EVOLUTION MINING LIMITED — Annual Report 2018

Oct 18, 2018

EVOLUTION MINING CREATING AUSTRALIA'S PREMIER GOLD MINING COMPANY

ABOUT EVOLUTION

We are a leading, growth-focussed Australian gold miner. Evolution operates five wholly-owned mines – Cowal in New South Wales; Mt Carlton, Mt Rawdon, and Cracow, in Queensland; and Mungari in Western Australia.

In addition, Evolution holds an economic interest in Ernest Henry, in Queensland, that will deliver 100% of future gold and 30% of future copper and silver produced from an agreed life of mine area. Outside of the life of mine area Evolution will have a 49% interest in future copper, gold and silver production from Ernest Henry.

In FY18 we produced 801,187 ounces of gold at an AISC of A\$797 per ounce to reach seven consecutive years of achieving production and cost guidance. Evolution has guided FY19 Group gold production of 720,000– 770,000 ounces at an All-in sustaining cost of A\$850–A\$900 per ounce of gold.

CONTENTS

Executive Chairman's Report	2
Sustainability Report	5
Chief Operating Officer's Review	35
Innovations and Asset Optimisation 42
Discovery	46

Front Cover: Photo of employees working in the open pit at Mt Rawdon taken by Fraser Perry (graduate Mining Engineer).

Mineral Resources and Ore Reserves 56 Chief Financial Officer's Review 63 Annual Financial Report 65 Shareholder Information 157 Corporate Information 159

FY18 HIGHLIGHTS

Continued delivery from operations

• Seventh consecutive year of achieving production and cost guidance
• Gold production of 801,187 ounces
• Record low AISC1 of A\$797 per ounce (US\$618/oz)2
• Record low All-in Cost (AIC)3 of A\$1,033 per ounce (US\$800/oz)2
• Continued improvements in safety with a 31% reduction in TRIF to 5.49

Sector leading cash generation

• Record operating mine cash flow of A\$811.8 million and record net mine cash flow of A\$539.94 million
• Record net mine cash flow at Ernest Henry (A\$219.2M), Mt Carlton (A\$108.7M) and Mt Rawdon (A\$49.7M)
• Group cash balance increased by A\$285.8 million to A\$323.2 million
• Net bank debt reduced by A\$325.8 million to A\$71.8 million
• Fully franked cash dividends of A\$109.9 million paid during FY18

Sustainable long-life asset portfolio

• Group average reserve life extended to beyond nine years
• Organic growth delivered through exploration success at Cowal, Mungari and Cracow
• Cowal's growth projects Stage H cutback and Float Tails Leach project remain on schedule and on budget

Innovative culture

■ Fast firsts and early adopters of new technologies driving asset optimisation to improve safety and efficiency, and reducing costs for asset optimisation

Shared value

• A\$1.26B contribution into the Australian economy

• Five new shared value projects and four environmental enhancement projects

• Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense 2. Using the average AUD:USD exchange rate of 0.7752 for FY18 3. Includes AISC plus growth (major project) capital and discovery expenditure. Calculated on per ounce sold basis 4. Group total of A\$539.9M includes Edna May net mine cash flow of A\$0.7M

We Say, We Do, We Deliver

Executive Chairman's Report

The 2018 Financial Year was yet another year in which our people delivered exceptional operating results from our quality asset portfolio which resulted in achieving record results on nearly every important metric we focus on.

We are a relatively young company and we are building one that we believe is both unique and distinct. In the seven years since our inception the Company has grown a reputation as a transparent, consistent and reliable gold producer.

Our core value of safety is critical to our success as a Company. Evolution remains focused on improving our high safety standards across our business. It is pleasing that in FY18 the Group achieved continued improvements in our Total Recordable Injury Frequency (TRIF) with a 31% reduction over the 12 months to 5.49.

At the same time, the Company continued its track record of delivering to, or outperforming, production and cost guidance. This marks seven consecutive years of achieving guidance since Evolution's formation in 2011.

Evolution produced 801,187 ounces of gold in FY18 at an All-in Sustaining Cost (AISC) of A\$797 per ounce and an All-in Cost of A\$1,033 per ounce. Using the average AUD:USD exchange rate for FY18 of 0.7752, Evolution's AISC equated to US\$618 per ounce, ranking Evolution as one of the lowest cost gold producers globally.

After six and a half years as Evolution's Chief Operating Officer, Mark Le Messurier departed the Company in December 2017. Throughout his time at the Company Mark helped build Evolution into one of the most highly respected mid-tier gold mining companies in the

On behalf of the Board of Directors of Evolution Mining Limited, I am proud to present you with the Company's 2018 Annual Report. This year's report also includes our inaugural Sustainability Report which supports our objectives of achieving long-term shareholder value in a corporately responsible manner and highlights the role we play in developing strong and sustainable communities.

world and had an unblemished record of delivery into production and cost guidance. On behalf of the Board and Leadership Team, I thank Mark for his significant contribution and wish him every success in the future.

Bob Fulker was appointed as Evolution's new Chief Operating Officer in February 2018 and has brought a strong focus on identifying innovative solutions in safety and operations to further improve the effectiveness and profitability of our assets.

In 2018 Evolution reported a record statutory net profit of A\$263.4 million. This was achieved on the back of a record operating cash flow of A\$811.8 million and a record net mine cash flow, after all sustaining and major project capital expenditure, of A\$539.9 million.

This strong cash generation enabled Evolution to reduce net debt by A\$325.8 million during the period to A\$71.8 million. The Company's gearing commenced the year at 15.9% and was reduced to 2.7% by 30 June 2018.

Ernest Henry, in its first full year in Evolution's portfolio, made another strong contribution, producing 95,209 ounces of gold at an AISC of A\$(641) per ounce to generate net mine cash flow of A\$219.2 million.

Cowal continued to deliver reliable, low-cost production with 257,951 of gold produced at an AISC of A\$877 per ounce. Mt Carlton also had another outstanding year with production of 112,479 ounces at an AISC of A\$535 per ounce.

The continued increase in cash generation of the business saw a total of A\$109.9 million in fully franked cash dividends paid during the year based on Evolution's dividend policy of a payout ratio of 50% of after tax earnings.

Major projects at Evolution's cornerstone Cowal operation progressed well during the year. The Float Tails Leach project, which will increase recoveries by 4 – 6%, and the Stage H cutback both tracked in line with plan. Cowal currently has a mine life through to 2032 and several significant opportunities are being assessed to increase production and further extend mine life. This includes increasing plant throughput from 7.5Mtpa to 9.8Mtpa, co-treating oxide ore and drilling activities to confirm and extend mineralisation at ore bodies outside of the main E42 pit, including E41, E46 and Galway/Regal.

A Modification 14 application to amend the current mining permit was submitted in March 2018. The application is to expand the plant to 9.8Mtpa and includes an Integrated Waste Landform and infrastructure upgrades.

Glen Masterman, Evolution's VP Discovery and Chief Geologist, continued to ramp up our activities in this area with a total discovery spend of A\$31.6 million in FY18. The projects with the highest investment for the year were Cowal's E41 and GR46, Mungari regional and Cracow extensional drilling.

Our focus on delivering on our strategy of upgrading the quality of our asset portfolio continued with the sale of the Edna May operation in September 2017 for an upfront payment of A\$40 million and a contingent payment of up to an additional A\$50 million.

Across our entire business our people have continued to work incredibly hard during the year and I would like to thank each and every Evolution employee and contractor for their contribution. Our people are our most important asset and we want to make every person's time at Evolution a highlight of their career. I also appreciate the support that our Leadership Team has received from the Board of Directors this year and recognise this as a critical ingredient of our success.

Evolution remains focused on prioritising margins over production growth and is forecasting Group gold production in FY19 of 720,000 – 770,000 ounces at an AISC in the range of A\$850/oz – A\$900/oz.

Evolution has a strong platform of high-quality assets with an average reserve life in excess of nine years. All assets are located in the safe jurisdiction of Australia with a highly skilled workforce, and in an attractive operating environment. Our balance sheet is strong, our assets are generating substantial cash flow and our business is now well positioned to prosper through the cycle.

Yours faithfully

JAKE KLEIN EXECUTIVE CHAIRMAN

Executing a clear and consistent strategy

SUSTAINABILITY REPORT

FY18 Sustainability Highlights

Safety

■■ Safety improvement: 31% reduction in Total Recordable Injury Frequency

Socio-economic contributions

• ■■ Five new Shared Value Projects commenced
• ■■ A\$1.26B contributed to the Australian economy
• ■■ A\$80M in direct spend with local organisations
• ■■ 52% local employment across our operations

Environmental

• ■■ Four Environmental Enhancement projects underway
• ■■ Zero material environmental incidents
• ■■ Zero fines for environmental incident/non-conformance

Diversity

• ■■ 50% female graduate intake for FY19
• ■■ Flexible work arrangements and helping parents return to work
• ■■ 4% of our employees identify as Aboriginal or Torres Strait Islander

Social licence to operate

■■ High approval rating from our stakeholders1

1. Determined by a study using the Stakeholder 360® research and engagement framework. Evolution was rated in the 'high approval' category (4.06 out of 5.00) . The mean social licence score in over 2,000 cases of social licence studied globally is 3.391

Reporting what matters to our business and our stakeholders

Our vision, strategy and values

Our vision

Inspired people creating Australia's premier gold company – a sustainable business that prospers through the cycle. We have grown into a globally relevant mid-tier gold producer since inception in November 2011.

Our strategy

We have a clear and consistent strategy:

• ■ Build a reputation for reliability and transparency
• ■ Reduce All-in Sustaining Costs
• ■ Increase free cash flow per share
• ■ Increase returns via dividends
• ■ Extend mine life

Our values

guide our behaviours and decisions in the workplace every day:

Safety: Think before we act, every job, every day.

Excellence:

We take pride in our work, deliver our best and always strive to improve.

Accountability:

If it is my responsibility, I own it – good or bad.

Respect:

We trust each other, act honestly and consider each other's opinion.

Sustainability Report

Evolution's inaugural Sustainability Report - providing transparency on the role we play in developing strong and sustainable communities in the interests of all stakeholders.

For us, being a sustainable business is about building a company that allows us to deliver long-term value to our investors while recognising our broader responsibilities to our other stakeholders. We believe that our direct and indirect economic contribution should generate shared value for all stakeholders, measured not only by the superior returns we deliver to our shareholders, but also by the positive legacies we leave in our communities. Our people are integral to our success and the delivery of our long-term strategy.

In FY18 we contributed A\$1.26 billion to the Australian economy (approximately A\$6.0 billion since formation of Evolution) and spent around A\$80 million directly with local community organisations. We attained a 'social licence to operate' score that placed us in the 'high approval' category which is a very strong result compared to other mining companies¹ .

Our partnership approach reflects our values of Safety, Excellence, Accountability and Respect and is guided by our Community Principles. In addition to our sponsorships and donations, we partner with our community stakeholders on Shared Value Projects – legacy projects that will provide benefits to the community that last beyond the life of the mine. In FY18 we established five new Shared Value Projects, including a business opportunity for one of our Queensland traditional owner partners and a regional tourism initiative in central west NSW.

Operating within an extractive industry, we know it is essential to provide a healthy and safe workplace for

our people and that we continue to deliver an outstanding level of environmental performance. We seek opportunities to effectively manage water and energy, minimise waste, and to reduce our environmental footprint. We currently have four environmental enhancement projects underway. We foster a culture where our people do the right thing because they want to, not because they have to, and this saw us reduce the number of injuries in FY18 by 31%.

We work to attract, engage, develop and retain talented people not only with the right skills but with the right mindset. We want our people's time at Evolution to be the highlight of their career. We invest in bespoke leadership programs as it is our leaders who are most influential in shaping the culture of our teams.

We believe that corporate governance is essential to sustained value creation and we are committed to maintaining a high standard in all aspects of corporate governance.

The voluntary reporting landscape is evolving rapidly, and we are committed to actively participating in enhanced disclosure of sustainability issues and opportunities. In FY18, we engaged an independent sustainability consultant to facilitate a workshop with various leaders across our business to identify and prioritise our sustainability topics. The material topics chosen were also informed by our engagement with stakeholders, including our 2018 Stakeholder Perception Survey (Deloitte).

Our inaugural Sustainability Report addresses Evolution's sustainability performance for the financial year ending 30 June 2018. This report provides information on economic, social and environmental topics that were identified as mattering most to our business and our stakeholders and builds upon the information we disclosed in our FY17 Annual Report. The key topics identified are:

• Heath, Safety and Wellbeing
• Local communities
• Traditional Custodians
• Procurement practices
• Effluents and waste
• Economic performance
• Water
• Biodiversity
• Energy use and emissions
• Mine closure and rehabilitation
• Employment

Corporate Governance

Evolution supports the intent of the ASX Corporate Governance Council's Principles and Recommendations (3rd Edition) and meets specific requirements unless disclosed otherwise. Our full Corporate Governance Statement is available in the corporate governance section of our website at https://evolutionmining.com.au/corporate-governance/.

Evolution's Governance Framework

Safety

We want our people to go home safely to their families. We foster a safety culture where people do the right thing for themselves and those around them because they believe in it, rather than because there is a rule in place.

The safety, health and wellbeing of our people is of paramount importance to us and we believe that every injury is preventable and that no task is so important that it cannot be done safely.

We work collaboratively with our internal and external stakeholders to identify and manage risks in the workplace striving to apply innovative and sustainable solutions that continuously improve our practices.

We have developed a comprehensive Health, Safety & Environmental (HSE) management system which our operations must comply with. Each calendar year, every site is subject to audit to ensure compliance with these HSE standards.

In FY18 we improved our safety performance achieving further significant reductions in our total recordable injury frequency (TRIF) from 7.96 to 5.49 and significant safety occurrence frequency from 4.95 to 3.20 (15% target reduction). Our focus on preventing vehicle incidents moved to "business as usual" and there was a further reduction in incidents over the year. We developed and rolled out our Critical Control plans for additional safety risks at each operational site and completed assurance reviews at the end of the year.

During the year, we focussed on improving the safety culture at each operational site. Audits were undertaken in December and June with each site demonstrating an improvement in safety culture.

Note: TRIF is calculated based on the frequency of total recordable injuries per million hours worked.

In FY19 we will continue with existing programs and commence new initiatives that will help drive our strategy and the achievement of our key goals. These will include:

• Two Critical Control assurance audits per site presented to the leadership team
• All critical control audit actions closed out by agreed time frames

Safety (continued)

We are very proud of our FY18 safety achievements

• 31% reduction in total recordable injury frequency
• 35% reduction in significant safety occurrence frequency
• An average of 110 safety interactions conducted daily
• Approximately 460 Take 5 pre-start safety checks conducted daily
• Conducted external safety audits of all our operations against the Evolution Safety and Health Management system
• Hosted our fourth Evolution Mine Rescue Challenge and the NSW Mine Rescue challenge which were held at West Wyalong

Awards in FY18

■ Victorian Mine Rescue competition – combined Evolution team Search and Rescue winner and Breathing Apparatus practical winner

We live by our Safety Principles

• Management takes accountability for safety performance
• Everyone is empowered to stop "at risk" behaviour and control unsafe conditions
• Everyone takes accountability for his/her own safety and for the safety of those around them
• All injuries and incidents are preventable
• No task is so important that it cannot be done safely

Emergency Response

Evolution continues to build mine rescue skills, capability and resources across the Group. We have five Emergency Response Teams (ERT) with a total of 147 members. Our teams have played an important role in supporting our operations and nearby communities.

Over the last 12 months, our ERT personnel were first responders to 16 offsite emergency incidents that occurred within our local communities. These incidents included motor vehicle accidents, fires, farm incidents and medical emergencies. The Mungari ERT provided assistance in Kalgoorlie following a significant storm in November 2017.

Evolution participated in a number of Mine Rescue events in FY18 as part of its commitment to safety and developing the skills of its people.

A team attended the Victorian Mine Rescue Competition and performed outstandingly well, winning the Search and Rescue exercise and the Breathing Apparatus practical event. This event highlighted the great collaboration between our mine rescue crews across different sites. For example, crews from as far away as Mt Carlton and Cowal worked together on specialised training, including swift water rescue.

We held our fourth Group Mine Rescue Challenge at West Wyalong showgrounds in New South Wales, and in the same week, hosted the New South Wales Mine Rescue

Challenge. Five teams participated in the Evolution challenge and eight teams in the New South Wales challenge. Our goal was for each team and its members to develop their skills substantially as a direct result of the challenge. The exercises included theory, multicasualty incident, search and rescue, road crash rescue and fire scenarios. It also involved a group scenario at the local flour mill involving community members and local emergency services where everyone worked together. The scenarios were designed to be realistic and replicate the intensity of emergency situations that could occur in a mine. Often this involved noise, wetness, darkness, inaccessible or hidden casualties, uncooperative patients and time constraints. There was great support from the local community and emergency services for both challenges which were hugely successful in building the resolve and abilities of the teams involved.

In December 2017, a Memorandum of Understanding (MOU) was signed between Evolution and the New South Wales State Emergency Service (SES). The MOU outlines how Evolution's staff will provide support to the New South Wales SES to build their operational response capability. Evolution also has agreements in place with various emergency service agencies in Queensland, Western Australia and New South Wales to work in partnership to support communities during any future natural disasters.

Pre-start stretching exercises at our Cowal operations

Health and Wellbeing

Promoting and supporting the wellness of our people is a mandate of our Safety and Health policy. Evolution is committed to investment in many activities that benefit our people's health and wellbeing including the provision of services by our health partners. Evolution offers confidential monthly one-on-one health consultations by physiologists to help individuals achieve positive health and wellbeing outcomes. This may include the tracking of health metrics such as blood pressure, cholesterol, glucose levels and weight, the provision of tailored exercise programs and proactive rehabilitation interventions.

The R U OK? Organisation has a mission to inspire and empower everyone to meaningfully connect with people around them and to support anyone struggling with life to genuinely change behaviour Australia-wide. At Evolution we embrace R U OK? Day. Not just once a year, but with regular reminders throughout the year to check in on our colleagues' mental health.

FY18 Health and Wellbeing Achievements

• More than 75% workforce participate in our Health and Wellbeing program
• 1,060 proactive rehabilitation interventions taken
• 7,760 one-on-one health consultations
• 2,029 Epworth sleep assessments
• Reductions in BMI, Blood Glucose and Cholesterol levels
• Onsite gym facilities and access to health professionals at our remote camps
• Group exercise activities at remote camps
• Employee Assistance Program (EAP) available to all employees and immediate family members
• Embracing R U OK? Day

75% PARTICIPATION IN VOLUNTARY HEALTH AND WELLBEING PROGRAMS

Our People and Culture

Inspired people creating Australia's premier gold company

One of the biggest challenges we face as an industry is attracting and retaining talented people. We want working at Evolution to be the highlight of our people's career and we believe we have the right group of people with a strong sense of purpose who are focussed on the continued delivery of our strategy.

Building a strong culture

We have continued to build a strong culture based on our values of Safety, Excellence, Accountability and Respect and have focussed on increasing our engagement levels and making Evolution an even greater place to work. This year we focussed on:

• Developing our people via our leadership development programs, individual development plans and on the job training
• Establishing employee consultation groups
• Embracing knowledge sharing using technology eg Yammer, as well as face to face forums
• Enhancing employee recognition programs

Focussing on creating an inclusive and diverse workplace

To us, diversity is about commitment to equality and the treatment of all individuals with respect. Diversity refers to all characteristics that make people different from each other including religion, race, ethnicity, language, gender, sexual orientation, disability, age or any other area of potential difference. Managing diversity makes us creative, productive, responsive, competitive and creates value for our shareholders.

Mining is the most male dominated industry in Australia1 . As of 30 June 2018, we had a total of 1,263 employees of which 1,097 are male (86.9%) and 166 (13.1%) are female.

In FY18 we paid attention to providing pathways to increase the number of women in our business and to helping mums and dads back into the workplace after taking parental leave. Some of our initiatives included:

• Increasing the number of flexible working arrangements eg adjusted start and finish times, compressed work weeks, and altered rosters
• Reviewing our practices for pre, during and post parental leave for males and females
• 1. Source: Workplace Gender Equality Agency data comparison 2017 www.data.wgea.gov.au

• 88% of employees who took parental leave returned to the workplace.
• Leveraging industry body memberships to offer mentee and mentor opportunities
• Attracting more female job applicants through targeted advertising
• Increasing female participation in our pipeline programs
• Current graduates: 40% female (exceeding the 30% target)
• FY18 vacation students: 29% female
• 2019 graduates: 50% female

Our workforce is comprised of 4% Aboriginal or Torres Strait permanent employees and more than half of our workforce are from our local communities (52%).

See our Workplace Gender Equality Public Report for further information on our workforce profile and our Diversity Policy is available on our website under the Corporate Governance section.

Our People and Culture (continued)

"Flexible work arrangements allow me to start later so that I can drop my son off at before school care. Without this flexibility, I would not be able to perform this role. It's very important to me that I can attend special school functions that occur during normal work hours such as certificate presentations and sporting events. I make up the time spent offsite at these events. I greatly appreciate this flexibility."

Marcelle - Geologist

Our People and Culture (continued)

Inspiring future miners

We are excited to be playing our part in building awareness amongst our younger people that mining offers a variety of vocational and professional career pathways. Our approach is to inspire, connect and engage with students via practical experiences and direct interactions with our mine sites and specialists to unearth these pathway possibilities.

Jason – Mining Engineer and Finance vacation student

Following my time as an engineering student, I aimed to improve my understanding of how the industry works as a whole. Being part of importance of this role within the mining industry. I was challenged and given my own roles and responsibilities. I noticed that Evolution stands by their values. It has been very rewarding to be part of a company displayed offsite. Evolution has given me the greatest possible start to

Some of our initiatives to help inspire students in FY18 included:

• Mine site tours with our local community schools
• Hosted high school work experience students at our sites and offices providing 'realistic job previews' of mining life
• High School scholarships offered to final year students to support tertiary education studies, particularly in STEM (Science, Technology, Engineering and mathematics) related fields
• Partnered with university faculties to host student study tours involving 'hands on' experience and mentoring by our Geology teams
• Hosted information and 'meet and greet' sessions with university mining faculties, highlighting the vacation and graduate student experience offerings
• Supported engineering student Demonstration Days by making our managers available to provide technical guidance and coaching to the students
• Provided winter and summer vacation student opportunities across each of our sites creating a pipeline of talent for our graduate program

Our flagship Graduate program

We believe Evolution can play a role in developing future leaders and have implemented a graduate program that is now getting nationwide recognition. The Australian Association of Graduate Employers ranked Evolution in the top 75 graduate employers. Evolution was the only gold mining company named in this group.

We have run three graduate programs with a bi-annual intake of around 9-12 graduates. The program runs over two years, with a range of rotations which provides broad exposure across many aspects of our business.

In FY18 we promoted graduate alumni into the roles of: Business Analyst (reporting directly to our Chief Operations Officer); Project Geoscientist within Group Discovery; and Project Manager at Cowal. In 2019, we will expand our Graduate intake by 20%.

Further information on our vacation and graduate programs is available on our website https:// evolutionmining.com.au/graduate-vacation-programs

Our People and Culture (continued)

Developing our people

We recognise that development is not a 'one size fits all' and have therefore designed a suite of personal and professional development opportunities for our people including:

• Performance and development planning by setting annual performance goals aligned to our annual Balanced Business Plan, tracking progress, and receiving direct feedback at biannual reviews and informally throughout the year, our people are clear on performance and development expectations.
• Bespoke leadership development programs our three tailored programs GOLD (intensive leadership experience), Silver (frontline leader workshop) and Alloy (leadership application) equipped over 100 of our leaders to drive a high performing team culture.
• Functional technical forums to share expertise, practice and knowledge to drive operational efficiencies through emerging technologies and applied innovation.
• Mentoring we matched high performing senior leaders with a Leadership Team member as a mentor which resulted in 33% of participants being internally promoted. We have a dedicated mentoring resource portal where our people can initiate their own mentoring relationships with the support of their Manager.
• Study support acquiring new skills and knowledge helps our people to perform at their best and delivers better business outcomes. Our employee benefits include financial study assistance and time off to study.

"I completed the Silver program. It reinforced a lot of what I am already doing as a leading hand and gave me confidence to tackle more difficult issues that arise. It also taught me that leading by example is the best way to go. I was given the opportunity to complete my Certificate III in Mobile Plant Maintenance. My Superintendent encouraged me to complete my apprenticeship onsite to give me more confidence mentoring staff and a better understanding of the safety aspects of the system components."

Doug - Step Up Leading Hand

Act Like an Owner

Our Act like an Owner (ALO) program has continued to be a key program in recognising our people for showing pride and commitment, being open to new ideas, supporting each other, being courageous and doing the right thing for the long term.

In late FY18 we streamlined this process allowing for easier submission of ALO nominations and more timely recognition of our people who are nominated.

Our focus for FY19

• Monthly Culture Pulse Survey to drive improvements
• Laser focus on roles and functions to ensure people are working on the right things at the right level
• Double the number of ALO nominations received in FY18
• Continue to develop our approach to inclusion and diversity and pilot a 'Return to Work' flexible working program at our Mungari operations for men and women who have been out of paid work for two plus years
• Extend our engagement with our local schools and Universities to build STEM capability and support vocational and professional talent pipelines
• Broaden our talent review and succession planning approach to emerging leaders and key specialists to strengthen leadership and talent bench strength

Our employees were again offered the opportunity to increase their ownership in the business through an employee share offer.

Social Responsibility

We believe we have an obligation to create shared value for all our stakeholders.

This is measured as much by the positive legacies we leave in our communities and the people whose lives we enrich as by the superior returns we deliver to our shareholders.

Listening to our stakeholders

In FY18 we completed our biennial Stakeholder Perception Study, facilitated by Deloitte, to understand our stakeholders' key areas of interest and concern and to measure the quality of our relationships. High quality relationships produce more social capital and are a foundation for social licence to operate.

We canvassed the views of 100 key stakeholders and 300 randomly selected members of the public across our five operations. Our Social Licence score was determined by using the Stakeholder 360® research and engagement framework. Evolution was rated in the 'high approval' (4.06 out of 5.00) category of social licence, with Deloitte noting that this is a high level of social licence compared to other mining companies. The mean social licence score in over 2,000 cases of social licence studied globally is 3.391 .

The study showed that what matters most to our stakeholders is local employment, local procurement and community investment, whilst the key areas of concern are environmental impacts and planning for closure.

Each operation identified key actions to address the feedback received. We will report our progress against these actions and ensure we continue our open dialogue with stakeholders and maintain our reputation for transparency.

Evolution has procedures to ensure complaints are handled appropriately and are promptly addressed. We share learnings across the business to prevent future similar incidents and we actively work to minimise the number of complaints received.

Community investment

We are committed to investing in our communities and partnering to achieve meaningful outcomes and to generate shared value. We share the economic benefit by, wherever possible, prioritising local procurement and local employment and training opportunities, particularly for our local indigenous communities.

We make a significant economic contribution to the Australian economy as well as directly within our local communities (see page 26).

In addition to our sponsorships and donations, we collaborate to implement projects that will continue to benefit the community long beyond the life of the mine. These Shared Value Projects will be particularly important for planning for closure and supporting the viability of communities beyond the life of mine which our stakeholders indicated were a very high priority at every operation in our Stakeholder Perception Study.

1. Boutilier, R. Technical notes on the SLO measure, 2015

SOCIAL LICENCE TO OPERATE

RATING FROM STAKEHOLDERS 'HIGH APPROVAL'

5 NEW SHARED VALUE PROJECTS

BUILDING COMMUNITY RESILIENCE

We collaborate to implement projects that will continue to benefit the community beyond the life of the mine.

In FY18 we commenced five new Shared Value Projects within our local communities:

• Cowal, NSW Somewhere Down the Lachlan Partnership with Forbes Art Society and local Councils to develop a significant regional tourist attraction linking the Forbes, Lachlan and Bland Shires. The initiative includes a sculpture trail along the Lachlan River, regular food and wine events that promote local produce to restaurants and consumers, and promotion of indigenous and other local art through sales and art classes.
• Mt Carlton, Qld 'Birriah Freight' Business Partnership with the Birriah People to establish

a freight business, to be owned by Birriah, which will consolidate freight in Townsville, deliver to our Mt Carlton operation and grow to service other businesses in the region. Supported by QUBE Logistics and other external partners.

• Mt Rawdon, Qld Mt Perry Men's Shed Partnership to enhance the local Men's Shed facilities, including tools, equipment and infrastructure for their new shed. Men's Sheds enhance mental health, build mateship and strengthen community spirit. They also provide valuable services to the community.
• Cracow, Qld Cracow Community Caravan Park Partnership with Banana Shire Council to expand the Heritage Centre Caravan Park from 3 serviced

sites to 11. Ownership will transition from Evolution to the Cracow Community Centre, a community co-operative. This will enable increased tourism in Cracow, provide potential for new local business opportunities and generate a sustainable income stream for the local community.

■ Mungari, WA - Hannans Primary School - Sensory Nature Play Area

Partnership to create a natural outdoor play area providing opportunities for children from the school and local community organisations to develop a range of skills and senses that are vital for physical and brain development.

Evolution received the Community Event of the Year Award in the Mt Perry Australia Day awards for delivering various health initiatives to the local community including skin checks, flu injections, first aid training and hosting the Mt Perry Charity Ball that raised over A\$33,000 to assist the prevention of suicide.

We were named Community Citizen of the Year at the Coolgardie Shire Australia Day Awards for our contribution to the community, including two Shared Value Projects, construction of a sensory nature play area and bush tucker garden in Coolgardie Primary School and a youth park in the community centre.

Traditional Custodians and Cultural Heritage

We respect the role of the traditional custodians of the land on which we operate, and we value the partnerships we have built with them. We take our responsibility to protect and manage Cultural Heritage extremely seriously and we are working with our indigenous partners to develop and deliver Cultural Awareness training at each operation to ensure we remain informed and respectful.

We are committed to partnering to advance the outcomes for indigenous people and we have implemented various initiatives to deliver this, including: our successful Shared Value Project with Gudjuda Reference Group Aboriginal Corporation; our Project

Bridge collaboration with key supply partners; and our establishment of the Birriah Freight business. We also provide scholarships for secondary and tertiary students, traineeships, apprenticeships and direct and indirect employment.

Whilst traineeships and entry level positions offer an important first step, we believe leadership development and promotion opportunities are critical for delivering sustainable outcomes. For example, we are pleased that two of our three Wulli Wulli trainees at Cracow were provided with full time positions in FY18.

Braydon – Our Apprentice Fitter from the Birriah People

Braydon commenced his career at our Mt Carlton operation in January 2014 as one of five trainees from the Birriah People. He completed a Certificate II in Resource Processing and was offered permanent employment, becoming a very competent processing operator. Braydon developed a keen interest in maintenance, assisting the team in his spare time, and was awarded the position of Apprentice Fitter. Braydon also stepped up to join the Emergency Response Team, became a mentor to his indigenous colleagues and acted as a role model to other employees.

CULTURAL HERITAGE INCIDENTS: NIL

CULTURAL HERITAGE-RELATED INFRINGEMENTS: NIL

COST OF CULTURAL HERITAGE-RELATED INFRINGEMENTS: NIL

Charmaine – winner of the 2018 Exceptional Indigenous Person in Queensland Resources

We were proud to see Charmaine named the 2018 Exceptional Indigenous Person in Queensland Resources. Charmaine, a Wulli Wulli person, joined our Cracow operation in 2012 as Safety Administrator, quickly progressing to Administration Team Leader. Her leadership qualities, drive for delivering positive community outcomes and ability to act as a mentor and confidante to people at all levels saw Charmaine promoted into the Group Community Relations Advisor role in 2017.

Further examples of our community initiatives and outcomes are provided on our website: www.evolutionmining.com.au/community/

Our Socio-Economic Contributions

We make significant contributions to local, regional and national economies directly through the payment of taxes and royalties to governments, as well as to our workforce and suppliers. In FY18 we contributed A\$1.26B to the Australian economy and approximately A\$6B since Evolution formed in 2011.

A\$80^M DIRECT SPEND WITH LOCAL ORGANISATIONS >A\$1.26^B CONTRIBUTED INTO AUSTRALIAN ECONOMY ECONOMIC CONTRIBUTION FY18 (A\$M)

EVOLUTION ECONOMIC CONTRIBUTION SINCE INCEPTION (A\$B)

A\$6.0^B

EVOLUTION ECONOMIC CONTRIBUTION SINCE INCEPTION (A\$B)

Tax Transparency Code

The Australian Board of Taxation released a voluntary Tax Transparency Code in 2016 designed to encourage greater transparency within the corporate sector of its compliance with Australian tax laws. We have adopted this voluntary reporting and continue to provide this information on the Evolution Mining website under the Corporate Governance section.

Protecting the Environment

We are committed to attaining an outstanding level of environmental performance in all our workplaces

Management Approach

Evolution incorporates environmental considerations into all areas of our business to effectively manage environmental impacts and risks. We have an Environment and Sustainability Policy that we expect our people and contractors to adhere to (available to view on our website under the Sustainability/ Environment section).

We believe we have a social responsibility to not only achieve all legislative compliance expectation but to strive for leading practice and to meet the expectations of the communities we operate within and are part of.

We developed and implemented 11 Environmental Protocols to lift us to a higher standard of environmental performance and have instituted governance reviews for our tailings storage facilities.

We are focussed on enhancing environmental stewardship through the development and implementation of quarterly environmental assurance reviews and integrating environmental considerations into our Life of Mine Plans across all sites. We undertake periodic reviews to ensure that our environmental performance targets and objectives are being achieved.

In FY18 we maintained our track record of no material environmental incidents and had four environmental enhancement projects underway.

Environmental Enhancement Projects

Coastal rehabilitation

We have partnered with North Queensland Dry Topics to sponsor the Burdekin waterways environmental enhancement project. The project involves the extraction of weeds in the Kalamia Creek to reinstate an open body of wetlands, restore fauna diversity and improve farm productivity.

Wildlife rescue - online training courses

We have partnered with WIRES (NSW Wildlife Information Rescue Education Services) to develop online training for volunteers in NSW, SA, QLD and WA. This initiative will improve access to training, reduce costs incurred by WIRES and the volunteers, and enhance the services provided.

Mallee fowl recovery in the Bland Shire

The Mallee fowl population in NSW is listed as endangered. Evolution has partnered with the Lake Cowal Foundation and the NSW Government to support the revitalisation of the Mallee fowl species in regional NSW as part of a greater National program which is being led by the Commonwealth Government.

Rehabilitation and land care

We have partnered with the Kalgoorlie-Boulder Urban Land Care Group to upgrade the nursery and expand communication programs for enhanced awareness of rehabilitation programs being undertaken.

Voluntary nature refuge reserve at Mt Perry

This project involves the voluntary preservation of approximately 10 square kilometres of land owned by Evolution near our Mt Rawdon operation at Mt Perry to create a nature refuge for local fauna (e.g. koalas and gliders). This project will help protect otherwise at-risk native fauna.

Environmental Protocols

Our Environmental Protocols consist of 11 benchmarks for best practice management in key business risk areas such as Waste Rock Management, Cyanide Management and Mine Closure and Rehabilitation. All our sites and workplaces are required to meet the protocols which are audited on a regular basis. Details of each protocol are provided on our website https://evolutionmining.com.au/ environment-2/

• 1. Air Quality
• 1. Biodiversity Management
• 1. Chemical Management
• 1. Cyanide Management
• 1. Water Management
• 1. Hydrocarbon Management
• 1. Waste rock Management
• 1. Rehabilitation and closure Management
• 1. Tailing Management
• 1. Waste Management
• 1. Energy efficiency

The environmental topics identified as being most important to our business and stakeholders are reported on below.

Water Management

Evolution takes a proactive approach to responsible water management and as a minimum complies with all relevant water licensing requirements set by Government and industry regulators. Our water management protocol ensures that our operations effectively manage water, including process water, stormwater, discharges and dewatering activities.

We utilise probabilistic site water balance models to predict water flow and requirements during droughts and storm-water flows.

Our operations prepare for seasonal variations in water flow and maintain routine dewatering activities to satisfy water licence conditions.

Each operation has different hydrogeological settings ranging from fresh to hypersaline surface and underground water and specific site licence to operate conditions.

In addition, there are water management requirements associated with tailings and waste rock management designed to manage risks associated with unwanted events.

The various streams of water have specific water management requirements. The protocol guides operations to ensure that clean water is kept separate from contaminated water (a similar management strategy is used for other waste by-product streams).

We monitor fresh water (surface, groundwater and rainwater intake) and recycled water volumes to ensure controls are implemented. FY18 water data from our sites is provided over page.

Environmental data (water, air emissions and energy) reported from our operations is collated and verified by external environmental accountants Greenbase.

FY18 parameter	Cowal gold operation	Cracow operation	Mt Carlton operation	Mt Rawdon operation	Mungari operation	Total
Surface water (ML)	1,274	487	283	33.6	-	2,077
Groundwater - mine dewatering (ML)	556	-	81	-	2,575	3,212
Groundwater - borefields (ML)	1,476	-	0.11	-	-	1,476
Rainwater (ML)	-	38.4	-	1,817	-	1,856
Municipal water (ML)	-	-	-	-	59	59
Other water (ML)	-	-	-	-	-	-
Total	3,305	526	364	1,851	2,634	8,680

FY18 Total Water Withdrawal

FY18 Water Recycled and Reused

FY18 parameter	Cowal gold operation	Cracow operation	Mt Carlton operation	Mt Rawdon operation	Mungari operation	Total
Total volume reused (ML)	2,711	305	171	2,801	1,030	7,018

Note: Water recycled and reused exceeded the withdrawal volume at Mt Rawdon mainly due to above average rainfall experienced in the Bundaberg region.

Climate Change, Emissions and Energy

Evolution acknowledges that Climate Change is occurring and its effects have the potential to impact our business. In FY19 we plan to identify and assess climate-related impacts to our business.

As a mining company, we can contribute to global efforts to combat Climate Change by promoting energy efficiency and reducing emissions. Each year we create and submit annual reports for the National Pollutant Inventory (NPi) and the National Greenhouse and Energy Reporting Act (NGER) to estimate greenhouse gas (GHG) emissions and energy use and we provide this information on our company website www.evolutionmining.com.au/environment-2.

In FY18 Scope 1 emissions decreased by 5%, Scope 2 emissions decreased by 9%, and energy consumption decreased by 7% compared to FY17. The decreases in emissions and energy are largely due to divestment of the Edna May asset in October 2017.

A summary of FY18 results is provided in the tables below.

	FY18	FY17
GHG emissions (t CO2-e)
Scope 1	159,061	167,734		-5%
Scope 2	394,144	430,993		-9%
Total Scope 1 & Scope 2	553,205	598,727		-8%
Energy (GJ)
Energy consumed	4,075,493	4,402,695		-7%
Net energy consumed	4,075,493	4,389,992		-7%
Energy produced		12,702		N/A

Air quality

Our operations develop, implement, communicate and adhere to their air quality management plan. This includes developing and implementing strategies, operational controls, management practices and monitoring/ inspections programs to verify that air emission controls are operating properly and to provide relevant, traceable data for internal and external reporting. We manage point and non-point source air emissions to ensure we are protective of human health and the environment.

Ambient dust, noise, odour, and spill light impacts on our surrounds and are closely monitored at our operations. Protection of our social licence to operate means that we operate above compliance in these areas within our community surroundings. We report our air emissions as per our legal and other requirements and communicate the outcomes in the various consultative forums for our operations.

Biodiversity management

We acknowledge that the nature of our operations can have significant environmental impacts. Additionally, our operations and growth strategy are dependent on obtaining and maintaining access to environmental resources. We believe that we all have a role in demonstrating our environmental responsibility by minimising impacts and contributing to enduring environmental benefits through every stage of our operations.

We have developed land and biodiversity management plans at our operations. These plans are risk-based. Adaptive strategies include the voluntary and prescribed biodiversity offset areas that are actively maintained for fire, pest and weed control at our operations.

CASE STUDY: Burdekin waterways environmental enhancement project

We have partnered with North Queensland Dry Tropics to improve the quality of runoff water into the Great Barrier Reef lagoon by slowing wet season floodwaters to allow entrained sediment time to settle. The project involves the extraction of weeds from the Kalamia Creek to reinstate an open body of wetlands, restore fauna diversity and improve farm productivity. Migratory birds from as far away as Siberia will have significant portions of their natural habitat reinstated and extracted weeds are being converted to compost.

The first phase of Evolution Mining's Environmental Enhancement Project (EEP) commenced in December 2017, removing 15 hectares of aquatic weeds from the Kalamia Creek wetland water body. The weed piles were transported to the composting site at a local landholder's property who placed the material in windrows and turned the piles fortnightly using his compost turner.

All local landholders supported the objectives of the project and are keen to see the open water body return. The landholders told stories about fish previously caught in the area before it became choked up with weeds and how they would like the local children to share the same experiences. Following a rainfall

event in February, the creek system received a good flood pulse.

A manager at the Pacific Reef Prawn farm located downstream said "I'm not sure of what you have actually done upstream in the creek but this is the cleanest we have ever seen the water during a flood pulse".

The project has received interest from local landholders eager to use some of the compost product. This indicates that if the final compost product is beneficial and cost mitigation is viable, it could be a popular renewable resource in the Lower Burdekin. The project is on-track to meet its milestones and long-term outcomes.

Waste rock management

This protocol addresses the characterisation of waste rock, design and construction of waste rock disposal facilities, potential acid generation, storm-water controls, monitoring, rehabilitation and closure.

The protocol is applied as required given that our goldsilver-copper ore bodies and their surrounding waste rock are generally quite different for each operation in terms of their potential for AMD and salinity impact on the surrounding environment. Operations maintain material balances for their topsoil, waste rock types throughout the lifecycle of operations in order to provide certainty for meeting eventual rehabilitation closure criteria requirements.

Where Potentially Acid Forming (PAF) waste rock is suspected or known to occur, the operation will place it inside and under Non-Acid Forming (NAF) covers.

Progressive rehabilitation activities are conducted as areas of the waste disposal facility become available. Full rehabilitation of these areas is conducted as soon as practicable.

FY18 waste rock produced: 39,905kt1 .

Tailings management

Tailings are the fine waste slurry residue of the crushed solid mineral ore that is fed into the process plant grinding mills. Tailings storage facilities need to be operated and rehabilitated with due care for a range of potential issues. Our protocol and governance process incorporate the International Council on Mining and Metals (ICMM) six key components of the Tailings Governance Framework.

Regular inspection and audit ensure that operations meet the requirements for the characterisation of tailings, protection of wildlife, protection of groundwater, prevention of uncontrolled releases to the environment, management of process fluids and the closure and rehabilitation of tailing storage facilities.

Ongoing efficient recovery of tailings decant water back to the processing plant water supply is essential to manage the water balance and minimise new water intake to operations.

Management of wildlife access and safe egress from tailings storage facilities is a key business imperative for our operations. Our fresh water-based operations have

cyanide destruction and slurry dilution to reduce WAD cyanide levels to safe levels for avifauna and terrestrial animals. Fencing, bird deterrent systems and regular monitoring and perimeter patrols provide early warning of such issues.

FY18 Tailings produced: 26,632kt1 (wet tonnes).

Waste management

We have established an ethos to reduce, recycle and reuse our resources occurring in our normal site waste management practices.

The on-site management of putrescible and nonputrescible waste streams has progressed to a stage where bioremediation and general landfill facilities and management practices are now relieving pressure on local government authority facilities. Generally septic waste solids are transported to local government authority facilities.

Our operations use specialist, government approved waste management service providers and tracking arrangements for the approved, safe disposal of transfers of obsolete or used hazardous material waste/ dangerous goods substances. Generally, chemicals are consumed in process. Hydrocarbons in the form of dirty rags, crushed oil filters, used engine coolants or used bulk lubes are typically sent off-site under commercial service arrangements for industrial re-refining (for re-use) or conversion into energy.

Rehabilitation and closure management

We acknowledge that mining is only a temporary use of land and the project planning cycle begins with ensuring our minimum disturbance of ground during the exploration drilling phase (10 to 30 years) and needs to look forward to what the operation's future land use/s will be and what the site should look like when the operational areas are ready for relinquishment.

Each of our sites have a closure plan in place which outlines the process to rehabilitate the site and performance criteria required before a tenement can be handed over to Government. These plans take into consideration both environmental and social impacts.

We rehabilitated 113.66 hectares of land in FY18 around two operations.

Environmental assurance

The Evolution Environmental Assurance Audit Program is undertaken by our corporate office. The program reviews different risk areas and aspects from the site operating licence each quarter. This assurance program assists in the effective management and monitoring of environmental risk across the organisation.

Quarterly assurance visits to our operations focused on hydrocarbon and chemical management. Small leaks and spill volumes have been focused on to ensure that incidents are being reported and the causes are promptly addressed.

Rehabilitation success and failures are reviewed with the view that other Sites share the learnings during subsequent Site visits or during our monthly Environmental Professional Network teleconference and our annual face-to-face gathering.

Assurance visit and audit recommendations are tracked and followed up via our company incident management system.

Environmental compliance

As part of our environmental management, Evolution's activities are governed by conditions detailed in mining approvals, lease conditions and licences set out by regulatory authorities.

Periodic voluntary independent environmental performance audits are also conducted.

Cyanide reduction

We are currently evaluating GlyCat technology using glycine and cyanide during the cyanidation process of gold ore. The GlyCat process will enhance the dissolution of gold where glycine is used as a catalyst with cyanide. This is a research program with Australian Mineral Industries Research Association (AMIRA)

Sunrise at the Mungari processing plant (photo by Andrew Millar)

Evolution – A Diversified Mid-tier Gold Miner

	1	2	3	4	5	6
	Cowal (100%)	Mungari (100%)	Mt Carlton (100%)	Mt Rawdon (100%)	Cracow (100%)	Ernest Henry (economic interest)	Group Total
Gold Reserves (Moz)1	3.05	0.83	0.71	0.67	0.25	0.90	7.22
Copper Reserves (kt)1	371		28			165
Gold Resources (Moz)1	6.08	2.58	1.06	1.07	0.51	1.92	14.27
Copper Resources (kt)1	560		52			334
Reserve grade (g/t Au)1	0.81	1.82	4.92	0.79	5.14	0.55	0.80
Reserve grade (% Cu)1	0.57		0.62			1.07	0.66
FY18 Au production (koz)2,3	258	118	112	105	90	95	801
FY18 AISC (A\$/oz)3,4	877	1,181	535	884	1,181	(641)	797
FY18 net mine cash flow3	101.2	23.7	108.7	49.7	36.7	219.2	539.9

• 1. This information is extracted from the report entitled "Annual Mineral Resources and Ore Reserve Statement" released by Evolution to ASX on 19 April 2018. Mineral Resources and Ore Reserves are depleted to 31 December 2017. Results also include the update on Castle Hill announcement entitled "Restructure of ownership of Castle Hill Gold Deposit" released by Evolution to ASX on 18 July 2018. Both announcements are available to view on www.evolutionmining.com.au. Further information is provided in the Mineral resources and Ore Reserves section of this report.
• 1. Group production total includes 21,639oz gold from Edna May operation (FY18Q1)
• 1. This information is extracted from the report entitled "June 2018 Quarterly Report" released by Evolution to ASX on 19 July 2018 and is available to view on www.evolutionmining.com.au. Group total of A\$539.9M includes Edna May net mine cash flow of A\$0.7M.
• 1. Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense

Chief Operating Officer's Review

We demonstrated our value of Safety in the best possible way by reducing the Total Recordable Injury Frequency (TRIF) by 31% to the lowest ever achieved for Evolution at 5.5.

The number of positive safety interactions in our team was well over 39,000 for the year and over 1,700 people were involved in our health and wellbeing programs. Significantly, we halved the number of vehicle interactions when compared with FY17 which was a key area of focus of our safety programs. We recognise that there is no place for complacency in safety and we will continue the momentum to improve our safety culture in FY19.

Our communities and social responsibility are vital to our ongoing sustainability and success. Everyone at Evolution has a role to play in building positive community relations. During the year, we collaborated with our community stakeholders on shared value projects and environmental enhancement projects to leave a positive legacy beyond the life of our mines.

We see innovation as critical to advancing our business and we actively seek opportunities to improve. We were first to apply high intensity grinding (HIGmill) technology in a hard rock (gold) environment and the first to use CaBolter technology in an innovative way (open pit environment). We worked with Minnovare to develop Production Optimiser technology to reduce stope dilution.

We had 58 Act Like an Owner nominations (ALO) during the period, an example of daring to think differently and

We Say, We Do, We Deliver

I started with Evolution in February 2018 and I am very excited to have witnessed the achievements of my team – delivering another outstanding year under our mantra "We Say, We Do, We Deliver."

we are aiming to double this FY19. Mt Rawdon won the "People's Choice Award" for their very innovative initiative, Barrell Mate, at the Queensland Mining Industry Health and Safety Conference. The site slurry pumps have a bearing barrel drive that fails and requires rebuilding in the workshop. The team designed and manufactured a twin clamp 360-degree rotating holder to allow an assembly to be rebuilt without leaving the holder, eliminating additional lifts and halving the amount of manual handling. This innovation has application across the industry.

FY18 was an excellent year from a production perspective with 801,187 ounces produced, towards the top end of our guidance (750,000 – 805,000oz), and four out of six operations were either at or above the top end of their guidance. This was achieved at a record low AISC of A\$797 per ounce.

Some highlights from our operations are provided below and further details are provided in the Directors' Report section of this document.

Cowal

The Cowal gold operation is a world-class, open pit gold operation located 350km west of Sydney. It is situated within the Bland, Lachlan and Forbes Shires on the traditional lands of the Wiradjuri People. Mining approval has been granted until at least 2032 and this long mine life provides a runway to capture additional upside.

Cowal had an outstanding year, delivering on projects while achieving above guidance ounces, below guidance costs, and significantly reducing TRIF from 7.4 to 3.3. The Stage H cutback is on track with early ore being mined. The Float Tails Leach project – which will increase recoveries between 4 and 6% – is due for commissioning in the first half of FY19. The Plant Expansion Feasibility Study to lift capacity from 7.5Mtpa up to 9.8Mtpa is also due for completion in late 2018.

Chief Operating Officer's Review (continued)

The site successfully hosted the Evolution and NSW Mine Rescue Challenges in West Wyalong which not only tested our emergency capabilities, but also saw participation from our local community.

Total FY18 gold production of 257,951oz was above the top end of the guidance range of 235,000 – 245,000oz. FY18 AISC of A\$877/oz was below the bottom end of the A\$950 – A\$1,000/oz guidance range. Full year net mine cash flow was A\$101.2 million.

A number of mill throughput records were set and a lot of hard work and innovation ensured that the highest throughput for a financial year of 7,795kt was achieved in FY18.

The underexplored region offers immense untapped potential. Exploration delivered material resource growth of 1.35 million ounces of gold prior to mining depletion, setting us up for another strong year and helping to ensure our future at Cowal.

In FY19, our challenge is to assess mining and processing options to take this operation to the next level of production excellence – aspiring to an annual production level of 300,000oz.

Mungari

The Mungari gold operation is located 600km east of Perth and 20km west of Kalgoorlie in Western Australia on the traditional land of the Maduwongga People. Our local communities are Kalgoorlie and Coolgardie. The operation is a key asset in Evolution's portfolio and consists of underground mining at Frog's Leg, open pit mining at White Foil and a strategically located 1.6Mtpa process plant.

Safety improved at Mungari with a significant reduction in Significant Safety Occurrence Frequency (SSOF) over the year from 6.0 to 2.4 and TRIF from 13.3 to 9.7. The operational performance also improved, highlighted by milling costs reducing by A\$2/t processed against budget. Total gold production for FY18 of 118,498oz was slightly below guidance of 120,000 – 130,000oz which resulted in FY18 AISC of A\$1,181/oz being above the guidance range of A\$990 – A\$1,050/oz. Full year net mine cash flow was A\$23.7 million.

Mungari's performance is expected to improve in FY19, built on the completion of the White Foil Stage 3 cutback and increased availability of high-grade ore feed from Frog's Leg underground.

The operation has a major footprint in the world-class Kalgoorlie gold district with opportunities for highgrade discoveries to expand production and lower costs. The operation currently has a 10 year mine plan and an aspiration to lift annual production up to a sustainable 150,000 ounce profile. Opportunities currently being investigated to support this production rate include:

• Un-constraining the crushing and leach circuit through data analysis to increase plant throughput to 1.9 - 2.0Mtpa
• Ore sorting technology to deliver the highest grade to the processing plant
• High-grade discoveries from an extensive regional exploration program
• Heap leach options
• Data analysis of seismicity to identify potential mineralisation

Mt Carlton

Our Mt Carlton operation is located 150km south of Townsville, Queensland, on the traditional lands of the Birriah People. Our local communities are Gumlu, Home Hill, Bowen and Townsville. At Mt Carlton, Evolution developed the expertise to commercialise a refractory, non-oxidised, high-sulphidation epithermal deposit which is a great credit to our people. The operation was developed by Evolution and commissioned in 2013. It is now a highly successful core asset and is one of the highest-grade open pit gold mines in the world with an innovative team culture driving this impressive performance. The operation has a current mine life out to 2025 and further mine life extensions are likely.

Ore is sourced from the V2 gold-copper-silver deposit which is processed on site to produce a concentrate and shipped to China for smelting. The process plant has a current capacity of 840ktpa. Approximately 10 – 15% of gold feed is recovered through a gravity circuit prior to the flotation circuit to produce doré gold bars which are sold to the ABC Refinery in Sydney. The gravity circuit was installed in 2017 and has lifted recoveries from 88% to 90 – 91%.

Mt Carlton's injury reduction in FY18 was impressive with TRIF reducing from 8.2 to 3.9. The operation installed the CAT fatigue management system in the truck fleet to assist in managing fitness for work.

Mt Carlton produced more than 100koz of gold for the third year in a row with FY18 production of 112,479oz. This exceeded the top end of the 100,000 – 110,000oz guidance range. A record low AISC of A\$535/oz was achieved which was substantially below guidance of A\$680 – A\$730/oz. Full year net mine cash flow was a record A\$108.7 million.

The team at Mt Carlton also advanced the Definitive Feasibility Study which is examining the relative merits of a Stage 4 cutback compared to a potential underground operation in FY20.

Future opportunities include:

• Real time data capture and analysis to improve Overall Equipment Effectiveness (OEE)
• World first online gold analysis (OLGA) technology developed by CSIRO which enables

Chief Operating Officer's Review (continued)

the processing team to be able to adjust processing parameters effectively in real time, reducing losses to tailings

• Recovery improvements such as tails retreatment
• Regional low sulphidation ore co-treatment opportunities

Cracow

The Cracow underground gold operation is located 500km north-west of Brisbane, Queensland, on the traditional lands of the Wulli Wulli People. Our local communities are Cracow and Theodore. The operation has been a consistent and reliable producer since mining began in 2004. The current mine life is out to 2023 however Cracow has a long track record for replacing mining depletion and maintaining a three to five year mine life.

The TRIF increased from 5.2 last year to 14.0. Safety continues to be a major focus for site with a focus on fatigue management.

Operationally, Cracow performed well in FY18, exceeding planned ounces and again extending mine life. Total gold production of 90,357oz was above the top end of the 85,000 – 90,000oz guidance range. AISC of A\$1,181/oz was in line with guidance of A\$1,150 – A\$1,200/oz. Full year net mine cash flow was A\$36.7 million.

Cracow's ongoing commitment to innovation was demonstrated by the increase in gold recovery in the order of 2% from the installation of a high-intensity grinding mill (HIGmill) and the development of Production Optimiser technology for underground production drill rigs to reduce stope mining dilution.

In FY19 we will continue to seek improvements and the most significant opportunities include: ore sorting; remote bogging from surface; and electric equipment.

"From a production perspective, FY18 was an excellent year with 801,187 ounces produced which was towards the top end of our guidance (750,000 – 805,000oz). Four out of six operations were either at or above the top end of their production guidance. This was achieved at a record low AISC of A\$797 per ounce."

Bob Fulker, COO

Chief Operating Officer's Review (continued)

Mt Rawdon

The Mt Rawdon open pit gold operation is located 75km south-west of Bundaberg, Queensland and is surrounded by the traditional lands of the Port Curtis Coral Coast People. Our local communities are Mt Perry, Gin Gin, Biggenden and Gayndah. Evolution has owned and operated Mt Rawdon since November 2011.

Total FY18 gold production was 105,053oz. A very strong June half year ensured production guidance of 105,000 – 115,000oz was achieved. AISC of A\$884/oz was also within the guidance range of A\$850 – A\$900/oz. Full year net mine cash flow of A\$49.7 million was a record under Evolution ownership. A significant production milestone was achieved in June 2018 with 50 tonnes of gold produced since the mine began operating

Safety at Mt Rawdon continues to be a key focus for the team. In FY18 we saw a decrease in TRIF from 6.6 to 5.1. In FY18 Mt Rawdon won the People's Choice Award at the Queensland Mine Safety Awards for their innovative "Barrel Mate" initiative. The team also designed and built a used tyre protection wall as a bund to protect against rock falls.

Improvements were made in blast efficiencies with: improved fragmentation; reduced blast delays; and reduction in downtime for blast evacuations.

The following innovations are currently being trialled:

• Truck payload management targeting consistent loading of trucks to increase productivity and reduce equipment damage by utilising CQMS Razer's Titan 3330 product
• Remote operation of production drills targeting the operation of multiple machines by a single operator and isolating the operator from working near high-walls
• Innovative use of the CaBolter to improve the productivity of ground support installation on the open pit walls

We partnered on a shared value project to enhance the local Men's Shed at Mt Perry. We produced the gold for the 2018 Lexus Melbourne Cup which brought the Melbourne Cup Tour to the community in September this year. We were also the major sponsor for Bundaberg's NAIDOC celebrations.

Ernest Henry

The Ernest Henry copper-gold operation is a large-scale, long-life asset operated by Glencore. The operation employs a sub-level caving ore extraction method. It is located 38km north east of Cloncurry, Queensland. In November 2016 Evolution acquired an economic interest in Ernest Henry that will deliver 100% of future gold and 30% of future copper and silver produced within an agreed life of mine area. Outside the life of mine area, Evolution will have a 49% interest in future copper, gold and silver production from Ernest Henry. The Ernest Henry transaction has materially improved the quality and longevity of the Group's portfolio and reduced the cost profile.

Total FY18 gold production of 95,209oz was above the top end of the 85,000 – 90,000oz guidance range. AISC of A\$(641)/oz was substantially below guidance of A\$(200) – A\$(150)/oz. Full year net mine cash flow was a record A\$219.2 million.

Yours faithfully

BOB FULKER CHIEF OPERATING OFFICER

FY19 Guidance and Three Year Outlook to FY21

Evolution is forecasting FY19 Group gold production of 720,000 – 770,000 ounces of gold. Group C1 cash costs are expected to be in the range of A\$560 – A\$610 per ounce and Group AISC are expected to be in the range of A\$850 – A\$900 per ounce.

Using the average AUD:USD exchange rate of 0.7752 for the 12 months to 30 June 2018, Evolution's forecast FY19 costs are among the lowest of global gold producers and equate to C1 cash costs of US\$430 – US\$470 per ounce and AISC of US\$660 – US\$700 per ounce.

Investment in sustaining capital in FY19 is forecast to be in the range of A\$105.0 – A\$135.0 million. The majority of the investment will be at Cowal, comprising of tails facilities, mobile fleet major repairs and equipment replacement. Investment in tails facilities will also take place at Mungari, Mt Carlton, Mt Rawdon and Cracow. Investment in growth (major project) capital and exploration is additional to the costs included in AISC. Investment in major capital in FY19 is forecast to be in the range of A\$150.0 – A\$180.0 million. The bulk of the major project capital investment is associated with expansion projects at Cowal with mine development of A\$70.0 – A\$75.0 million and Float Tails Leach project investment of A\$6.0 – 9.0 million. Major project capital investment at Mt Carlton, Mt Rawdon and Cracow relates predominantly to mine development.

Exploration investment is expected to total approximately A\$40.0 – A\$55.0 million. This is a substantial increase on the FY18 exploration spend of A\$31.6 million. Cowal (A\$15.0 – A\$20.0 million) and Mungari (A\$15.0 – A\$20.0 million) will receive the largest allocation of the investment in FY19.

FY19 AISC guidance of A\$850 – A\$900 per ounce positions Evolution as one of the world's lowest cost gold producers. A breakdown of production, costs and capital guidance is provided in the table below.

FY19 guidance	Gold production (oz)	C1 cash costs1 (A\$/oz)	All-in sustaining cost1 (A\$/oz)	Sustaining capital (A\$M)	Major capital (A\$M)
Cowal	240,000 – 250,000	765 – 840	975 – 1,075	55 – 60	90 – 100
Mungari	125,000 – 135,000	875 – 925	1,050 – 1,100	10 – 15	0 – 5
Mt Carlton	95,000 – 105,000	470 – 520	670 – 720	7.5 – 12.5	25 – 30
Mt Rawdon	95,000 – 105,000	815 – 865	1,000 – 1,050	5 – 10	25 – 30
Cracow	80,000 – 85,000	850 – 900	1,250 – 1,300	17.5 – 22.5	10 – 15
Ernest Henry	85,000 – 90,000	(875) – (825)	(575) – (525)	10 – 15	0
Corporate			45 – 50
Group	720,000 – 770,000	560 – 610	850 – 900	105 – 135	150 – 180
Copper (t)
Ernest Henry	19,000 – 21,000
Mt Carlton	800 – 1,000

1. A copper price assumption of A\$8,800/t has been used for by-product credits

Three Year Outlook to FY21

Evolution remains focused on prioritising margins over production growth. The Company expects to produce in excess of 700,000 ounces of gold for at least the next three years1 . All-in sustaining costs are expected to remain relatively flat throughout this period which will enable the business to prosper even in weaker gold price environments. Evolution continues to invest in future production growth. Capital expenditure will remain elevated in FY19 due to investment in major projects at Cowal. It is then expected to decline from FY20 onwards.

		Production Outlook FY19 – FY21
Period	FY19	FY20	FY21
Gold Production (koz)	720 – 770	720 – 770	700 - 750
AISC (A\$/oz)	850 – 900	850 – 900	870 – 920
Sustaining capital (A\$/M)	105 – 135	115 – 145	95 - 125
Major project capital (A\$M)	150 – 180	115 – 145	115 - 145

1. For information on the Exploration Targets, refer to ASX release entitled "Three Year Outlook and High-Grade Drill results from new Dalwhinnie Lode at Cowal" released to the ASX on 4 September 2018 and available to view at www.evolutionmining.com.au

FY19 Guidance and Three Year Outlook to FY21 (continued)

Cautionary statement concerning the proportion of Exploration Targets1

Of Evolution's Production Outlook, 2% is comprised of Exploration Targets. The potential quantity and grade of this exploration target is conceptual in nature and there has been insufficient exploration to determine a Mineral Resource and there is no certainty that further exploration work will result in the determination of Mineral Resources or that production target itself will be realised.

Cautionary statement concerning the proportion of Inferred Mineral Resources

There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised.

Material Assumptions

The material assumptions on which the Production Target is based are presented in ASX release Annual Mineral Resources and Ore Reserves Statement" released to the

ASX on 19 April 2018 and available to view at www.evolutionmining.com.au. The material assumptions upon which on which the forecast financial information is based are:

Silver	A\$20/oz
Copper	A\$8,800/t
Diesel	A\$110/bbl

Competent Persons Statement

The estimated Mineral Resources and Ore Reserves underpinning the Production Target and Exploration Target have been prepared by Competent Persons in accordance with the requirements in Appendix 5A (JORC Code). The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcement.

Relevant proportions of Mineral Resources and Ore Reserves underpinning the Production Target

The Production Target comprises 96.5% Probable Ore Reserves, 1.5% Inferred Mineral Resources and 2% Exploration Targets.

Innovation and Asset Optimisation

Innovation and Asset Optimisation

Our aim is to differentiate ourselves through innovation, incremental improvements and excellent operational discipline to deliver better margins and value. We embrace disruption and constant change to innovate and evolve. We focus on the few things that make the biggest difference.

To enable "Different Thinking" we needed to structure our business appropriately. We recently shifted the focus of our highly skilled technical professionals, the Technical Services Group, to drive the attributes of Transformation and Effectiveness. This team had previously focused on technical work streams "Within" the business. The change is to enable them to work "On" the business in a Transformational role while still being intimately involved in operational discipline improvements to drive operational effectiveness from good to great.

Innovation – Fast Firsts

Developing the Production Optimiser

Cracow operation partnered with Minnovare to develop Production Optimiser technology for underground stope drilling. The technology allows for accurate drill hole placement, reducing drill hole deviation which then improves the blast-hole drilling accuracy. This then leads to a reduction in stope dilution. Use of this technology has delivered a consistent improvement in drilling accuracy with stope mining dilution being reduced by up to 50%. In addition, the success demonstrated with the Production Optimiser has allowed the modification of drill patterns to further reduce planned dilution. Minimum stoping widths at Cracow have typically been in the order of 1.9m. With improvements in accuracy, trials have commenced to reduce this minimum width down to 1.3m.

We are now adapting this technology for the open pit drilling fleet at our operations.

Focusing on innovation rather than invention allows us to be Fast Firsts rather than Fast Followers. We believe that this approach will extend our competitive advantage within the mining industry.

At Evolution we encourage disruption and an agile approach to innovation. We look for ground breaking ideas to transform the company's ounce and cost profile, while maintaining a myopic focus on value accretion.

High-intensity grinding mill (HIGmill)

Evolution's Cracow mine was the first gold processing plant to apply the high intensity grinding mill (HIGmill) technology to improve recovery. Cracow commissioned this technology in January 2017 and has shown a consistent increase in processing recovery of 2%.

grinding rotors. Attached to the fixed shell are stationary HIGmill and proceeds upwards through all grinding stages prior to exiting the HIGmill at the top. The mill media and the entire charge is mixed and grinding is facilitated by the rotating discs. This technology has been used extensively in the industrial minerals space This technology was chosen for use at Cracow due to the grind-sensitive nature of the ore and the power-efficient grinding characteristics of the HIGmill.

CaBolter - Applying proven technology in a new way

Our Mt Rawdon operation is the first to use the proven CaBolter technology, normally used for underground wall support by remote drilling, in an innovative way. They have applied this technology in the open pit to install ground support. This technology provides a safer working environment as our people are isolated from working near highwalls.

Innovation and Asset Optimisation (continued)

Online Gold Analysis

Our Mt Carlton operation will be the first operation to trial the online gold analyser (OLGA) developed by CSIRO. This new system will provide average gold grades of plant feed every 10 minutes versus our current six-hourly lab assays. The benefit of this system will be that the processing team will be able to adjust plant parameters effectively in real time thereby reducing losses to tailings.

Float Tails Leach Project

At Cowal we are in the process of installation of our float tails leach project which is due for completion during FY19. The installation will include;

• A new leach circuit to treat flotation tails and detoxification of the stream before pumping to the tails storage facility
• A new carbon handling and electrowinning facility to treat the gold recovered from the flotation tails leach circuit
• A new reagent mixing and distribution systems needed for the operation of the leach circuit, detoxification facilities and carbon handling facilities

With the completion of this circuit and commissioning on track for the December quarter, we are looking for a 4 – 6% recovery improvement as well as approximately 10,000 ounces per year recovered from the tails.

Innovations and improvements on the radar

Data Analytics

Data analytics is a resource that will facilitate many business improvement opportunities.

We are currently partnering with a firm to predict tails grade by analysing thousands of live variables and comparing them to historic data. We aim to predict situations that will lead to increased tails gold grade and thus allow the operator to react with the best information, improving recovery and thus revenue. We are expanding our data lake to enable both internal and external collaboration.

Power optimisation

Electricity is a significant cost to our operations, and it is constraining us from expanding mill capacity at two of our operations. We believe there is an opportunity to analyse our power consumption and correlate it with our production patterns to develop techniques which optimise our electricity usage, reducing our costs and enabling improved throughput and recoveries of our mills.

Fragmentation analysis

Digital imagery is not new but enabling our processing plants to improve their grinding efficiency and power draw by tracking blast effectiveness on the feed belts will enable early plant optimisation, improved throughput and recovery with a feedback loop to the blast design and the engineers. Ultimately reducing total cost and increasing throughput.

Overall Equipment Effectiveness

Overall Equipment Effectiveness (OEE) is the gold standard for measuring manufacturing productivity. OEE identifies time that is truly productive and optimises it through data. It requires quality data, a strong operating discipline to investigate significant non-conformance, and an improvement plan with measurable outcomes.

Discovery

Developing a pipeline of high-quality exploration targets

Evolution is committed to organic growth by discovery of new resources at our existing operations and across our portfolio of greenfield projects. Our discovery strategy is simple. We are focused on finding epithermal (low, intermediate and high sulphidation) deposits and orogenic lode gold deposits. In the epithermal category we are searching for high sulphidation deposits like Mt Carlton, intermediate sulfidation deposits like Cowal and low sulfidation deposits like Cracow. In the orogenic lode gold category, we are exploring for deposit styles typically mined in the Yilgarn Craton in Western Australia.

We have continued building land positions around our operating assets at Mungari, Cowal and Cracow. We are also developing a pipeline of exploration projects in Queensland between Cracow and Mt Carlton. We recognise a key to our success will be our ability to leverage external partnerships. As a result, we are partnering with groups who have superior geological knowledge of and access to areas prospective for the types of mineral deposit we want to find.

We plan to invest between A\$40 and A\$55 million on Discovery programs and a further A\$10 to A\$15 million on resource definition drilling. Our largest Discovery investments will be made at Cowal and Mungari with each of these projects running budgets of between A\$15 and A\$20 million.

Exploration Footprint

APPROACH: UPGRADE THE PIPELINE

People

New, invigorated

Discovery Culture

Tactics

Build land positions

footprint vectoring

Deposit Styles

Orogenic lode gold

Geographic Focus

Emphasis in

ENABLERS: LEVERAGING THE BEST TEAMS

Organisation

Near-mine exploration – tailored to meet the needs of our operations

Partnerships

Become a partner

Deploy Evolution

• ■ Resource definition drilling programs resulted in an increase in Ore Reserves prior to mining deletion of:
• ■ 127,000 gold ounces at Mt Carlton
• ■ 168,000 gold ounces at Mungari
• ■ 150,000 gold ounces at Cracow
• ■ Maiden Ore Reserve of 817,000 gold ounces at Marsden
• ■ Discovery of new high-grade lode at GRE46 Dalwhinnie lode
• ■ Exploration success at the Ora Banda camp, Mungari
• ■ Acquisition of Connors Arc Project an early stage exploration project in north-east Queensland

Growth opportunities include:

• Further delineation and conversion of the significant mineral endowment at Cowal along the 3km long Gold Corridor between E46 and E41
• Testing for extensions to the newly discovered Dalwhinnie lode at GRE46
• Evaluation of regional porphyry copper-gold potential within the Cowal Province
• Advancing the Mungari Provincial pipeline (>30 current targets) and continuation of the near-mine drilling programs with targets including deep extension drilling at Frog's Leg, evaluation of the White Foil underground, and nearsurface extensions of mineralisation north of the White Foil open pit
• Further extensional and infill drilling at Cracow with targets on the known structural corridors including the Kilkenny to Empire trend
• Further resource definition drilling at Mt Carlton and continuation of testing for underground resource extensions
• Extensional drilling below the 1,200m level at Ernest Henry (subject to agreement with Glencore).

of our portfolio and strengthened our team which came together in a new exploration hub created in Sydney."

Glen Masterman, VP Discovery and Chief Geologist

Our Pipeline of Opportunities

Our goal is to improve the overall quality of our portfolio by building a base of early-stage project opportunities and being prepared to continually upgrade and substitute projects. Our pipeline has been developed to include various stages of project maturity and degrees of risk. New projects are aligned with our desire to improve asset quality and to match our geographic and commodity preferences.

Cowal

Near Mine Growth

GRE46

Following on from the success of converting the Stage H resource to reserves exploration drilling turned its attention to the Galway-Regal-E46 (GRE46) corridor. We announced a maiden Inferred underground resource at GRE46 (603,000 gold ounces) and demonstrated the potential to expand the underground mineralised zone. A further 206,000 resource ounces were identified at E41 and GRE46 open pits.

Step-out drilling confirmed high-grade mineralisation is open along strike and recently identified the highgrade Dalwhinnie lode located 30 to 50 metres into the footwall of the GRE46 underground resource. An underground exploration decline has been approved by the Board and awaits approval by the NSW Division of Resources and Geoscience. Development is planned to commence in FY19.

We believe there is sufficient untested area to support resource growth of more than 500,000 ounces, bringing the endowment to greater than one million ounces at GRE46.

E41

The E41 deposit represents a strong opportunity to continue baseload open pit feed to Cowal's production profile as mineralisation is constrained by drilling, not by geology.

Drilling at E41 West identified a new and significant zone of mineralisation over 250m in length outside of the resource, along strike and at depth.

Regional Opportunities

Marsden – reserve conversion

Marsden is a copper-gold porphyry deposit located immediately to the southeast of the operation. In FY18, we announced a maiden Ore Reserve of 817,000 gold ounces and 371,000 copper tonnes. Marsden has longterm strategic value to our exploration activities in the area and highlights the copper-gold opportunity in the Cowal district.

East Girral

An unexplored structure northwest of the mine was identified as highly prospective. Subsequent aircore drilling in FY18 delineated a significant geochemical anomaly and follow up drilling is planned.

Mungari

The Kalgoorlie region around the Mungari operation is the focus of Evolution's search for orogenic gold deposits with a view to finding high-grade feed for the processing plant. As such, most exploration is within 50km of the plant on a large package of 100% owned tenements which host more than >30 quality targets.

Frog's Leg Underground

Frog's Leg Deep

Our highest priority target at Mungari is delineating down-dip extensions of the Frog's Leg vein. The geological architecture is permissive of a repeat of "flexures" and an underground drilling program has been designed to test the vein beneath the lowest workings at Frog's Leg. Drilling will commence when the drill drive has reached a suitable position. Drilling is expected to be completed in the March quarter 2019.

White Foil

Infill drilling of the underground Mineral Resource at White Foil will continue in FY19. The objective of this next phase of drilling is to increase confidence in the estimate to enable the reporting of Indicated Mineral Resources and Ore Reserves in key areas. Current estimates show sufficient grade and continuity to establish an underground mining operation at White Foil. Previous drilling was undertaken to a nominal 40m x 40m spacing, with drilling in FY19 increasing drill density to a 20m x 20m pattern.

White Foil will have significant potential to grow its resource base as an underground operation, as drilling from underground workings is a more cost-effective means of testing deeper zones of mineralisation than surface drilling.

Regional Open Pits

Castle Hill

Evolution terminated Norton Gold Fields' right to mine and process ore from the Castle Hill deposit in July 2018. The new Agreement allows Evolution to explore and develop an important package of tenements at Mungari that were effectively quarantined by the rights held by Norton Gold Fields.

Castle Hill is located approximately 25km northwest of the Mungari processing plant and hosts a Mineral Resource of 695,000 ounces and Ore Reserve of 236,000 ounces with potential to expand. The reserves currently exclude Kiora and Wadi deposits.

Castle Hill is now expected to provide base-load feed for the Mungari processing facility following forecast completion of the White Foil open-pit in FY20. Infill drilling and engineering studies relevant to Castle Hill and the surrounding deposits are underway and include drilling at Picante, Ridgeback, and Burgundy.

Ora Banda Camp

Exploration programs have prioritised targets with the potential to deliver high grades from the well-endowed Ora Banda camp with historic production of about three million ounces. Prioritised targets have similar geology to the main producers in the Ora Banda camp and we see the same stratigraphy as the rocks that are well mineralised at Frog's Leg along the K2 and K2B structural positions. We have identified several areas that have been ineffectively explored for Ora Banda style mineral systems.

At the Perimeter prospect, significant intersections were returned from an 800m long corridor hosting mineralisation in narrow sheeted and stockwork quartz veins. Mineralisation is open along strike and at depth with higher grades showing an apparent steep plunge

towards the southwest. Step-out drilling is planned for FY19 to delineate the full scope of the mineralised system.

Drilling at the Scottish Archer prospect defined highgrade gold mineralisation and further drilling to test the depth and strike extensions will be undertaken in FY19. Results from Perimeter and Scottish Archer confirm new target models and transfer geological knowledge from Frog's Leg.

At the Lady Agnes prospect, drilling identified mineralisation along a 200m strike length which remains open at depth.

Cracow

Cracow has a very strong history of reserve replacement. In FY18, resource definition drilling focussed on extension and further delineation of the Coronation, Baz, Imperial, Griffin and Killarney structures and resulted in the addition of 150,000 ounces to Ore Reserves.

Diamond drilling in FY19 will target resource conversion and high priority extensional underground targets including Killarney and the area between Coronation and Sterling. Sterling is currently interpreted as the continuation of the Coronation deposit based on the geometry of Coronation and information from historic surface drilling.

Location map of the western vein field at Cracow

Mt Rawdon

Although not in our current mine plans, the orebody at Mt Rawdon clearly continues down plunge and at depth. Our focus is on testing zones outside of existing reserves to confirm continuity of high-grade zones. The aim is to identify high-grade mineralisation for conversion to reserves. Eight holes are planned to be drilled in FY19.

Ernest Henry

The Ernest Henry copper-gold operation is a large-scale, long-life asset operated by Glencore. We acquired an economic interest in Ernest Henry that will deliver 100% of future gold and 30% of future copper and silver production above the 1,200mRL and a 49% interest in future copper, gold and silver production below the 1,200mRL.

Significant opportunity exists for mine life extension below the 1,200mRL. Most of the drilling to date has been completed above this level where gold grade distributions closely correlate with copper grades. High-grade copper grades have been identified below the 1,200mRL and we can assume that high-grade gold mineralisation is also continuous as there are no geological constraints. Mineralisation remains open at depth.

Connors Arc, Queensland

Evolution entered into an agreement with Orion Minerals Limited (ASX:ORN) ("Orion") to acquire 100% of the Connors Arc exploration project, a large early-stage exploration project covering approximately 3,200km2, located 160km northwest of Rockhampton in Queensland (see ASX announcement 2 May 2018, Figure 1). It is a technically compelling project with multiple and very extensive alteration zones which could be indicative of multiple preserved epithermal gold systems. The project area has similar geological characteristics to two of Evolution's current mines,

Mt Carlton and Cracow, both of which are greater than one million ounces epithermal gold deposits. Work started on the project in July 2018 with the completion of an airborne hyperspectral survey.

Connors Arc Project

Tennant Creek, Northern Territory

Emmerson Resources and Evolution agreed to restructure the Tennant Creek joint venture following completion of the Stage 1 earn-in in December 2017. Under the new arrangement, Evolution will acquire a 100% interest in the Gecko – Goanna Copper Gold corridor and the Orlando pit as illustrated in the right hand figure. In May 2018 Emmerson Resources shareholders approved the restructure. A strategic review of the project was progressed.

Tennant Creek Joint Venture

Mungari Exploration team

54 Evolution Mining Limited Annual Report ²⁰¹⁸

Mineral Resources and Ore Reserves

Group Mineral Resources as at 31 December 2017 are estimated at 14.27 million ounces of gold and 946,000 tonnes of copper compared with the estimate at 31 December 2016 of 14.18 million ounces of gold and 1.03 million tonnes of copper after accounting for mining depletion of 842,000 ounces of gold. All Mineral Resources are constrained at an A\$1,800/oz economic threshold at Evolution's 100% owned assets. Mineral Resources are reported inclusive of Ore Reserves.

Group Ore Reserves as at 31 December 2017 are estimated at 7.22 million ounces of gold and 564,000 tonnes of copper compared with the 31 December 2016 estimate of 6.99 million ounces of gold and 212,000 tonnes of copper after accounting for mining depletion of 842,000 ounces of gold.

Evolution is committed to building a sustainable business that prospers through the cycle and has therefore used an unchanged and conservative gold price assumption of A\$1,350/oz to estimate Ore Reserves.

Commodity Price Assumptions

Commodity price assumptions used to estimate the December 2017 Mineral Resources and Ore Reserves are unchanged for gold, copper and silver to those used previously (December 2016 Mineral Resources and Ore Reserves).

• Gold: A\$1,350/oz for Ore Reserves, A\$1,800/oz for Mineral Resources
• Silver: A\$20.00/oz for Ore Reserves, A\$26.00/oz for Mineral Resources
• Copper: A\$6,000/t for Ore Reserves, A\$9,000/t for Mineral Resources

Changes since 31 December 2017 Mineral Resources and Ore Reserves Statement

Evolution's Mineral Resource and Ore Reserve estimates as at 31 December 2017 were released to the ASX on 19 April 2018 in the report entitled "Annual Mineral Resources and Ore Reserves Statement" (also available to view at www.evolutionmining.com.au). In this report the Castle Hill Mineral Resource attributable to Evolution

was estimated at 23.06Mt grading 0.91g/t Au for 671koz after accounting for Norton's share of the Stage 1 open pit over which Norton had the right to mine and process ore. On 18 July 2018, Evolution announced the termination of Norton's right to mine and process ore from the Castle Hill deposit giving full ownership of the Mineral Resource to Evolution. The Mineral Resource was re-estimated at 19.32Mt grading 1.12g/t Au for 695koz using Evolution's assumptions and operating parameters.

Also, in the 19 April 2018 Annual Mineral Resources and Ore Reserves Statement, the Castle Hill Ore Reserve attributable to Evolution was estimated at 1.93Mt grading 1.04g/t Au for 65koz (at a 0.6g/t Au cut-off) representing a 50% share of the Norton Stage 1 open pit over which Evolution would receive a profit share (i.e. 50% of total profits). Similarly, Evolution re-estimated the Ore Reserve at 5.35Mt grading 1.38g/t Au for 236koz using its assumptions and operating parameters.

Full details of the Castle Hill Mineral Resource and Ore Reserve estimates are provided in the report entitled "Restructure of Ownership of Castle Hill Gold Deposit" released to the ASX on 18 July 2018 and available to view at www.evolutionmining.com.au.

Evolution is not aware of any other new information or data that materially affects the information contained in the Annual Mineral Resources and Ore Reserves Statement 31 December 2017 other than changes due to normal mining depletion during the six months ended 30 June 2018.

JORC 2012 and ASX Listing Rules Requirements

The Mineral Resources and Ore Reserves statement included with this announcement has been prepared in accordance with the 2012 Edition of the "Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code 2012) for all projects. Group Mineral Resources and Ore Reserves summaries are tabulated on the following pages. Material Information summaries are also provided for GRE46 Underground Mineral Resource at Cowal and the Marsden Mineral resource and Ore Reserve pursuant to ASX Listing Rules 5.8 and 5.9 and the Assessment and Reporting Criteria in accordance with JORC Code 2012 requirements.

Governance and Internal Controls

Evolution Mining reports its Mineral Resources and Ore Reserves on an annual basis, with Mineral Resources inclusive of Ore Reserves. Reporting is in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and the ASX Listing Rules. All Mineral Resource and Ore Reserve estimates and procedures are subject to internal and external review by qualified professionals. All Competent Persons named by Evolution are suitably qualified and experienced as defined in the JORC Code 2012 Edition. Prior to the public release of the Mineral Resource and Ore Reserve estimates, they are reviewed by the Evolution Board.

Competent Persons Statement

The information in this report that relates to the Mineral Resources and Ore Reserves listed in the table below is based on, and fairly represents, information and supporting documentation prepared by the Competent Person whose name appears in the same row, who is employed on a full-time basis by Evolution Mining Limited. Each person named in the table below has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012. Each person named in the table below is a member or fellow of the Australasian Institute of Mining and Metallurgy and consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.

Evolution employees acting as a Competent Person may hold equity in Evolution Mining Limited and may be entitled to participate in Evolution's executive equity long-term incentive plan, details of which are included in Evolution's annual Remuneration Report. Annual replacement of depleted Ore Reserves is one of the performance measures of Evolution's long-term incentive plans.

Activity	Competent Person	Membership status
Cowal Mineral Resource	James Biggam	Member
Cowal Ore Reserve	Ryan Kare	Member
Mungari Mineral Resource	Andrew Engelbrecht	Member
Mungari Ore Reserve	Matt Varvari	Member
Mt Carlton Mineral Resource	Matthew Obiri-Yeboah	Member
Mt Carlton Open Pit Ore Reserve	Anton Kruger	Fellow
Mt Carlton Underground Ore Reserve	Tully Davies	Member
Cracow Mineral Resource	Chris Wilson	Member
Cracow Ore Reserve	Phillip Jones	Member
Mt Rawdon Mineral Resource	Timothy Murphy	Member
Mt Rawdon Ore Reserve	Dimitri Tahan	Member
Marsden Mineral Resources	Michael Andrew	Fellow
Marsden Ore Reserve	Anton Kruger	Fellow

Full details of the Ernest Henry Mineral Resources and Ore Reserves are provided in the report entitled "Glencore Resources and Reserves as at 31 December 2017" released February 2018 and available to view at www.glencore.com. The information in this statement that relates to the Ernest Henry Mineral Resource and Ore Reserve is based on, and fairly represents, information and supporting documentation prepared by Colin Stelzer and Mark Jamieson respectively. Colin and Mark are members of the Australasian Institute of Mining and Metallurgy and are full-time employees of Glencore. The Company confirms that all material assumptions and technical parameters underpinning the estimates in Glencore's market release continue to apply and have not materially changed. Colin Stelzer and Mark Jamieson consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. Ernest Henry Resource is reported on a 100% basis for gold and 30% for copper (Evolution Mining has rights to 100% of the revenue from future gold production and 30% of future copper and silver produced from an agreed life of mine area and 49% of future gold, copper and silver produced from the Ernest Henry Resource outside the agreed life of mine area). Apportioning of the resource into the specific rights does not constitute a material change to the reported figures.

Forward looking statements

This report prepared by Evolution Mining Limited (or "the Company") includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control.

Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward-looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based

Group Gold Mineral Resources Statement

Group Gold Mineral Resources – December 2017
	Gold			Measured			Indicated			Inferred			Total Resource
Project	Type	Cut Off	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	CP3
Cowal1	Open pit	0.4	46.64	0.70	1,049	141.99	0.91	4,173	5.27	1.50	255	193.90	0.88	5,476
Cowal	Underground	3	-	-	-	-	-	-	5.90	3.17	603	5.90	3.17	603
Cowal1	Total	0.4	46.64	0.70	1,049	141.99	0.91	4,173	11.17	2.39	858	199.80	0.95	6,079	1
Cracow1	Total	2.8	0.17	8.52	46	1.40	7.13	321	1.56	2.87	144	3.13	5.08	511	2
Mt Carlton1	Open pit	0.35	0.59	3.65	69	10.36	2.38	793	0.69	4.58	101	11.64	2.57	963
Mt Carlton	Underground	2.4	-	-	-	0.21	11.56	78	0.05	10.38	15	0.25	11.35	93
Mt Carlton1	Total		0.59	3.65	69	10.57	2.60	870	0.73	4.90	117	11.89	2.76	1,056	4
Mt Rawdon1	Total	0.2	2.89	0.58	54	39.79	0.71	905	5.77	0.58	108	48.44	0.69	1,067	5
Mungari1	Open pit	0.5	0.18	0.94	5	33.06	1.30	1,379	11.69	1.51	566	44.93	1.35	1,950
Mungari	Underground	2.5/1.5	0.41	9.46	124	1.48	4.50	214	3.70	2.47	294	5.59	3.52	633
Mungari1	Total		0.59	6.84	130	34.54	1.43	1,593	15.40	1.74	860	50.52	1.59	2,583	3
Ernest Henry2	Total	0.9	13.20	0.69	293	67.10	0.62	1,338	15.00	0.60	289	95.30	0.63	1,920	6
Marsden	Total	0.2	-	-	-	119.83	0.27	1,031	3.14	0.22	22	122.97	0.27	1,053	7
Total			64.07	0.80	1,640	415.22	0.77	10,231	52.77	1.41	2,398	532.06	0.83	14,269

Data is reported to significant figures to reflect appropriate precision and may not sum precisely due to rounding

Mineral Resources are reported inclusive of Ore Reserves

Includes stockpiles

2Ernest Henry Operation cut-off 0.9% CuEq

Group Mineral Resources Competent Person3 (CP) Notes refer to: 1. James Biggam; 2. Chris Wilson; 3. Andrew Engelbrecht; 4 Matthew Obiri-Yeboah; 5. Tim Murphy; 6. Colin Stelzer (Glencore); 7. Michael Andrew

This information is extracted from the reports entitled "Annual Mineral Resources and Ore Reserves Statement" released on 19 April 2018 and "Restructure of Ownership of Castle Hill Gold Deposit" released to ASX on 18 July 2018 and both available and available to view at www.evolutionmining.com.au. Full details of the Ernest Henry Mineral Resources and Ore Reserves are provided in the report entitled "Glencore Resources and Reserves as at 31 December 2017" released February 2018 and available to view at www.glencore.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Reports and that all material assumptions and parameters underpinning the estimates in the Reports continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the Reports. Ernest Henry Resource is reported on a 100% basis for gold and 30% for copper (Evolution Mining has rights to 100% of the revenue from future gold production and 30% of future copper and silver produced from an agreed life of mine area and 49% of future gold, copper and silver produced from the Ernest Henry Resource outside the agreed life of mine area). Apportioning of the resource into the specific rights does not constitute a material change to the reported figures

						Group Gold Ore Reserves – December 2017
	Gold			Proved			Probable			Total Reserve
Project	Type	Cut Off	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	Tonnes (Mt)	Gold Grade (g/t)	Gold Metal (koz)	CP3
Cowal1	Open pit	0.4	46.64	0.70	1,049	69.64	0.89	1,998	116.28	0.81	3,046	1
Cracow1	Underground	3.4	0.17	5.72	32	1.31	5.08	213	1.48	5.14	245	2
Mt Carlton1	Open pit	0.8	0.59	3.65	69	3.63	4.96	578	4.22	4.77	647	3
Mt Carlton	Underground	3.7	-	-	-	0.28	7.22	65	0.28	7.22	65	6
Mt Carlton1	Total		0.59	3.65	69	3.91	5.11	643	4.50	4.92	712
Mt Rawdon1	Open pit	0.3	2.89	0.58	54	23.56	0.81	617	26.44	0.79	671	4
Mungari	Underground	2.75	0.37	5.86	70	0.71	4.70	107	1.08	5.10	177
Mungari1	Open pit	0.7/0.85- 0.95	0.18	0.79	5	12.87	1.57	646	13.05	1.55	651
Mungari1	Total		0.55	4.24	75	13.58	1.75	753	14.13	1.82	828	5
Ernest Henry2	Underground	0.9	10.20	0.77	253	41.20	0.49	649	51.40	0.55	902	7
Marsden	Open pit	0.3	-	-	-	65.17	0.39	817	65.17	0.39	817	3
Total			61.03	0.78	1,530	218.37	0.81	5,690	279.41	0.80	7,220

Group Gold Ore Reserves Statement

Data is reported to significant figures to reflect appropriate precision and may not sum precisely due to rounding

Includes stockpiles

2Ernest Henry Operation cut-off 0.9% CuEq

Group Ore Reserve Competent Person3 (CP) Notes refer to: 1. Ryan Kare; 2. Phillip Jones; 3. Anton Kruger; 4. Dimitri Tahan; 5. Matt Varvari; 6. Tully Davies; 7. Mark Jamieson (Glencore)

This information is extracted from the reports entitled "Annual Mineral Resources and Ore Reserves Statement" released on 19 April 2018 and "Restructure of Ownership of Castle Hill Gold Deposit" released to ASX on 18 July 2018 and both available and available to view at www.evolutionmining.com.au. Full details of the Ernest Henry Mineral Resources and Ore Reserves are provided in the report entitled "Glencore Resources and Reserves as at 31 December 2017" released February 2018 and available to view at www.glencore.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Reports and that all material assumptions and parameters underpinning the estimates in the Reports continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the Reports

	Copper		Measured				Indicated			Inferred			Total Resource
Project	Type	Cut Off	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	CP3
Marsden	Total	0.2	-	-	-	119.83	0.46	553	3.14	0.24	7	122.97	0.46	560	7
Ernest Henry2	Total	0.9	3.96	1.30	51	20.13	1.18	238	4.50	1.00	45	28.59	1.17	334	6
Mt Carlton1	Open pit	0.35	0.59	0.37	2	10.36	0.41	43	0.69	0.68	5	11.64	0.43	50
Mt Carlton	Underground	2.4	-	-	-	0.21	0.99	2	0.05	1.40	1	0.25	1.06	3
Mt Carlton1	Total		0.59	0.37	2	10.57	0.43	45	0.74	0.73	5	11.89	0.44	52	4
		Total	4.55	1.18	54	150.53	0.56	836	8.38	0.68	57	163.45	0.58	946

Group Copper Mineral Resources Statement

Group Copper Ore Reserves Statement

	Copper			Proved			Probable			Total Reserve
Project	Type	Cut-Off	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	Tonnes (Mt)	Copper Grade (%)	Copper Metal (kt)	CP3
Marsden		0.3	-	-	-	65.17	0.57	371	65.17	0.57	371	3
Ernest Henry2	Total	0.9	3.06	1.50	46	12.36	0.96	119	15.42	1.07	165	7
Mt Carlton1	Open pit	0.8	0.59	0.37	2	3.63	0.7	25	4.22	0.64	27	3
Mt Carlton	Underground	3.7	-	-	-	0.28	0.36	1	0.28	0.36	1	6
Mt Carlton1	Total		0.59	0.37	2	3.91	0.66	26	4.50	0.62	28
		Total	3.65	1.32	48	81.44	0.63	516	85.09	0.66	564

Group Mineral Resources Competent Person3 (CP) Notes refer to 1. James Biggam; 2. Chris Wilson; 3. Andrew Engelbrecht; 4 Matthew Obiri-Yeboah; 5. Tim Murphy; 6. Colin Stelzer (Glencore); 7. Michael Andrew

Group Ore Reserve Competent Person3 (CP) Notes refer to 1. Ryan Kare; 2. Phillip Jones; 3. Anton Kruger; 4. Dimitri Tahan; 5. Matt Varvari; 6. Tully Davies; 7. Mark Jamieson (Glencore)

The following notes relate to both tables above

Data is reported to significant figures to reflect appropriate precision and may not sum precisely due to rounding

Mineral Resources are reported inclusive of Ore Reserves

Includes stockpiles

2 Ernest Henry Operation cut-off 0.9% CuEq

Full details of the Ernest Henry Mineral Resources and Ore Reserves are provided in the report entitled "Glencore Resources and Reserves as at 31 December 2017" released February 2018 and available to view at www.glencore.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Report and that all material assumptions and parameters underpinning the estimates in the Report continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the Report. Ernest Henry Resource is reported on a 100% basis for gold and 30% for copper (Evolution Mining has rights to 100% of the revenue from future gold production and 30% of future copper and silver produced from an agreed life of mine area and 49% of future gold, copper and silver produced from the Ernest Henry Resource outside the agreed life of mine area). Apportioning of the resource into the specific rights does not constitute a material change to the reported figures.

Board of Directors

Jacob (Jake) Klein

BCom (Hons), ACA, Executive Chairman

Mr Klein was appointed as Executive Chairman in October 2011, following the merger of Conquest Mining Limited and Catalpa Resources Limited. Previously he served as

the Executive Chairman of Conquest Mining.

Prior to that, Mr Klein was President and CEO of Sino Gold Mining Limited, where he managed the development of that company into the largest foreign participant in the Chinese gold industry. Sino Gold was listed on the ASX in 2002 with a market capitalisation of A\$100 million and was purchased by Eldorado Gold Corporation in late 2009 for over A\$2 billion. It became an ASX/S&P 100 Company, operating two award-winning gold mines and engaging over 2,000 employees and contractors in China. Prior to joining Sino Gold (and its predecessor) in 1995, Mr Klein was employed at Macquarie Bank and PricewaterhouseCoopers.

Mr Klein was a Non-Executive Director of the Lynas Corporation Limited from August 2004 to May 2017, a company with operations in Australia and Malaysia and of OceanaGold Corporation from December 2009 to July 2014 a company with operations in the Philippines, USA and New Zealand.

Lawrie Conway

B Bus, CPA, MAICD, Finance Director and Chief Financial Officer

Mr Conway was appointed Finance Director and Chief Financial Officer of Evolution Mining Limited with effect from 1 August 2014 (previously a Non-Executive Director). Mr Conway has more than 28 years' experience in the

resources sector across a diverse range of commercial, financial and operational activities. He has held a mix of corporate, operational and commercial roles within Australia, Papua New Guinea and Chile with Newcrest and prior to that with BHP Billiton. He most recently held the position of Executive General Manager – Commercial and West Africa with Newcrest Mining where he was responsible for Newcrest's group Supply and Logistics, Marketing, Information Technology and Laboratory functions as well as Newcrest's business in West Africa.

Mr Conway is a Non-Executive Director of Aurelia Metals Ltd (appointed in June 2017).

James (Jim) Askew

BEng (Mining), MEngSc, FAusIMM, MCIMM, MSME (AIME), MAICD, Non-Executive Director

Mr Askew is a mining engineer with more than 40 years' broad international experience as a Director and Chief

Executive Officer for a wide range of Australian and international publicly listed mining, mining finance and other mining related companies. Mr Askew has served on the boards of numerous mining and mining services companies, which currently include OceanaGold Limited (Chairman since November 2006), a company with operations in the Philippines, USA and New Zealand; Syrah Resources Limited (Chairman since October 2014), a company with operations in Mozambique and in the USA; and Endeavour Mining Corporation (Non-Executive Director since July 2017), a company with operations in Cote d'Ivoire, Mali and Burkina Faso.

Mr Askew is a member of the Risk Committee and Member of the Nomination and Remuneration Committee.

Within the last 3 years Mr Askew has been a Non-Executive Director of Nevada Copper Limited and Asian Mineral Resources Ltd.

Graham Freestone

BEc (Hons), Non-Executive Director

Mr Freestone has more than 45 years' experience in the petroleum and natural resources industry. He has a broad finance, corporate and commercial background obtained in Australia and

internationally through senior finance positions with the Shell Group, Acacia Resources Limited and AngloGold Ashanti Limited.

Mr Freestone was the Chief Financial Officer and Company Secretary of Acacia Resources Limited from 1994 until 2001. From 2001 to 2009 he was a Non-Executive director of Lion Selection Limited, and from 2009 to 2011 he was a Non-Executive Director of Catalpa Resources Limited and Chaired their Audit Committees during that period.

Mr Freestone is a Non-Executive Director of Kasbah Resources Limited (appointed February 2017) a company

Board of Directors (continued)

with a tin project in Morocco and Chairs its Remuneration and Audit Committees.

Mr Freestone was Chair of the Audit Committee from 2011 until June 2018 and remains a member of the Audit Committee. Subsequent to year end,

Mr Freestone stepped down from the Risk Committee and was appointed as a member of the Nomination and Remuneration Committee.

Andrea Hall

BCom, FCA, M. App Fin, GAICD, Non-Executive Director

Ms Hall is a Chartered Accountant with more than 30 years' experience in the financial services industry in roles involved in internal audit, risk management, corporate and operational

governance, external audit, financial management and strategic planning. Prior to retiring from KPMG in 2012, Ms Hall was a Perth-based partner within KPMG's Risk Consulting Services in industries including mining, mining services, transport, healthcare, insurance, property and government.

Ms Hall is currently a Non-Executive Director and Chair of the Audit and Risk Committee at ASX-listed Pioneer Credit Limited and Automotive Holdings Group Limited. Ms Hall is also a Non-Executive Director of Insurance Commission of Western Australia and the Fremantle Football Club.

Ms Hall became Chair of the Audit Committee in June 2018 and was a member until this date.

Colin (Cobb) Johnstone

BEng (Mining), Lead Independent Director

Mr Johnstone is a mining engineer with over 30 years' experience in the resources sector. He has served as General Manager at some of Australia's largest mines including the

Kalgoorlie Super Pit in Western Australia, the Olympic Dam Mine in South Australia and the Northparkes Mine in New South Wales. He has extensive international experience including Canada, China, Africa and South America.

Mr Johnstone was Chief Operating Officer at Equinox Minerals Limited, until the acquisition by Barrick Gold Corporation in 2011. Prior to that Mr Johnstone was Chief Operating Officer of Sino Gold Mining Limited, where he oversaw the development and operation of gold mines in China. Mr Johnstone is Chairman of Aurelia Metals Ltd (since November 2016).

Mr Johnstone is the Lead Independent Director, Chair of the Risk Committee, and a member of the Audit Committee. Mr Johnstone was a former Non-Executive Director of Magnis Resources Ltd; Neometals Ltd (Reed Resources Ltd); and Metallum Ltd.

Thomas (Tommy) McKeith

BSc (Hons), GradDip Eng (Mining), MBA, Non-Executive Director

Mr McKeith is a geologist with 30 years' experience in various mine geology, exploration and business development roles. He

was formerly Executive Vice President (Growth and International Projects) for Gold Fields Limited, where he was responsible for global greenfields exploration and project development.

Mr McKeith was also Chief Executive Officer of Troy Resources Limited and has held Non-Executive Director roles at Sino Gold Limited, Avoca Resources Limited and is currently the Non-Executive Chairman of Prodigy Gold NL.

Mr McKeith is the Chair of the Nomination and Remuneration Committee. Subsequent to year end, Mr McKeith stepped down from the Audit Committee and was appointed as a member of the Risk Committee.

Chief Financial Officer's Review

The true test of a good strategy is the financial outcomes generated. Right from when Evolution was formed we have directed our energy to establishing a globally relevant mid-tier gold company that generates superior returns for our shareholders. The financial performance achieved in the twelve months to 30 June 2018 truly do reflect that we have executed well against that strategy. Right across the business we have seen all areas combine to deliver excellent financial outcomes for our shareholders. The results clearly demonstrate that the decisions taken over the past few years have significantly improved the quality of our portfolio.

"The business delivered on production and cost guidance for the seventh consecutive year. Evolution recorded a 21% increase in statutory net profit after tax to A\$263.4 million and produced an underlying profit after tax to A\$250.8 million (30 June 2017: A\$217.6 million and A\$206.6 million respectively). Both of these were record profits."

Lawrie Conway Finance Director and Chief Financial Officer

The Group's ongoing focus on productivity improvements and cost efficiencies delivered another year of outstanding results. Total gold production of 801,187oz was at the upper end of original guidance for the year of 750,000oz – 805,000oz. Record low AISC of A\$797/oz, represented a decrease of 12% on the prior year and was well below original guidance of A\$820/oz – A\$870/oz.

Operating mine cash flow of A\$811.8 million represented an increase of 15% on the prior year. Net mine cash flow increased 17% on the previous year to A\$539.9 million with all mines contributing positive cash flows after meeting their capital investment commitments.

Net bank debt was reduced by A\$325.8 million to A\$71.8 million (30 June 2017: A\$397.6 million).

Revenue for the year ended 30 June 2018 increased by 4% to A\$1,540.4 million (30 June 2017: A\$1,479.9 million). This is largely due to a full 12-month sales contribution from Ernest Henry totalling A\$347.4 million (30 June 2017: A\$163.3 million1) partly offset by the impact of the disposal of the Edna May Operation which resulted in a decrease in revenue of A\$79.7 million on the prior year.

Total gold sold equalled 798,101oz which included deliveries into the hedge book of 205,915oz at an average price of A\$1,564/oz (30 June 2017: 248,493oz, A\$1,584/oz). The remaining 592,186oz were sold at achieved average price of A\$1,673/oz (30 June 2017: 568,830oz, A\$1,666/oz). The Group's hedge book totalled 250,000oz at 30 June 2018 at an average price of A\$1,711/oz with deliveries through to June 2020.

Group operating costs (excluding depreciation, amortisation and fair value adjustments of A\$435.6 million) decreased to A\$705.5 million (30 June 2017: A\$719.7 million) largely as a result of the sale of Edna May during the year which resulted in a decrease of A\$61.5 million on the prior year. This was offset by the inclusion of a full 12 months of operating costs from Ernest Henry, which accounted for an increase of A\$52.3 million to A\$116.4 million (30 June 2017: \$64.1 million). The operating costs for the five existing mine sites remained consistent, with an increase of only 2% on the prior year to A\$554.6 million.

In December 2017, the Group made its first income tax payment having utilised all unrestricted tax losses. A total of A\$48.4 million of income tax was paid during

Chief Financial Officer's Review (continued)

the year including tax paid for the 30 June 2017 financial year (A\$30.7 million) and tax instalments for 30 June 2018 financial year (A\$17.7 million). This was another indication of the quality and profitability of the portfolio now in place.

Total exploration expenditure for the year ended 30 June 2018 was A\$31.6 million (30 June 2017: A\$29.0 million) with an exploration expense of A\$5.4 million (30 June 2017: A\$12.6 million).

Capital expenditure for the year totalled A\$271.9 million (30 June 2017: A\$245.0 million). This consisted of sustaining capital, including near mine exploration and resource definition of A\$100.9 million (30 June 2017: A\$116.6 million) and growth (major capital) projects of A\$171.0 million (30 June 2017: A\$128.4 million). The main growth capital projects included: Stage H and Float Tails (Dual) Leach projects (A\$84.6 million) at Cowal, Cracow underground mine development (A\$14.4 million), Mt Rawdon capital waste stripping (A\$10.9 million) and Mungari underground development (A\$8.9 million).

On 3 October 2017, the sale of the Edna May Operation to Ramelius Operations Pty Ltd was completed for total proceeds of up to A\$90.0 million. The consideration comprised of a A\$40.0 million up front cash payment and contingent consideration in the form of either a cash royalty, Ramelius shares, or a combination of both up to A\$50.0 million.

In August 2017, the Directors approved a change to the dividend policy of whenever possible paying a dividend equivalent to 50% of the Company's after-tax earnings. This policy was applied to both the interim and final dividend for 2018. Total dividends declared for the 2018 financial year were 7.5 cents per share totalling A\$126.9 million. These dividends were fully franked.

Evolution is forecasting FY19 Group gold production of 720,000 – 770,000 ounces of gold. Group C1 cash costs are expected to be in the range of A\$560 – A\$610 per ounce and Group AISC are expected to be in the range of A\$850 – A\$900 per ounce.

In conclusion, the 2018 financial year was another great year for Evolution. We are committed to maintaining our focus on low costs and strong cash generation. We are also actively investing in the future to ensure the sustainability of our business and are confident in our ability to continue to deliver superior shareholder returns.

Financials	Units	FY18	FY17	Change
Statutory Profit before tax	A\$M	338.9	237.3	43%
Statutory Profit after tax	A\$M	263.4	217.6	21%
Underlying Profit after tax	A\$M	250.8	206.6	21%
EBITDA	A\$M	795.1	713.9	11%
Operating Mine Cash Flow	A\$M	811.8	706.5	15%
Net Mine Cash Flow	A\$M	539.9	461.5	17%
Group Cash Flow1	A\$M	395.6	382.0	4%
EBITDA Margin2	%	53.0	49.0	8%
AIC Margin	A\$/oz	612.0	568.0	8%
Earnings Per Share	cps	15.6	13.3	17%
Gearing	%	2.7	15.9	83%
Final dividend (fully franked)	cps	7.5	5.0	33%

1. Excludes proceeds from Edna May (FY18) and Pajingo (FY17)

2. FY18 excludes Edna May; FY17 excludes Pajingo

Yours faithfully

LAWRIE CONWAY FINANCE DIRECTOR and CHIEF FINANCIAL OFFICER

Evolution Mining Limited Annual Financial Report

Contents

	Page
Directors' Report	66
Auditor's Independence Declaration	104
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income	105
Consolidated Balance Sheet	106
Consolidated Statement of Changes in Equity	107
Consolidated Statement of Cash Flows	108
Notes to the Consolidated Financial Statements	109
Directors' Declaration	150
Independent Auditor's Report to the Members	151
Shareholder Information	157
Corporate Information	159

Directors' Report

The Directors present their report together with the consolidated financial report of the Evolution Mining Limited Group, consisting of Evolution Mining Limited ("the Company") and the entities it controlled at the end of, or during, the year ended 30 June 2018.

Directors

The Directors of Evolution Mining Limited during the year ended 30 June 2018 and up to the date of this report are set out below. All Directors held their position as a Director throughout the entire year and up to the date of this report unless otherwise stated.

Jacob (Jake) Klein	Executive Chairman
Lawrence (Lawrie) Conway	Finance Director and Chief Financial Officer
Colin (Cobb) Johnstone	Lead Independent Director
James (Jim) Askew	Non-Executive Director
Graham Freestone	Non-Executive Director
Thomas (Tommy) McKeith	Non-Executive Director
Naguib Sawiris (i)	Non-Executive Director
Sebastien de Montessus (i)	Non-Executive Director
Andrea Hall (ii)	Non-Executive Director
Vincent Benoit (iii)	Alternate Non-Executive Director for Naguib Sawiris
Amr El Adawy (iii)	Alternate Non-Executive Director for Sebastien de Montessus
Andrew Wray (iv)	Alternate Non-Executive Director for Naguib Sawiris and Sebastien de Montessus

(i) Resigned as Non-Executive Director effective 1 August 2018.

(ii) Appointed as Non-Executive Director effective 1 October 2017.

(iii) Resigned as Alternate Non-Executive Director effective 19 April 2018.

(iv) Appointed as Alternate Non-Executive Director effective 19 April 2018. Resigned as Alternate Non-Executive Director effective 1 August 2018.

Company Secretary

The name of the Company Secretary during the full year ended 30 June 2018 and up to the date of this report is as follows:

Evan Elstein

Principal activities

The principal activities of the Group during the year were exploration, mine development, mine operations and the sale of gold and gold/copper concentrate in Australia. There were no significant changes to these activities during the year.

Key highlights for the year

Key highlights for the year ended 30 June 2018 include:

• Safety of our people is of paramount importance and our focus has been demonstrated through an improved total recordable injury frequency (TRIF) of 5.50 (30 June 2017: 7.96).
• The Group recorded a statutory net profit after tax of \$263.4 million for the year, an increase of 21% on the prior year. Underlying profit after tax increased by 21% to a record \$250.8 million (30 June 2017: \$206.6 million).
• The Group's continuing focus on productivity improvements and cost efficiencies delivered a year with outstanding results including:
• Total gold production of 801,187oz at the upper end of original guidance for the year of 750,000oz 805,000oz.
• Record low AISC of A\$797/oz, representing a decrease of 12% on the prior year and falling below original guidance of A\$820/oz - A\$870/oz.
• Operating mine cash flow of A\$811.8 million, representing an increase of 15% on the prior year.
• Net mine cash flow of A\$539.9 million, representing an increase of 17% on the prior year with all mines contributing positive cash flows after all capital investment.
• Net bank debt has been reduced by \$325.8 million to \$71.8 million (30 Jun 2017: \$397.6 million).

Key highlights for the year (continued)

• A total of \$109.9 million (30 June 2017: \$63.0 million) in fully franked dividends was paid during the year. A final dividend of 4 cents per share fully franked (\$67.7 million) was declared and will be paid on 28 September 2018.
• In May 2018, Evolution entered into an agreement with Orion Minerals Limited to acquire 100% of the Connors Arc exploration project, a large, early-stage exploration project covering approximately 3,200km², located 160km northwest of Rockhampton in Queensland. It is a technically compelling project with multiple and very extensive alteration zones which could be indicative of multiple preserved epithermal gold systems. The project area has similar geological characteristics to two of Evolution's current mines, Mt Carlton and Cracow, both of which are greater than one million ounce epithermal gold deposits.
• In March 2018, the Group successfully renewed the Senior Secured Revolving Loan ("Facility A") and the Performance Bond Facility ("Facility C") through to July 2021 for \$350.0 million and \$175.0 million respectively (previously \$300.0 million and \$155.0 million respectively). The expiry date of the Senior Secured Term Loan ("Facility D") remains unchanged at October 2021. Facility A (\$350.0 million) remained undrawn at 30 June 2018. The renewal of the debt facilities has secured a saving of approximately \$6 million over the term of the loans compared to the previous pricing.
• In February 2018, an agreement was reached with Emmerson Resources Limited to restructure the Tennant Creek Mineral Field Joint Venture. Under the new arrangement, Evolution has forgone its right to a 65% interest in the entire JV area and instead acquired a 100% interest in the Gecko, Goanna and Orlando Copper-Gold project.
• In December 2017, the Group made its first income tax payment. A total of \$48.4 million of income tax was paid during the year including tax paid for the 30 June 2017 financial year (\$30.7 million) and tax instalments for the current year (\$17.7 million).
• On 3 October 2017, the sale of the Edna May Operation to Ramelius Operations Pty Ltd was completed for total proceeds of up to \$90.0 million. The consideration comprised of a \$40.0 million up-front cash payment and contingent consideration in the form of either a cash royalty, Ramelius shares, or combination of both up to \$50.0 million.
• In September 2017, the Group repaid the outstanding balance of \$40.0 million on the Senior Secured Term Loan ("Facility B") in anticipation of the up-front cash payment to be received on the sale of the Edna May Operation. The Senior Secured Revolving Loan ("Facility A") remained undrawn during the year.
• On 4 August 2017, the Group agreed to subscribe for a \$2.5 million investment in the initial public offering of Riversgold Ltd, a new, gold-focussed, exploration company whose strategy is to build a portfolio of high-quality mineral projects with a view to sell or enter into a joint venture at an appropriate time in the project life cycle. This provided the Company with a shareholding of 15.1% in Riversgold Ltd.

Operating and Financial Review

Evolution is a leading, growth-focussed Australian gold company. As at 30 June 2018, the Group consisted of five wholly-owned operating gold mines: Cowal in New South Wales; Cracow, Mt Carlton and Mt Rawdon in Queensland; and Mungari in Western Australia, and an economic interest in the Ernest Henry Copper-Gold Operation (100% of gold and 30% of copper and silver) in Queensland.

The Group's strategy is to deliver shareholder value through efficient gold production, growing gold reserves and developing acquiring or divesting assets to improve the quality of the portfolio. Since its formation in November 2011, the Group has built a strong reputation for operational predictability and stability through a record of consistently achieving production and cost guidance with guidance met for seven consecutive years. A portfolio approach to production provides Evolution with a Group-wide level of operational stability and predictability without reliance on one single asset. The Group's high-performance team culture and clearly defined business plans and goals further contribute to delivering reliable and consistent results.

To build a sustainable business, the Group maintains a strong commitment to growth through exploration and a disciplined methodical approach to business development through opportunistic, logical, value-accretive acquisitions and divestments.

Profit Overview

The Group achieved a record 12-month statutory net profit after tax of \$263.4 million for the year ended 30 June 2018 (30 June 2017: \$217.6 million), largely driven by a 12 month contribution from the Ernest Henry Copper-Gold Operation compared to 8 months in the previous year. In October 2017, the Group disposed of the Edna May asset to Ramelius Operations Pty Limited as part of its strategy to improve the quality of its asset portfolio.

The following graph shows the movements in the Group's statutory profit after tax for the year ended 30 June 2017 to the year ended 30 June 2018.

Operating and Financial Review (continued)

Profit Overview (continued)

The Group achieved a record underlying net profit after tax of \$250.8 million for the year ended 30 June 2018 (30 June 2017: \$206.6 million). The table below shows a reconciliation of statutory profit/(loss) before tax to the underlying profit after tax.

	2018	2017
	\$'000	\$'000
Statutory profit before income tax	338,934	237,284
Fair value gain	(3,142)	-
Loss on sale of subsidiary	-	3,576
Transaction and integration costs	(866)	6,987
Underlying profit before income tax	334,926	247,847
Income tax expense	(75,546)	(19,677)
Tax benefit on sale of subsidiary	4,165	-
Tax effect of adjustments	1,201	(1,182)
Recognition of previously unrecognised tax losses	(4,544)	(20,400)
Recognition of previously unrecognised temporary differences	(9,440)	-
Underlying profit after income tax	250,762	206,588

Cash Flow

Operating mine cash flow increased 15% with all operations producing positive operating mine cash flows totalling \$811.8 million (30 June 2017: \$706.5 million). Total capital expenditure increased 11% which was in line with plan at \$271.9 million (including all sustaining and major capital expenditure, rehabilitation costs and capital stripping).

The Group's All in Sustaining Cost decreased by 12% to \$797/oz (30 June 2017: \$907/oz) driven by the inclusion of 12 months (30 June 2017: 8 months) of results from Ernest Henry which contributed an AISC of \$(641)/oz for the year offset by the 11% increase in capital expenditure attributable in the most part to Cowal Stage H capital waste stripping costs and Cowal's Float Tails Leach project.

Operating and Financial Review (continued)

Key Results

The consolidated operating and financial results for the current and prior year are summarised below. All \$ figures refer to Australian thousand dollars (A\$'000) unless otherwise stated.

Key Business Metrics	30 June 2018	30 June 2017 % Change (ii)
Total underground ore mined (kt)	7,817	5,662	38%
Total underground lateral development (m)	13,640	11,290	21%
Total open pit ore mined (kt)	14,453	19,672	(27)%
Total open pit waste mined (kt)	40,984	33,128	24%
Processed tonnes (kt)	21,425	20,607	4%
Gold grade processed (g/t)	1.37	1.49	(8)%
Gold production (oz)	801,187	844,124	(5)%
Silver production (oz)	989,253	1,067,681	(7)%
Copper production (t)	23,268	14,898	56%
Unit cash operating cost (A\$/oz) (i)	512	625	18%
All in sustaining cost (A\$/oz) (i)	797	907	12%
All in cost (A\$/oz) (i)	1,033	1,073	4%
Gold price achieved (A\$/oz)	1,645	1,641	0.2%
Silver price achieved (A\$/oz)	22	24	(8)%
Copper price achieved (A\$/t)	8,923	7,600	17%
Total Revenue	1,540,433	1,479,876	4%
Cost of sales (excluding D&A and fair value adjustments (i))	(705,553)	(719,738)	2%
Corporate, admin, exploration and other costs (excluding D&A)	(39,797)	(46,283)	14%
EBIT (i)	360,380	270,959	33%
EBITDA (i)	795,083	713,855	11%
Statutory profit/(loss) after income tax	263,388	217,607	21%
Underlying profit after income tax	250,762	206,588	21%
Operating mine cash flow	811,766	706,484	15%
Capital expenditure	(271,870)	(244,998)	(11)%
Net mine cash flow	539,896	461,486	17%

(i) EBITDA, EBIT, Unit cash operating cost, All-in Sustaining Cost (AISC), and All-in Cost (AIC) are non-IFRS financial information and are not subject to audit.

(ii) Percentage change represents positive/(negative) impact on the business

(iii) Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely the cost of Ernest Henry's operation.

Mining Operations

Cowal

Cowal was the Group's highest producer, achieving above guidance gold production of 257,951oz (guidance of 235,000 - 245,000oz) at an average unit cash operating cost of \$675/oz and AISC of \$877/oz. Cash costs and AISC were in line with, and below the lower end of guidance of \$660 -\$720/oz and \$950 - \$1,000/oz respectively. Capital expenditure for the year was \$124.6 million, of which \$84.9 million relate to the Stage H and Float Tails (Dual) Leach projects. Commissioning of the Float Tails (Dual) Leach project is forecast to commence in September 2018. Once commissioned, the project is expected to increase recoveries between 4 and 6%.

Cowal ore mining activities in the year focussed on the E42 Stage G cutback to a current operating level of 858mRL. At 30 June 2018, Stage H material movement remained on track, and mining activities have transitioned from free digging in the oxides to drill and blast in the primary rock.

During March 2018, Cowal submitted the Modification 14 development application, which includes seeking approval to increase plant throughput from 7.5Mtpa to 9.8Mtpa to the NSW Department of Planning and Environment. Public support has been strong. Evolution has submitted responses to public submissions and is now awaiting a decision from the regulator. This is expected to be received in the second half of FY19.

Exploration work delivered material resource growth, reflected in the Mineral Resources and Ore Reserves update which incorporated full year drilling results and contributed an 816,000oz addition at Galway Regal E46 Underground and at the E41 and E46 open pits. Work programs in FY19 will aim to further delineate extensions of these resources along strike and at depth. Definition drilling is also planned to confirm grade continuity and understand geologic controls on grade distribution to support further classification upgrades.

A maiden Ore Reserve for Marsden, located 17km from the Cowal plant, has been also included in the Mineral Resources and Ore Reserves update, contributing 835,000oz of gold and 380,000t of copper.

Key Business Metrics	30 June 2018	30 June 2017	Change	% Change
Operating cash flow (\$'000)	225,812	237,007	(11,195)	(5)%
Sustaining capital (\$'000)	(39,697)	(43,849)	4,152	(9)%
Major capital (\$'000)	(84,923)	(27,080)	(57,843)	214%
Total capital (\$'000)	(124,620)	(70,929)	(53,691)	76%
Net mine cash flow (\$'000)	101,192	166,078	(64,886)	(39)%
Gold production (oz)	257,951	263,015	(5,064)	(2)%
All-in Sustaining Cost (\$/oz)	877	833	(44)	5%
All-in Cost (\$/oz)	1,223	941	(282)	30%

Operating and Financial Review (continued)

Mining Operations (continued)

Mungari

Mungari produced a total of 118,498oz at an average unit cash operating cost of \$991/oz and an AISC of \$1,181/oz. Gold production was below guidance of 120,000 - 130,000oz due to significant seismic activity at the Frog's Leg underground mine in the first half of FY18. As a consequence cash costs and AISC were above guidance of \$860 - \$910/oz and \$990 - \$1,050/oz respectively. Capital expenditure in the year was \$46.6 mllion of which \$8.9 million related to mine development at the Frog's Leg underground mine and \$27.7 million related to capital waste stripping on the White Foil open pit.

The Frog's Leg underground mine produced 462kt of ore at an average grade of 5.32g/t. Total development for the year was 1,749m but was impacted by heading availability and rehabilitation operations in the first half. Total material moved at the White Foil open pit was 501kt at an average grade of 1.61 g/t. The Stage 3 cutback progressed on plan and moved into an operating phase during the later half of the year with subsequent reduced volumes of capital waste being recognised.

The process plant performed well over the course of the year, with 1,654kt of ore processed at an average grade of 2.36g/t. Increased gold recoveries of 94.2% were achieved (30 June 2017 : 92.4%) following the successful commissioning of an additional Knelson concentrator allowing for increased recoveries in the gravity circuit.

Mungari's performance is expected to improve in FY19 driven by the completion of the White Foil Stage 3 cutback and increased availability of high-grade ore feed from the Frog's Leg underground mine.

Investment in discovery and resource definition drilling programs across the Mungari tenements continued during the year with full results received for definition drilling at the White Foil underground target incorporated in the December 2017 Mineral Resources and Ore Reserves update. Development commenced to extend the Frog's Leg decline with the aim of establishing an underground drilling position to test extensions of the Frog's Leg vein structure well below the base of the deepest workings. Drilling at Perimeter and Scottish Archer targets, north of the Mungari processing plant, has returned significant mineralisation. During FY19, drilling is planned to delineate the full scope of the mineralised system at Perimeter and to test the depth and strike extents of the high-grade zone at Scottish Archer.

Key Business Metrics	30 June 2018	30 June 2017	Change	% Change
Operating cash flow (\$'000)	70,240	95,958	(25,718)	(27)%
Sustaining capital (\$'000)	(9,935)	(14,566)	4,631	(32)%
Major capital (\$'000)	(36,611)	(22,161)	(14,450)	65%
Total capital (\$'000)	(46,546)	(36,727)	(9,819)	27%
Net mine cash flow (\$'000)	23,694	59,231	(35,537)	(60)%
Gold production (oz)	118,498	143,820	(25,322)	(18)%
All-in Sustaining Cost (\$/oz)	1,181	1,143	38	(3)%
All-in Cost (\$/oz)	1,604	1,371	233	(17)%

Operating and Financial Review (continued)

Mining Operations (continued)

Mt Carlton

Mt Carlton produced 112,479oz, exceeding guidance of 100,000 - 110,000 ozs. Unit cash operating costs of \$299/oz and AISC of \$535/oz were both substantially below the bottom end of guidance of A\$420 - \$470/oz and A\$680 - \$730/oz respectively. The production and cash cost performance over and above plan was predominantly due to higher grades in bonanza zones of the pit outperforming the resource model.

Mining during the year was focussed on the western end of Stage 3a of the V2 pit with a shift in focus to the Stage 3b cutback in the later stages. This placed emphasis on Stage 3b ore, and the new Southern ramp construction with anticipation that ore from Stage 3b North (75RL) will be delivered in early FY19.

Capital expenditure for the year of \$30.9 million is largely attributed to Stage 3b capital waste of \$21.0 million combined with the purchase of a new excavator and the start of Stage 5 Tailings Storage Facility lift.

The Mine Extension Feasibility Study is ongoing and due for completion and decision in the first half of FY19.

Key Business Metrics	30 June 2018	30 June 2017	Change	% Change
Operating cash flow (\$'000)	139,598	120,339	19,259	16%
Sustaining capital (\$'000)	(9,866)	(15,304)	5,438	(36)%
Major capital (\$'000)	(21,009)	(13,887)	(7,122)	51%
Total capital (\$'000)	(30,875)	(29,191)	(1,684)	6%
Net mine cash flow (\$'000)	108,723	91,148	17,575	19%
Gold production (oz)	112,479	105,024	7,455	7%
All-in Sustaining Cost (\$/oz)	535	622	(87)	(14)%
All-in Cost (\$/oz)	735	762	(27)	(4)%

Operating and Financial Review (continued)

Mining Operations (continued)

Mt Rawdon

Mt Rawdon achieved total gold production of 105,053oz at a unit cash operating cost of A\$693/oz and an AISC of A\$884/oz. Production was at the lower end of guidance of 105,000 - 115,000oz, while cash costs and AISC were within guidance of \$670 - \$720/oz and \$850 - \$900/oz respectively. Capital expenditure for the year was \$19.5 million with a large amount of this attributable to capital waste mined in the Stage 4 cutback.

Mining activities during the year were focussed on the progression of the Stage 4 cutback and sourcing ore from the lower benches of the open pit. In the early FY19 the plant will predominantly process stockpiles as mining activities focus on waste material in Stage 4 and installing additional ground support in the western area of the pit.

Key Business Metrics	30 June 2018	30 June 2017	Change	% Change
Operating cash flow (\$'000)	69,198	69,035	163	%
Sustaining capital (\$'000)	(8,574)	(14,242)	5,668	(40)%
Major capital (\$'000)	(10,924)	(19,071)	8,147	(43)%
Total capital (\$'000)	(19,498)	(33,313)	13,815	(41)%
Net mine cash flow (\$'000)	49,700	35,722	13,978	39%
Gold production (oz)	105,053	101,331	3,722	4%
All-in Sustaining Cost (\$/oz)	884	873	11	(1)%
All-in Cost (\$/oz)	987	1,065	(78)	7%

Operating and Financial Review (continued)

Mining Operations (continued)

Cracow

Cracow exceeded guidance of 85,000 - 90,000oz, producing 90,357oz at a unit cash operating cost of \$762/oz and AISC of \$1,181/oz. Cash costs were below the lower end of the guidance of \$810 - \$860/oz while AISC was within the guidance range of \$1,150 - \$1,200/oz.

A total of 537kt of ore was mined at an average grade of 5.51g/t during the year with primary ore sources being the Kilkenny, Coronation and Griffin ore bodies.

Capital expenditure for the year was A\$34.0 million comprising mainly of capital works to upgrade the airstrip servicing the site, mobile fleet replacement and refurbishment, and mine development. Capital investment at the mine increased in FY18 and will be similar in FY19 due to the age of the mine and the successful increase in mine life over the last 18-24 months.

Resource definition and exploration drill programs at Cracow during the year returned strong results from the Killarney structure where mineralisation is continuing to be defined to the south of the current resource.

Key Business Metrics	30 June 2018	30 June 2017	Change	% Change
Operating cash flow (\$'000)	70,771	72,690	(1,919)	(3)%
Sustaining capital (\$'000)	(19,601)	(17,462)	(2,139)	12%
Major capital (\$'000)	(14,451)	(14,168)	(283)	2%
Total capital (\$'000)	(34,052)	(31,630)	(2,422)	8%
Net mine cash flow (\$'000)	36,719	41,060	(4,341)	(11)%
Gold production (oz)	90,357	89,496	861	1%
All-in Sustaining Cost (\$/oz)	1,181	1,123	58	(5)%
All-in Cost (\$/oz)	1,269	1,208	61	(5)%

Operating and Financial Review (continued)

Mining Operations (continued)

Ernest Henry

Attributable production from Ernest Henry was 95,209oz of gold exceeding guidance of 85,000 - 90,000oz, 66,750oz of silver and 21,011t of copper at a negative unit cash operating cost of \$(921)/oz and a negative AISC of \$(641)/oz after copper and silver by-product credit of (1,984)/oz. Cash costs and AISC were substantially below FY18 guidance of \$(500) - \$(300)/oz and \$(200) - \$(150)/oz respectively.

Ore mined was 6,819kt at an average grade of 0.56g/t gold and 1.12% copper. Underground development was 6,781m. Ore processed was 6,759kt at an average grade of 0.56g/t gold and 1.12% copper. Gold recovery and copper recovery of 80.3% and 96.3% respectively were achieved.

Key Business Metrics		30 June 2018 30 June 2017 (i)		% Change
Operating cash flow (\$'000)	230,860	87,851	143,009	163%
Sustaining capital (\$'000)	(11,618)	(6,066)	(5,552)	92%
Major capital (\$'000)	-	-	-	-%
Total capital (\$'000)	(11,618)	(6,066)	(5,552)	92%
Net mine cash flow (\$'000)	219,242	81,785	137,457	168%
Gold production (oz)	95,209	60,259	34,950	58%
Copper production (t)	21,011	13,306	7,705	58%
All-in Sustaining Cost (\$/oz)	(641)	(361)	(280)	78%
All-in Cost (\$/oz)	(641)	(361)	(280)	78%

(i) Results for 2017 were for 8 months from 1 November 2016.

(ii) Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely the cost of Ernest Henry's operation.

Operating and Financial Review (continued)

Mining Operations (continued)

Edna May

The Edna May Operation was sold on 3 October 2017 to Ramelius Operations Pty Ltd for total proceeds of up to \$90.0 million. The consideration comprised of a A\$40.0 million up-front cash payment and contingent consideration in the form of either a cash royalty, Ramelius shares, or combination of both up to \$50.0 million.

No profit or loss has been recognised on disposal with the value of the consideration, including the net present value of the contingent consideration, closely matching the carrying value of the Edna May Operation at date of disposal. No contingent consideration has been received to date. The value of the contingent consideration will be assessed at each reporting period.

During the period that Edna May was still under Evolution ownership, Edna May produced 21,639oz of gold at an AISC of \$1,588/oz.

Financial Performance

Profit or Loss

Revenue for the year ended 30 June 2018 increased by 4% to \$1,540.4 million (30 June 2017: \$1,479.9 million). This is largely due to a full 12 months' sales contribution from Ernest Henry totalling \$347.4 million (30 June 2017: \$163.3 million). This is comprised of \$188.8 million for copper and silver revenue and \$158.6 million for gold revenue (30 June 2017: \$102.9 million for 8 months of copper and silver revenue and \$60.4 million for 5 months of gold revenue). The achieved copper price increased 17% to \$8,923/t which favourably impacted revenue in the year. This was partly offset by the impact of the disposal of the Edna May Operation which resulted in a decrease of \$79.7 million on the prior year.

Total gold sold equalled 798,101oz which included deliveries into the hedge book of 205,915oz at an average price of \$1,564/oz (30 June 2017: 248,493oz, \$1,584/oz). The remaining 592,186oz were sold at spot price achieving an average price of \$1,673/oz (30 June 2017: 568,830oz, \$1,666/oz). The Group's hedge book totals 250,000oz as at 30 June 2018 at an average price of \$1,711/oz with deliveries through to June 2020.

Operating costs (excluding depreciation, amortisation and fair value adjustments of \$435.6 million) decreased to \$705.5 million (30 June 2017: \$719.7 million) largely as a result of the sale of Edna May during the year which resulted in a decrease of \$61.5 million on the prior year. This was offset by the inclusion of 12 months' worth of Ernest Henry's results, which accounted for an increase of \$52.3 million in operating costs (30 June 2018: \$116.4 million; 30 June 2017: \$64.1 million). The operating costs for the five existing mine sites remained consistent, with an increase of only 2% on the prior year to \$554.6 million.

An independent valuation of the Cowal open pit and Mungari open pit and underground has been completed during the financial year. A balance sheet reclassification of \$90.5 million has been recorded (from Property, Plant and Equipment to Mine Development) with a resulting \$2.9 million of additional mine development amortised during this financial year. As a consequence of this valuation, a reduction in income tax expense for the year of \$22.7 million has been recorded of which \$9.4 million has been excluded from underlying profit as it relates to tax depreciation that will be deducted in future years.

The Group posted a 21% increase in statutory profit after tax to \$263.4 million (30 June 2017: \$217.6 million) driven by increased sales, decreased costs per ounce and decreased transaction costs and exploration expense. Underlying profit after tax was \$250.8 million (30 June 2017: \$206.6 million).

Balance Sheet

Total assets increased 4% during the year to \$3,056.3 million (30 June 2017: \$2,945.5 million). An increase in cash of \$285.8 million since 30 June 2017 to \$323.2 million combined with the recognition of deferred consideration on the Edna May disposal of \$34.4m has been offset by the disposal of total assets attributable to Edna May of \$114.0 million as well as a reduction in the net carrying amount of property, plant and equipment and producing mines due to a depreciation charge of \$405.2 million outstripping capital additions of \$323.8 million. Non-current inventories increased by \$37.6 million to \$38.5 million and include ore stockpiles at Mt Rawdon (\$16.9 million) and Cowal (\$21.6 million) not expected to be processed within 12 months. The Cowal ore stockpile of \$13.3 million at the beginning of the year has been reclassified from Mine Development.

Operating and Financial Review (continued)

Financial Performance (continued)

Balance Sheet (continued)

Total liabilities for the Group decreased to \$767.9 million at 30 June 2018, a decrease of \$49.3 million, or 6% on the prior year. The decrease is in part attributable to the \$40.0 million final repayment of the Senior Secured Term Loan ("Facility B") established for the Cowal acquisition. The remaining decrease is due to the disposal of liabilities of \$37.6 million related to the sale of Edna May offset by a \$11.1 million increase in the current tax liability to \$47.3 million at 30 June 2018.

The Group ended the year with a cash balance of \$323.2 million and available credit of \$350.0 million in Facility A as part of its Senior Secured Syndicated Revolving and Term Facility.

Cash Flow

Total cash inflows for the year amounted to \$285.8 million (30 June 2017: inflow \$20.2 million).

	30 June 2018	30 June 2017	Change
	\$'000	\$'000	\$'000	% Change
Cash flows from operating activities	714,166	650,795	63,371	10%
Cash flows from investing activities	(270,284)	(1,120,794)	850,510	(76)%
Cash flows from financing activities	(158,087)	490,156	(648,243)	(132)%
Net movement in cash	285,795	20,157	265,638	1,318%
Cash at the beginning of the year	37,385	17,295	20,090	116%
Effects of exchange rate changes on cash	46	(67)	113	(169)%
Cash at the end of the year	323,226	37,385	285,841	765%

Net cash outflows from investment activities were \$270.3 million, an \$850.5 million decrease (30 June 2017: \$1,120.8 million) in the most part attributable to the prior year payments for the acquisition of the economic interest in Ernest Henry Copper-Gold Operation of \$884.0 million (including transaction fees) and receipt of \$41.9 million on the sale of Pajingo. Capital investments for the year include property, plant and equipment of \$116.1 million and mine development and exploration of \$191.9 million.

Net cash outflows from financing activities were \$158.1 million, an increase of \$648.2 million (30 June 2017: inflow \$490.2 million). Financing cash flows for the year included the repayment of \$40.0 million on the Senior Secured Term Loan and dividend payments of \$109.9 million offsetting the \$408.8 million in equity raised in 2017.

Taxation

During the year, the Group made its first income tax payment of \$36.2 million related to the 30 June 2017 financial year and recognised an income tax expense of \$75.5 million (30 June 2017: \$19.7 million). On the balance sheet, the Company recognised a current tax liability of \$47.3 million (30 June 2017: \$36.2 million) and a deferred tax asset of \$0.4 million (30 June 2017: \$16.4 million).

Income tax expense for the year has been reduced by \$26.7 million due to the recognition of tax losses and temporary differences as an asset. This includes \$22.7 million as a consequence of an independent valuation of the Cowal open pit and Mungari open pit and underground that was completed during the financial year.

The tax payments made in respect of the 30 June 2017 financial year combined with tax instalments paid over the course of the 30 June 2018 financial year have enabled the declaration of fully franked interim and final dividends.

Capital Expenditure

Capital expenditure for the year totalled \$271.9 million (30 June 2017: \$245.0 million). This consisted of sustaining capital, including near mine exploration and resource definition of \$100.9 million (30 June 2017: \$116.6 million) and mine development of \$171.0 million (30 June 2017: \$128.4 million). The main capital projects included the Stage H and Float Tails (Dual) Leach projects (\$84.6 million) at Cowal, Cracow underground mine development (\$14.4 million), Mt Rawdon capital waste stripping (\$10.9 million) and Mungari underground development (\$8.9 million).

Financial Performance (continued)

Financing

Total finance costs for the year were \$24.8 million (30 June 2017: \$35.2 million), a decrease of 30%. Included in total finance costs are interest expense of \$20.5 million (30 June 2017: \$24.2 million), amortisation of debt establishment costs of \$0.7 million (30 June 2017: \$7.4 million) and discount unwinding on mine rehabilitation liabilities of \$3.6 million (30 June 2017: \$3.3 million).

In September 2017, the Group repaid the outstanding balance of \$40.0 million on the Senior Secured Term Loan ("Facility B") in anticipation of the up-front cash payment to be received on the sale of the Edna May Operation. The Senior Secured Revolving Loan ("Facility A") remained undrawn during the year.

In March 2018, the Group successfully renewed the Senior Secured Revolving Loan ("Facility A") and the Performance Bond Facility ("Facility C") through until July 2021 for \$350.0 million and \$175.0 million respectively (previously \$300.0 million and \$155.0 million respectively). The expiry on the Senior Secured Term Loan ("Facility D") remains unchanged at October 2021. The renewal of the debt facilities has secured a saving of approximately \$6 million over the term of the loans compared to the previous pricing.

The repayment periods and the outstanding balances as at 30 June 2018 on each facility are set out below:

Facility	Term date	Outstanding balance
Senior Secured Revolving Loan - Facility A (\$350.0 million)	31 July 2021	\$ nil
Performance Bond Facility - Facility C	31 July 2021	\$132 million
Senior Secured Term Loan - Facility D	15 October 2021	\$395 million

Material business risks

The Group prepares its business plans using estimates of production and financial performance based on a range of assumptions and forecasts. There is uncertainty in these assumptions and forecasts, and risk that variation from them could result in actual performance being different to expected outcomes. The uncertainties arise from a range of factors, including the nature of the mining industry and general economic factors. The material business risks faced by the Group that may have an impact on the operating and financial prospects of the Group as at 30 June 2018 are:

Fluctuations in the gold price and Australian dollar

The Group's revenues are exposed to fluctuations in the gold, silver and copper prices and the Australian dollar. Volatility in the gold, silver and copper prices and Australian dollar creates revenue uncertainty and requires careful management of business performance to ensure that operating cash margins are maintained should the Australian dollar price fall.

Declining gold, silver and copper prices can also impact operations by requiring a reassessment of the feasibility of a particular exploration or development project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment could cause substantial delays and/or may interrupt operations, which may have a material adverse effect on our results of operations and financial condition.

Mineral Resources and Ore Reserves

The Group's Mineral Resources and Ore Reserves are estimates, and no assurance can be given that the estimated reserves and resources are accurate or that the indicated level of gold, silver, copper or any other mineral will be produced. Such estimates are, in large part, based on interpretations of geological data obtained from drill holes and other sampling techniques. Actual mineralisation or geological conditions may be different from those predicted. No assurance can be given that any part or all of the Group's Mineral Resources constitute or will be converted into Ore Reserves.

Market price fluctuations of gold, silver and copper as well as increased production and capital costs may render the Group's Ore Reserves unprofitable to develop at a particular site or sites for periods of time or may render Ore Reserves containing relatively lower grade mineralisation uneconomic. Estimated reserves may have to be re-estimated based on actual production experience. Any of these factors may require the Group to reduce its Mineral Resources and Ore Reserves, which could have a negative impact on the Group's financial results.

Operating and Financial Review (continued)

Material business risks (continued)

Replacement of depleted reserves

The Group must continually replace reserves depleted by production to maintain production levels over the long term. Reserves can be replaced by expanding known ore bodies, locating new deposits or making acquisitions. Exploration is highly speculative in nature. The Group's exploration projects involve many risks and are frequently unsuccessful. Once a site with mineralisation is discovered, it may take several years from the initial phases of drilling until production is possible.

As a result, there is no assurance that current or future exploration programs will be successful. There is a risk that depletion of reserves will not be offset by discoveries or acquisitions or that divestitures of assets will lead to a lower reserve base. The mineral base of the Group may decline if reserves are mined without adequate replacement and the Group may not be able to sustain production beyond the current mine lives, based on current production rates.

Mining risks and insurance risks

The mining industry is subject to significant risks and hazards, including environmental hazards, industrial accidents, unusual or unexpected geological conditions, unavailability of materials and equipment, pit wall failures, rock bursts, seismic events, cave-ins, and weather conditions (including flooding and bush fires), most of which are beyond the Group's control. These risks and hazards could result in significant costs or delays that could have a material adverse effect on the Group's financial performance, liquidity and results of operation.

The Group maintains insurance to cover the most common of these risks and hazards. The insurance is maintained in amounts that are considered reasonable depending on the circumstances surrounding each identified risk. However, property, liability and other insurance may not provide sufficient coverage for losses related to these or other risks or hazards.

Production and cost estimates

The Group prepares estimates of future production, cash costs and capital costs of production for its operations. No assurance can be given that such estimates will be achieved. Failure to achieve production or cost estimates or material increases in costs could have an adverse impact on the Group's future cash flows, profitability, results of operations and financial condition.

The Group's actual production and costs may vary from estimates for a variety of reasons, including: actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to the ore reserves, such as the need for sequential development of ore bodies and the processing of new or different ore grades; revisions to mine plans; risks and hazards associated with mining; natural phenomena such as inclement weather conditions, water availability and floods; and unexpected labour shortages or strikes.

Costs of production may also be affected by a variety of factors including: changing waste-to-ore ratios, ore grade metallurgy, labour costs, cost of commodities, general inflationary pressures and currency exchange rates.

Environmental, health and safety, and permits

The Group's mining and processing operations and exploration activities are subject to extensive laws and regulations governing the protection of the environment, waste disposal, worker safety, mine development and protection of endangered and other special status species. The Group's ability to obtain permits and approvals and to successfully operate may be adversely impacted by real or perceived detrimental events associated with the Group's activities or those of other mining companies affecting the environment, human health and safety or the surrounding communities. Delays in obtaining or failure to obtain government permits and approvals may adversely affect the Group's operations, including its ability to continue operations.

While the Group has implemented extensive health, safety and community initiatives at its sites to ensure the health and safety of its employees, contractors and members of the community affected by its operations, there is no guarantee that such measures will eliminate the occurrence of accidents or other incidents which may result in personal injuries or damage to property, and in certain instances such occurrences could give rise to regulatory fines and/or civil liability.

Operating and Financial Review (continued)

Material business risks (continued)

Community relations

The Group has an established community relations function, both at a Group level and at each of its operations. The Group function has developed a community engagement framework, including a set of principles, policies and procedures designed to provide a structured and consistent approach to community activities across our sites whilst recognising that, fundamentally, Community Relations is about people connecting with people. The Group recognises that a failure to appropriately manage local community stakeholder expectations may lead to dissatisfactions which have the potential to disrupt production and exploration activities.

Risk management

The Group manages the risks listed above, and other day-to-day risks through an established management framework which conforms to Australian and international standards and guidance. The Group's risk reporting and control mechanisms are designed to ensure strategic, operational, legal, financial, reputational and other risks are identified, assessed and appropriately managed. These are reviewed by the Risk Committee throughout the year.

The financial reporting and control mechanisms are reviewed during the year by management, the internal audit process, the Audit Committee and the external auditors.

The Group has policies in place to manage risk in the areas of Health and Safety, Environment and Equal Employment Opportunity.

The Leadership Team, the Risk Committee and the Board regularly review the risk portfolio of the business and the effectiveness of the Group's management of those risks.

Dividends

In August 2017, the Directors approved a change to the dividend policy of whenever possible paying a dividend equivalent to 50% of the Group's after tax earnings. The change was effective immediately and was applied to the final dividend for 2017 and interim dividend for 2018. This policy remains consistent at 30 June 2018. Dividends will be rounded to the nearest half-cent.

The Board has confirmed that Evolution is in a sound position to meet its commitment under the new policy to pay a final fully franked dividend for the current period of 4 cents per share, totalling \$67.7 million. Evolution shares will trade excluding entitlement to the dividend on 28 August 2018, with the record date being 29 August 2018 and payment date of 28 September 2018.

The Dividend Reinvestment Plan ("DRP") remains suspended.

Significant changes in the state of affairs

There were no significant changes in the nature of the activities of the Group during the period, other than those included in the Key Highlights.

Further information on likely developments in the operations of the Group and the expected results of operations have not been included in this Annual Financial Report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.

Events occurring after the reporting period

No matter or circumstance has occurred subsequent to the year end that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations or state of affairs of the Group or economic entity in subsequent financial years except for the following matters:

• On 18 July, the Company reached an agreement to terminate Norton Gold Field's right to mine and process ore from the Castle Hill deposit. This provides Evolution with full ownership and unfettered access to the deposit located 25km from the Mungari processing facility. Castle Hill is estimated to contain Ore Reserves of 236,000oz which will provide a material extension to the operating life at Mungari. Evolution will pay an initial up-front cash payment of \$12 million (paid 31 July 2018), a further \$3 million six months after completion of the transaction and a 2% net smelter royalty over the first 38,000oz of gold production from certain tenements within the Castle Hill deposit area.

Events occurring after the reporting period (continued)

• On 26 July, it was announced that La Mancha had undertaken a block trade monetisation of shares reducing its direct interest in Evolution to 9.6%. In accordance with the terms of the Share Sale Agreement signed between Evolution and La Mancha in April 2015, La Mancha had the right to nominate Directors to the Board of Evolution provided that it held more than 10.0% of the shares on issue in Evolution. La Mancha's nominee Directors, Mr Naguib Sawiris, Mr Sebastian de Montessus and their Alternate Director, Mr Andrew Wray resigned from the Board of Directors of Evolution effective 1 August 2018.

Environmental regulation and performance

The Executive Chairman reports to the Board on all significant safety and environmental incidents. The Board also has a Risk Committee which has oversight of the safety, health and environmental performance of the Group and meets at least two times per year. The Directors are not aware of any environmental incidents occurring during the year ended 30 June 2018 which would have a materially adverse impact on the overall business of the Group.

The operations of the Group are subject to environmental regulation under the jurisdiction of the countries in which those operations are conducted namely in Australia. Each mining operation is subject to particular environmental regulation specific to their activities as part of their operating licence or environmental approvals. Each of our sites are required to also manage their environmental obligations in accordance with our corporate environmental policies and standards.

The environmental laws and regulations that cover each of our sites, combined with our policies and standards, address the potential impact of the Group's activities in relation to water and air quality, noise, land disturbance, waste and tailings management, and the potential impact upon flora and fauna.

The Group has a uniform internal reporting system across all sites. All environmental incidents, including breaches of any regulation or law are assessed according to their actual or potential environmental consequence. Given levels of environmental incidents are tracked based on factors such as spill volume, incident location (onsite or offsite) and potential or actual environmental impacts. These levels include: I (insignificant), II (minor), III (moderate), IV (major), V (catastrophic).

Across the five Evolution Mining Sites, excluding government reporting for vehicular and non-vehicular native fauna deaths, the Level III reports for the past two years have been:

	2018	2017
Number of Level III incidents	8	9

Incidents were notified to the relevant government authority and the relevant agreed action was taken. There have been no Level IV or V incidents.

Information on Directors

The following information is current as at the date of this report. Please refer to the Remuneration Report section (e) for details of shareholdings, options and rights.

Jacob (Jake) Klein, BCom Hons, ACA, Executive Chairman

Mr Klein was appointed as Executive Chairman in October 2011, following the merger of Conquest Mining Limited and Catalpa Resources Limited. Previously he served as the Executive Chairman of Conquest Mining.

Prior to that, Mr Klein was President and CEO of Sino Gold Mining Limited, where he managed the development of that company into the largest foreign participant in the Chinese gold industry. Sino Gold was listed on the ASX in 2002 with a market capitalisation of A\$100 million and was purchased by Eldorado Gold Corporation in late 2009 for over A\$2 billion. It became an ASX/S&P 100 Company, operating two award-winning gold mines and engaging over 2,000 employees and contractors in China. Prior to joining Sino Gold (and its predecessor) in 1995, Mr Klein was employed at Macquarie Bank and PricewaterhouseCoopers.

Mr Klein was a Non-Executive Director of the Lynas Corporation Limited from August 2004 to May 2017, a company with operations in Australia and Malaysia and of OceanaGold Corporation from December 2009 to July 2014 a company with operations in the Philippines, USA and New Zealand.

Lawrence (Lawrie) Conway B Bus, CPA, GAICD, Finance Director and Chief Financial Officer

Mr Conway was appointed Finance Director and Chief Financial Officer of Evolution Mining Limited with effect from 1 August 2014 (previously a Non-Executive Director).

Mr Conway has more than 28 years' experience in the resources sector across a diverse range of commercial, financial and operational activities. He has held a mix of corporate, operational and commercial roles within Australia, Papua New Guinea and Chile with Newcrest and prior to that with BHP Billiton. He most recently held the position of Executive General Manager – Commercial and West Africa with Newcrest Mining where he was responsible for Newcrest's group Supply and Logistics, Marketing, Information Technology and Laboratory functions as well as Newcrest's business in West Africa.

Mr Conway is a Non-Executive Director of Aurelia Metals Ltd (appointed in June 2017).

James (Jim) Askew, BEng (Mining), MEngSc, FAusIMM, MCIMM, MSME (AIME), MAICD, Non-Executive Director

Mr Askew is a mining engineer with more than 40 years' broad international experience as a Director and Chief Executive Officer for a wide range of Australian and international publicly listed mining, mining finance and other mining related companies.

Mr Askew has served on the boards of numerous mining and mining services companies, which currently include OceanaGold Limited (Chairman since November 2006), a company with operations in the Philippines, USA and New Zealand; Syrah Resources Limited (Chairman since October 2014), a company with operations in Mozambique and in the USA; and Endeavour Mining Corporation (Non-Executive Director since July 2017), a company with operations in Cote d'Ivoire, Mali and Burkina Faso.

Mr Askew is a member of the Risk Committee and Member of the Nomination and Remuneration Committee.

Within the last 3 years Mr Askew has been a Non-Executive Director of Nevada Copper Limited and Asian Mineral Resources Ltd.

Information on Directors (continued)

Graham Freestone, BEc (Hons), Non-Executive Director

Mr Freestone has more than 45 years' experience in the petroleum and natural resources industry. He has a broad finance, corporate and commercial background obtained in Australia and internationally through senior finance positions with the Shell Group, Acacia Resources Limited and AngloGold Ashanti Limited.

Mr Freestone was the Chief Financial Officer and Company Secretary of Acacia Resources Limited from 1994 until 2001. From 2001 to 2009 he was a Non-Executive director of Lion Selection Limited, and from 2009 to 2011 he was a Non-Executive director of Catalpa Resources Limited, and Chaired their Audit Committees during that period.

Mr Freestone is a Non-Executive Director of Kasbah Resources Limited (appointed February 2017) a company with a tin project in Morocco, and Chairs its Remuneration and Audit Committees.

Mr Freestone was Chair of the Audit Committee from 2011 until June 2018 and remains a member of the Audit Committee. Subsequent to year end, Mr. Freestone stepped down from the Risk Committee and was appointed as a member of the Nomitation and Remuneration Committee.

Colin (Cobb) Johnstone, BEng (Mining), Lead Independent Director

Mr Johnstone is a mining engineer with over 30 years' experience in the resources sector. He has served as General Manager at some of Australia's largest mines including the Kalgoorlie Super Pit in Western Australia, the Olympic Dam Mine in South Australia and the Northparkes Mine in New South Wales. He has extensive international experience including Canada, China, Africa and South America.

Mr Johnstone was Chief Operating Officer at Equinox Minerals Limited, until the acquisition by Barrick Gold Corporation in 2011. Prior to that Mr Johnstone was Chief Operating Officer of Sino Gold Mining Limited, where he oversaw the development and operation of gold mines in China. Mr Johnstone is Chairman of Aurelia Metals Ltd (since November 2016).

Mr Johnstone is the Lead Independent Director, Chair of the Risk Committee, and a member of the Audit Committee.

Mr Johnstone was a former Non-Executive Director of Magnis Resources Ltd; Neometals Ltd (Reed Resources Ltd); and Metallum Ltd.

Thomas (Tommy) McKeith, BSc (Hons), GradDip Eng (Mining), MBA, Non-Executive Director

Mr McKeith is a geologist with 30 years' experience in various mine geology, exploration and business development roles. He was formerly Executive Vice President (Growth and International Projects) for Gold Fields Limited, where he was responsible for global greenfields exploration and project development.

Mr McKeith was also Chief Executive Officer of Troy Resources Limited and has held Non-Executive Director roles at Sino Gold Limited, Avoca Resources Limited and is currently the Non-Executive Chairman of Prodigy Gold NL.

Mr McKeith is the Chair of the Nomination and Remuneration Committee. Subsequent to year end, Mr. McKeith stepped down from the Audit Committee and was appointed as a member of the Risk Committee.

Andrea Hall, BCom, FCA, M. App Fin, GAICD, Non-Executive Director

Ms Hall is a Chartered Accountant with more than 30 years' experience in the financial services industry in roles involved in internal audit, risk management, corporate and operational governance, external audit, financial management and strategic planning. Prior to retiring from KPMG in 2012, Ms Hall was a Perth-based partner within KPMG's Risk Consulting Services in industries including mining, mining services,transport, healthcare, insurance, property and government.

Ms Hall is currently a Non-Executive Director and Chair of the Audit and Risk Committee at ASX-listed Pioneer Credit Limited and Automotive Holdings Group Limited. Ms Hall is also a Non-Executive Director of Insurance Commission of Western Australia and the Fremantle Football Club.

Ms Hall became Chair of the Audit Committee in June 2018 and was a member until this date.

Company Secretary

Evan Elstein, BCom (Accounting and Finance), ACA, FGIA, FCIS

Mr Elstein was appointed as the Company Secretary and Vice President for Information Technology in October 2011 following the merger of Conquest Mining Limited and Catalpa Resources Limited. Previously he served as Company Secretary of Conquest Mining. He is a Chartered Accountant, Chartered Secretary, and a member of Chartered Accountants Australia and New Zealand, the Institute of Chartered Secretaries and Administrators and the Governance Institute of Australia.

Mr Elstein has over 25 years' experience in senior financial, commercial and technology roles, where his responsibilities have included the roll out of IT projects and services, business improvement initiatives and merger and acquisition activities. He has held senior positions with IT consulting companies in Australia, and previously served as the Chief Financial Officer and Company Secretary of Hartec Limited. Prior to that, Mr Elstein held senior finance and operations positions at Dimension Data in South Africa.

Meetings of directors

The numbers of meetings of the Company's Board of Directors and of each Board Committee held during the year ended 30 June 2018, and the numbers of meetings attended by each Director were:

				Meetings of committees
	Board			Audit		Risk Management		Nomination and Remuneration
	A	B	A	B	A	B	A	B
Jacob (Jake) Klein	6	6	-	-	-	-	-	-
Lawrence (Lawrie) Conway	6	6	-	-	-	-	-	-
James (Jim) Askew	6	6	-	-	2	2	3	3
Graham Freestone	6	6	4	4	2	2	-	-
Colin (Cobb) Johnstone	6	6	4	4	2	2	-	-
Thomas (Tommy) McKeith	6	6	4	4	-	-	3	3
Andrea Hall (i)	5	5	3	3	-	-	-	-
Naguib Sawiris (ii)	-	6	-	-	-	-	-	-
Sebastien de Montessus (ii)	3	6	-	-	-	-	1	3
Vincent Benoit (iii)	-	-	-	-	-	-	-	-
Amr El Adawy (iii)	-	-	-	-	-	-	-	-
Andrew Wray (iv)	2	2	-	-	-	-	1	1

A = Number of meetings attended

B = Number of meetings held during the time the Director held office or was a member of the committee during the year

• (i) Andrea Hall was appointed into her role on 1 October 2017.
• (ii) Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018.
• (iii) Vincent Benoit and Amr El Adawy resigned from their roles effective 19 April 2018.
• (iv) Andrew Wray was appointed to his role on 19 April 2018 and resigned on 1 August 2018.

Remuneration Report (Audited)

This Remuneration Report forms part of the Directors' Report for the year ended 30 June 2018. This report contains details of the remuneration paid to the Directors and Key Management Personnel ("KMP") and is aligned to the Company's overall remuneration strategy and framework. The Company's remuneration philosophy and strategy is designed to ensure that the level and composition of remuneration is competitive, reasonable and appropriate for the results delivered and to attract and retain appropriately experienced Directors and employees.

This remuneration report is presented under the following sections:

• (a) Remuneration Overview
• (b) Remuneration Governance
• (c) Remuneration Strategy and Framework
• (d) Executive Remuneration Outcomes
• (e) Non-Executive Director Remuneration (f) Other Remuneration Information
• (g) Summary of Key Terms

(a) Remuneration Overview

(i) Key Management Personnel

The executive remuneration framework covered in this report includes the Executive Directors (Executive Chairman and Chief Financial Officer) and those executives considered to be Key Management Personnel ("KMP") named below:

Name	Position
Jacob (Jake) Klein	Executive Chairman
Lawrence (Lawrie) Conway	Finance Director and Chief Financial Officer
Aaron Colleran	Vice President Business Development & Investor Relations
Paul Eagle	Vice President People & Culture
Evan Elstein	Company Secretary & Vice President Information Technology
Bob Fulker (i)	Chief Operating Officer
Glen Masterman	Vice President Discovery & Chief Geologist
Mark Le Messurier (ii)	Chief Operating Officer

(i) Bob Fulker was appointed into his role on 12 February 2018.

(ii) Mark Le Messurier resigned from his role effective 1 January 2018.

(ii) Key Remuneration Outcomes

Key remuneration outcomes for the 2018 financial year are summarised in the table below:

Remuneration	Description
STIP Outcomes	The average STIP outcome for the KMP was 90.3% of the maximum opportunity based on the assessment of business and personal measures. This reflects the Company's outstanding operating and financial performance, and improvement in the upgrading of the asset portfolio during the year.
LTIP Outcomes	69.3 % of the Performance Rights awarded during the 2016 financial year and tested as at 30 June 2018 vested on 16 August 2018. This reflects the Company's continued strong performance during the three years to 30 June 2018. The Performance Rights awarded during the 2015 financial year were tested as at 30 June 2017, with 100% of the Performance Rights meeting their performance measures and were approved by the Board on 16 August 2017 to vest.
KMP Remuneration	Five of the KMP received increases to their fixed remuneration during the 2018 financial year.
NED Remuneration	Non-Executive Directors did not receive any increase to their fees during the year.

(iii) What has changed in relation to remuneration during the 2018 financial year

No key changes to the executive remuneration framework have been implemented during the 2018 financial year.

Remuneration Report (Audited) (continued)

(a) Remuneration Overview (continued)

(iv) What changes are planned for remuneration in the 2019 financial year

Commencing in the 2019 financial year, the Long Term Incentive Plan is to be extended down one level in the organisation.

(b) Remuneration Governance

The Board of Directors ("the Board") has an established Nomination and Remuneration Committee, consisting solely of Non-Executive Directors, with the delegated responsibility to report on and make recommendations to the Board on the:

• Appropriateness of the remuneration policies and systems, having regard to whether they are:
• Relevant to the Company's wider objectives and strategies;
• Legal and defensible;
• In accordance with the human resource objectives of the Company;
• Performance of the Executive Directors (on an annual basis) and ensure there is a process for determining key performance indicators for the ensuing period; and
• Remuneration of the Executive Directors, Non-Executive Directors and Key Management Personnel, in accordance with approved Board policies and processes.

(c) Remuneration Strategy and Framework

The executive remuneration framework has been designed to align Executive Directors and KMP objectives with shareholder and business objectives by offering a remuneration package based on key performance areas affecting the Company's overall performance. The Board believes the remuneration framework to be strategic, appropriate and effective in its ability to attract and retain KMP and to operate and manage the Company effectively.

The Group's target remuneration philosophies are:

• Total Fixed Remuneration TFR (being salary, superannuation, plus regular allowances) positioned at the median (50th percentile) based on the industry benchmark McDonald report (an industry recognised gold and general mining remuneration benchmarking survey covering over 97 organisations within the industry);
• Total Annual Remuneration TAR (TFR plus STI) at target at the 75th percentile for high performers; and
• Total Remuneration TR (TAR plus LTI) at the 75th percentile, with flexibility to provide up to the 90th percentile levels for high performers and critical roles.

The overarching objectives and principles of the Group's remuneration strategy are that:

• Total remuneration for each level of the workforce is appropriate and competitive;
• Total remuneration comprises a competitive fixed component and a sizeable "at risk" component based on performance hurdles;
• Short term incentives are appropriate with hurdles that are measurable, transparent and achievable;
• Incentive plans are designed to motivate and incentivise for high performance and delivery on organisational objectives;
• The corporate long term incentives are focussed on shareholder value; and
• The principles and integrity of the remuneration review process deliver fair and equitable outcomes.

Remuneration Report (Audited) (continued)

(c) Remuneration Strategy and Framework (continued)

The following table outlines the remuneration components for all KMP for the 2018 financial year:

Component	Performance measure	Strategic objective
Total Fixed Remuneration (TFR)	Key results areas for the role are determined based on the individual's position and key business imperatives.	Remuneration is designed to attract, motivate and retain key personnel. Considerations include: • Overall Company business plan • External market conditions • Key employee value drivers • Individual employee performance • Industry benchmark data
Short Term Incentive (STI)	Key Performance indicators are set with a mix of individual and corporate elements. The relative weighting of which is dependent on the individual employee job banding and position. For the Executive Chairman, the weighting is 70% corporate and 30% individual and for the remainder of the KMP, 60% corporate and 40% individual. For the corporate component for FY18, the measures focussed on safety, cash contribution, costs and strategic imperatives focused on delivering the Cowal projects to plan, improving the portfolio quality (including M&A and divestments; Discovery and LOM Plans), delivery of key business improvement projects, while making tangible progress with the Discovery strategy through the identification and acquisition of new projects.	The objective is to motivate employees to achieve key annual targets focussed on safety, operations, cash contribution, and effective cost management, improving the overall quality of the asset portfolio and driving a high achievement team culture.
Long Term Incentive (LTI)	Performance measures agreed with the	The primary objective to deliver industry
	Board have a 3 year time horizon and are focussed on enhancing shareholder value.	leading shareholder returns.

Remuneration Report (Audited) (continued)

(c) Remuneration Strategy and Framework (continued)

The target achievement remuneration ratio mix for Executive Directors and KMP for the 2018 financial year and prior financial year is as follows:

(d) Executive Remuneration Outcomes

(i) Financial Performance

The Group has demonstrated strong performance over the past five years. The following table breaks down the key performance indicators for the Group over this time frame:

	2018	2017	2016	2015	2014
Statutory profit/(loss) for the year (\$'000)	263,388	217,607	(24,349)	100,115	50,017
Underlying profit for the year after income tax (\$'000) (i)	250,762	206,588	134,496	106,050	50,017
EBITDA (\$'000)	795,083	713,855	607,551	272,656	207,556
Basic earnings per share (cents)	15.57	13.28	(1.75)	13.71	7.06
Dividends declared (cents per share)	7.5	5.0	3.0	2.0	2.0
Share price (\$) at 30 June closing	3.51	2.41	2.33	1.15	0.70

(i) Refer to the Profit Overview section in the Operating and Financial Review for a reconciliation of the underlying profit for the year.

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(ii) STIP

Component	Performance measure
Participation	employees.	The Overall Group STIP applies to site based employees at the level of Manager and all Group office
Composition	band.	The Group STIP is a cash bonus, up to a maximum percentage of TFR, based on the employee job
Performance conditions		It is assessed and paid annually conditional upon the achievement of key company objectives and individual KPIs. For the 2018 financial year, the company objectives were focussed in the areas of safety, group cash contribution, production, costs and a strategic imperative element.
Award parameters		The Group STIP is currently set at between 10% and 60% of TFR for Target achievement, with a maximum of 20%-90% of TFR for Stretch achievement, depending on the employee job band. Details of the Group STIP paid to the Directors and KMP are shown in the Remuneration Table in section d(iv). The Group's performance against the STI Scorecard for FY18 is as follows:
	STIP Scorecard		Target (100%)	STIP Weighting	Result	Award
	HSE	SSO Frequency Rate (SSOFR) Environmental Critical Controls Compliance - top 3 Hazards (%)	4.2 90%	20% 10%	3.2 80%	30% 5%
	Profitability	Group Cash Contribution (\$ million) Group All In Costs (\$/oz sold)	270 1,140	20% 20%	386 1,045	30% 30%
	Strategic Imperatives	Discretionary	100%	30%	135%	40.5%
	Total			100%		135.5%
FY18 STIP considerations		At the time of setting the FY18 STIP measures, the Board determined it would consider the following factors when awarding the score for the strategic imperatives measure: • Delivery to plan of the Cowal projects • Improvement in the portfolio quality (covering M&A, divestments, Discovery and LOM Plans) • Delivery of the key business improvement projects; and • Advancement in the discovery area: - Identification and acquisition of at least one new advanced project - Generate or acquire at least 3 new exploration projects at drill test or target definition stage
Award outcome for the year		The Board approved a discretionary score of 135.0% for the following reasons: • The Float Tails Leach project progressed to plan with commissioning ready for H1 FY19. The establishment activities for Stage H were completed ahead of schedule and under budget. The mining of Stage H finished ahead of the accelerated development plan and costs remain on budget. The steering committee reviews were undertaken every month with dashboard tracking of all projects at Cowal in place. The project team established at Cowal is highly skilled and establishing good standards for project execution. • The sale of Edna May was successfully completed. Evolution demonstrated it is a good seller, not only in terms of portfolio management, but in how we dealt with the Edna May workforce and transitioned service and processes to the new owner. • Discovery program gained good momentum throughout FY18, with 3 new early stage exploration projects added to the portfolio, including the acquisition of the Connors Arc project and 10 prospects across the Company's operations were advanced to the next stage of exploration. • Life of Mines have improved with focus being applied towards further improvements in FY19. • During FY18, \$28.3 million of value beyond budget was achieved with all operations contributing to the result through improvements in productivity and commercial contract terms and efficiency gains.

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(ii) STIP (continued)

Component	Performance measure
	2018	Total STIP Granted (\$)	% of Maximum Entitlement Granted	% of Maximum Entitlement Forfeited
	Directors
	Jacob Klein	657,000	90.8%	9.2%
	Lawrie Conway	480,000	88.9%	11.1%
	Key Management Personnel
	Aaron Colleran	375,000	89.7%	10.3%
	Paul Eagle	300,000	87.8%	12.2%
	Evan Elstein	310,000	85.1%	14.9%
	Bob Fulker (i)	170,000	86.3%	13.7%
	Glen Masterman	350,000	91.5%	8.5%
	Mark Le Messurier (ii)	150,000	74.2%	25.8%

(i) Bob Fulker was appointed into his role on 12 February 2018. His STIP is pro-rated for his period of employment. (ii) Mark Le Messurier resigned from his role effective 1 January 2018. His STIP is pro-rated for his period of employment.

(iii) LTIP

Component	Performance measure
Participation	The Group LTIP applies to employees at the level of Manager and above across the Group.
Performance	Up to 3 years.
period
Composition	The Company has one long term incentive plan currently in operation, the Employee Share Option and Performance Rights Plan ("ESOP"). The Employees and Contractors Plan (ECOP) and the Option component of the ESOP are now effectively dormant with no new options to be issued under these plans. All remaining Options either expired or were exercised during the previous financial year. The ESOP (approved by shareholders on 23 November 2010, 26 November 2014 and 23 November 2017) provides for the issuance of Performance Rights to Executive Directors and eligible employees. This LTIP was introduced for employees at the level of Manager and above, effective from 1 July 2011 and provides equity based "at risk" remuneration, up to maximum percentages, based on, and in addition to, each eligible employee's TFR. These incentives are aimed at retaining and incentivising KMP and senior managers on a basis that is aligned with shareholder interests, and are provided via Performance Rights.
Performance conditions	The Performance Rights are issued for a specified period and each Performance Right is convertible into one ordinary share. All Performance Rights expire on the earlier of their expiry date or termination of the employee's employment subject to Director discretion. Performance Rights do not vest until a specified period after granting and their exercise is conditional on the achievement of certain performance hurdles that are aligned with shareholder interests. There are no voting or dividend rights attached to the Performance Rights. Voting rights will attach to the ordinary shares when the Performance Rights vest. Unvested Performance Rights cannot be transferred and will not be quoted on the ASX.
Award parameters	Further details on each of the performance conditions laid out below are detailed in Section f(i) - 'Other Remuneration Information'.

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(iii) LTIP (continued)

Component		Performance Measure
		Performance Target	Description			Weighting for each year from FY15 grants
	(i)	TSR Performance		The Group's relative total shareholder return (TSR) measured against the TSR for a peer Company of 20 comparator gold mining companies (Peer Group)		25%
	(ii)	Absolute TSR performance	The Group's absolute TSR return			25%
	(iii)	Growth in Earnings per share		Growth in the Group's Earnings per share		25%
	(iv)	Increase in ore reserves per share		Increasing the ore reserves per share over a 3 year period		25%
FY18 LTIP considerations				Each year an assessment is made by the Directors against performance hurdles and guidelines established by the Board. In exercising their discretion under the rules, the Directors will take into account matters such as the position of the eligible person, the role they play in the Group, the nature or terms of their employment or contract and the contribution they make to the Group as a whole.
ECOP Options		At 30 June 2018 there were no Options outstanding (FY17: nil)
					2018 Number	2017 Number
		Outstanding balance at the beginning of the year			-	52,954
		Issued during the period			-	-
		Exercised during the period			-	-
		Expired during the period			-	(52,954)
		Outstanding balance at the end of the year			-	-
ESOP Options		At 30 June 2018 there were no Options outstanding (FY17: nil)			2018	2017
					Number	Number
		Outstanding balance at the beginning of the year			-	5,150,390
		Issued during the period			-	-
		Exercised during the period Expired during the period			- -	(4,178,661) (971,729)
		Outstanding balance at the end of the year			-	-
Award outcome for the year - ESOP Performance Rights				Outcomes for the FY15 award which vested during the year are set out as follows:
		Performance Target		Measure	FY15 Outcome	% Vested
	(i)	TSR Performance		Percentile	5th	25%
	(ii)	Absolute TSR performance		Compound annual return	53%	25%
	(iii)	Growth in Earnings per share		Compound annual return	20%	25%
	(iv)	Increase in ore reserves per share		Percentage increase	128%	25%

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(iii) LTIP (continued)

Component Performance Measure

Outcomes for the FY16 award which will vest in August 2018 are set out as follows:

	Performance Target	Measure	FY16 Outcome	% Vested
(i)	TSR Performance	Percentile	20th	19%
(ii)	Absolute TSR performance	Compound annual return	42%	25%
(iii)	Growth in Earnings per share	Compound annual return	2%	0%
(iv)	Increase in ore reserves per share	Percentage increase	136%	25%

The movement in Performance Rights under this plan is in the table below:

	2018 Number	2017 Number
Outstanding balance at the beginning of the year	26,278,566	29,429,811
Performance Rights granted (withdrawn) during the period
pursuant to Retention Agreement*	-	(3,750,000)
Performance Rights granted during the period pursuant to
Transition Incentive Plan*	-	3,375,000
Performance rights granted during the period	6,586,571	6,797,540
Vested during the period	(9,214,401)	(7,961,146)
Lapsed during the period	-	-
Forfeited during the period	(2,708,126)	(1,612,639)
Outstanding balance at the end of the year	20,942,610	26,278,566

*The 3,750,000 Performance Rights granted in December 2015 to Mr. Jake Klein were withdrawn pursuant to a Transition Incentive Plan (TIP) under the Retention Agreement which the Company has entered into with Mr. Klein. Under the Plan the Company granted 3,375,000 Performance Rights to Mr. Klein subject to the satisfaction of Vesting Conditions to be tested as at 16 December 2019 and were approved by shareholders at the shareholder meeting held on 21 June 2017.

The table below reflects the Performance Rights granted, vested, or lapsed in each financial year:

	FY14	FY15	FY16	FY17	FY18	Running Balance
Granted	10,498,408	10,804,370	8,141,368	6,797,540	6,586,571	42,828,257
Granted - TIP	-	-	-	3,375,000	-	3,375,000
Vested	(7,961,147)	(9,214,401)	-	-		- (17,175,548)
Lapsed	-	-	-	-	-	-
Forfeited	(2,537,261)	(1,589,969)	(2,279,972)	(1,022,779)	(655,118)	(8,085,099)
Subject to vesting	-	-	5,861,396	9,149,761	5,931,453	20,942,610
Testing date	30/06/16	30/06/17	30/06/18	30/06/19	30/06/2020	-
Testing date - TIP	-	-	-	16/12/19	-	-
Vesting (%)	100%	100%	69.3%	-	-	-

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STI 2017 - - - - - - - - 610,000 475,000 391,500 265,000 300,000 Bonus - - - - - - - 2018 657,000 480,000 375,000 300,000 310,000 170,000 Post-Employment - - - - - - 2017 19,616 19,616 11,007 10,248 19,616 19,616 19,616 Superannuation Benefits 2018 - - - - 20,048 20,048 11,279 6,832 20,048 20,048 20,048 10,024 10,411 Remuneration Outcomes (continued) Base Salary and Fees 2017 115,867 - 133,125 107,877 104,375 409,368 373,718 - 984,184 665,384 113,750 95,000 335,384 Total Fixed Report (Audited) (continued) 2018 714,952 115,000 71,918 135,000 109,589 95,000 105,000 444,952 359,952 384,952 195,668 1,083,752 118,721 Remuneration summary table Executive Remuneration Report Key Management Personnel Sebastien de Montessus (iv) Graham Freestone Naguib Sawiris (iv) Thomas McKeith Directors' Colin Johnstone Remuneration Lawrie Conway Andrea Hall (iii) Aaron Colleran Bob Fulker (v) James Askew Evan Elstein Jacob Klein Paul Eagle Directors (iv) (d)
								LTI
								Amortised Value (i)		Other Benefits (ii)	Total
							2018	2017	2018	2017	2018	2017
							2,883,090	1,218,472	-	-	4,643,890	2,832,272
							259,061	301,828	-	-	1,474,061	1,461,828
							37,633	18,690	-	-	152,633	132,440
							37,633	18,690	-	-	167,633	145,564
							25,031	-	-	-	103,781	-
							37,633	18,690	-	-	172,633	151,815
							37,633	18,690	-	-	157,633	137,787
							37,633	18,690	-	-	132,633	113,690
							37,633	18,690	-	-	142,633	123,065
							243,688	337,130	-	-	1,083,688	1,157,614
							201,628	212,628	-	-	881,628	832,628
							217,642	285,293	-	-	932,642	978,627
							57,554	-	173,395	-	606,641	-
Glen Masterman (vi)	404,952	362,435	20,048	17,980	350,000	300,000	307,301	107,809	-	-	1,082,301	788,224
335,000 150,000 19,616 10,024 430,384 214,976 Mark Le Messurier (vii)							226,102	364,530	368,352	-	969,454	1,149,530
2,676,500 2,792,000 156,931 168,858 4,230,851 4,554,384							4,646,895	2,939,830	541,747	-	12,703,884	10,004,112

(i) Amortised value of share based rights comprises the fair value of options and performance rights expensed during the year for KMP, and retention rights for NED.

(ii) Other benefits include relocation costs and a sign on bonus for Bob Fulker and termination benefits for Mark Le Messurier.

(iii) Andrea Hall was appointed into her role on 1 October 2017.

(iv) Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018. (v) Bob Fulker was appointed into his role on 12 February 2018.

(vi) Glen Masterman was appointed into his role on 1 August 2016.

(vii) Mark Le Messurier resigned from his role effective 1 January 2018.

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(v) Executive service agreements

Remuneration and other key terms of employment for the Executive Directors and KMP are formalised in the Executive Services Agreements table below:

Name	Term of agreement and notice period	Total Fixed Remuneration	Notice Period by Executive	Notice period by Evolution	Termination payments (i)
Existing Executive Directors and Key Management Personnel
Jacob Klein Executive Chairman	Open	803,800 300,000 fixed Director's Fees	6 months	6 months	12 month Total Fixed Remuneration
Aaron Colleran Vice President Business Development and Investor Relations	Open	475,000	3 months	6 months	6 months Total Fixed Remuneration
Lawrie Conway Finance Director and Chief Financial Officer Paul Eagle	Open	610,000 135,000 fixed Director's Fees	3 months	6 months	6 months Total Fixed Remuneration 6 months
Vice President People and Culture	Open	395,000	3 months	6 months	Total Fixed Remuneration
Evan Elstein Company Secretary and Vice President Information Technology	Open	412,500	3 months	6 months	6 months Total Fixed Remuneration
Bob Fulker (ii) Chief Operating Officer	Open	525,000	3 months	6 months	6 months Total Fixed Remuneration
Glen Masterman Vice President Discovery and Chief Geologist	Open	440,000	3 months	6 months	6 months Total Fixed Remuneration

(i) For a change of control event, the termination payment is 12 months TFR for Executive Directors and KMP. (ii) Bob Fulker was appointed into his role on 12 February 2018.

Fixed salary, inclusive of the required superannuation contribution amount, is reviewed annually by the Board following the end of the financial year. The amounts set out above are the Executive Directors and KMP total fixed remuneration as at the date of this report.

(e) Non-Executive Director Remuneration Outcomes

The Board policy is to remunerate Non-Executive Directors (NEDs) at market rates for comparable companies for time, commitment and responsibilities. The Nomination and Remuneration Committee determines Non-Executive Directors fees and reviews this annually, based on market practice, their duties and areas of responsibility. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders (currently \$950,000 per annum). Fees for Non-Executive Directors are not linked to the performance of the Group and they currently do not participate in the Group's STIP or LTIP.

Under the NED Equity Plan, NEDs will be granted Share Rights as part of their remuneration. The number of Share Rights granted will be calculated in accordance with the following formula:

"Equity Amount" (\$) for the financial year/Value per Share Right

Remuneration Report (Audited) (continued)

(e) Non-Executive Director Remuneration Outcomes (continued)

Where:

• "Equity Amount" is an amount determined by the Board, having regard to level of board and committee fees paid in cash and independent advice received. For 2018, the Equity Amount is \$40,000 for each NED.
• The Value per Share Right = the volume weighted average price (VWAP) of Evolution's ordinary shares traded on the ASX over the 5 trading day period up to and including 30 June each year. For FY2018, the VWAP used to determine the number of share rights granted to each NED was \$2.3957.

Providing the NED remains a director of Evolution, Share Rights will vest and automatically exercise 12 months after the grant date. The Share Rights granted to NEDs under the NED Equity Plan are not subject to performance conditions or service requirements which could result in potential forfeiture. Vested Share Rights will convert into ordinary shares on a one-for-one basis. Vested Share Rights will be satisfied by either issuing shares or arranging for shares to be acquired on-market, subject to the Evolution Securities Trading Policy and the inside information provisions of the Corporations Act.

Upon the transfer to the relevant NED, the shares will be subject to disposal restrictions (Disposal Conditions) under the earlier of:

• the NED ceasing to be a director of Evolution; or
• 3 years from the date of grant of the share rights or such longer period nominated by the NED at the time of the offer (up to a maximum 15 years from the date of grant).

Generally, Share Rights will lapse if a Participant ceases to be a Director of the Company.

Broken out in the table below is a summary of the fee structure by individual as at 30 June 2018. For remuneration outcomes please refer to table in section d (iv). Note that a change in Board Sub-Committee fees was implemented during the year.

				Cash Component (\$)		Equity (\$)
	Base Fees	Lead Independent	Sub-Committee Chairman	Sub-Committee Member	Total Cash Fees	NED Equity Plan Shares	Total per annum (\$)
Directors
James Askew	95,000	-	-	20,000	115,000	40,000	155,000
Graham Freestone	95,000	-	25,000	10,000	130,000	40,000	170,000
Andrea Hall (i)	71,250	-	-	7,500	78,750	40,000	118,750
Colin Johnstone	95,000	15,000	15,000	10,000	135,000	40,000	175,000
Thomas McKeith	95,000	-	15,000	10,000	120,000	40,000	160,000
Naguib Sawiris (ii)	95,000	-	-	-	95,000	40,000	135,000
Sebastien de	95,000	-	-	10,000	105,000	40,000	145,000
Montessus (ii)
	641,250	15,000	55,000	67,500	778,750	280,000	1,058,750

(i) Andrea Hall was appointed into her role on 1 October 2017.

(ii) Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018.

Remuneration Report (Audited) (continued)

(f) Other Remuneration Information

(i) LTIP performance parameters

Component	Assessment
TSR Performance		The Group's TSR will be based on the percentage by which its 30-day volume weighted average share price quoted on ASX ("VWAP") at the close of trade on the Relevant Date (plus the value of any dividends paid during the performance period) has increased over the Group's applicable 30-day VWAP at the close of trade, relating to the grant of Performance Rights for that period.
	Level of performance achieved	Evolution TSR performance as compared to the Peer Group TSR	% of TSR Performance Rights vesting
	Threshold	Top 50th percentile	33%
		Above the top 50th percentile and below the top 25th percentile	Straight-line pro-rata between 33% and 66%
	Target	Top 25th percentile	66%
		Above the top 25th percentile and below the top 10th percentile	Straight-line pro-rata between 66% and 100%
	Exceptional	Top 10th percentile or above	100%
Absolute TSR performance		Performance rights will be will be tested against the Group's Absolute TSR performance relative to the 30 days VWAP (Absolute TSR Performance Rights) as at 30 June 2018, 30 June 2019 and 30 June 2020 respectively, measured as the cumulative annual TSR over the three year performance period.
	Level of performance achieved	Evolution Absolute TSR performance	% of Absolute TSR Performance Rights vesting
	Threshold	10% Per Annum Return	33%
		Above 10% Per Annum Return and below 15% Per Annum Return	Straight-line pro-rata between 33% and 66%
	Target	15% Return Per Annum	66%
		Above 15% Per Annum Return and below 20% Per Annum Return	Straight-line pro-rata between 66% and 100%
	Exceptional	Above 20% Per Annum Return	100%
Growth in earnings per share		A proportion of Performance Rights granted during the years ended 30 June 2016, 30 June 2017 and 30 June 2018 and those to be granted during the year ended 30 June 2019, will be tested against the Group's growth in Earnings Per Share, calculated by excluding any Non-Recurring Items, and measured as the cumulative annual growth rate over the three year performance period.
	Level of performance achieved	Evolution Earnings per share performance	% of Earnings Per Share Performance Rights vesting
	Threshold	7% Per Annum Growth in EPS	33%
		Above 7% Per Annum Growth in EPS and below 11% Per Annum Growth in EPS	Straight-line pro-rata between 33% and 66%
	Target	11% Per Annum Growth in EPS	66%
		Above 11% Per Annum Growth in EPS and below 15% Per Annum Growth in EPS	Straight-line pro-rata between 66% and 100%
	Exceptional	Above 15% Per Annum Growth in EPS	100%

Directors' Report

Remuneration Report (Audited) (continued)

(f) Other Remuneration Information (continued)

(i) LTIP performance parameters (continued)

Component	Assessment
Increase in ore reserves per share	June 2019 and 30 June 2020.	A proportion of Performance Rights will be tested against the Group's ability to grow its Ore Reserves, calculated by measuring the growth over the three year performance period by comparing the baseline measure of the Ore Reserves as at 31 December ("Baseline Ore Reserves") to the Ore Reserves as at 31 December three years later on a per share basis, with testing to be performed at 30 June 2018, 30
	Level of performance achieved	Evolution Growth in Ore Reserves per share performance	% of Growth in Ore Reserves Performance Rights vesting
	Threshold	90% of Baseline Ore Reserves	33%
		Above 90% of Baseline Ore Reserves but below 100% Baseline Ore Reserves	Straight-line pro-rata between 33% and 66%
	Target	100% Baseline Ore Reserves	66%
		Above 100% of Baseline Ore Reserves and below 120% of Baseline Ore Reserves	Straight-line pro-rata between 66% and 100%
	Exceptional	120% and above of Baseline Ore Reserves	100%

Remuneration Report (Audited) (continued)

(f) Other Remuneration Information (continued)

(ii) Director and key management personnel equity holdings

	Balance at the start of the year	Received during the year on conversion of performance rights	Received during the year on exercise of options	Other changes	Balance at the end of the year
Directors
Jacob Klein	10,470,058	2,229,965	-	-	12,700,023
Lawrie Conway	156,923	536,347	-	-	693,270
James Askew	757,289	16,298	-	-	773,587
Graham Freestone	114,207	16,298	-	-	130,505
Andrea Hall (i)	-	-	-	-	-
Colin Johnstone	108,969	16,298	-	-	125,267
Thomas McKeith	156,923	16,298	-	-	173,220
Naguib Sawiris (ii) (iii)	-	16,298	-	-	16,298
Sebastien de Montessus (iii)	-	16,298	-	-	16,298
Amr El Adawy (iv)	11,333	-	-	(11,333)	-
Key Management Personnel
Aaron Colleran	667,836	-	-	(637,836)	30,000
Paul Eagle	280,842	-	-	(113,842)	167,000
Evan Elstein	449,095	411,200	-	(290,295)	570,000
Bob Fulker (v)	-	-	-	-	-
Mark Le Messurier (vi)	937,933	536,347	-	(121,538)	1,352,742
Glen Masterman	-	-	-	-	-
	14,111,408	3,811,647	-	(1,174,844)	16,748,210

(i) Andrea Hall was appointed into her role on 1 October 2017.

(ii) At 30 June 2018, La Mancha had a relevant interest in 253,891,807 Evolution shares, representing approximately 15% of Evolution's issued capital. Subsequent to the year end, it was announced that La Mancha had undertaken a block trade monetisation of shares, reducing its direct interest in Evolution to 9.6%.

(iii) Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018.

(iv) Amr El Adawy resigned as Alternate Non-Executive Director on 19 April 2018.

(v) Bob Fulker was appointed into his role on 12 February 2018.

(vi) Mark Le Messurier resigned from his role effective 1 January 2018.

Remuneration Report (Audited) (continued)

(f) Other Remuneration Information (continued)

(ii) Director and key management personnel equity holdings (continued)

Performance and Share Rights

							At end of the year
	Balance at the start of the year	Granted as compen sation	Converted	Lapsed Other	changes	Balance at the end of the year	Vested and exercisable	Unvested
Directors
Jacob Klein	7,778,641		692,165 (2,229,965)	(428,590)	-	5,812,251	968,607	4,843,644
Lawrie Conway	1,177,637	369,050	(536,347)	(102,832)	-	907,508	232,400	675,108
James Askew	16,298	16,697	(16,298)	-	-	16,697	-	16,697
Graham Freestone	16,298	16,697	(16,298)	-	-	16,697	-	16,697
Andrea Hall (i)	-	16,697	-	-	-	16,697	-	16,697
Colin Johnstone	16,298	16,697	(16,298)	-	-	16,697	-	16,697
Thomas McKeith	16,298	16,697	(16,298)	-	-	16,697	-	16,697
Naguib Sawiris (ii)	16,298	16,697	(16,298)	-	-	16,697	-	16,697
Sebastien de Montessus (ii)	16,298	16,697	(16,298)	-	-	16,697	-	16,697
Key Management Personnel
Aaron Colleran	1,089,289	286,014	-	(95,280)	-	1,280,023	538,807	741,216
Paul Eagle	665,043	233,732	-	(52,559)	-	846,216	373,050	473,166
Evan Elstein	938,252	249,109	(411,200)	(84,551)	-	691,610	191,084	500,526
Bob Fulker (iii)	-	322,919	-	-	-	322,919	-	322,919
Mark Le Messurier (iv)	1,177,637	276,787	(536,347)	(102,832)	-	815,245	232,400	582,845
Glen Masterman	276,080	261,410	-	-	-	537,490	-	537,490
	13,200,367		2,808,065 (3,811,647)	(866,644)	-	11,330,141	2,536,348	8,793,793

(i) Andrea Hall was appointed into her role on 1 October 2017.

(ii) Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018.

(iii) Bob Fulker was appointed into his role on 12 February 2018.

(iv) Mark Le Messurier resigned from his role effective 1 January 2018.

(g) Summary of Key Terms

Below is a list of key terms with definitions used within the Director's Report:

Key Term	Definition
The Board of Directors ("the Board" or "the Directors")	The Board of Directors, the list of persons under the relevant section above.
Key Management Personnel ("KMP")	Senior executives have the authority and responsibility for planning, directing and controlling the activities of the Company and are members of the senior leadership team. KMP for the financial year ended 30 June 2018 are listed above.
Total Fixed Remuneration ("TFR")	Total Fixed Remuneration comprises a base salary plus superannuation. This is currently positioned at the median (50th percentile) of the industry benchmarking report.
Short Term Incentive ("STI") and Short Term Incentive Plan ("STIP")	STI is the short-term incentive component of Total Remuneration. The STI usually comprises a cash payment that is only received by the employee if specified annual goals are achieved. STIP refers to the plan under which the incentives are granted and paid.

Remuneration Report (Audited) (continued)

(g) Summary of Key Terms (continued)

Key Term	Definition
Long Term Incentive ("LTI") and Long term Incentive Plan ("LTIP")	LTI is the long-term incentive component of Total Remuneration. The LTI comprises of Performance Rights, usually with a three year vesting period that are subject to specified vesting conditions established by the Board. Further details of the vesting conditions associated with the performance rights are detailed in the Vesting Conditions of Performance Rights section. Performance Rights cannot be exercised unless the vesting conditions have been satisfied. LTIP refers to the plan under which LTIs are granted and is aimed at retaining and incentivising KMP and senior managers to achieve business objectives that are aligned with shareholder interests, and are currently provided via Performance Rights.
Total Annual Remuneration	Total Fixed Remuneration plus STI.
Total Remuneration	Total Fixed Remuneration plus STI and LTI.
Superannuation Guarantee Charge ("SGC")	This is the employer contribution to an employee nominated superannuation fund required by law. The percentage contribution was set at 9.5% in the reporting period and is capped in line with the SGC maximum quarterly payment.
Employees and Contractors Option Plan ("ECOP")	The plan permits the Company, at the discretion of the Directors, to grant Options over unissued ordinary shares of the Company to eligible Directors, members of staff and contractors as specified in the plan rules. The plan is currently dormant and no further Options will be issued under this plan.
Employee Share Option and Performance Rights Plan ("ESOP")	The plan permits the Company, at the discretion of the Directors, to grant both Options and Performance Rights over unissued ordinary shares of the Company to eligible Directors and members of staff as specified in the plan rules.
NED Equity Plan	The plan permits the Company, at the discretion of the Board and Remuneration Committee to issue remuneration to Non-Executive Directors through Share Rights.
Total Shareholder Return ("TSR")	TSR is the total return on an ordinary share to an investor arising from growth in the share price plus any dividends received.
Key Performance Indicators ("KPIs")	A form of performance measurement for individual performance against a pre-defined set of goals.
Volume Weighted Average Share Price ("VWAP")	A 30 day volume weighted average share price quote on the Australian Stock Exchange (ASX). The VWAP is to be used when assessing Company performance for TSR.
Fees	Fees paid to Executive and Non-Executive Directors for services as a Director, including sub-committee fees as applicable.

Indemnification of officers and auditors

During the financial year the Company paid a premium in respect of a contract insuring the Directors of the Company, the company secretaries and all executive officers of the Company and of any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The Company has entered into a Deed of Indemnity, Insurance and Access with each Director. In Summary the Deed provides for:

• Access to corporate records for each Director for a period after ceasing to hold office in the Company;
• The provision of Directors and Officers Liability Insurance; and
• Indemnity for legal costs incurred by Directors in carrying out the business affairs of the Company.

Except for the above the Company has not otherwise, during or since the financial year, except to the amount permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Non-audit services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Company and/or the Group are important.

Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for non-audit services provided during the year are set out below. Details of the amounts paid or payable to the auditor for audit services provided during the year are set out in note 25(a).

The board of Directors has considered the position and, in accordance with advice received from the audit committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

Non-audit services (continued)

During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit firms:

	2018 \$	2017 \$
Other assurance services
PricewaterhouseCoopers firm:
Assurance related services	-	140,413
Non PricewaterhouseCoopers audit firms
Internal audit services	168,971	114,348
Other assurance services	259,965	20,000
Total remuneration for other assurance services	428,936	274,761
SPACE Taxation services
PricewaterhouseCoopers firm:
Tax compliance services	-	89,391
Tax advisory services	8,670	402,939
Non PricewaterhouseCoopers audit firms
Tax compliance services	397,215	111,861
Tax advisory services	254,242	291,424
Total remuneration for taxation services SPACE	660,127	895,615
SPACE Total remuneration for non-audit services	1,089,063	1,170,376

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 104.

Rounding of amounts

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the Directors' Report. Amounts in the Directors' Report have been rounded off in accordance with that ASIC Corporations Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

This report is made in accordance with a resolution of Directors.

Jacob (Jake) Klein Executive Chairman

Andrea Hall Chair of the Audit Committee

Sydney

Auditor's Independence Declaration

As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2018, I declare that to the best of my knowledge and belief, there have been:

• (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• (b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Evolution Mining Limited and the entities it controlled during the period.

Marc Upcroft Sydney Partner PricewaterhouseCoopers

17 August 2018

PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Profit or Loss and Other Comprehensive Income

		30 June	30 June
		2018	2017
	Notes	\$'000	\$'000
Sales revenue	2	1,540,433	1,479,876
Cost of sales	2	(1,140,472)	(1,151,344)
Gross Profit		399,961	328,532
Interest income		3,332	1,519
Other income		651	776
Share based payments expense	24	(8,491)	(6,413)
Corporate and other administration costs	2	(27,193)	(28,728)
Transaction and integration costs	2	866	(6,987)
Loss on sale of subsidiary		-	(3,576)
Exploration and evaluation costs expensed		(5,414)	(12,645)
Finance costs	2	(24,778)	(35,194)
Profit before income tax expense		338,934	237,284
Income tax expense	3	(75,546)	(19,677)
Profit after income tax expense attributable to Owners of Evolution Mining Limited		263,388	217,607
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Changes in the fair value of available-for-sale financial assets	11(b)	(1,925)	1,699
Changes in the fair value of cash flow hedges	11(b)	-	127
Exchange differences on translation of foreign operations Blank	11(b)	46	(47)
Other comprehensive income, net of tax		(1,879)	1,779
Total comprehensive income		261,509	219,386
Total comprehensive income for the period is attributable to:
Owners of Evolution Mining Limited		261,509	219,386
		261,509	219,386
		Cents	Cents
Earnings per share for profit attributable to Owners of Evolution Mining Limited: Basic earnings per share	4	15.57	13.28
Diluted earnings per share	4	15.51	13.23

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Consolidated Balance Sheet

		30 June 2018	30 June 2017
	Notes	\$'000	\$'000
ASSETS
Current assets
Cash and cash equivalents Trade and other receivables	9 12	323,226	37,385 63,119
Inventories	14	71,296 264,221	276,869
Total current assets		658,743	377,373
Non-current assets
Inventories	14	38,459	827
Available-for-sale financial assets		5,536	4,962
Property, plant and equipment	7	571,775	741,189
Mine development and exploration	8	1,743,752	1,801,479
Deferred tax assets	17	419	16,448
Other non-current assets	15	37,632	3,191
Total non-current assets		2,397,573	2,568,096
Total assets		3,056,316	2,945,469
LIABILITIES
Current liabilities
Trade and other payables	13	152,367	156,627
Interest bearing liabilities	10	93,496	53,401
Current tax liabilities		47,312	36,214
Provisions	16	32,085	30,173
Other current liabilities		63	3,206
Total current liabilities		325,323	279,621
Non-current liabilities
Interest bearing liabilities	10	292,470	382,723
Provisions	16	150,129	154,873
Total non-current liabilities		442,599	537,596
Total liabilities		767,922	817,217
Net assets		2,288,394	2,128,252
EQUITY
Issued capital	11(a)	2,183,727	2,183,727
Reserves	11(b)	45,407	38,795
Retained earnings/(Accumulated losses)	11(c)	59,260	(94,270)
Capital and reserves attributable to owners of Evolution Mining Limited		2,288,394	2,128,252
Total equity		2,288,394	2,128,252

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

Consolidated Consolidated Statement of Changes in Equity Statement of Changes in

	Notes	Issued capital \$'000	Share based payments \$'000	Fair value revaluation reserve \$'000	Cash flow hedges \$'000	Foreign currency translation \$'000	Retained earnings \$'000	Total equity \$'000
Balance at 1 July 2016		1,770,987	29,496	(110)	(127)	104		(248,917) 1,551,433
Profit after income tax expense Changes in fair value of available-for-sale financial assets		- -	- -	- 1,699	- -	- -	217,607 -	217,607 1,699
Changes in fair value of cash flow hedge Exchange differences on translation		-	-	-	127	-	-	127
of foreign operations Total comprehensive income		- -	- -	- 1,699	- 127	(47) (47)	- 217,607	(47) 219,386
Transactions with owners in their capacity as owners: Contributions of equity Dividends provided for or paid Recognition of share-based	11(a) 5	412,740 -	- -	- -	- -	- -	- (62,960)	412,740 (62,960)
payments	24	- 412,740	7,653 7,653	- -	- -	- -	- (62,960)	7,653 357,433
Balance at 30 June 2017		2,183,727	37,149	1,589	-	57		(94,270) 2,128,252
Balance at 1 July 2017		2,183,727	37,149	1,589	-	57		(94,270) 2,128,252
Profit after income tax expense Fair value loss on avaible-for-sale financial		-	-	-	-	-	263,388	263,388
assets, net of tax Exchange differences on translation of		-	-	(1,925)	-	-	-	(1,925)
foreign operations Total comprehensive expense		- -	- -	- (1,925)	- -	46 46	- 263,388	46 261,509
Transactions with owners in their capacity as owners:
Dividends provided for or paid Recognition of share-based payments		- -	- 8,491	- -	- -	- -	(109,858) -	(109,858) 8,491
Balance at 30 June 2018		- 2,183,727	8,491 45,640	- (336)	- -	- 103	(109,858) 59,260	(101,367) 2,288,394

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows

		30 June	30 June
	Notes	2018 \$'000	2017 \$'000
Cash flows from operating activities
Receipts from sales		1,554,951	1,441,275
Payments to suppliers and employees		(775,032)	(768,279)
Other income		651	776
Interest received		2,510	1,519
Interest paid		(20,495)	(24,496)
Income taxes paid		(48,419)	-
Net cash inflow from operating activities	6(a)	714,166	650,795
Cash flows from investing activities
Payments for property, plant and equipment		(116,053)	(91,041)
Payments for mine development and exploration		(191,875)	(181,267)
Proceeds from sale of property, plant and equipment		595	1,820
Proceeds from sale of subsidiary		40,000	40,688
Cash disposed on sale of subsidiary		(13)	-
Payments for transaction and integration costs		(438)	(3,045)
Transfer from term deposits		-	(3)
Transaction costs related to business disposal		-	(3,942)
Payments for Available-for-sale financial assets		(2,500)	-
Payment for economic interest in Ernest Henry		-	(884,004)
Net cash outflow from investing activities		(270,284)	(1,120,794)
Cash flows from financing activities
Proceeds from interest bearing liabilities - Senior Secured Syndicated Revolving and
Term Facility		-	475,000
Repayment of interest bearing liabilities - Senior Secured Syndicated Revolving and
Term Facility		(40,000)	(325,000)
Repayment of short term borrowings		(84,330)	(163,232)
Proceeds from short term borrowings		77,460	161,630
Payment of finance lease liabilities		(1,344)	(8,316)
Dividends paid		(109,873)	(52,419)
Proceeds from issues of shares		-	408,808
Payment of transaction costs for issuing shares		-	(6,315)
Net cash inflow from financing activities		(158,087)	490,156
Net increase/ in cash and cash equivalents		285,795	20,157
Cash and cash equivalents at the beginning of the period		37,385	17,295
Effects of exchange rate changes on cash and cash equivalents		46	(67)
Cash and cash equivalents at end of period	9	323,226	37,385

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Notes to the Consolidated Financial Statements

Contents of the Notes to the Consolidated Financial Statements

	Business Performance	110
1	Performance by Mine	110
2	Revenue and Expenses	111
3	Income tax expense	113
4	Earnings per share	113
5	Dividends	114
6	Other cash flow information	115
	Resource Assets and Liabilities	117
7	Property, plant and equipment	117
8	Mine development and exploration	119
	Capital Structure, Financing and Working Capital	123
9	Cash and cash equivalents	123
10	Interest bearing liabilities	123
11	Equity and reserves	124
12	Trade and other receivables	126
13 14	Trade and other payables Inventories	127 127
15	Other non-current assets	128
16	Provisions	128
17	Deferred tax balances	130
	Risk and unrecognised items	132
18	Financial risk management	132
19	Contingent liabilities and contingent assets	135
20	Commitments	135
21	Events occurring after the reporting period	137
	Other information	138
22	Ernest Henry Operation	138
23	Related party transactions	139
24	Share-based payments	140
25 26	Remuneration of auditors Deed of cross guarantee	142 143
27	Interests in other entities	144
28	Parent entity financial information	145
29	Summary of significant accounting policies	146
30	New accounting standards	147

Page

Business Performance

This section highlights the key indicators on how the Group performed during the year.

1 Performance by Mine

(a) Description of segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive Chairman and the Senior Leadership Team (the chief business decision makers) in assessing performance and in determining the allocation of resources.

The Group's operational mine sites, Exploration and Corporate are each treated as individual operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

Corporate includes share-based payment expenses and other corporate expenditures supporting the business during the period.

Segment performance is evaluated based on earnings before interest, tax, depreciation and amortisation (EBITDA).

The Group's operations are all conducted in the mining industry in Australia.

(b) Segment information

The segment information for the reportable segments for the year ended 30 June 2018 is as follows:

	Cowal \$'000	Mungari \$'000	Mt Carlton \$'000	Mt Rawdon \$'000	Edna May \$'000	Cracow \$'000	Ernest Henry \$'000	Pajingo \$'000	Explo ration \$'000	Corp orate \$'000	Total \$'000
30 June 2018
SPACE Revenue EBITDA	422,858 234,225	191,062 67,331	214,844 136,503	179,387 93,006	37,171 2,629	147,708 70,210	347,403 230,976	- -	- (5,414)	(34,383)	- 1,540,433 795,083
Sustaining Capital Major Capital Total Capital	39,697 84,923 124,620	9,935 36,611 46,546	9,866 21,009 30,875	8,574 10,924 19,498	1,599 3,072 4,671	19,601 14,451 34,052	11,618 - 11,618	- - -	- - -	1,619 - 1,619	102,509 170,990 273,499

The segment information for the reportable segments for the year ended 30 June 2017 is as follows:

	Cowal \$'000	Mungari \$'000	Mt Carlton \$'000	Mt Rawdon \$'000	Edna May \$'000	Cracow \$'000	Ernest Henry \$'000	Pajingo \$'000	Explo ration \$'000	Corp orate \$'000	Total \$'000
30 June 2017
Space Revenue EBITDA	440,691 258,434	231,767 90,029	197,093 126,051	166,471 91,578	116,845 20,588	146,149 71,610	163,342 99,234	17,518 2,614	- (12,645)	(33,638)	- 1,479,876 713,855
Sustaining Capital Major Capital Total Capital	43,849 27,080 70,929	14,566 22,161 36,727	15,304 13,887 29,191	14,242 19,071 33,313	2,241 28,519 30,760	17,462 14,168 31,630	6,066 - 6,066	2,820 3,560 6,380	- - -	1,035 - 1,035	117,585 128,446 246,031

1 Performance by Mine (continued)

(c) Segment reconciliation

	30 June 2018 \$'000	30 June 2017 \$'000
Reconciliation of profit before income tax expense
SPACE EBITDA	795,083	713,855
Depreciation and amortisation	(405,230)	(388,824)
Interest income	3,332	1,519
Acquisition and integration costs	866	(6,987)
Fair value amortisation expense	(33,481)	(45,035)
Fair value unwinding expense	3,142	1,526
Finance costs	(24,778)	(35,194)
Loss on sale of subsidiary	-	(3,576)

Recognition and measurement

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

Profit before income tax expense 338,934 237,284

The Board of Evolution Mining Limited has appointed a strategic steering committee which assesses the financial performance and position of the Group, and makes strategic decisions. The steering committee, which has been identified as being the chief business decision maker, consists of the Executive Chairman and the Senior Leadership Team (KMP).

2 Revenue and Expenses

	30 June 2018 \$'000	30 June 2017 \$'000
Sales revenue
Gold sales	1,312,640	1,341,311
Silver sales	21,049	25,164
Copper sales	206,744	113,401
	1,540,433	1,479,876
	30 June	30 June
	2018	2017
	\$'000	\$'000
Cost of sales Mine operating costs	639,609	657,258
Royalty and other selling costs	65,944	62,480
Depreciation and amortisation expense	404,580	388,097
Fair value amortisation	33,481	45,035
Fair value gain	(3,142)	(1,526)
	1,140,472	1,151,344

2 Revenue and Expenses (continued)

	30 June 2018 \$'000	30 June 2017 \$'000
Corporate and other administration costs
Depreciation and amortisation expense	650	727
Corporate overheads	26,543	28,001
	27,193	28,728
Transaction and integration costs
Contractor, consultants and advisory expense	724	2,998
Corporate and administration expense	978	944
Stamp duty on business combinations	(2,568)	3,045
	(866)	6,987
Finance costs
Finance lease interest expense	19	338
Amortisation of debt establishment costs	740	7,444
Unwinding of discount on provisions	3,544	3,254
Interest expense	20,475	24,158
	24,778	35,194
Depreciation and amortisation
Cost of sales (excluding Ernest Henry)	278,911	323,195
Cost of sales (Ernest Henry)	125,669	64,902
Corporate and other administration costs	650	727
	405,230	388,824

Recognition and measurement

Revenue from the sale of goods is recognised when there has been a transfer of risks and rewards to the customer and no further processing is required by the Group, the quality and quantity of the goods has been determined with reasonable accuracy, the price is fixed or determinable, and collectability is probable. The point at which risk and title passes for concentrate sales is generally upon receipt of the bill of lading when the commodity is delivered for shipment. Revenue is measured at the fair value of the consideration received or receivable.

The terms of metal in concentrate sales contracts with third parties contain provisional pricing arrangements whereby the selling price for metal in concentrate is based on prevailing spot prices on a specified future date after shipment to the customer (quotation period). Adjustments to the sales price occur based on movements in quoted marked prices up to the date of final settlement. The period between provisional invoicing and final settlement is typically between one and three months. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable.

3 Income tax expense

Judgement is required to determine whether deferred tax assets are recognised in the Balance Sheet. Management must assess the likelihood that the Group will generate sufficient taxable earnings in future periods in order to recognise and utilise those deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and existing tax laws. These assessments require the use of estimates such as commodity prices and operating performance over the life of the assets. To the extent that cash flows and taxable income differ significantly from estimates, the Group's ability to realise the deferred tax assets reporting could be impacted.

(a) Income tax expense

	30 June 2018 \$'000	30 June 2017 \$'000
Current tax on profits for the period	85,490	36,214
Deferred tax	(4,433)	3,863
Previously unrecognised tax loss now recognised	-	(20,400)
Adjustments for current tax of prior periods	(5,511)	-
	75,546	19,677

(b) Numerical reconciliation of income tax expense to prima facie tax payable

	30 June	30 June
	2018	2017
	\$'000	\$'000
Profit before income tax	338,933	237,284
Tax at the Australian tax rate of 30%	101,680	71,185
space Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Costs of business acquisitions	-	982
Deferred tax expense on sale of subsidiary	4,165	-
Adjustments for current tax of prior periods	(5,511)	-
Share-based payments	2,547	1,924
Loss on sale of subsidiary	-	1,073
Other	(689)	2,257
Temporary differences now recognised to reduce deferred tax expense	(12,993)	-
Tax loss recognised to reduce deferred tax expense	(4,544)	(20,400)
Tax losses used to reduce current tax expense	(9,109)	(37,344)
Income tax expense	75,546	19,677

4 Earnings per share

(a) Earnings per share

	30 June 2018 Cents	30 June 2017 Cents
Basic earnings per share (cents)	15.57	13.28
Diluted earnings per share (cents)	15.51	13.23

4 Earnings per share (continued)

(b) Earnings used in calculating earnings per share

	30 June 2018 \$'000	30 June 2017 \$'000
Earnings per share used in the calculation of basic and diluted earnings per share: Profit after income tax attributable to the owners of the parent	263,388	217,607
(c) Weighted average number of shares used as the denominator
	2018 Number	2017 Number
Weighted average number of ordinary shares used in calculating the basic earnings per share Effect of dilutive securities (i)	1,691,215,407 6,419,798	1,638,875,242 5,584,134
Adjusted weighted average number of ordinary shares used in calculating the diluted earnings per share	1,697,635,205	1,644,459,376

(i) Performance rights and share rights have been included in the determination of diluted earnings per share

5 Dividends

(a) Ordinary shares

	30 June 2018 \$'000	30 June 2017 \$'000
Interim dividend - 2018 Interim dividend for the year ended 30 June 2018 of 3.5 cents per share fully franked (30 June 2017: 2 cent per share unfranked) per fully paid share paid on 30 March 2018	59,180	33,595
Space Final dividend - 2017 Final dividend for the year ended 30 June 2017 of 3 cents per share fully franked (30 June
2016: 2 cent per share unfranked) per fully paid share paid on 26 September 2017	50,678 109,858	29,365 62,960

(b) Dividends not recognised at the end of the reporting period

In June 2017, the Directors approved a change to the dividend policy of whenever possible paying a dividend equivalent to 50% of the Group's earnings. The final dividend for 2018 has been calculated accordingly.

5 Dividends (continued)

(b) Dividends not recognised at the end of the reporting period (continued)

	30 June 2018 \$'000	30 June 2017 \$'000
In addition to the above dividends, since period end the Directors have recommended the payment of a fully franked final dividend of 4.0 cents per fully paid ordinary share (30 June 2017: 3 cents fully franked). The aggregate amount of the proposed dividend expected to be paid on 28 September 2018 out of retained earnings at 30 June 2018, but not recognised as a liability at period end, is	67,704	50,484

(c) Franked dividends

The final dividend recommended after 30 June 2018 will be fully franked out of franking credits expected to arise from the payment of income tax during the year ending 30 June 2019. The franking account balance at the end of the financial year is \$1.3 million (30 June 2017: nil)

6 Other cash flow information

(a) Reconciliation of profit after income tax to net cash inflow from operating activities

2018 2017 \$'000 \$'000 Profit after income tax 217,607 263,388 Transaction and integration costs (866) 6,987 Fair value amortisation and expense 43,509 30,339
Depreciation and amortisation 388,824 404,650
Unwind of discount on provisions 3,254 3,544
Amortisation of debt establishment costs 7,444 740
Share-based payments expense 6,413 8,491
Exploration and evaluation costs expensed 12,645 5,414
Income tax expense 75,546
Loss on sale of subsidiary 3,576 -
Timing difference on settlement of Ernest Henry sales/ costs 16,887 (76)
Change in operating assets and liabilities:
Increase in operating receivables (36,237) (9,509)
Increase in inventories (41,586) (26,728)
Increase in operating payables 8,179 4,957
Increase in current and deferred tax balances 19,677 (48,419)
Increase in borrowing costs (7,857) (2,684)
4,695 Increase in other provisions 2,157
650,795 Net cash inflow from operating activities 714,166

6 Other cash flow information (continued)

(b) Net debt reconciliation

This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.

	30 June 2018 \$'000	30 June 2017 \$'000
Net debt
Cash and cash equivalents Bank loans	323,226 (395,000)	37,385 (435,000)
Net bank debt	(71,774)	(397,615)
Available-for-sale financial assets	5,536	4,961
Finance lease liabilities	-	(1,344)
Net debt	(66,238)	(393,998)

	Cash and cash equivalent \$'000	Available for-sale (i) \$'000	Finance leases due within 1 year \$'000	Bank loans due within 1 year \$'000	Bank loans due after 1 year \$'000	Total \$'000
Year ended 30 June 2017
space Net debt at the beginning of the year Cash flows Foreign exchange adjustments Other non-cash movements Net debt as at end of the year	17,295 20,157 (67) - 37,385	3,263 - - 1,698 4,961	(8,316) 6,972 - - (1,344)	- (50,000) - - (50,000)	(285,000) (100,000) - - (385,000)	(272,758) (122,871) (67) 1,698 (393,998)
Year ended 30 June 2018
space Net debt at the beginning of the year Cash flows Foreign exchange adjustments Other non-cash movements Net debt at the end of the year	37,385 285,794 47 - 323,226	4,961 - - 575 5,536	(1,344) 1,344 - - -	(50,000) (45,000) - - (95,000)	(385,000) 85,000 - - (300,000)	(393,998) 327,138 47 575 (66,238)

(i) Available-for-sale comprise current investments that are traded in an active market, being the Group's financial assets held at fair value through profit or loss.

Resource Assets and Liabilities

This section provides information that is relevant to understanding the composition and management of the Group's assets and liabilities.

7 Property, plant and equipment

		Plant and
	Freehold land \$'000	equipment \$'000	Total \$'000
At 1 July 2017
Cost	16,841	1,640,294	1,657,135
Accumulated depreciation	-	(915,946)	(915,946)
Net carrying amount	16,841	724,348	741,189
Year ended 30 June 2018
Carrying amount at beginning of year	16,841	724,348	741,189
Additions	-	116,053	116,053
Reclassification	-	(90,578)	(90,578)
Disposals	-	(595)	(595)
Depreciation	-	(117,563)	(117,563)
Depreciation relating to fair value uplift on business combinations	-	(4,608)	(4,608)
Disposal of subsidiary	(2,580)	(69,543)	(72,123)
Carrying amount at the end of the year	14,261	557,514	571,775
At 30 June 2018
Cost	14,261	1,590,847	1,605,108
Accumulated depreciation	-	(1,033,333)	(1,033,333)
Net carrying amount	14,261	557,514	571,775
Included in above	-	103,445	103,445
Assets in the course of construction

7 Property, plant and equipment (continued)

	Freehold land \$'000	Plant and equipment \$'000	Total \$'000
At 1 July 2016
Cost	10,526 -	1,565,270 (786,026)	1,575,796 (786,026)
Accumulated depreciation Net carrying amount	10,526	779,244	789,770
Year ended 30 June 2017
Carrying amount at beginning of year	10,526	779,244	789,770
Additions	4,258	86,783	91,041
Reclassification	2,057	(2,322)	(265)
Disposals	-	(1,820)	(1,820)
Depreciation	-	(132,076)	(132,076)
Depreciation relating to fair value uplift on business combinations	-	(5,461)	(5,461)
Carrying amount at the end of the year	16,841	724,348	741,189
At 30 June 2017
Cost	16,841	1,640,294	1,657,135
Accumulated depreciation	-	(915,946)	(915,946)
Net carrying amount	16,841	724,348	741,189
Included in above
Carrying amount of lease assets	-	2,952	2,952
Assets in the course of construction	-	67,352	67,352
	-	70,304	70,304

Recognition and measurement

Cost

Plant and equipment is carried at cost less accumulated depreciation and impairment. Costs equals the fair value of the item at acquisition date and includes expenditure that is directly attributable to the acquisition of the items. Freehold land is carried at cost.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit or Loss during the reporting period in which they are incurred.

An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected to bring no future economic benefits. Any gain or loss from derecognising the asset is included in the statement of profit or loss in the period the item is derecognised.

Depreciation

Depreciation of plant and equipment is calculated using either the straight line or units of production method to allocate their cost, net of their residual values, over their estimated useful lives. The rates vary between 10% and 33% per annum. Freehold land is not depreciated.

Accounting estimates and judgements

Estimation of remaining useful lives, residual values and depreciation methods involve significant judgement and are reviewed annually for all major items of plant and equipment. Any changes are accounted for prospectively from the date of reassessment to the end of the revised useful life.

8 Mine development and exploration

	Producing	Exploration
	mines	and evaluation	Total
	\$'000	\$'000	\$'000
At 1 July 2017
Cost	2,959,137	128,128	3,087,265
Accumulated amortisation	(1,285,786)	-	(1,285,786)
Net carrying amount	1,673,351	128,128	1,801,479
Year ended 30 June 2018
Carrying amount at beginning of year	1,673,351	128,128	1,801,479
Additions	176,772	31,014	207,786
Amortisation	(287,668)	-	(287,668)
Amortisation recognised in inventory	(580)	-	(580)
Amortisation relating to fair value uplift on business combinations	(28,873)	-	(28,873)
Asset write-off	-	(5,410)	(5,410)
Reclassifications	91,837	(1,259)	90,578
Disposal of subsidiary	(20,108)	(172)	(20,280)
Reclassification to long term inventory	(13,280)	-	(13,280)
Carrying amount at the end of the year	1,591,451	152,301	1,743,752
At 30 June 2018
Cost	3,085,507	152,301	3,237,808
Accumulated amortisation	(1,494,056)	-	(1,494,056)
Net carrying amount	1,591,451	152,301	1,743,752

8 Mine development and exploration (continued)

	Producing	Exploration
	mines	and evaluation	Total
	\$'000	\$'000	\$'000
At 1 July 2016
Cost	1,962,882	110,338	2,073,220
Accumulated amortisation	(1,015,047)	-	(1,015,047)
Net carrying amount	947,835	110,338	1,058,173
Year ended 30 June 2017
Carrying amount at beginning of year	947,835	110,338	1,058,173
Additions	151,500	30,473	181,973
Amortisation	(256,748)	-	(256,748)
Acquisition of economic interest in Ernest Henry Operation (i)	884,004	-	884,004
Amortisation recognised in inventory	(13,990)	-	(13,990)
Amortisation relating to fair value uplift on business combinations	(39,574)	-	(39,574)
Exchange differences	-	21	21
Asset write-off	-	(12,645)	(12,645)
Reclassifications	324	(59)	265
Carrying amount at the end of the year	1,673,351	128,128	1,801,479
At 30 June 2017
Cost	2,959,137	128,128	3,087,265
Accumulated amortisation	(1,285,786)	-	(1,285,786)
Net carrying amount	1,673,351	128,128	1,801,479

(i) Refer to note 22 for information on the Ernest Henry transaction and financial results for the year ended 30 June 2018.

Recognition and measurement

Mines under construction

This expenditure includes net direct costs of construction, borrowing costs capitalised during construction and an appropriate allocation of attributable overheads. Expenditure is net of proceeds from the sale of ore extracted during the construction phase to the extent that this ore extracted is considered material to the development of the mine.

After production commences, all aggregated costs of construction are transferred to producing mines or plant and equipment as appropriate.

Producing mines - deferred stripping

Stripping (waste removal) costs are incurred both during the development phase and production phase of operations. Stripping costs incurred during the development phase are capitalised as mines under construction. Stripping costs incurred during the production phase are generally considered to create two benefits:

• the production of ore inventory in the period accounted for as a part of the cost of producing those ore inventories; or
• improved access to the ore to be mined in the future recognised under producing mines if the following criteria are met:
• Future economic benefits (being improved access to the ore body) associated with the stripping activity are probable;
• The component of the ore body for which access has been improved can be accurately identified; and
• The costs associated with the stripping activity associated with that component can be reliably measured.

The amount of stripping costs deferred is based on the life of component ratio which is obtained by dividing the amount of waste tonnes mined by the quantity of gold ounces contained in the ore for each component of the mine. Stripping costs incurred in the period are deferred to the extent that the actual current period waste to contained gold ounce ratio exceeds the life of component expected 'life of component' ratio.

8 Mine development and exploration (continued)

Recognition and measurement

Producing mines - deferred stripping

A component is defined as a specific volume of the ore body that is made more accessible by the stripping activity and is determined based on mine plans. An identified component of the ore body is typically a subset of the total ore body of the mine. Each mine may have several components, which are identified based on the mine plan.

The deferred stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the ore within an identified component, plus an allocation of directly attributable overhead costs.

The deferred stripping asset is depreciated over the expected useful life of the identified component of the ore body that is made more accessible by the activity, on a units of production basis. Economically recoverable reserves are used to determine the expected useful life of the identified component of the ore body.

Exploration and evaluation

Exploration and evaluation expenditure related to areas of interest is capitalised and carried forward to the extent that rights to tenure of the area of interest are current and either:

• Costs are expected to be recouped through the successful development and exploitation of the area of interest or alternatively by sale; or
• Where activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Such expenditure consists of an accumulation of acquisition costs and direct exploration and evaluation costs incurred, together with an appropriate portion of directly related overhead expenditure.

The carrying value of capitalised exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying value may exceed its recoverable amount. Any amounts in excess of the recoverable amount are derecognised in the financial year it is determined.

Depreciation and amortisation

The Group uses the units of production basis when amortising mine development assets which results in an amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item's economic life has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which it is located.

Impairment of non-financial assets

(i) Testing for impairment

At each reporting date, the Group tests its tangible and other intangible assets for impairment where there in an indication that:

• the asset may be impaired; or
• previously recognised impairment (on assets other than goodwill) may have changed.

Where the asset does not generate cash inflows independent from other assets and its value in use cannot be estimated to be close to its fair value, the asset is tested for impairment as part of the cash generating unit (CGU) to which it belongs. The Group considers each of its mine sites to be a separate CGU.

If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount is reduced to the recoverable amount and an impairment loss recognised in the Statement of Profit or Loss. The recoverable amount of an asset or CGU is determined as the higher of its fair value less costs of disposal or value in use.

(ii) Impairment calculations

In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining fair value less costs of disposal, a discounted cash flow model is used based on a methodology consistent with that applied by the Group in determining the value of potential acquisition targets, maximising the use of market observed inputs. These calculations, classified as Level 3 on the fair value hierarchy, are compared to valuation multiples, or other fair value indicators where available, to ensure reasonableness.

8 Mine development and exploration (continued)

Accounting estimates and judgements

Deferred stripping

The life of component ratio is a function of the mine design and therefore changes to that design will generally result in changes to the ratio. Changes in other technical or economic parameters that impact reserves will also have an impact on the life of component ratio even if they do not affect the mine design. Changes to production stripping resulting from a change in life of component ratios are accounted for prospectively.

Exploration and evaluation

Judgement is required to determine whether future economic benefits are likely, from either exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. In addition to these judgements, the Group has to make certain estimates and assumptions such as the determination of a JORC resource which is itself an estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e. measured, indicated or inferred). These estimates directly impact when the Group capitalises exploration and evaluation expenditure. The capitalisation policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves will be found. Any such estimates and assumptions may change as new information becomes available.

The recoverable amount of capitalised expenditure relating to undeveloped mining projects (projects for which the decision to mine has not yet been approved at the required authorisation level within the Group) can be particularly sensitive to variations in key estimates and assumptions. If a variation in key estimates or assumptions has a negative impact on recoverable amount it could result in a requirement for impairment.

Units of production method of amortisation

The Group uses the units of production basis when amortising mine development assets which results in an amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item's economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which it is located. These calculations require the use of estimates and assumptions.

Ore reserves and resources

The Group estimates its ore reserves and mineral resources annually at 31 December each year and reports in the following April, based on information compiled by Competent Persons as defined in accordance with the Australasian code for reporting Exploration Results, Mineral Resources and Ore Resources (JORC code 2012). The estimated quantities of economically recoverable reserves are based upon interpretations of geological models and require assumptions to be made regarding factors such as estimates of short and long-term exchange rates, estimates of short and long-term commodity prices, future capital requirements and future operating performance. Changes in reported reserves estimates can impact the carrying amount of mine development (including exploration and evaluation assets), the provision for rehabilitation obligations, the recognition of deferred tax assets, as well as the amount of amortisation charged to the statement of profit or loss.

Impairment

Significant judgements, estimates and assumptions are required in determining value in use or fair value less costs of disposal. This is particularly so in the assessment of long life assets. It should be noted that the CGU recoverable amounts are subject to variability in key assumptions including, but not limited to, gold and copper prices, currency exchange rates, discount rates, production profiles and operating and capital costs. A change in one or more of the assumptions used to determine value in use or fair value less costs of disposal could result in a change in a CGU's recoverable amount.

The Group has considered whether past impairment losses should be reversed given the expectation of continued improved earnings in relation to those CGUs. While there are some indicators supporting a reversal of impairment, other indicators (such as metals prices, continued price volatility and variability in values of asset transactions) do not clearly support a reversal. Accordingly a reversal of past impairment losses has not been recognised.

Capital Structure and Financing

This section provides information on the Group's capital and financial management activities.

9 Cash and cash equivalents

	30 June 2018 \$'000	30 June 2017 \$'000
Current assets
Bank balances Cash at bank	- 323,226	- 37,385
	323,226	37,385

Recognition and measurement

Cash and short-term deposits in the balance sheet comprise cash and bank and on hand and short term deposits with an original maturity of three months or less and are classified as financial assets held at amortised cost.

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.

10 Interest bearing liabilities

	30 June	30 June
	2018	2017
	\$'000	\$'000
Current liabilities
Bank loans	95,000	50,000
Less: Borrowing costs	(1,504)	(4,813)
Finance lease liabilities	-	1,344
Other borrowings	-	6,870
	93,496	53,401
Non-current liabilities
Bank loans	300,000	385,000
Less: Borrowing costs	(7,530)	(2,277)
	292,470	382,723

In September 2017, the Group repaid the outstanding balance of \$40.0 million on the Senior Secured Term Loan ("Facility B") in anticipation of the up-front cash payment to be received on the sale of the Edna May Operation. The Senior Secured Revolving Loan ("Facility A") remained undrawn during the year.

In March 2018, the Group successfully renewed the Senior Secured Revolving Loan ("Facility A") and the Performance Bond Facility ("Facility C") through until July 2021 for \$350.0 million and \$175.0 million respectively (previously \$300.0 million and \$155.0 million respectively). The expiry on the Senior Secured Term Loan ("Facility D") remains unchanged at October 2021. The renewal of the debt facilities has secured a saving of approximately \$6 million over the term of the loans compared to the previous pricing.

10 Interest bearing liabilities (continued)

The repayment periods and the outstanding balances as at 30 June 2018 on each Facility are set out below:

	Term date	Outstanding balance
Senior Secured Revolving Loan - Facility A (\$350.0 million)	31 July 2021	\$ nil
Performance Bond Facility - Facility C	31 July 2021	\$132 million
Senior Secured Term Loan - Facility D	15 October 2021	\$395 million

(a) Secured liabilities and assets pledged as security

The New Facility is secured in the form of a General Security Agreement and Share Security Agreement over the Groups operating assets. The carrying amounts of assets pledged as general security for total borrowings is \$1.952 billion. The share capital pledged as share security for total borrowings is \$1.872 billion.

Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default.

Recognition and measurement

Interest bearing liabilities are initially recognised at fair value less directly attributable transaction costs incurred and subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised.

11 Equity and reserves

(a) Contributed equity

Movements in ordinary share capital

Ordinary shares are fully-paid and have no par value. They carry one vote per share and the rights to dividends. They bear no special terms or conditions affecting income or capital entitlements of the shareholders and are classified as equity.

	Number of
	shares	\$'000
Balance at 1 July 2016	1,468,262,821	1,770,987
Shares issued on vesting of performance rights	7,961,146	-
Shares issued under DRP for final dividend	1,927,526	4,055
Shares issued under DRP for interim dividend	3,066,229	6,192
Shares issued under Institutional Component of Entitlement Offer	151,914,603	311,425
Shares issued under Retail Component of Entitlement Offer	44,976,448	90,134
Shares issued under Employee Share Scheme (i)	511,192	-
Shares issued on exercise of unlisted share options	4,178,661	7,249
Less: share issue costs	-	(6,315)
Balance at 30 June 2017	1,682,798,626	2,183,727
Shares issued on vesting of performance rights	9,214,401	-
Shares issued under Employee Share Scheme (i)	501,234	-
Shares issued under NED Equity Plan	97,788	-
Balance at 30 June 2018	1,692,612,049	2,183,727

(i) Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in note 24.

11 Equity and reserves (continued)

(a) Contributed equity (continued)

Recognition and measurement

Ordinary share capital is classified as equity and is recognised at the fair value of the consideration received by the Group. Incremental costs directly attributable to the issue of new shares, options or performance rights are shown in equity as a deduction, net of tax, from the proceeds.

(b) Other reserves

		30 June 2018	30 June 2017
	Notes	\$'000	\$'000
Fair value revaluation reserve Share-based payments		(336)	1,589 37,149
Other reserves		45,640 103	57
		45,407	38,795
Movements:
Fair value revaluation reserve
Balance at the beginning of the year		1,589	(110)
Change in fair value of available-for-sale financial assets		(1,925)	1,699
Balance at the end of the year		(336)	1,589
Cash flow hedges
Balance at the beginning of the year		-	(127)
Change in the fair value of cash flow hedges		-	127
Balance at the end of the year		-	-
Share-based payments
Balance at the beginning of the year		37,149	29,496
Share based payments expense	24	8,491	7,653
Balance at the end of the year		45,640	37,149
Foreign currency translation
Balance at the beginning of the year		57	104
Currency translation differences arising during the year		46	(47)
Balance at the end of the year		103	57

(i) Nature and purpose of other reserves

Fair value revaluation reserve

The fair value revaluation reserve records fair value changes on financial assets designated at fair value through other comprehensive income.

Cash flow hedges

The cash flow hedging reserve records the portion of gains or losses on derivatives that are designated and qualify as cash flow hedges and are recognised in other comprehensive income.

11 Equity and reserves (continued)

(b) Other reserves (continued)

(i) Nature and purpose of other reserves (continued)

Share-based payments

The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including Non-Executive Directors, Executive Directors and key management personnel as part of their remuneration. Refer to note 24 for further information.

Foreign currency translation

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

(c) Retained earnings

Movements in retained earnings were as follows:

	Notes	30 June 2018 \$'000	30 June 2017 \$'000
Balance at the beginning of the year	5	(94,270)	(248,917)
Net profit for the period		263,388	217,607
Dividends paid		(109,858)	(62,960)
Balance at the end of the year		59,260	(94,270)

12 Trade and other receivables

	30 June 2018 \$'000	30 June 2017 \$'000
Current assets Trade receivables (i)	60,394	53,534
GST refundable Prepayments Other receivables	3,501 5,386 2,015	4,349 3,296 1,940
	71,296	63,119

(i) Trade receivables includes accrued income of \$46.897 million (30 June 2017: \$40.263 million) relating to silver and copper sales from April to June 2018 production for Ernest Henry. These amounts are to be settled in July to September 2018. Refer to note 22 for further information on the transaction and the financial results for the year ended 30 June 2018.

Recognition and measurement

Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days and therefore are all classified as current.

Other receivables

These amounts generally arise from transactions outside the usual operating activities of the Group. They do not contain impaired assets and are not past due.

13 Trade and other payables

	30 June	30 June
	2018	2017
	\$'000	\$'000
Current liabilities
Trade creditors and accruals (i)	123,889	132,073
Other payables	28,478	24,554
	152,367	156,627

(i) Trade creditors and accruals include accrued costs of \$29.157 million (30 June 2017: \$29.522 million) relating to the Group's share of production costs for April to June 2018 for Ernest Henry. These amounts are to be settled in July to September 2018. Refer to note 22 for further information on the transaction and the financial results for the year ended 30 June 2018.

Recognition and measurement

Trade creditors and accruals

Trade creditors and accruals represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are paid on normal commercial terms. The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature.

14 Inventories

	30 June 2018 \$'000	30 June 2017 \$'000
Current
Stores	43,334	46,946
Ore	166,820	175,302
Doré and concentrate	6,055	8,088
Metal in circuit	21,867	21,323
Metal in transit	26,145	25,210
Total current inventories	264,221	276,869
Non-current
Stores	-	827
Ore	38,459	-
Total non-current inventories	38,459	827

Recognition and measurement

Ore stockpiles, metal in circuit, gold doré, metal in transit, refined gold bullion and concentrate are physically measured or estimated and valued at the lower of cost and net realisable value. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable production overhead expenditure, including depreciation and amortisation, incurred in converting materials into finished goods.

Materials and supplies are valued at the lower of cost and net realisable value. Any provision for obsolescence is determined by reference to specific stock items identified. A regular and ongoing review is undertaken to establish the extent of surplus items and a provision is made for any potential loss on their disposal. If the stockpile is not expected to be processed within 12 months after reporting date, it is included in non-current assets.

14 Inventories (continued)

Accounting estimates and judgements

Net realisable value

Net realisable value involves significant judgements and estimates in relation to the selling price in the ordinary course of business less estimates costs of completion and estimated costs necessary to make the sale.

The total expense relating to inventory write downs to net realisable value for the year ended 30 June 2018 was \$6.128 million (30 June 2017: \$9.117 million).

15 Other non-current assets

	30 June 2018 \$'000	30 June 2017 \$'000
Non-current assets -Other
Contingent consideration attributable to the Pajingo Operation	3,100	3,100
Contingent consideration attributable to the Edna May Operation	34,441	-
Other	91	91
Total other non-assets	37,632	3,191

Contingent consideration amounts classified as a financial asset are remeasured to fair value with changes in fair value recognised in profit or loss. No fair value gains or losses have been recognised in profit or loss during the year.

16 Provisions

	30 June 2018 \$'000	30 June 2017 \$'000
Current
Employee entitlements	32,085	30,173
	32,085	30,173
Non-current
Employee entitlements	2,935	5,298
Rehabilitation provision	146,988	149,372
Other long term provision	206	203
	150,129	154,873
Total provisions	182,214	185,046

16 Provisions (continued)

(i) Movements in provisions

Movements in each class of provision during the financial year are set out below:

	Employee
	benefits	Rehabilitation	Other	Total
	\$'000	\$'000	\$'000	\$'000
30 June 2018
Space Carrying amount at the beginning of the year	35,471	149,372	203	185,046
Charged to profit or loss
- unwinding of discount	-	3,544	-	3,544
- provision recognised	3,099	(944)	-	2,155
Re-measurement of provision	-	16,000	3	16,003
Disposal of subsidiary	(3,550)	(20,984)	-	(24,534)
Carrying amount at the end of the year	35,020	146,988	206	182,214
30 June 2017
Space Carrying amount at the beginning of the year Charged to profit or loss	30,982	145,916	200	177,098
- unwinding of discount	-	3,204	-	3,204
- provision recognised	4,489	(814)	-	3,675
Re-measurement of provision	-	1,066	3	1,069

Employee benefits

The provision for employee benefits represent wages and salaries, annual leave and long service leave entitlements.

Rehabilitation

The nature of site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and restoration, reclamation and revegetation of affected areas of the site in accordance with the requirements of the mining permits.

Carrying amount at the end of the year 35,471 149,372 203 185,046

Recognition and measurement

Employee benefits

Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled.

Long service leave liabilities are measured at the present value of the estimated future cash outflows for the services provided by employees up to the reporting date.

Liabilities not expected to be settled within twelve months are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity that match, as closely as possible to the related liability.

Rehabilitation

Site restoration costs are recorded at the present value of the estimated future costs of the legal and constructive obligation to rehabilitate locations.

16 Provisions (continued)

Recognition and measurement (continued)

Rehabilitation

When the liability is initially recorded, the present value of the estimated cost is capitalised as part of the carrying value of the related mining assets. Over time, the discounted liability is increased for the change in the present value based on a discount rate that reflects current market assessments. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred.

The unwinding of the effect of discounting the provision is recorded as a finance cost in the statement of profit or loss. The carrying amount is capitalised as part of mine development and amortised on a units of production basis.

Accounting estimates and judgements

Employee benefits

Management judgement is required in determining the future probability of employee departures and period of service used in the calculation of long service leave.

Rehabilitation

Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Factors that will affect this liability include changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plan and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which they change or become known.

17 Deferred tax balances

(a) Recognised deferred tax balances

	30 June	30 June
	2018	2017
	\$'000	\$'000
Inventories	31,836	31,897
Exploration and evaluation expenditure	(32,710)	(24,664)
Property, plant and equipment	(13,849)	(6,080)
Mine development	(52,539)	(61,244)
Employee benefits	10,506	10,644
Provisions	44,158	44,812
Share issue costs	1,088	2,168
Other	(1,661)	(1,485)
Deferred tax balances from temporary differences	(13,171)	(3,952)
Tax losses carried forward	13,590	20,400
Deferred tax assets/(liabilities)	419	16,448

17 Deferred tax balances (continued)

(b) Movement in deferred tax balances during the year

	Balance at 1 July 2017 \$'000	Recognised in profit or loss \$'000	Utilised to reduce tax liability \$'000	Balance at 30 June 2018 \$'000
Inventories	31,897	(61)	-	31,836
Exploration and evaluation expenditure	(24,663)	(8,047)	-	(32,710)
Property, plant and equipment	(6,079)	(7,770)	-	(13,849)
Mine development	(61,244)	8,705	-	(52,539)
Employee benefits	10,644	(138)	-	10,506
Provisions	44,811	(653)	-	44,158
Share issue costs	2,168	(1,080)	-	1,088
Tax losses carried forward	20,400	13,654	(20,463)	13,591
Other	(1,486)	(176)	-	(1,662)
Deferred tax assets	16,448	4,434	(20,463)	419

(c) Tax losses

The Group has unrecognised available tax losses of \$33.382 million as at 30 June 2018. These tax losses have not been recognised due to the uncertainty of their recoverability in future periods.

Accounting estimates and judgements

Judgement is required to determine whether deferred tax assets are recognised in the Balance Sheet. Management must assess the likelihood that the Group will generate sufficient taxable earnings in future periods in order to recognise and utilise those deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and existing tax laws. These assessments require the use of estimates such as commodity prices and operating performance over the life of the assets. To the extent that cash flows and taxable income differ significantly from estimates, the Group's ability to realise the deferred tax assets reporting could be impacted.

Risk and Unrecognised Items

This section of the notes discusses the Group's exposure to various risks and shows how these could affect the Group's financial position and performance as well as providing information on items that are not recognised in the financial statements as they do not (yet) satisfy the recognition criteria.

18 Financial risk management

The Group's activities expose it to a variety of financial risks such as market risk (including interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.

Risk management is carried out at a corporate level under policies approved by the Board of Directors. Management identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units. The Board of Directors approves written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, gold price risk and use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

The Group holds the following financial instruments:

	30 June 2018 \$'000	30 June 2017 \$'000
Financial Assets
Cash and cash equivalents	323,226	37,385
Trade and other receivables (excluding GST refundable)	67,795	58,770
Available-for-sale financial assets	5,536	4,962
	396,557	101,117
Financial Liabilities
Trade and other payables	152,367	156,627
Interest bearing liabilities	385,966	436,124
	538,333	592,751

(a) Derivatives

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group currently only designates derivatives as cash flow hedges (hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions). There are no fair value hedges or net investment hedges, nor are there any derivatives that do not classify for hedge accounting.

The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income through the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Statement of Profit or Loss within other income or other expense.

Amounts accumulated in the cash flow hedge reserve are reclassified to the Statement of Profit or Loss in the periods when the hedged item affects profit or loss for instance when the forecast sale that is hedged takes place.

18 Financial risk management (continued)

(a) Derivatives (continued)

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, fixed assets) the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in profit or loss as depreciation in the case of fixed assets.

Derivatives are only used for economic hedging purposes and not as speculative investments. The Group has no derivative financial instruments at 30 June 2018 (nil for 2017).

(b) Market risk

(i) Foreign exchange risk

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Group's functional currency. Management has set up a policy to manage their foreign exchange risk against their functional currency and is measured using sensitivity analysis and cash flow forecasting.

As at 30 June 2018, the Group held US\$0.766 million (30 June 2017: US\$4.634 million) in US dollar currency bank accounts, outstanding receivables of US\$6.875 million (30 June 2017: US\$8.252 million) relating to the Mt Carlton operation and US\$34.661 million (30 June 2017: US\$30.970 million) relating to Ernest Henry. An increase/decrease in AUD:USD foreign exchange rates of 5% will result in a \$38,280 (30 June 2017: \$231,700) increase/decrease in US dollar currency bank account balances and a \$2,076,815 (30 June 2017: \$1,961,100) increase/decrease in US dollar receivables.

The Group also held NZ\$ nil (30 June 2017: NZ\$0.041 million) in a NZ dollar currency bank account.

(ii) Price risk

The Group is currently exposed to the risk of fluctuations in prevailing market commodity prices on the gold, silver and copper currently produced from its gold mines and market share prices on the available-for-sale assets. The Group has in place physical gold delivery contracts as at 30 June 2018 covering sales of 250,000 oz (30 June 2017: 458,495 oz) of gold at an average flat forward price of \$1,711 (30 June 2017: \$1,645). An increase/decrease in market share prices on available-for-sale assets of 10% will result in a \$553,643 (30 June 2017: \$496,107) increase/decrease in available-for-sale assets.

(iii) Cash flow and fair value interest rate risk

The Group's interest rate risk arises from variable interest rates on interest bearing liabilities. As at 30 June 2018, the Group held interest bearing liabilities of \$395 million (30 June 2017: \$435 million) which incurs interest at a variable rate. An increase/decrease of variable interest rates of 0.25% will result in a \$1.849 million (30 June 2017: 0.25%, \$1.658million) increase/decrease in interest expense relating to interest bearing liabilities.

(c) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers, and cash and investment securities held with banks. At the balance sheet date there were no significant concentrations of credit risk given customers and banks have investment grade credit ratings. The total trade and other receivables outstanding at 30 June 2018 was \$71.296 million (30 June 2017: \$63.119 million). Cash and cash equivalents at 30 June 2018 were \$323.2 million (30 June 2017: \$37.4 million).

(d) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. Prudent liquidity risk management implies maintaining sufficient cash and term deposits, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

18 Financial risk management (continued)

(d) Liquidity risk (continued)

(i) Financing arrangements

The Group had access to the following undrawn borrowing facilities at the end of the reporting period:

	30 June 2018	30 June 2017
	\$'000	\$'000
Bank loans - revolving credit facility
Expiring beyond one year	350,000	300,000
	350,000	300,000

(ii) Maturities of financial liabilities

The tables below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for:

• all non-derivative financial liabilities, and
• net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

	Less than 1 year \$'000	Between 1 and 2 years \$'000	Between 2 and 5 years \$'000	Over 5 years \$'000	Total contractual cash flows \$'000	Carrying amount (assets)/ liabilities \$'000
At 30 June 2018
Space Non-derivatives Trade and other payables	152,367	-	-	-	152,367	152,367
Finance lease liabilities Other borrowings	-	-	-	-	-	-
Bank loans	- 109,826	- 119,873	- 195,858	- -	- 425,557	- 395,000
	262,193	119,873	195,858	-	577,924	547,367
At 30 June 2017

Non-derivatives
Trade and other payables	156,627	-	-	-	156,627	156,627
Finance lease liabilities	1,344	-	-	-	1,344	1,344
Other borrowings	6,870	-	-	-	6,870	6,870
Bank loans	64,356	163,660	233,036	-	461,052	435,000
	229,197	163,660	233,036	-	625,893	599,841

18 Financial risk management (continued)

(e) Risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group's focus has been to raise sufficient funds through equity and debt capital markets to fund capital investment in working capital and exploration and evaluation activities.

The Group monitors its liquidity through analysis of regular cash flow forecasts.

(i) Loan covenants

The lenders have placed covenants over the Group's Senior Secured Revolving and Term Facility based on the current ratio, leverage ratio, debt service ratio and the tangible net worth ratio. The Group has complied with these covenants during the year.

19 Contingent liabilities and contingent assets

(a) Contingent liabilities

The Group had contingent liabilities at 30 June 2018 in respect of:

(i) Claims

At the date of this report the Group was unaware of any material claims, actual or contemplated.

(ii) Guarantees

The Group has provided bank guarantees in favour of various government authorities and service providers with respect to site restoration, contractual obligations and premises at 30 June 2018. The total of these guarantees at 30 June 2018 was \$132.356 million with various financial institutions (30 June 2017: \$125.183 million).

20 Commitments

(a) Capital and lease commitments

(i) Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements the Group is required to perform minimum exploration work to meet minimum expenditure requirements specified by various government authorities. These obligations are subject to renegotiation when application for a mining lease is made and at various other times. These obligations are not provided for in the financial report and are payable:

	30 June 2018 \$'000	30 June 2017 \$'000
Within one year	10,479	7,529
Later than one year but not later than five years Later than five years	30,756 40,236	15,873 31,707
	81,471	55,109

20 Commitments (continued)

(a) Capital and lease commitments

(ii) Capital commitments

The Group has the following capital commitments in relation to capital projects and joint venture requirements at each of the sites.

	30 June 2018	30 June 2017
	\$'000	\$'000
Within one year	17,619	26,227
	17,619	26,227

(iii) Non-cancellable operating leases

The Group leases mining equipment, office space and small items of office equipment under operating leases. The leases typically run for one month to five years with an option to renew at the expiry of the lease period. None of these leases include contingent rentals.

	30 June 2018 \$'000	30 June 2017 \$'000
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year	14,576	23,209
Later than one year but not later than five years	9,355	5,231
Later than five years	1,145	-
	25,076	28,440

(b) Gold delivery commitments

Gold for physical delivery oz	Contracted sales price A\$/oz	Value of committed sales \$'000
		254,037
		173,667
		427,704
	150,000 100,000 250,000	1,694 1,737 3,431

As at 30 June 2017
Within one year	208,495	1,567	319,156
Later than one year but not greater than five years	250,000	1,711	427,705
	458,495	3,278	746,861

20 Commitments (continued)

(b) Gold delivery commitments

The counterparties to the physical gold delivery contracts are Australia and New Zealand Banking Group Limited ("ANZ"), National Australia Bank Limited ("NAB"), Commonwealth Bank of Australia ("CBA"), Citibank N.A ("Citibank") and Societe Generale ("SG"). Contracts are settled on a quarterly basis by the physical delivery of gold per the banks instructions. The contracts are accounted for as sale contracts with revenue recognised once the gold has been delivered to Macquarie, ANZ, NAB, WBC, CBA, Citibank, SG or one of their agents. The physical gold delivery contracts are considered a contract to sell a non-financial item and is therefore out of the scope of AASB 139 Financial Instruments: Recognition and Measurement. As a result no derivatives are required to be recognised. The Company has no other gold sale commitments with respect to its current operations.

21 Events occurring after the reporting period

No matter or circumstance has occurred subsequent to the year end that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations or state of affairs of the Group or economic entity in subsequent financial years except for the following matters:

(a) Restructure of Ownership of Castle Hill Gold Deposit

On 18 July, the Company reached an agreement to terminate Norton Gold Field's right to mine and process ore from the Castle Hill deposit. This provides Evolution with full ownership and unfettered access to the deposit located 25km from the Mungari processing facility. Castle Hill is estimated to contain Ore Reserves of 236,000oz which will provide a material extension to the operating life at Mungari. Evolution will pay an initial up-front cash payment of \$12 million (paid 31 July 2018), a further \$3 million six months after completion of the transaction and a 2% net smelter royalty over the first 38,000oz of gold production from certain tenements within the Castle Hill deposit area.

(b) Resignation of La Mancha Directors

On 26 July, it was announced that La Mancha had undertaken a block trade monetisation of shares reducing its direct interest in Evolution to 9.6%. In accordance with the terms of the Share Sale Agreement signed between Evolution and La Mancha in April 2015, La Mancha had the right to nominate Directors to the Board of Evolution provided that it held more than 10.0% of the shares on issue in Evolution. La Mancha's nominee Directors, Mr Naguib Sawiris, Mr Sebastian de Montessus and their Alternate Director, Mr Andrew Wray resigned from the Board of Directors of Evolution effective 1 August 2018.

Other Information

This section covers additional financial information and mandatory disclosures.

22 Ernest Henry Operation

(a) Description

On 24 August 2016, the Group announced that through a wholly owned subsidiary, it had entered into a transaction with Glencore plc to acquire an economic interest in the Ernest Henry Copper-Gold Operation for an up-front payment of \$880 million. This \$880 million up-front payment is recognised as a mine development asset. The Group also announced the entry into a strategic alliance with Glencore plc in respect of potential future regional acquisitions and the commitment the parties made to cooperate on exploration activities in the region surrounding Ernest Henry. The transaction was completed on 1 November 2016.

Under the agreement, the Group has a right to the production output when produced in relation to 100% of future gold and 30% of future copper and silver from the agreed life of mine area. Copper and silver sales revenue are recognised in the same month as their production is reported as the production is in control of the purchaser (Glencore). Gold sales and gold revenues are recognised when the metal is received and sold by Evolution. In addition to the up-front payment, the Group must also contribute 30% of future production costs in respect of the life of mine area.

The Group has agreed to an ongoing obligation to pay an amount equal to 49% of development and production costs in return for 49% of future copper, gold and silver production from new reserves extending beyond the mine life at acquisition date.

(b) Financial performance and position

The below information presents the financial performance and balance sheet information of the Ernest Henry operation included in the Consolidated Financial Statements for the eight months ended 30 June 2017.

	30 June 2018 \$'000	30 June 2017 \$'000
Revenue (note 2)	347,403	163,342
Cost of sales (excluding amortisation)	(116,427)	(64,108)
Amortisation	(125,669)	(64,902)
Profit before income tax	105,307	34,332

22 Ernest Henry Operation (continued)

(b) Financial performance and position (continued)

The carrying amounts of assets and liabilities as at the period end were:

	30 June	30 June
	2018	2017
	\$'000	\$'000
Assets
Trade and other receivables	46,897	40,263
Inventories	26,145	25,210
Mine Development	696,548	811,178
Total assets	769,590	876,651
Liabilities
Trade and other payables	29,157	29,522
Total liabilities	29,157	29,522
Net assets	740,433	847,129

23 Related party transactions

(a) Parent entities

The ultimate parent entity within the Group is Evolution Mining Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in note 27.

(c) Key management personnel compensation

	30 June 2018 \$	30 June 2017 \$
Short-term employee benefits	7,888,131	6,907,351
Post-employment benefits	168,858	156,931
Share-based payments	4,646,895	2,939,830
	12,703,884	10,004,112

Detailed remuneration disclosures are provided in the remuneration report on pages 86 to 101.

23 Related party transactions (continued)

(d) Transactions with other related parties

Directors fees in the amount of \$115,000 were paid to International Mining and Finance Corp, a company of which Mr James Askew is a Director for services provided during the period (30 June 2017:\$113,750).

Directors fees in the amount of \$300,000 were paid to DAK Corporation Pty Ltd, a company of which Mr Jacob Klein is a Director for services provided during the period (30 June 2017: \$200,000).

Directors fees in the amount of \$135,000 were paid to Lazy 7 Pty Ltd, a company of which Mr Colin Johnstone is a Director for services provided during the period (30 June 2017: \$137,748).

Directors fees in the amount of \$95,000 were paid to Mr Naguib Sawiris as a Director for services provided during the period (30 June 2017: \$95,000).

Directors fees in the amount of \$105,000 were paid to Mr Sebastien de Montessus as a Director for services provided during the period (30 June 2017: \$104,375).

24 Share-based payments

(a) Types of share based payment plans

The Group has two Option and Performance Rights plans in existence:

(1) Employee Share Option and Performance Rights Plan (ESOP)

The ESOP was established and approved at the Annual General Meeting on 23 November 2010, and amended on 19 October 2011. The latest plan was approved at the Annual General Meeting on 26 November 2014 and permits the Company, at the discretion of the Directors, to grant both Options and Performance Rights over unissued ordinary shares of the Company to eligible Directors and members of staff as specified in the plan rules.

(2) Non-Executive Director Equity Plan (NEDEP)

The NEDEP was established and approved at the Annual General Meeting on 24 November 2016. The plan permits the Company, at the discretion of the Directors, to grant NED Share Rights as part of their remuneration.

(b) Recognised share based payment expenses

	30 June 2018 \$'000	30 June 2017 \$'000
Expense arising from equity settled share based payment transactions recognised in profit and loss	8,491	6,413

(c) Summary and movement of NED Share Rights on issue

The following table illustrates the number and movements in, Share Rights issued during the year.

	2018	2017
	Number	Number
Outstanding balance at the beginning of the year	97,788	-
Share Rights granted	116,879	97,788
Vested	(97,788)	-
Lapsed	-	-
Forfeited	-	-
Outstanding balance at the end of the year	116,879	97,788

24 Share-based payments (continued)

(c) Summary and movement of NED Share Rights on issue (continued)

There were 116,879 Share Rights granted during the 2018 financial year. Provided the NEDs remain directors of Evolution, Share Rights will vest and automatically exercise 12 months after the grant date of 23 November 2017.

(d) Fair value determination

During the year, the Company issued two allotments of performance rights that will vest on 30 June 2020. They have four performance components being a Total Shareholder Return ("TSR") condition, an absolute TSR condition, a Growth in Earnings per share ("EPS") condition and a Growth in Ore Reserves condition.

(i) TSR Performance Right Valuation

The fair value of the TSR Performance Rights (market-based condition) was estimated at the date of grant using Monte Carlo simulation, taking into account the terms and conditions upon which the awards were granted.

(ii) Absolute TSR Performance Right Valuation

The Absolute TSR Performance Right Valuation will be measured as the cumulative annual TSR over the three year period ending 30 June 2020.

(iii) Growth in Earnings per Share

The growth in Earnings per Share is measured as the cumulative annual growth rate in EPS, excluding non recurring items over the three year period ending 30 June 2020.

(iv) Growth in Ore Reserves per Share

The growth in Ore Reserves per share is measured by comparing the Baseline measure of the Ore Reserves as at 31 December 2015, to the Ore Reserves as at 31 December 2018 on a per share basis, with testing to be performed at 30 June 2019.

The following tables list the inputs to the models used for the Performance Rights granted for the period:

	TSR	Absolute TSR	Growth in EPS	Growth in Ore Reserves
September 2017 Performance Rights issue
Number of rights issued	1,516,766	1,516,766	1,516,766	1,516,766
Spot price (\$)	2.410	2.410	2.410	2.410
Risk-free rate (%)	2.05	2.05	2.05	2.05
Term (years)	2.8	2.8	2.8	2.8
Volatility (%)	58	58	58	58
Fair value at grant date (\$)	1.51	1.28	2.26	2.26
February 2018 Performance Rights issue
Number of rights issued	130,627	130,627	130,627	130,627
Spot price (\$)	2.810	2.810	2.810	2.810
Risk-free rate (%)	2.05	2.05	2.05	2.05
Term (years)	2.4	2.4	2.4	2.4
Volatility (%)	53	53	53	53
Fair value at grant date (\$)	1.85	1.55	2.66	2.66

The volatility above was determined with reference to historical volatility but also incorporates factors that management believes will impact the actual volatility of the Company's shares in future periods.

Recognition and measurement

The Group provides benefits to its employees (including Key Management Personnel) in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

24 Share-based payments (continued)

Recognition and measurement (continued)

Vesting conditions that are linked to the price of shares of the Company (market conditions) are taken into account when determining the fair value of equity settled transactions. Other vesting conditions such as service conditions are excluded from the measurement of fair value but are considered in estimating the number of investments that may ultimately vest.

The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled ("the vesting period").

The charge to the Statement of Profit or Loss for the period is the cumulative amount as calculated above less the amounts already recognised in previous periods. There is a corresponding entry to equity.

Accounting estimates and judgements

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined by an external specialist using an option pricing model, based off the assumptions detailed above.

25 Remuneration of auditors

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

(a) PricewaterhouseCoopers

	2018 \$	2017 \$
Audit and other assurance services
Audit and review of financial statements	510,920	511,940
Other assurance services
Assurance related services	-	140,413
Total remuneration for audit and other assurance services	510,920	652,353
Taxation services
Tax compliance services	-	89,391
Tax advisory services	8,670	402,939
Total remuneration for taxation services	8,670	492,330
Total remuneration of PricewaterhouseCoopers	519,590	1,144,683

25 Remuneration of auditors (continued)

(b) Non-PricewaterhouseCoopers related audit firms

	2018	2017
	\$	\$
Audit and other assurance services
Other assurance services
Internal audit services	168,971	114,348
Other assurance services	259,965	20,000
Total remuneration for audit and other assurance services	428,936	134,348
Taxation services
Tax compliance services	397,215	111,861
Tax advisory services	254,242	291,424
Total remuneration for taxation services	651,457	403,285
Total remuneration of non-PricewaterhouseCoopers audit firms	1,080,393	537,633
Total auditors' remuneration	1,599,983	1,682,316

It is the Group's policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where PricewaterhouseCoopers's expertise and experience with the Group are important. These assignments are principally tax advice and due diligence on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the Group's policy to seek competitive tenders for all major consulting projects.

26 Deed of cross guarantee

Evolution Mining Limited and those entities identified in note 27 are parties to a deed of cross guarantee under which each Company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and Directors' Report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.

The companies identified above represent a 'closed group' for the purposes of the Class Order, and as there are no other parties to the deed of cross guarantee that are controlled by Evolution Mining Limited, they also represent the 'extended closed group'.

The Consolidated Balance Sheet, Consolidated Statement of Profit or Loss and Other Comprehensive Income, and summary of movements in consolidated retained earnings for the year ended 30 June 2018 of the closed group is equal to the Consolidated Balance Sheet, Consolidated Statement of Profit or Loss and Other Comprehensive Income, and Consolidated Statement of Changes in Equity of the Group.

27 Interests in other entities

(a) Significant investments in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in accordance with the accounting policy described below:

			Equity holding
	Country of		2018	2017
Name of entity	incorporation	Class of shares	%	%
Evolution Mining Management Services Pty Ltd	Australia	Ordinary	100	100
Conquest Mining Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Edna May Ops Pty Ltd (i) (ii)	Australia	Ordinary	-	100
Mt Rawdon Operations Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Westonia Mines Minerals Pty Ltd (i)	Australia	Ordinary	100	100
Lion Selection Pty Ltd (i)	Australia	Ordinary	100	100
Auselect Pty Ltd (i)	Australia	Ordinary	100	100
Lion Mining Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Sedgold Pty Ltd (i)	Australia	Ordinary	100	100
Fernyside Pty Ltd (i)	Australia	Ordinary	100	100
Evolution Tennant Creek Pty Ltd (ii)	Australia	Ordinary	100	100
Evolution Mining NZ Pty Ltd (ii)	Australia	Ordinary	100	100
Evolution Mining (Cowal) Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Evolution Mining Mungari Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Toledo Holding (Ausco) Pty Ltd (i)	Australia	Ordinary	100	100
Evolution Mining (Mungari East) Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Evolution Mining (Phoenix) Pty Limited (i) (ii)	Australia	Ordinary	100	100
Hayes Mining Pty Ltd (i)	Australia	Ordinary	100	100
Evolution Mining (Aurum 2) Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Evolution Mining (Connors Arc) Pty Ltd (i) (ii)	Australia	Ordinary	100	-
Evolution Mining (Canada Holdings) Ltd (ii)	Canada	Ordinary	100	-
Evolution Mining Management Services (Canada) Ltd (ii)	Canada	Ordinary	100	-

(i) These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order 98/1418 issued by the Australian Securities and Investments Commission. For further information refer to note 26.

(ii) These entities are considered to be the material controlled entities of the Group. Their principal activities are identifying, developing and operating gold related projects.

Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of business.

28 Parent entity financial information

The financial information for the parent entity, Evolution Mining Limited has been prepared on the same basis as the consolidated financial statements.

(b) Summary financial information

The individual financial statements for the parent entity show the following aggregate amounts:

	30 June	30 June
	2018	2017
	\$'000	\$'000
Balance sheet
Space Assets
Current assets	316,591	27,659
Non-current assets	2,065,188	2,385,766
Total assets	2,381,779	2,413,425
Liabilities
Current liabilities	158,438	101,283
Non-current liabilities	294,284	406,690
Total liabilities	452,722	507,973
Net assets	1,929,057	1,905,452
Shareholders' equity
Space Issued capital Reserves	2,183,727	2,183,727
Fair Value revaluation reserve	1,131	3,042
Share based payment reserve	45,566	37,075
Accumulated losses	(301,367)	(318,392)
Total equity	1,929,057	1,905,452
Statement of Profit or Loss and Other Comprehensive Income
Space Profit for the year	126,882	82,842
Other comprehensive expense	-	-
Total comprehensive expense	126,882	82,842

(c) Guarantees entered into by the parent entity

The parent entity has provided bank guarantees, as detailed in note 19.

(d) Contingent liabilities of the parent entity

The parent entity did not have any contingent liabilities as at 30 June 2018 or 30 June 2017. For information about guarantees given by the parent entity, please see above.

29 Summary of significant accounting policies

(a) Basis of preparation

This financial report is a general purpose financial report, prepared by a for-profit entity, in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB).

The financial report also complies with the International Financial Reporting Standards (IFRS) including interpretations as issued by the International Accounting Standards Board (IASB).

The financial report has been prepared on a historical cost basis, except for derivative financial instruments and available-for-sale assets which have been measured at fair value.

The financial report has been presented in Australian (AU) dollars and all values are rounded to the nearest AU\$1,000 (AU\$'000) unless otherwise stated.

The accounting policies have been consistently applied by all entities included in the Group and are consistent with those applied in the prior year.

(b) Principles of consolidation

The consolidated financial statements include the financial statements of the parent entity, Evolution Mining Limited, and its controlled entities (referred to as 'the Consolidated Entity' or 'the Group' in these financial statements). A list of significant controlled entities (subsidiaries) is presented in note 27.

Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one of more of the three elements of control. Specifically the Group controls an investee if, and only if, the Group has all of the following:

• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its control over the investee to affect its returns.

Non- controlling interests in the results and equity of the entities that are controlled by the Group is shown separately in the Statement of Profit or Loss or Other Comprehensive Income, Balance Sheet and Statement of Changes in Equity respectively.

(c) Foreign currency translation

(i) Functional and presentation currency

The presentation currency of the Group is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

(ii) Transactions and balances

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. The subsequent payment or receipt of funds related to a transaction is translated at the rate applicable on the date of payment or receipt. Monetary assets and liabilities are denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

All exchange differences in the consolidated financial statements are taken to the Statement of Other Comprehensive Income and accumulated in a reserve.

29 Summary of significant accounting policies (continued)

(c) Foreign currency translation (continued)

(iii) Translation

The assets and liabilities of subsidiaries with functional currency other than Australian dollars (being the presentation currency of the Group) are translated into Australian dollars at the exchange rate at the reporting date and the Statement of Profit or Loss is translated at the average exchange rate for the period. On consolidation, exchange differences arising from the translation of these subsidiaries are recognised in Other Comprehensive Income and accumulated in the foreign currency translation reserve.

(d) Intangible assets

(i) Mining tenements, mining rights and mining information

Mining tenements have a finite useful life and are carried at cost less, where applicable, any accumulated amortisation and accumulated impairment losses. The carrying values of mining tenements and mining rights are reviewed to ensure they are not in excess of their recoverable amounts. Amortisation of mining tenements and mining rights commences from the date when commercial production commences or in the case of the acquisitions, from the date of acquisition and is charged to the profit or loss. Mining tenements are amortised over the life of the mine using units of production basis in ounces.

Mining information has a finite useful life and is carried at cost less accumulated amortisation. Mining information amortisation is recognised over the period that the information is expected to remain relevant.

The amortisation of the above intangibles is classified as a cost of sale.

30 New accounting standards

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2018 reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new standards and interpretations is set out below.

Title of standard	Nature of change	Impact	Mandatory application date/ Date of adoption by group
AASB 15 Revenue from Contracts with Customers	The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers contracts for goods and services and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer. The standard permits either a full retrospective or a modified retrospective approach for the adoption.	Management has assessed the effects of applying the new standard on the group's financial statements and on the recognition of revenue derived through the sale of gold and concentrate. Management have concluded that there is no material impact in the treatment of revenue recognition following transition to AASB 15. The new standard introduces new disclosure requirements. These are expected to change the nature and extent of the group's disclosures with regards to revenue particularly in the year of the adoption of the new standard.	Mandatory for financial years commencing on or after 1 January 2018.

30 New accounting standards (continued)

Title of standard	Nature of change	Impact	Mandatory application date/ Date of adoption by group
AASB 9 Financial Instruments	AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets.	The group has reviewed its financial assets and liabilities and is expecting the following impact from the adoption of the new standard on 1 July 2018: Financial assets held by the group are broken down as follows: • Equity instruments currently classified as Available For Sale (AFS) for which a Fair Value through Other Comprehensive Income (FVOCI) election is available; • Cash and cash equivalents including current accounts and short-term term deposits, and; • Trade receivables currently held at cost, to be measured at amortised cost under the classification conditions for AASB 9. The group does not expect the new guidance to affect the classification and measurement of these financial assets. However, gains or losses realised on the sale of financial assets designated as FVOCI will no longer be transferred to profit or loss on sale, but instead reclassified below the line from the FVOCI reserve to retained earnings. During the 2018 financial year, no gains or losses were recognised in profit or loss in relation to the disposal of available-for-sale financial assets. There will be no impact on the group's accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the group does not have any such liabilities. The derecognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed. The new hedge accounting rules under AASB 9 have no impact as the group is not currently hedge accounting. The new impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses as is the case under AASB 139. It applies to financial assets classified at amortised cost, debt instruments measured at FVOCI, contract assets under AASB 15 Revenue from Contracts with Customers, lease receivables, loan commitments and certain financial guarantee contracts. Based on the assessments undertaken to date, the group expects no impact on the allowances for trade receivables or cash and cash equivalents as the only applicable financial assets. The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extent of the group's disclosures about its financial instruments particularly in the year of the adoption of the new standard.	Must be applied for financial years commencing on or after 1 January 2018. The group will apply the new rules retrospectively from 1 July 2018, with the practical expedients permitted under the standard. Comparatives for FY18 will not be restated.

30 New accounting standards (continued)

Title of standard	Nature of change	Impact	Mandatory application date/ Date of adoption by group
AASB 16 Leases	AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases.	The standard will affect primarily the accounting for the Group's operating leases. As at the reporting date, the Group has non-cancellable operating lease commitments of \$25.076 million, see note 20. To date, the group has focussed on the provisions of the standard that will most impact the financial results. Below is a summary of the work performed and the assessed impact of the new standard: • Data gathering: Site and group data has been collated related to contracts that may contain a lease.	Mandatory for financial years commencing on or after 1 January 2019. At this stage, the Group does not intend to adopt the standard before its effective date.
		• Data integrity and analysis: a number of the identified contracts are covered by the exception for short-term and low-value leases and some commitments may relate to arrangements that will not qualify as leases under AASB 16.	The group intends to apply the modified retrospective transition
		• Modelling of transition options: Review of the transition options indicates that there is not a material difference to the group between the three transition methodologies. Accordingly, the group intends to apply the modified retrospective transition approach.	approach and will not restate comparative amounts for the year prior to first adoption.
		• Financial reporting: Preliminary review results indicate that under the requirements of AASB 16, a lease asset and liability would be recorded on balance sheet of approximately \$20m-\$25m if the standard applied at 30 June 2018.
		Work will continue during FY19 on the implementation of processes and systems prior to the effective date of 1 July 2019.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Director's Declaration

In the Directors' opinion:

• (a) the financial statements and notes set out on pages 105 to 149 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standard, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
• (ii) giving a true and fair view of the consolidated entity's financial position as at 30 June 2018 and of its performance for the year ended on that date, and
• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
• (c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note 26 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 26.

Note 29(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of Directors.

Jacob (Jake) Klein Executive Chairman

Sydney

Andrea Hall Chair of the Audit Committee

Independent Auditor's Report to the Members

Independent auditor's report Our opinion

To the members of Evolution Mining Limited In our opinion:

Report on the audit of the financial report The accompanying financial report of Evolution Mining Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including:

Our opinion a) giving a true and fair view of the Group's financial position as at 30 June 2018 and of its financial performance for the year then ended

In our opinion:

The accompanying financial report of Evolution Mining Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited

• a) giving a true and fair view of the Group's financial position as at 30 June 2018 and of its financial performance for the year then ended The Group financial report comprises: • the consolidated statement of profit or loss and other comprehensive income for the year ended 30
• b) complying with Australian Accounting Standards and the Corporations Regulations 2001. June 2018

What we have audited • the consolidated statement of changes in equity for the year then ended

The Group financial report comprises: • the consolidated statement of cash flows for the year then ended

• the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2018 • the notes to the consolidated financial statements, which include a summary of significant accounting policies
• the consolidated balance sheet as at 30 June 2018 • the directors' declaration.
• the consolidated statement of changes in equity for the year then ended
• the consolidated statement of cash flows for the year then ended Basis for opinion
• the notes to the consolidated financial statements, which include a summary of significant accounting policies We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial report section
• the directors' declaration. of our report.

Basis for opinion We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial report section of our report. opinion. Independence

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with

We are independent of the Group in accordance with the auditor independence requirements of the

Independence the Code.

We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

PricewaterhouseCoopers, ABN 52 780 433 757

One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

PricewaterhouseCoopers, ABN 52 780 433 757 Liability limited by a scheme approved under Professional Standards Legislation.

Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates.

• For the purpose of our audit we used overall Group materiality of \$19.9 million, which represents approximately 2.5% of the Group's earnings before interest, tax, depreciation and amortisation (EBITDA).
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole.
• We chose EBITDA because, in our view, it is the benchmark against which the performance of the Group is most commonly measured.

• Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events.

• Our audit procedures were predominantly performed at the Group's corporate office in Sydney. We also conducted site visits to the Mt Carlton mine site.

Materiality Audit scope Key audit matters

• Amongst other relevant topics, we communicated the following key audit matters to the Audit Committee:
• − Valuation of assets at Mungari and Cowal
• − Assessment of the carrying value of assets
• These are further described in the Key audit matters section of our report.

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context.

Key audit matter	How our audit addressed the key audit matter
Valuation of assets held at Mungari and
Cowal (Refer to note 3, 7 and 8)	We have performed the following procedures,
	amongst others, to assess the valuations and associated accounting and tax impact:

The Group obtained external valuations of the open cut pit mine development and property, plant and equipment at Cowal and the open cut pit and underground mine development at Mungari. The valuations were conducted principally to obtain accurate values for the assets to support the Group's income tax positions.

The resulting consequence of the valuations are as follows:

• A current year balance sheet reclassification of \$90.5 million from Property, Plant and Equipment to Mine Development, with a resulting \$2.9 million of additional mine development amortisation recognised in the current year,
• A reduction in income tax expense for the current year of \$22.7m due to net additional tax values of the assets.

This was a key audit matter because of the:

• Inherent subjective nature and judgment involved in the assumptions applied with valuations
• Relative size of Mine Development and Property, Plant and Equipment balance in the consolidated balance sheet
• Significant judgement involved in assessing the tax position taken and the quantum of the additional tax benefit obtained as a result of the valuations performed.

associated accounting and tax impact:

For the external valuations we:

• read the valuation reports and considered the approach applied by the external valuer,
• assessed the competency and capabilities of the external valuer,
• read the valuer's terms of engagement and did not identify any terms that might affect their objectivity or impose limitations on their work relevant to the valuation,
• Agreed the impact of the valuations to the Group's accounting records.

For the associated accounting impact, we recalculated the accuracy of the balance sheet reclassification and the resulting additional depreciation recognised as a result of the reclassification.

For the associated tax consequences we, in conjunction with our tax experts:

• examined position papers prepared by management
• held various discussions with management to discuss tax positions and approach in relation to the valuations performed and proposed amendments to prior tax returns.

Key audit matter	How our audit addressed the key audit matter
Assessment of the carrying value of assets (Refer to note 7 and 8)	We evaluated the Group's assessment of indicators of impairment or reversal of impairment and its conclusion not to recognise an impairment or
At 30 June 2018, the Group held mine development and exploration assets of \$1,744 million and property, plant and equipment of \$572 million. In line with the requirements of AASB 136, the	impairment reversal. In particular, we assessed the appropriateness of the impairment assessment that no internal or external indicators of impairment exist by evaluating the current year financial performance
Group has assessed whether there is an indication that an asset may be impaired. This assessment considered performance against budget, adverse	of each CGU and the budget and forecast as well as evaluating external market data.
changes in the business or regulatory environment and changes to other key assumptions that affect cash flows and discount rates. The Group identified	In regards to the impairment reversal for Mt Carlton, we performed the following:
no indicators of impairment for any Cash Generating Unit ("CGU").	• compared the current year US\$ gold prices to the US\$ gold prices when the impairment occurred
AASB 136 also requires an assessment at each reporting date whether there is an indication that an impairment loss recognised in prior periods may no longer exist or may have decreased. If any	• compared current gold price forecasts to gold price forecasts when the impairment occurred
such indication exists, the Group shall determine whether all or part of the prior impairment loss need to be reversed.	• considered the Group's calculations of recoverable amount, including sensitivities of key assumptions, and compared them to the carrying value of the Mt Carlton assets
The Group previously recognised impairment losses of \$148.6 million relating to the carrying value of Mt Carlton's non-current assets in 2013 as a result of the fall in the gold price combined with a compression of valuations in the gold industry.	• analysed market data for recent gold mine transactions and compared to the carrying value of the Mt Carlton assets.
The Group performed an assessment of whether to reverse a portion of the previously recognised impairment losses related to Mt Carlton up to the carrying amount that would have been determined (net of amortisation) had no impairment loss been recognised. The assessment focused on changes in macro-economic factors, operating and financial performance for the period, and updates to mine plans. The Group anticipates continued strong performance at Mt Carlton which, together with the wider recovery of some gold prices, provides evidence that conditions leading to its past impairment may no longer be present. This is an indicator that the mine assets should be considered	We also evaluated the adequacy of the disclosures made in the note 8 in light of the requirements of Australian Accounting Standards.

The assessment of the carrying values of assets was a key audit matter due to the significant judgement involved in the determination as to whether or not an impairment charge or reversal relating to an asset or CGU is required.

Other information

The directors are responsible for the other information. The other information included in the Group's annual report for the year ended 30 June 2018 comprises the Director's Report (but does not include the financial report and our auditor's report thereon), which we obtained prior to the date of this auditor's report. We also expect other information to be made available to us after the date of this auditor's report.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor's report.

Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 86 to 101 of the directors' report for the year ended 30 June 2018.

In our opinion, the remuneration report of Evolution Mining Limited for the year ended 30 June 2018 complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

PricewaterhouseCoopers

Marc Upcroft Sydney Partner 17 August 2018

Shareholder Information

Capital (as at 27 September 2018)

Share Capital	1,696,675,463
Ordinary shareholders	20,548
Shareholdings with less than a marketable parcel of \$500 worth of ordinary shares	966
Market price	A\$2.64

Distribution of Fully Paid Shares (as at 27 September 2018)

Range	Securities	%	No. of Holders	%
100,001 and Over	1,548,337,088	91.26	274	1.33
10,001 to 100,000	99,082,246	5.84	3,855	18.76
5,001 to 10,000	24,876,915	1.47	3,311	16.11
1,001 to 5,000	21,771,833	1.28	7,963	38.75
1 to 1,000	2,607,381	0.15	5,145	25.04
Total	1,696,675,463	100.00	20,548	100.00
Unmarketable Parcels	47,402	0.00	966	4.70

Substantial Shareholders (as at 27 September 2018)

	Fully Paid Ordinary Shares
	Number	%
La Mancha Group International BV	161,891,807	9.54
Van Eck Global	237,760,469	14.01
Total	399,652,276	23.55%

Shareholder Information (continued)

Twenty Largest Shareholders (as at 27 September 2018)

	Fully Paid Ordinary Shares
Name	Current balance	Issued capital %
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	634,465,783	37.39
J P MORGAN NOMINEES AUSTRALIA LIMITED	341,212,175	20.11
CITICORP NOMINEES PTY LIMITED	276,587,196	16.30
NATIONAL NOMINEES LIMITED	75,623,736	4.46
BNP PARIBAS NOMINEES PTY LTD	33,312,932	1.96
BNP PARIBAS NOMS PTY LTD	18,573,836	1.09
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA	14,345,892	0.85
BRISPOT NOMINEES PTY LTD	12,550,549	0.74
CITICORP NOMINEES PTY LIMITED	9,264,513	0.55
NATIONAL NOMINEES LIMITED	8,851,406	0.52
ROXI PTY LIMITED	7,337,371	0.43
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	6,639,806	0.39
SMARTEQUITY EIS PTY LTD	5,428,171	0.32
AMP LIFE LIMITED	4,777,489	0.28
LUJETA PTY LTD	4,428,723	0.26
UBS NOMINEES PTY LTD	4,189,751	0.25
PACIFIC CUSTODIANS PTY LIMITED	4,052,188	0.24
ZERO NOMINEES PTY LTD	3,880,000	0.23
BNP PARIBAS NOMINEES PTY LTD	3,546,354	0.21
CS THIRD NOMINEES PTY LIMITED	3,343,936	0.20
Total	1,472,411,807	86.78
TOTAL
Balance of Register	1,472,411,807	86.78
Grand TOTAL	224,263,656	13.22
	1,696,675,463	100.00

1.5 Share Buy-Backs

There is no current on-market buy-back scheme.

2. Other Information

Corporate Information

ABN 74 084 669 036

Board of Directors

Jacob (Jake) Klein	Executive Chairman
Lawrence (Lawrie) Conway	Finance Director and Chief Financial Officer
Colin (Cobb) Johnstone	Lead Independent Director
James (Jim) Askew	Non-Executive Director
Graham Freestone	Non-Executive Director
Thomas (Tommy) McKeith	Non-Executive Director
Andrea Hall	Non-Executive Director

Company Secretary

Evan Elstein

Registered Office

Level 24, 175 Liverpool Street SYDNEY NSW 2000

Postal Address

Level 24, 175 Liverpool Street SYDNEY NSW 2000 T: +61 2 9696 2900 F: +61 2 9696 2901

Share Register

Link Market Services Level 12, 680 George Street SYDNEY NSW 2000 T: +61 1300 554 474 F: +61 2 9287 0303 Email: registrars@linkmarketservices.com.au

Auditor

PricewaterhouseCoopers One International Towers Sydney Watermans Quay BARANGAROO NSW 2000 T: +61 2 8266 0000 F: +61 2 8266 9999

Website

www.evolutionmining.com.au

Stock Exchange Listing

Evolution Mining Limited (EVN) shares are listed on the Australian Securities Exchange

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Level 24, 175 Liverpool Street SYDNEY NSW 2000 +61 2 9696 2900 +61 2 9696 2901 ASX: EVN

WWW. EVOLUTIONMINING .COM.AU