Evolution Mining slides 15% after weaker than expected quarter

The news: Shares in Evolution Mining have slid to a three-month low after the gold miner reported a disappointing December quarter and a cost blowout at its Canadian mine.

The numbers: Evolution said gold production for the three months ended 31 December was up 2% quarter on quarter to 161,073 ounces, but the figure fell short of market estimates. All-in sustaining cost was nearly flat at $1,618 per ounce but continues to be above its full-year target. Shares in the company were down 16% to $3.15.

The context: The company’s flagship Cowal mine in NSW led the improvement in production, with output up 6%. However, performance was much weaker at the company’s Red Lake mine in Canada, with production down 4% amid ongoing materials handling constraints and all-in sustaining costs jumping 31% to $2908 an ounce. Despite this, Evolution reiterated its forecast for annual gold production of 789,000 ounces, copper production of 62,500 tonnes and an AISC of $1,340 per ounce.