Evolution Mining share price rockets 10% on strong quarterly update

This mining stock is glittering like gold on the market today.

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The Evolution Mining Ltd (ASX: EVN) share price is catching the eye on Wednesday.

In morning trade, the gold miner's shares are currently up almost 10% to a 52-week high of $4.24.

Why is the Evolution Mining share price charging higher today?

Investors have been buying the company's shares this morning in response to the release of its quarterly update.

According to the release, Evolution Mining delivered a 15% increase in gold production during the third quarter to 185,252 ounces of gold.

Also going down well with investors is news that this increased production was achieved with a 9.6% lower all-in sustaining cost (AISC) of A$1,464 per ounce (US$963 per ounce).

With the gold price hurtling higher during the quarter, it certainly was a great time to deliver higher production and lower costs.

For example, Evolution Mining's average realised price was A$3,171 for the three months. This led to the company recording an all-in cost margin of A$947 per ounce, which represents a sizeable 40% increase quarter on quarter.

This goes some way to explaining why the Evolution Mining share price is charging higher today.

What drove the strong quarter?

Management advised that its strong quarter was driven by all operations delivering materially to plan. This includes the successful planned major shutdowns at Cowal and Ernest Henry.

In addition, it highlights that the Cowal underground mine transitioned to commercial production at the end of the quarter. Pleasingly, it achieved a 1.5 million tonne annualised mining rate in the month of March, which bodes well for the current quarter.

The gold miner's managing director and chief executive officer, Lawrie Conway, was pleased with the quarter. He said:

We continue to see increased cash generation with the cash balance up 13% to $215 million and gearing improving to 28%. Our portfolio is well positioned to benefit from high spot gold and copper prices with 95% of gold production unhedged and no copper hedging. Several milestones were achieved with Ernest Henry now fully repaid, Northparkes significant inaugural quarterly cash flow and the Cowal underground reaching commercial production, transforming the Cowal operation.

Guidance unchanged

There has been no change to the company's FY 2024 guidance.

It continues to expect gold production to be in the region of 749,000 ounces and its AISC to be around A$1,410 per ounce. Copper production is tracking towards 65,000 tonnes.

This latest gain means that the Evolution Mining share price is now up 26% since this time last month.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

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