The Australian share market is rocketing higher today, but the same cannot be said for gold miner EVOLUTION FPO (ASX: EVN).
The miner’s shares fell 8.5% (compared to a 1.5% lift for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO)) despite it reporting a remarkable 112% increase in underlying net profit to $106.1 million for the year ended 30 June 2015, and a 5% lift in revenue to $666 million.
This was the result of the company’s strong focus on cost-cutting and the falling Australian dollar (as gold is priced in US dollars, this is beneficial for local miners), as well as a 2% increase in production. During the year, the miner produced 437,570 ounces of the shiny metal at an all-in sustaining cost (AISC) of US $807, or AU $1,037, an ounce. This compares to the AU $941 AISC reported by Newcrest Mining Limited (ASX: NCM) for the same period.
Speaking of Newcrest Mining, today’s heavy fall for Evolution Mining can likely be attributed to Newcrest decreasing its stake in the business. A separate announcement this morning showed that Newcrest now owns just 8.1% of Evolution, down from 10.73% previously, and indicates that Newcrest is no longer keen on a potential play for its smaller rival.
At the same time, the gold price also dropped 1.2% overnight to US $1,123.81 an ounce, according to the Fairfax press, which could have an impact on the stock’s performance today.
Although gold prices have actually risen recently due to the market’s volatility, shares remain your best bet for maximising your long-term wealth. Thanks to the market’s recent crash, ASX stocks haven’t looked this appealing in years…