Photo by: Bloomberg
PERTH (miningweekly.com) – Gold major Evolution Mining swung to a profit in the financial year ended June 30, on the back of a 9% increase in gold production and reduced capital expenditure (capex).
Evolution reported profit of A$50-million, compared with a net loss of A$307.4-million in the previous financial year. The miner said the increased profit resulted from the completion of construction at Mt Carlton, as well as improved capital budgeting discipline.
“This set of results shows the strength of the Evolution asset portfolio. All of our mines generated positive cash flow and achieved meaningful cost savings, compared to previous years,” said Evolution chairperson Jake Klein.
During the year under review, the company produced 427 703 oz of gold, which was within its guidance, generating a sales revenue of A$634.4-million, up 5% on the 2013 financial year.
Gold production was 9% higher in the year under review owing to the additional gold and silver produced from the Mt Carlton mine, in Queensland. The production growth was partly offset by lower average realised gold prices in the period, Klein pointed out.
As a result of the Mt Cartlon mine coming into production, Evolution's capex declined from the A$374.7-million in 2013, to A$154.3-million in 2014.
The ASX-listed gold miner responded to the lower gold price environment by implementing further productivity and efficiency initiatives across all of its operations and maintaining a strict discipline in relation to discretionary expenditure.
All-in sustaining costs (AISC) for the year under review reached A$1 083/oz, compared with year earlier costs of A$1 228/oz. However, total costs of sales for the period increased by 8%, to A$539.8-million, compared with the A$498.8-million reported in the previous financial year, owing to increased activity at the Mt Carlton mine following the start of commercial production.
Earnings before interest, taxes, depreciation and amortisation declined by 2%, to A$207.5-million during the full year, compared with the A$211.7-million reported in the previous financial year.
“Evolution is in a strong financial position and we are confident of achieving production and cost guidance in the coming year,” Klein added.
Group production was forecast at between 400 000 oz and 440 000 oz for 2015, at an AISC of between A$1 505/oz and A$1 130/oz. Klein pointed out that the production forecast for 2015 was similar to the production levels achieved in 2014 and reflected the steady-state production of all operations.