JOHANNESBURG (miningweekly.com) – Australia’s second-largest gold producer, Evolution Mining, on Tuesday announced that it would double its dividend payout on a strong long-term outlook.

From the end of the 2016 financial year, the payout rate would double to 4% of revenue, which the company said compared well with midtier miners’ payout rate.

The company, which owns and operates seven gold mines in Queensland, New South Wales and Western Australia, also outlined a three-year production plan, which showed an upward trajectory for production and a downward trajectory for costs.

Evolution said it expected its 2016 financial year production to hit the 800 000 oz mark – in line with its guidance – at a C1 unit cost of A$740/oz and an all-in sustaining cost (AISC) of A$1 000/oz.

The 2016 production would generate about A$405-million in net cash flow after sustaining and major capital expenditure, reported Evolution executive chairperson Jake Klein.

Evolution forecast group production of 800 000 oz to 860 000 oz in the 2017 financial year, with C1 cash costs estimated to be between A$685/oz and A$745/oz and AISC between A$985/oz and A$1 045/oz.

Sustaining capital expenditure (capex) would be in the range of A$90-million to A$120-million in the 2017 financial year, with the majority of the expenditure related to resource definition drilling and tailings facilities. The Cowal mine, located on the traditional lands of the Wiradjuri People in New South Wales, would receive the largest proportion of the sustaining capex.

Evolution would spend between A$110-million and A$140-million on major capital investments and would spend between A$25-million and A$30-million on exploration expenditure.

“Evolution is now firmly in the lowest cost quartile of global gold producers. With production expected to increase in the 2017 financial year, we are looking forward to an even better year ahead,” Klein said.

The company maintained its production outlook for the 2018 financial year in the 800 000 oz to 860 000 oz range, but its AISC was forecast to decrease to between A$990/oz and A$930/oz.

Production could increase to 870 000 oz in the 2019 financial year (800 000 oz minimum guidance), while AISC would further decrease to between A$980/oz and A$910/oz.