Evolution Mining shares dip as rainfall hits gold production
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More news: Shares in Evolution Mining lowered on the ASX after the gold and copper miner flagged that high rainfall in NSW and Queensland had negatively impacted production during the three months to May.
Shares were down 1.3% to $3.71 by 12:40pm AEST. However, over the past 12 months its shares have risen 10.4%.
RBC Capital Markets analysts, who rate Evolution at 'underperform', said they expected the hit to gold production to drive down Q4 totals 6% below their estimates and 4% below consensus. While they said a miss to guidance was already expected, their forecasts did not implicitly include these negative events for the quarter.
The analysts also said Evolution's quarter-to-date cashflow was tracking below their Q4 forecast, while RBC and consensus forecasts suggested the miner's Red Lake mine in Canada could miss its FY24 guidance, which has already been revised lower.
Rainfall hits Evolution Mining gold production
The news: Evolution Mining has reported a hit to its gold production during the three months to May, as high rainfall in NSW and Queensland impacted operations at its Cowal and Mount Rawdon mines.
The numbers: Evolution said the net impact on gold production over the quarter to 31 May is around 26,000 ounces. During the March quarter gold production was at 185,252.
In April, the company flagged FY24 gold production guidance of approximately 749,000 ounces.
However, the Sydney-based miner also flagged "significantly" higher cash flow delivering a current cash balance above $320 million. This equates to a quarterly cash flow of over $145 million after payment of its FY24 interim dividend of around $40 million. In March, Evolution posted cash balance of $215 million.
Meanwhile, the gold and copper miner noted that operating costs remain "in line with the plan", with all-in sustaining cost expected to be "amongst the most attractive in the industry" and up to 5% above guidance of $1,410 per ounce.
The context: Evolution said that during the June quarter, its Cowal and Mount Rawdon operations have been impacted by continued high levels of rainfall. Restrictions to open-pit operations at both sites have necessitated the processing of lower grade stockpile ore at various stages, it said.
However, the Cowal underground operation has not been impacted by weather and continued its planned ramp up following commencement of commercial production in April.
Elsewhere, operations at Evolution's Canadian gold mine Red Lake have been disrupted by localised seismic events at the Balmer and Cochenour areas. While mining rates improved "materially" over the quarter, haulage rates lowered near-term capacity.
The source: ASX announcement
