Evolution Mining operates five 100% owned gold mines – Cowal in New South Wales, Mt Carlton and Mt Rawdon in Queensland, Mungari in Western Australia, and Red Lake in Ontario, Canada. Along with gold, EVN also explores silver and copper deposits.
Evolution reported a 29% growth in revenues in FY2020. The company has a 3-point plan in place that is expected to bring significant growth to the firm. Production is planned to increase to over 800,000 ounces during the three years to FY2023. Growth is expected to be driven by the initiation of the Cowal underground mine in late FY2022 and the execution of the Red Lake transformation plan. Investment in two significant projects at Cowal and Red Lake will materially increase production and transform the quality of the company’s asset portfolio. Major capital investment at Cowal is expected to increase production to above 300,000 ounces per annum. Red Lake will continue to invest in mine development aimed at augmenting annual production to over 200,000 ounces.
After a rough few weeks for EVN shares as they dropped from around $5 to around $4, EVN shares surged by 4.42% today and closed at $4.25 a share. EVN shares were upbeat as the company completed a $400 million fully underwritten institutional placement at a price of $3.85.
The Institutional Placement was undertaken to fund the acquisition of the Kundana Operations, a 51% interest in the East Kundana Joint Venture, 100% interest in certain tenements comprising the Carbine Project and a75% interest in the West Kundana Joint Venture from another top Aussie Gold Miner – Northern Star Resources (ASX: NST).
The acquisition creates Evolution’s fourth cornerstone asset. It provides a pathway to annual production objective of 200,000 ounces at Mungari, Increases strategic presence in the Kalgoorlie district and builds on strong existing Maduwongga and Marlinyu Ghoorlie native title partnerships, unlocks compelling operational synergies, improves near term grade profile to increase production and cash flow, and more than doubles Mungaru Mineral Resources and Ore Reserves base to significantly extend mine life.
The markets have taken the announcement positively and EVN shares bounced back today, while NST shares slumped given the asset sale.
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