Evolution Mining sees surge in production, cash flow from expanded Mungari operations in latest quarter

Gold production and cash flow surged at Evolution Mining’s expanded Mungari operations in the December quarter, putting it on track to achieve targeted output of 200,000 ounces per year. Evolution told the market on Wednesday that Mungari, 20km west of Kalgoorlie-Boulder, produced a record 50,000 ounces of gold during the quarter, up on the 40,000oz churned out in September and 39,000 oz in June. The company said the net mine cash flow of $104 million was a record and up 142 per cent on the $43m of the September quarter. Evolution said the cash flow was 49 per cent of the $212m invested in the expansion project, which increased mill throughput to 4.2 million tonnes per annum from 2Mtpa. The company said commissioning of the plant expansion was complete, and during the quarter operated at an annualised processing rate of 4.1Mtpa — an 11 per cent increase in throughput quarter-on-quarter. Evolution said gold recovery improved 1.5 per cent, total ore mined increased 54 per cent compared to the prior quarter, and there were 13 per cent and 15 per cent increases in gold grade mined from underground and open pit sources, respectively. The company said during the ramp-up period an opportunity was taken to fully test the expanded plant with third-party ore of different grade, hardness, and mineralogy compared to the lower-grade transitional ore mined in the early stages at Castle Hill. Evolution said the third-party ore was bought on a profit-share basis, resulting in 127,000t of ore being processed, which produced 9000oz of gold. The company said the ore performed well, confirming the processing capability of the upgraded plant. It said associated costs and ounces of the purchased ore were excluded from the quarter’s all-in-sustaining costs, which came in at $2119/oz, up on the September quarter figure of $1982 but significantly lower than June’s $2534/oz and March’s $2926/oz. Revolution said it continued to experience intermittent power outages at Mungari but fewer than in the September quarter, with redundancy measures in place helping ensure essential aspects of the operation stayed functional during power outages. Across the company’s six sites in Australia and Canada, December quarter production was 191,000oz of gold and 18,000t of copper at a “sector-leading” AISC of $1275/oz. This resulted in record operating mine cash flow of $1.1 billion, up 57 per cent on the September quarter, and record net mine cash flow of $727m, up from $366m in September. Evolution said FY26 group production guidance remained within a range of 710,000oz to 780,000oz of gold and 70,000t to 80,000t of copper, with AISC guidance reduced slightly to $1640/oz to $1760/oz. The company said it had cash of $967m at December 31, an increase of $187m during the quarter. Evolution shares rose $1.28, or 9.5 per cent, to $14.79 near the close on Wednesday. Managing director and chief executive Lawrie Conway said Evolution had delivered another consistent quarter, representing eight consecutive quarters of delivery to plan. “Delivering to plan in a rising metal price environment with minimal hedging has generated record cash flow and sector-leading cost performance,” he said. “Our teams continue to safely demonstrate operational discipline while also successfully progressing key growth projects. “Mungari’s expanded plant and new mining hub is fully commissioned and already generating strong return on investment via record high cash flows. “We continue to bank the benefits of higher metal prices, which is ultimately delivering value for shareholders.”