Evolution Mining’s (ASX: EVN) shares were up around 2% in afternoon trading after the Sydney-based large-cap gold and copper miner delivered record earnings and record cash generation during the first half of FY25.
The ASX50 stock reported a 1H net profit of $365 million, up 277% from last year. Despite a major jump in asset valuations, the company said it would not be perturbed by future organic and M&A growth following numerous recent acquisitions, including the Northparkes mine in NSW for US$475 million.
The miner will pay a fully-franked dividend of 7 cents a share, up 250% on the previous period.
With the gold price now at a record high just under US$2,900 an ounce - having run up 30% in 2024 – managing director Lawrie Conway has also prepped shareholders for a dividend bonanza.
“With spot prices well above the achieved prices in the first half and the business well placed to deliver on FY25 guidance, we are on track to generate over $2 billion of operating cash flow for the year, which will continue to see improved returns to our shareholders,” said Conway.
Gold price to hit US$3,000
Added to shareholders' fortunes, Citi expects gold prices to remain elevated throughout 2025 - potentially reaching the $3,000 mark - as geopolitical uncertainties continue to impact investor sentiment.
The miner’s earnings margin increased from 43% to 50%, driving underlying earnings growth of 77% to a record $1,014 million.
Underscoring the strong result was a 22% increase in gold production to 388,346 ounces and a 36% lift in copper production to 37,613 tonnes, plus higher gold and copper prices and slightly lower costs.
The miner achieved an average gold price of $3,875 an ounce (up 29%) and an average copper price of $13,795 a tonne (up 9%), while its all-in sustained cost was down 1% to $1,638 an ounce.
Other important numbers for today:
• Group cash flow lifted from $221 million to $273 million.
• Statutory net profit was up 277% to $365 million.
• Underlying net profit was up 144% to $385 million.
• Record earnings per share of 18.4 cents.
Today’s result coincided with revelation that the miner’s founder Jake Klein will move from his current executive chairman role to non-executive chairman from 30 June.
“I am very confident this company will still be able to identify and execute deals that are accretive to us, and which improve the quality of our portfolio,” Klein noted.
While the miner currently has five Australian assets, plus the troubled Red Lake operation in Canada, the miner plans to optimise its portfolio of assets to eight.
However, Conway reminded investors that the company is in no hurry with valuations at current levels.
Looking forward
The miner is around nine months ahead of schedule on an expansion aimed at boosting Mungari production from 130,000 ounces to 200,000 ounces annually.
Meanwhile, the Castle Hill pit, which will provide base load ore for the new mill, is on track for an advanced project schedule.
While mining activity at Mt Rawdon ceased during the half-year, management said the Feasibility Study for the Mt Rawdon Pumped Hydro project is progressing well and remains on schedule.
The miner also noted substantial progress in organic growth studies at Evolution's operations during the half-year with exciting drill results at Ernest Henry, Northparkes and Cowal.
Evolution Mining has a market cap of $12.5 billion making it a top ASX50 stock; the share price has more than doubled in one year and is up 31% year to date.
The stock’s share price appears to be in a strong bullish trend confirmed by multiple indicators.
Consensus on the stock is Hold.
This article does not constitute financial product advice. You should consider independent advice before making financial decisions.
