The Motley Fool

Evolution share price lower despite increased scale of opportunity

The Evolution Mining Ltd (ASX: EVN) share price is down 2.5% today despite reporting a record cash flow in the June quarter. The gold miner produced 218,104 ounces (oz) of gold across its mines during the quarter leading to full year production of 746,463 oz. 

About Evolution Mining

Evolution Mining is an Australian gold producer operating five wholly owned mines. Four gold mines are located in Australia across Queensland, Western Australia, and New South Wales. The Red Lake mine is located in Canada. Evolution Mining also has an interest in a copper-gold mine in Queensland. 

What did Evolution Mining announce? 

Evolution Mining released its June quarterly results this morning which showed production of 218,104 oz of gold for the quarter. The company sold 218,685 oz of gold at an average price of $2,500 per oz during the quarter. The company also produced 233,252 oz of silver in 4Q FY20 and 6,684 tonnes of copper. FY20 gold production was 746,463 oz at an all-in sustaining cost of $1,043 per oz, above guidance of 715,000 oz. 

In the June quarter, mine operating cash flow increased 39% quarter-on-quarter to $352 million, while free cash flow increased 69% to $188 million. Over FY20, mine operating cash flow increased 45% year-on-year to $1,121 million and free cash flow increased 86% to $524 million. Cash in the bank increased by $205 million during the June quarter to $374 million. Net bank debt decreased to $196 million. 

How has the Evolution share price been performing? 

The Evolution share price is up 67% over 2020 and 87% from its March low. The rising share price has been aided by the increasing price of gold. The gold price has increased from around $2200 per ounce in January to closer to $2600 per ounce now. Other gold miners have seen similar share price rises as a result. The Silver Lake Resources Limited (ASX: SLR) share price is up 92% over 2020 and the Saracen Mineral Holdings Limited (ASX: SAR) share price is up 86%. 

What’s next for the Evolution share price? 

Evolution Mining is progressing the transformation of the Red Lake mine, with progress ahead of schedule. The company has advised that the scale of opportunity at Red Lake is far greater than expected. The group has an average reserve life of over 10 years and had exploration success in FY20 at a number of sites. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Related Articles...

Kate O'Brien