Australian gold miner Evolution Mining on Wednesday posted a 4% drop in half-year net profit to A$96.9-million, but underlying profit increased and the company declared its twenty-second consecutive dividend.

Evolution, which owns and operates mines in Australia and Canada, reported underlying after-tax profit of A$158.1-million for the six months ended December 2023, an increase from A$103.1-million in the corresponding period.

Basic earnings were 5.23c, up from 5.50c a share.

Group cash flow totalled A$52.4-million, which is an increase of A$169.3-million on the prior period, when an outflow of A$116.9-million was reported.

“The first half of FY24 saw Evolution return to net cash generation, realising the benefit of capital invested in growth projects over the past couple of years. This will see us deliver increased cash flows in the second half of FY24, and beyond, as we deliver on our commitment to building free cash flow, deleveraging and increasing shareholder returns,” commented MD and CEO Lawrie Conway.

Based on the positive cash generation and outlook for the year, the directors declared an interim fully franked dividend of 2c a share, which is the twenty-second consecutive dividend.

Evolution produced a total of 319 377 oz at an all-in sustaining cost (AISC) of A$1 615/oz from its six operating mines, including Cowan and Northparkes in New South Wales; Ernest Henry and Mt Rawdon in Queensland; Mungari in Western Australia and Red Lake in Ontario, Canada.

The Cowal mine, which increased gold production to 139 709 oz, returned to significant cash generation during the six months, realising net mine cash flow of A$77.6-million. The underground mine at Cowal continues to ramp up and is expected to reach commercial production at the end of the March quarter, based on achieving an annualised mining rate of 1.4-million tonnes.

Ernest Henry produced 40 770 oz of gold and 26 442 t of copper at an AISC of negative A$1 851/oz, owing to higher gold sold and lower achieved copper price, which reduced the byproduct credits and resulted in higher operating costs.

Red Lake’s production fell from 61 100 oz in December 2022 to 49 292 oz in December 2023, with output impacted by materials handling constraints and a seismic-related restriction.

Evolution states that the focus at Red Lake is for the operation to become a consistent and reliable producer, as well as generating positive cash flow. Red Lake’s performance in the second half of the year is expected to improve, the company said, noting that its full-year guidance is 125 000 oz to 135 000 oz.

Production fell by nearly 19% at Mungari, with output of 56 822 oz at an AISC of A$2 623/oz in the six months.

Lower production in the half year was the result of a slower-than-planned ramp-up at the Paradigm mining centre combined with delayed face positions and available stoping fronts at Kundana mining centre. Productivity is expected to improve in the second half.

Mt Rawdown increased production to 31 772 oz at an AISC of A$2 573/oz.