Evolution Mining Ltd (ASX: EVN) shares are having a very strong session.
In morning trade, the $9.6 billion ASX 200 gold stock is up 5% to a new 52-week high of $4.95.
This compares favourably to a 0.4% decline by the ASX 200 index.
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Why is this ASX 200 gold stock smashing the market?
Investors have been bidding the gold miner's shares higher this morning after responding positively to the release of its first quarter update.
For the three months ended 30 September, Evolution Mining reported gold and copper production of 193,554 ounces and 19,059 tonnes, respectively.
While the ASX 200 stock's gold production was down 8.7% from the fourth quarter of FY 2024, it was ahead of the consensus estimate of 189,000 ounces.
This was achieved with an all-in sustaining cost (AISC) of $1,569 per ounce (US$1,051 per ounce), which management notes is one of the lowest in the sector. It is also in line with the consensus AISC estimate of $1,567 per ounce.
Strong gold price delivers big margins
Evolution Mining continues to benefit from the sky-high gold price. For the first quarter, it averaged a realised price of $3,681 per ounce. This was up 4.8% from the previous quarter.
In light of its low AISC and high realised gold price, the ASX 200 gold stock reported operating mine cash flow of $429 million. This represents a 61% margin of $2,227 per ounce.
Group cash flow of $108 million resulted in a 20% increase in its cash balance to $484 million. This means that reduction in gearing has continued, with Evolution Mining ending the quarter at 23.9% with total liquidity now over $1 billion.
Commenting on the quarter, the ASX 200 gold stock's managing director and CEO, Lawrie Conway, said:
We have seen the benefits of the foundation laid during the second half of FY24 to ensure safe and reliable delivery in FY25, continuing the momentum of high margin cash flow generation. The September quarter delivered exactly that.
It is very satisfying to start the year in a positive way with a first quarter on plan with an improved safety performance. With spot prices well above the achieved prices in the September quarter and the business delivering to plan, we are on track for over $1.9 billion of operating cash flow for the year.
Following today's gain, Evolution Mining's shares are now up 42% over the past 12 months.
