2021 was a bumper financial year for the mining company…
The post Evolution Mining (ASX:EVN) share price gains on record profit appeared first on The Motley Fool Australia. –
Right now, the Evolution share price is $4.05, 2.53% higher than its previous close.
Evolution share price jumps on $345 million statutory NPAT
Here’s how Evolution performed during FY21:
Record statutory net profit after tax (NPAT) of $345.3 million – up 14%
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) of A$914.2 million, down 11% on that of FY20
Revenue decreased by 4% to around $1.86 billion
5-cent final dividend
The period saw an increased achieved gold price of $2,369 per ounce. However, that was partially offset by a decrease in production for the year.
Evolution produced 680,788 ounces of gold in FY21, 8% less than it did in FY20.
Additionally, the company achieved all-in sustaining costs of $1,215 per ounce, which it says is sector-leading among global gold producers.
Of the company’s approximate $1.86 billion of revenue, around $1.60 billion came from gold, $236.9 million from copper, and $22.1 million from silver.
The 5-cent final dividend brings Evolution shareholders’ total FY21 dividends to 12 cents per share. That’s 23.5% more than FY20’s total dividends.
Evolution ended the period with $160.1 million of cash and $620 million worth of debt.
What happened in FY21 for Evolution Mining?
It’s been a big financial year for Evolution Mining and its share price.
The company acquired Canadian gold producer Battle North Gold Corp in May. Evolution also acquired the Crush Creek Project, located near its Mt Carlton operation in Queensland.
The company committed to transition to net-zero scope 1 and 2 greenhouse gas emissions by 2050, and to reduce its greenhouse gas emissions by 30% by 2030.
Evolution also released its maiden mineral resource estimate for its Red Lake Project during FY21.
Finally, it successfully completed a number of drilling programs at Mt Carlton.
COVID-19 had no material impact on Evolution’s operations.
What did management say?
Evolution’s executive chair Jake Klein commented on the results driving the company’s share price today. He said:
I am proud of Evolution’s achievements during FY21 amid the challenging backdrop of the COVID-19 pandemic. Our teams have risen to the challenge to deliver a record net profit and maintain our sector leading margins.
The fully franked final dividend of 5 cents per share is our 17th consecutive dividend, with $943 million in dividends paid to shareholders since our maiden dividend in 2013.
We continued to upgrade the quality of the portfolio with our commitment to develop the Cowal Underground mine, and district consolidations completed at both Red Lake and Mungari to further enhance those cornerstone operations.
What’s next for Evolution Mining?
Here’s what may drive the Evolution share price during the current financial year:
Evolution estimates its production for FY22 will increase to between 700,000 and 760,000 ounces.
It also expects its production will be between 815,000 and 875,000 ounces in FY23, and between 940,000 and 1,010,000 ounces in FY24.
The company plans to invest between $125 million and $155 million into sustaining capital in FY22. The majority of the capital will be directed to Cowal and Red Lake and be put towards equipment and infrastructure.
Major capital in FY22 is anticipated to be in the range of $440 million to $510 million, with more than half associated with expanding, developing, and exploring Cowal.
Additionally, Evolution plans to invest major capital into Red Lake, developing mining areas in its Upper Campbell and McFinley deposits.
Finally, major capital for the Campbell mill and Bateman mill will up their processing capacity by more than 2 million tonnes per annum, and put them on the path to surpassing 350,000 ounces of production in FY26.
Evolution share price snapshot
It’s been a tough slog for the Evolution share price.
Right now, it’s 23% less than it was at the start of 2021. It has also fallen 33% since this time last year.
Should you invest $1,000 in Evolution Mining right now?
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Motley Fool contributor Brooke Cooper 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.