Earnings call transcript: Evolution Mining Q4 2025 sees strong cash flow

Evolution Mining Ltd (EVN) recently held its Q4 2025 earnings call, highlighting robust financial performance and operational improvements. According to InvestingPro data, the company maintains strong profitability with a 100% gross profit margin and is expected to continue its growth trajectory this year. Despite a slight dip in stock value, the company reported significant cash generation and a reduction in gearing, underscoring its strong market position.

Key Takeaways

• Produced 182,000 ounces of gold and 19,000 tonnes of copper in Q4.
• Ended the year with $760 million in the bank, reducing gearing from 25% to 15%.
• Paid its 24th consecutive dividend, reflecting stable financial health.
• Mungari mill expansion and Cowal OPC project are progressing well.
• FY 2026 guidance targets up to 780,000 ounces of gold production.

Company Performance

Evolution Mining demonstrated consistent performance across its operations in Q4 2025. The company produced 182,000 ounces of gold and 19,000 tonnes of copper, contributing to a full-year production of 751,000 ounces of gold and 76,000 tonnes of copper. With a market capitalization of $410.16 million and a P/E ratio of 11.14, the company’s focus on operational efficiency is evident in its reduced gearing and strong cash flow, positioning it as a leader in the mining sector. InvestingPro analysis reveals 6 additional key insights about EVN’s financial health and growth potential.

Financial Highlights

• Revenue: Not specified in the call.
• Annual cash generation: Nearly $800 million.
• All-in sustaining cost (AISC) for gold: $15.72 per ounce.
• Group cash flow for Q4: $38 million at a margin over $1,700 per ounce.

Market Reaction

The company’s stock experienced a decline of 1.75%, closing at $7.56, down from its previous close of $7.70. According to InvestingPro data, EVN shows impressive returns with a 4.65% price gain over the past six months and maintains a stable beta of 0.59. The stock offers an attractive dividend yield of 5.95%, having maintained dividend payments for 13 consecutive years. Despite this, Evolution Mining remains well-positioned within its 52-week range, reflecting investor confidence in its long-term strategy.

Outlook & Guidance

Looking forward, Evolution Mining has set a production guidance of 710,000 to 780,000 ounces of gold for FY 2026, with AISC expected to range between $17.20 and $18.80 per ounce. The company plans capital investments between $780 million and $980 million, focusing on safe and consistent delivery. With an InvestingPro Financial Health Overall Score of 2.53 (rated as "GOOD") and analysts predicting continued profitability, the company appears well-positioned for future growth. Get detailed analysis and 12+ additional exclusive insights with a Pro Research Report.

Executive Commentary

CEO Laurie Conway emphasized the company’s commitment to consistent performance, stating, "We want to continue what we’ve done over the last twelve months and really the last eighteen months, which is deliver consistently quarter in, quarter out." COO Matt O’Neill added, "Our goal remains the same. We say, we do, we deliver," highlighting the company’s focus on operational excellence and resource expansion.

Risks and Challenges

• Fluctuating gold and copper prices could impact revenue.
• Potential delays in project expansions like the Mungari mill.
• Market volatility affecting investor sentiment and stock performance.
• Operational challenges in maintaining low AISC amidst rising costs.
• Global economic conditions influencing commodity demand and pricing.

Q&A

During the earnings call, analysts inquired about the Ernest Henry extension study and the Mungari mill ramp-up potential. They also sought clarification on stockpile processing at North Parks and Cowal and discussed the company’s strategy for Red Lake production. These discussions underscore the market’s interest in Evolution Mining’s growth and operational strategies.

Full transcript - Evolution Mining Ltd (EVN) Q4 2025:

Mel, Conference Operator: Thank you for standing by, and welcome to the Evolution Mining June twenty twenty five Quarter Results. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. I would now like to hand the conference over to Mr. Laurie Conway, Managing Director and Chief Executive Officer.

Please go ahead.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Thank you, Mel, and good morning, everyone. I’m joined today on the call by Matt O’Neill, our Chief Operating Officer Glenn Marsterman, our VP, Discovery and Peter Rocio Conner, our GM, Investor Relations. Today, we released our June quarterly report and an exploration update, which will be the reference point for the call. Glen will take you through the great exploration results we’ve seen at Mungari and North Parks, which is providing us with confidence about further resource growth at both operations a little bit later. The June has been another busy and successful quarter at Evolution.

It rounded out what has been an excellent year for us. Up front, I want to thank all of our employees and contractors who have enabled us to safely deliver on our plan in a much more consistent and reliable way. The three charts on the first page of the report and the sustainability chart on Page two perfectly depict the year’s performance, including the consistency quarter on quarter. With our TRIF improving 35% over the prior year and reaching its lowest point at just under 5%, it does mean that we have delivered our plan with a strong focus on safety. We have met our original group guidance, generating record cash flow, which has hit the bank account to further improve the balance sheet flexibility.

We produced 182,000 ounces of gold and 19,000 tonnes of copper at an all in sustaining cost of $15.62 dollars per ounce. For the year, we produced 751,000 ounces of gold, 76,000 tonnes of copper at an all in sustaining cost of $15.72 dollars per ounce for continuing operations. It is to be noted that the all in sustaining cost included an additional $40 to $45 per ounce for royalties that were due to the higher than planned gold price. However, we will take the net additional revenue of $950 per ounce any day. You’ll see the word record multiple times in the report.

This is because we have broken many, be they safety, operational and financial. Our group cash flow for the quarter was $3.00 $8,000,000 at a margin of over $1,700 per ounce. For the year, we generated just shy of $800,000,000 of cash at an achieved gold price that is $800 per ounce below the current spot. The group cash flow was underpinned by the $2,300,000,000 of operating cash flow generated during the year. I want to call out Cowal in terms of the operational cash flow.

Ten years ago tomorrow, we received New South Wales government consent to acquire Cowal, and a week later, we took ownership. We paid just over $700,000,000 to acquire the operation. This investment and all subsequent investment has been repaid. Last year, several people said that the best days of Cowal may be behind it. While in FY ’twenty five, it delivered $855,000,000 in operating cash flow, more than we paid for the asset and $600,000,000 of net mine cash flow.

Having approved the OPC project in April with a 35% to 70% rate of return, it is abundantly clear that Cowal has many more decades of significant contribution to revolution. We ended the year with $760,000,000 in the bank, To evidence our continued discipline to capital management, we repaid all of our FY ’twenty six debt commitments of $145,000,000 on top of the $75,000,000 FY ’twenty five commitments. We also paid our twenty fourth consecutive dividend during the quarter. This financial performance resulted in our gearing improving to 15%, and we are now back in the normal operating gearing range. We should remember that our gearing was 25% at the start of the year, which means we have improved by 10 percentage points or a 40% reduction.

We successfully renewed our $525,000,000 revolver facility through until August 2028, and this facility remains undrawn. A couple of other highlights during the quarter included the early commencement of commissioning of the plant expansion at Mungari, the approval of the Cowal OPC project and the appointment of Fran Summerhays as our CFO. I’m looking forward to Fran joining us in September. Turning to our FY ’twenty six group guidance. We have released our key group metrics today and will provide full details with our financial results next month.

In short, the way I would describe the FY ’twenty six group guidance is a rinse and repeat of what we did in FY ’twenty five to safely deliver high margin, significant cash flow. Our group production is guided at seven and ten thousand to 780,000 ounces of gold and 70,000 to 80,000 tonnes of copper, which is the same as last year. The difference will be in where the production comes from this year, and that Mungari will be ramping up to the 200,000 ounce rate, while Cowal will be completing the mining of this ore in Stage H, North Park’s completed mining of E31 open pits in FY ’twenty five, and Ernest Henry will see planned lower grades. We’ve continued our focus on costs and expect to see about a 4% inflation impact, which equates to between $105 and $125 per ounce. Cowal and North Parks will be utilizing a larger proportion of stockpile ore during FY ’twenty six that was predominantly built up during FY ’twenty five due to the completion of Stage H and the E31 pits.

This will result in a higher noncash cost component of the all in sustaining cost in the order of $75 to $90 per ounce. These two items are the drivers to the movement from the FY ’twenty five all in sustaining cost to FY ’twenty six, which is guided at $17.2 to $18.8 per ounce. I note that a number of analysts are quoting a 15% increase in our all in sustaining cost. However, our all in sustaining cost is reported on a by product basis. These two changes I just spoke about are the main drivers to the FY ’twenty six all in sustaining cost change, of which the cash component is increasing due to inflation by 4%.

This equates to $85,000,000 to $95,000,000 cash impact on our operating spend of around 2,100,000,000.0 It is not a 15% change. The movement in our operating costs equates to $130 to $140 per ounce change in the gold price. And remember that the spot price is $800 per ounce higher than what we achieved last year. Therefore, we could make up the operating cost increase in the first quarter of FY ’twenty six if the gold price holds at the current levels for this quarter. Our FY ’twenty six all in sustaining cost guidance will still see us as one of the lowest cost producers in the sector.

Our group capital investment is guided at $780,000,000 to $980,000,000 which at the midpoint will be around $200,000,000 lower than our FY ’twenty five investment. As we head into FY ’twenty six with a continued focus on safe, consistent and reliable delivery, achieving our plan will result in another year of significant growth the with material upside at the spot gold price. With that, I’ll now hand over to Matt to take you through the operational performance.

Matt O’Neill, Chief Operating Officer, Evolution Mining: Thank you, Laurie. As noted, the final quarter of financial year ’twenty five capped off a great year for our operations, with all sites safely delivering to plan. Over the 2025 financial year, as noted earlier, we set a number of new records for safety, production and financial outcomes. As I talked to at the last quarterly update, the consistency and predictability we are seeing in the operations now is built on the back of teamwork and collaboration, not just at the operations, but more broadly across the wider Evolution team and is a credit to everyone involved. Our goal remains the same.

We say, we do, we deliver, and I’m very pleased to say that I think the Evolution team has done that this year. We placed a strong focus on safety and sustainability over the course of the year, and pleasingly, this effort has shown in the results we have achieved, with the headline number being the 35 improvement in our TRIF, and pleasingly, all of our operations contributed to this. The rigorous and disciplined approach to safety from everyone is evident across both the leading and lagging indicators. The drift noted before is our key lagging indicator, and one of the key leading indicators that we use is outstanding material risk actions. And I’m happy to be able to say that this sat at zero outstanding actions as of the end of the financial year.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: We also achieved a number

Matt O’Neill, Chief Operating Officer, Evolution Mining: of operational milestones during the quarter. Most pleasingly, in a year where we saw a rise in gold price, we achieved our full year guidance for production, ensuring we banked the benefits of the high gold price as evidenced in the financial results. Mungari 4.2 commissioning continued with ramp up to full production well advanced, and we commenced the OPC project at Cowal post board approval in the March. There are a few items that are worth calling out in our group production numbers for the June, and these are: the mill shutdown at Cowal, which saw the reduced output from the operation over that quarter the commissioning of the new mill at Mungari, which, as you can see in the quarterly numbers for that operation, is starting to show the benefit The continued consistent performance at Red Lake, which this year had its best year under Evolution ownership and set a number of records, including net mine cash flow, ore mined and processed and gold produced. Also worthy of a call out is the continued cash generation from Mt Rawdon, which continues to contribute to the group.

Moving into the financial year ’twenty six, we’re in a good position to repeat financial year ’twenty five, and the operational focus remains the same: continued safe delivery to plan. We have exciting long life operations, each with opportunities to grow or extend, as evidenced by the exploration announcements Glen will talk to next, and also the project pipeline noted in our quarterly announcement. We will continue to do the work required to ensure we achieve the full potential of each of our operations. I’ll now hand over to Glen to walk through the exploration updates.

Glen Marsterman, VP, Discovery, Evolution Mining: Thank you, Matt, and good morning, everyone. I’d like to turn your attention to our exploration announcement, which was released this morning in addition to the June quarterly report. Firstly, I want to take you back to August 2023 when we first introduced the Genesis discovery on our Mungari site visit during Diggers and Dealers that year. A few of you will remember the revealing of the gold rich stop work zone along the wall of the ore drive, which signified the very top of the newly discovered Genesis vein. Since then, our drilling has also discovered the Solomon Vein shown in Figure one of this morning’s release, which is parallel to and in the hanging wall of the Genesis ore body.

Together, we have reported a mineral resource of over 300,000 ounces of gold at an average grade of 10 grams per tonne contained in both bainarays. The resource and growth potential are situated entirely on our 100% owned tenements at Mungari. We remain very excited about the potential to extend these vein systems along strike and at depth as we are convinced we have unearthed the new mineralized corridor, which we expect should continue along strike towards the historically mined Barker’s ore body shown in Figure one. This new search space spans a large volume of prospective geology, which had never been effectively tested by previous drilling. We will continue to aggressively explore this area to expand the mineral resource into the untested gap towards Barkers with the aim of extending high grade production well into the future.

Positive results were also received underneath the Arctic pit north of Millennium, also shown in Figure one. The results are significant because we believe we have picked up the very well endowed Streswecky line of load under the pit with lots of room to grow it. At Northparks, we have been exploring along the stock margin contact represented by the pink unit in Figure two. This contact is important because it is localised in placement of copper rich porphyries, which are preserved at depths very close to surface. Our geological model is predicting the potential for the discovery of additional porphyry targets to be preserved at similar depths to Major Tom and E51 in the sparsely drilled areas highlighted by the red dash shapes in Figure two.

The Major Tom and E51 results confirm continuity of grade and volume geometries of copper mineralization at both prospects. Drilling programs have been extended into the September to ensure the full extent of mineralization will be delineated at both targets before we commence resource modeling and optimization studies. Elsewhere across the portfolio, drilling is recommenced at the Kolonkari North project near Ernest Henry in Queensland. Work is progressing on the recently acquired Coralla project, also adjacent to Ernest Henry. We are aiming to develop open pit copper gold drill targets on both projects within haulage distance from Ernest Henry with potential to utilize latent capacity in the processing.

Drilling also commenced in the June on our Slate Bay target near Red Lake. Slate Bay is hosted in rocks of similar age to Kinross’ Great Bear deposit, which were typically never previously considered to be prospective for gold until the discovery of Great Bear. We have developed a sizable and strong gold in glacial tilanomaly in this very underexplored rock package only 15 kilometers north of Red Lake. Key points I want you to take away from the results released this morning are firstly, that the high grades in drilling at Mungari increase our confidence of being able to sustain for longer the high grade underground production at current rates or better. And secondly, we have confirmed the geological model at North Parks that will lead to a potential pipeline of new copper rich near surface open pit targets with the ability to offer future operational flexibility and incremental production growth.

And with that, Mel, would you please open the line to questions?

Mel, Conference Operator: Thank Your Question comes from Kate McCutcheon with Citi.

Kate McCutcheon, Analyst, Citi: Congrats on the strong SAFE results. I guess across the portfolio, there’s organic growth options across each of them. You’ve guided us to $750,000,000 to $950,000,000 CapEx spend over the next five years, and we’ve got FY 2026. Can you talk through the staging of that CapEx by side at a high level over that period? What that profile looks like and what projects come in and out or how they’re prioritized?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Looks like you want more than just the FY ’twenty six guidance there, Kate. Look, I think, our view there is the projects, they go through feasibility and then into execution, they’re going to change. So that’s why where we stand, Cowal is the main one. $430,000,000 over the next seven years. You’ll see a fair portion of that come through over the next, I would say, two to three years as we do the Bund at the North and then this other surface infrastructure and go to the South, then the next decision point comes into the the Ernest Henry extension and then e 22.

As you know, we’ve got the hybrid study, which is and that will then be something the Board will consider in the first half of this year and similarly with the extension at Ernest Henry. I think the what the study team has been doing at Ernest Henry is working out, yes, it will now be more trucking down below the existing 1,200 level. So the capital pushes out a few years, but we need to get that final feasibility study. So it’s a long way of saying at the moment, that $750,000,000 to $950,000,000 is going to be the average over the next five years. As these projects advance, we will be updating on that spend, but I would be taking that as sort of the average over the next five years.

Kate McCutcheon, Analyst, Citi: Got it. Thank you. And then at Cowen North Park, that noncash compartment in all in sustaining costs, I assume it’s larger at that number. Is there anything you can say about that? Or can you talk to the tonnes of stockpiles we should expect for the mill feed at North Park and Cowal in terms of forecasting next year?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. The short answer to that, Shade, is that it will be at Cowal. When you look at it, we got 1,500,000 tonnes of ore at North Parks from the E31 that will feed through over the course of the year, but the value of that ore in terms of the overall production considering you got 6,500,000 tonnes and most of it coming from the underground on a per ounce basis. I think the only difference you have there is they produce less ounces than cow. So on a per ounce basis, will be a relatively larger amount.

Then if you look at cow, we’ll be into the third quarter is when we start to move into ore sorry, in the stockpiled ore only, and that becomes the majority of the feed for the basically, almost the second half of the year. So that’s why it will be the largest proportion of that $80.70, $80 an ounce will be at at Cowal.

Kate McCutcheon, Analyst, Citi: Okay. Got it. But I have to wait until the full year before I will get the numbers by each side. Is that right?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Absolutely, you will. Sorry. That’s a 75 to $90 an ounce, but yes.

Mel, Conference Operator: K.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: If you if you you if you look at it if you look at it, Kate, you know, produces, over 300,000 ounces out of 750,000 ounces. So on a per ounce basis in the group impact, will be the larger portion.

Mel, Conference Operator: Your next question comes from Daniel Morgan with Barron Joey.

Daniel Morgan, Analyst, Barron Joey: First question is just on Ernest Henry. I note the extension study is complete but not released to us. And there’s a PFS Stewart, but for the end of this year. And and, Laurie, you just also intimated that there might be a bit more trucking in the near term, which if I put all that together, does that is the crusher chamber and associated infrastructure, is that gonna be deeper in the mine and therefore a longer life proposition? Is that what we’re looking at here?

Thank you.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Thanks, Dan. I’ll hand this over to Matt. But just to briefly, yes, we will be trucking below, and therefore, we have to introduce trucks more trucks into Ernest Henry that will look at their capital in FY ’twenty six. And that is the reason why the study went for a bit longer is to look at how we can best optimize the ore body. And reason, it finishes in the June quarter, but the next board meeting is later in this quarter, and therefore, the board needs to see the outcomes before the market.

Matt O’Neill, Chief Operating Officer, Evolution Mining: Yeah. I wouldn’t say without going into all of the detail. Thanks, Ari. But the the study, I suppose, is the high level, and then Glenn’s talked about it as as we’ve gone through, is that there’s been more mineralization at Ernest Henry coming, and so that study has included some of that, and that has an impact on what we do there to make sure that we maximize it. The trucking does buy us a little bit of time.

It does obviously tend and lend itself towards what you indicated of, well, where does the crusher go? And that’s really the the key point of what we’re talking about. But going through the economics, the trucking works quite efficiently because it’s not trucking to surface. It’s only trucking back to the crushing horizon. Nothing that’s an important point to note of what we’re talking about there, but you will see some of that come through in the study when it gets released.

Daniel Morgan, Analyst, Barron Joey: Thank you. And just at Mungari, is there a live update of how well the mill commissioning is going? When can we when might you expect it to be running at the 4,200,000 tonnes in the ramp up? Thank you.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yeah. I’ll cover that one. It’s it’s going pretty well.

Matt O’Neill, Chief Operating Officer, Evolution Mining: We had a really good start and sort of a honeymoon period for a commissioning of a mill. Last month, we had a a really strong month in terms of throughput. So there’s been no major concerns that have come up. I would expect us to start seeing everything come to fruition sometime in the next quarter. But we’ve been able to achieve throughputs and we’ve been able to achieve recoveries.

It’s

Ben Lyons, Analyst, Jarden: just sort

Matt O’Neill, Chief Operating Officer, Evolution Mining: of bedding in some of the things that you find as you commission the plant like that. So no material items that are slowing us down at this stage, which is really good.

Daniel Morgan, Analyst, Barron Joey: Thank you. And just last question is that Mt Rawdon, I appreciate a small asset in the portfolio now, but it looks like you’re going to be doing some processing of stockpiles into FY ’twenty six. When do you expect last gold production to be? How material is this? And you have provided group guidance for FY ’twenty six.

I presume it’s either a minor contribution to it or it’s excluded from cost calculations, etcetera. Could you just outline that? Yes.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Sure, Dan. So what we’ve seen with where the gold price is sitting, there is economic very low grade material on the ground there at Mt Rawdon. We were able to process that through the last part of FY ’twenty five, and it will go through the first part. So it won’t it will be very minimal contribution in terms of that $710,000,000 to $780,000,000 And then in terms of the all in sustaining costs we quoted, that is on the ounces and costs for the continuing operations, so excluding Mt Rawdon.

Mel, Conference Operator: Your next question comes from Hugo Nitalaki with Goldman Sachs.

Hugo Nitalaki, Analyst, Goldman Sachs: Congrats on the full year results. First one on NorthPark maybe for Glen. Just noting the open pit there is a stock and you’ve now got the stockpile material to process this year. Could you just give us a little bit an update on how you’re thinking about when the next open pit gets developed? Is that something for FY ’twenty seven or more FY ’twenty eight as you choose between sort of E51 and major time or E27?

Matt O’Neill, Chief Operating Officer, Evolution Mining: Sorry, got my mic on now. Yes, look, I

Glen Marsterman, VP, Discovery, Evolution Mining: think that’s probably fair timing for the next open pit delivery, and that would be E28 Northeast Pit. And what we’re looking at trying to do with the exploration drilling and subsequent studies is to build this pipeline of open pit targets that we can, for the most part, switch on and off when we need them to from a sort of flexibility operational standpoint. And if there’s opportunities to introduce some production growth, we’ll look at that as well.

Hugo Nitalaki, Analyst, Goldman Sachs: Great. That’s helpful color. And then maybe just one on cash flow, given the focus there. Just some observations in terms of the quarter, like your corporate costs and D and A both stepped up significantly in the fourth quarter. I appreciate you’re setting up a Brisbane office.

You’ve a number of studies running. How much of that step up is sort of the underlying corporate versus the studies? And what do you think your corporate costs should be on an underlying basis going forward?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. A couple of things in there driving that, Hugo, is there’s studies work and that we’ve done that are not being deemed as capital, so they fall into the corporate costs. And then as we get into June, you have a lot of true ups across all of the departments. And so that’s why that was higher in the quarter. And then in the D and A, you’ve got to take into consideration that we put out the MRR, and therefore, you update your D and A for the whole six months based on the latest.

And so with some of the changes in the MRR, the depreciation per ounce will look a lot higher than normal. But the full year D and A gives a fair indication of what we are starting as the base going into ’twenty six.

Daniel Morgan, Analyst, Barron Joey: Got it. And then just so

Hugo Nitalaki, Analyst, Goldman Sachs: I can on the cash flow pace, it looks like your cash tax in the second half was a fair bit lower than what would have been implied by your first half reporting. Do you expect any catch up there? And then also on working capital, the 100,000,000 build in the quarter, are the moving pieces in that? And do you expect that to unwind?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. So tax, quite simply, is that we make our installment payments monthly, and then we make our final payments in the December quarter. So that’s why you’ll see the second half is generally lower than the first half because you have that final payment for the prior year tax returns in the December. In terms of the working capital, I look at it from an annual basis to start to try and keep it simple. And what we really have is our working capital movement in a year is $60,000,000 either inflow or outflow, but it’s heavily impacted on concentrate sales at Ernest Henry and North Parks nowadays.

And when you see in the June, had we a North Park shipment that fell from the June into the July. And therefore, the sales, as you’ll see, for North Parks for the year were less than the production for the year, and therefore, our receivables were lower. And Ernest Henry, we received a settlement in June that was actually expected in July. So the combination of those reduced our receivables by about 40,000,000 to 60,000,000 and that would have brought us back into the normal range just in that perspective. But in addition to receivables, the June, you’ll see that our we had a higher major capital spend in the quarter, and that was really related to projects finishing and new projects starting, and we’ve got project claims and deposit requests coming through in the June, resulting in higher payables.

So you’ll see that those two combined to drive the working capital movement in the June quarter. But as I’ve said, those concentrate sales are the ones that really drive it on the annual basis. But as we look forward in the unwind, you’ll see we received the payment for that North Park shipment in this quarter and therefore that will offset some of the payables that will go out. So you won’t see the full 98 in the September and concentrate shipments really and the timing of them are the ones that drive our working capital movements quarter on quarter.

Daniel Morgan, Analyst, Barron Joey: That’s a powerful color. I’ll pass on.

Mel, Conference Operator: Thank you. Your next question comes from Paul Keener with Ord Minute. Please go ahead.

Paul Keener, Analyst, Ord Minute: Yes. Hi, Laurie and team. Thanks for taking my questions. Firstly, just on Cowal. I see there was an underground roof collapse there back in March.

Just sort of want to know what the ground conditions are like there as you continue to ramp up the underground operations, and I guess any learnings or changes in procedures following that incident?

Matt O’Neill, Chief Operating Officer, Evolution Mining: Thanks, Paul. Matt will take that. Yep. No problems. So, yeah, without going into huge amounts of detail on the incident, we’re still we’ve it’s under investigation at the moment, and then you have seen the department notices on that.

The what we’ve done in the short term, we did take some actions to stop some of the areas until we finished our investigation around the geotech. Once we’ve completed that, we changed some standards on ground control in some of the drives depending on their orientation. But at this stage, that’s probably all I can really talk about there. It wasn’t we haven’t seen anything majorly different across the whole operation, if you know what mean. We did have that as an isolated event, but we have taken steps to make sure we put probably more conservatism back into some areas short term.

Paul Keener, Analyst, Ord Minute: Yes, understood. Thanks for that color. And then just another one just there on the stockpile adjustments for ’26 at both Cal and NorthPark. Just double checking that that $75 to $90 an ounce, that’s included in your all in

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: sustaining cost guidance for ’26? Yes, it is.

Mel, Conference Operator: Your next question comes from Ben Lyons with Jarden.

Ben Lyons, Analyst, Jarden: Just one further one on the cash flow statement, please. Noting the early repayment of $145,000,000 just given the very attractive structure and cost profile for a lot of your facilities. Just wondering what your intentions may be and whether you intend on making further early debt requirements or possibly just growing the cash balance going forward?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Sorry, Ben. It was just a little bit hard to get that last part of the question.

Ben Lyons, Analyst, Jarden: Just around whether you intend on making further early debt repayments or growing the cash balance? Thanks, Larry.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. Thanks, Ben. No, look, our view is that we’ll continue to balance out between the capital investment, the debt repayments and dividends. We don’t see a lot of value in building up a large cash balance. As I said, we’re back at 15% gearing, well into the range that we see as our normal operating.

I would expect that we’ll continue on reducing those debt term lines earlier.

Ben Lyons, Analyst, Jarden: Your

Mel, Conference Operator: next question comes from Al Harvey with JPMorgan.

Ben Lyons, Analyst, Jarden: Just on FY ’twenty six guidance. Wondering if could just step us through the downside and upside scenarios that would take you to the end of the 7 and 10,000 to 780,000 ounce range. Is it primarily around the speed of the Mongari ramp up or something else in the portfolio?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Al, I am going to not deflect that one to Matt because I think he’d give you all the downsides and not the upsides. But look, I think we can talk about that in August when we go asset by asset. But our position is that we want to continue what we’ve done over the last twelve months and really the last eighteen months, which is deliver consistently quarter in, quarter out. There are things that can be the downside, but our focus is on just delivery each quarter safely getting those ounces and copper tonnes out.

Ben Lyons, Analyst, Jarden: Sure. Thanks, Larry. And maybe are you able to share the FY ’twenty six copper price and Australian dollar assumptions?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. It’s in report, dollars 4,400 an ounce Aussie for the gold royalty price assumption and $14,500 a tonne Australian for our copper by product credit.

Ben Lyons, Analyst, Jarden: Your

Mel, Conference Operator: next question comes from Mitch Ryan with Jefferies.

Paul Keener, Analyst, Ord Minute: First question, obviously, the two key studies completed during the quarter still need to go to the Board. So I’m assuming that those the CapEx associated with those is excluded from the FY ’twenty six guidance at this point in time. Is that correct?

Ben Lyons, Analyst, Jarden: In terms

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: of studies and the like, are included is the trucking requirements that we have for Ernest Henry. In terms of E22, nothing material in the guidance. And in terms of but we’re not expecting any execution in FY ’twenty six.

Ben Lyons, Analyst, Jarden: Okay. Perfect.

Paul Keener, Analyst, Ord Minute: Thanks for clarifying that one. And then obviously, the RPC project commenced in the quarter. Have you commenced the Bundle roll move as part of that? And can you progress into Stage I without the Bundle roll move?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: So the second part, yes, Stage I progresses without the need for the Bundle to be in place. And in the first part, we were fortunate we had the Board out there in the June as part of their annual visit and a few days afterwards when the works on the Bund Wall commenced. So they actually saw the contract and mobilizing the site while we were there in the June.

Ben Lyons, Analyst, Jarden: Okay. I guess

Paul Keener, Analyst, Ord Minute: been given capital numbers, if I recall correctly,

Ben Lyons, Analyst, Jarden: around it happening in dry conditions to the in wet conditions.

Paul Keener, Analyst, Ord Minute: Have we that sits inside that four thirty?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. So the four thirty allows for Northern Light Protection Bun to be done as a wet move, and the the Southern, it’s intended as as a dry move, but that’s a few years away.

Ben Lyons, Analyst, Jarden: Okay.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: And based on where it is, we’d expect the the water to have receded enough.

Ben Lyons, Analyst, Jarden: Okay. Great. Perfect. Appreciate your time. That’s it for me.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Thanks, Mitch.

Mel, Conference Operator: Thank you. Your next question comes from Andrew Bola with Macquarie. Please go ahead.

Ben Lyons, Analyst, Jarden: Apologies if you’ve already answered those. I’ve got booted during Dan’s questions. The first one for me, you provided some broad color from the major operations into next year. Just wondering if you can provide similar commentary on Red Lake. I mean, I think comments in the past is that asset long term potential of roughly 140,000 ounces per annum.

Is that still where the thinking is? And is that the sort

Matthew Frydman, Analyst, MST Financial: of run rate you expect to achieve in ’twenty six?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Thanks, Andrew. Sorry that Dan kicked you off the line. In terms of Red Lake, I’ll hand to Matt just to talk about the operation and where it’s going. I was there a couple of weeks ago and just seeing that they’re definitely getting more resilience into the operation and being able to get more consistency. What we want and that hasn’t changed for the last eighteen months, we want 30,000 to 40,000 ounces quarter in, quarter end, safely delivered and generating positive cash.

We saw that through last year. And Matt, do just want to talk about then what that does going forward? Yes. I think

Matt O’Neill, Chief Operating Officer, Evolution Mining: you covered it off in terms of the real key for Red Lake is about making money. And so that continues to be the focus rather than chasing a target is is probably the message to keep giving the team at that operation, and they’ve been able to do that this year. So the 30 to 40 each quarter, obviously, you do the maths on that and you get your range, but that’s still the thinking. It’s still probably an exciting asset, and I know Glenn would be pretty keen. In terms of geology and what we still see available there, for me, I still look at that as one of the exciting ones.

It’s we’ve got to earn the right and and have consistent delivery and making some money to be able to go and chase that. So that’s kind of the process for at least the next twelve or eighteen months for me at Red Lake.

Ben Lyons, Analyst, Jarden: No worries. Thanks. And on to Mt Rawdon. I mean, last quarter, you commented that you’re going to see stockpile production in the fourth quarter of FY ’twenty five. You’re doing a final Talaten lift, and it seems to be an implication that sorry, an inference that production will continue into ’twenty six.

I assume that’s not material. And is that included in the overall group production number for FY ’twenty six?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes. Andrew, that was a question of Dan’s. So Mt Rawdon, based on the metal prices, we’ll continue to process some low grade material through the plant because it does make money as ever. We’ll see that tail off through the next couple of quarters. The ounces are included in the seven ten to seven eighty.

They’re not material ounces in terms of a group perspective. It will be less a lot less than what we did, the 35,000 ounces last year. And in terms of our all in sustaining cost, the ounces and costs of the other assets are the only ones that are included in terms of the AISC. Okay, perfect. Thanks.

That’s all for me.

Mel, Conference Operator: Your next question comes from Alex Barclay with RBC.

Ben Lyons, Analyst, Jarden: Just a quick follow-up question on Red Light Okay. And it was a great baseline. You’re able to give some breakdown of which mine areas had occurred at and and why and and why was why did the update do now? Thanks.

Glen Marsterman, VP, Discovery, Evolution Mining: Yeah. So, Alex, you’re referring to the MRL reserve grade at Red Lake just to be

Ben Lyons, Analyst, Jarden: Yeah. That’s right. Apologies. I don’t think it was article since then. So, yeah, the decision is that it basically impacts guidance going forward.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yeah. So there’s a couple of couple of

Glen Marsterman, VP, Discovery, Evolution Mining: things to on the reserve grade. I think what what we’ve done in the underground is really to sort of fully understand the full potential of the resource and how that’s going to convert to a reserve. So a couple of the drivers there that have really sort of driven affected impacted cut off grades. So we’ve seen inflation come in. But also as we’ve started to open up in the underground, we’ve seen that we’ve had swings and roundabouts and we’ve not seen the type of continuity that we had assumed in the drilling by the spaced at the time.

So these have driven changes to both the resource and the reserve. And so what we’ve done on the reserve is to look at the resource to sort of maximize the full reserve potential. Now in fact, what that enables us to do is then to that we’re currently mining to, and as Laurie mentioned earlier, in terms of what we’ve been doing in the last eighteen months, it’s really to start to look at how start how to generate cash flow and what that is doing what that is switching us to is mining at a higher cutoff grade, mining more selectively as we sort of progress at Red Lake, and, yeah, mining to a grade that’s in the plan is going to be higher than the reserve. Now what enables us to do that in the plan is that we do have resource that sits there at higher grade. We need to upgrade the drilling classification on that.

So we’ve doubled the drilling budget in FY ’twenty six to enable us to do that. That will convert to reserve and allow us to then sort of narrow that gap between what we see in the reserve grade, which is lower than what we have in the plan.

Mel, Conference Operator: Your next question comes from Matthew Frydman with MST Financial.

Matthew Frydman, Analyst, MST Financial: I might continue with Glen while he’s got the mic. And can I ask on Mungari in the context of some of your commentary already this morning and also the recent MRR update? Obviously, you’re finding more high grade underground material from Genesis continuing to add tonnes to the reserve there. So I guess looking forward and now that the mill project is largely completed, how do you think about the splits in terms of feed between underground, open pits from Castle Hill and other areas? Does that change going forward now that you’ve got more confidence in the underground?

I think previously you said you expect it to be about an eighty-twenty split between open pit and underground. As I say, does change now going forward? Is there any consideration in that of feeding 100% Evolution owned dirt versus EKJV dirt into the mill? And I guess bigger picture, is the near term target still that sort of circa 200,000 ounces? Or as you suggest, Glen, does this discovery more kind of add to the runway or add to the length of time that you can operate at that level in the future?

Does it sustain that production level for longer?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Yes, Matt, Glenn will talk about the exploration potential. I think in terms of an operating standpoint, the eighty-twenty is still the expectations in the plan of the split between the open pit and the underground. Glen’s role is to get the 20% to 30%, and therefore, we get more production out of Mungari. In terms of the joint venture, I mean, our EK JV, it operates it’s operating well. We do the campaign processing of that material that will continue as we go forward even under the expanded plant.

Do want to talk about the underground and Yes.

Glen Marsterman, VP, Discovery, Evolution Mining: And I think, in terms of what we saw, Matt, you referenced the the sort of the growth in the resource and the reserve in our MRR statement. A lot of that was driven in the open pits. What you know, we we have captured some you know, the resource growth that I spoke about in the underground this morning. That is included, but most of that growth was driven by the open pits, and that was with the drill bit and metal prices has also helped increase there. I think from what we’re seeing at the moment in the the extension of these things is, you know, and and continuing to delineate and grow the resource is really, really important to us.

As Laurie alluded to, I think the first trick that we want to be able to succeed at is actually extending that 20% contribution for as long as we can into the future. What we’re doing with the results at the moment is confirming we can. So we want to be able to get that underground production to match the open pit production in terms of its ultimate mine life so that we always have that eighty-twenty contribution. Now assuming we’re good enough and we make more discoveries in the underground, which we believe we will, then there’s the opportunity to to think about how we, if and we increase the underground production rate. And I think what the result both from Genesis and its extension towards Barkers.

And then at Arctic, which is further north of Millennium, we’re starting to see that we have that opportunity to deliver on both fronts.

Matthew Frydman, Analyst, MST Financial: Yes. Understand. Thanks for that, Glenn. That’s pretty clear. Can I ask just a quick one while we’re on Mungari?

The processing cost, the all in sustaining cost of $91 an ounce, I’m assuming that, that largely represents the capitalization of most of the processing costs, while obviously the mill expansion is ramping up and you’ve alluded to commercial production in the first half. So should we expect that processing costs as a function of all in sustaining costs will lift once you declare commercial production, but obviously offset by the growth CapEx rolling off. Hope that all made sense, but yes, just wondering what the $91 an ounce relates to? Thanks.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: The answer there, Matt, is no, it isn’t. The capital for the plant is in the major capital section of the cost per ounce. The higher cost per ounce at Mungari is on two things. You’re putting you are in a commissioning phase and you’re putting through lower grade material through that phase. And then we also have toll treated some material that was of our old low grade stockpile material that will come through into a processing cost as well.

But what you’ll see in FY ’twenty six as we move to the 4,200,000 tonne rate, cost per ounce will reduce, particularly in the processing area. That’s where we’ll get the economies of scale.

Matthew Frydman, Analyst, MST Financial: Yes. Okay. I understand, Laurie. Perhaps I didn’t express it clearly, but in the quarter, you declared that your processing cost per ounce at Mungari was $91 an ounce, which seems artificially low. So I’m just

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: trying to understand what drove that, whether that was recognizing sorry, that revenues that If in that regard, yes, some of those commissioning costs get backed out and capitalized. So I thought you meant the actual construction costs. So, yes, Matt, in that regard.

Matthew Frydman, Analyst, MST Financial: Yes. No. Sorry. I meant the yeah. I meant the impact to

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: all in sustaining costs.

Matthew Frydman, Analyst, MST Financial: So I assume partly that capitalization continues until you declare commercial production?

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Correct.

Matthew Frydman, Analyst, MST Financial: Okay, I understand. And then maybe just lastly, I suppose, capital management and capital returns. Obviously, you’ve mentioned on the call that you’re quite comfortable with the balance sheet flexibility. Obviously, gearing’s come right back into the range. Just thinking about how that translates to capital returns at the end of the financial year.

Obviously, you enjoy a Tax Shield benefit on some of those cash flows that you generate, particularly out of Northparks. I guess wondering whether, in your view, does the franking balance in generation support continuing to pay out 50% of cash flow as the policy sort of dictates? Or are there other options? Remind us of where buybacks sit in terms of the capital return framework? And is that something the Board might consider?

Yes.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Short answer to that, Matt, is we each time we sit down with the Board and look at our policy. We’ll do that in August. Think the last couple of halves we’ve made the call that our policy we think is working well where 50% of our cash flows going back to our shareholders and we use the balance for either reinvestment in the business, reducing our gross debt levels, I don’t think you’re to see much of a change.

Mel, Conference Operator: Thank you. There are no further questions at this time. I’ll now hand back to Mr. Conway for closing remarks.

Laurie Conway, Managing Director and Chief Executive Officer, Evolution Mining: Thank you, Mel, and thank you, everyone, for taking the time to join us on the call today. We certainly had a great quarter to finish a successful year, which improved in not only the safety and the consistency, but also in the exploration and projects areas and generating significant cash flow as we’ve seen today. We’ll continue to apply that cost and capital discipline, and we’ll see that flow through into FY ’twenty six and look forward to updating you next month on our full year financial results. Thank you.

Mel, Conference Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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