The Evolution Mining Ltd (ASX: EVN) share price is surging in mid-morning trade following the release of its quarterly results.
At the time of writing, the Evolution share price is punching higher since the opening bell, up 4.15% to $6.14.
The Australian mining and exploration company owns and operates five gold and silver mines in New South Wales, Queensland and Western Australia. Let’s see how it performed for the first quarter of FY21.
Quarter results for FY21
Evolution reported a strong quarterly result for the period ending September 30. The company achieved a gold production of 170,021 ounces, with an all-in sustaining cost (ASIC) of $1,198 per ounce. Before C1 cash costs, royalties, general corporate and administration expenses, all-in cost stood at $1,663 per ounce.
Operating mine cash flow came in at $272.3 million, and a net mine cash flow of $183.4 million.
Evolution advised net bank debt of $180.3 million, a decrease of the $196.4 million reached at the end of June.
The gold miner announced it was tracking ahead of its FY21, and hit a major milestone for the Cowan underground mine development. Evolution submitted a significant state development (SSD) application and modification 16 development application to the New South Wales Department of Planning, Industry and Environment. An environmental impact study will form part of the SSD.
Evolution is forecasting FY21 gold production of between 670,000 – 730,000 ounces, of an ASIC of $1,240–$1,300 per ounce.
What did the CEO say?
Evolution executive chair Jake Klein said it was great to start the new financial year with continued positive momentum. He added:
Our operations are performing well and it is pleasing to be ahead of where we had planned to be at the end of the first quarter. Most importantly, the business continues to generate sector leading cash flow per ounce and our balance sheet remains strong with net debt reducing even after rewarding shareholders with their 15th consecutive dividend of A$153.8 million.
Mr Klein also spoke about the company’s future plans:
The submission for approval of the Cowal underground mine is another important step towards achieving our objective of producing 350,000 ounces per annum of low-cost gold from this cornerstone operation.
Is the Evolution share price in the buy zone?
I think that a little bit of gold exposure is good for every portfolio. This is where established gold miners like Newcrest Mining Limited (ASX: NCM) or Northern Star Resources Limited (ASX: NST) have a little advantage.
As attractive Evolution’s opportunities may seem, I will be watching its developments from the side lines for now.
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Returns as of 27th November
Motley Fool contributor Aaron Teboneras 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.
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