Page 28 - gmj142-Jan-Mar2-mag-web

The Perth Mint
The Perth Mint
– Australasia’s
– Australasia’s
refiner of choice
refiner of choice
With operations fully guaranteed by the Government of Western
Australia, The Perth Mint has earned a reputation as the lowest risk
With operations fully guaranteed by the Government of Western
refinery in Australasia. That’s why we’re trusted with processing more
Australia, The Perth Mint has earned a reputation as the lowest risk
than 90 per cent of Australasia’s gold production.th processing more
refinery in Australasia. That’s why we’re trusted wi
than 90 per cent of Australasia’s gold production.
perthmint.com/refine
FINALIST: MINER perthmint.com/refine
Evolution:
Conquering the MINT0272A-FP A4 RefinerOfChoice.indd 1 11/3/20 4:00 pm
mid-tier MINT0272A-FP A4 RefinerOfChoice.indd 1 11/3/20 4:00 pm

by Michael Washbourne
Jake Klein

volution Mining Ltd has no ambitions to become a major, Despite being unable to visit its newest asset due to international
Ebut it does still aspire to one day be known as the world’s travel restrictions, Evolution has firmly bedded down control of
best mid-tier gold producer, even if takes another 10 years to the Red Lake mine in Canada. Klein said the former Newmont
get there. Corp operation had “exceeded our expectations from when we
The past two years have seen a number of leading gold producers did our due diligence”.
agree to join forces, including the recent proposed $16 billion Evolution assumed full ownership of Red Lake in April and has
merger between Super Pit co-owners Northern Star Resources since upgraded the resource to 11 moz, making it the largest
Ltd and Saracen Mineral Holdings Ltd, encouraging speculation and highest grade operation in the company’s portfolio. Plans
as to which big-name companies might be next to get engaged. are under way for the mine to produce 300,000-500,000 ozpa
Evolution executive chairman Jake Klein told GMJ his company on a sustainable basis.
only had eyes for the mid-tier space which he believes will “Maybe it’s been a good thing for the operation that we haven’t
continue to generate the best shareholder returns. been able to go over there and tinker with things,” Klein said.
“As a mid-tier, you’re large enough to generate enough cash “Would we have liked to have been on the ground? Yes, but
flow to fund your own growth, but you’re still small enough where it’s worked well without us being there. We’ve had a couple of
discovery makes a real difference to your value – and it’s also the people go over and relocate and put themselves at personal
space which has delivered the best shareholder returns over a inconvenience to be there and stay there. But fundamentally
long period of time,” Klein said. there is a great orebody there and there are great people and
“The larger you get, the more challenging it is to replace reserves those are the two ingredients you need to make a great mine.”
and extend mine life and the more you are likely to be a proxy for Evolution’s Australian portfolio continues to be the envy of
the gold price. The real value creation in the gold space is through many. Cowal could soon also be producing 350,000 ozpa if
discovery and unfortunately the larger you get, statistically you the New South Wales regulator approves development of the
are less likely to make a discovery that’s really going to move the new underground mine and Ernest Henry continues to generate
needle from a shareholder value perspective.” record cash flows with a possible mine life extension on the
A dual winner of GMJ’s Miner of the Year, Evolution has now horizon.
been nominated for the award every year since the company Mungari in Western Australia also appears to have turned the
was formed following the merger of Klein’s Conquest Mining with corner after several years of underperformance, with record
Catalpa Resources in 2011. net mine cash flow of $44.9 million achieved in the September
Asked if the company had achieved what it set out to do 10 years quarter.
ago, Klein bluntly replied: “Not yet.” In 2020, Evolution farewelled one of its foundation assets with
“We still have a long way to go to be a great gold company, and the sale of Cracow in Queensland to Aeris Resources Ltd in a
we want to be one. We want to be the best mid-tier around and deal valued at up to $125 million, including payments based on
we’ve got a way to go to achieve that. I’m not sure you ever get exploration success.
there.” “Aeris are investing in exploration at a scale we couldn’t have
Klein described the perfect mid-tier gold company as one which done because we’ve got what we considered to be better
delivered the best long-term returns to shareholders, no longer opportunities in the portfolio,” Klein said.
had to advertise for jobs because people were lining up to “We’ve always said 6-8 assets is the right size for Evolution, but
be part of the team and was seen as adding positively to the I’ve also said you never have the right 6-8 assets because if
communities in which it operates. you’re continually improving your portfolio, you’re going to need
Evolution recently paid its 15th consecutive dividend and in to keep rotating those assets. We’ll still have 6-8 assets in 10
FY2020 returned $365 million of the $726 million generated from years time, but they won’t be the same 6-8 assets as we have
its operations to shareholders. today.”

Page 28