Photo by: Bloomberg
PERTH (miningweekly.com) – Midtier gold miner Evolution Mining on Friday reported a 13% decline in net profits for the interim period ending December, as the miner faced a falling gold price.
During the six months under review, net profits decreased to A$35.4-million, while earnings before interest, tax, depreciation and amortisation fell by 18%, to A$110.8-million, compared with the previous corresponding period.
Executive chairperson Jake Klein pointed out that the company had been faced with an 11% decline in average realised gold price during the period, which reached A$1 444/oz, while the price for silver also declined by 26%, to A$22.49/oz.
Sales revenue for the interim period reached A$320.9-million, which was in line with the previous corresponding period, as lower revenue was offset by a 9% increase in gold production, owing to the successful ramp-up of the Mt Carlton mine.
The company was also protected from the full impact of the falling gold price by securing additional high-priced gold hedging during the period, taking total cover to 205 559 oz, at an average gold price of A$1 593/oz.
“Evolution has continued to demonstrate its ability to deliver solid, predictable operating performance and positive cash flow in a lower gold price environment,” Klein said on Friday.
During the interim period, Evolution sold some 193 456 oz of gold and more than 1.3-million ounces of silver.
Meanwhile, average cash costs increased to $766/oz during the interim period, a 2% increase on the previous corresponding period.
Klein said that the company had initiated a group-wide focus on cost reduction, capital discipline and productivity improvements to combat the lower gold price, with capital expenditure declining 57% on the previous corresponding period, with the completion of the Mt Carlton construction the biggest contributor to this.