and Twin Otter.
Numerous significant drill intersections at the Cowal underground including 34m (23.8m etw) grading 5.5g/t Au from 529m (GRUD0186) continued to provide robust infill results. Extensional resource drilling down plunge of Regal and Dalwhinnie returned a best result of 19m (13.3m etw) grading 15.6g/t Au from 635m (1535DD544B). Results will be reflected in the next resource model update.
Total Recordable Injury Frequency (TRIF): The frequency of total recordable injuries per million hours worked.
This information is extracted from the report entitled 'Red Lake 11 Million Ounce JORC Code Mineral Resource" released to the ASX on 13 August 2020. See page 18 of this release for further details.
Evolution Mining Limited Quarterly Report September 2020
2
OVERVIEW
Group safety performance (TRIF)
8.4
7.2 6.8 7.1
FY20 Q2
FY20 Q3
FY20 Q4
FY21 Q1
Group production (koz)
218.1
170.9
165.5
170.0
FY20 Q2
FY20 Q3
FY20 Q4
FY21 Q1
Group operating mine cash flow
(A$M)
352.1
233.1
257.4
272.3
FY20 Q2
FY20 Q3
FY20 Q4
FY21 Q1
Group AISC (A$ per ounce)
1,069 991 1,088 1,198
FY20 Q2
FY20 Q3
FY20 Q4
FY21 Q1
Summary of key projects
Cowal
Significant State Development and Modification 16 applications submitted
Underground
Feasibility Study progressing on schedule
Galway exploration decline received Board and regulatory approval to
enable additional underground drilling
Integrated Waste Landform
Stage 1 completed and first deposition achieved in October
Stage H cutback
On track for completion by the end of FY21
Satellite open pits
Pre-Feasibility Study commenced for satellite pits outside E42
Red Lake
Transformation plan
Progressing in line with schedule
Mineral Resources
Initial JORC Code 2012 Mineral Resource of 11Moz declared
Ore Reserves
Initial JORC Code 2012 Ore Reserves expected in March 2021 quarter
Decline
Surface decline study initiated to develop upper level ore access. Results
expected in March 2021 quarter
Processing
Pre-Feasibility Study to commence assessing long term processing
options. Results expected in June 2021 quarter
Ernest Henry
Drilling below 1200RL
CY2020 drill program of 18,000m progressing in line with plan
Mungari
Processing
Castle Hill processing study progressing. Outcome expected in June 2021
quarter
Evolution Mining Limited Quarterly Report September 2020
3
OVERVIEW
September 2020 quarter production and cost summary1
Sep 2020 quarter
Units
Cowal
Ernest
Red
Mungari
Mt
Mt Carlton
Group
Henry
Lake
Rawdon
UG lat dev - capital
m
0
263
1,479
532
0
450
2,723
UG lat dev - operating
m
0
1,680
1,199
137
0
358
3,373
Total UG lateral
m
0
1,942
2,678
669
0
808
6,097
development
UG ore mined
kt
0
1,659
117
101
0
38
1,915
UG grade mined
g/t
0.00
0.59
6.42
3.93
0.00
5.48
1.22
OP capital waste
kt
3,850
0
0
1,316
1,026
0
6,193
OP operating waste
kt
606
0
0
89
971
1,039
2,704
OP ore mined
kt
410
0
0
393
463
112
1,379
OP grade mined
g/t
0.87
0.00
0.00
1.09
1.03
2.39
1.11
Total ore mined
kt
410
1,659
117
494
463
150
3,294
Total tonnes
kt
2,116
1,691
120
515
849
234
5,526
processed
Grade processed
g/t
0.91
0.59
6.35
2.35
0.83
2.40
1.11
Recovery
%
83.9
76.5
93.6
90.9
88.5
81.8
85.9
Gold produced4
oz
51,774
24,569
26,638
35,370
20,024
11,646
170,021
Silver produced
oz
39,980
21,035
1,169
3,145
23,719
75,021
164,069
Copper produced
t
0
5,040
0
0
0
511
5,552
Gold sold
oz
49,929
27,560
26,053
35,865
20,760
12,592
172,759
Achieved gold price
A$/oz
2,501
2,505
2,586
2,557
2,467
2,660
2,534
Silver sold
oz
39,980
21,035
1,169
3,145
23,719
84,861
173,909
Achieved silver price
A$/oz
34
27
36
35
35
36
35
Copper sold
t
0
5,040
0
0
0
558
5,598
Achieved copper price
A$/t
0
9,720
0
0
0
9,193
9,668
Cost Summary
Mining
A$/prod oz
145
1,045
389
477
1,670
527
Processing
A$/prod oz
677
394
307
603
731
489
Administration and
A$/prod oz
144
282
102
161
553
212
selling costs
Stockpile adjustments
A$/prod oz
(14)
(97)
98
144
66
22
By-product credits
A$/prod oz
(26)
(2,018)
(2)
(3)
(103)
(706)
(361)
C1 Cash Cost
A$/prod oz
926
(983)
1,623
893
1,281
2,313
889
C1 Cash Cost
A$/sold oz
960
(876)
1,659
880
1,235
2,140
875
Royalties
A$/sold oz
75
194
0
66
125
221
97
Gold in Circuit and
A$/sold oz
(26)
11
9
(35)
280
12
other adjustments
Sustaining capital2
A$/sold oz
10
167
377
151
138
17
137
Reclamation and other
A$/sold oz
8
27
9
74
16
18
adjustments
Administration costs3
A$/sold oz
59
All-in Sustaining
A$/sold oz
1,026
(515)
2,074
1,115
1,536
2,674
1,198
Cost
Major project capital
A$/sold oz
837
0
271
302
237
(0)
374
Discovery
A$/sold oz
75
0
85
105
4
59
90
All-in Cost
A$/sold oz
1,938
(515)
2,430
1,522
1,777
2,732
1,663
Depreciation &
A$/prod oz
190
1,400
168
374
604
658
480
Amortisation4
All metal production is reported as payable. Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost
Sustaining Capital includes 60% UG mine development capital. Group Sustaining Capital includes A$2.36/oz for Corporate capital expenditure
Includes Share Based Payments
Gold production at Red Lake is gold production Payable
Evolution Mining Limited Quarterly Report September 2020
4
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Evolution Mining Limited published this content on 27 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2020 22:14:01 UTC
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