EVOLUTION FPO (ASX: EVN) is one of the largest ASX-listed gold miners and as volatility of world share markets starts to climb, now could be the ideal time to consider adding exposure to gold to your portfolio.
Not all gold miners are created equal however, so here are three things every investor must know before buying Evolution Mining:
1. Cost and production
Evolution ranked amongst the top three low-cost gold miners on an All-In Sustaining Costs (AISCs) basis for the most recent June quarter, with AISCs of $1,057 per ounce, just behind investor darling Northern Star Resources Ltd (ASX: NST).
This is positive for the company given the average gold price received was $1,422. Evolution has proved to be one of the more consistent gold miners and grew production by 9% in FY14 over FY13.
Stability is a rare characteristic in the gold mining industry and this makes Evolution stand out as a company to suit more risk averse investors.
2. A perfect storm for gold prices?
Currently sitting at around US$1,307 ($1,408) per ounce the coming six months could be a turning point for the price of gold as a 'safe haven'.
The precious metal historically has a positive correlation with global uncertainty and volatility and there has been a recent spike in potentially combustible events including civil war in Iraq, sanctions against Russia and the evolving threat of Ebola.
Combined with shaky share markets and the growing chorus of experienced investment voices singing a psalm of warning, gold's fortunes could be about to take a swing upwards.
3. Evolving outlook
Guidance provided by Evolution for FY15 is for similar levels of production to that of FY14; between 400,000 and 440,000 ounces of gold. Pleasingly for investors, Evolution looks set to maintain its status of low cost production, with estimated AISCs of between $1,050 and $1,130 per ounce.
If the price of gold does shoot up in the next six months, Evolution could be on track for a strong performance.
