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MarketScreener Homepage  >  Equities  >  AUSTRALIAN SECURITIES EXCHANGE LIMITED  >  Evolution Mining Ltd    EVN   AU000000EVN4

EVOLUTION MINING LTD

(EVN)
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End-of-day quote. End-of-day quote AUSTRALIAN SECURITIES EXCHANGE LIMITED - 08/20
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08/16EVOLUTION MINING : Fy19 financial results and final dividend
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08/14EVOLUTION MINING : Appendix 4E and FY19 Annual Financial Report
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08/14EVOLUTION MINING : FY19 Financial Results and Final Dividend
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Evolution Mining : Appendix 4E and FY19 Annual Financial Report

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08/14/2019 | 08:22pm EDT

APPENDIX 4E

EVOLUTION MINING LIMITED ACN 084 669 036

AND CONTROLLED ENTITIES

ANNUAL FINANCIAL REPORT

For the year ended 30 June 2019

Results for Announcement to the Market

Key Information

30 June 2019

30 June 2018

Up / (down)

% Increase/

$'000

$'000

$'000

(decrease)

Revenues from contracts with customers

1,509,824

1,540,433

(30,609)

(2)%

SPACE

Earnings before Interest, Tax, Depreciation & Amortisation

(EBITDA)

730,262

795,083

(64,821)

(8)%

SPACE

Statutory profit before income tax

314,826

338,934

(24,108)

(7)%

SPACE

Profit from ordinary activities after income tax attributable to

the members

218,188

263,388

(45,200)

(17)%

Dividend Information

Amount

Franked amount

per share

per share

Cents

Cents

Final dividend for the year ended 30 June 2019

Dividend to be paid on 27 September 2019

6.0

6.0

Space

Interim dividend for the year ended 30 June 2019

Dividend fully paid on 30 March 2019

3.5

3.5

Space

Final dividend for the year ended 30 June 2018

Dividend fully paid on 29 September 2018

4.0

4.0

Net Tangible Assets

30 June 2019

30 June 2018

$

$

Net tangible assets per share

1.45

1.35

Earnings Per Share

30 June 2019

30 June 2018

Cents

Cents

Basic earnings per share

12.86

15.57

Diluted earnings per share

12.78

15.51

Additional Appendix 4E disclosure requirements can be found in the notes to these financial statements and the Directors' Report attached thereto. This report is based on the consolidated financial statements which have been audited by PricewaterhouseCoopers.

Evolution Mining Limited

Directors' Report

30 June 2019

Directors' Report

The Directors present their report together with the consolidated financial report of the Evolution Mining Limited Group, consisting of Evolution Mining Limited ("the Company") and the entities it controlled at the end of, or during, the year ended 30 June 2019.

Directors

The Directors of Evolution Mining Limited during the year ended 30 June 2019 and up to the date of this report are set out below. All Directors held their position as a Director throughout the entire year and up to the date of this report unless otherwise stated.

Jacob (Jake) Klein

Executive Chairman

Lawrence (Lawrie) Conway

Finance Director and Chief Financial Officer

Thomas (Tommy) McKeith (i)

Lead Independent Director

James (Jim) Askew

Non-Executive Director

Graham Freestone

Non-Executive Director

Andrea Hall

Non-Executive Director

Colin (Cobb) Johnstone (i)

Non-Executive Director

Naguib Sawiris (ii)

Non-Executive Director

Sebastien de Montessus (ii)

Non-Executive Director

Andrew Wray (iii)

Alternate Non-Executive Director for Naguib Sawiris and Sebastien de Montessus

  1. Appointed as Lead Independent Director replacing Colin (Cobb) Johnstone effective 1 December 2018.
  2. Resigned as Non-Executive Director effective 1 August 2018.
  3. Resigned as Alternate Non-Executive Director effective 1 August 2018.

Company Secretary

The name of the Company Secretary during the full year ended 30 June 2019 and up to the date of this report is as follows:

Evan Elstein

Principal activities

The principal activities of the Group during the year were exploration, mine development, mine operations and the sale of gold and gold/copper concentrate in Australia. There were no significant changes to these activities during the year.

Key highlights for the year

Key highlights for the year ended 30 June 2019 include:

  • Driving a safety culture where our people do the right thing because they want to, not because they have to underpins our safety programs. Disappointingly our total recordable injury frequency (TRIF) for the year was 8.3 (30 June 2018: 5.5). Investigations showed an increase in minor injuries with a need to increase focus on promoting mindfulness and pre-task risk identification. Safety programs included HSE Systems and Critical Control verification audits. The focus continues to be on improving Evolution's safety culture and embedding adequate management of critical controls associated with high risks across all sites.
  • The Group published it's inaugural Sustainability Report during the year.
  • The Group recorded a statutory net profit after tax of $218.2 million for the year, a decrease of 17% on the prior year. Underlying profit after tax decreased by 13% to $218.2 million (30 June 2018: $250.8 million).
  • The Group's continuing focus on productivity improvements and cost efficiencies delivered another year of strong results including:
    • Total gold production of 753,001oz which was above the midpoint of guidance for the year of 720,000oz - 770,000oz.
    • Operating mine cash flow of $771.5 million.
    • Net mine cash flow of $497.8 million, with all operations delivering positive cash flow generation after meeting their operating and capital needs.
    • Evolution continued investing for extensions of mine life and production growth, including the approval of major development projects and exploration drilling at Cowal, and development of an underground mine and plant upgrade at Mt Carlton.
    • Evolution moved into a net cash position during the year and as at 30 June 2019 the net cash position was $35.2 million (30 June 2018: net bank debt of $71.8 million).
    • A total of $127.0 million (30 June 2018: $109.9 million) in fully franked dividends was paid during the year. A final dividend of 6 cents per share fully franked ($101.8 million) was declared and will be paid on 27 September 2019.
    • During the year, the Group made $95.0 million of repayments on the Senior Secured Term Loan ("Facility D"). The $350.0 million Senior Secured Revolving Loan ("Facility A") remains undrawn at 30 June 2019.

1

Evolution Mining Limited Directors' Report

30 June 2019 (continued)

Key highlights for the year (continued)

  • During the year, the Group hedged a further 300,000oz of production at an average price of A$1,871/oz for quarterly deliveries between July 2020 and June 2023. The additional hedging provides support to the balance sheet during a period of major capital investment while leaving the majority of production unhedged. The proportion of expected production hedged is 13-15% per annum through until 30 June 2023.
  • In August 2018, La Mancha Group International B.V. (La Mancha) Group sold a portion of their shareholding in the Group, taking their total holding down to 9.6%. In line with the terms of the Share Sale Agreement signed between the two Companies, La Mancha's nominee Directors Mr Naguib Sawiris, Mr Sebastian de Montessus and their Alternate Director Mr Andrew Wray resigned from the Board of Directors effective 1 August 2018.
  • In September 2018, the Group entered into an earn-in joint venture agreement with Andromeda Metals Limited over the Drummond exploration project. Drummond is an early-stage gold exploration project located in northern Queensland covering roughly 520km². The project is approximately 50km southwest of the Group's Mt Carlton operation. The key terms of the agreement are as follows:
    • The Group can earn a 51% interest in the project by making a cash payment of $300,000 to Andromeda and spending $2 million on exploration over a two year period.
    • The Group can earn a further 29% (for a total of over 80%) by making an additional cash payment of $200,000 and spending $4 million on exploration over two years.
    • The Group manages and operates the joint venture while it is sole contributing and thereafter while ever it holds a majority equity.
  • In October 2018, the Board approved the Mt Carlton underground development and plant upgrade modifications at an estimated investment of $60.0 million to be incurred from FY19 to FY22. First ore from the underground is planned for FY21.
  • In October 2018, the Cowal operation was granted regulatory approval from the NSW Department of Planning and Environment to increase the plant processing rate by 31% from 7.5 million tonnes per annum (Mtpa) to 9.8Mtpa. Other key features of the modification application include the implementation of a secondary crushing circuit at the processing plant and the development of an Integrated Waste Landform (IWL) to facilitate storage of tailings over the life of mine. Subsequent to this regulatory approval, the Board approved the first stage upgrade to the Cowal processing plant in November 2018. The first stage of the project will take the processing capacity to at least 8.7Mtpa at an estimated capital investment of $25.0 to $30.0 million.
  • In October 2018, regulatory approval to commence the development of the Galway-Regal-E46 (GRE46) exploration decline at Cowal was received. The decline will allow the Group to conduct further resource definition and discovery drilling at GRE46 as well as further drilling to delineate the Dalwhinnie Lode. Drilling success has been reported at both GRE46 and Dalwhinnie as at 30 June 2019.
  • During December 2018, the Group agreed to subscribe for a further 3.2 million shares in Riversgold Ltd, taking the Company's shareholding to 15.7 million shares and a total of 18.7% of the outstanding shares in Riversgold Ltd.
  • In February 2019, the Group acquired 11.05 million shares, representing a 19.9% shareholding, in Tribune Resources Limited for a cash consideration of $41.3 million. Tribune's major asset is it's interest in the East Kundana mining operation which is a joint venture between Northern Star Resources Limited (51% and operator), Rand Mining Limited (12.25%) and Tribune (36.75%). The East Kundana Joint Venture (EKJV) tenements are adjacent to the Group's 1.7 million tonnes per annum Mungari processing plant, which is located approximately 20km west of Kalgoorlie in Western Australia.
  • In April 2019, the Group entered into an earn-in joint venture agreement with Enterprise Metals Limited (Enterprise) over the Murchison exploration project. Murchison is a large, early-stage gold exploration project covering ~750km2 in the Murchison region of central Western Australia. The Group can earn an 80% interest in the Murchison project by:
    • Spending $6.0 million on exploration over a four-year period.
    • Making an initial cash payment to Enterprise of $150,000 on signing of the agreement.
    • Making an additional cash payment to Enterprise of $150,000 should the agreement remain in place after two years. The Group will operate the project during the earn-in period.

2

Evolution Mining Limited Directors' Report

30 June 2019 (continued)

Operating and Financial Review

Evolution is a leading, low cost Australian gold mining company. As at 30 June 2019, the Group consisted of five wholly-owned operating gold mines: Cowal in New South Wales; Cracow, Mt Carlton and Mt Rawdon in Queensland; and Mungari in Western Australia, and an economic interest in the Ernest Henry Copper-Gold Operation (100% of gold and 30% of copper and silver) in Queensland.

The Group's strategy is to deliver shareholder value through efficient gold production, growing gold reserves and developing acquiring or divesting assets to improve the quality of the portfolio. Since its formation in November 2011, the Group has built a strong reputation for operational predictability and stability through consistently delivering to guidance. A portfolio approach to production provides Evolution with a Group-wide level of operational stability and predictability without reliance on one single asset. The Group's high-performance team culture and clearly defined business plans and goals further contribute to delivering reliable and consistent results.

To build a sustainable business, the Group maintains a strong commitment to growth through exploration and a disciplined approach to business development through opportunistic, logical, value-accretive acquisitions and divestments.

Profit Overview

The Group achieved a statutory net profit after tax of $218.2 million for the year ended 30 June 2019 (30 June 2018: $263.4 million). The following graph shows the movements in the Group's statutory profit after tax for the year ended 30 June 2018 to the year ended 30 June 2019.

Gold revenue was $31.9 million higher driven by higher gold prices this was partially offset by $25.3 million lower by-product revenue as a result of lower copper and silver prices and volumes. FY18 included a loss of $3.7 million at Edna May which was sold in October 2017.

Mine operating costs excluding Edna May and inventory movements were higher than FY18 by $43.4 million. Lower capitalisation of mine costs in the financial year mainly for the completion of the White Foil cutback at Mungari during FY18 contributed to $27.8 million of higher mine operating costs being expensed in FY19 with the remainder of the increase driven by a mix of input prices and activities. Higher power prices contributed an additional $7.5 million to power costs, mainly at Cowal, due to the full year impact in FY19 of higher priced contracts that were effective from 1 January 2018. Oil price increases resulted in $6.6 million of higher diesel costs while labour costs moved approximately 3% higher than FY18.

Inventory movements resulted in an additional charge to costs in FY19 of $21.6 million driven by utilisation of ore stockpiles at Mt Rawdon resulting in an $5.3 million FY19 expense compared to a credit to costs of $23.8 million in FY18 where ore stockpiles increased. Inventory movements at other sites partially offset the impact at Mt Rawdon with a net credit to operating costs in FY19 of $7.5 million.

Lower depreciation and amortisation expense reflects the higher reserves in the 2018 Mineral Resource and Ore Statement issued in April 2019 over which assets are to be depreciated and fair value at Cowal and Mungari are to be amortised.

Tax expense for the current year is higher with the prior year reduced by the recognition of tax losses and temporary differences including $22.7 million as a consequence of an independent valuation of the Cowal open pit and Mungari open pit and underground that was completed during the prior year.

The Group achieved an underlying net profit after tax of $218.2 million for the year ended 30 June 2019 (30 June 2018: $250.8 million). The table below shows a reconciliation of statutory profit/(loss) before tax to the underlying profit after tax.

3

Evolution Mining Limited Directors' Report

30 June 2019 (continued)

Operating and Financial Review (continued)

Profit Overview (continued)

2019

2018

$'000

$'000

Statutory profit before income tax

314,826

338,934

Fair value gain

-

(3,142)

Transaction and integration costs

-

(866)

Underlying profit before income tax

314,826

334,926

Income tax expense

(96,638)

(75,546)

Tax benefit on sale of subsidiary

-

4,165

Tax effect of adjustments

-

1,201

Recognition of previously unrecognised tax losses

-

(4,544)

Recognition of previously unrecognised temporary differences

-

(9,440)

Underlying profit after income tax

218,188

250,762

Cash Flow

Operating mine cash flow decreased by 5% totalling $771.5 million (30 June 2018: $811.8 million). Total capital expenditure totalled $273.6 million which included $93.2 million of sustaining capital expenditure and $180.4 million of major capital expenditure.

Key Results

The consolidated operating and financial results for the current and prior year are summarised below. All $ figures refer to Australian thousand dollars (A$'000) unless otherwise stated.

Key Business Metrics

30 June 2019

30 June 2018

% Change (ii)

Total underground ore mined (kt)

7,680

7,817

(2)%

Total underground lateral development (m)

14,538

13,640

7%

Total open pit ore mined (kt)

11,703

14,453

(19)%

Total open pit waste mined (kt)

37,501

40,984

(8)%

Processed tonnes (kt)

21,050

21,425

(2)%

Gold grade processed (g/t)

1.32

1.37

(4)%

Gold production (oz)

753,001

801,187

(6)%

Silver production (oz)

709,497

989,253

(28)%

Copper production (t)

21,846

23,268

(6)%

Unit cash operating cost (A$/oz) (i)

627

512

(22)%

All in sustaining cost (A$/oz) (i)

924

797

(16)%

All in cost (A$/oz) (i)

1,215

1,033

(18)%

Gold price achieved (A$/oz)

1,760

1,645

7%

Silver price achieved (A$/oz)

21

22

(5)%

Copper price achieved (A$/t)

8,587

8,923

(4)%

Total Revenue

1,509,824

1,540,433

(2)%

Cost of sales (excluding D&A and fair value adjustments (i)

(735,971)

(705,553)

(4)%

Corporate, admin, exploration and other costs (excluding D&A)

(43,591)

(39,797)

(10)%

EBIT (i)

330,304

360,380

(8)%

EBITDA (i)

730,262

795,083

(8)%

Statutory profit/(loss) after income tax

218,188

263,388

(17)%

Underlying profit after income tax

218,188

250,762

(13)%

Operating mine cash flow

771,461

811,766

(5)%

Capital expenditure

(273,636)

(271,870)

(1)%

Net mine cash flow

497,825

539,896

(8)%

  1. EBITDA, EBIT, Unit cash operating cost, All-in Sustaining Cost (AISC), and All-in Cost (AIC) are non-IFRS financial information and are not subject to audit.
  2. Percentage change represents positive/(negative) impact on the business.
  3. Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely the cost of Ernest Henry's operation.

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Evolution Mining Limited published this content on 15 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2019 00:21:06 UTC

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EBIT 2020 548 M
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Technical analysis trends EVOLUTION MINING LTD
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
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Mean consensus UNDERPERFORM
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Spread / Lowest Target -48,8%
EPS Revisions
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NameTitle
Jacob Klein Executive Chairman
Robert Fulker Chief Operating Officer
Lawrie Conway CFO, Finance Director & Executive Director
Evan Elstein Secretary, Vice President-IT & Community Relations
James Edward Askew Non-Executive Director
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