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NEWS Jake Klein

The importance

of mining

Ernest

by Fraser Palamara

volution Mining Ltd’s decision to take outright ownership
Eof Ernest Henry paid off with the Queensland gold-copper
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mine proving to be a silver lining for the company in an otherwise SUBSCRIBE NOW
disappointing FY22.
Evolution fell short of operational delivery for the financial year, Australia’s Paydirt Gold Mining Journal Both magazines
producing 640,275oz gold at AISC $1,259/oz. While chairman
(Up to 10% for 24 month option) 12 months 24 months 12 months 24 months 12 months 24 months
Jake Klein lamented the miner’s “challenging” period, Ernest
Henry did exactly what it was supposed to do: lower group AISC. Within Australia q $A140.00 q $A250.00 q $A50.00 q $A100.00 q $A180.00 q $A350.00
“We have learnt lessons and made changes within our business
“During the FY22 period, we acquired the balance of Ernest
to return to our high standards,” he said. Within Australia – Airmail q $A180.00 q $A325.00 q $A95.00 q $A170.00 q $A265.00 q $A475.00
Henry from Glencore which we believe is one of the most
important transactions in Evolution’s history,” Klein told “The macro environment in which we are operating is PNG, New Zealand & Asia q $A205.00 q $A370.00 q $A110.00 q $A200.00 q $A305.00 q $A550.00
shareholders at the company AGM. “Ernest Henry is a world- challenging, as we unfortunately find ourselves living in a time Elsewhere q $ A240.00 q $A430.00 q $A125.00 q $A225.00 q $A345.00 q $A620.00
class asset in Australia and one which we already knew of rapidly rising risk. This is most evident on the geopolitical front
extremely well thanks to our successful investment in the asset with the ongoing war in Ukraine, tension between China and * Single issue price - $11.95 inc GST. 2-year subscription available
in 2016. the West, and a number of other jurisdictions seeing heightened
military and political activity. PERSONAL DETAILS
“The acquisition delivered an immediate and substantial
increase in cash flow generation, lowered our AISC and has “Central banks are trying to combat record inflation levels with Name: ...........................................................................................................................................................................
clear growth potential.” quantitative tightening and higher interest rates. A stronger
US dollar and the Federal Reserve’s aggressive monetary
Evolution’s peers have typically experienced AISC of more than Company Name: Position:
tightening, particularly since June, have until recently been a .......................................................................... ..................................................................
$1,400/oz over past financial periods. Such saved costs in FY22
key headwind for the gold price whilst inflation has concurrently
helped the company achieve the second highest statutory net
put upward pressure on costs.” Postal Address: ............................................................................................................................................................
profit after tax in its history at $323.3 million with an EBITDA
margin of 44%. Gold spot prices saw success earlier in 2022, peaking above
$US2,000/oz through March, but later falling to nearly $US1,600/ Postcode: .................................. State: ......................................... Country: ..................................................................
Operating mine cash flow sat at $893.3 million before sustaining
oz in November.
and capital investments of $606.4 million.
Evolution’s own share price experienced pain throughout the Phone: ....................................... Email: .........................................................................................................................
Evolution assumed full control of Ernest Henry after paying $800
last 12 months, falling nearly 35% on a yearly basis. November,
million to Glencore plc over the past year, with an additional
however, did see the company’s shares rally back by nearly PAYMENT METHOD ................
$200 million to be repaid in early 2023.
30%. Klein remained bullish on gold’s near term fundamentals.
The focus has now turned towards growing Ernest Henry. The EFT Name: Paydirt Media Pty Ltd Bank: ANZ Bank Branch: West Perth
“Looking forward though, the outlook for gold is stronger with the
company recently grew gold resources at the mine by 24% to 2 BSB: 016 498 Acc: 8371 62319
Fed expected to ease interest rate increases within 12 months
moz and copper resources by 28% to 1.13mt. These estimates
as inflation reduces and the global economy is expected to slow International SWIFT Code: ANZBAU3M *Please quote company name
were made following the completion of nearly 200 drill holes.
significantly,” he said.
Klein said mineralisation continued to impress as the company Post Cheque Payable to: Paydirt Media Pty Ltd PO Box 1589, West Perth, Western Australia 6872
“In uncertain times like this, we believe that Evolution is well
carried out a mine-life extension study.
placed to prosper through these headwinds the sector is
“The recent drilling results from our ongoing exploration Credit Card MasterCard Visa Amex Diners
currently experiencing.”
programme showcase the enormous opportunity at Ernest
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–
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For FY23, Evolution is targeting 720,000oz at a “sector-leading” Card Number Expiry Date:
Henry, with drill holes intersecting significant mineralisation
AISC of $1,240/oz, while in FY24, the company seeks to maintain
widths within the pre-feasibility study area and below,” he said. DO NOT AUTO-RENEW. If you provide your credit card details, your subscription will be automatically renewed unless you tick this box.
AISC for even larger production guidance of 800,000oz.
Reflecting on Evolution failing to meet operational guidance,
Klein felt the gold sector as a whole was leaving behind a Amount: $AUD ................... Name on card: .................................................................... CVV / CSC No: ....................
tumultuous year.
Signature: ...........................
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