ASX:EVN
Evolution Mining Ltd
Investment Summary
The fund managers believe that Evolution Mining Ltd is demonstrating strong performance, bolstered by a number of positive factors. They note that the company's record cash flows in the second quarter were driven by **higher gold prices** and a **weaker Australian dollar**. In January, Evolution achieved **AUD 4,069 per ounce** of gold sold, and expectations are high for further records in the third quarter due to current gold prices exceeding **AUD 4,600 per ounce**. The first half of FY25 was marked by a **record underlying profit of A$385m**, supported by low costs of **A$1,638/oz** and a significant **reduction in net debt** to 23% gearing, with a target of 20% during FY25. Additionally, exploration results at key sites provide multiple **medium to long-term growth options**. However, managers from Milford Asset Management advise caution, indicating a tactical profit-taking due to the recent strong price movements.
Commentary From The Managers
Cadence Capital
28 Feb 2025
$6.09
- Cadence Capital notes Evolution Mining's strong operating performance as demonstrated in their recent H1 FY25 results.
- Evolution Mining achieved a record underlying profit of A$385 million driven by favorable gold prices.
- The company's low-cost base is highlighted with All In Sustaining Costs (AISC) of A$1,638/oz.
- Net mine cash flow reached A$435 million, contributing to a significant reduction in net debt.
- Gearing has decreased to 23%, with a target reduction to 20% during FY25.
- FY25 guidance indicates sustained production rates and gradually increasing net mine cash flows.
Milford Asset Management
28 Feb 2025
$6.09
- Milford Asset Management remains positive on the medium-term outlook for gold.
- Evolution Mining has seen a strong performance with a +6.8% increase.
- The recent advance in gold prices has driven positive performance.
- Milford has tactically taken some profits due to the strength of the move.
Cadence Capital
31 Jan 2025
$5.70
- Cadence Capital updates its investment thesis on Evolution Mining Ltd.
- January report shows record cash flows driven by higher gold prices and a weaker Australian dollar.
- Evolution received AUD 4,069 per ounce of gold sold in Q2.
- Current gold price exceeds AUD 4,600 per ounce, suggesting continued strong performance.
- Third quarter expected to also produce record cash flows.
- Excellent exploration results at Ernest Henry, Northparkes, and Cowal, providing multiple growth options.
- Growth prospects are seen both in the medium and long term.
- Cadence Capital continues to hold shares based on these positive developments.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.