EVOLUTION MINING LIMITED — Interim / Quarterly Report 2014

Feb 20, 2014

Evolution Mining FY14 Half-Year Financial Results For the six month period ending 31 December 2013

21 February 2014 Tim Churcher - VP Finance & Chief Financial Officer

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Disclaimer

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• This presentation has been prepared by Evolution Mining Limited (“Evolution Mining”) and consists of slides for a presentation concerning the company. By reviewing/attending this presentation, you acknowledge and agree the following.

• This presentation includes forward-looking statements. Forward-looking statements inherently involve subjective judgement and analysis and are subject to a number of risks, uncertainties, contingencies and other factors, many of which are outside the control of, and may be unknown to, Evolution Mining. As such, actual results or performance may vary materially from those expressed or implied by forward-looking statements. The types of factors that could cause such variation in actual results or performance include (without limitation) commodity prices, operational problems and general economic conditions. Given these factors, undue reliance should not be placed on forward-looking statements, which speak only as at the date of this presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, Evolution Mining does not undertake any obligation to publicly update or revise any forwardlooking statements contained in this presentation, including (without limitation) where Evolution Mining’s expectations change in relation to such statements and where there is a change in events, conditions or circumstances providing the basis for any such statement.

• No representation or warranty, express or implied, is made as to the accuracy, completeness, reliability, fairness or correctness of the information contained in this presentation. To the maximum extent permitted by law, Evolution Mining and its related bodies corporate and affiliates, and each of their respective directors, officers, employees, agents and representatives, disclaim any liability or responsibility for loss or damage arising from or in connection with the use of the information contained in this presentation.

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Half-year financial highlights

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• Net profit of A$35.4M

• Revenue from gold, silver and copper sales of A$320.9M

• EBITDA of A$110.9M

• Group production of 214,396 gold equivalent¹ ounces

• Group average cash costs of A$766 (US$707[2] ) per ounce and AISC[3] of A$1,070 (US$987[2] ) per ounce

• Cash and available credit of A$95.2M at 31 December 2013

• Modest gearing of 13%

• Commercial production achieved at Mt Carlton, Evolution’s newest mine

• Exploration team working towards transformational discovery – 4D studies progressing well

• Interim dividend of 1 cent per share declared (unfranked)

• Gold equivalent is defined as gold plus payable silver from the A39 deposit at Mt Carlton

• Using an average AUD:USD exchange rate for the December half of $0.9227

• AISC (All-in Sustaining Cost) includes C1 cash cost plus royalty, sustaining capital, general corporate and administration expenses

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Profit result summary

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		6 months ending	6 months ending
	Financial Summary	31-Dec-13	31-Dec-12
		A$’000	A$’000
	Gold price received (A$/oz)	1,444	1,630
	Silverprice received(A$/oz)	22.49	30.43
	Total Revenue	320,934	321,642			Lower gold price, Mt Carlton addition
	Cost of sales (excluding D&A)	(198,162)	(169,236)			Mt Carlton costs
	Corporate, Exploration & other	(11,899)	(16,938)			Cost reduction initiatives
	EBITDA1	110,873	135,468
	D&A	(68,170)	(71,868)			June 30 asset impairment
	EBIT1	42,703	63,600
	Net interest expense2	(7,254)	(5,067)			Increased debt levels
	Income tax expense	-	(17,846)			Favourable tax ruling
	Net Profit	35,449	40,687

1. EBITDA and EBIT are non-IFRS financial information and are not subject to audit

2. Net interest expense is interest income less interest charged for the period

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Key revenue drivers

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 H1 FY14 revenue from gold and silver sales maintained A$320.9M

	1HFY14	1HFY13	Change
Gold price received (A$/oz)	1,444	1,630	(11%)
Silver price received (A$/oz)	22.49	30.43	(26%)

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A$M Group Revenue
400
A$321.6M A$64.4M A$320.9M
300
A$65.1M
200
100
0
Six months to 31 Lower commodity Mt Carlton revenue Six months to 31
Dec 2012 price and grade Dec 2013
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 Lower commodity prices and grade offset by Mt Carlton revenue

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Key profit driver – site EBIT

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EBIT (H1 FY13 v H1 FY14)

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A$M
30
25
20
15
10
5
0
Cracow Pajingo Edna May Mt Rawdon Mt Carlton
Six months to 31 Dec 2012 Six months to 31 Dec 2013
-
Site EBIT excludes corporate and exploration costs. Site EBIT is non IFRS financial information and not subject to audit.
A$25.4M
A$19.6M A$20.1M A$20.4M
A$15.9M
A$14.1M
A$10.8M
A$4.8M A$5.0M
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Total site EBIT H1 FY14 of A$55.1M

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Key profit driver – operating costs

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A$M Operating costs (H1 FY13 v H1 FY14)
60
50
40
30
20
Cracow Pajingo Edna May Mt Rawdon Mt Carlton
Six months to Dec 31, 2012 Six months to Dec 31, 2013
A$49.6M
A$46.1M
A$44.7M
A$39.9M A$40.0M A$39.6M
A$37.0M A$36.5M
A$33.9M
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Impact of cost reduction initiatives and productivity improvements

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Group cash flow

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• Net cash inflow from operations of A$114.0M

• Net cash outflow from investing activities of A$102.2M (A$90.8M of which is capital expenditure outlay)

• Net cash inflow from financing activities of A$11.6M (includes A$7.1M dividend payment)

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A$M
140
A$114.0M
120
100
80
60
40 A$11.5M
A$37.0M
20
A$102.2M
A$13.7M
0
Cash at 30 Jun 2013 Operating activities Investing activities Financing activities Cash at 31 Dec 2013
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Generating cash in a lower gold price environment

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Cash flow driver - EBITDA

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H1 FY14 Site EBITDA vs Capex
A$M
50
40
Growth Capex
30
Sustaining Capex
Site EBITDA
20
10
0
Edna May Cracow Pajingo Mt Rawdon Mt Carlton
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1. Site EBITDA is before all corporate administration costs, non-recurring items and exploration expenses

Site EBITDA¹ of A$122.8M. Capital expenditure of A$90.8M

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Balance sheet & liquidity

Balance Sheet 31 Dec 13 30 Jun 13	Balance Sheet 31 Dec 13 30 Jun 13
A$’000 A$’000
Cash 36,950	13,662
Short term borrowings 12,756	4,496
Long term debt 141,784	126,784
Total debt 154,540 131,280
Net Debt [ND] 117,590	117,618
Equity [E] 776,518	747,329
Net debt + Equity 894,108 864,947
Gearing [ND/ND+E] 13% 14%
Cash + Available credit 95,166	86,878
Debt capacity 200,000	200,000
Available credit 58,216	73,216

• Conservative balance sheet maintained

• Available liquidity of A$95.2M (cash and available credit)

• Gearing modest at 13%

Modest gearing ratio

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Summary

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• Operational stability and predictability delivered through a portfolio of five Australian mines

• First-half net profit of A$35.4 million

• Implemented production efficiencies, capital discipline and cost reductions in response to a lower gold price environment

• Interim dividend of 1 cent per share delivering returns to shareholders

• FY14 production and cost guidance maintained: 400,000 – 450,000 gold equivalent ounces with cash operating costs in the range of A$770 – A$820/oz

• FY14 capital spend anticipated to be at the lower end of the A$160M – A$185M guidance

• Highly talented exploration team focused on transformational growth

• Strong financial position – no current intention to raise additional equity

Uniquely positioned to participate in a transformational period in the Australian gold industry

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Evolution Mining ASX Code: EVN

www.evolutionmining.com.au

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