The Evolution Mining Ltd (ASX: EVN) share price has dropped more than 19% after the ASX gold share’s December quarterly update.
The business has gold projects in Australia and Canada – Australia is most of its focus.
What’s happening to the Evolution Mining share price?
It reported gold production of 161,073 ounces for the three months to December 2023. This came at an all-in sustaining cost (AISC) of $1,618 per ounce, or US$1,052 per ounce.
Group cashflow was $78.8 million, before dividends and Northparkes acquisition funding), which was an increase of $105.2 million compared to the three months to September 2023. It said “momentum is expected to build further” in the second half of FY24.
Net mine cashflow increased 85% to $131.8 million, with the balance sheet’s cash being $191 million.
The business pointed out it has bought 80% of its interest in the Northparkes copper-gold mine. In the first two weeks of ownership, Northparkes delivered 1,193 tonnes of copper and 1,011 ounces of gold, resulting in $9.5 million of cash flow after the triple flag stream commitment.
Guidance maintained
One of the things that normally affects the Evolution Mining share price is how much production it’s expected to deliver in the current financial year.
The ASX gold share is expecting to achieve gold production of 789,000 ounces and copper production of 62,500 tonnes. The ASIC is expected to be $1,340 per tonne, so the current quarter saw costs significantly ahead of that.
All sites other than Red Lake are forecast to “meet or exceed” the mid-point of their original production guidance. Due to the first half performance at Red Lake, and a revision to plans for the second half, guidance there has been changed to 125,000 ounces to 135,000 ounces.
Management departure
Evolution Mining’s chief operating officer, Bob Fulker, has decided to leave the company to “pursue other opportunities” – he will finish at the end of March.
Final thoughts on the Evolution Mining share price
It’s difficult for miners to keep cost growing low during this period of higher inflation, and the company has no control over what’s happening with the commodity price.
Sometimes a sell-off like this can be an opportunity, but it’s hard to say if this is because of how unpredictable mining can be. I like the ASX gold share, but I prefer other miners and commodities, though I view its growing copper exposure as a good development.
