Gold miner Evolution Mining has boosted shareholder returns sharply despite a 10% slide in interim to $122.5 million for the December half. Directors declared a fully franked interim dividend of 3.5 cents, up from two cents unfranked a year ago.
Underlying profit after tax jumped to $124.7 million, from $115 million, driven by strong production, while revenue was up 10% at $782.1 million. The company said operating cash flow rose 9% against a 2% decline in the gold price to $A1,621/oz, with all operations producing positive operating mine cash flows
This result was driven by a strong operating performance across Evolution’s sites with half-year production of 407,459 ounces. All-in Sustaining Costs (AISC) fell 20% 20% from the December 2016 half-year to $A785 per ounce ($US611/oz).
The shares reacted positively to the result and closed up more than 2% at $2.85. Group cash generation continued to strengthen with net cash flow after investing up 20% to $A176.8 million.
"This was a result of mine operating cash flow increasing 22% to A$415.1 million and net mine cash flow increasing 37% to A$292.5 million after all capital expenditure. The major cash flow contributors were Ernest Henry (A$107.4 million), Cowal (A$87.3 million) and Mt Carlton (A$57.5 million),” director said.
Total capital expenditure fell 3% to $122.6 million (including all sustaining and major capital expenditure, rehabilitation costs and capital stripping). The fall was attributable to the disposal of the Edna May mine, contributing savings of roughly $3.1 million on the prior year.
Evolution operates five wholly-owned mines – Cowal in New South Wales; Mt Carlton, Mt Rawdon, and Cracow, in Queensland; and Mungari in Western Australia.
In addition Evolution holds an economic interest in Ernest Henry, in Queensland, that will deliver 100% of future gold and 30% of future copper and silver produced from an agreed life of mine area.
Outside of the life of mine area Evolution will have a 49% interest in future copper, gold and silver production from Ernest Henry.
Executive Chairman Jake Klein said in yesterday’s statement:
"These half year financial results continue to demonstrate the quality of Evolution’s asset portfolio and consistent operational performance. A 20% decline in AISC contributed to higher EBITDA margins of 53% and a 20% increase in Group cash generated to A$176.8 million.
"It is also pleasing to have increased our interim dividend by 75% to 3.5 cents per share fully franked. Our business is clearly in great shape but we remain focussed on driving further improvements.”