CAHPF - Evolution Mining Limited (CAHPF) Q3 2024 Earnings Call Transcript
2024-04-17 09:58:02 ET
Evolution Mining Limited (CAHPF)
Q3 2024 Results Conference Call
April 16, 2024 08:30 PM ET
Company Participants
Lawrie Conway - CEO, MD & Director
Barrie Van Der Merwe - Chief Financial Officer
Glen Masterman - Former Vice President of Discovery
Conference Call Participants
Rahul Anand - Morgan Stanley
Matthew Frydman - MST Financial
Hugo Nicolaci - Goldman Sachs
Andrew Bowler - Macquarie
Jon Bishop - Jarden
Levi Spry - UBS
Daniel Morgan - Barrenjoey
Al Harvey - JPMorgan
Mitch Ryan - Jefferies
Jarrod Lucas - ABC News
Presentation
Lawrie Conway
Thank you, Darcy, and good morning, everyone. Firstly, on behalf of us all here at Evolution, I express our condolences for those impacted by the tragic and senseless event that occurred here in Bondi on Saturday afternoon. The loss of lives and injuries suffered by many people going about their daily life is hard to comprehend. Our thoughts and prayers are with everyone as are our thanks and appreciation to the emergency services response to the event.
Today, we released our quarterly report and an exploration update. The exploration results continue to drive the mineral resource growth at Ernest Henry and Mungari. Specifically, at Ernest Henry, we are gaining more confidence around Ernie Junior connecting to the main ore body. This provides potential for additional metal per vertical meter, further enhancing the value of this world-class deposit. At Mungari, the results are really positive for the potential of additional high-grade mineral resource at Kundana to increase the value of the expanded processing plant.
The March quarter saw us deliver materially to our plans despite the adverse impact of the wet weather. The improved performance has set us up for a strong June quarter. The momentum and the cash build continued from the December quarter with group cash flow up 7.5% to $85 million at an average price that was $545 per ounce and $1,350 per tonne below the current spot gold and copper prices. With regards to our copper revenue, a key thing to note about the shipments that went in late March will mostly be settled using the average copper price in April, which provides further upside to our cash flow.
The planned higher production in the June quarter matched with the current high metal prices will allow us to materially increase our cash flow and further reduce our gearing from the current 28%, which is down nearly 5% from the start of the financial year. We will realize the full benefit of the record gold price with only 10,000 hedged ounces due to be delivered this quarter. Overall, 95% of our production in the next 2 years is unhedged, while we have no copper hedging.
The improved cash generation was driven by the 15% increase in production to 185,000 ounces and a 10% reduction in our all-in sustaining cost to $1,464 per ounce. Due to the quarter end, happening over the Easter period, our sales were lower than production, and as such, our all-in sustaining cost would have been about 4% lower at $1,405 per ounce and cash around $25 million higher. These benefits will flow through in the current quarter.
Northparkes delivered strong positive cash flow at $37 million in our first full quarter of ownership and post stream obligations. This exceeded our expectations and demonstrates the quality of the asset, as we said on acquisition, that it would be cash generative from day 1....
Evolution Mining Limited (CAHPF) Q3 2024 Earnings Call Transcript