//Evolution rakes in the cash despite drop in production

Evolution rakes in the cash despite drop in production

Evolution on Thursday announced that mine operating cash flows for the quarter ended March reached A$257.4-million, while free cash flows reached A$111.5-million.

Gold production in the March quarter declined slightly from the 170 890 oz produced in the December quarter, to 165 502 oz, while silver production declined from 137 262 oz to 118 224 oz, and copper production from 5 572 t to 4 832 t. Gold sales for the March quarter was also down accordingly, from 173 408 oz to 167 374 oz.

However, Evolution noted that gold prices achieved for the quarter reached A$2 366/oz, up from the A$2 091/oz reported in the December quarter.

Gold production from the Cowal mine, in New South Wales, reached 60 554 oz, which was down from the 65 080 oz produced in the previous quarter, with Evolution telling shareholders that the planned lower production reflected the continued treatment of low-grade stockpile material, which was partially upgraded through ore sorting.

The Mungari mine, in Western Australia, contributed 32 721 oz during the quarter, down from the 32 751 oz delivered in the previous quarter, with plant throughput affected by a capital works programme aimed at achieving a sustained two-million tonne a year processing rate.

The Mt Carlton and Mt Rawdon operations, both in Queensland, delivered 13 306 oz and 16 434 oz of gold respectively, while Cracow, also in Queensland, added a further 22 227 oz, up from the 19 854 oz delivered in the December quarter.

At Ernest Henry, in Queensland, production declined from 23 080 oz to 20 261 oz, with an unplanned breakdown in the ball mill impacting production negatively.

With excess processing capacity available, the operation is planning to make up for some of the March shortfall in the June quarter.

Evolution on Thursday told shareholders that group production for the full year is expected to be around 725 000 oz, not accounting for production from the Red Lake project, in Canada.

Under the ‘locked box’ agreement with gold miner Newmont struck earlier this year, Evolution will receive A$18.8-million from Red Lake’s net cash generation in the March quarter, during April.

The mine produced 37 895 oz of gold and sold 42 141 oz during the March quarter. For the June quarter, the mine is expected to produce around 25 000 oz of gold at an all-in sustaining price of between A$2 100/oz and A$2 300/oz, as the operation focuses on implementing interim and transformation plans.

Between A$5-million and A$7-million of sustaining capital, and between A$15-million and A$17-million of major capital will be spent at the project, with a further A$3-million to A$4-million to be spent on exploration.

(miningweekly)