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PowerPoint Presentation
Quarterly Results
September 2015
DISCLAIMER
Forward looking statements
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These materials prepared by Evolution Mining Limited (or 'the Company') include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'continue', and 'guidance', or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.
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Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.
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Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control.
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Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
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September 2015 quarter highlights
Addition of Cowal and Mungari significantly increases production at substantially lower average cost
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Transformational quarter - record quarterly Group gold production of 174,169 ounces (attributable) achieved at
an average C1 cash cost of A$631 per ounce (US$458/oz)1 and AISC2 of A$882 per ounce (US$640/oz)
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Standout performance from Cowal with 46,419 ounces (attributable) from 69 days of ownership at a C1 cash cost of A$415/oz (US$301/oz) and AISC of A$524/oz (US$380/oz). Strong cash generation from Mungari with net mine cash flow of A$19.0 million from just 37 days of ownership
Strong financial position
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Record quarter net mine cash flow of A$105.0 million - an increase of 154% quarter on quarter
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Early repayment of A$77.0 million into the Senior Secured Revolving Syndicated Facility reduced Group debt to A$530.0 million and net debt to A$481.8 million - gearing falls to a manageable 23% as at 30 September 2015
Increasing mineral inventory
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Cowal Ore Reserve estimate increased by 40% to 2.18 million ounces gold3 and Mineral Resource estimate increased by 48% to 5.09 million ounces gold3 inclusive of Ore Reserves
Discovery success
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Mauretania gold and copper discovery at Tennant Creek JV with Emmerson Resources (ASX:ERM): 30m grading 3.22g/t gold from 57m and 24m grading 1.07% copper from 78m in maiden drill program
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Broad, high-grade intersections returned at Cowal from resource definition drilling at Regal and Galway including: 73m (25m4) grading 4.79g/t gold from 207m (E46D3238), and 50m (17m4) grading 5.28g/t gold from 90m (1535DD24)
Growing asset portfolio
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Unconditional takeover bid for Phoenix Gold (ASX:PXG) - Evolution currently owns and has received acceptances for 29.15%
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All US dollar prices in this report have been calculated using the average AUD:USD exchange rate for the Sep 2015 quarter of US$0.726
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AISC (All-in sustaining cost) includes C1 cash cost, plus royalty expense, sustaining capital expense, general corporate and administration. Calculated on per ounce sold basis
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Full details of the Cowal Mineral Resource and Ore Reserve estimates are provided in the report entitled 'Resources and Reserves increased at Cowal' released on 26 August 2015 and is available to view on www.evolutionmining.com.au 3
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Reported intervals are down hole widths as true widths are not currently known. An estimated true width (ETW) is provided
September quarter summary
Units
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Dec quarter
FY15
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Mar quarter
FY15
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Jun quarter
FY15
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Sep quarter
FY16
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Gold produced
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oz
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113,280
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103,305
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113,821
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174,169
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By-product silver produced
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oz
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122,641
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115,832
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111,580
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170,202
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C1 cash cost1
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A$/oz
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692
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736
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690
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631
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All-in sustaining cost2
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A$/oz
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990
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1,024
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1,048
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882
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All-in Cost3
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A$/oz
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1,240
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1,269
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1,318
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1,015
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Gold sold
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oz
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117,359
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103,211
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111,783
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179,256
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Achieved gold price
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A$/oz
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1,428
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1,562
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1,533
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1,559
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Silver sold
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oz
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130,315
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110,659
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112,681
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178,432
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Achieved silver price
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A$/oz
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8
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22
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21
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20
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Before royalties and after by-product credits
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Includes C1 cash cost, plus royalty expense, plus sustaining capital, plus general corporate and administration expense. Calculated on per ounce sold basis following transition to 'All-in' cost metric calculation to World Gold Council standards in FY16. Previously reported on a per ounce produced basis. Prior periods have not been restated
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Includes AISC plus growth (major project) capital and discovery expenditure. Calculated on per ounce sold basis following transition to 'All-in' cost metric calculation to World Gold Council standards in FY16. Previously reported on a per ounce produced basis. Prior periods have not been restated
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Improved scale and asset quality
September quarter production ounces
Group C1 costs, AISC1 & net mine cash flow
Cracow Pajingo
Mt Rawdon
19,090
23,890
14,290
9901,024
1,048
882
Edna May Mt Carlton Cowal
46,419
24,213
28,498
17,769
736
692 691
39.9 39.4 41.4
631
105.0
Mungari
FY15 Q2 FY15 Q3 FY15 Q4 FY16 Q1
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Includes C1 cash cost, plus royalty expense, plus sustaining capital, plus general corporate and administration expense. Calculated on per ounce sold basis following transition to 'All-in' cost metric calculation to World Gold Council standards in FY16. Previously reported on a per ounce produced basis. Prior periods have not been restated
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Operations
Cowal
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Standout performance with attributable gold production of 46,419oz (69 days of Evolution ownership) at C1 cash cost of A$415/oz and AISC of A$524/oz
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Costs substantially lower than
planned due:
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Net mine cash flow of A$38.9 million
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Cost guidance to be reviewed in January following a full quarter of ownership
Production drilling at Cracow
Cowal processing plant
Cowal open pit October 2015: Stage g cutback looking west
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Mungari
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Gold production of 19,090oz attributable (37 days of Evolution ownership) at C1 cash cost of A$690/oz; AISC of A$968/oz
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Net mine cash flow of A$19.0 million
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Plant performing at 1.7Mtpa - above nameplate capacity (1.5Mtpa) and at 97.6% utilisation
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Focus on asset integration and implementation of opportunities to unlock value
Stage 2B cutback Stage 2A working floor
Stage 1 pit and sump
Mungari open pit (White Foil) October 2015 looking south to Stage 2 cutback
First gold pour under Evolution ownership at Mungari
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Cracow
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September 2015 quarter gold production of 23,890oz at C1 cash cost of A$669/oz and AISC of A$940/oz
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Continuing to improve on FY15 initiatives around scheduling, dilution management and metallurgical recovery
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Focus on production drilling to
improve stoping flexibility in FY16
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Increased productivity achieved across production drills
Development drilling at Cracow
834
50, 000
670
636669
900
600
27,868oz
25, 000
23,280oz
20,112oz
23,890oz
300
0 0
Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16
Production gold (oz) C1 Cash Cost (A$/oz)
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Edna May
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September quarter gold production of 17,769oz at C1 cash cost of A$1,315/oz; AISC of A$1,328/oz
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Unit costs increased due to lower production as a result of lower grade
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Operating costs increased due to classification of stripping activities as operating waste
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High plant utilisation (94.8%) resulted
in record quarterly throughput
Stage 2
Edna May Stage 2 northern cutback looking north west October 2015
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December quarter focus on Stage 2 capital waste removal to access higher-grade ore
50,000
535663
947
1,315
1,300
1,000
700
29,906oz
400
25,000
25,267oz
22,283oz
17,769oz
100
-200
0
Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16
Production gold (oz) C1 Cash Cost (A$/oz)
-500
10
Pajingo
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September quarter production of 14,290oz at C1 costs of A$941/oz; AISC of A$1,284/oz
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Higher costs due to the mining of lower grade areas in line with mine plan
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Net mine cash flow of A$4.7 million
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Total milling costs decreased through cost reduction initiatives
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Historic low grade stockpile being processed and achieving above plan grades
Jumbo in operation at Pajingo
853
758
842
941
900
25, 000
600
14,118oz
18,151oz
15,583oz
14,290oz
300
0 0
Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16
Production gold (oz) C1 Cash Cost (A$/oz)
11
Mt Rawdon
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September quarter production of 28,498oz at C1 cash of A$441/oz and AISC of A$700/oz
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Ongoing improvement initiatives around grinding and cyanide consumption delivered a 6% saving in unit processing costs
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Unit mining costs reduced to A$2.63/t - a 23% improvement over the past 12 months (FY15: A$3.41/t) due to:
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Continued improvement in
Mt Rawdon open pit October 2015 looking north to Stage 4 cutback - north and west walls currently being stripped
900
698 680
mining productivity
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Low fuel prices
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Production drilling improvements
50, 000
25, 000
564
441
600
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Shorter haulage distances to the western waste dump from Stage 4 cutback
27,066oz
21,315oz
27,242oz
28,498oz
0
Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16
300
0
Production gold (oz) C1 Cash Cost (A$/oz)
12
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