PERTH (miningweekly.com) – Australian gold producer Evolution Mining has more than doubled its underlying net profit for the financial year ended June, as the company’s focus on cost reduction and improved efficiencies paid off.
Underlying net profit for the year reached a record A$106.1-million, compared with the A$50-million reported the year before, while earnings before interest, taxes, depreciation and amortisation increased by 28% to A$266.4-million.
Evolution executive chairperson Jake Klein said on a conference call on Thursday that these results were reflective of the journey Evolution had been on in the last four years.
“We started this journey with assets that were perceived as high cost, with limited mine lives. By acting like owners and focusing on costs and efficiency gains, we have materially improved these assets. Put simply, this year, these results show that we were able to produce more gold from these same assets at significantly lower cost, while also selling each ounce at a higher amount.”
Evolution reported record gold production of 437 570 oz for the year, as well as record low group average cash costs of A$711/oz and all-in sustaining costs of A$1 036/oz, which compared with the A$1 083/oz reported last year.
Operating costs decreased by 9%, to A$360.5-million, with Evolution noting that this lower cost level was sustainable going forward, owing to strong cost control at all operations. The transition to an owner-miner model at the Mt Rawdon mine in July 2014 and the more recent transition of the Mt Carlton mine had been a driving force behind the reduction in operating costs.
Sales revenue for the full year increased by 5% to A$666-million, driven by an 11% increase in gold volumes sold to 426 562 oz.
Looking ahead, Evolution was forecasting group gold production of between 730 000 oz and 810 000 oz for the 2016 financial year, as the newly acquired La Mancha assets were expected to add to production in the new year.
The La Mancha assets included the high-grade Frog’s Leg underground mine and the adjacent White Foil openpit mine, in Western Australia, as well as the recently completed 1.5-million-tonne-a-year Mungari carbon-in-leach processing plant.
Evolution had also acquired the Cowal gold project in July, where an ore reserve estimate of 72.58-million tonnes, grading 0.93 g/t gold for 2.18-million ounces of contained gold, had been defined.
Further, the miner flagged a takeover offer for fellow-listed Phoenix Gold, which had assets adjacent to the La Mancha assets.
“We look forward to the next exciting phase in Evolution’s growth as we now turn our focus towards the successful integration of Cowal and Mungari, while maintaining our high standards across all of our sites,” Klein said.