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Inspired People Creating Australia’s Premier Gold Company

We are a leading, growth-focused Australian gold miner

We are committed to deliver long-term stakeholder value through safe, lowcost gold production in an environmentally and socially responsible manner.

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ERNEST HENRY
(Economic interest
100% future gold
30% future copper and silver
from agreed life of mine area)
MT CARLTON
(100%)
Darwin
Townsville
Rockhampton
MT RAWDON
(100%)
Brisbane
CRACOW
(100%)
Perth
Sydney
Melbourne
MUNGARI
COWAL
(100%)
(100%)
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Executive Chairman’s Report 4 SustainabilityReport 6 Our People 1 7 Environment 24 Social Responsibility 31 Sustainability Performance Data 36 Chief OperatingOfcer’s Review 42	Innovation and Asset Optimisation 48
	Discovery 52
	Mineral Resources and Ore Reserves 56
	Chief Financial Ofcer’s Review 61
	Annual Financial Report 67
	Shareholder Information 149
	Corporate Information 153

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Our story

In 2010, an opportunity was identified to fill a vacuum in the Australian gold mining sector by creating a new mid-tier gold producer.

Executive Chairman and founder, Jake Klein, with the assistance of a small management team, pursued a series of bold and complex deals to form Evolution in November 2011.

Since then, we’ve weathered some storms and by delivering a reliable operating performance and executing on a clear strategy of upgrading the quality of the asset portfolio, Evolution has grown to become a leading global mid-tier gold mining company.

We are now one of the lowest cost gold producers in the world and have built a business that will prosper through the cycle.

Evolution Mining Limited Annual Report 2019

FY19 highlights

Continued delivery

Sector leading cash generation

ACHIEVED PRODUCTION GUIDANCE

8YEARS

OPERATING MINE CASH FLOW

A$771M

2ND LOWEST COST GOLD PRODUCER IN TOP 10 GOLD MINERS ( VAN ECK GOLD MINER INDEX [GDX])

AISC[1] A$924/OZ

FY19 GOLD PRODUCTION

753KOZ

FY20 GUIDANCE 725-775KOZ

NET MINE CASH FLOW

A$498M

A$2B OF NET MINE CASH FLOW BETWEEN FY15-19

FULLY FRANKED 13TH CONSECUTIVE DIVIDENDS DIVIDEND A$127M A$459M

2ND HIGHEST EBITDA MARGIN IN TOP 10 GDX

48%

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History of creating value
554%
95%
26%
1 YEAR 3 YEARS 5 YEARS
TOTAL SHAREHOLDER RETURN [2]
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Group delivering strong EBITDA margins

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----- Start of picture text -----

FY19 48%
FY18 [3] 53%
FY17 [3] 49%
FY16 46%
FY15 40%
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Includes C1 cash cost, plus royalties, sustaining capital, general corporate and administration expense. Calculated per ounce sold
TSR for period ending 30 June 2019
FY18 excludes Edna May, FY17 excludes Pajingo

Evolution Mining Limited Annual Report 2019

FY19 highlights (continued)

Sustainable long-life asset portfolio

Innovative culture

GROUP AVERAGE ORE RESERVE LIFE

~ 10YEARS

MINERAL RESOURCES 480KOZ

TOTAL 14.73MOZ

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CONTRIBUTION TO AUSTRALIAN ECONOMY

ORE RESERVES 410KOZ

TOTAL

7.46MOZ

A$1.28B

FAST FIRST AND EARLY ADOPTER OF NEW TECHNOLOGIES DRIVING ASSET OPTIMISATION TO IMPROVE SAFETY AND EFFECIENCY

SIGNIFICANT INVESTMENT IN COWAL TO EXTEND MINE LIFE AND INCREASE PRODUCTION TO ABOVE

300KOZPA

SHARED VALUE PROJECTS

Continuing to deliver MROR growth

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----- Start of picture text -----

14.73
14.18 14.24
14.01
7.27
7.19 7.19
5.08.16
5.0
2.76 6.99 7.05 7.46
5.85
2.24
DEC 14 DEC 15 DEC 16 DEC 17 DEC 18
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Continuing to increase returns to shareholders
9.5
7.5
5
3
2
2 459
1 298
171
87
21 43
7
FY13 FY14 FY15 FY16 FY17 FY18 FY19
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ORE RESERVES (Moz) MINERAL RESOURCES (Moz)

CULMINATING DIVIDENDS CENTS PER SHARE DECLARED A$M (PRE-DRP)

The FY19 dividend was paid on 27 September 2019

See website for details on Mineral Resources and Ore Reserves at (MROR) December 2018

3 Evolution Mining Limited Annual Report 2019

Executive Chairman’s Report

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Inspired people creating Australia’s premier gold company

On behalf of the Board of Directors of Evolution Mining Limited, I am proud to present you with the Company’s 2019 Annual Report. This incorporates our annual Sustainability Report which supports our objective to deliver long-term stakeholder value through safe, low-cost gold production in an environmentally and socially responsible manner.

I am pleased to report that we delivered another strong performance from our quality portfolio of assets in the 2019 Financial Year.

Evolution was formed in 2011 at a time when nearly three quarters of Australia’s annual gold production was owned by foreign operators. From the very beginning we developed a clear and consistent strategy to capitalise on what we felt would be a transformational period in the Australian gold industry. We set out to build and upgrade the quality of our asset portfolio and become a globally relevant, mid-tier Australian gold company that prospers through the cycle.

In the years that followed we had the courage to act countercyclically to acquire great assets from offshore companies which found themselves divesting mines in Australia to repair their balance sheets. Through focus and commitment, we have added significant value to these operations which now cornerstone our portfolio.

Today we are a very different company, but our vision and strategy has not changed.

In FY19 we produced 753,001 ounces of gold at an All-in Sustaining Cost (AISC) of A$924 per ounce (US$661/oz). This ranks Evolution as one of the lowest cost gold producers in the world.

No amount of financial or operational success is worth anything if we can’t keep our people safe. In FY19 the Total Recordable Injury Frequency (TRIF) rose to 8.3 (30 June 2018: 5.5). We are disappointed with this performance and people across all of our sites and offices have refocused their efforts on embedding behavioural safety initiatives to drive improvements. On a positive note, we have seen an improvement in the reporting culture, a reduction in the severity of injuries, and improved responsiveness to investigating significant incidents and implementing corrective actions.

With the Australian dollar gold price trading around record highs, there is no doubt that it’s a fantastic time to be an Australian gold producer. But if history is any guide, we are entering a challenging period if we wish to remain a credible and margin focused business. As has been the case in past cycles, we are already seeing signs of cost inflation creeping back into the industry. At Evolution we dare to be different. We cannot use industry headwinds as an excuse and concede higher costs are inevitable. The vast majority of our cost base is within our control, and we must continue to be laser focused on finding innovative ways to reduce or at least maintain our low-cost base.

During the last five years we have generated over A$1.5 billion in free cash flow which has enabled us to repay A$910.0 million of debt, return A$345.0 million in dividends to our shareholders, and grow our cash balance by over A$300.0 million. This was all achieved with Mungari and Cowal being in the portfolio for around four years and Ernest Henry’s contribution has been for less than three years. This was also with a weighted average gold price of A$1,638 per ounce which is substantially below the current spot price.

Our Mineral Resources and Ore Reserves are perhaps the best gauge of the sustainability of this cash generation. In FY19 we were again successful at adding to resources and reserves after allowing for mining depletion. Over the last five years our discovery budget has grown from A$20.0 million to more than A$80.0 million, our average reserve life has increased from five years to ten years, and reserves per share have increased by 42%. It’s important to note that we use a very conservative A$1,350 per ounce to estimate Ore Reserves and A$1,800 per ounce to estimate Mineral Resources.

In 2019 Evolution reported a record statutory net profit of A$218.2 million. This was achieved on the back of operating mine cash flow of A$771.5 million, net mine cash flow of A$497.8 million, and Group free cash flow of A$291.6 million. These continued strong results moved the balance sheet to a net cash position and allowed us to further increase the final dividend declared in August 2019 by 50% to 6 cents per share fully franked.

Our portfolio of assets again demonstrated the benefits of diversification, delivering another consistent operational performance. We continue to focus on the transformation and effectiveness of our business with our innovation pipeline delivering a number of projects into operating phase including the high intensity grinding mill at Cracow, the Float Tails Leach plant at Cowal and tele-remote drilling at Mt Rawdon.

Cowal continued to deliver reliable, low-cost production with 251,500 ounces of gold produced at an AISC of A$995 per ounce. Mt Carlton also had another strong year with production of 106,646 ounces at an AISC of A$737 per ounce. Ernest Henry continued to be an impressive contributor to the portfolio, producing 98,689 ounces of gold at an AISC of A$(539) per ounce to generate net mine cash flow of A$222.2 million.

We continue to invest capital in projects that improve our business and generate an appropriate return on our shareholders’ funds. In FY19 capital expenditure totalled

Evolution Mining Limited Annual Report 2019

Executive Chairman’s Report (continued)

A$273.6 million of which A$180.5 million was major capital. The main major capital projects included the Cowal Stage H development, Float Tails Leach and E46 land acquisition costs; underground mine development at Cracow, Mt Carlton and Mungari; and capital waste stripping at Mt Carlton and Mt Rawdon.

In the current environment we believe focusing on organic growth opportunities within our business and earlier stage opportunities presents a tremendous opportunity to create shareholder value. Since Glen Masterman joined Evolution three years ago to head our Discovery team, he has been building out our discovery strategy, defining our strengths and targets, assembling a fantastic team and building momentum in this critical area. We currently have three earlier stage joint ventures and a number of others in the pipeline. We have committed to spend A$80.0 – A$105.0 million on discovery in FY20 which is almost double what we spent in FY19 and multiples of any previous year. Drilling at Cowal, Mungari and across our Greenfields projects are expected to consume the lion’s share of the FY20 Discovery budget.

Mining is often portrayed negatively in many corners of the mainstream media. As an industry we must get better at articulating the enormous contribution our industry has made to Australia’s past economic prosperity and the importance of our sector to its future. At Evolution alone, in only the 12 months in FY19, we contributed around A$1.28 billion dollars to the Australian economy and provided much needed jobs in our country’s regional areas. Importantly, we have nine shared value projects underway which are designed to create a tangible, sustainable legacy in our communities beyond the life of the mine. The communities in which we operate and our employees are potentially our most powerful advocates. We need to continually work to demonstrate that we are worthy of their support and trust.

Across our entire business our people continued to work incredibly hard during FY19 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.

In particular, I would like to highlight the contribution from Aaron Colleran, who left Evolution during the year. As VP Business Development and Investor Relations Aaron played a very important role in the establishment and development of Evolution, was a key member of the Leadership team, and was instrumental in positioning Evolution’s portfolio as one of the lowest cost producers in the world. I would also like to thank Graham Freestone who is stepping down from the Board at the end of this year. Graham has been a member of the Board since the Company’s formation in 2011 and has made a significant contribution to Evolution’s growth over the years. My sincere thanks go to both Aaron and Graham.

Evolution remains focused on prioritising margins over production growth and is forecasting Group gold production in FY20 of 725,000 – 775,000 ounces at an AISC in the range of A$890/oz – A$940/oz.

Evolution has a strong platform of high-quality assets with an average reserve life of approximately ten 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 from the current gold price environment and through the cycle.

Yours faithfully

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JAKE KLEIN EXECUTIVE CHAIRMAN

At Evolution we dare to be different

5 Evolution Mining Limited Annual Report 2019

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Sustainability Report

Evolution Mining Limited Annual Report 2019

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Evolution Mining Limited Annual Report 2019

Sustainability Report

2019 achievements

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SAFETY

IMPROVEMENT in reporting culture
REDUCTION in severity of incidents
HSE SYSTEM and Critical Control verification audits conducted at each asset
ZERO FATALITIES

ENVIRONMENTAL

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DIVERSITY

50% FEMALE graduate INTAKE (30% target)
39% FEMALE SUMMER VACATION interns (25% target)
14.7% FEMALE WORKFORCE
Enhanced flexible work arrangements offering and helping parents return to work
4.8% of our employees identify as ABORIGINAL OR TORRES STRAIT ISLANDER

SOCIAL RESPONSIBILITY

Four new SHARED VALUE PROJECTS
Zero catastrophic or major environmental incidents
Conducted 12 internal environmental network meetings
Four new Environmental Enhancement projects underway

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CONTRIBUTION TO THE AUSTRALIAN ECONOMY

A$1.28B contributed to the Australian economy

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A$92.3M in direct spend with local organisations
54% local employment across our operations

GOVERNANCE

Developed and approved new Sustainability Objective, Policy and Performance Standards
Conducted 24 Tailings Storage Facility Governance meetings over five sites and Group office

A$1.28B

Our second Sustainability Report encompasses Evolution’s sustainability performance for the financial year ending 30 June 2019 (FY19). It covers our mines in New South Wales, Western Australia, Queensland and various exploration activities. We do not report on our partnership project Ernest Henry which we only have a financial stake in and is run by our joint venture partner Glencore. Please see our website and accompanying Annual Report for more information about our Company activities.

8 Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

Our business

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Our vision

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Inspired people creating Australia’s premier gold company – a sustainable business that prospers through the cycle.

Our corporate strategy

A portfolio of six to eight assets generating superior returns with an average mine life of at least 10 years
Build a reputation for sustainability, reliability and transparency
Embed financial discipline across the business
An active pipeline of quality exploration and development projects
Open to all quality gold, silver and copper-gold value accretive investments

Our values

Our values guide our behaviours and decisions in the workplace every day:

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SAFETY
THINK BEFORE WE ACT,
EVERY JOB, EVERY DAY.
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----- Start of picture text -----

EXCELLENCE
WE TAKE PRIDE IN OUR
WORK, DELIVER OUR BEST
AND ALWAYS STRIVE TO
IMPROVE.
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----- Start of picture text -----

RESPECT
WE TRUST EACH OTHER, ACT
HONESTLY AND CONSIDER
EACH OTHER’S OPINION.
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ACCOUNTABILITY IF IT IS MY RESPONSIBILITY, I OWN IT – GOOD OR BAD.

Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

Evolution supply chain

Contractors and suppliers are a crucial part of our business and we rely on them to ensure that we meet our overall operating strategy and maximise efficiencies.

Our supply chain includes but is not limited to:

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Exploration & discovery ■ Drilling contractors ■ Surveying ■ Geology and geophysical contractors ■ Earthmoving contractors ■ Analytical laboratories ■ Environmental and water consultants Support services ■ Camp management services ■ PPE and PPC ■ Power, communication and IT services ■ Medical, health and safety services ■ Insurance ■ Labour supply ■ Employee benefits ■ Water and waste management Mining ■ Underground contractors ■ Fuel, oil and tyre supply ■ Cement supply ■ Blasting software and consultants ■ Explosives supply ■ Mining communications ■ Fleet, maintenance, parts and equipment Processing ■ Shutdown contractors ■ Lab services ■ Supply of grinding media and ■ Civil contractors flocculants ■ Fuel and gas supply ■ Chemical supply

Transportation

Freight services ■ Stevedoring
■ Haulage services ■ Shipping ■ Port services

10 Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

The Executive Chairman on sustainability at Evolution

Welcome to Evolution Mining’s FY19 Sustainability Report. This is the second year we have released a dedicated report outlining the efforts of our people to ensure our business has a sustainable future for our stakeholders. Evolution continues to deliver measurable value for our business and the communities in which we operate by furthering our objective of delivering long-term stakeholder value through safe, low-cost gold production in an environmentally and socially responsible manner.

I am proud that our higher levels of transparency have been recognised with Evolution included in this year’s Dow Jones Sustainability Index Australia. This reflects our commitment to improve Evolution’s performance and reporting on topics of safety, excellence in environmental stewardship, helping our communities thrive and developing our people. This report encapsulates our progress on the most material aspects of these key sustainability areas, with additional detailed information available on our website.

Essential to the sustainability of our business is the safety of our people. We have built a culture that emphasises doing the right thing because people want to, not because they have to. Our ultimate goal is for Evolution to have zero injuries with our people always going home safely to their families. Initiatives this year contributing to this goal include improved reporting culture, a reduction in severity of incidents and the faster completion of significant incident investigations and corrective actions.

Evolution made a significant A$1.28 billion contribution to the Australian economy through our activities. We are particularly proud of our A$92.3 million contribution to regional businesses and organisations in the communities

across Queensland, New South Wales and Western Australia where we operate. Across our operations we source 54% of our employees from local communities, making Evolution and its people a critical part of these regional centres.

We are focused on creating more opportunities for female participation in what has traditionally been a male dominated industry. Our attention has been on increasing female participation rates in our graduate and vacation programs and ensuring we have pathways to strong diversity in the next generation of miners.

We are working hard to effectively manage water and energy, minimise waste and to reduce our environmental footprint. We have mapped out our climate related risks to better understand potential long-term impacts to our business and communities.

Evolution is proud of the progress we have made in FY19 and have laid the foundation for further transparency and policy development in FY20. I would like to acknowledge and thank all of our staff, contractors, and partners for their dedication and ongoing contribution to our sustainability efforts.

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Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

Sustainability governance updates in FY19

Sustainability objective and strategy

The objective of our sustainability efforts is to deliver long-term stakeholder value through safe, low-cost gold production in an environmentally and socially responsible manner.

We are developing a business-driven sustainability strategy and action-based reporting to guide our sustainability efforts over a five-year horizon to be endorsed by our Board of Directors. Integrating our strategy goals and targets within our day-to-day business allows us to realise value through greater clarity and purpose, uncovering opportunities for improvement and understanding how sustainability contributes to our success.

Our near-term strategy focuses on the following key areas:

A safe and supportive workplace and improved safety culture
Excellence in environmental stewardship and a riskbased approach to sustainability and climate change
Helping our communities thrive beyond the life of our mines

In FY19 we continued to improve the transparency of our disclosures. This was recognised with admission to the Dow Jones Sustainability Index (DJSI) Australia which ranked Evolution in the top performing Australian mining companies for corporate sustainability in the annual assessment. Evolution joins only one other gold company recognised in this category.

Sustainability Policy

In FY19 we developed a Sustainability Policy to deliver on our objective. This policy prescribes ten key focus areas that will ensure sustainability is embedded in our decision making at all levels of the organisation.

The policy can be viewed at:

https:/evolutionmining.com.au/env-sustain-policy

Developing effective teams aligned with our approach to diversity and inclusion

The Evolution sustainability ecosystem

Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

United Nations’ Sustainable Development Goals

Our Sustainability Policy is aligned to the United Nations’ Sustainable Development Goals (SDGs), in recognising the role business plays in providing economic growth which underpins health, social, employment and education benefits.

We believe the SDGs are a key inspiration for the future prosperity of our stakeholders and have linked our Sustainability Policy to eight different SDGs.

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Evolution Policy SDG number & name Specific SDG
Foster a safe, diverse GENDER Goal 5: 5.5 Ensure women’s full and effective participation and equal
EQUALITY
and inclu s ive workplace Gender equality opportunities for leadership at all levels of decision making in
political, economic and public life
Demonstrate robust LIFE Goal 15: 15.3 By 2030, combat desertification, restore degraded land
risk management ON LAND Life on land and soil, including land affected by desertification, drought
and environmental and floods, and strive to achieve a land degradation-neutral
stewardship world
Are an employer of DECENT WORK AND Goal 8: 8.3 Prom o t e d evelopment-oriented policies that support
choice, attracting the ECONOMIC GROWTH Decent work and productive activities, decent job creation, entrepreneurship,
most talented people economic growth creativity and innovation, and encourage the formalization
and growth of micro-, small- and medium-sized enterprises,
including through access to financial services
Contribute positively SUSTAINABLE CITIES Goal 11: 11.4 Strengthen efforts to protect and safeguard the world’s
to local, regional and AND COMMUNITIES Sustainable cities cultural and natural heritage
national sustainability and communities
efforts
Protect and enhance RESPONSIBLE Goal 12: 12.B Develop and implement tools to monitor sustainable
our reputation as a CONSUMPTION AND PRODUCTION Responsible development impacts for sustainable tourism that creates jobs
trusted partner and consumption and promotes local culture and products
provide sustainable and production
community benefits
Advance outcomes REDUCED Goal 10: 10.2 By 2030, empower and promote the social, economic and
for Indigenous peoples INEQUALITIES Reduced political inclusion of all, irrespective of age, sex, disability, race,
and protecting cultural inequalities ethnicity, origin, religion or economic or other status
heritage
Respect the human DECENT WORK AND Goal 8: 8.7 Take immediate and effective measures to eradicate forced
rights of all our ECONOMIC GROWTH Decent work and labour, end modern slavery and human trafficking and secure
stakeholders economic growth the prohibition and elimination of the worst forms of child
labour, including recruitment and use of child soldiers, and by
2025 end child labour in all its forms
Be transparent at all PEACE, JUSTICE Goal 16: 16.B Promote and enforce non-discriminatory laws and
levels of Corporate AND STRONGINSTITUTIONS Peace, justice and policies for sustainable development
Governance and comply strong institutions
with applicable laws and
regulations
Operate at the highest PEACE, JUSTICE Goal 16: 16.3 Promote the rule of law at the national and international
standards of financial AND STRONGINSTITUTIONS Peace, justice and levels and ensure equal access to justice for all
and ethical behaviour strong institutions
Foster an innovative INDUSTRY, INNOVATION Goal 9: 9.4 By 2030, upgrade infrastructure and retrofit industries to
culture relentlessly AND INFRASTRUCTURE Industry, make them sustainable, with increased resource-use efficiency
driving operational innovation and and greater adoption of clean and environmentally sound
excellence infrastructure technologies and industrial processes, with all countries taking
action in accordance with their respective capabilities
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Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

Sustainability Performance Standards

In FY19 we developed a set of Sustainability Performance Standards that support Evolution’s Sustainability Policy by prescribing the minimum requirements that every Evolution asset (operations, exploration projects and offices) must meet to manage threats associated with specific activities or tasks. Equally we seek to identify opportunities that have the potential to drive value creation for both Evolution and the communities in which we operate.

The standards prescribe ‘what’ each asset must do, then each asset will determine ‘how’ they will meet or exceed the standard. Each asset will be conducting a gap analysis over the first six months of FY20 and the expectation is that by the end of FY20 we will be 95% compliant with all Sustainability Standards. A monthly steering committee will review progress, raise any issues and highlight the wins along the way. The full standards can be found on our website in the Governance section: https://evolutionmining. com.au/corporate-governance/. We will report progress in our FY20 Sustainability Report.

Reporting what matters to our stakeholders

We believe that trusting and reciprocal relationships are the foundation for creating shared value outcomes and ensuring we consistently earn our social licence to operate.

Maintaining high quality stakeholder relationships ensures mutually beneficial outcomes are driven throughout all of our sustainability initiatives and minimises preventable costs and delays.

Every Evolution operation and exploration site has a targeted plan for partnering with local and regional stakeholders to generate shared value. Each plan is developed following a review of:

Key social responsibility issues and opportunities
Analysis of the local stakeholder context
Support of strategic operational and exploration objectives for that site and for Evolution
The life of mine

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What our stakeholders are telling us

Our central method for collecting feedback from stakeholders is our biennial Stakeholder Perception Survey. To ensure this is a robust and comprehensive feedback mechanism, we partner with Deloitte to perform:

100 in-depth telephone interviews with stakeholders across our five mine sites
300 public opinion surveys conducted with 60 randomly selected residents in close proximity of our five operations

14 Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

Evolution’s stakeholder mix

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Evolution Mining Limited Annual Report 2019

Sustainability Report (continued)

This report is centred on economic, social and environmental topics that were identified as material to our stakeholders and business through a materiality workshop and builds on disclosures in our FY18 Sustainability Report. The material topics identified were:

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Material topics Page Number(s)
Heath, safety and wellbeing 18-20, 37
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Material topics Heath, safetyand wellbeing	Page Number(s) 18-20, 37
Local communities	32-35, 39-40
Climate change	26
Traditional custodians Procurement practices	35, 38 10, 39-40
Efuents and waste	29, 39
Economic performance	32, 40
Water	26-39
Biodiversity	28
Energy use and emissions	26, 38
Mine closure and rehabilitation	29
Employment	21-23, 37-38

Benchmarking and memberships

Evolution participates in benchmarking assessments including indices such as the Dow Jones Sustainability Index assessment and memberships with key bodies. Together with our commitments, partnerships and stakeholder feedback, these assessments and memberships allow us to track performance against relevant standards and peers to ensure continual improvement.

Corporate Governance

Evolution supports the intent of the ASX Corporate Governance Council’s Principles and Recommendations (4th Edition) and meets specific requirements unless

disclosed otherwise. Our full Corporate Governance Statement is available in the Corporate Governance section of our website at http://evolutionmining.com.au/corporategovernance

Risk management

The Group manages risk 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 & Sustainability 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 area of Sustainability.

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.

Supporting documents:

Risk and Sustainability Committee Charter: https://evolutionmining.com.au/risk-sustain-charter/

Risk Management Policy https://evolutionmining.com.au/risk-management-policy/

Sustainability Performance Standards https://evolutionmining.com.au/wp-content/ uploads/2019/08/20190715-GRP-STD-SustainabilityPerformance-Standards.pdf

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GROUP
LEADERSHIP
TEAM
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Evolution Mining Limited Annual Report 2019

Our People

Sustainability Report (continued)

Safety

Evolution is committed to providing a healthy and safe workplace and target an injury free work environment for all personnel.

Evolution is committed to high standards of safety leadership for employees, contractors and the communities in which we operate. Mining activities by their nature have the potential to impact the safety of people and all risks must be identified, evaluated and managed to mitigate all identified actual and potential adverse impacts so far as reasonably practical.

Our safety target is to achieve an injury and occupational disease-free workplace by ensuring hazards are identified and managed at the source, all safety incidents are thoroughly investigated, learnings shared, and corrective actions implemented.

The Safety Performance Standards support Evolution’s Sustainability Policy by prescribing the minimum requirements for managing the risks associated with specific activities or tasks that have the potential to adversely affect the safety of employees, business partners and communities affected by business operations.

In FY19 the total recordable injury frequency (TRIF) was 8.31, above our target of 4.95. This is an increase from 5.49 in FY18 and against our trend of year on year improvement. We acknowledge this decline in our safety performance and all sites have refocused their efforts on embedding behavioural safety initiates to drive improvements. We believe that every injury is preventable and that no task is so important that it cannot be done safely.

In FY19 two external critical control risk assurance audits were conducted at each site with results presented to the leadership team. At the end of the financial year all sites achieved a satisfactory rating. All priority one critical control audit actions were closed by their due date.

FY19 highlights

FY19 safety achievements

95 daily safety interactions
486 daily Take 5 pre-start safety checks
Hosted our fifth Evolution Mine Rescue Challenge at Cracow involving the community and state emergency agencies
Revision of our Health and Safety Performance Standards
Facilitated Crisis Management and emergency exercises at site and in our group office
First place award for Mungari team who won the breathing apparatus skills event at the Chamber of Minerals and Energy Underground Mine Rescue competition

FY20 focus

In FY20 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:

Total Recordable Injury Frequency less than 5.5
All risk register actions completion for top five risks for each site

Supporting documents:

Sustainability Policy

https://evolutionmining.com.au/env-sustain-policy/

Safety Performance Standards

“We absolutely believe that every injury can be prevented and will use all resources at our disposal to make sure our people get home safely to their families”– Bob Fulker, Evolution COO

https://evolutionmining.com.au/wp-content/ uploads/2019/08/20190715-GRP-STD-SustainabilityPerformance-Standards.pdf

Sustainability Data

Safety data table p 37

Evolution Mining Limited Annual Report 2019

Our People

Sustainability Report (continued)

Emergency response

We believe in always using our resources to support our communities through significant incidents or threatening situations.

Evolution continues to build mine rescue skills, capability and resources across the Group. We have five Emergency Response Teams (ERT) with a total of 132 members. Our teams have played an important role in supporting our operations and nearby communities.

Our Crisis Management Plan outlines the roles, responsibilities and processes our corporate crisis management team would follow in the event of a crisis. Each of our sites have Emergency Response Plans that outline the response to be initiated in the event of an onsite emergency.

Over the last 12 months, our ERT personnel were first responders to 14 offsite emergency incidents that occurred within our local communities. These incidents included

motor vehicle accidents, fires, farm incidents and medical emergencies. Evolution also provided a team to assist with flood recovery in Townsville in February 2019.

A Memorandum of Understanding between Evolution and the New South Wales State Emergency Service (SES) is in place which has assisted with flood rescue operations in the Sydney CBD and storms and flash flooding in Cootamundra.

Our teams attended the Victorian Mine Rescue Competition and W.A. Chamber of Minerals and Energy Underground Mine Rescue competition, placing first in the breathing apparatus skills event. We held our fifth Group Mine Rescue Challenge at Cracow in Queensland.

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Evolution Mining Limited Annual Report 2019

Our People

Sustainability Report (continued)

Health and wellbeing

We believe that our people’s mental wellbeing is equally as important as their physical wellbeing. That’s why we have a comprehensive health and wellbeing program to look after our people and promote positive mental health.

Over the long term we have seen a reduction in individuals in high risk categories for a number of measures including:
Cholesterol – 79%
Blood glucose – 70%
Body mass index – 32%

FY19 highlights

7,568 one-on-one confidential consultations with onsite physiologists to support our people proactively manage their health and wellbeing
1,355 participants have attended at least once, representing approximately 90% of employees. 1,030 have attended at least twice – representing approximately 70% of employees
Key reasons for attending consults included
Weight loss
Preventative musculoskeletal management
Heart disease and diabetes prevention
Improving sleep
Managing fatigue
Diastolic blood pressure – 76%
Employee Assistance Program (EAP) available to all employees and immediate family members
Business wide communications on R U OK?
Additional onsite activities included 149 warm up for work sessions, 3,059 Epworth sleep assessments, 81 Fatigue and Manual Handling education sessions as well as 359 monthly health education at pre-starts and toolboxes

Supporting documents:

Sustainability Policy

https://evolutionmining.com.au/env-sustain-policy/

Health and Wellbeing Performance Standards https://evolutionmining.com.au/wp-content/ uploads/2019/08/20190715-GRP-STD-SustainabilityPerformance-Standards.pdf

90% – Voluntary participation in health and wellbeing program

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Evolution Mining Limited Annual Report 2019

Our People

Sustainability Report (continued)

Highlight of our people’s careers

We believe working at Evolution should be the highlight of our people’s career and remain confident we have the right group of people with a strong sense of purpose who are focused on the continued delivery of our strategy.

We have continued to build a strong culture based on our values of Safety, Excellence, Accountability and Respect. Our values and supporting behaviours ensure we get the ’how’ right and guide how we work together every day.

To understand how our culture is experienced by our people in real time, we have rolled out a monthly digital survey. This was launched across all sites and is accessible via any mobile device. 87% of our people have ‘had their say’ and initial feedback is very positive, with results highlighted below.

Growing our people

To promote a high achievement culture, we want to recognise our people’s efforts and reward the outcomes they deliver. This is achieved by setting performance and development goals linked to our annual business plans. This enables our people to recognise their personal contribution to the success of our business.

We continued our commitment to developing our people and overdelivered on our 25% target by filling 33% of our internal vacancies from our existing workforce. This also ensures we retained skills, knowledge and expertise within our company.

Building talent

We developed independent Readiness and Development Centres for our senior leaders and held two Operational Management sessions focused on team purpose, unity and effectiveness. Our talent management strategy for the upcoming year is to increase the visibility of our high potential mid-level and frontline leader talent to strengthen our future pipeline for business-critical roles and continuity.

33% – of FY19 vacancies filled internally, a 65% increase from FY18

Focused leadership

A project is in place to ensure we have the right people with the right skills, in the right roles at the right time, with the right level of support, process and systems. This enables effective and timely decision-making at all levels of Evolution. Engaging more than 130 of our leaders, we have now defined at each site what working at the right level means for our leaders, across levels and functions.

Pulse survey feedback (as at 30 June 2019 - 575 people)

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SAFETY EXCELLENCE
80 73
ACCOUNTABILITY RESPECT
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68 73
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RIGHT
PERSON
RIGHT
LEVEL
RIGHT RIGHT
ROLE SKILLS
RIGHT SYSTEMS
SUPPORT
T
RI
H
G
G
H
RI
T
P
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O
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S
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Evolution Mining Limited Annual Report 2019

Our People

Sustainability Report (continued)

Aligned with Project Right Level, we also refreshed and simplified our leadership behaviours to increase clarity for easier engagement.

Nine leadership behaviours reduced to five
54 leadership indicators reduced to 25

Evolution leadership behaviours

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BE YOUR BEST COMMUNICATE

COACH AND COLLABORATE DELIVER DEVELOP RESULTS

Developing our people

We held quarterly Leadership Group development sessions and our bespoke middle management leadership program ‘Gold Plus’ was upgraded to create a more focused learning experience. In five years, over 130 leaders have graduated to go on to lead more trusting, empowered and accountable teams.

Close to 60 of our frontline emerging leaders completed our ‘Silver’ program emphasising cross site and function participation. Participants are equipped to coach their teams to work effectively, safely and identify continuous improvement opportunities.

Our graduate program

We continued with our vacation and graduate programs to attract and develop mining talent. Across the two-year program we had 12 graduates across many disciplines who gained experience across multiple sites and worked with a variety of leaders.

FY20 focus

We are developing a new reporting system to give clarity on how many hours and how much value is being allocated to training our people and will report this in FY20.

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Evolution Mining Limited Annual Report 2019

Our People

Sustainability Report (continued)

Creating a diverse and inclusive workplace

We believe in growing a rich culture, diverse workforce and a work environment in which every employee is treated fairly, respected and has the opportunity to contribute to business success.

Across our 1,365 people, we continued to develop our approach to diversity and inclusion. In FY19 we increased our female workforce representation to 14.7% and our Indigenous workforce representation to 4.8%. To increase diversity in FY19 we:

Focused on increasing female participation in our pipeline programs. 50% of our graduates were female (30% target). 39% of vacation students were female (25% target)
Doubled the number of female mentee opportunities through Women in Mining partners
Held inaugural Women in Mining forum for female employees to network and receive professional development on career mobility

FY20 focus

Innovating for now and into the future

In FY19 we built new strategic partnerships to generate interest and enthusiasm for careers in Science, Technology, Engineering and Mathematics (STEM):

Partnering with Queensland Minerals Energy Academy to lead hands-on careers workshops for school students. Six high school events were delivered reaching 78 students and 45 teachers
Our inaugural Hackathon tackled site operational challenges. The winning team are now engaged as contractors to develop more solutions across our business

Supporting documents:

Sustainability Policy

https://evolutionmining.com.au/env-sustain-policy/

Working with our Board and Leadership Team to update our Corporate Governance Statement, Diversity Policy and Code of Conduct In FY20.

Diversity Policy

https://evolutionmining.com.au/diversity-inc-policy/

Sustainability Data

Return to work – flexible and local

To support work-life integration, we offer flexibility in how hours are worked with adjusted start and finish times, altered rosters and compressed working weeks. We also offer part time and job share structures, and work from home arrangements.

We are also piloting a local casual employment pool at our Mt Carlton operation to employ local residents in operator level roles. Employees are trained to step into leave replacements and vacancies to support site workforce planning, whilst providing employment opportunities for our local communities.

Diversity data table p 37-38

Workplace Gender Equality information

https://evolutionmining.com.au/wp-content/ uploads/2019/06/2019-WGEA-Public-Report.pdf

50% – FY19 female graduates (30% target)

Recognising and rewarding our great people

Our ‘Act Like an Owner’ (ALO) program recognises people striving to go above and beyond in their job.

39% – FY19 female summer

vacation interns (25% target)

This was our most successful year, with 131 new initiatives exceeding our target of 85
Winners were recognised at an ALO awards event which will be expanded in FY20

We are proud that employees share in Evolution’s success and have increased staff ownership by:

Extending our Long Terms Incentive Plan (LTIP) to an additional 100 of our leaders
Continuation of our Employee Share Scheme (ESS) into its fifth year and highest ever participation at 97%

Evolution Mining Limited Annual Report 2019

Environment

24 Evolution Mining Limited Annual Report 2019

Environment

Sustainability Report (continued)

We believe in leaving our environments in a better state than when we arrived and are committed to attaining an outstanding level of environmental performance in all our operations.

Evolution incorporates environmental considerations into all areas of our business to effectively manage environmental impacts and risks. We have a Sustainability Policy that we expect our people and contractors to adhere to.

We have a social responsibility to not only achieve all legislative compliance expectations but strive for leading practice and to meet the expectations of the communities we operate within and are part of. In FY19 we:

Developed and implemented eight Environmental Performance Standards to lift us to a higher standard of environmental performance
Instituted governance reviews for our Tailings Storage Facilities
Developed and implemented quarterly environmental assurance reviews and integrating environmental considerations into our Life of Mine Plans across all sites

Environmental performance standards

Our Environmental Performance Standards consist of eight key business risk areas. All our sites and workplaces are required to meet the performance standards which are audited on a regular basis. Details of each performance standard are provided on our website https://evolutionmining.com.au/environment/

Air Quality
Biodiversity
Rehabilitation and Mine Closure
Resource Efficiency and Emission Reduction
Tailings Storage Facilities
Waste
Waste Rock and Ore
Undertook periodic reviews to ensure that our environmental performance targets and objectives are being achieved

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. Our FY19 incidents can be found on page 38.

Water

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

Supporting documents:

Sustainability Policy

https://evolutionmining.com.au/env-sustain-policy/

“We operate in some magnificent areas of natural beauty and work very hard to protect, and even enhance, these and nearby areas where we can.” Simon Delander – Group General Manager - HSE and Risk

Tailings Storage Facility Governance Policy https://evolutionmining.com.au/tailings-gov-policy/

Sustainability Performance Standards

https://evolutionmining.com.au/wp-content/ uploads/2019/08/20190715-GRP-STD-SustainabilityPerformance-Standards.pdf

Sustainability Data

Environmental data table p 38 - 39

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MAJOR OR CATASTROPHIC INCIDENTS FOR FY19

25 Evolution Mining Limited Annual Report 2019

Environment

Sustainability Report (continued)

Water management

We recognise the importance of water to our business and our communities. Evolution believes in taking a proactive approach to responsible water management. Our standards aspire to reduce the demand for new water and the overall requirement for water in our operations.

In FY19 our total water withdrawn increased by 6%. This increase was in line with the cumulative total dry tonnes milled which also rose by 1%.

Total water recycled and reused increased by 21% between FY18 and FY19. We use recycled water primarily to process ore and in other activities such as paste fill, irrigation, dust suppression and construction.

Our water management performance standard ensures that our operations effectively manage water, including process water, stormwater, discharges and dewatering activities. As a minimum we comply with all relevant water licensing requirements set by Government and industry regulators.

We utilise probabilistic site water balance models to predict water flow and requirements during droughts and stormwater flows. Our operations prepare for seasonal variations in water flow and maintain routine dewatering activities to satisfy water licence conditions.

In addition, there are water management requirements associated with tailings and waste rock management designed to manage risks associated with unwanted events. Each of our operations separate clean water (rainfall runoff in non-disturbed areas) and potentially mine affected waters (rainfall runoff within the mining footprint). Waters which are captured within the mining footprint are reused in an effort to reduce the demand on our external supplies.

The various streams of water have specific water management requirements. The performance standard 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).

Climate related risk, emissions and energy

Evolution acknowledges that climate related risk has the potential to impact our business and communities.

Evolution is committed to understanding and proactively managing the impact of climate related risks to our business and our environment. This includes integrating financial, physical, regulatory, reputational, market, and climate related risks, as well as energy considerations, into our Life of Mine strategic planning and decision making.

We will work to build the climate related risk resilience of our assets, our communities and our environment.

We will implement sound risk management practices across all areas and activities in our business and apply Board level governance.

Our Sustainability Principles include improving the disclosure of, and actively managing, climate related risks and opportunities, improving energy efficiency and the responsible management of water usage. Climate related risks have been identified as key risks on the Evolution Mining Risk Register which are regularly reviewed and monitored by the Risk and Sustainability Committee.

We will transparently report emissions and energy consumption performance and disclose material climate related risks. The Company has completed a process to identify and assess climate related impacts to our business, with the main areas of focus in the near term to be improving energy efficiency and responsibly managing water use.

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Evolution Mining Limited Annual Report 2019

Environment

Sustainability Report (continued)

During 2018, Evolution commissioned a report covering its power procurement and the potential integration of renewable power options. This report was completed in early 2019 and we are currently reviewing localised solar options and large-scale project partnering opportunities. None of these projects are currently at formal agreement. As part of the process in assessing power requirements for new projects, the opportunities to incorporate renewable power options are undertaken.

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.

In FY19, Scope 1 emissions decreased by 2% and Scope 2 emissions decreased by 3%. Overall energy consumption decreased by 2% compared to FY18. The decreases in emissions and energy are largely due to a decrease in activity recorded at Cowal, Mt Rawdon and Mungari. We will be investigating opportunities to further reduce in FY20. See page 38 for emissions data.

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 local communities 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 then communicate the outcomes in the various consultative forums for our operations.

Air quality

Our operations develop, implement, communicate and adhere to their air quality management plan. This includes developing and implementing strategies, operational

FY20 focus

In FY20 Evolution will be trialling a new air quality measurement program with enhanced technology at our Cowal site to monitor particulate matter in real-time.

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Evolution Mining Limited Annual Report 2019

Environment

Sustainability Report (continued)

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Biodiversity

We acknowledge that the nature of our operations can have significant environmental impacts on the flora and fauna that we share the landscape with. 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 each of our operations. These plans are risk-based. The Management Plan for our Cowal site can be viewed on our website at https://evolutionmining.com.au/cowal/ under Environmental Management Plans.

Adaptive strategies include the voluntary and prescribed biodiversity offset areas that are actively maintained for fire, pest and weed control at our operations.

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 performance standards and governance process incorporate the International Council on Mining and Metals (ICMM) six key components of the Tailings Governance Framework.

Accountabilities, Responsibilities and Competency; all sites are now equipped with a responsibility matrix
Planning and Resourcing; Tailings life of mine project teams are in place at each level of the organisation
Risk Management; considered a high priority risk for the organisation all sites have completed Principal Hazard Management Plans, Bowtie risk assessment and Critical Control Plans for each facility
Emergency Preparedness and Response; Dam break studies have been completed for all active Tailings Storage Facilities
Review and Assurance; tailings governance assurance meetings have been formally introduced during FY19 and will continue at each level of the organisation

Regular inspections and audits 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.

Evolution Mining Limited Annual Report 2019

Environment

Sustainability Report (continued)

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 weak acid dissociable (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.

FY19 Ore processed: 14,221kt (dry tonnes) to produce 654,312oz Au, excluding Ernest Henry.

Supporting documents

Tailings Storage Facility Governance Policy https://evolutionmining.com.au/tailings-gov-policy/

Sustainability Performance Standards https://evolutionmining.com.au/wp-content/ uploads/2019/08/20190715-GRP-STD-SustainabilityPerformance-Standards.pdf

The on-site management of organic and industrial/ inorganic 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 transferred off-site for industrial re-refining (for re-use) or conversion into energy.

A site resource recovery strategy has been implemented at our Cracow project in central Queensland to reduce waste to landfill and enhance our custodianship of the environment. Effectiveness of the strategy is monitored using our environmental database system to capture and analyse the data collected. Initial data will be shared in FY20.

Waste rock management

Waste rock is identified as the extracted mineral bearing ore that does not meet a site’s minimum concentration of mineral. This performance standard 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 performance standard is applied as required based on each ore body and the surrounding waste rock. Each operation is generally quite different in terms of potential for acid mine drainage (AMD) and salinity impact on the surrounding environment. Operations maintain material balances for topsoil, waste rock types throughout the lifecycle of operations for 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.

FY19 waste rock produced: 37,501kt representing an 6% reduction on waste rock produced in FY18 (39,905kt).

Waste management

Our waste goals aim to reduce, recycle and reuse our resources occurring in our normal site waste management practices.

Rehabilitation and closure management

We acknowledge that we are only visitors in our communities and mining is a short-term land use. Our 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 uses will be and what the site should look like when the operational areas are ready for relinquishment.

Each of our sites has 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. Rehabilitation and land use management plans for our Cowal site can be found at https://evolutionmining.com.au/compliance/#cowalpart

In addition to the post mining plans Evolution are actively seeking ways to ensure the land is economically, socially and environmentally sustainable at relinquishment in preparation for future land use. Initiatives include:

Partnering with six other operators in the KalgoorlieBoulder region to support regional development including recreational and tourism. The project aims to add economic and environmental value and is then transferred to an external entity and ultimate relinquishment of mining tenure
Our Mt Rawdon site is working closely with CSIRO to develop a wetland project to provide a natural treatment of mine affected water that could be reused

Evolution Mining Limited Annual Report 2019

Environment

Sustainability Report (continued)

for irrigation purposes or released back to the natural environment. The CSIRO has developed a synthetic clay called ‘Virtual Curtain’ that reduces the number of contaminants in the water column by binding to the sediment, thus making it non-toxic

Our Mt Carlton team has partnered with environmental specialists in refining quality control in the placement of waste rock as a final landform to ensure potentially problematic material is encapsulated in the most efficient manner for future land use
At Cowal we rehabilitated 18.2 hectares of land in FY19. Rehabilitation was complete for waste rock emplacement which stabilised batter slopes with rock armour and provided a stable layer able to support long-term vegetation growth

Environmental enhancement projects

We believe in the power of partnerships, that’s why we like to contribute to projects that are relevant to our communities and leave a positive environmental impact.

In FY19 we continued our program of implementing Environmental Enhancement projects with a primary purpose of improving or enhancing environmental values onsite or in nearby communities. We have eight Environmental Enhancement projects currently under way. The full list of detailed summaries and progress can be found on our website. We commenced a new partnership with NQ Dry Tropics to help threatened beach scrub communities inland from the Great Barrier Reef between Crystal Creek and Bowen. Key activities include removal of weeds, management of fuel loads, traditional owner engagement and community education.

20 Environmental Assurance Audits are carried throughout the year across our five sites

12 monthly Environmental Professional Network teleconference calls

Environmental assurance

The Evolution Environmental Assurance Audit Program is undertaken by our corporate office and 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 so learnings can be shared across sites during site visits, during our monthly Environmental Professional Network teleconferences or 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.

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Evolution Mining Limited Annual Report 2019

Social Responsibility

Evolution Mining Limited Annual Report 2019

Social Responsibility

Sustainability Report (continued)

We believe we have an obligation to create shared value for all our stakeholders. This is measured as much by the superior returns we deliver to our shareholders as by the positive legacies we leave in our communities and the people whose lives we enrich.

Evolution seeks to deliver long-term benefits to local communities and other stakeholders through engagement and collaboration, and by understanding the social impacts of our activities, mitigating negative effects and achieving outcomes of mutual benefit.

Building and maintaining strong, supportive relationships and partnerships with local people in the areas where we operate drives value creation for both Evolution and the community.

Detailed highlights from our community initiatives as well as our Community Principles are detailed in our Annual Community Report which can be found on our website: https://evolutionmining.com.au/wp-content/ uploads/2019/04/Evolution-Community-Report-2018_ FINAL.pdf

Economic contribution FY19 (A$M)

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Interest, A$15M
Taxes, A$91M
Dividends, A$127M
Royalties, A$63M
Wages, A$212M
Goods and services,
A$775M
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Our Socioeconomic contribution

We make significant contribution 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 FY19 we contributed A$1.28B to the Australian economy and approximately A$7.26B since Evolution formed in 2011.

CONTRIBUTED INTO AUSTRALIAN ECONOMY

A$1.28B

Evolution economic contribution since inception (A$B)

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8.0 7.26
7.0
5.98
6.0
4.71
5.0
3.59
4.0
2.54
3.0
1.94
2.0 1.34
1.0 0.50
0.0
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
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ECONOMIC CONTRIBUTION SINCE INCEPTION

A$7.26B

DIRECT SPEND WITH LOCAL ORGANISATIONS

A$92.3M

“Building trusting relationships is important to us and we are committed to regularly listening to and engaging with our local communities in an honest, timely and transparent manner.” Anika McManus, Group Manager – External and Indigenous Relations

Evolution Mining Limited Annual Report 2019

Social Responsibility

Sustainability Report (continued)

Community investment

We prioritise local procurement and local employment wherever possible, particularly for our local Indigenous communities. We are committed to sharing the economic benefits by investing in our communities and partnering to achieve meaningful outcomes that generate shared value.

In addition to local sponsorships and donations, we collaborate on sustainable development projects that will continue to benefit the community long beyond the life of the mine. This was highlighted by our stakeholders as a high priority.

Sustainability Projects go through a rigorous development and approval process. Each project is developed in partnership to ensure it delivers broad community benefits, addresses a specific community need, and is self-sustaining, i.e. it will continue to sustainably deliver benefits when Evolution steps away from supporting it. We also assess the project against a range of business and community value drivers and shape the project to enhance these outcomes.

The value drivers were developed by Evolution’s Leadership Team, site General Managers and Group Community Relations. The project does not have to deliver all of these however, the more it delivers, the better.

Sustainability Project Value Drivers
Alignment with Evolution	Health and safety outcomes	Scalability
strategy and planning
Use of internal skills/assets	Talent attraction, development and retention	Long-term viability
Reputation and social licence	Compliance or stakeholder commitments	Educational outcomes
Stakeholder trust and support	Community-led impact	Local economic outcomes
Innovation	Alignment with government or strategic drivers	Environmental outcomes
Employee engagement	Local capacity and partnerships	Community resilience
Costs, efciencies or ROI	Mine dependency	Infrastructure capability

Human rights

Evolution is committed to respecting the human rights of all our stakeholders. This means we engage with employees, business partners, community groups and all other stakeholders in a manner that protects the basic rights and fundamental freedoms to which all human beings are entitled. It also means we must conduct appropriate risk-based due diligence on all relevant business partners in our supply chain to ensure those rights and freedoms are protected.

In FY19 the Australian Government enacted the Modern Slavery Act 2018 under which Evolution will be reporting annually on the risks of modern slavery in our operations and supply chains. It also requires reporting on the action we have taken to assess and address those risks, and the effectiveness of our response. The term ’modern slavery’ refers to the worst forms of exploitation.

Our inaugural Modern Slavery Statement, approved by our Board of Directors, will be published in H1 of FY21, reporting on the FY20 year. The steps we took in FY19 to prepare for the Modern Slavery legislation include:

Established a cross-functional working group for planning, strategy and execution
Including Modern Slavery within the Human Rights Social Responsibility Standard
Ensuring Vendor compliance:
Discussed Modern Slavery expectations with prospective and current vendors
Updated standard contract clause to address Modern Slavery
Commenced development of a risk assessment to prioritise highest risk vendors
Commenced development of an assurance process for onshore and offshore vendors
Commenced development of vendor communication pack
Commenced development of pre-qualification of non-contract vendors (FY20 completion)
Developed an education/communication pack to be rolled out across all Evolution assets and more broadly across wider stakeholder group (FY20 completion)
Discussed development of a remediation plan (FY20 completion)

“Evolution welcomes this legislation and the difference this can make towards addressing global slavery. We look forward to sharing our progress in FY20.” Gary Ward - Group Manager, Supply

33 Evolution Mining Limited Annual Report 2019

Social Responsibility

Sustainability Report (continued)

FY19: Sustainability Project highlights:

UQ research partnership | Using gold for early cancer diagnosis

Gold has a rich history in Australia and it also has a bright future. Researchers from the University of Queensland (UQ) have developed a breakthrough test using gold nanoparticles that can detect the presence of cancer cells anywhere in the human body. Evolution has committed to supporting this research through a three-year partnership and an offer to provide gold samples.

This research will potentially enable early diagnosis for all cancer types. If cancer is caught early, survival rates can improve by up to 98 percent.

Goldfields childcare centre | Out of school hours care

Lack of affordable childcare is an ongoing issue in the W.A. Goldfields region. Reliable childcare is an essential service to encourage families to live in the region. It is also important for attracting and retaining Mungari’s 94% local employees. The City of Kalgoorlie-Boulder and the Chamber of Commerce and Industry identified childcare shortages as a key driver of the current labour shortage.

When the Goldfields Childcare Centre received notice to vacate their rented premises, Evolution and other funding partners stepped in to support the opening of a new centre to enable them to continue their after school hours care program for 20 children (46 families) and expand their services by a further 20 places, enabling families on the waiting list to benefit.

Indigenous business development

Evolution has provided funding for an expert feasibility study of a potential business opportunity for Wiradjuri Condobolin Corporation (WCC) to develop a commercial plantation of native foods. This study will inform the feasibility of establishing the business and detail a plan to take the project forward. Australian Native Food and Botanicals (ANFAB) proposed the project and if the study shows the venture is viable, Evolution will continue to work with ANFAB, WCC and other potential stakeholders through the start-up phase of the business.

2019 North Queensland floods

In February 2019 North Queensland experienced severe flooding and was declared a natural disaster zone. Evolution ERT personnel assisted affected employees and their many fellow community members whose homes and businesses had been damaged or destroyed.

In addition to helping clean-up efforts, Evolution donated A$100,000 to GIVIT who support people impacted by natural disasters.

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Mt Perry tram car
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2019 North Queensland floods
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UQ research partnership
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Evolution Mining Limited Annual Report 2019

Social Responsibility

Sustainability Report (continued)

Local economic development projects

Supporting the economic development of our local communities is a priority for Evolution and a key focus with our sustainability projects.

Coolgardie’s Ben Prior Park and open-air mining museum

In the centre of Coolgardie, on the main road, is an open-air living history collection with old gold mining equipment such as shaft winder wheels and a drilling rig used by early gold miners. It is a visible and convenient place to stop for the 400,000 vehicles that travel through Coolgardie every year. Evolution has partnered with the Shire of Coolgardie, the Kambalda Men’s Shed and Coolgardie Men’s Shed to upgrade this tourism rest stop and local park to encourage tourists to stay and contribute to the Coolgardie economy.

Indigenous development projects

We value the partnerships we have built with the traditional custodians of the lands on which we operate. We take our obligation to protect and manage cultural heritage extremely seriously and we are committed to supporting initiatives that advance the outcomes for Indigenous people. In FY19 we:

Continued with various education and training initiatives including secondary and tertiary student scholarships, traineeships, apprenticeships and direct and indirect employment
Enhanced the ability of our people to effectively operate within different cultural contexts through cultural competency training to be launched in FY20
Cultural competency training complements awareness training that is conducted by the local traditional custodians

Mt Perry tram car

Evolution has partnered with the Mt Perry Community Development Board (MPCDB) and have purchased a Melbourne Tram Car to be restored and displayed as a tourist attraction in Mt Perry. The tram is now being refurbished at the Mt Perry Men’s Shed in partnership with local Gidarjil Indigenous trainees. Once refurbishment is completed, the tram will become a mining museum and coffee shop. The tram represents the connection between Mt Perry, Evolution and Melbourne following the use of gold from Mt Rawdon to make the 2018 Melbourne Cup Trophy.

Indigenous training

The Mt Perry community, supported by a number of partners including Evolution, undertook a Beautification Project to refresh their picturesque community. Gidarjil trainees were engaged to undertake a large component of the project, including landscaping works around the Men’s’ Shed and establishing a native bush tucker garden. The trainees developed skills to support the completion of their Certificate I in Conservation and Land Management, opening pathways to employment in the region. Evolution contributed to the purchase of a new bus for the Gidarjil trainees to move around the region for this project and other initiatives that enhance their traineeship outcomes.

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“The trainees should be very proud of the quality of the work they have undertaken and
their contribution to the Mt Perry township.” Jamie Coad, Mt Rawdon General Manager
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35 Evolution Mining Limited Annual Report 2019

Evolution Mining Limited Annual Report 2019

Sustainability Performance Data

Sustainability Report (continued)

Safety

Safety performance
	FY19	FY18	FY17	FY16	FY15
Employee fatalities	0	0	0	0	0
Contractor fatalities	0	0	0	0	0
Total Recordable Incident Frequency (TRIF)	8.31	5.49	7.96	9.7	9.6
Lost Time Injury Frequency (LTIF )	1.75	0.5	0.4	1.8	1
Vehicle Incidents	65	34	62	102	136
Signifcant Safety Occurence Frequency (SSOF)	n/a	3.2	4.95	5.9	11.61^
Safety Incident Frequency (SIF)*	15.97

All classifications above include contractors. *In FY19 Evolution changed the definition of significant safety occurrence and renamed to significant incidents. The definition change has resulted in more incidents being classified as significant incidents. ^FY15 figures are for Evolution operated assets. In the FY16 annual report Mungari and Cowal FY15 figures had been added for comparative purposes (operated by previous owner).

Emergency Rescue Teams (ERT)

	Number of	Community	State Emergency
	ERT members	responses	Service support
Cowal	26	1	3
Cracow	26	4
Mt Carlton	26	3
Mungari	31	3
Mt Rawdon	23	0
Total	132	11	3

People

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Diversity
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Profle FY19	Full time	Full time	Part	time	Fixed term	Fixed term		Casual	Employees	Contractors	Work-
											force
	M	F	M	F	M	F	M	F	Total	Total	Total
	1,101	166	1	11	30	11	12	10	1,342	576	1,918
New Employees	Age group		Age group		Age group		Total
FY19		<36	36–55			>55
	M	F	M	F	M	F
	158	64	117	23	24	6	392

Turnover FY19	Age group		Age group		Age group		Total
		<36	36–55			>55
	M	F	M	F	M	F
	33%	6%	42%	7%	10%	1%	18%

Turnover result for EVN total is voluntary permanent only 12 month moving average result. The split by age bracket and gender is the % of all terminations (summing up to 100%), rather than turnover rates for each grouping.

Evolution Mining Limited Annual Report 2019

Sustainability Performance Data

Sustainability Report (continued)

People (continued)

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Diversity
Site profile FY19 Corporate Cowal Mungari Mt Carlton Mt Rawdon Cracow Total
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M F	M	F	M	F	M	F	M	F	M	M	F	All
81 41	342	53	205	51	142	12	172	22	202	1,144	198	1,342

State profle FY19 NSW	WA		QLD
M F	M	F	M	F
423 94	205	51	516	53

Developing our approach to diversity and		inclusion					FY19 target			FY19 actual
Female graduate participation							30%				50%
Female summer vacation interns							25%				39%
Aboriginal or Torres Strait Islander	employee										4.8%

Environment

Environmental incidents
Incident level	2019	2018	2017
Catastrophic	0	0	0
Major	0	0	0
Moderate	9	7	9
Energy
Energy consumption (GJ)	FY19	FY18	FY17	FY16
Total	3,986,905	4,075,493	4,402,695	4,415,040
Energy intensity (ore processed - GJ/tonne)
Total	0.28	0.291	0.272	0.273
Ore processed does not include our fnancial stake in Ernest Henry. Emissions
Total direct and indirect emissions	FY19	FY18	FY17	FY16
Greenhouse gas emissions Scope 1 (t CO2-e)(1)	155,085	159,061	167,734	157,584
Greenhouse gas emissions Scope 2 (t CO2-e)(2)	383,449	394,144	430,993	472,257
Total of Scope 1 and Scope 2 (t CO2-e)	538,533	553,205	598,727	629,841
Sulphur oxide SOx (kg)	916	926	1,002	936
Nitrous oxide NOx (kg)	1,397,676	1,395,277	1,521,718	1,627,006
Carbon Monoxide (CO) (kg)	719,005	701,930	886,918	788,636
Particulate matter < 10 um (kg)	4,260,114	4,323,757	5,163,574	5,585,918
Particulate matter < 2.5 um (kg)	88,471	86,683	95,254	104,208
Total volatile organic compounds (VOC) (kg)	90,036	86,380	97,958	110,103

The energy and emissions boundary is based on operational control as defined by the National Greenhouse and Energy Reporting (NGER) Act 2007. The applied global warming potential (GWP) rates and emission factors are based on the NGER Act (2007) and the National Pollutant Inventory.

Scope 1 refers to emissions produced directly by operations, primarily resulting from combustion of various fuels and includes CO2-equivalent values for greenhouse gases such as CH4, N20 and SF6.
Scope 2 refers to indirect emissions resulting from the import of electricity from external parties; commonly the electricity grid.

Evolution Mining Limited Annual Report 2019

Sustainability Performance Data

Sustainability Report (continued)

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Water withdrawal
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Water withdrawal	Surface	(ML) water				FY19	FY19 change	FY19 change		FY18
Surface water (ML)						3,506		69%		2,077
Groundwater - mine dewatering (ML)						3,034		-6%		3,212
Groundwater - borefelds (ML)						1,589		8%		1,476
Rainwater (ML)						1,000		-46%		1,856
Municipal water (ML)						66		12%		59
Total water withdrawal						9,194		6%		8,680
Reused (ML)						8,545		22%		7,018
% Total reused						93%		15%		81%
Water intensity (ore processed-kL/tonne)						0.65		5%		0.62
Water discharge
Water	Surface	Sewers that		Land - Dust	Land -	Groundwater		Treatment		Total
discharge	water	lead		suppression	Irrigation			Facility
(ML)		to water
Total	1,552	0		1,074	12.7		0	454		3,093
Waste
Mineral waste	Waste material		Solids in tailings		Total ore		Waste oil/grease		Explosives (t)*
	mined (kt)			(kt)	processed	(kt)	- recycled (kL)
Total		37,708		14,162	14,221		73			12,505

The reporting period for liquid fossil fuels, lubricants and explosives is July 2018 to June 2019 and reported as part of the National Pollutant Inventory.

Non-mineral waste
Tonnes	Of-site	On-site	Of-site	Tyres disposed	Steel -	Plastic -
	landfll	landfll	recycling	of on-site	recycled	recycled
Total	7,207	1,792	456	10	47	20
Rehabilitation and	closure
Land management (ha)			Land disturbed		Land rehabilitated
Total			2,984		18.2
Environmental compliance
Total volume of signifcant spills			232L oil

Evolution Mining Limited Annual Report 2019

Sustainability Performance Data

Sustainability Report (continued)

Social responsibility

Socioeconomic contribution
(A$) million Operations	Employees		Payments to		Payments to		Payments to government			Total
			providers of		fnancial				contribution
				capital
Type Supplier	Wages			Dividend	Interest		Taxes	Royalties
payments			payments to
(Goods and			shareholders
services)
Total 775	212			127	15		91	63		1,283
Economic contribution
	FY19	FY18		FY17	FY16	FY15	FY14	FY13	FY12	Total
Contributed into Australian	1.28		1.26	1.12	1.05	0.60	0.60	0.84	0.50	7.26
Economy (A$) billion
Direct spend with local	92.3		80
organisations (A$) million

Reconciliation to income tax payable*	FY19
	(A$) million
Proft before income tax expense	314.8
Permanent diferences	10.9
Temporary diferences:
– Accounting and tax depreciation diferences	78.4
– Mine development	-168.8
– Exploration and evaluation expenditure	-60.7
– Provisions	2.0
– Other	-3.0
Taxable income before utilisation of carried forward restricted tax losses	173.6
Australian income tax payable	52.1
Corporate income tax paid during the year ended June 2019	-43.9
Utilisation of carried forward restricted tax losses	-8.5
FY18 R&D refund expected	-1.2
Net income tax payable/(receivable)	-1.5

40 Evolution Mining Limited Annual Report 2019

Evolution Mining Limited Annual Report 2019

Chief Operating Officer’s Review

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A Year of Achievements

Having completed my first full 12 months with Evolution, I have had the privilege of working with a talented team of people who are striving to make Evolution Australia’s premier gold company. Every individual is driven to find new ways to continue to improve our business and deliver value to our employees, shareholders and all external stakeholders.

The 2019 Financial Year was a great period from a production perspective, with 753,001 ounces of gold produced. This was achieved at an All-in Sustaining Cost (AISC) of A$924 per ounce. Four of our six operations were either at or above the top end of their production guidance.

The year saw us deliver at the upper end of our 720,000 – 770,000 ounce production guidance. Although we had a small miss on the top end of our AISC cost guidance of A$850 - A$900 per ounce, we remain one of the lowest cost gold producers in the world and are focused on maintaining our value proposition in FY20.

The Total Recordable Injury Frequency (TRIF) increased to 8.3. We are disappointed with this result and have refocused our safety efforts in FY20 to improve our performance. On a positive note we saw improvements in our leading indicators like infield Safety Interactions and in our reporting culture through increased hazards and near miss reporting. It is also pleasing that the severity of injuries experienced throughout our workforce declined in FY19.

Keeping each other safe and supporting everyone’s wellbeing must be our highest priority to enable us to improve our safety culture in FY20.

Our approach to community engagement and social responsibility are vital to our ongoing success and sustainability as a business. During the year we commenced eight new Sustainability Projects across our operations. Each of these projects was developed in partnership with our community stakeholders and will deliver positive long term social and environmental outcomes.

We all can be proud of the difference we are making in our local communities. Thank you to our people who volunteered their time to support these initiatives and help make them a success. Importantly, we had no significant community or environmental incidents throughout the year.

Thinking differently

Over the past year we have increased our focus on ‘thinking differently’. A strong indication of this is the success we have had with our Act Like an Owner initiative which commenced in February 2015. A further 131 nominations were submitted in FY19 which is a fantastic result and substantially exceeded our FY18 result of 41. Seven initiatives were inspired by activities at other sites or were implemented in cooperation with another operation which demonstrates the benefits of cross-site collaboration and information sharing are being embraced.

Our focus on innovation saw an increase in data driven initiatives under our Data Enabled Business Improvement (Debi) program such as our Hackathon, Explorathon and predictive analytics. Data availability and usability continues to improve and I am excited with what Debi will enable us to achieve in the future.

We aim to make FY20 another strong year and our breakthrough goal is to amplify our high achievement culture. This builds on the strong culture we already have at Evolution by targeted development plans for all of our people, either supporting their career progression or improving performance in their current role. We also have a strong focus on fostering trust by having open, honest and courageous conversations.

A strong achievement culture will underpin the delivery of our operations and growth objectives. This will ensure we maintain our focus on sustainability through robust risk management and strong safety leadership, environmental stewardship and continuing to strengthen our reputation as a trusted partner and employer of choice.

Some highlights from our operations are provided in the following text with further details provided in the Directors’ Report section of this Annual Report.

Continuing to strengthen our reputation as a trusted partner and employer of choice

42 Evolution Mining Limited Annual Report 2019

(continued) Chief Operating Officer’s Review

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 to 2032 and this long mine life provides a tremendous runway to capture additional upside.

Cowal had another great year in FY19. During the year the operation was granted regulatory approval to increase the plant processing rate by 31% from 7.5 million tonnes per annum (Mtpa) to 9.8Mtpa. Plant throughput continues to improve with record monthly throughput achieved during the period.

The Cowal operating team successfully commissioned the Float Tails Leach (FTL) circuit, upgraded the SAG Mill Gearless Motor Drive, commenced the Warraga underground exploration decline and the Evolution Board approved the Integrated Waste Landfill improvements on the Tailing’s Storage Facility.

The Warraga decline had reached 550 metres of lateral development as of 30 June 2019 and is progressing ahead of schedule. The underground drilling program commenced during the June 2019 quarter and will continue for the next 18 months.

Total FY19 gold production of 251,500 ounces was above guidance of 240,000 – 250,000oz. AISC of A$995/oz was at the bottom end of the A$975 – A$1,075/oz guidance range. Full year net mine cash flow was A$87.5 million.

Mungari

The Mungari gold operation is located 600km east of Perth and 20km west of Kalgoorlie in Western Australia. There are currently two registered native title claims over the majority of the Mungari tenements – the Maduwongga People and the Marlinyu Ghoorlie 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, a large regional tenement package hosting a total Mineral Resource of 2.5 million ounces, and a strategically located 1.6Mtpa nameplate processing plant.

Mungari managed to achieve a credible result in FY19 despite having to navigate through several significant unplanned events. Total FY19 gold production of 120,535 ounces was below the bottom end of the 125,000 – 135,000oz guidance range. The miss was predominantly due to a major seismic event in November 2018 which led to a redesign of the underground stope access to allow mining to continue safely. AISC of A$1,320/oz was above guidance of A$1,050 – A$1,100/oz guidance. Full year net mine cash flow was A$35.8 million.

The operation has a major footprint in the world-class Kalgoorlie gold district with opportunities for high-grade discoveries to expand production and lower costs. The operation currently has a 10-year mine plan and work has commenced to improve the cost position of this operation to deliver a long-term value by unlocking the large resources base most effectively.

Cowal is a long life, low cost asset that will be a cornerstone of our business for many years to come.

Cowal is a long life, low cost, cornerstone asset

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Evolution Mining Limited Annual Report 2019

(continued) Chief Operating Officer’s Review

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 example of thinking differently to unlock a previously uneconomic deposit.

The operation was developed by Evolution and commissioned in 2013. It is now a core asset and one of the highest-grade open pit gold mines in the world. The operation has a current mine life out to 2025. The development of an underground mine from within the open pit was approved in FY19 and its development will be the next significant milestone for the operation.

Mt Carlton produced more than 100koz of gold for the third year in a row with FY19 production of 106,646 ounces. This was an impressive achievement considering the operation had to manage through a significant rain event which shut operations and restricted site access for over 30 days during the third quarter. This was a very concerning period with the safety of our Mt Carlton people front of mind.

Despite these challenges, our team performed admirably and Mt Carlton exceeded the top end of the 95,000 – 105,000oz guidance range. An AISC of A$737/oz was slightly above the top end of the A$670 – A$720/oz guidance. Full year net mine cash flow was A$84.6 million.

During the year we achieved a world first by trialling an online gold analysis (OLGA) technology developed by the CSIRO. This gives the processing team the ability to adjust processing parameters effectively, in real time, with the effect of reducing losses to tailings.

Mt Carlton is extremely proud to have produced the gold for the 2019 Lexus Melbourne Cup which brought the Melbourne Cup Tour to the local community in August 2019.

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 Byellee, Gooreng Gooreng, Gurang and Taribelang Bunda people who make up the Port Curtis Coral Coast native title claim group. Our local communities are Mt Perry, Gin Gin, Biggenden and Gayndah. Evolution has owned and operated Mt Rawdon since November 2011.

Total FY19 gold production of 94,647oz was just below the bottom end of the 95,000 – 105,000oz guidance range. The team at Mt Rawdon had to manage multiple pit wall stability issues as well as a major failure in the mill gear box during the year. Achieved AISC of A$1,233/oz was above the top end of the A$1,000 – A$1,050/oz guidance. The miss on FY19 production and costs was predominantly driven by reduced access to higher grade ore in the open pit as a result of the pit wall stability issues.

Despite these challenges the Mt Rawdon team are true innovators and consistently submit commendable ALO nominations. At Mt Rawdon our people exemplify thinking differently when it comes to driving improvements to their operation from both a safety and production perspective.

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 extends to 2023, however Cracow has a long track record for replacing mining depletion and maintaining a consistent three to five-year mine life.

Cracow continued to perform well in FY19 with total gold production of 80,983oz within the 80,000 – 85,000oz guidance range. AISC of A$1,272/oz was also in line with guidance of A$1,250 – A$1,300/oz. Full year net mine cash flow was A$36.1 million.

Cracow continues to drive effectiveness and productivity through innovation with examples including moving to narrower underground stoping, automated water management in the grinding circuit, vulcanised rubber rotor installation on the high intensity grinding mill and tele-remoting from the surface.

44 Evolution Mining Limited Annual Report 2019

(continued) Chief Operating Officer’s Review

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 revenue and 30% of future copper and silver revenue produced from 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 revenue from Ernest Henry. Throughout the duration of our partnership, Glencore has operated the asset exceptionally well and has consistently delivered results which exceed the agreed mine plan. The Ernest Henry transaction has materially improved the quality and longevity of the Group’s portfolio and reduced the cost profile.

Total FY19 gold production of 98,689oz was well above the top end of the 85,000 – 90,000oz guidance range. AISC of A$(539)/oz was substantially below guidance of A$(200) – A$(150)/oz. Full year net mine cash flow was a record A$222.2 million.

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BOB FULKER CHIEF OPERATING OFFICER

Ernest Henry has materially improved the quality and longevity of the Group’s portfolio

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The Mt Carlton crew excited to see the Melbourne Cup on site
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45 Evolution Mining Limited Annual Report 2019

FY19 Operational Highlights and Outlook

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Cowal Mungari Mt Mt Cracow Ernest Group
(100%) (100%) Carlton Rawdon (100%) Henry Total
(100%) (100%) (economic
interest)
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Gold Reserves (Moz)1	3.88	0.63	0.62	0.57	0.19	0.75	7.46
Copper Reserves (kt)1	371		31			136	538
Gold Resources (Moz)1	7.42	2.51	0.82	1	0.45	1.47	14.72
Copper Resources (kt)1	560		34			387	982
Reserve grade (g/t Au)1	0.85	1.82	4.04	0.69	5.07	0.54	0.8
Reserve grade (% Cu)1	0.57		0.66			1.05	0.65
FY19 Au production (koz)2,3	252	121	107	95	81	99	753
FY19 AISC (A$/oz)3,4	995	1,320	737	1,233	1,272	-539	924
FY19 net mine cash fow3	87	36	85	32	36	222	498

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.
Group production total includes 21,639oz gold from Edna May operation (FY18Q1)
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
Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense

Outlook for FY20

Evolution is forecasting FY20 Group gold production of 725,000 – 775,000 ounces of gold with AISC expected to be in the range of A$890 – A$940 per ounce.

Using the average AUD:USD exchange rate of 0.7156 for the 12 months to 30 June 2019, Evolution’s forecast FY20 costs are among the lowest of global gold producers and equate to AISC of US$635 – US$670 per ounce.

Investment in sustaining capital in FY20 is forecast to be between A$90 – A$130 million. Investment in tails facilities is the main capital item taking place at Mungari, Mt Carlton, Mt Rawdon and Cracow. Resource definition drilling, which is included in sustaining capital, is expected to be A$13 – A$20 million. Investment in major project capital and exploration is additional to the costs included in AISC.

Major capital in FY20 is expected to be in the range of A$195 – A$235 million. The bulk of the major project capital investment is associated with expansion projects at Cowal as the operation delivers on its objective of increasing production from 250,000 to over 300,000 ounces per annum. Major capital at Cowal includes continuation of the Stage H mine development of A$75 – A$85 million, a ramp up of the Integrated Waste Landform (Life of Mine tails solution) of A$35 – A$40 million and the plant expansion project and other projects of A$5 – A$10 million. Major project capital investment at Mt Carlton predominantly relates to the development of the new underground mine of A$30 – A$35 million; plant optimisation of A$5 – A$10 million; and Stage 4 open pit mine development of A$15 – A$20 million.

FY20 exploration investment is expected to be A$80 – A$105 million . This is a substantial increase on the FY19 group exploration spend of approximately A$50 million and is largely driven by the success at Cowal as the GRE46 and Dalwhinnie underground mineralisation continues to be defined and extended. Cowal (A$50 – A$60 million), Mungari (A$15 – A$20 million) and greenfields exploration projects (A$10 – A$15 million) will receive the largest allocation of the discovery investment in FY20.

FY20 production guidance of 725,000 – 775,000 ounces is unchanged from the three-year outlook issued at Evolution’s Annual General Meeting on 22 November 2018. AISC guidance of A$890 – A$940 per ounce is in line with the cost results achieved in FY19 and is approximately 5% higher than the previous outlook.

Evolution Mining Limited Annual Report 2019

FY19 Operational Highlights and Outlook (continued)

A breakdown of production, costs and capital guidance is provided in the table below:

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FY20 guidance Gold production C1 cash costs [1] All-in sustaining cost [1] Sustaining capital Major capital
(oz) (A$/oz) (A$/oz) (A$M) (A$M)
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Cowal	255,000 – 265,000	810 – 860	930 – 980	25 – 35	115 – 135
Mungari	115,000 – 125,000	1,030 – 1,080	1,230 – 1,280	10 – 15	10 – 15
Mt Carlton	95,000 – 105,000	400 – 450	800 – 850	20 – 25	50 – 60
Mt Rawdon	90,000 – 100,000	960 – 1,010	1,210 – 1,260	10 – 15	10 – 12.5
Cracow	82,500 – 87,500	800 – 850	1,200 – 1,250	15 – 20	10 – 12.5
Ernest Henry	87,500 – 92,500	(925) – (880)	(590) – (540)	10 – 15	0
Corporate			45 – 50	0 – 5
Group	725,000 – 775,000	610 – 660	890 – 940	90 – 130	195 – 235
Copper (t)
Ernest Henry	19,000 – 21,000
Mt Carlton	2,000 – 3,000

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

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47 Evolution Mining Limited Annual Report 2019

Innovation and Asset Optimisation

Our aim is to differentiate our company through innovation, incremental improvements and excellent operational discipline to deliver value for our stakeholders. We embrace disruption and constant change to ensure our business continues to evolve. We focus on the few things that make the biggest difference.

Innovation & Fast Firsts

Float Tails Leach

At Cowal we commissioned our Float Tails Leach project which included:

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 system needed for the operation of the leach circuit, detoxification facilities and carbon handling facilities

The circuit was commissioned in the March 2019 quarter with a 5% gold recovery improvement achieved in the June 2019 quarter.

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Looking inside one of the tanks

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The location of the float tails leach tanks in the bottom left of this image of the Cowal plant

Evolution Mining Limited Annual Report 2019

Innovation and Asset Optimisation (continued)

OLGA project

The OLGA (Online Gold Analyser) project, in collaboration with CSIRO, was specifically designed to enable direct measurement of gold in tailings, feed and concentrate streams down to sub-ppm levels. This is a significant advancement from conventional XRF systems that have detection limits in the tens to hundreds of ppm range.

The trial commenced in December 2018 with installation and commissioning of the first OLGA on the float feed at Mt Carlton.

This new technology provides average gold grades of plant feed every 10 minutes versus our current wait time on conventional lab assays of approximately six hours.

This provides the processing team with the benefit of being able to adjust plant parameters effectively in real time thereby reducing losses to tailings.

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One of our Mt Carlton employees at the OLGA machinery

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One of the teams presenting at the Hackathon, one of our data driven initiatives
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49 Evolution Mining Limited Annual Report 2019

Innovation and Asset Optimisation (continued)

Aerial short-wave infrared (SWIR) hyperspectral surveys

We are committed to applying innovative and best practice technologies where they can improve efficiencies or open up new search spaces for discovery of gold deposits. In the September 2018 quarter we flew SWIR surveys over the Connors Arc, Mount Carlton and Cracow projects in Queensland. This technique allows the identification of key indicator or alteration minerals commonly associated with high sulphidation epithermal gold deposits (e.g. Mt Carlton) and low sulphidation epithermal gold deposits (e.g. Cracow). This technology has been applied successfully for exploration in the Americas but is rarely applied in Australia. The hyperspectral surveys have been valuable both in identifying previously unrecognised alteration mineral anomalies and focusing exploration fieldwork. Ground truthing of the aerially detected alteration mineral anomalies has confirmed a number of new gold prospects, and the technique will be an important part of Evolution’s Discovery workflow in the future.

Debi (Data Enabled Business Improvement)

Data and technology will play an increasingly important role in our drive to remain amongst the lowest cost gold producers in the world. In FY19 we commenced the Debi Program with some excellent results achieved. A highlight of the program was the prevention of a potentially significant mill failure at Mungari through the analysis of data collected by the Obzervr maintenance app. The prevention of this incident saved the operation in excess of A$1 million.

Another significant improvement in FY19 was the establishment of a data lake. This enables data science improvement projects relating to the significant volumes of operational data we collect from our processing plants and mining fleet. We also implemented solutions to streamline visibility of previous drilling campaigns on our tenements and reduce our holdings of spare parts inventory in a safe and sustainable manner.

In FY20 we are doubling down on our efforts to drive operational efficiency and effectiveness gains through smarter use of our data.

Each site has a specific savings target and collectively we are aiming to realise more than A$25 million worth of benefits from improvement initiatives associated with data. We are also looking to use innovative technologies including augmented reality to enhance the way we collaborate, plan and communicate.

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Our hololens project – part of Debi

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Mineralisation at Mt Carlton developed within magmatic hydrothermal centres. We identify “hot spots” as accumulations of low pH clay

Evolution Mining Limited Annual Report 2019

Innovation and Asset Optimisation (continued)

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Drone technology for Magnetic survey deployed at the Drummond project

Drone technology

Drone technology is routinely used for various monitoring and photogrammetry applications across a range of industries. We have adopted these standard applications and recently extended the use of drones to the collection of magnetic data. Drone magnetics is an emerging technique providing essential data in areas that are too small to consider traditional airborne acquisition. The method is faster, cheaper and safer than ground magnetic surveying. In addition, the drone technology enables surveying in areas where access is restricted by other stakeholder activities such as cropping and grazing.

sampling and lab processing. This allows more frequent sample intervals and results in a better representative understanding of the gold in circuit. The benefit of the Carbon Scout is the automated carbon density measurement, in addition to the provisioning of a single sampling point at ground level. Interpretation of real time data enables circuit optimisation in carbon-in-leach and carbon-in-pulp circuits, reducing soluble gold loses and improving cash flow. Cowal has partnered with Gekko and installed one unit with a second unit planned to be installed on the CIL circuit during FY20.

Our Operating System

Innovations and improvements on the horizon

Cyanide reduction

We continue to evaluate GlyCat technology by using glycine and cyanide during the cyanidation process of gold ore at Cowal with an initial trial completed in FY19. The GlyCat process will enhance the dissolution of gold where glycine is used as a catalyst with cyanide. This research program is being run in collaboration with the Australian Mineral Industries Research Association (AMIRA) and has potential to deliver a significant reduction in cyanide and overall reagent costs.

Carbon Scout

The Carbon Scout is an automated carbon sampling and measurement device which eliminates manual

We have developed an Operating System which will allow us to implement Overall Equipment Effectiveness (OEE) which 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 nonconformance, and an improvement plan with measurable outcomes. OEE is being implemented at Mt Carlton as a pilot in FY20 and we are expecting this to deliver cost savings and increase productivity.

Power optimisation

Electricity continues to be a significant cost to our operations which is a constraint on expanding mill capacity at two of our operations. 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.

Evolution Mining Limited Annual Report 2019

Discovery

Evolution is committed to organic growth by discovery of new resources at our existing operations and across our portfolio of greenfield projects.

Our Discovery group had an outstanding 2019 Financial Year. Our exploration and resource definition geology teams delivered a strong 2019 calendar year-end result that saw our Mineral Resources and Ore Reserves grow considerably. Of note was the excellent outcome at Cowal where we added over 1.6 million ounces to Mineral Resources before mining depletion. It was also pleasing to see that we not only replaced depletion but grew our Ore Reserves by 410,000 ounces. A significant component of our resource growth occurred at the GRE46 underground project where discovery of the Dalwhinnie mineralised position became the main driver with very high grades encountered over thick intervals.

Our Discovery strategy is simple: we focus on safely and responsibly finding new deposits that have the potential to deliver long life, low cost mines that improve the quality of our portfolio.

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PEOPLE
PORTFOLIO
SOCIAL LICENCE
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We explore mainly for epithermal and orogenic lode gold mineralisation because we believe we have the right blend of skills and expertise to discover these types of deposits. However, we are also willing to consider other mineralisation styles if we believe they can deliver high quality opportunities. In the epithermal class of deposits, we are searching for high-sulfidation deposits like Mt Carlton, carbonate-base metals deposits like Cowal and low-sulfidation deposits like Cracow. In the orogenic lode gold class of deposits, we are exploring for deposit styles typically mined in the Yilgarn Craton in Western Australia.

Our area selection and project evaluation methodologies consider the following technical characteristics to help rank and prioritise where we are willing to go:

Key mineral systems elements such as geologic architecture, fluid and metal sources, and the drivers and traps capable of producing world-class gold deposits
Footprint scales demonstrating size and grade potential for an Evolution-scale mining operation. Distribution patterns of low-level gold, pathfinder elements and alteration mineral associations that demonstrate evidence of large hydrothermal systems always rank highly
Navigating to gold using the right data layers to enable determination of where we are in a system and to vector to gold quickly and effectively. We believe strongly in integrating geological observations with project-wide multi-element geochemistry, airborne & handheld spectral analysis and best-suited geophysical techniques

Critically, it is essential to definitively test the best targets early. Clear program objectives and results that inform technical and, in some cases, good judgment calls to persist with a target or alternatively to walk away are vital to our strategy.

A key driver underpinning our success is ensuring we have the right people in the right jobs making the right decisions. Over the last three years we have built our team adding quality talent and leadership. This year we established an early-stage exploration team to run our new projects in Queensland and Western Australia. We invested strongly in technical development of our people and provided opportunities to upskill and gain experience across our diverse portfolio of assets and greenfields exploration projects. In December 2018 we hosted our first “Explorathon” in Kalgoorlie which stimulated a series of new ideas and potential breakthroughs that have led to some interesting and potentially game-changing results at Mungari. We believe that developing an inclusive culture that fosters curiosity, freedom to think creatively and to try new things will continue to lead to success.

In the 2020 Financial Year, approximately 85% of our discovery investment will be directed to resource growth and delivering new discoveries near our operating mines. Significant discovery programs are underway at Cowal, New South Wales and Mungari, Western Australia. At Cowal, work is well underway on an exploration decline which has been positioned from the east wall of the E42 open pit. We have commenced underground drilling with the aim of expanding and confirming resources and gathering information for studies to examine and scope future underground mining opportunities. At Mungari, we continue to drill aggressively for high grade vein deposits. These narrow veins average one to two metres wide and are like finding needles in a haystack. We have built up a strong understanding of the geologic controls of this style of mineralisation which is now serving us well as we prioritise new targets for drilling.

Evolution Mining Limited Annual Report 2019

Discovery (continued)

We are continuing to invest in resource definition and discovery across our operations in Queensland. In the last 12 months we added the Connors Arc (100%) and Drummond Gold (Evolution earning 80%) greenfields projects which we hope will fortify a long-term operating future in this part of the state. Across in Western Australia we commenced exploration at our Murchison project (Evolution earning 80%) which is situated in an underexplored area of very well-endowed geology in the camp that hosts the Big Bell, Cuddingwarra and Mt Magnet deposits.

Our discovery approach is shaped by focusing on unlocking resource potential in highly prospective geology near our operations across Queensland, New South Wales and Western Australia. Our discovery and resource definition teams will continue to steadily grow Mineral

Resources and convert them to Ore Reserves. Creation of our greenfields discovery team with talented and skilled explorers will give us another lever to pull on creating value through discovery of the next generation of gold deposits in Australia.

Evolution holds highly prospective tenements in New South Wales, Queensland, Northern Territory, and Western Australia. At the end of FY19 our discovery team was exploring 8,705km[2] of granted tenements and mining leases with applications for 787km[2] pending. These tenement areas are either 100% owned by Evolution or subject to earn-in or JV agreements.

Evolution spent approximately A$49.9 million on discovery and A$15.3 million on reserve definition drilling in FY19. A total of 299km of drilling was completed.

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One of the Explorathon groups viewing the White Foil geology at Mungari
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Evolution Mining Limited Annual Report 2019

Discovery (continued)

Cowal

Early in FY19 the Dalwhinnie Lode within the GRE46 Corridor was discovered at Cowal which drove an aggressive program of exceptional drill results throughout the year. By the end of the year the underground exploration drive at GRE46 was well underway and underground drilling has continued to deliver strong results.

Other growth opportunities at Cowal will come from further delineation and conversion of the significant mineral endowment on Cowal’s mining lease including E41, E42 and E46. There are several other regional opportunities that have been evaluated within the Cowal Province including exploration drilling east of the mine to delineate the edges of the Cowal mineral system and 15km west of the mine at East Girral. There is also potential for the discovery of porphyry copper-gold deposits on the wider property package.

Mungari

Testing of several high-grade targets at Mungari continued in FY19 with some success. Early results at Scottish Archer were very encouraging but lacked continuity in followup drilling. Deep drilling underground at Frog’s Leg from the Banjo Decline was very encouraging for potential incremental additions and is supporting development of a geological model that will be generating future targets.

Boomer was one of the targets generated at the Explorathon and is located approximately 300m west of Frog’s Leg. Drilling has shown early promising signs intersecting very high grades (0.3m at 230g/t Au[1] ) and visible gold in association with a laminated vein. Further upside is likely to be realised at expansions around Castle Hill and nearby prospects such as the Picante trend.

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Cowal GRE46 underground area

Planned drilling Orange shows Yellow shows from exploration outline of December December 2018 decline in blue 2017 mineable MSO outlines shape optimiser (MSO) outlines

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Laminated vein with 0.3m at 230.0g/t Au from 227.2m (EVDD0048)

EVDD0048 results are extracted from the report entitled “June Quarterly Report” released to the ASX 24 Jul 2019 and available to view on our website, www.evolutionmining.com.au.

Evolution Mining Limited Annual Report 2019

Discovery (continued)

Drummond Project, Queensland (earning 80%)

In September 2018 Evolution entered into an earn-in joint venture agreement with Andromeda Metals Limited (ASX:AND) over the Drummond exploration project.

Drummond is an early-stage gold exploration project located in northern Queensland covering ~520km[2] . The project is approximately 140km south of Townsville and 50km southwest of Evolution’s Mount Carlton operation. Outcropping gold-bearing veins of the same style and scale to the nearby Pajingo gold-silver deposit occur within the project. Vein textures at several prospects in the project suggest the system is largely preserved, and that the most prospective level for gold mineralisation remains untested by drilling.

A first phase diamond drilling program was completed at Drummond on the Bunyip Hill and SW Limey epithermal

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Location of the Drummond exploration project

Au-Ag prospects. Several short mineralised intercepts were obtained from an epithermal-style quartz veins supporting the occurrence of potentially other significant epithermal systems preserved in the region.

Murchison (earning 80%)

In April 2019 Evolution entered into an earn-in joint venture agreement with Enterprise Metals Limited (ASX:ENT) over the Murchison exploration project.

Murchison is a large, early-stage gold exploration project covering ~750km[2] in the Murchison region of central Western Australia. The project is prospective for Archaean greenstone gold deposits and encompasses poorly tested continuations of the Big Bell and Cuddingwarra Shear Zones which host multi-million ounce gold deposits at Big Bell, Cuddingwarra and Mount Magnet.

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Location of Murchison exploration tenements

55 Evolution Mining Limited Annual Report 2019

Mineral Resources and Ore Reserves

Group Mineral Resources as at 31 December 2018 are estimated at 14.73 million ounces of gold and 982,000 tonnes of copper compared with the estimate at 31 December 2017 of 14.24 million ounces of gold and 946,000 tonnes of copper. The updated estimate accounts for mining depletion in 2018 of 902,000 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 2018 are estimated at 7.46 million ounces of gold and 538,000 tonnes of copper compared with the 31 December 2017 estimate of 7.05 million ounces of gold and 564,000 tonnes of copper after accounting for mining depletion of 902,000 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 2018 Mineral Resources and Ore Reserves are unchanged for gold, copper and silver to those used previously (December 2017 Mineral Resources and Ore Reserves). The A$1,350/oz gold price assumption used to estimate Ore Reserves has been unchanged since 2012.

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 2018 Mineral Resources and Ore Reserves Statement

Evolution is not aware of any new information or data that materially affects the information contained in the Annual Mineral Resource and Ore Reserve Statement 31 December 2018 other than changes due to normal mining depletion during the six months ended 30 June 2019.

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. A material information

summary is also provided for the Cowal 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.

56 Evolution Mining Limited Annual Report 2019

Mineral Resources and Ore Reserves (continued)

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Activity Competent Person Membership status
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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	Chris Wilson	Member
Mt Carlton Open Pit Ore Reserve	Sam Patterson	Member
Mt Carlton Underground Ore Reserve	Ben Hawkins	Member
Cracow Mineral Resource	Michael Smith	Member
Cracow Ore Reserve	Matt Gray	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 2018” released 1 February 2019 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 Mike Corbett respectively. Colin and Mike 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 Mike Corbett 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

Replacing our reserves on an annual basis is an imperative at Evolution so it was pleasing to see that we not only replaced depletion but grew our Ore Reserves by 410,000 ounces – Glen Masterman – VP Discovery and Chief Geologist

57 Evolution Mining Limited Annual Report 2019

Mineral Resources and Ore Reserves (continued)

CP3	CP3		1	2			4	5			3	6
Gold Measured Indicated Inferred Total Resource	Gold Metal (koz) 6,004	1,411	7,415	454	682	141	823	996	1,902	611	2,514	1,470
	Gold Grade (g/t) 0.82	3.24	0.96	4.78	2.23	8.20	2.60	0.62	1.33	3.78	1.58	0.63
	Tonnes (Mt) 227.09	13.55	240.64	2.96	9.51	0.53	10.04	50.07	44.49	5.04	49.52	72.05
	Gold Metal (koz) 193	1,411	1,604	147	48	20	68	146	463	247	710	253
	Gold Grade (g/t) 1.07	3.24	2.60	2.88	3.44	7.43	4.10	0.60	1.56	3.31	1.91	0.62
	Tonnes (Mt) 5.63	13.55	19.18	1.59	0.43	0.08	0.52	7.51	9.27	2.32	11.59	12.71
	Gold Metal (koz) 4,784	-	4,784	227	586	120	706	783	1,433	278	1,711	952
	Gold Grade (g/t) 0.85	-	0.85	6.47	2.13	8.38	2.44	0.65	1.27	3.61	1.42	0.62
	Tonnes (Mt) 174.92	-	174.92	1.09	8.57	0.45	9.02	37.36	35.03	2.39	37.42	47.76
	Gold Metal (koz) 1,027	-	1,027	79	49	-	49	68	6	86	93	264
	Gold Grade (g/t) 0.69	-	0.69	9.04	3.03	-	3.00	0.41	1.02	8.40	5.63	0.71
	Tonnes (Mt) 46.54	-	46.54	0.27	0.50	-	0.50	5.19	0.19	0.32	0.51	11.57
	Cut-Of 0.4	2.0		2.8	0.35	2.4		0.2	0.5	2.0/1.5		0.9
	Type Open pit	UG	Total	Total	Open pit	UG	Total	Total	Open pit	UG	Total	Total
	Project Cowal1	Cowal	Cowal1	Cracow1	Mt Carlton1	Mt Carlton	Mt Carlton1	Mt Rawdon1	Mungari1	Mungari	Mungari1	Ernest Henry2

Evolution Mining Limited Annual Report 2019

Mineral Resources and Ore Reserves (continued)

CP3 1	CP3 1	2	6	7		4			5	8	Marsden Open pit 0.3 - - - 65.17 0.39 817 65.17 0.39 817 3 Total 61.27 0.76 1,498 230.50 0.80 5,960 291.77 0.80 7,458 Data is reported to signifcant fgures to refect appropriate precision and may not sum precisely due to rounding 1. Includes stockpiles 2. Ernest Henry Operation cut-of 0.9% CuEq 3. Group Ore Reserve Competent Person (CP) Notes refer to 1. Ryan Kare; 2. Matt Gray; 3. Anton Kruger; 4. Dimitri Tahan; 5. Matt Varvari; 6. Sam Patterson; 7. Ben Hawkins; 8. Mike Corbett (Glencore). 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 2018” released 1 February 2019 and available to view at www.glencore.com. The Company confrms that it is not aware of any new information or data that materially afects 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. Mike Corbett consents to the inclusion in this report of the matters based on their information in the form and context in
Gold Proved Probable Total Reserve	Gold Metal (koz) 3,880	187	513	108	622	570	521	113	634	747
	Gold Grade (g/t) 0.85	5.07	3.82	5.65	4.04	0.69	1.60	4.77	1.82	0.54
	Tonnes (Mt) 141.25	1.15	4.18	0.60	4.78	25.56	10.12	0.74	10.86	43.00
	Gold Metal (koz) 2,854	124	465	108	573	521	511	80	590	481
	Gold Grade (g/t) 0.94	4.77	3.92	5.65	4.16	0.72	1.61	4.58	1.77	0.46
	Tonnes (Mt) 94.70	0.81	3.69	0.60	4.28	22.65	9.85	0.54	10.39	32.50
	Gold Metal (koz) 1,027	63	49	-	49	49	10	34	44	267
	Gold Grade (g/t) 0.69	5.76	3.03	-	3.03	0.52	1.14	5.26	2.89	0.79
	Tonnes (Mt) 46.54	0.34	0.50	-	0.50	2.92	0.27	0.20	0.47	10.50
	Cut-Of 0.45	3.4	0.8	3.7		0.3	0.75	3.2		0.9
	Type Open pit	Underground	Open pit	Underground	Total	Open pit	Open pit	Underground	Total	Underground
											Full details of the Ernest Henr www.glencore.com. The Comp underpinning the estimates in
	Project Cowal1	Cracow1	Mt Carlton1	Mt Carlton	Mt Carlton1	Mt Rawdon1	Mungari1	Mungari	Mungari1	Ernest Henry2

Evolution Mining Limited Annual Report 2019

Mineral Resources and Ore Reserves (continued)

Group Copper Mineral Resources Statement Copper Measured Indicated Inferred Total Resource CP3 Project Type Cut-Of 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) Marsden Total 0.2 - - - 119.83 0.46 553 3.14 0.24 7 122.97 0.46 560 1	2
Copper Metal (kt) 560	387	29
Copper Grade (%) 0.46	1.19	0.30
Tonnes (Mt) 122.97	32.44	9.51
Copper Metal (kt) 7	67	2
Copper Grade (%) 0.24	1.17	0.46
Tonnes (Mt) 3.14	5.73	0.43
Copper Metal (kt) 553	252	26
Copper Grade (%) 0.46	1.17	0.30
Tonnes (Mt) 119.83	21.51	8.57
Copper Metal (kt) -	69	1
Copper Grade (%) -	1.32	0.24
Tonnes (Mt) -	5.21	0.50
Cut-Of 0.2	0.9	0.35
Type Total	Total	Open pit
Project Marsden	Ernest Henry2	Mt Carlton1

Evolution Mining Limited Annual Report 2019

Chief Financial Officer’s Review

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A clear priorty for Evolution since the Company’s formation has been to generate superior returns for our shareholders. The financial performance achieved in the 12 months to 30 June 2019 continued to demonstrate the quality of Evolution’s asset portfolio and enabled a further increase in dividends paid to our shareholders.

The business delivered statutory net profit after tax of A$218.2 million and generated free cash flow of A$291.6 million. With Evolution moving to a net cash position by 30 June 2019 the Board approved an improvement to the Company’s dividend policy by changing the payout ratio to target 50% of free cash flow. Evolution declared a final fully franked dividend of 6 cents per share – a 50% increase on the final FY18 dividend. Lawrie Conway – Finance Director and Chief Financial Officer

The Group recorded a statutory net profit after tax of A$218.2 million for the year, a decrease of 17% on the prior year. Underlying profit after tax decreased by 13% to A$218.2 million (30 June 2018: A$250.8 million).

The Group’s ongoing focus on productivity improvements and cost efficiencies delivered another year of strong results. Total gold production of 753,001oz was above the midpoint of guidance for the year of 720,000 – 770,000oz. Our AISC of A$924/oz placed Evolution among the lowest cost gold producers in the world.

Looking forward, Evolution has guided FY20 gold production of 725,000 – 775,000 ounces at an All-in Sustaining Cost of A$890 – A$940 per ounce.

Operating mine cash flow of A$771.5 million was generated and after A$273.7 million of capital investment a net mine cash flow of A$497.8 million was generated. It was very pleasing again for all our mines to be contributing positive cash flows after meeting their operating and capital requirements.

Evolution continued to invest in extensions of mine life and production growth, including the approval of major development projects and exploration drilling at Cowal, and development of an underground mine and plant upgrade at Mt Carlton.

Evolution moved into a net cash position during the year. As at 30 June 2019 the net cash position was A$35.2 million (30 June 2018: net bank debt of A$71.8 million). During the financial year the Group made A$95.0 million of repayments on the Senior Secured Term Loan (“Facility D”). The A$350.0 million Senior Secured Revolving Loan (“Facility A”) remains undrawn at 30 June 2019 and is available until 31 July 2021.

Revenue for the year ended 30 June 2019 decreased by 2% to A$1,509.8 million (30 June 2018: A$1,540.4 million). The 7% higher achieved gold price of A$1,760/oz was offset by a decrease in sold ounces of 7% to 742,964oz (30 June 2018: 798,101oz including 22,903oz at Edna May)

and lower copper and silver revenue which is a result of both volume and price. Revenue comprised of A$1,307.5 million for gold and A$202.3 million for copper and silver (30 June 2018: A$1,312.6 million for gold and A$227.8 million for copper and silver). The Edna May operation contributed revenue in 2018 for three months of A$37.2 million prior to its sale on 3 October 2017.

Total gold sold of 742,964oz included deliveries into the hedge book of 150,000oz at an average price of A$1,690/ oz (30 June 2018 hedge deliveries: 205,915oz at A$1,564/ oz). The remaining 592,964oz were sold at spot, achieving an average price of A$1,777/oz (30 June 2018 spot sales: 592,186oz at A$1,673/oz). The Group’s hedge book as at 30 June 2019 totals 400,000oz at an average price of A$1,838/oz with deliveries through to June 2023.

Group operating costs (excluding depreciation, amortisation and fair value adjustments of A$398.5 million) increased to A$736.0 million (30 June 2018: A$705.5 million). Mine operating costs, excluding Edna May, were higher than FY18 by A$43.4 million. Lower capitalisation of mine costs in the financial year, mainly due to the completion of the White Foil cutback at Mungari during FY18, contributed to A$27.8 million of higher mine operating costs being expensed in FY19 with the remainder of the increase driven by a mix of input prices and activities. Higher power prices contributed an additional A$7.5 million to power costs, mainly at Cowal, due to the full year impact in FY19 of higher priced contracts that were effective from 1 January 2018. Oil price increases resulted in A$6.6 million of higher diesel costs while FY19 labour costs increased by approximately 3% above FY18.

Inventory movements resulted in a charge to costs in FY19 of A$21.6 million driven by utilisation of ore stockpiles at Mt Rawdon resulting in an A$5.3 million expense in FY19 compared to a credit to costs of A$23.8 million in FY18 where ore stockpiles increased. Inventory movements at other sites partially offset the impact at Mt Rawdon with a net credit to operating costs in FY19 of A$7.5 million.

61 Evolution Mining Limited Annual Report 2019

(continued) Chief Financial Officer’s Review

FINAL DIVIDEND

FULLY FRANKED

6cps 50%

During the year, the Group made income tax payments of A$91.2 million related to the 30 June 2018 and 30 June 2019 financial years and recognised an income tax expense of A$96.7 million (30 June 2018: A$75.5 million).

Total exploration expenditure for the year ended 30 June 2019 was A$52.1 million (30 June 2018: A$31.6 million) with an exploration expense of A$7.2 million (30 June 2018: A$5.4 million).

Capital expenditure for the year totalled A$273.6 million (30 June 2018: A$271.9 million). This consisted of sustaining capital, including near mine exploration and resource definition, of A$93.2 million (30 June 2018: A$100.9 million) and major capital of A$180.4 million (30 June 2018: A$171.0 million). The main major capital projects included the Cowal Stage H development, Float Tails Leach project and E46 land acquisition costs; underground mine development at Cracow, Mt Carlton and Mungari; and capital waste stripping at Mt Carlton and Mt Rawdon.

In August 2019, the Directors approved a change to the dividend policy to paying a dividend, of whenever possible, based on free cash flow generated during a year. The Directors will assess the group cash flow and outlook for the business with the intention to return excess cash to shareholders and targeting a payout level around 50% of cash flow. The Group’s free cash flow is defined as cash flow before debt, dividends and any merger and acquisition activities. The change was applied to the final dividend for FY19.

In conclusion, the 2019 Financial Year was another good year for Evolution. Looking forward, we remain focused on maintaining low costs and strong cash generation. We will continue to invest capital on projects that provide appropriate returns on capital and are committed to funding our discovery strategy which is delivering strong results for our business. We are also confident in our ability to continue to deliver superior shareholder returns.

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Financials Units FY19 FY18 Change
Statutory Profit before tax A$M 314.8 338.9 -7%
Statutory Profit after tax A$M 218.2 263.4 -17%
Underlying Profit after tax A$M 218.2 250.8 -13%
EBITDA A$M 730.3 795.1 -8%
Operating Mine Cash Flow A$M 771.5 811.8 -5%
Net Mine Cash Flow A$M 497.8 539.9 -8%
Group Cash Flow [1] A$M 291.6 395.6 -26%
EBITDA Margin [2] % 48 53 -10%
Earnings Per Share cps 12.9 15.6 -21%
Final dividend (fully franked) cps 6 4 50%
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Excludes proceeds from Edna May sale (FY18) and Tribune & Castle Hill investments (FY19)
FY18 excludes Edna May

Yours faithfully

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LAWRIE CONWAY FINANCE DIRECTOR and CHIEF FINANCIAL OFFICER

62 Evolution Mining Limited Annual Report 2019

Evolution Mining Limited Annual Report 2019

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Board of Directors
Standing left to right: Cobb Johnstone, Lawrie Conway, Jake Klein, Jim Askew, Andrea Hall, Graham Freestone, Tommy McKeith
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The Board has implemented and is committed to the ASX Corporate Governance Council’s Fourth Edition Corporate Governance Principles and Recommendations, and to maintaining a high standard of Corporate Governance which reflects the requirements of the market regulators and the expectations of the Company’s security holders.

Jacob (Jake) Klein

BCom Hons, ACA, Executive Chairman

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 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, 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 30 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).

64 Evolution Mining Limited Annual Report 2019

Board of Directors (continued)

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 includes Syrah Resources Limited (Chairman since October 2014), a company with operations in Mozambique and in the USA; and Endeavour Mining Corporation, a company with operations in Cote d’Ivoire, Mali and Burkina Faso (Non-Executive Director since July 2017).

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

Within the last three years Mr Askew has been a NonExecutive Director of Nevada Copper Limited; Asian Mineral Resources Ltd; and OceanaGold Corporation.

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. He was a Non-Executive Director of Lion Selection from 2001 to 2009 and was a Non-Executive Director of Catalpa Resources Limited from 2009 to 2011 and Chaired their Audit Committees during that period.

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 currently Chairman of Aurelia Metals Ltd, a position he has held since November 2016.

Mr Johnstone was Evolution’s Lead Independent Director from 25 November 2015 to 30 November 2018 and remains the Chair of the Risk and Sustainability Committee and a member of the Audit Committee.

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

Thomas (Tommy) McKeith

BSc (Hons), GradDip Eng (Mining), MBA, Lead Independent 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 and Genesis Minerals Limited.

Mr McKeith is the Lead Independent Director effective from 1 December 2018, Chair of the Nomination and Remuneration Committee and Member of the Risk and Sustainability Committee.

Andrea Hall

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

Mr Freestone was a Non-Executive Director of Kasbah Resources Limited from 2017 to 2019, a company with a tin project in Morocco, and Chaired its Remuneration and Audit Committees.

Mr Freestone is a member of the Audit Committee and is a Member of the Nomination and Remuneration Committee.

Colin (Cobb) Johnstone

BEng (Mining), Non-Executive 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.

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, Andrea was a Perth based partner within KPMG’s Risk Consulting Services where she serviced 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. She is also a Non-Executive Director of Insurance Commission of Western Australia and the Fremantle Football Club.

Ms Hall is the Chair of the Audit Committee.

65 Evolution Mining Limited Annual Report 2019

66 Evolution Mining Limited Annual Report 2019

Evolution Mining Limited Annual Financial Report

	Page
Directors' Report	68
Auditor's Independence Declaration	103
Financial Statements
Consolidated Statement of Proft or Loss and Other Comprehensive Income 104
Consolidated Balance Sheet	105
Consolidated Statement of Changes in Equity	106
Consolidated Statement of Cash Flows	107
Notes to the Consolidated Financial Statements	108
Directors' Declaration	142
Independent Auditor's Report to the Members	143
Shareholder Information	149
Corporate Information	153

Evolution Mining Limited Annual Report 2019

Directors' Report

Results for Announcement to the Market

Key Information

	30 June 2019	30 June 2018	Up / (down)	% Increase/
	$'000	$'000	$'000	(decrease)
Revenues from contracts with customers	1,509,824	1,540,433	(30,609)	(2)%
SPACE
Earnings before Interest, Tax, Depreciation & Amortisation
(EBITDA)	730,262	795,083	(64,821)	(8)%
SPACE
Statutory profit before income tax	314,826	338,934	(24,108)	(7)%
SPACE
Profit from ordinary activities after income tax attributable to
the members	218,188	263,388	(45,200)	(17)%

Dividend Information

	Amount	Franked amount
	per share	per share
	Cents	Cents
Final dividend for the year ended 30 June 2019
Dividend to be paid on 27 September 2019	6.0	6.0
Space
Interim dividend for the year ended 30 June 2019
Dividend fully paid on 30 March 2019	3.5	3.5
Space
Final dividend for the year ended 30 June 2018
Dividend fully paid on 29 September 2018	4.0	4.0

Net Tangible Assets

	30 June 2019	30 June 2018
	$	$
Net tangible assets per share	1.45	1.35
Earnings Per Share
	30 June 2019	30 June 2018
	Cents	Cents
Basic earnings per share	12.86	15.57
Diluted earnings per share	12.78	15.51

Additional Appendix 4E disclosure requirements can be found in the notes to these financial statements and the Directors' Report attached thereto. This report is based on the consolidated financial statements which have been audited by PricewaterhouseCoopers.

68 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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 2019.

Directors

The Directors of Evolution Mining Limited during the year ended 30 June 2019 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.

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

(i) Appointed as Lead Independent Director replacing Colin (Cobb) Johnstone effective 1 December 2018. (ii) Resigned as Non-Executive Director effective 1 August 2018.

(iii) 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 2019 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 2019 include:

Driving a safety culture where our people do the right thing because they want to, not because they have to underpins our safety programs. Disappointingly our total recordable injury frequency (TRIF) for the year was 8.3 (30 June 2018: 5.5). Investigations showed an increase in minor injuries with a need to increase focus on promoting mindfulness and pre-task risk identification. Safety programs included HSE Systems and Critical Control verification audits. The focus continues to be on improving Evolution’s safety culture and embedding adequate management of critical controls associated with high risks across all sites.
The Group published it's inaugural Sustainability Report during the year.
The Group recorded a statutory net profit after tax of $218.2 million for the year, a decrease of 17% on the prior year. Underlying profit after tax decreased by 13% to $218.2 million (30 June 2018: $250.8 million).
• The Group’s continuing focus on productivity improvements and cost efficiencies delivered another year of strong results including:
Total gold production of 753,001oz which was above the midpoint of guidance for the year of 720,000oz - 770,000oz.
Operating mine cash flow of $771.5 million.
Net mine cash flow of $497.8 million, with all operations delivering positive cash flow generation after meeting their operating and capital needs.
Evolution continued investing for extensions of mine life and production growth, including the approval of major development projects and exploration drilling at Cowal, and development of an underground mine and plant upgrade at Mt Carlton.
Evolution moved into a net cash position during the year and as at 30 June 2019 the net cash position was $35.2 million (30 June 2018: net bank debt of $71.8 million).
A total of $127.0 million (30 June 2018: $109.9 million) in fully franked dividends was paid during the year. A final dividend of 6 cents per share fully franked ($101.8 million) was declared and will be paid on 27 September 2019.
During the year, the Group made $95.0 million of repayments on the Senior Secured Term Loan (“Facility D”). The $350.0 million Senior Secured Revolving Loan ("Facility A") remains undrawn at 30 June 2019.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Key highlights for the year (continued)

During the year, the Group hedged a further 300,000oz of production at an average price of A$1,871/oz for quarterly deliveries between July 2020 and June 2023. The additional hedging provides support to the balance sheet during a period of major capital investment while leaving the majority of production unhedged. The proportion of expected production hedged is 13-15% per annum through until 30 June 2023.
In August 2018, La Mancha Group International B.V. (La Mancha) Group sold a portion of their shareholding in the Group, taking their total holding down to 9.6%. In line with the terms of the Share Sale Agreement signed between the two Companies, 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 effective 1 August 2018.
In September 2018, the Group entered into an earn-in joint venture agreement with Andromeda Metals Limited over the Drummond exploration project. Drummond is an early-stage gold exploration project located in northern Queensland covering roughly 520km². The project is approximately 50km southwest of the Group's Mt Carlton operation. The key terms of the agreement are as follows:
The Group can earn a 51% interest in the project by making a cash payment of $300,000 to Andromeda and spending $2 million on exploration over a two year period.
The Group can earn a further 29% (for a total of over 80%) by making an additional cash payment of $200,000 and spending $4 million on exploration over two years.
The Group manages and operates the joint venture while it is sole contributing and thereafter while ever it holds a majority equity.
In October 2018, the Board approved the Mt Carlton underground development and plant upgrade modifications at an estimated investment of $60.0 million to be incurred from FY19 to FY22. First ore from the underground is planned for FY21.
In October 2018, the Cowal operation was granted regulatory approval from the NSW Department of Planning and Environment to increase the plant processing rate by 31% from 7.5 million tonnes per annum (Mtpa) to 9.8Mtpa. Other key features of the modification application include the implementation of a secondary crushing circuit at the processing plant and the development of an Integrated Waste Landform (IWL) to facilitate storage of tailings over the life of mine. Subsequent to this regulatory approval, the Board approved the first stage upgrade to the Cowal processing plant in November 2018. The first stage of the project will take the processing capacity to at least 8.7Mtpa at an estimated capital investment of $25.0 to $30.0 million.
In October 2018, regulatory approval to commence the development of the Galway-Regal-E46 (GRE46) exploration decline at Cowal was received. The decline will allow the Group to conduct further resource definition and discovery drilling at GRE46 as well as further drilling to delineate the Dalwhinnie Lode. Drilling success has been reported at both GRE46 and Dalwhinnie as at 30 June 2019.
During December 2018, the Group agreed to subscribe for a further 3.2 million shares in Riversgold Ltd, taking the Company’s shareholding to 15.7 million shares and a total of 18.7% of the outstanding shares in Riversgold Ltd.
In February 2019, the Group acquired 11.05 million shares, representing a 19.9% shareholding, in Tribune Resources Limited for a cash consideration of $41.3 million. Tribune’s major asset is it's interest in the East Kundana mining operation which is a joint venture between Northern Star Resources Limited (51% and operator), Rand Mining Limited (12.25%) and Tribune (36.75%). The East Kundana Joint Venture (EKJV) tenements are adjacent to the Group's 1.7 million tonnes per annum Mungari processing plant, which is located approximately 20km west of Kalgoorlie in Western Australia.
In April 2019, the Group entered into an earn-in joint venture agreement with Enterprise Metals Limited (Enterprise) over the Murchison exploration project. Murchison is a large, early-stage gold exploration project covering ~750km2 in the Murchison region of central Western Australia. The Group can earn an 80% interest in the Murchison project by:
Spending $6.0 million on exploration over a four-year period.
Making an initial cash payment to Enterprise of $150,000 on signing of the agreement.
Making an additional cash payment to Enterprise of $150,000 should the agreement remain in place after two years.
The Group will operate the project during the earn-in period.

70 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review

Evolution is a leading, low cost Australian gold mining company. As at 30 June 2019, 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 consistently delivering to guidance. 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 approach to business development through opportunistic, logical, value-accretive acquisitions and divestments.

Profit Overview

The Group achieved a statutory net profit after tax of $218.2 million for the year ended 30 June 2019 (30 June 2018: $263.4 million). The following graph shows the movements in the Group's statutory profit after tax for the year ended 30 June 2018 to the year ended 30 June 2019.

==> picture [452 x 184] intentionally omitted <==

Gold revenue was $31.9 million higher driven by higher gold prices this was partially offset by $25.3 million lower by-product revenue as a result of lower copper and silver prices and volumes. FY18 included a loss of $3.7 million at Edna May which was sold in October 2017.

Mine operating costs excluding Edna May and inventory movements were higher than FY18 by $43.4 million. Lower capitalisation of mine costs in the financial year mainly for the completion of the White Foil cutback at Mungari during FY18 contributed to $27.8 million of higher mine operating costs being expensed in FY19 with the remainder of the increase driven by a mix of input prices and activities. Higher power prices contributed an additional $7.5 million to power costs, mainly at Cowal, due to the full year impact in FY19 of higher priced contracts that were effective from 1 January 2018. Oil price increases resulted in $6.6 million of higher diesel costs while labour costs moved approximately 3% higher than FY18.

Inventory movements resulted in an additional charge to costs in FY19 of $21.6 million driven by utilisation of ore stockpiles at Mt Rawdon resulting in an $5.3 million FY19 expense compared to a credit to costs of $23.8 million in FY18 where ore stockpiles increased. Inventory movements at other sites partially offset the impact at Mt Rawdon with a net credit to operating costs in FY19 of $7.5 million.

Lower depreciation and amortisation expense reflects the higher reserves in the 2018 Mineral Resource and Ore Statement issued in April 2019 over which assets are to be depreciated and fair value at Cowal and Mungari are to be amortised.

Tax expense for the current year is higher with the prior year reduced by the recognition of tax losses and temporary differences including $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 prior year.

The Group achieved an underlying net profit after tax of $218.2 million for the year ended 30 June 2019 (30 June 2018: $250.8 million). The table below shows a reconciliation of statutory profit/(loss) before tax to the underlying profit after tax.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Profit Overview (continued)

	2019	2018
	$'000	$'000
Statutory profit before income tax	314,826	338,934
Fair value gain	-	(3,142)
Transaction and integration costs	-	(866)
Underlying profit before income tax	314,826	334,926
Income tax expense	(96,638)	(75,546)
Tax benefit on sale of subsidiary	-	4,165
Tax effect of adjustments	-	1,201
Recognition of previously unrecognised tax losses	-	(4,544)
Recognition ofpreviouslyunrecognised temporarydifferences	-	(9,440)
Underlying profit after income tax	218,188	250,762

Cash Flow

Operating mine cash flow decreased by 5% totalling $771.5 million (30 June 2018: $811.8 million). Total capital expenditure totalled $273.6 million which included $93.2 million of sustaining capital expenditure and $180.4 million of major capital expenditure.

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 2019	30 June 2018	% Change (ii)
Total underground ore mined (kt)	7,680	7,817	(2)%
Total underground lateral development (m)	14,538	13,640	7%
Total open pit ore mined (kt)	11,703	14,453	(19)%
Total open pit waste mined (kt)	37,501	40,984	(8)%
Processed tonnes (kt)	21,050	21,425	(2)%
Gold grade processed (g/t)	1.32	1.37	(4)%
Gold production (oz)	753,001	801,187	(6)%
Silver production (oz)	709,497	989,253	(28)%
Copper production (t)	21,846	23,268	(6)%
Unit cash operating cost (A$/oz) (i)	627	512	(22)%
All in sustaining cost (A$/oz) (i)	924	797	(16)%
All in cost(A$/oz) (i)	1,215	1,033	(18)%
Gold price achieved (A$/oz)	1,760	1,645	7%
Silver price achieved (A$/oz)	21	22	(5)%
Copperprice achieved(A$/t)	8,587	8,923	(4)%
Total Revenue	1,509,824	1,540,433	(2)%
Cost of sales (excluding D&A and fair value adjustments (i)	(735,971)	(705,553)	(4)%
Corporate, admin, exploration and other costs (excluding D&A)	(43,591)	(39,797)	(10)%
EBIT (i)	330,304	360,380	(8)%
EBITDA (i)	730,262	795,083	(8)%
Statutory profit/(loss) after income tax	218,188	263,388	(17)%
Underlying profit after income tax	218,188	250,762	(13)%
Operatingmine cash flow	771,461	811,766	(5)%
Capital expenditure	(273,636)	(271,870)	(1)%
Net mine cash flow	497,825	539,896	(8)%

(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.

72 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Mining Operations

Cowal

Cowal had another successful year, achieving above guidance gold production of 251,500oz (guidance of 240,000 - 250,000oz) at an average unit cash operating cost of $765/oz and AISC of $995/oz. Cash costs and AISC were below the lower end and within guidance of $765 - $840/oz and $975 - $1,075/oz respectively. Capital expenditure for the year was $144.7 million, of which $100.7 million relates to major projects consisting mostly of the Stage H cutback.

Cowal activities in the year focussed on the Stage H cutback, commissioning of the Float Tails Leach (FTL) circuit and construction pre-works of the Integrated Waste Landform tailings facility.

During October 2018, the Cowal operation was granted regulatory approval from the NSW Department of Planning and Environment to increase the plant processing rate by 31% from 7.5 million tonnes per annum (Mtpa) to 9.8Mtpa per the Modification 14 development application.

Regulatory approval to commence the development of the Galway-Regal-E46 (GRE46) exploration decline at Cowal was also approved. The decline will allow Evolution to conduct further resource definition and discovery drilling at GRE46 as well as further drilling to delineate the Dalwhinnie Lode. Excellent drilling results were reported at both GRE46 and Dalwhinnie as of 30 June 2019 which continues to highlight the high-grade nature of this mineralised system.

Exploration work delivered material resource and ore reserves growth, reflected in the Mineral Resources and Ore Reserves update which incorporated full year drilling results as at 31 December 2018. Cowal was a major contributor with a 134% increase to Mineral Resources to 1.41 million ounces and a 27% increase to Ore Reserves to 3.88 million ounces.

The underground exploration decline had reached 550 metres of lateral development as of 30 June 2019 and is progressing ahead of schedule. The underground drilling program commenced during the June 2019 quarter and will continue for the next 12-18 months

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Key Business Metrics	30 June 2019	30 June 2018	Change	% Change
Operating cash flow ($'000)	232,258	225,812	6,446	3%
Sustaining capital ($'000)	(44,000)	(39,697)	(4,303)	11%
Major capital ($'000)	(100,734)	(84,923)	(15,811)	19%
Total capital ($'000)	(144,734)	(124,620)	(20,114)	16%
Net mine cash flow ($'000)	87,524	101,192	(13,668)	(14)%
Gold production (oz)	251,500	257,951	(6,451)	(3)%
All-in Sustaining Cost ($/oz)	995	877	(118)	(13)%
All-in Cost($/oz)	1,500	1,223	(277)	(23)%

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Mining Operations (continued)

Mungari

Mungari produced a total of 120,535oz at an average unit cash operating cost of $1,078/oz and an AISC of $1,320/oz. Gold production was below the bottom end of the 125,000 - 135,000oz guidance range. Cash costs and AISC were above guidance of $875 - $925/oz and $1,050 - $1,100/oz respectively. Capital expenditure in the year was $28.1 million of which $15.0 million related to mine development at the Frog’s Leg underground mine.

The Frog’s Leg underground mine produced 391kt of ore at an average grade of 4.54g/t. Total development for the year was 1,928m which increased from the prior year (30 June 2018: 1,749m). Total material moved at the White Foil open pit was 1,640kt at an average grade of 1.61 g/t. The White Foil open pit Stage 3 cutback progressed on plan and continued into an operating phase with reduced volumes of capital waste being recognised.

The process plant performed well over the course of the year, with 1,660kt of ore processed at an average grade of 2.40g/t. Strong gold recoveries of 93.8% were achieved despite a slight decrease from the prior year (30 June 2018: 94.2%).

In July 2018, the Group signed an agreement with Norton Gold Fields Limited to restructure ownership of the Castle Hill gold deposit. The Group now owns 100% of this project with Ore Reserves of 236,000 ounces which will provide a material extension to the operating life at Mungari.

Drilling for FY20 will be focussed on Ora Banda, phase 3 drilling for the Banjo (Frog’s Leg) deeper targets and the Boomer prospect which is 400m west of Frog’s Leg.

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Key Business Metrics	30 June 2019	30 June 2018	Change	% Change
Operating cash flow ($'000)	63,864	70,240	(6,376)	(9)%
Sustaining capital ($'000)	(11,960)	(9,935)	(2,025)	20%
Major capital ($'000)	(16,153)	(36,611)	20,458	(56)%
Total capital ($'000)	(28,113)	(46,546)	18,433	(40)%
Net mine cash flow ($'000)	35,751	23,694	12,057	51%
Gold production (oz)	120,535	118,498	2,037	2%
All-in Sustaining Cost ($/oz)	1,320	1,181	(139)	(12)%
All-in Cost($/oz)	1,536	1,604	68	4%

74 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Mining Operations (continued)

Mt Carlton

Mt Carlton produced a total of 106,646oz which was above the top end of the 95,000 - 105,000oz guidance range. Unit cash operating costs of $492/oz was within the guidance of $470 - $520/oz and AISC of $738/oz was slightly above the top end of the $670 - $720/oz guidance.

In early October 2018 the Board approved development of the Mt Carlton underground mine which will allow production from the high-grade link zone to be brought forward. Establishment work has commenced and first ore from the underground is planned to be delivered in FY21.

Mining activities focused on progressing both the Stage 3 and Stage 4 cutbacks. Work on the Stage 3 underground project focused on mobilisation of the mining contractor and establishment of services (electricity, water and compressed air) to the portal location in anticipation of commencing underground development early in the September 2019 quarter.

Capital expenditure for the year of $35.6 million is largely attributed to Stage 3b capital waste of $20.0 million combined with the new underground mine construction project.

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Key Business Metrics	30 June 2019	30 June 2018	Change	% Change
Operating cash flow ($'000)	120,190	139,598	(19,408)	(14)%
Sustaining capital ($'000)	(8,039)	(9,866)	1,827	(19)%
Major capital ($'000)	(27,537)	(21,009)	(6,528)	31%
Total capital ($'000)	(35,576)	(30,875)	(4,701)	15%
Net mine cash flow ($'000)	84,614	108,723	(24,109)	(22)%
Gold production (oz)	106,646	112,479	(5,833)	(5)%
All-in Sustaining Cost ($/oz)	738	535	(203)	(38)%
All-in Cost($/oz)	1,015	735	(280)	(38)%

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Mining Operations (continued)

Mt Rawdon

Mt Rawdon achieved total gold production of 94,647oz at a unit cash operating cost of $1,073/oz and an AISC of $1,233/oz. Production was slightly lower than guidance of 95,000 - 105,000oz, while cash costs and AISC exceeded the guidance of $815 - $865/oz and $1000 - $1050/oz respectively. The poor FY19 production and costs were predominantly driven by reduced access to higher grade ore in the open pit at the northern end of the pit. This was a timing and sequencing matter. Capital expenditure for the year was $28.4 million with $19.7 million attributable to capital waste mined in the Stage 4 cutback.

Mining activities were focussed on waste material in Stage 4 and installing additional ground support in the western area of the pit.

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Key Business Metrics	30 June 2019	30 June 2018	Change	% Change
Operating cash flow ($'000)	60,006	69,198	(9,192)	(13)%
Sustaining capital ($'000)	(4,446)	(8,574)	4,128	(48)%
Major capital ($'000)	(23,921)	(10,924)	(12,997)	119%
Total capital ($'000)	(28,367)	(19,498)	(8,869)	45%
Net mine cash flow ($'000)	31,639	49,700	(18,061)	(36)%
Gold production (oz)	94,647	105,053	(10,406)	(10)%
All-in Sustaining Cost ($/oz)	1,233	884	(349)	(39)%
All-in Cost($/oz)	1,490	987	(503)	(51)%

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Mining Operations (continued)

Cracow

Cracow produced 80,923oz at a unit cash operating cost of $900/oz and AISC of $1,272/oz within the guidance of 80,000 - 85,000oz, at $850 - $900/oz and $1,250 - $1,300/oz respectively.

A total of 560kt of ore was mined at an average grade of 4.88g/t during the year with primary ore sources being the Kilkenny, Coronation and Imperial ore bodies.

Capital expenditure for the year was $27.2 million comprising mainly of $12 million attributable towards further development of the underground mine.

==> picture [313 x 135] intentionally omitted <==

Key Business Metrics	30 June 2019	30 June 2018	Change	% Change
Operating cash flow ($'000)	63,326	70,771	(7,445)	(11)%
Sustaining capital ($'000)	(15,158)	(19,601)	4,443	(23)%
Major capital ($'000)	(12,052)	(14,451)	2,399	(17)%
Total capital ($'000)	(27,210)	(34,052)	6,842	(20)%
Net mine cash flow ($'000)	36,116	36,719	(603)	(2)%
Gold production (oz)	80,983	90,357	(9,374)	(10)%
All-in Sustaining Cost ($/oz)	1,272	1,181	(91)	(8)%
All-in Cost($/oz)	1,355	1,269	(86)	(7)%

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Mining Operations (continued)

Ernest Henry

Ernest Henry gold production of 98,689oz was well above guidance of 85,000 - 90,000oz. A negative AISC of $(539)/oz was within guidance of $(575) - (525)/oz, after taking into account copper and silver by-product credits of (1,843)/oz. Negative cash costs of $(783)/oz were above the original guidance of $(875) - (825)/oz.

Ore mined was 6,728kt at an average grade of 0.58g/t gold and 1.10% copper. Underground development was 7,203m. Ore processed was 6,829kt at an average grade of 0.58g/t gold and 1.10% copper. Gold recovery and copper recovery of 80.7% and 96.7% respectively were achieved.

During the December 2018 quarter the New Reserves Joint Venture was formed which relates to resources outside the current mine plan to the 1200RL. Planned extensional drilling below the 1200RL is scheduled for the latter part of the 2019 calendar year with a view to extend mine life.

==> picture [365 x 175] intentionally omitted <==

Key Business Metrics	30 June 2019	30 June 2018	Change	% Change
Operating cash flow ($'000)	231,821	230,860	961	%
Sustaining capital ($'000)	(9,640)	(11,618)	1,978	(17)%
Major capital ($'000)	-	-	-	-%
Total capital ($'000)	(9,640)	(11,618)	1,978	(17)%
Net mine cash flow ($'000)	222,181	219,242	2,939	1%
Gold production (oz)	98,689	95,209	3,480	4%
Copper production (t)	21,008	21,011	(3)	%
All-in Sustaining Cost ($/oz)	(539)	(641)	102	(16)%
All-in Cost($/oz)	(539)	(641)	102	(16)%

(i) 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.

78 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Financial Performance

Profit or Loss

Revenue for the year ended 30 June 2019 decreased by 2% to $1,509.8 million (30 June 2018: $1,540.4 million). The 7% higher achieved gold price of $1,760/oz was offset by a decrease in produced ounces of 6% to 753,000oz (30 June 2018: 801,187oz) and lower copper and silver revenue which is a result of both volume and price. Revenue is comprised of $1,307.5 million for gold revenue and $202.3 million for copper and silver revenue (30 June 2018: $1,312.6 million of gold revenue and $227.8m of copper and silver revenue). The Edna May operation contributed revenue in 2018 for 3 months contributing $37.2m of revenue prior to its sale on 3 October 2017.

Total gold sold equalled 742,964oz which included deliveries into the hedge book of 150,000oz at an average price of $1,690oz (30 June 2018: 205,915 oz, $1,564/oz). The remaining 592,964oz were sold at spot price achieving an average price of $1,777/oz (30 June 2018: 592,186 oz, $1,673/oz). The Group's hedge book totals 400,000oz as at 30 June 2019 at an average price of $1,837.57/oz with deliveries through to June 2023.

The achieved copper price decreased 4% to $8,587/t resulting in copper revenue reducing in the year by $18.8 million.

Operating costs (excluding depreciation, amortisation and fair value adjustments of $398.5 million) increased to $736.0 million (30 June 2018: $705.5 million).

Balance Sheet

Total assets increased 1% during the year to $3,093.9 million (30 June 2018: $3,056.3 million). Equity investments at fair value through other comprehensive income (FVOCI) have increased $60.6 million following the acquisition of a 19.9% stake in Tribune Resources Limited (Tribune) for a cash consideration of $41.3 million in February 2019, the investment increased in value to $60.5 million at 30 June 2019. The net carrying amount of property, plant and equipment and producing mines decreased $66.4 million due to a depreciation charge of $374.9 million outstripping capital additions of $274.5 million. Exploration increased $60.1 million with capitalised exploration spend of $67.3 million partially offset by exploration expenses of $7.2 million.

Total liabilities for the Group decreased to $687.4 million at 30 June 2019, a decrease of $80.5 million, or 10% on the prior year. The decrease is in part attributable to scheduled debt repayments of $95.0 million on the Senior Secured Term Loan. The tax liability at 30 June 2018 was paid during the current financial year. In addition, tax instalments were made during the year in relation to the expected tax payable for the year ended 30 June 2019 reducing the tax liability by $47.3 million.

The Group ended the year with a cash balance of $335.2 million and available credit of $350.0 million in Facility A as part of its Senior Secured Syndicated Revolving and Term Facility. Net cash at balance date was $35.2 million, with cash of $335.2 million and $300.0 million of drawn debt on the Senior Secured Term Loan.

Cash Flow

Total cash inflows for the year amounted to $11.9 million (30 June 2018: $285.8 million).

		30 June 2019	30 June 2018	Change
		$'000	$'000	$'000	% Change
	Cash flows from operating activities	616,236	714,166	(97,930)	(14)%
	Cash flows from investing activities	(382,187)	(270,284)	(111,903)	41%
	Cash flows from financingactivities	(222,111)	(158,087)	(64,024)	40%
Net movement in cash		11,938	285,795	(273,857)	(96)%
Cash at the beginning of the year		323,226	37,385	285,841	765%
	Effects of exchange rate changes on cash	-	46	(46)	(100)%
	Cash at the end of the year	335,164	323,226	11,938	4%

Net cash outflows from investment activities were $382.2 million, a $111.9 million increase (30 June 2018: $270.3 million) including the investment in Tribune of $41.3 million and the acquisition of the Castle Hill mining rights for $15.0 million. The prior year included a receipt of $40.0 million on the sale of Edna May. Capital investments for the year included property, plant and equipment of $105.4 million and mine development and exploration of $218.6 million.

Net cash outflows from financing activities were $222.1 million, an increase of $64.0 million (30 June 2018: $158.1 million). Financing cash flows for the year included the repayment of $95.0 million on the Senior Secured Term Loan and dividend payments of $127.0 million.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Operating and Financial Review (continued)

Financial Performance (continued)

Taxation

During the year, the Group made income tax payments of $91.2 million related to the 30 June 2018 and 30 June 2019 financial years and recognised an income tax expense of $96.7 million (30 June 2018: $75.5 million). The 2018 income tax expense was reduced by $26.7 million due to the recognition of tax losses and temporary differences as an asset. This included $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 that financial year.

The tax payments made in respect of the 30 June 2018 financial year combined with tax instalments paid over the course of the 30 June 2019 financial year have enabled the declaration of fully franked interim and final dividends.

Capital Expenditure

Capital expenditure for the year totalled $273.6 million (30 June 2018: $271.9 million). This consisted of sustaining capital, including near mine exploration and resource definition of $93.2 million (30 June 2018: $100.9 million) and mine development of $180.4 million (30 June 2018: $171.0 million). The main capital projects included the Cowal Stage H development, Float Tails Leach project and E46 land acquisition costs; underground mine development at Cracow, Mt Carlton and Mungari; and capital waste stripping at Mt Carlton and Mt Rawdon.

Financing

Total finance costs for the year were $22.6 million (30 June 2018: $24.8 million), a decrease of 9%. Included in total finance costs are interest expense of $18.2 million (30 June 2018: $20.5 million), amortisation of debt establishment costs of $2.5 million (30 June 2018: $0.7 million) and discount unwinding on mine rehabilitation liabilities of $1.9 million (30 June 2018: $3.6 million).

The Group made scheduled debt repayments of $95.0 million on the Senior Secured Term Loan during the financial year.

The repayment periods and the outstanding balances as at 30 June 2019 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 ($175.0 million)	31 July 2021	$136 million
Senior Secured Term Loan - Facility D	15 October 2021	$300 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 2019 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.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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.

Climate Change

Evolution Mining acknowledges that climate change is occurring and its effects have the potential to impact our business. The highest priority climate related risks include the following: reduced water availability; extreme weather events; changes to legislation and regulation; reputational risk; technological and market changes; and shareholder activism.

The Group is committed to understanding and proactively managing the impact of climate related risks to our business and our environment. This includes integrating financial, physical, regulatory, reputational, market, and climate related risks, as well as energy considerations, into our Life of Mine strategic planning and decision making. The Group works to build the resilience of our assets, our communities and our environment to climate related impacts. To do this, we work in partnership with a broad range of stakeholders including representative bodies of the communities in which we operate, industry, government, investors and non-governmental organisations to share learnings and identify approaches to addressing climate related risks and opportunities.

The Group transparently reports our emissions and energy consumption performance.

81 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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

On 15 August 2019, the Directors approved a change to the dividend policy of whenever possible paying a dividend based on free cash flow generated during a year. The Directors will assess the group cash flow and outlook for the business with the intention to return excess cash to shareholders and targeting a level around 50% of cash flow. The Group's free cash flow is defined as cash flow before debt and dividends. The change was effective immediately and was applied to the final dividend for 2019.

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 6 cents per share, totalling $101.8 million. Evolution shares will trade excluding entitlement to the dividend on 26 August 2019, with the record date being 27 August 2019 and payment date of 27 September 2019.

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.

Environmental regulation and performance

The Executive Chairman reports to the Board on all significant safety and environmental incidents. The Board also has a Risk and Sustainability Committee which has oversight of the safety, health, environmental and stakeholder 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 2019 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.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Environmental regulation and performance (continued)

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) potential or actual environmental impacts and legal obligation. 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 three years have been:

	2019	2018
Number of Level III incidents	9	8

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

Of the nine reports to the regulatory authorities in FY19 only three were classified as having actual Level III consequence with regard for environmental impact and there were no further enforcement action by regulatory authorities in relation to the reports.

83 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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 30 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 includes Syrah Resources Limited (Chairman since October 2014), a company with operations in Mozambique and in the USA; and Endeavour Mining Corporation, a company with operations in Cote d’Ivoire, Mali and Burkina Faso (Non-Executive Director since July 2017). Mr Askew is a member of the Risk and Sustainability Committee and Member of the Nomination and Remuneration Committee. Within the last three years Mr Askew has been a Non-Executive Director of Nevada Copper Limited; Asian Mineral Resources Ltd; and OceanaGold Corporation. 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 was a Non-Executive Director of Kasbah Resources Limited from 2017 to 2019, a company with a tin project in Morocco, and Chaired its Remuneration and Audit Committees. Mr Freestone is a member of the Audit Committee and is a Member of the Nomination and Remuneration Committee.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Information on Directors (continued)

Colin 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 was the Lead Independent Director from 25 November 2015 to 30 November 2018 and remains the Chair of the Risk and Sustainability 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 and Genesis Minerals Limited. Mr McKeith is the Lead Independent Director effective from 1 December 2018, Chair of the Nomination and Remuneration Committee and Member of the Risk and Sustainability 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, Andrea was a Perth based partner within KPMG’s Risk Consulting Services where she serviced 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. She is also a Non-Executive Director of Insurance Commission of Western Australia and the Fremantle Football Club. Ms Hall is the Chair of the Audit Committee. Company Secretary Evan Elstein, BCom GDA, 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 member of Chartered Accountants Australia and New Zealand, the Institute of Chartered Secretaries and Administrators and a fellow of the Governance Institute of Australia. Mr Elstein has over 26 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, acquisition and divestment 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.

85 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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 2019, and the numbers of meetings attended by each Director were:

			Meetings of committees	Meetings of committees	Meetings of committees	Meetings of committees	Meetings of committees	Meetings of committees
	Board		Audit		Risk Management		Nomination and Remuneration
	A	B	A	B	A	B	A	B
Jacob (Jake) Klein Lawrence (Lawrie) Conway James (Jim) Askew Graham Freestone Colin (Cobb) Johnstone Thomas (Tommy) McKeith (i) Andrea Hall (i)	7 7 7 7 6 7 7	7 7 7 7 7 7 7	- - - 4 4 - 4	- - - 4 4 - 4	- - 4 - 3 4 -	- - 4 - 4 4 -	- - 3 3 - 3 -	- - 3 3 - 3 -

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

86 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited)

This Remuneration Report forms part of the Directors' Report for the year ended 30 June 2019. 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 Outcomes (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
	Paul Eagle	Vice President People & Culture
	Evan Elstein	Company Secretary & Vice President Information Technology
	Bob Fulker	Chief Operating Officer
	Glen Masterman	Vice President Discovery & Business Development
	Aaron Colleran *	Vice President Business Development & Investor Relations

Aaron Colleran resigned from the Company effective 1 July 2019 and the KMP position effective 1 January 2019.

(ii) Key Remuneration Outcomes

Key remuneration outcomes for the 2019 financial year are summarised in the table below:

	Remuneration	Description
	STIP Outcomes	The average STIP outcome for the KMP was 74.1% of the maximum opportunity based on the
		assessment of business and personal measures. This reflects the Company's outstanding operating
		and financialperformance,and improvement in the upgradingof the assetportfolio duringtheyear.
	LTIP Outcomes	88.2% of the Performance Rights awarded during the 2017 financial year and tested as at 30 June
		2019 vested on 16 August 2019. This reflects the Company's continued strong performance during
		the threeyears to 30 June 2019.
	KMP Remuneration	Five of the KMP received increases to their fixed remuneration duringthe 2019 financialyear.
	NED Remuneration	Non-Executive Directors did not receive anyincrease to their fees duringtheyear.

(iii) What has changed in relation to remuneration during the 2019 financial year

During the 2019 financial year, the Long Term Incentive Plan was extended down to superintendent and senior technical levels in the organisation.

87 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(a) Remuneration Overview (continued)

(iv) What changes are planned for remuneration in the 2020 financial year

The Nomination and Remuneration committee has undertaken a review of the remuneration structure for the Company. This was in light of a tightening labour market in the industry. The intent of the review was to remain competitive in the market and continuing to align to the Company’s target remuneration philosophy to position Total Remuneration at the market 75th percentile and to use the variable elements as the key component of remuneration. The Company remains committed to keeping tighter controls on the fixed component of the cost base. With respect to KMP remuneration, an independent adviser was engaged. As a result of the review, the Board has approved an increase to the long term incentive proportion of the remuneration structure for all participant levels of the LTI Program. For the KMP, in conjunction with this change the Board has agreed with KMP members that their fixed remuneration (TFR) will remain unchanged for the next 3 years from their TFR on 1 July 2019, based on current role scope and form of the Company. Overall, the Board believes this aligns to the Company’s philosophy of promoting a high achieving culture where the KMP and the broader workforce are incentivised to deliver sustainable business outcomes while increasing shareholder value. The percentage uplifts for the different levels of the LTI Program, effective from the 1 July 2019, increases the variable component by 9-18%.

The Nomination and Remuneration Committee has also undertaken an independent review of NED fees. As a result of the review, the Board approved an increase in the overall fees paid to NEDs. This is the first change since 2016 when the NED Equity Plan was introduced and first change to the cash component of the NED fees since 2015 and aligns to the stated philosophy of positioning the NED Total Remuneration at P75. The NED fees will change from the current $95,000 cash and $40,000 NED Equity Plan, to $120,000 cash and $65,000 NED Equity Plan from 1 July 2019. There has also been an adjustment in committee and Lead Independent Director Fees to align to the benchmark from the independent review.

(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 100 organisations within the industry);
Total Annual Remuneration - TAR (TFR plus STI) at target at the 75th percentile for on target performance; 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.

88 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(c) Remuneration Strategy and Framework (continued)

The following table outlines the remuneration components for all KMP for the 2019 financial year:

Component	Performance measure	Strategic objective
Total Fixed Remuneration (TFR)	Key results areas for the role are	Remuneration is designed to attract,
	determined based on the individual's	motivate and retain key personnel.
	position and key business imperatives.	Considerations include:
		• Overall Company strategy and
		business plan
		• External market conditions
		• Key employee value drivers
		• Individual employee performance
		• Industrybenchmark data
Short Term Incentive (STI)	Key Performance indicators are set with	The objective is to motivate employees
	a mix of individual and corporate	to achieve key annual targets focused
	elements. The relative weighting of	on safety, operations, cash contribution,
	which is dependent on the individual	and effective cost management,
	employee job banding and position. For	improving the overall quality of the asset
	the Executive Chairman, the weighting	portfolio and driving a high achievement
	is 70% corporate and 30% individual	team culture.
	and for the remainder of the KMP, 60%
	corporate and 40% individual. For the
	corporate component for FY19, the
	measures focused on safety, cash
	contribution, costs and strategic
	imperatives focused on improving our
	overall asset portfolio aligned to the
	business strategy and improving
	operational effectiveness via the delivery
	ofprioritycapitalprojects.
Long Term Incentive (LTI)	Performance measures agreed with the	The primary objective to deliver industry
	Board have a 3 year time horizon and	leading shareholder returns.
	are focused on enhancing shareholder
	value.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(c) Remuneration Strategy and Framework (continued)

The target achievement remuneration ratio mix for Executive Directors and KMP for the 2019 financial year and prior financial year is as follows:

==> picture [428 x 184] intentionally omitted <==

The target achievement remuneration ratio mix for Executive Directors and KMP for the 2020 financial year will be as follows:

==> picture [403 x 202] intentionally omitted <==

(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:

	2019	2018	2017	2016	2015
Statutory profit/(loss) for the year ($'000)	218,188	263,388	217,607	(24,349)	100,115
Underlying profit for the year after income tax ($'000) *	218,188	250,762	206,588	134,496	106,050
EBITDA ($'000)	730,262	795,083	713,855	607,551	272,656
Basic earnings per share (cents)	12.86	15.57	13.28	(1.75)	13.71
Dividends declared (cents per share)	9.5	7.5	5.0	3.0	2.0
Shareprice($)at 30 June closing	4.36	3.51	2.41	2.33	1.15

Refer to the Profit Overview section in the Operating and Financial Review for a reconciliation of the underlying profit for the year after income tax.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(ii) STIP Component Performance measure Participation The Overall Group STIP applies to site based employees at the level of Manager and above and all Groupoffice employees. Composition The Group STIP is a cash bonus, up to a maximum percentage of TFR, based on the employee job band. Performance conditions It is assessed and paid annually conditional upon the achievement of key company objectives and individual KPIs. For the 2019 financial year, the company objectives were focused on the areas of safety, groupcash contribution, production,costs and strategic imperatives. 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 STIP Scorecard for FY19 is as follows: STIP Scorecard Target (100%) STIP Weighting Result Award HSE TRI Frequency (TRIF) 4.95 15% 8.3 0% Environmental Critical Controls Compliance - top3 Hazards(%) 100% 15% 125% 18.8% Profitability Group Cash Contribution ($ million) 260 20% 326 30% GroupAll In Costs($/oz sold) 1,210 20% 1,215 19.2% Strategic Imperatives Discretionary 100% 30% 125% 37.5% Total 100% 105.4% FY19 STIP considerations At the time of setting the FY19 STIP measures, the Board determined it would consider the following factors when awarding the score for the strategic imperatives measure: • Improvement in the overall asset portfolio, aligned to the business strategy (delivered mainly through goals as identified in the FY19 Business Plan) • Improvement in Operational Effectiveness (via delivery of priority capital projects per FY19 Business Plan)	(ii) STIP Component Performance measure Participation The Overall Group STIP applies to site based employees at the level of Manager and above and all Groupoffice employees. Composition The Group STIP is a cash bonus, up to a maximum percentage of TFR, based on the employee job band. Performance conditions It is assessed and paid annually conditional upon the achievement of key company objectives and individual KPIs. For the 2019 financial year, the company objectives were focused on the areas of safety, groupcash contribution, production,costs and strategic imperatives. Award parameters The Group STIP is currently set at between 10% and 60% of TFR for Target achievement, with a maximum of 20%-90% of TFR for Stretch achievement, depending on the employee job band. Details of the Group STIP paid to the Directors and KMP are shown in the Remuneration Table in section d(iv). The Group's performance against the STIP Scorecard for FY19 is as follows: STIP Scorecard Target (100%) STIP Weighting Result Award HSE TRI Frequency (TRIF) 4.95 15% 8.3 0% Environmental Critical Controls Compliance - top3 Hazards(%) 100% 15% 125% 18.8% Profitability Group Cash Contribution ($ million) 260 20% 326 30% GroupAll In Costs($/oz sold) 1,210 20% 1,215 19.2% Strategic Imperatives Discretionary 100% 30% 125% 37.5% Total 100% 105.4% FY19 STIP considerations At the time of setting the FY19 STIP measures, the Board determined it would consider the following factors when awarding the score for the strategic imperatives measure: • Improvement in the overall asset portfolio, aligned to the business strategy (delivered mainly through goals as identified in the FY19 Business Plan) • Improvement in Operational Effectiveness (via delivery of priority capital projects per FY19 Business Plan)
FY19 STIP considerations
Award Outcome for the year	The Board approved a score of 125% for the strategic imperatives component of the STIP taking into consideration the overall performance of the business over the course of the year as well as delivery of key strategic outcomes as follows: Improvement in asset quality, including • Increasing the average mine life to beyond 10 years; • Ore reserves, net of depletion, increasing by 410,000 ounces to 7.5 million ounces; • Progress in transforming Cowal into a world-class mine through improved operational performance; Stage H cutback on track; significant discovery success at GRE46-Dalwhinnie; MOD14 permitting approval; Underground Exploration permitting (REF) approval; plant expansion progressing to plan; and successful commissioning of the flotation tails leach project; • Improvement in the exploration pipeline including 3 new active projects; and • Assessing multiple business development opportunities which aligned to improving the quality of the portfolio. Improvement in operating effectiveness via deliver of priority projects during the year, including • Mt Carlton underground mine development and plant upgrade projects approved and tracking to plan at the end of the financial year; • Multiple projects being executed concurrently at Cowal as noted above and being on track; Talent management, including • Exceeding internal target of internal placement with 33% of roles filled during the year by existing Evolution employees which was up from 20% in FY18; • Continued leadership development via Gold, Silver and Alloy programs with a focus on building the pipeline of future leaders; • Targeted development programs for the operations management leadership with site General M i lhi
	anagers and ste eadersp teams; and • Implementation of real time feedback tool to monitor engagement and actioning feedback from the engagement surveys.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

Remuneration Report (Audited) (continued) (d) *Executive Remuneration Outcomes (continued)*	Remuneration Report (Audited) (continued) (d) *Executive Remuneration Outcomes (continued)*
(ii) STIP (continued)
Component	Performance measure
	2019 Total STIP Granted ($) % of Maximum Entitlement Granted % of Maximum Entitlement Forfeited
	Directors
	Jacob Klein 544,000 75.2% 24.8% Lawrie Conway 417,000 76.0% 24.0%
	Key Management Personnel
	Aaron Colleran 182,000 68.8% 31.2% Paul Eagle 259,000 72.8% 27.2% Evan Elstein 273,000 73.6% 26.4% Bob Fulker 348,000 73.6% 26.4% Glen Masterman 308,000 77.9% 22.1%
(iii) LTIP
Component	Performance measure
Participation	The Group LTIP applies to employees at the level of Manager, Supervisor, Functional Lead and above across the Group.
Performance period	Up to 3 years.
Composition	The Company has one long term incentive plan currently in operation, the Employee Share Option and Performance Rights Plan (“ESOP”). 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 first introduced for employees at the level of Manager and above and provides equity based “at risk” remuneration, up to maximum percentages, based on, and in addition to, each eligible employee’s TFR. Effective from 1 July 2018, the LTIP was extended to the superintendent and senior technical level in the Company. These incentives are aimed at retaining and incentivising those eligible employees 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 and dividend rights attach to the ordinary shares when the Performance Rights vest and shares allocated to the participating employee. Unvested Performance Rights cannot be transferred and will not bequoted 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'. Performance Target Description Weighting for each year from FY16 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%
	Performance Target Description Weighting for each year from FY16 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%
FY19 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 theymake to the Groupas a whole.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(d) Executive Remuneration Outcomes (continued)

(iii) LTIP (continued)

Component	Performance measure
Award outcome for the year - ESOP Performance Rights	Outcomes for the FY16 award which vested during the year 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% Total 69% Outcomes for the FY17 award which will vest in August 2019 are set out as follows: Performance Target Measure FY17 Outcome % Vested (i) TSR Performance Percentile 10th 25% (ii) Absolute TSR performance Compound annual return 27.7% 25% (iii) Growth in Earnings per share Compound annual return 9.9% 14% (iv) Increase in ore reserves per share Percentage increase 117.4% 24% Total 88%

Component

Performance measure

Award outcome
for the year -
ESOP
Performance
Rights

Outcomes for the FY16 award which vested during the year 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%
Total
69%
Outcomes for the FY17 award which will vest in August 2019 are set out as follows:
Performance Target
Measure
FY17
Outcome
% Vested
(i)
TSR Performance
Percentile
10th
25%
(ii)
Absolute TSR performance
Compound annual return
27.7%
25%
(iii)
Growth in Earnings per share
Compound annual return
9.9%
14%
(iv)
Increase in ore reserves per share
Percentage increase
117.4%
24%
Total
88%

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

	2019 2018
	Number Number
Outstanding balance at the beginning of the year Performance rights granted during the period Vested during the period Lapsed during the period Forfeited during the period Outstanding balance at the end of theyear	20,942,610 26,278,566 5,699,933 6,586,571 (4,063,412) (9,214,401) (1,797,984) - (2,138,086) (2,708,126)
	18,643,061 20,942,610

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

	FY15 FY16 FY17 FY18 FY19 Running Balance
	Granted 10,804,370 8,141,368 6,797,540 6,586,571 5,699,933 38,029,782 Granted - TIP - - 3,375,000 - - 3,375,000 Vested (9,214,401) (4,022,944) - - - (13,237,345) Lapsed - (2,338,350) - - - (2,338,350) Forfeited (1,589,969) (2,279,972) (1,454,806) (1,428,082) (933,095) (7,685,924) Subject to vesting - - 8,717,734 5,158,489 4,766,838 18,643,061 Testing date 30/06/17 30/06/18 30/06/19 30/06/2020 30/06/2021 - Testing date - TIP - - 16/12/19 - - -
	Vesting (%) - excludingTIP 100% 69.3% 88.2% - - -

FY15
FY16
FY17
FY18
FY19
Running
Balance

Granted
10,804,370
8,141,368
6,797,540
6,586,571
5,699,933
38,029,782
Granted - TIP
-
-
3,375,000
-
-
3,375,000
Vested
(9,214,401)
(4,022,944)
-
-
- (13,237,345)
Lapsed
-
(2,338,350)
-
-
-
(2,338,350)
Forfeited
(1,589,969)
(2,279,972)
(1,454,806)
(1,428,082)
(933,095)
(7,685,924)
Subject to vesting
-
-
8,717,734
5,158,489
4,766,838
18,643,061
Testing date
30/06/17
30/06/18
30/06/19
30/06/2020
30/06/2021
-
Testing date - TIP
-
-
16/12/19
-
-
-

Vesting (%) -
excludingTIP
100%
69.3%
88.2%
-
-
-

3,750,000 Performance Rights were granted in December 2015 to Mr. Jake Klein and were subsequently 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.

93 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)


Remuneration Report (Audited) (continued)	(d) *Executive Remuneration Outcomes (continued)*	(iv) Remuneration summary table	Total Fixed Post-Employment STI LTI	Remuneration Benefits	Base Salary and Fees Superannuation Bonus Amortised Value Other Benefits *Total	2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018	Directors	Jacob Klein 1,083,268 1,083,752 20,532 20,048 544,000 657,000 3,611,342 2,883,090 - - 5,529,142 4,643,890	Lawrie Conway 724,468 714,952 20,532 20,048 417,000 480,000 328,415 259,061 - - 1,490,415 1,474,061	James Askew 115,000 115,000 - - - - 37,895 37,633 - - 152,895 152,633	Graham Freestone 97,481 118,721 17,519 11,279 - - 37,895 37,633 - - 152,895 167,633	Andrea Hall 109,589 71,918 10,411 6,832 - - 37,895 25,031 - - 157,895 103,781	Colin Johnstone 126,250 135,000 - - - - 37,895 37,633 - - 164,145 172,633	Thomas McKeith 117,580 109,589 11,170 10,411 - - 37,895 37,633 - - 166,645 157,633	Naguib Sawiris *** 7,917 95,000 - - - - 16,879 37,633 - - 24,796 132,633	Sebastien de Montessus *** 8,750 105,000 - - - - 16,879 37,633 - - 25,629 142,633	Key Management Personnel	Aaron Colleran **** 317,967 444,952 20,532 20,048 182,000 375,000 300,907 243,688 - - 821,406 1,083,688	Paul Eagle 374,468 359,952 20,532 20,048 259,000 300,000 252,824 201,628 - - 906,824 881,628	Evan Elstein 387,500 384,952 25,000 20,048 273,000 310,000 268,121 217,642 - - 953,621 932,642	Bob Fulker 504,468 195,668 20,532 10,024 348,000 170,000 122,786 57,554 - 173,395 995,786 606,641	Glen Masterman 419,468 404,952 20,532 20,048 308,000 350,000 288,988 307,301 - - 1,036,988 1,082,301	Mark Le Messurier - 214,976 - 10,024 - 150,000 - 226,102 - 368,352 - 969,454	4,394,174 4,554,384 187,292 168,858 2,331,000 2,792,000 5,396,616 4,646,895 - 541,747 12,309,082 12,703,884	* 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 NEDs.	** Other benefits for 2018 include relocation costs and a sign on bonus for Bob Fulker and termination benefits for Mark Le Messurier.	*** Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018.	**** Aaron Colleran resigned from the Company effective 1 July 2019 and the KMP position effective 1 January 2019.

Evolution Mining Limited Annual Report 2019

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	Total Fixed	Notice Period by	Notice period by	Termination
	agreement and	Remuneration	Executive	Evolution	payments *
	noticeperiod
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
Lawrie Conway		625,000			6 months
Finance Director and	Open	135,000 fixed	3 months	6 months	Total Fixed
Chief Financial Officer		Director's Fees			Remuneration
Paul Eagle					6 months
Vice President People	Open	420,000	3 months	6 months	Total Fixed
and Culture					Remuneration
Evan Elstein Company Secretary and Vice President Information Technology	Open	420,000	3 months	6 months	6 months Total Fixed Remuneration
Bob Fulker Chief Operating Officer	Open	540,000	3 months	6 months	6 months Total Fixed Remuneration
Glen Masterman
Vice President Discovery					6 months
and Business					Total Fixed
Development	Open	450,000	3 months	6 months	Remuneration

For a change of control event, the termination payment is 12 months TFR for Executive Directors and KMP.

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.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

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

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 2019, the Equity Amount is $40,000 for each NED while for 2020 the Equity Amount will be $65,000 for each NED.
The Value per Share Right equals the volume weighted average price (VWAP) of Evolution’s ordinary shares traded on the ASX over the 10 trading day period commencing the day after the release of the full year financial results. For 2020, the 10 trading day period to calculate the VWAP used to determine the number of share rights granted to each NED commences on 16 August 2019.

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 2019. For remuneration outcomes please refer to table in section d (iv).

			Cash Component($)	Cash Component($)		Equity ($)
	Base Fees	Lead	Sub-Committee	Sub-Committee	Total Cash	NED Equity	Total per
		Independent	Chairman	Member	Fees	Plan Shares	annum($)
Directors
James Askew	95,000	-	-	20,000	115,000	40,000	155,000
Graham Freestone	95,000	-	-	20,000	115,000	40,000	155,000
Andrea Hall	95,000	-	25,000	-	120,000	40,000	160,000
Colin Johnstone	95,000	-	15,000	10,000	120,000	40,000	160,000
Thomas McKeith	95,000	15,000	15,000	10,000	135,000	40,000	175,000
	475,000	15,000	55,000	60,000	605,000	200,000	805,000

96 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(f) Other Remuneration Information (i) LTIP performance parameters Component Assessment Relative TSR Performance Performance Rights will be tested against the Group’s TSR performance relative to a peer group of comparator gold companies. The Group’s and the peer group’s TSR will be based on the percentage by which its 30-day volume weighted average share price quoted on the ASX (“VWAP”) (plus the value of any dividends paid during the performance period) has increased over a three year period ending 30 June 2019,30 June 2020 and 30 June 2021. Performance Rights granted in FY 17, FY18 and FY19 Performance Rights granted on or after 1 July 2019 Level of performance achieved Performance Rights granted in FY17, FY18 and FY19 % of TSR Performance Rights vesting Performance Rights granted in FY20 % of TSR Performance Rights vesting Threshold Top 50th percentile 33% Below 50th percentile 0% Above the top 50th percentile and below the top25thpercentile Straight-line pro-rata between 33% and 66% Target Top 25th percentile 66% At the 50th percentile 50% Above the top 25th percentile and below the top10thpercentile Straight-line pro-rata between 66% and 100% Between 50th percentile and below 25thpercentile Straight-line pro-rata 50%-100% Exceptional Top 10th percentile or above 100% At or above 25th percentile 100%	(f) Other Remuneration Information (i) LTIP performance parameters Component Assessment Relative TSR Performance Performance Rights will be tested against the Group’s TSR performance relative to a peer group of comparator gold companies. The Group’s and the peer group’s TSR will be based on the percentage by which its 30-day volume weighted average share price quoted on the ASX (“VWAP”) (plus the value of any dividends paid during the performance period) has increased over a three year period ending 30 June 2019,30 June 2020 and 30 June 2021. Performance Rights granted in FY 17, FY18 and FY19 Performance Rights granted on or after 1 July 2019 Level of performance achieved Performance Rights granted in FY17, FY18 and FY19 % of TSR Performance Rights vesting Performance Rights granted in FY20 % of TSR Performance Rights vesting Threshold Top 50th percentile 33% Below 50th percentile 0% Above the top 50th percentile and below the top25thpercentile Straight-line pro-rata between 33% and 66% Target Top 25th percentile 66% At the 50th percentile 50% Above the top 25th percentile and below the top10thpercentile Straight-line pro-rata between 66% and 100% Between 50th percentile and below 25thpercentile Straight-line pro-rata 50%-100% Exceptional Top 10th percentile or above 100% At or above 25th percentile 100%
Component
Relative TSR Performance
	Performance Rights granted in FY 17, FY18 and FY19 Performance Rights granted on or after 1 July 2019
	Level of performance achieved Performance Rights granted in FY17, FY18 and FY19 % of TSR Performance Rights vesting Performance Rights granted in FY20 % of TSR Performance Rights vesting
	Threshold Top 50th percentile 33% Below 50th percentile 0% Above the top 50th percentile and below the top25thpercentile Straight-line pro-rata between 33% and 66%
	Target Top 25th percentile 66% At the 50th percentile 50% Above the top 25th percentile and below the top10thpercentile Straight-line pro-rata between 66% and 100% Between 50th percentile and below 25thpercentile Straight-line pro-rata 50%-100%
	Exceptional Top 10th percentile or above 100% At or above 25th percentile 100%
Absolute TSR performance Performance rights will be tested against the Group’s Absolute TSR performance relative to the 30 days VWAP (Absolute TSR Performance) as at 30 June 2019, 30 June 2020 and 30 June 2021 respectively,measured as the cumulative annual TSR over the threeyearperformanceperiod. 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%
	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 2017, 30 June 2018 and 30 June 2019 and those to be granted during the year ended 30 June 2020, will be tested against the Group’s growth in Earnings Per Share, calculated by excluding any Non-Recurring Items, and measured as the cumulative annualgrowth rate over the threeyearperformanceperiod.
	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 100%
	EPS

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(f) Other Remuneration Information (continued)

(i) LTIP performance parameters (continued)

Component	Assessment
Increase in ore	A proportion of Performance Rights will be tested against the Group’s ability to grow its Ore Reserves,
reserves per share	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 2019, 30
	June 2020 and 30 June 2021.
Level of performance		Evolution Growth in Ore Reserves	% of Growth in Ore Reserves
achieved		per share performance	Performance Rights vesting
Threshold		90% of Baseline Ore Reserves	33%
		Above 90% of Baseline Ore Reserves	Straight-line pro-rata between 33%
		but below 100% Baseline Ore	and 66%
		Reserves
Target		100% Baseline Ore Reserves	66%
		Above 100% of Baseline Ore	Straight-line pro-rata between 66%
		Reserves and below 120% of Baseline	and 100%
		Ore Reserves
Exceptional		120% and above of Baseline Ore	100%
		Reserves

(ii) Director and key management personnel equity holdings

	Balance at the	Received during	Received during	Other changes	Balance at the
	start of the year	the year on	the year on		end of the year
		conversion of	exercise of
		performance	options
		rights
Directors
Jacob Klein	12,700,023	968,607	-	(2,500,000)	11,168,630
Lawrie Conway	693,270	232,400	-	-	925,670
James Askew	773,587	16,697	-	-	790,284
Graham Freestone	130,505	16,697	-	-	147,202
Andrea Hall	-	16,697	-	-	16,697
Colin Johnstone	125,267	16,697	-	-	141,964
Thomas McKeith	173,220	16,697	-	-	189,917
Naguib Sawiris *	16,298	11,528	-	(27,826)	-
Sebastien de Montessus *	16,298	11,528	-	(27,826)	-
Key Management Personnel
Aaron Colleran **	30,000	-	-	-	30,000
Paul Eagle	167,000	-	-	-	167,000
Evan Elstein	570,000	191,084	-	(210,000)	551,084
Bob Fulker	-	-	-	-	-
Glen Masterman	-	-	-	-	-
	15,395,468	1,498,632	-	(2,765,652)	14,128,448

In August 2018, La Mancha sold a portion of their shareholding in the Company, taking their total shareholding down to 9.6% of Evolution’s issued capital. In line with the terms of the Share Sale Agreement, La Mancha's nominee Directors Mr Naguib Sawiris, Mr Sebastian de Montessus and their Alternate Director Andrew Wray resigned from the Board of Directors effective 1 August 2018. ** Aaron Colleran resigned from the Company effective 1 July 2019 and the KMP position effective 1 January 2019.

98 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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 theyear
Balance at the start of theyear Granted as compen- sation Converted Lapsed Other changes Balance at the end of the year Vested and exercisable Unvested
Directors
Jacob Klein 5,812,251 495,935 (968,607) (91,625) - 5,247,954 684,854 4,563,100 Lawrie Conway 907,508 268,831 (232,400) (36,115) - 907,824 269,943 637,881 James Askew 16,697 11,447 (16,697) - - 11,447 - 11,447 Graham Freestone 16,697 11,447 (16,697) - - 11,447 - 11,447 Andrea Hall 16,697 11,447 (16,697) - - 11,447 - 11,447 Colin Johnstone 16,697 11,447 (16,697) - - 11,447 - 11,447 Thomas McKeith 16,697 11,447 (16,697) - - 11,447 - 11,447 Naguib Sawiris 16,697 - (11,528) (5,169) - - - - Sebastien de Montessus 16,697 - (11,528) (5,169) - - - -
Key Management Personnel
Aaron Colleran ** 1,280,023 209,335 - (33,383) - 1,455,975 960,626 495,349 Paul Eagle 846,216 174,079 - (28,253) - 992,042 584,231 407,811 Evan Elstein 691,610 181,791 (191,084) (29,667) - 652,650 221,751 430,899 Bob Fulker 322,919 231,371 - - - 554,290 - 554,290 Glen Masterman 537,490 193,911 - (32,577) - 698,824 243,503 455,321
10,514,896 1,812,488 (1,498,632) (261,958) - 10,566,794 2,964,908 7,601,886

Naguib Sawiris and Sebastien de Montessus resigned from their roles effective 1 August 2018. ** Aaron Colleran resigned from the Company effective 1 July 2019 and the KMP position effective 1 January 2019.

Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

Remuneration Report (Audited) (continued)

(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 The Board of Directors, the list of persons under the relevant section above.
Board” or “the Directors”)
Key Management Personnel Senior executives have the authority and responsibility for planning, directing and
("KMP") controlling the activities of the Company and are members of the senior leadership team.
KMP for the financial year ended 30 June	2018 2019	are listed above.
Total Fixed Remuneration Total Fixed Remuneration comprises a base salary plus superannuation. This is currently
("TFR") positioned at the median (50th percentile)	of the industry benchmarking report.
Short Term Incentive ("STI") STI is the short-term incentive component of Total Remuneration. The STI usually
and Short Term Incentive Plan comprises a cash payment that is only received by the employee if specified annual
(“STIP”) goals are achieved. STIP refers to the plan under which the incentives are granted and
paid.
Long Term Incentive ("LTI") and LTI is the long-term incentive component of Total Remuneration. The LTI comprises of
Long term Incentive Plan Performance Rights, usually with a three year vesting period that are subject to specified
(“LTIP”) 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 This is the employer contribution to an employee nominated superannuation fund
Charge ("SGC") 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 The plan permits the Company, at the discretion of the Directors, to grant Options over
Option Plan ("ECOP") 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 The plan permits the Company, at the discretion of the Directors, to grant both Options
Performance Rights Plan and Performance Rights over unissued ordinary shares of the Company to eligible
("ESOP") 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 is the total return on an ordinary share to an investor arising from growth in the
("TSR") share price plus any dividends received.
Key Performance Indicators A form of performance measurement for individual performance against a pre-defined set
("KPIs") of goals.
Volume Weighted Average A 30 day volume weighted average share	price	quote on the Australian Stock Exchange
Share Price (“VWAP”) (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.

100 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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 26(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.

101 Evolution Mining Limited Annual Report 2019

Directors' Report (continued)

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:

	2019 $ 2018 $
Other assurance services PricewaterhouseCoopers firm: Due dilligence services Non PricewaterhouseCoopers audit firms Internal audit services Other assurance services *Total remuneration for other assurance services* SPACE Taxation services PricewaterhouseCoopers firm: Tax compliance services Tax advisory services Non PricewaterhouseCoopers audit firms Tax compliance services Tax advisory services *Total remuneration for taxation services* SPACE SPACE *Total remuneration for non-audit services*	200,000 - 205,029 168,971 56,244 259,965
	461,273 428,936
	116,600 - - 8,670 68,523 397,215 538,213 254,242
	723,336 660,127
	1,184,609 1,089,063

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 103.

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.

==> picture [63 x 37] intentionally omitted <==

Jacob (Jake) Klein Executive Chairman

==> picture [57 x 42] intentionally omitted <==

Andrea Hall Chair of the Audit Committee

Sydney

102 Evolution Mining Limited Annual Report 2019

Auditor’s Independence Declaration

==> picture [73 x 55] intentionally omitted <==

Auditor’s Independence Declaration

As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2019, 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.

==> picture [77 x 36] intentionally omitted <==

Marc Upcroft Sydney Partner 15 August 2019 PricewaterhouseCoopers

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.

103 Evolution Mining Limited Annual Report 2019

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Notes
30 June
2019
$'000
30 June
2018
$'000
Sales revenue
2
1,509,824
1,540,433
Cost of sales
2
(1,133,046)
(1,140,472)
Gross Profit
376,778
399,961
Interest income
7,134
3,332
Other income
574
651
Share based payments expense
25
(10,884)
(8,491)
Corporate and other administration costs
2
(27,519)
(27,193)
Transaction and integration costs
2
(1,455)
866
Exploration and evaluation costs expensed
(7,190)
(5,414)
Finance costs
2
(22,612)
(24,778)
Profit before income tax expense
314,826
338,934
Income tax expense
3
(96,638)
(75,546)
Profit after income tax expense attributable to Owners of Evolution Mining
Limited
218,188
263,388
Other comprehensive income
Changes in the fair value of equity investments at fair value through other
comprehensive income (FVOCI) (will not be reclassified to profit or loss)
11(b)
18,845
(1,925)
Exchange differences on translation of foreign operations (may be reclassified to
profit or loss)
(103)
46
Other comprehensive income for the period, net of tax
18,742
(1,879)
Total comprehensive income for the period
236,930
261,509
Total comprehensive income for the period is attributable to:
Owners of Evolution Mining Limited
236,930
261,509
236,930
261,509
Cents
Cents
Earnings per share for profit attributable to Owners of Evolution Mining
Limited:
Basic earnings per share
4
12.86
15.57
Diluted earnings per share
4
12.78
15.51

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

104

Evolution Mining Limited Annual Report 2019

Consolidated Balance Sheet

Notes
30 June
2019
$'000
30 June
2018
$'000
ASSETS
Current assets
Cash and cash equivalents
9
335,164
323,226
Trade and other receivables
12
86,207
71,296
Inventories
14
259,909
264,221
Current tax receivables
1,467
-
Total current assets
682,747
658,743
Non-current assets
Inventories
14
58,923
38,459
Equity investments at fair value through other comprehensive income (FVOCI)
15(a)
66,185
5,536
Property, plant and equipment
7
577,053
571,775
Mine development and exploration
8
1,672,068
1,743,752
Deferred tax assets
18
-
419
Other non-current assets
16
36,915
37,632
Total non-current assets
2,411,144
2,397,573
Total assets
3,093,891
3,056,316
LIABILITIES
Current liabilities
Trade and other payables
13
156,828
152,367
Interest bearing liabilities
10
108,248
93,496
Current tax liabilities
-
47,312
Provisions
17
29,957
32,085
Other current liabilities
-
63
Total current liabilities
295,033
325,323
Non-current liabilities
Interest bearing liabilities
10
185,185
292,470
Provisions
17
153,376
150,129
Deferred tax liabilities
18
53,819
-
Total non-current liabilities
392,380
442,599
Total liabilities
687,413
767,922
Net assets
2,406,478
2,288,394
EQUITY
Issued capital
11(a)
2,183,727
2,183,727
Reserves
11(b)
72,379
45,407
Retained earnings
11(c)
150,372
59,260
Capital and reserves attributable to owners of Evolution Mining Limited
2,406,478
2,288,394
Total equity
2,406,478
2,288,394

ASSETS
Current assets
Cash and cash equivalents
9
Trade and other receivables
12
Inventories
14
Current tax receivables
Total current assets
Non-current assets
Inventories
14
Equity investments at fair value through other comprehensive income (FVOCI)
15(a)
Property, plant and equipment
7
Mine development and exploration
8
Deferred tax assets
18
Other non-current assets
16
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
13
Interest bearing liabilities
10
Current tax liabilities
Provisions
17
Other current liabilities
Total current liabilities
Non-current liabilities
Interest bearing liabilities
10
Provisions
17
Deferred tax liabilities
18
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
11(a)
Reserves
11(b)
Retained earnings
11(c)
Capital and reserves attributable to owners of Evolution Mining Limited
Total equity

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

105 Evolution Mining Limited Annual Report 2019

Consolidated Statement of Changes in Equity

Notes Issued capital $'000 Share- based payments $'000 Fair value revaluation reserve $'000 Foreign currency translation $'000 Retained earnings $'000 Total equity $'000	Notes Issued capital $'000 Share- based payments $'000 Fair value revaluation reserve $'000 Foreign currency translation $'000 Retained earnings $'000 Total equity $'000
Balance at 1 July 2017 Profit after income tax expense Changes in fair value of Equity investments at FVOCI Exchange differences on translation of foreign operations Total comprehensive income Transactions with owners in their capacity as owners: Dividends provided for or paid 5 Recognition of share-based payments 25 Balance at 30 June 2018 Balance at 1 July 2018 Profit after income tax expense Changes in fair value of Equity investments at FVOCI Exchange differences on translation of foreign operations Total comprehensive expense Transactions with owners in their capacity as owners: Dividends provided for or paid 5 Recognition of share-based payments 25 Balance at 30 June 2019	2,183,727 37,149 1,589 57 (94,270) 2,128,252
	- - - - 263,388 263,388 - - (1,925) - - (1,925) - - - 46 - 46
	- - (1,925) 46 263,388 261,509
	- - - - (109,858) (109,858) - 8,491 - - - 8,491
	- 8,491 - - (109,858) (101,367)
	2,183,727 45,640 (336) 103 59,260 2,288,394
	2,183,727 45,640 (336) 103 59,260 2,288,394
	- - - - 218,188 218,188 - - 18,845 - - 18,845 - - - (103) - (103)
	- - 18,845 (103) 218,188 236,930
	- - - - (127,076) (127,076) - 8,230 - - - 8,230
	- 8,230 - - (127,076) (118,846)
	2,183,727 53,870 18,509 - 150,372 2,406,478

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

106 Evolution Mining Limited Annual Report 2019

Consolidated Statement of Cash Flows

Notes
30 June
2019
$'000
30 June
2018
$'000
Cash flows from operating activities
Receipts from customers
1,512,675
1,554,951
Payments to suppliers and employees
(794,648)
(775,032)
Other income
574
651
Interest received
7,057
2,510
Interest paid
(18,243)
(20,495)
Income taxes paid
(91,179)
(48,419)
Net cash inflow from operating activities
6(a)
616,236
714,166
Cash flows from investing activities
Payments for property, plant and equipment
(105,415)
(116,053)
Payments for mine development and exploration
(218,623)
(191,875)
Proceeds from sale of property, plant and equipment
142
595
Proceeds from sale of subsidiary
700
40,000
Payments for stamp duty related to business disposal
(15)
-
Cash disposed on sale of subsidiary
-
(13)
Payments for transaction and integration costs
(1,440)
(438)
Transfer from term deposits
17
-
Payments for equity investments
(41,803)
(2,500)
Payments for exploration asset acquisitions
(15,750)
-
Net cash outflow from investing activities
(382,187)
(270,284)
Cash flows from financing activities
Repayment of interest bearing liabilities - Senior Secured Syndicated Revolving and
Term Facility
(95,000)
(40,000)
Repayment of short term borrowings
-
(84,330)
Proceeds from short term borrowings
-
77,460
Payment of finance lease liabilities
-
(1,344)
Dividends paid
(127,111)
(109,873)
Net cash outflow from financing activities
(222,111)
(158,087)
Net increase in cash and cash equivalents
11,938
285,795
Cash and cash equivalents at the beginning of the year
323,226
37,385
Effects of exchange rate changes on cash and cash equivalents
-
46
Cash and cash equivalents at end of year
9
335,164
323,226

Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Other income
Interest received
Interest paid
Income taxes paid
Net cash inflow from operating activities
6(a)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for mine development and exploration
Proceeds from sale of property, plant and equipment
Proceeds from sale of subsidiary
Payments for stamp duty related to business disposal
Cash disposed on sale of subsidiary
Payments for transaction and integration costs
Transfer from term deposits
Payments for equity investments
Payments for exploration asset acquisitions
Net cash outflow from investing activities
Cash flows from financing activities
Repayment of interest bearing liabilities - Senior Secured Syndicated Revolving and
Term Facility
Repayment of short term borrowings
Proceeds from short term borrowings
Payment of finance lease liabilities
Dividends paid
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
9

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

107 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements

	Business Performance	109
1	Performance by Mine	109
2	Revenue and Expenses	110
3	Income tax expense	113
4	Earnings per share	113
5	Dividends	114
6	Other cash fow information	115
	Resource Assets and Liabilities	116
7	Property, plant and equipment	116
8	Mine development and exploration	118
	Capital Structure, Financing and Working Capital	121
9	Cash and cash equivalents	121
10	Interest bearing liabilities	121
11	Equity and reserves	122
12	Trade and other receivables	123
13	Trade and other payables	124
14	Inventories	124
15	Financial assets and fnancial liabilities	125
16	Other non-current assets	125
17	Provisions	125
18	Deferred tax balances	127
	Risk and unrecognised items	128
19	Financial risk management	128
20	Contingent liabilities and contingent assets	130
21	Commitments	131
22	Events occurring after the reporting period	132
	Other Disclosures	133
23	Ernest Henry Operation	133
24	Related party transactions	134
25	Share-based payments	134
26	Remuneration of auditors	136
27	Deed of cross guarantee	137
28	Interests in other entities	137
29	Parent entity fnancial information	138
30	Summary of signifcant accounting policies	139
31	New accounting standards	140

108 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

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 year.

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 2019 is as follows:

			Mt	Mt		Ernest	Edna	Explo-	Corp-
	Cowal	Mungari	Carlton	Rawdon	Cracow	Henry	May	ration	orate	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
30 June 2019
SPACE
Revenue	435,556	212,881	198,532	166,954	144,475	351,426	-	-	-	1,509,824
EBITDA	230,674	75,234	120,337	53,912	62,077	231,619	-	(7,190)	(36,401)	730,262
Sustaining Capital	44,000	11,960	8,039	4,446	15,158	9,636	-	-	1,433	94,672
Major Capital	100,734	16,153	27,537	23,921	12,052	-	-	-	-	180,397
Total Capital	144,734	28,113	35,576	28,367	27,210	9,636	-	-	1,433	275,069

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

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

109 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

1 Performance by Mine (continued)

(c) Segment reconciliation

	30 June 2019 $'000 30 June 2018 $'000
Reconciliation of profit before income tax expense SPACE EBITDA Depreciation and amortisation Interest income Transaction and integration costs Fair value amortisation expense Fair value unwinding expense Finance costs Profit before income tax expense	730,262 795,083 (374,909) (405,230) 7,134 3,332 (1,455) 866 (23,594) (33,481) - 3,142 (22,612) (24,778)
	314,826 338,934

Recognition and measurement

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

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 2019 $'000 30 June 2018 $'000
*Revenue from contracts with customers* Gold sales Silver sales Copper sales	1,307,532 1,312,640 14,397 21,049 187,895 206,744
	1,509,824 1,540,433

Disaggregation of revenue from contracts with customers

			Mt	Mt		Ernest	Edna
	Cowal	Mungari	Carlton	Rawdon	Cracow	Henry	May	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
							30	June 2019
SPACE
Gold sales	430,304	212,556	186,885	164,095	143,674	170,018	-	1,307,532
Silver sales	5,252	325	4,143	2,859	801	1,017	-	14,397
Copper sales	-	-	7,504	-	-	180,391	-	187,895
Total Revenue from contracts with
customers	435,556	212,881	198,532	166,954	144,475	351,426	-	1,509,824

110 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

2 Revenue and Expenses (continued)

Disaggregation of revenue from contracts with customers (continued)

			Mt	Mt		Ernest	Edna
	Cowal	Mungari	Carlton	Rawdon	Cracow	Henry	May	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
							30	June 2018
Space
Gold sales	416,512	190,509	186,513	176,701	146,854	158,557	36,994	1,312,640
Silver sales	6,346	553	9,075	2,686	854	1,358	177	21,049
Copper sales	-	-	19,256	-	-	187,488	-	206,744
Total Revenue from contracts with
customers	422,858	191,062	214,844	179,387	147,708	347,403	37,171	1,540,433

Assets related to contracts with customers

The Group has recognised the following revenue-related contract assets:

	30 June 2019 $'000 30 June 2018 $'000
Ernest Henry silver and copper accrued revenue (i)	47,574 46,897
	47,574 46,897

(i) The Group's contract asset relates to silver and copper accrued revenue from April to June 2019 production for the Ernest Henry operation. These amounts are to be settled in July to September 2019. Refer Note 23.

Recognition and measurement - revenue from contracts with customers

The Group adopted AASB 15 during the year. In accordance with the transition provisions in AASB 15, the group adopted the modified retrospective approach and has not restated comparatives for the 2018 financial year. As the transitional provisions did not have a material impact on the amount of revenue recognised under the previous AASB 118, no cumulative adjustment was recognised to the opening balance of retained earnings for the 2019 financial year. The accounting policy in respect of revenue is set out below.

The Group generates sales revenue primarily from the performance obligation to deliver goods such as gold and concentrate to the buyer. Revenue from contracts with customers is recognised when control of the goods are transferred to the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

For gold sales, revenue is recognised at the point where the doré leaves the gold room at the Group's mine site to the buyer or where gold metal credits are transferred to the customer's account. In relation to the Group's economic interest in Ernest Henry (note 23(a)) gold sales are recognised when the metal is received and sold by Evolution.

For concentrate sales, revenue is recognised generally upon receipt of the bill of lading when the commodity is delivered for shipment. Copper and silver in concentrates sales in relation to the Group's economic interest in Ernest Henry (note 23(a)) are recognised as accrued revenue in the same month as their production is reported as the production is in the control of the customer. The transaction price for each contract is allocated entirely to this performance obligation.

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

Accounting estimates and judgements

Timing of Revenue Recognition - Ernest Henry Operation

The Group applied significant judgement as to when gold, silver and copper revenue should be recognised from the Ernest Henry Mine. Gold sales are recognised by the Group when the bullion is delivered to Evolution’s gold account and sold in the third month after the month of production. Copper and silver sales are recognised as accrued revenue by the Group in the same month as their production is reported by the operator Glencore. Copper and silver is sold in accordance with the Offtake Agreement with Glencore where the metal is sold immediately following treatment and refining and is paid for in cash.

111

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

2 Revenue and Expenses (continued)

	30 June 2019 $'000 30 June 2018 $'000
*Cost of sales* Mine operating costs Royalty and other selling costs Depreciation and amortisation expense Fair value amortisation Fair value gain *Corporate and other administration costs* Depreciation and amortisation expense Corporate overheads *Transaction and integration costs* Contractor, consultants and advisory expense Corporate and administration expense Stamp duty on business combinations *Finance costs* Amortisation of debt establishment costs Unwinding of discount on provisions Interest expense *Depreciation and amortisation* Cost of sales (excluding Ernest Henry) Cost of sales (Ernest Henry) Corporate and other administration costs	672,987 639,609 62,984 65,944 373,481 404,580 23,594 33,481 - (3,142)
	1,133,046 1,140,472
	1,428 650 26,091 26,543
	27,519 27,193
	1,209 724 231 978 15 (2,568)
	1,455 (866)
	2,468 740 1,901 3,544 18,243 20,494
	22,612 24,778
	243,578 278,911 129,903 125,669 1,428 650
	374,909 405,230

112 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

3 Income tax expense

(a) Income tax expense

	30 June 2019 $'000 30 June 2018 $'000
Current tax on profits for the period Deferred tax Adjustments for current tax of prior periods (b) Numerical reconciliation of income tax expense to prima facie tax payable	52,092 85,490 45,785 (4,433) (1,239) (5,511)
	96,638 75,546

	30 June 2019 $'000 30 June 2018 $'000
Profit before income tax Tax at the Australian tax rate of 30% space Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Deferred tax expense on sale of subsidiary Adjustments for current tax of prior periods Share-based payments Other Temporary differences now recognised to reduce deferred tax expense Tax loss recognised to reduce deferred tax expense Tax losses used to reduce current tax expense Income tax expense	314,826 338,934 94,448 101,680 - 4,165 (1,239) (5,511) 3,265 2,547 164 (689) - (12,993) - (4,544) - (9,109)
	96,638 75,546

4 Earnings per share

(a) Earnings per share

		30 June 2019 Cents 30 June 2018 Cents
Basic earnings per share (cents) Diluted earnings per share (cents) (b) Earnings used in calculating earnings per share		12.86 15.57 12.78 15.51

		30 June 2019 $'000 30 June 2018 $'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 (c) Weighted average number of shares used as the denominator		218,188 263,388

		2019 Number 2018 Number
Weighted average number of ordinary shares used in calculating the basic earnings per share Effect of dilutive securities (i) Adjusted weighted average number of ordinary shares used in calculating the diluted earnings per share
	s per ed	1,696,474,437 1,691,215,407 10,320,172 6,419,798
		1,706,794,609 1,697,635,205

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

113 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

5 Dividends

(a) Ordinary shares

	30 June 2019 $'000 30 June 2018 $'000
Interim dividend - 2019 Interim dividend for the year ended 30 June 2019 of 3.5 cents per share fully franked (30 June 2018: 3.5 cents per share fully franked) per fully paid share paid on 29 March 2019 Space Final dividend - 2018 Final dividend for the year ended 30 June 2018 of 4 cents per share fully franked (30 June 2017: 3 cents per share fully franked) paid on 28 September 2018	59,321 59,180 67,755 50,678
	127,076 109,858

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

In August 2019, the Directors approved a change to the dividend policy of whenever possible paying a dividend based on free cash flow generated during a year. The Directors will assess the group cash flow and outlook for the business with the intention to return excess cash to shareholders and targeting a level around 50% of cash flow. The Group's free cash flow is defined as cash flow before debt and dividends. The final dividend for 2019 has been calculated accordingly.

	30 June	30 June
	2019	2018
	$'000	$'000
In addition to the above dividends, since period end the Directors have recommended the
payment of a fully franked final dividend of 6.0 cents per fully paid ordinary share (30 June
2018: 4 cents fully franked). The aggregate amount of the proposed dividend expected to be
paid on 27 September 2019 out of retained earnings at 30 June 2019, but not recognised as
a liability at period end, is	101,824	67,704

(c) Franked dividends

The final dividend recommended after 30 June 2019 will be fully franked out of the franking credits balance at the end of the financial year and the franking credits expected to arise from the payment of income tax during the year ending 30 June 2020. The franking account balance at the end of the financial year is $38.1 million (30 June 2018: $1.3 million).

114

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

6 Other cash flow information

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

30 June
2019
$'000
30 June
2018
$'000

Profit after income tax
Transaction and integration costs
Fair value amortisation and expense
Depreciation and amortisation
Unwind of discount on provisions
Amortisation of debt establishment costs
Share-based payments expense
Exploration and evaluation costs expensed
Timing difference on settlement of Ernest Henry sales/costs
Income tax expense
Tax Payments
Change in operating assets and liabilities:
Increase in operating receivables
Increase in inventories
Increase in operating payables
(Decrease)/Increase in borrowing costs
(Decrease)/Increase in other provisions
Net cash inflow from operating activities

218,188
263,388
1,455
(866)
23,594
30,339
373,551
404,650
1,901
3,544
2,468
740
8,906
8,491
7,190
5,414
2,091
(76)
96,638
75,546
(91,179)
(48,419)
(14,991)
(9,509)
(13,039)
(26,728)
1,967
8,179
-
(2,684)
(2,504)
2,157

616,236
714,166

(b) Net cash/(debt) reconciliation

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

		30 June 2019 $'000 30 June 2018 $'000
Net debt Cash and cash equivalents Bank loans Net cash/(debt)		335,164 323,226 (300,000) (395,000)
		35,164 (71,774)
	Cash and cash equivalent $'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 2018 space Net debt at the beginning of the year Cash flows Foreign exchange adjustments Net debt as at end of the year Year ended 30 June 2019 Net debt as at 1 July 2018 Cash flows Net debt as at 30 June 2019	37,385 (1,344) (50,000) (385,000) (398,959) 285,794 1,344 (45,000) 85,000 327,138 47 - - - 47
	323,226 - (95,000) (300,000) (71,774)
	323,226 - (95,000) (300,000) (71,774) 11,938 - (15,000) 110,000 106,938
	335,164 - (110,000) (190,000) 35,164

115

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

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

	Freehold land $'000 Plant and equipment $'000 Total $'000
At 1 July 2018 Cost Accumulated depreciation Net carrying amount Year ended 30 June 2019 Carrying amount at the beginning of the year Additions Disposals Depreciation Depreciation relating to fair value uplift on business combination Carrying amount at the end of the year At 30 June 2019 Cost Accumulated depreciation Net carrying amount Included in above Assets in the course of construction	14,261 1,590,847 1,605,108 - (1,033,333) (1,033,333)
	14,261 557,514 571,775
	14,261 557,514 571,775 3,268 102,147 105,415 - (147) (147) - (97,530) (97,530) - (2,460) (2,460)
	17,529 559,524 577,053
	17,529 1,682,343 1,699,872 - (1,122,819) (1,122,819)
	17,529 559,524 577,053

	- 87,926 87,926

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

	- 103,445 103,445

116

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

7 Property, plant and equipment (continued)

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.

117 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

8 Mine development and exploration

	Producing mines $'000 Exploration and evaluation $'000 Total $'000
At 1 July 2018 Cost Accumulated depreciation Net carrying amount Year ended 30 June 2019 Carrying amount at beginning of year Additions Amortisation Amortisation recognised in inventory Amortisation relating to fair value uplift on business combinations Asset write-off Reclassification to long term inventory Carrying amount at the end of the year At 30 June 2019 Cost Accumulated amortisation Net carrying amount	3,085,507 152,301 3,237,808 (1,494,056) - (1,494,056)
	1,591,451 152,301 1,743,752
	1,591,451 152,301 1,743,752 169,108 67,299 236,407 (276,883) - (276,883) (1,358) - (1,358) (21,134) - (21,134) - (7,190) (7,190) (1,526) - (1,526)
	1,459,658 212,410 1,672,068
	3,253,088 212,410 3,465,498 (1,793,430) - (1,793,430)
	1,459,658 212,410 1,672,068

	Producing mines $'000 Exploration and evaluation $'000 Total $'000
At 1 July 2017 Cost Accumulated depreciation Net carrying amount Year ended 30 June 2018 Carrying amount at beginning of year Additions Amortisation Amortisation recognised in inventory Amortisation relating to fair value uplift on business combinations Asset write-off Reclassification to long term inventory Disposal of subsidiary Carrying amount at the end of the year At 30 June 2018 Cost Accumulated depreciation Net carrying amount	2,959,137 128,128 3,087,265 (1,285,786) - (1,285,786)
	1,673,351 128,128 1,801,479
	1,673,351 128,128 1,801,479 176,772 31,014 207,786 (287,668) - (287,668) (580) - (580) (28,873) - (28,873) - (5,410) (5,410) 78,557 (1,259) 77,298 (20,108) (172) (20,280)
	1,591,451 152,301 1,743,752
	3,085,507 152,301 3,237,808 (1,494,056) - (1,494,056)
	1,591,451 152,301 1,743,752

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.

118 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

8 Mine development and exploration (continued)

Recognition and measurement

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.

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.

119 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

8 Mine development and exploration (continued)

Recognition and measurement

Impairment of non-financial assets

(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.

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.

120

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

Capital Structure and Financing

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

9 Cash and cash equivalents

	30 June 2019 $'000 30 June 2018 $'000
Current assets Bank balances Short term deposits Cash at bank	- - 230,000 230,000 105,164 93,226
	335,164 323,226

Recognition and measurement

Cash and short-term deposits in the balance sheet comprise cash at 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 2019 $'000 30 June 2018 $'000
Current liabilities Bank loans Less: Borrowing costs Non-current liabilities Bank loans Less: Borrowing costs	110,000 95,000 (1,752) (1,504)
	108,248 93,496
	190,000 300,000 (4,815) (7,530)
	185,185 292,470

The Senior Secured Revolving Loan ("Facility A") remained undrawn during the year.

During the prior year, 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 date of the Senior Secured Term Loan (“Facility D”) remained unchanged at October 2021.

The repayment periods and the outstanding balances as at 30 June 2019 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 ($175.0 million)	31 July 2021	$136 million
Senior Secured Term Loan - Facility D	15 October 2021	$300 million

(a) Secured liabilities and assets pledged as security

The Facility is secured in the form of a General Security Agreement and Share Security Agreement over the Group's operating assets. The carrying amounts of assets pledged as general security for total borrowings is $1.747 billion. The share capital pledged as share security for total borrowings is $1.524 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.

121

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

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 2017 Shares issued on vesting of performance rights Shares issued under Employee Share Scheme (i) Shares issued under NED Equity Plan Balance at 30 June 2018 Shares issued on vesting of performance rights Shares issued under Employee Share Scheme (i) Shares issued under NED Equity Plan Balance at 30 June 2019	1,682,798,626 2,183,727 9,214,401 - 501,234 - 97,788 -
	1,692,612,049 2,183,727 4,063,414 - 287,716 - 106,541 -
	1,697,069,720 2,183,727

(i) Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in note 25.

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

Notes 30 June 2019 $'000 30 June 2018 $'000	Notes 30 June 2019 $'000 30 June 2018 $'000
Fair value revaluation reserve Share-based payments Other reserves Movements: Fair value revaluation reserve Balance at the beginning of the year Change in fair value of equity investments 15(a) Balance at the end of the year Share-based payments Balance at the beginning of the year Share based payments recognised 25 Balance at the end of the year Foreign currency translation Balance at the beginning of the year Currency translation differences arising during the year Balance at the end of the year	18,509 (336) 53,870 45,640 - 103
	72,379 45,407
	(336) 1,589 18,845 (1,925)
	18,509 (336)
	45,640 37,149 8,230 8,491
	53,870 45,640
	103 57 (103) 46
	- 103

(i) Nature and purpose of other reserves

Fair value revaluation reserve

The fair value revaluation reserve records fair value changes on equity investments designated at fair value through other comprehensive income.

122

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

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 25 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 2019 $'000 30 June 2018 $'000	Notes 30 June 2019 $'000 30 June 2018 $'000
Balance at the beginning of the year Net profit for the period Dividends paid 5 Balance at the end of the year	59,260 (94,270) 218,188 263,388 (127,076) (109,858)
	150,372 59,260

12 Trade and other receivables

	30 June 2019 $'000 30 June 2018 $'000
Current assets Accrued Revenue Trade receivables GST refundable Prepayments Other receivables	47,574 46,897 25,748 13,497 6,085 3,501 4,504 5,386 2,296 2,015
	86,207 71,296

Recognition and measurement

Accrued Revenue

Accrued revenue of $47.6 million (30 June 2018: $46.9 million) relates to silver and copper sales from April to June 2019 production for Ernest Henry. This balance is the Group's revenue-related contract asset under AASB 15 Revenue from Contracts with Customers (see note 2). These amounts are to be settled in July to September 2019. Refer to note 23 for further information on the transaction and the financial results for the year ended 30 June 2019.

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.

123 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

13 Trade and other payables

	30 June 2019 $'000 30 June 2018 $'000
Current liabilities Trade creditors and accruals Other payables	133,264 123,888 23,564 28,479
	156,828 152,367

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 the 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.

Trade creditors and accruals include accrued costs of $32.2 million (30 June 2018: $29.2 million) relating to the Group's share of production costs for April to June 2019 for Ernest Henry. These amounts are to be settled in July to September 2019. Refer to note 23 for further information on the transaction and the financial results for the year ended 30 June 2019.

14 Inventories

	30 June 2019 $'000 30 June 2018 $'000
Current Stores Ore Doré and concentrate Metal in circuit Metal in transit Total current inventories Non-current Ore Total non-current inventories Recognition and measurement	49,895 43,334 145,542 166,820 7,979 6,055 28,496 21,867 27,997 26,145
	259,909 264,221
	58,923 38,459
	58,923 38,459

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. If the stockpile is not expected to be processed within 12 months after reporting date, it is included in non-current assets.

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.

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 2019 was $15.1 million (30 June 2018: $6.1 million).

124

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

15 Financial assets and financial liabilities

(a) Equity Investments at FVOCI

	30 June 2019 $'000 30 June 2018 $'000
Listed securities - Non-current Tribune Resources Ltd (i) Emmerson Resources Ltd Riversgold Ltd Other	60,505 - 5,406 4,128 267 1,375 7 33
	66,185 5,536

(i) On 25 February 2019, the Group acquired 11.05 million shares, representing a 19.9% shareholding, in Tribune Resources Limited (“Tribune”) for a cash consideration of $41.3 million.

Recognition and measurement

Equity Investments at FVOCI

The adoption of AASB 9 Financial Instruments from 1 July 2018 resulted in a change of classification for the Group's listed equity investments. Under the previous AASB 139 Financial Instruments, the investments were designated as Available For Sale (AFS) but under AASB 9 Financial Instruments the Group has made the sole option to irrevocably designate the listed equity investments as Fair value through other comprehensive income (FVOCI).

Subsequent changes in the fair value of equity investments are presented and accumulated in a separate reserve within equity and not through profit or loss. On disposal of these equity investments, any related balance within the FVOCI reserve is reclassified to retained earnings. These equity instruments are not held for trading but rather intended to be held over the long-term as strategic investments and the group considers this classification to be more relevant.

16 Other non-current assets

	30 June 2019 $'000 30 June 2018 $'000
Non-current assets -Other Contingent consideration attributable to the Pajingo Operation Contingent consideration attributable to the Edna May Operation Other Total other non-current assets Recognition and measurement	2,400 3,100 34,441 34,441 74 91
	36,915 37,632

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.

17 Provisions

		30 June 2019 $'000 30 June 2018 $'000
Current Employee entitlements Non-current Employee entitlements Rehabilitation provision Other long term provision Total provisions		29,957 32,085
		29,957 32,085

		5,196 2,935 147,970 146,988 210 206
		153,376 150,129
		183,333 182,214

Total provisions

125

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

17 Provisions (continued)

(i) Movements in provisions

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

	Employee benefits $'000 Rehabilitation $'000 Other $'000 Total $'000
30 June 2019 Space Carrying amount at the beginning of the year Charged to profit or loss - unwinding of discount - provision recognised Re-measurement of provision Carrying amount at the end of the year 30 June 2018 Space Carrying amount at the beginning of the year Charged to profit or loss - unwinding of discount - provision recognised Re-measurement of provision Disposal of subsidiary Carrying amount at the end of the year	35,020 146,988 206 182,214 - 1,901 - 1,901 - (1,091) - (1,091) 133 172 4 309
	35,153 147,970 210 183,333
	35,471 149,372 203 185,046 - 3,544 - 3,544 3,099 (944) - 2,155 - 16,000 3 16,003 (3,550) (20,984) - (24,534)
	35,020 146,988 206 182,214

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.

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.

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.

126

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

17 Provisions (continued)

Accounting estimates and judgements (continued)

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.

18 Deferred tax balances

(a) Recognised deferred tax balances

	30 June 2019 $'000 30 June 2018 $'000
Inventories Exploration and evaluation expenditure Property, plant and equipment Mine development Employee benefits Provisions Share issue costs Other Deferred tax balances from temporary differences Tax losses carried forward Deferred tax (liabilities)/assets	31,836 31,836 (50,934) (32,710) (69,082) (13,849) (24,431) (52,539) 10,609 10,506 43,875 44,158 114 1,088 - (1,661)
	(58,013) (13,171) 4,194 13,590
	(53,819) 419

(b) Movement in deferred tax balances during the year

	Balance at 1 July 2018 $'000 Recognised in profit or loss $'000 Utilised to reduce tax liability $'000 Balance at 30 June 2019 $'000
Inventories Exploration and evaluation expenditure Property, plant and equipment Mine development Employee benefits Provisions Share issue costs Tax losses carried forward Other Deferred tax assets/ (liabilities)	31,836 - - 31,836 (32,710) (18,224) - (50,934) (13,849) (55,233) - (69,082) (52,539) 28,108 - (24,431) 10,506 103 - 10,609 44,158 (283) - 43,875 1,088 (974) - 114 13,591 (944) (8,453) 4,194 (1,662) 1,662 - -
	419 (45,785) (8,453) (53,819)

(c) Tax losses

The Group has unrecognised available tax losses of $33.4 million as at 30 June 2019. 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.

127 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

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.

19 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 2019 $'000 30 June 2018 $'000
Financial Assets Cash and cash equivalents Trade and other receivables (i) Equity investments at FVOCI Financial Liabilities Trade and other payables Interest bearing liabilities	335,164 323,226 38,633 24,399 66,185 5,536
	439,982 353,161
	156,828 152,367 293,433 385,966
	450,261 538,333

(i) Excludes Ernest Henry accrued revenue.

(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.

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 2019 (nil for 2018).

128

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

19 Financial risk management (continued)

(a) Derivatives (continued)

(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 2019, the Group held US$0.2 million (30 June 2018: US$0.8 million) in US dollar currency bank accounts, outstanding receivables of US$3.8 million (30 June 2018: US$6.9 million) relating to the Mt Carlton operation and US$33.4 million (30 June 2018: US$34.7 million) relating to Ernest Henry. An increase/decrease in AUD:USD foreign exchange rates of 5% will result in an $8,191 (30 June 2018: $38,280) increase/decrease in US dollar currency bank account balances and a $1.9 million (30 June 2018: $2.1 million) increase/decrease in US dollar receivables.

(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 equity investments. The Group has in place physical gold delivery contracts as at 30 June 2019 covering sales of 400,000 oz (30 June 2018: 250,000 oz) of gold at an average flat forward price of $1,838/oz (30 June 2018: $1,711/oz). The Group invested in Tribune Resources Limited in February 2019 and acquired 11,045,101 ordinary shares. An increase/decrease in market share prices on equity investments assets of 10% will result in a $6.6 million (30 June 2018: $0.6 million) increase/decrease in equity investments.

(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 2019, the Group held interest bearing liabilities of $300.0 million (30 June 2018: $395.0 million) which incurs interest at a variable rate. An increase/decrease of variable interest rates of 0.25% will result in a $1.0 million (30 June 2018: 0.25%, $1.8 million) 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 investment securities. 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 2019 was $38.6 million (30 June 2018: $24.4 million). Cash and cash equivalents at 30 June 2019 were $335.2 million (30 June 2018: 323.2 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.

(i) Financing arrangements

The Group had access to the following undrawn borrowing facilities at the end of the reporting period:

	30 June 2019 $'000 30 June 2018 $'000
Bank loans - revolving credit facility Expiring beyond one year	350,000 350,000
	350,000 350,000

(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.

129 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

19 Financial risk management (continued)

(d) Liquidity risk (continued)

(ii) Maturities of financial liabilities (continued)

	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 2019 Space Non-derivatives Trade and other payables Bank loans At 30 June 2018 Space Non-derivatives Trade and other payables Bank loans	156,828 - - - 156,828 156,828 118,865 114,770 80,496 - 314,131 300,000
	275,693 114,770 80,496 - 470,959 456,828
	152,367 - - - 152,367 152,367 109,826 119,873 195,858 - 425,557 395,000
	262,193 119,873 195,858 - 577,924 547,367

(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.

20 Contingent liabilities and contingent assets

(a) Contingent liabilities

The Group had contingent liabilities at 30 June 2019 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 2019. The total of these guarantees at 30 June 2019 was $136.3 million with various financial institutions (30 June 2018: $132.4 million).

130

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

21 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 2019 $'000 30 June 2018 $'000
Within one year Later than one year but not later than five years Later than five years	16,438 10,479 30,925 30,756 35,922 40,236
	83,285 81,471

(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 2019 $'000 30 June 2018 $'000
Within one year	17,828 17,619
	17,828 17,619

(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 2019 $'000 30 June 2018 $'000
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within one year Later than one year but not later than five years Later than five years	22,389 14,576 14,782 9,355 - 1,145
	37,171 25,076

131 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

21 Commitments (continued)

(b) Gold delivery commitments

	Gold for physical delivery oz Average contracted sales price A$/oz Value of committed sales $'000
As at 30 June 2019 Within one year Later than one year but not greater than five years As at 30 June 2018 Within one year Later than one year but not greater than five years	100,000 1,737 173,667 300,000 1,871 561,363
	400,000 3,608 735,030
	150,000 1,694 254,037 100,000 1,737 173,667
	250,000 3,431 427,704

The counterparties to the physical gold delivery contracts are Australia and New Zealand Banking Group Limited ("ANZ"), National Australia Bank Limited ("NAB"), Westpac Banking Corporation (“WBC”), 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 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 9 Financial Instruments . As a result no derivatives are required to be recognised. The Company has no other gold sale commitments with respect to its current operations.

22 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.

132

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

Other Disclosures

This section covers additional financial information and mandatory disclosures.

23 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 customer (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.

	30 June 2019 $'000 30 June 2018 $'000
Revenue (note 2) Cost of sales (excluding amortisation) Amortisation Profit before income tax	351,426 347,403 (119,806) (116,427) (129,903) (125,669)
	101,717 105,307

The carrying amounts of assets and liabilities as at the period end were:

	30 June 2019 $'000 30 June 2018 $'000
Assets Accrued Revenue Inventories Mine Development Total assets Liabilities Trade and other payables Total liabilities Net assets	47,574 46,897 27,997 26,145 574,937 696,548
	650,508 769,590
	32,155 29,157
	32,155 29,157
	618,353 740,433

133

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

24 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 28.

(c) Key management personnel compensation

	30 June 2019 $ 30 June 2018 $
Short-term employee benefits Post-employment benefits Share-based payments	6,725,174 7,888,131 187,292 168,858 5,396,616 4,646,895
	12,309,082 12,703,884

Detailed remuneration disclosures are provided in the remuneration report on pages 87 to 100.

(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 2018:$115,000).

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 2018: $300,000).

Directors fees in the amount of $126,250 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 2018: $135,000).

Directors fees in the amount of $7,917 were paid to Mr Naguib Sawiris as a Director for services provided during the period (30 June 2018: $95,000).

Directors fees in the amount of $8,750 were paid to Mr Sebastien de Montessus as a Director for services provided during the period (30 June 2018: $105,000).

25 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. Shareholder approval was refreshed at the Annual General Meeting on 26 November 2014 and again on 23 November 2017 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 2019 $'000 30 June 2018 $'000
Expense arising from equity settled share based payment transactions recognised in profit and loss (c) Summary and movement of NED Share Rights on issue	10,884 8,491

The following table illustrates the number and movements in, Share Rights issued during the year.

134

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

25 Share-based payments (continued)

(c) Summary and movement of NED Share Rights on issue (continued)

	2019 2018
	Number Number
Outstanding balance at the beginning of the year Share Rights granted Vested Lapsed Forfeited Outstanding balance at the end of theyear	116,879 97,788 57,235 116,879 (106,541) (97,788) (10,338) - - -
	57,235 116,879

There were 57,235 Share Rights granted during the 2019 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 2018 with disposal restrictions attached to these shares.

(d) Fair value determination

During the year, the Company issued two allotments of performance rights that will vest on 30 June 2021. 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 2021.

(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 2021.

(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 2017, to the Ore Reserves as at 31 December 2020 on a per share basis, with testing to be performed at 30 June 2021.

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 2018 Performance Rights issue
Number of rights issued	1,368,520	1,368,520	1,368,520	1,368,468
Spot price ($)	2.74	2.74	2.74	2.74
Risk-free rate (%)	2.01	2.01	2.01	2.01
Term (years)	2.8	2.8	2.8	2.8
Volatility (%)	45	45	45	45
Fair value at grant date ($)	1.52	0.93	2.57	2.57
February 2019 Performance Rights issue
Number of rights issued	56,475	56,475	56,475	56,480
Spot price ($)	3.8	3.8	3.8	3.8
Risk-free rate (%)	1.73	1.73	1.73	1.73
Term (years)	2.4	2.4	2.4	2.4
Volatility (%)	42	42	42	42
Fair value at grant date ($)	2.09	1.74	3.61	3.61

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).

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.

135

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

25 Share-based payments (continued)

Recognition and measurement (continued)

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.

26 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

	2019 $ 2018 $
Audit and other assurance services Audit and review of financial statements Due dilligence services Total remuneration for audit and other services Taxation services Tax compliance services Tax advisory services Total remuneration for taxation services Total remuneration of PricewaterhouseCoopers	492,854 510,920 200,000 -
	692,854 510,920
	116,600 - - 8,670
	116,600 8,670
	809,454 519,590

(b) Non-PricewaterhouseCoopers related audit firms

	2019 $ 2018 $
Audit and other assurance services Other assurance services Internal audit services Other assurance services Total remuneration for audit and other assurance services Taxation services Tax compliance services Tax advisory services Total remuneration for taxation services Total remuneration of non-PricewaterhouseCoopers audit firms	205,029 168,971 56,244 259,965
	261,273 428,936
	68,523 397,215 538,213 254,242
	606,736 651,457 868,009 1,080,393

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.

136

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

27 Deed of cross guarantee

Evolution Mining Limited and those entities identified in note 28 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 2019 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.

28 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		2019	2018
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
Mt Rawdon Operations Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Westonia Mines Minerals Pty Ltd (i) (iii)	Australia	Ordinary	100	100
Lion Selection Pty Ltd (i) (iii)	Australia	Ordinary	100	100
Auselect Pty Ltd (i) (iii)	Australia	Ordinary	100	100
Lion Mining Pty Ltd (i) (ii)	Australia	Ordinary	100	100
Sedgold Pty Ltd (i) (iii)	Australia	Ordinary	100	100
Fernyside Pty Ltd (i) (iii)	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	100
Evolution Mining (Canada Holdings) Ltd (ii)	Canada	Ordinary	100	100
Evolution Mining Management Services (Canada) Ltd (ii)	Canada	Ordinary	100	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 27.

(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.

(iii) On 3 July 2019, the following entities were deregistered:

Auselect Pty Ltd (ACN 077 885 208)
Sedgold Pty Ltd (ACN 010 077 988)
Lion Selection Pty Ltd (ACN 123 217 112)
Fernyside Pty Limited (ACN 001 245 530)
Westonia Mines Minerals Pty Ltd (ACN 059 349 094)

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.

137 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

29 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 2019 $'000 30 June 2018 $'000
Balance sheet Space Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Shareholders' equity Space Issued capital Reserves Fair Value revaluation reserve Share based payment reserve Accumulated losses Total equity Statement of Profit or Loss and Other Comprehensive Income Space Profit for the year Other comprehensive expense Total comprehensive expense	331,341 316,591 1,982,504 2,065,188
	2,313,845 2,381,779
	121,444 158,438 261,497 294,284
	382,941 452,722
	1,930,904 1,929,057
	2,183,727 2,183,727 20,003 1,131 53,796 45,566 (326,622) (301,367)
	1,930,904 1,929,057
	101,824 126,882 - -
	101,824 126,882

(c) Guarantees entered into by the parent entity

The parent entity has provided bank guarantees, as detailed in note 20.

(d) Contingent liabilities of the parent entity

The parent entity did not have any contingent liabilities as at 30 June 2019 or 30 June 2018. For information about guarantees given by the parent entity, please see above.

138 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

30 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 except for changes arising from adoption of new accounting standards which have been seperately disclosed.

(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 28.

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.

(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.

139 Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

30 Summary of significant accounting policies (continued)

(d) Intangible assets (continued)

(i) Mining tenements, mining rights and mining information

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.

31 New accounting standards

The accounting policies applied by the Group in the consolidated financial statements have been consistently applied with those applied in the prior year except for the application AASB 9 and 15 as described below. The Group has adopted all of the new, revised or amending standards that are mandatory. The Group has for the first time applied AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with Customers with effect from 1 July 2018.

Please refer to note 2 in relation to the impact of adopting AASB 15 Revenue from Contracts with Customers.

AASB 9 Financial Instruments

AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting.

The financial assets held by the group are detailed as follows:

Equity investments at Fair Value through Other Comprehensive Income (FVOCI);
Cash and cash equivalents (including current accounts and short-term term deposits);
Trade receivables currently held at cost, to be measured at amortised cost under the classification conditions for AASB 9.

The adoption of AASB 9 resulted in a change of classification for the Group's listed equity investments at FVOCI. Please refer to note 15 for further details.

The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. There are no expected lifetime ECLs based on zero historical customer default. Therefore, there is no impact on transition to IFRS 9 for trade receivables.

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.

In accordance with the transition provisions in AASB 9, comparative figures have not been restated.

140

Evolution Mining Limited Annual Report 2019

Notes to the Consolidated Financial Statements (continued)

31 New accounting standards (continued)

AASB 16 Leases is not mandatory for the 30 June 2019 reporting period and have not been early adopted by the Group. AASB 16 leases will be adopted from 1 July 2019. The Group’s assessment of the impact is set out below.

	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 $37.2 million, see note 21. 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. • 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. • 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. • 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 $33.7 and $35.8 million respectively if the standard applied at 30 June 2019. The Group will implement the new standard with an effective date of 1 July 2019. 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. The group intends to apply the modified retrospective transition approach and will not restate comparative amounts for the year prior to first adoption.

141 Evolution Mining Limited Annual Report 2019

Directors’ Declaration

In the Directors' opinion:

(a) the financial statements and notes set out on pages 104 to 141 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 2019 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 27 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 27.

Note 30(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.

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Jacob (Jake) Klein Executive Chairman

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Andrea Hall Chair of the Audit Committee

Sydney

142 Evolution Mining Limited Annual Report 2019

Independent Auditor’s Report

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Independent auditor’s report

To the members of Evolution Mining Limited

Report on the audit of the financial report

Our opinion

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:

giving a true and fair view of the Group's financial position as at 30 June 2019 and of its financial performance for the year then ended

complying with Australian Accounting Standards and the Corporations Regulations 2001 .

What we have audited

The Group financial report comprises:

the consolidated balance sheet as at 30 June 2019
the consolidated statement of profit or loss and other comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant accounting policies
the directors’ declaration.

Basis for opinion

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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

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

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.

143 Evolution Mining Limited Annual Report 2019

Independent Auditor’s Report (continued)

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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.

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Materiality Audit scope Key audit matters
For the purpose of our audit  Our audit focused on where  Amongst other relevant topics, we used overall Group the Group made subjective we communicated the materiality of $18.4 million, judgements; for example, following key audit matters to which represents significant accounting the Audit Committee: approximately 2.5% of the estimates involving ~~~~ Implementation of new
Group’s earnings before assumptions and inherently interest, tax, depreciation and uncertain future events. revenue accounting policy ~~~~
amortisation (EBITDA). Assessment of the carrying  Our audit procedures were value of assets.
We applied this threshold, predominantly performed at  These are further described in together with qualitative the Group’s corporate office in the Key audit matters section
considerations, to determine Sydney. We also conducted a the scope of our audit and the site visit to the Cowal mine of our report. nature, timing and extent of site. 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.
We utlised a 2.5% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds.

144

Evolution Mining Limited Annual Report 2019

Independent Auditor’s Report (continued)

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Key audit matters

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*	*Key audit matter*	*How our audit addressed the key audit*
		*matter*
*Implementation of new revenue accounting*		We performed the following procedures, amongst
*policy*		others:
(Refer to	note 2)
		 Developed an understanding of and evaluated the
The Group adopted a new revenue accounting policy		operating effectiveness of relevant key revenue
during the year due to the mandatory introduction of		internal controls
AASB 15	Revenue for Contracts with Customers. The
new policy is disclosed in Note 2.		 Assessed the adequacy of the methodology used
		by the Group for determining the extent of
The adoption of a new revenue accounting policy was		contract reviews required to identify AASB 15
a key audit matter due to the:		impact
	significance of revenue to understanding the	 Assessed whether the Group’s new accounting
	financial results for users of the financial	policies were in accordance with the requirements
	report	of AASB 15 through consideration of accounting
		papers on key areas of judgement prepared by the
	complexity involved in applying the new	Group.
	AASB 15 requirements given the bespoke
	nature of terms and conditions in contracts	 For all contracts with customers we:
	with customers
		o Developed an understanding of the key terms of
	judgements required by the Group in	the arrangement including parties, term dates,
	applying the new AASB 15 requirements,	background of agreement, performance
	such as whether contracts contain multiple	obligations and payments to be made
	performance obligations which should be
	accounted for separately and when to	o Considered the Group’s identification of
	recognise revenue based on when ‘control’	performance obligations and allocation of
	transfers to a customer	selling prices to the performance obligations by
		reading the contracts with customers and
	judgement required by the Group as to when	inspecting sales invoices issued in fulfilling
	gold, silver and copper revenue should be	these contracts
	recognised from the Ernest Henry Mine as
	this required an assessment of the	 We also evaluated the adequacy of the
	contractual terms and arrangements in light	disclosures made in note 2 in light of the
	of the requirements of the new AASB 15	requirements of Australian Accounting
	standard.	Standards.

145 Evolution Mining Limited Annual Report 2019

Independent Auditor’s Report (continued)

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Key audit matter

How our audit addressed the key audit matter

Assessment of the carrying value of assets (Refer to notes 7 and 8)

At 30 June 2019, the Group held mine development and exploration assets of $1,672 million and property, plant and equipment of $557 million.

In line with the requirements of AASB 136, the Group has assessed whether there is an indication that an asset may be impaired. This assessment considered performance against budget, adverse changes in the business or regulatory environment and changes to other key assumptions that affect cash flows and discount rates. The Group identified no indicators of impairment for any Cash Generating Unit (“CGU”).

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 such indication exists, the Group shall determine whether all or part of the prior impairment loss need to be reversed.

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.

We evaluated the Group’s assessment of indicators of impairment or reversal of impairment and its conclusion not to recognise an impairment or 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 of each CGU and the budget and forecast as well as evaluating external market data.

In regards to the impairment reversal for Mt Carlton, we performed the following:

compared the current year US$ gold prices to the US$ gold prices when the impairment occurred
compared current gold price forecasts to gold price forecasts when the impairment occurred
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.

We also evaluated the adequacy of the disclosures made in the note 8 in light of the requirements of Australian Accounting Standards.

The Group performed an assessment of whether to reverse 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 for reversal of impairment.

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.

146 Evolution Mining Limited Annual Report 2019

Independent Auditor’s Report (continued)

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Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we obtained included the Directors' Report. We expect the remaining 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 we do not and will not express an opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information 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 on the other information that we obtained prior to the date of this auditor’s report, 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.

When we read the other information not yet received, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgement to determine the appropriate action to take.

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 the 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.

147 Evolution Mining Limited Annual Report 2019

Independent Auditor’s Report (continued)

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Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 87 to 100 of the directors’ report for the year ended 30 June 2019.

In our opinion, the remuneration report of Evolution Mining Limited for the year ended 30 June 2019 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.

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PricewaterhouseCoopers

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Marc Upcroft Partner

Sydney 15 August 2019

148 Evolution Mining Limited Annual Report 2019

Shareholder Information

Capital (as at 26 September 2019)

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----- Start of picture text -----

|||
|---|---|
|Share Capital|1,701,367,831|
|Ordinary shareholders|20,629|
|Shareholdings with less than a marketable parcel of $500 worth of ordinary shares|853|
|Market price|A$4.62|

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Distribution of Fully Paid Shares (as at 26 September 2019)

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----- Start of picture text -----

||||||
|---|---|---|---|---|
|Range|Securities|%|No. of Holders|%|
|100,001 and Over|1,571,360,923|92.36|225|1.09|
|10,001 to 100,000|82,671,335|4.86|3,246|15.74|
|5,001 to 10,000|22,217,627|1.31|2,980|14.45|
|1,001 to 5,000|22,174,933|1.30|8,207|39.78|
|1 to 1,000|2,943,013|0.17|5,971|28.94|
|Total|1,701,367,831|100.00|20,629|100.00|
|Unmarketable Parcels|22,569|0.00|853|4.13|

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Substantial Shareholders (as at 26 September 2019)

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----- Start of picture text -----

||||
|---|---|---|
|Fully Paid Ordinary Shares|
|Number|%|
|Van Eck Global|198,866,370|11.69|
|La Mancha Group International BV|151,391,807|8.90|
|Total|350,258,177|20.59|

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Twenty Largest Shareholders (as at 26 September 2019)

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||||
|---|---|---|
|Fully Paid Ordinary Shares|
|Name|Current|Issued|
|balance|capital %|
|HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED|724,954,306|42.61|
|J P MORGAN NOMINEES AUSTRALIA PTY LIMITED|358,143,244|21.05|
|CITICORP NOMINEES PTY LIMITED|277,002,241|16.28|
|NATIONAL NOMINEES LIMITED|52,498,482|3.09|
|BNP PARIBAS NOMINEES PTY LTD|30,943,790|1.82|
|BNP PARIBAS NOMS PTY LTD|12,711,824|0.75|
|HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED|6,906,143|0.41|
|CITICORP NOMINEES PTY LIMITED|6,213,931|0.37|
|BNP PARIBAS NOMINEES PTY LTD|5,845,000|0.34|
|ROXI PTY LIMITED|5,522,225|0.32|
|SMARTEQUITY EIS PTY LTD|5,428,171|0.32|
|LUJETA PTY LTD|4,428,723|0.26|
|WARBONT NOMINEES PTY LTD|4,084,372|0.24|
|HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2|3,921,806|0.23|
|AMP LIFE LIMITED|3,740,492|0.22|
|BNP PARIBAS NOMINEES PTY LTD|3,509,871|0.21|

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149

Evolution Mining Limited Annual Report 2019

Shareholder Information (continued)

PACIFIC CUSTODIANS PTY LIMITED	3,336,299	0.20
NATIONAL NOMINEES LIMITED	2,784,715	0.16
BUTTONWOOD NOMINEES PTY LTD	2,572,257	0.15
MR KEVIN GOORJIAN & MRS JUDITH GOORJIAN	2,452,112	0.14
Total	1,517,000,004	89.16

TOTAL	1,517,000,004	89.16
Balance of Register	184,367,827	10.84
Grand TOTAL	1,701,367,831	100.00

1.5 Share Buy-Backs

There is no current on-market buy-back scheme.

2 Other Information

Evolution Mining Limited, incorporated and domiciled in Australia, is a public listed Company limited by Shares.

150 Evolution Mining Limited Annual Report 2019

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151 Evolution Mining Limited Annual Report 2019

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152 Evolution Mining Limited Annual Report 2019

Corporate Information

ABN 74 084 669 036

Board of Directors

Jacob (Jake) Klein Lawrence (Lawrie) Conway Thomas (Tommy) McKeith Colin (Cobb) Johnstone James (Jim) Askew Graham Freestone Andrea Hall

Executive Chairman

Finance Director and Chief Financial Officer Lead Independent Director Non-Executive Director Non-Executive Director Non-Executive Director 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

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

T: +61 1300 554 474 F: +61 2 9287 0303

153 Evolution Mining Limited Annual Report 2019

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 Level 24, 175 Liverpool Street SYDNEY NSW 2000

 +61 2 9696 2900

 +61 2 9696 2901

ASX: EVN

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www.evolutionmining.com.au

AI assistant

EVOLUTION MINING LIMITED — Annual Report 2019

64885_rns_2019-10-24_d5710318-5930-4a07-83af-2d25238ea38d.pdf

We are a leading, growth-focused Australian gold miner

Contents

Our story

FY19 highlights

Continued delivery

Sector leading cash generation

8YEARS

A$771M

AISC[1] A$924/OZ

753KOZ

A$498M

48%

Group delivering strong EBITDA margins

FY19 highlights (continued)

Innovative culture

~ 10YEARS

TOTAL 14.73MOZ

TOTAL

7.46MOZ

A$1.28B

300KOZPA

SHARED VALUE PROJECTS

Continuing to deliver MROR growth

Executive Chairman’s Report

Inspired people creating Australia’s premier gold company

Executive Chairman’s Report (continued)

Sustainability Report

Sustainability Report

2019 achievements

SAFETY

ENVIRONMENTAL

DIVERSITY

SOCIAL RESPONSIBILITY

GOVERNANCE

A$1.28B

Sustainability Report (continued)

Our business

Our vision

Our corporate strategy

Our values

Sustainability Report (continued)

Evolution supply chain

Transportation

Sustainability Report (continued)

The Executive Chairman on sustainability at Evolution

Sustainability Report (continued)

Sustainability governance updates in FY19

Sustainability objective and strategy

Sustainability Policy

The Evolution sustainability ecosystem

Sustainability Report (continued)

United Nations’ Sustainable Development Goals

Sustainability Report (continued)

Sustainability Performance Standards

Reporting what matters to our stakeholders

Sustainability Report (continued)

Evolution’s stakeholder mix

Sustainability Report (continued)

Benchmarking and memberships

Corporate Governance

Risk management

Supporting documents:

Sustainability Report (continued)

Safety

FY19 highlights

FY19 safety achievements

FY20 focus

Supporting documents:

Sustainability Policy

Safety Performance Standards

Our People

Sustainability Report (continued)

Emergency response

Our People

Sustainability Report (continued)

Health and wellbeing

FY19 highlights

EVOLUTION MINING LIMITED Annual Report 2019