Pinned straw:
12-Feb-2025: EVN-Record-H1-FY25-Financial-Performance.PDF
Plus: FY25 Half Year Results Presentation.PDF
Plus: Appendix 4D and FY25 Half Year Financial Report.PDF
Plus: Evolution-Mining-Executive-Leadership-Update.PDF
Two months ago, I highlighted here that EVN were in a solid uptrend:
Well, that has certainly continued, and today's report hasn't done that uptrend any harm at all:
Disclosure: I hold EVN in my SMSF, having bought back in last year. I had previously gone cold on the company because of the increased exposure to copper through their production of more copper than gold (by value) at two of their mines (Ernest Henry and Northparkes), however I'm now more comfortable with that dual exposure - to both copper and gold.
Here's some of today's highlights:
I note they are using a gold price there (in note 5 above) of A$3,300/oz and the gold price today was over A$4,600/oz, so EVN are being conservative here, and there is clearly plenty of further upside potential in this guidance.
And here (below) are some of the more important slides from their presentation today:
Above: The only metric that was below the previous half was gearing, i.e. they have reduced their debt, so every single metric improved.
I love the way they break down their costs by minesite (below). Ernest Henry and Northparkes had NEGATIVE AISC (All In Sustaining Costs per ounce of gold produced) due to copper byproducts, which, as I have previously stated here, distorts their Group AISC number (which is $1,475 to $1,575 per ounce - all amounts are in Australian dollars) and makes them look like low cost gold producers when the reality is that 3 out of 6 of their mines (being Mungari, Red Lake and Mt Rawdon, the bottom three below) have high costs, and in Mt Rawdon's case, VERY high costs ($3,000 to $3,500/ounce).
Cowal is EVN's BEST gold mine by a country mile, and they have reasonable costs of $1,700 to $1,770/ounce, but EVN's overall group cost guidance for all the gold they expect to produce in FY25 is even LOWER than Cowal, even though their other three gold mines (Mungari, Red Lake and Mt Rawdon) have HIGHER costs. The group AISC (costs) are distorted by those negative AISC (costs) at their two copper/gold mines where they use all of the profits from those mines' copper production to offset the gold production costs from those two mines and end up with negative costs because they make more profit from that copper than it costs them to produce the gold from those two mines.
Below is something I'd like to see ALL gold producers (and other miners) do, break down their costs in percentage terms so analysts and us mug punters can see how much underlying price movements in these inputs (electricity, labout, diesel, reagents, etc) might affect EVN's costs. They also show there (below, right) how copper and gold price movements - and volumes produced - affect their cash flows and their costs.
It's a pretty comprehensive report in terms of both what they've achieved and their guidance.
Disc: Holding.
@Bear The AISC costs of Mt Rawdon in the HY report are not really a true reflection of the mine as it is now just processing stockpiles so the $3000-3500 AISC is more of an accounting charge than a true reflection of what it costs. In one of the quarterlies a while back they talked about this, how its not a cash cost. Agree though its not a spectacular mine and they wont lose much when it goes.
These are the AISC from the december quarterly, and for most of the time I've been following it its had an AISC of between 1600-2500. It looks like they have another 7-12000 ounces to get out of the stockpiles and then its shut down permanently and will potentially become a hydro battery, which I think is a bit of a sleeper at the moment in terms of value generation.
