Evolution (ASX:EVN) share price lifts on production guidance beat

Here’s why the Evolution Mining share price is running away this morning…
The post Evolution (ASX:EVN) share price lifts on production guidance beat appeared first on The Motley Fool Australia. –

The Evolution Mining Ltd (ASX: EVN) share price is moving higher on Wednesday morning. This follows the company releasing its September quarterly report this morning.

At the time of writing, shares in the gold mining company are up 2.15% to $3.80. This incline places the S&P/ASX 200 Index (ASX: XJO) constituent 16.2% above its 52-week low.

Let’s have a look at what investors are getting excited about this morning.

Why is the Evolution Mining share price moving higher?

The market appears to be pleased by the quarterly numbers posted by Evolution Mining today. In the first quarter of FY22, gold production improved with a slightly higher achieved price. Here are some highlights from the quarterly report:

Gold production of 170,681 ounces, above the 155,000 to 167,000 previously guided
All-in sustaining costs (AISC) of A$1,413 per ounce, below the A$1,450 per ounce previously guided
Mine operating cash flow of A$193.7 million
Group cash flow of $30.2 million
Cash in the bank at the end of the quarter of $422.2 million

What happened during the quarter?

It was mostly a positive quarter for the nearly $7 billion gold mining company. During the 3-month period, Evolution achieved total group gold production of 170,681 ounces. This represents a 0.9% quarter-on-quarter lift in production output. Importantly, the production exceeded the range previously guided, giving shareholders a pleasant surprise.

Additionally, the miner managed to deliver AISC below its projections. Although, the $1,413 per ounce costs do reflect a 14% increase compared to the prior quarter. However, the stronger achieved gold price during the quarter helped partially offset the rising costs, this being a positive for the Evolution share price.

With reasonably steady gold prices and 163,046 ounces of gold sold during the first quarter, Evolution was able to pull in $193.7 million in mine operating cash flow. These funds accommodated the repayment of a $145 million drawn-down facility and a $25 million quarterly repayment. As a result, the company’s net debt finished the quarter at $467.8 million, slightly higher than the $451.2 million at the end of FY21.

Operationally, Evolution progressed the development of the Cowal underground mine, with several key milestones being achieved. Meanwhile, at Red Lake, underground development increased a further 28% to 3,132 metres.

Other milestone moments during the first quarter included the completion of the Kundana mine and Carbine project acquisition. This project, including multiple joint ventures with Northern Star Resources Ltd (ASX: NST), came to a total consideration of $400 million.

Looking ahead

The gold mining giant did not provide any forward-looking guidance in conjunction with its quarterly report. However, Evolution Mining did highlight its continued drive to upgrade the quality of its asset portfolio.

For now, it appears the miner will have its hands full with progressing its Cowal underground development and Red Lake transformation plan. On top of this, drilling at Cue joint venture has extended the gold mineralisation footprint for over 1.6km strike length, with the release stating it is “emerging as an exciting discovery”.

Despite what it has planned ahead, the Evolution share price is down 38.5% over the past 12 months.

The post Evolution (ASX:EVN) share price lifts on production guidance beat appeared first on The Motley Fool Australia.

Should you invest $1,000 in Evolution Mining right now?

Before you consider Evolution Mining, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Evolution Mining wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

5 things to watch on the ASX 200 on Wednesday

Northern Star (ASX:NST) share price wanes as quarterly production falls

5 things to watch on the ASX 200 on Tuesday

Top brokers name 3 ASX shares to sell today

5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!