EVOLUTION MINING LIMITED - Regulatory Filings 2016

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ASX: EVN | www.evolutionmining.com.au
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Marcelle Watson – Senior Mine Geologist White Foil Operations, Mungari
Photography courtesy of Dianne Newell – Manager People and Culture, Mungari
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3 Our Achievements in FY16
5 Executive Chairman’s Report
7 Safety and Health
9 Our Assets
20 FY16 Production Summary
22 Outlook for FY17
23 Performance History -
Key Indicators
24 Act Like an Owner
34 People and Culture
36 Environmental Responsibility
38 Community Spirit
40 Mineral Resources and Ore Reserves
44 Board of Directors
47
50 Annual Financial Report
174 Shareholder Information
176 Corporate Information
27 Discovery

Forward Looking Statements

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

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

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

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

Creating Australia’s premier gold mining company

Evolution Mining is a leading, growth-focused Australian gold miner. We operate six wholly-owned mines – Cowal in New South Wales, Mt Carlton, Mt Rawdon, and Cracow in Queensland, and Mungari and Edna May in Western Australia. We are acquiring an economic interest in the Ernest Henry copper-gold operation[1] in Queensland.

In FY16 Evolution produced 803,476 ounces of gold at an AISC of A$1,014 per ounce, generating a net mine cash flow of A$428.2 million.

Assuming the completion of the proposed acquisition of an economic interest in Ernest Henry, Evolution has revised FY17 Group gold production guidance to 800,000 – 860,000 ounces at an AISC of A$900 – A$960 per ounce.

Our company has continued to grow into a genuine mid-tier Australian gold producer after the acquisition of Cowal in July 2015 and Mungari in August 2015.

We have improved the quality of our assets through the sale of the Pajingo Mine and the acquisition of an economic interest in the world-class Ernest Henry copper-gold mine, expected to complete in the December quarter 2016.

We have a reputation for: operational consistency and reliability with a track record of always achieving production and cash cost guidance since formation; and for value accretive acquisitions.

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Tennant
Creek JV Ernest Henry
(Evolution economic interest)
Mt Carlton
Mt Rawdon
Cracow
Mungari
Edna May Cowal
Puhipuhi
Operation
Exploration
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AISC (All-in Sustaining Cost) includes C1 cash cost, plus royalty expense, plus sustaining capital expense, plus general corporate and administration expenses on a per ounce sold basis

AIC (All-in cost) is ASIC plus growth (major capital) and discovery expenditure. Calculated on per ounce produced basis Calculated using an average AUD:USD exchange rate for FY16 of US$0.7284

Completion of the transaction is subject only to Australian Foreign Investment Review Board (“FIRB”) approval

Evolution Mining Limited Annual Report 2016

Evolution – Australia’s second largest gold producer

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280,401oz 392,920oz 428,703oz 437,570oz 803,476oz
FY12 FY13 FY14 FY15 FY16
Photography courtesy of Dianne Newell – Manager People and Culture, Mungari
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Note:

FY16 will be gold ounces

Attributable gold equivalent ounces

800,000 - 860,000 A$900 - A$960

FY17 GUIDANCE

PRODUCTION OUNCES

FY17 GUIDANCE

AISC COST PER OUNCE

koz 14,015

DEC15 RESOURCE

koz 5,853

DEC15 RESERVE

+2.3Moz

AU EQ PRODUCED

SINCE NOVEMBER 2011

Evolution Mining Limited Annual Report 2016

Our Achievements in FY16

�84%

FY16 GROUP PRODUCTION 803,476 ounces

33%�

TRIFR 14.5* to 9.7

�114% FY16 UNDERLYING PROFIT A$226.9M

A$1,014/oz

A$1,134/oz

�211%

FY16 AISC

US$739/oz record low

REDUCED AIC BY 12% US$826/oz result of sustained focus on cost reduction and productivity improvements

RECORD NET MINE CASH FLOW

A$428.2M

Record gold production of 803,476 ounces – an 84% increase
Keeping our people safe – we maintained a steady total recordable injury frequency rate (TRIFR[1] ) of 9.7
Record low AISC of A$1,014/oz (US$739/oz) – the lowest quartile of global gold producers
AIC reduced by 12% to A$1,134/oz (US$826/oz)
EBITDA increased by 123% to A$607.5M
Statutory net loss of A$24.3M after acquisition, integration and impairment costs
Gearing reduced from a peak of 32%[2] to 15% – A$322.0M debt repayment
Doubling the dividend payout ratio to 4% of revenue
Five consecutive years of achieving guidance since the Company’s inception
Completion of the Cowal and Mungari transactions – significantly reducing Group costs and increasing cash generation
Dealer of the Year Award 2016 – 25th Diggers and Dealers Mining Forum
Ore Reserves increased from 1.56Moz to 2.85Moz (+83%) under Evolution ownership
Cowal gold production of 237,940 ounces with an AISC of A$776/oz (US$565/oz)
Mungari gold production of 137,193 ounces with an AISC of A$1,024/oz (US$745/oz) from ten months ownership
Takeover of Phoenix Gold Limited – clear commercial logic given the close proximity to the Mungari operations
Outstanding results from Mt Carlton with gold production of 113,056 ounces (45% increase on FY15) at an AISC of A$742/oz (US$540/oz) – our lowest cost mine
results from Cowal’s Stage H cutback and Cracow, and extending mineralisation at Frog’s Leg and White Foil at Mungari
of the V2 open pit at Mt Carlton
High-grade gold intersections returned at Edna Beryl West (Tennant Creek JV)
We maintained an outstanding environmental performance across all of our sites

In FY16 we completed transformational acquisitions of Cowal and Mungari, integrated these new assets, focused on operational efficiency at all operations, and hunted for more opportunities to upgrade the quality of our asset portfolio

Total recordable injury frequency rate (TRIFR) is the frequency of total recordable injuries per million hours worked

Post completion of Cowal and Mungari acquisitions

Evolution Mining Limited Annual Report 2016

Executing a clear and sound strategy

First world jurisdiction

Operating in Australia
Gold miners currently experiencing strong tailwinds

Mid-tier

Portfolio of 6 - 8 assets to ensure focus is maintained

Low cost

Driving down costs and improving productivity
Upgrading the quality of the portfolio

Reliability

Five consecutive years of meeting production and cost guidance

Organic growth

Investing in near mine and regional exploration

M&A

Logical, opportunistic, value accretive acquisitions

Superior returns

Balance sheet strength
Capital growth and increased dividends

Evolution Mining Limited Annual Report 2016

Executive Chairman’s Report

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On behalf of the Board of Directors of Evolution Mining I am pleased to present you with the Company’s 2016 Annual Report.

When Evolution was formed in 2011 we articulated a very clear strategy to build a globally relevant mid-tier Australian gold miner. In the 2016 Financial Year we continued to deliver on this strategy by leveraging our operational success to improve the quality of our asset portfolio. The immediate impact of the acquisition and integration of the Cowal and Mungari operations during the year saw Evolution achieve a record 2016 year on almost every metric.

To succeed as a company we need to live our core value of safety. I am pleased to say that in FY16 Evolution maintained a strong focus on improving our high safety standards across our business. At the same time, the Company continued its track record of delivering to or outperforming production and cost guidance, marking five consecutive years of achieving guidance since the Company’s inception in 2011.

Evolution’s gold production increased by 84% to a record 803,476 ounces at an average C1 cash cost of A$722 per ounce, an AISC[1] of A$1,014 per ounce and a AIC[2] of A$1,134 per ounce. Using the average AUD:USD exchange rate for FY16 of 0.7284, Evolution’s AISC equated to

US$739 per ounce, placing the Company in the lowest cost quartile of global gold producers. The contribution from our new, low cost assets, our “acting like owners” culture across our workforce, and maintaining a focus on cost and efficiency gains, saw our AIC fall by 12% in the 2016 financial year.

114% to a record A$226.9 million. The strong Australian dollar gold price and lower cost base resulted in record high cash margins and a record operating cash flow of A$628.4 million in 2016. Net mine cash flow, after all sustaining and major project capital expenditure, increased by 211% to A$428.2 million.

This strong cash generation enabled Evolution to make A$322.0 million in debt repayments during the period. As a result, the Company’s gearing was reduced to 15% by 30 June 2016 after peaking at 32% in July 2015 at the completion of the Cowal transaction.

throughout the year. In the first year under Evolution ownership both Cowal and Mungari made a strong contribution to our FY16 result. Cowal produced 237,940 ounces of gold at an AISC of A$776 per ounce. Mungari produced 137,193 ounces of gold at an AISC of A$1,024 per ounce from just over ten months of ownership.

Mt Carlton delivered an outstanding result with gold production of 113,056 ounces. This substantially exceeded original FY16 guidance of 80,000 – 87,500 ounces and represented a 45% increase on FY15 production. Importantly, this was achieved at an AISC of A$742 per ounce which made Mt Carlton Evolution’s lowest cost asset in 2016.

business allowed Evolution’s Board of Directors to approve the doubling of the Company’s dividend payout ratio to 4% of gold revenue. This change was announced in June 2016 and was applied to the final 2016 dividend declared in August 2016.

Following on from the Cowal and Mungari acquisitions that were announced during FY15, Evolution moved quickly to acquire Phoenix Gold Limited. This transaction was completed in January 2016. The Phoenix tenement package adjoined the Mungari operation and covers a significant strike length of the highly prospective Zuleika Shear and Kunanalling Shear. Evolution now has a land package of approximately 880km[2] surrounding the newly built 1.6Mtpa Mungari mill – just 20 kilometres west of Kalgoorlie in Western Australia.

1 AISC (all-in sustaining cost) includes C1 cash cost plus royalty expense, sustaining capital expense, general corporate and administration. Calculated on per ounce produced basis

2 AIC (All-in cost) is ASIC plus growth (major capital) and discovery expenditure. Calculated on per ounce produced basis

Evolution Mining Limited Annual Report 2016

Executive Chairman’s Report (continued)

Evolution continued to actively pursue its strategy of upgrading the quality of its asset portfolio. In August 2016 Evolution announced the acquisition of an economic interest in the Ernest Henry mine – a large scale, long life, copper-gold asset operated by Glencore plc. Evolution’s economic interest consists of:

100% of gold and 30% of copper and silver produced over current 11 year Life of Mine plan
30% contribution to current Life of Mine production costs
49% interest in all copper, gold and silver production beyond current Life of Mine plan
An agreement to work together to establish an exploration joint venture

If Evolution had owned this asset in FY16 it would have delivered pro-forma production of 88,000 ounces of gold at an AISC of A$(59) per ounce and a net mine cash flow of A$142.0 million. The transaction remains subject to Foreign Investment Review Board approval and is expected to close in the December quarter 2016.

In August 2016 Evolution also announced the divestment of the Pajingo gold mine for total proceeds of up to A$52.0 million, including an upfront cash payment of A$42.0 million. Pajingo made a very important contribution to Evolution for the last six years, however our significant growth in the last 18 months means it made strategic sense for the asset to be operated by an emerging gold producer which can provide the focus needed to extend the mine’s operating life. We sincerely thank all the team at Pajingo for the contribution they have made to Evolution.

Discovery remains a key part of our business as we continue to focus on increasing our reserve base to extend the average Group mine life. In June 2016, Dr Glen Masterman was appointed as our new VP Discovery and Chief Geologist and brings more than 20 years of experience in the gold sector in senior technical and management roles both in Australia and internationally. Further exciting progress was made in Discovery across

Evolution’s portfolio during FY16. Highlights included:

Positive drill results from the Cowal E42 Stage H resource definition program
Strong results at Mt Carlton testing for high-grade extension opportunities to the V2 orebody
mineralisation at Frog’s Leg underground and the White Foil open pit beyond the limits of the December 2015 Ore Reserve
Encouraging results from early drilling at Johnson’s Rest, Mungari
from resource definition drilling at Cracow
at Edna Beryl West in the Tennant Creek JV

During the year Evolution invested A$26.8 million in exploration and we expect to spend a further A$25 – A$30 million in the year ahead.

Across our entire business our people have continued to work incredibly hard during the year and I would like to thank each and every Evolution employee and contractor for their contribution. 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.

Assuming completion of the Ernest Henry transaction, in FY17 Evolution expects to produce 800,000 – 860,000 ounces of gold at an AISC of A$900 – A$960 per ounce. Evolution has issued a three year outlook which highlights continued improvement in both production and costs. In FY19 we expect to produce 830,000 – 890,000 ounces at an AISC of A$830 – A$900 per ounce.

Evolution has a strong platform of high quality assets, all located in a stable region with a highly skilled workforce, and in an operating environment where costs have declined and the currency is low. Our balance sheet is strong, our assets are generating substantial cash flow and our business is well positioned for the future.

Yours faithfully,

JAKE KLEIN EXECUTIVE CHAIRMAN

Evolution Mining Limited Annual Report 2016

Safety and Health

The safety and well-being of our people is of paramount importance to us. We believe that every injury is preventable.

injury frequency rate (from 14.5* to 9.7). Strategies to continuously identify and manage risks in the workplace remain a high priority. Examples of these are:

Vehicle Incident Prevention Program (VIPP) where we focused on educating through Alert Driver (an online training system) and increased communication on incident and prevention strategies
Beyond Zero – a leadership development course aimed at enhancing front-line leaders’ safety skills

In FY17 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:

Business as usual for the VIPP and Beyond Zero programs
The development and roll out of Critical Control plans

We are very proud of our FY16 safety achievements

Implementation of a range of technology deployments across the Group including installation of dash cameras, proximity detection systems and fatigue monitoring devices
813 people trained in Alert Driver safety training modules
Improved engagement with our workforce – an average of 87 safety interactions conducted each day
An average of 726 Take 5 pre-start safety checks conducted each day
Conducted external safety audits of all operations against the Evolution Safety and Health Management system
258 leaders completed Beyond Zero safety leadership training
Hosted the second Evolution Mine Rescue Challenge at Mt Carlton

Note:

*Mungari and Cowal data has been added to FY15 TRIFR for comparative purposes (operated by previous owner)

33%�

62%�

55%�

TRIFR SIGNIFICANT SAFETY 14.5 to 9.7 OCCURRENCES*

VEHICLE INCIDENTS

Evolution Mining Limited Annual Report 2016

Safety and Health (continued)

To support our value of “Safety – every job, every day” we live by our Safety Principles

Management takes accountability for safety performance

FY16 health achievements

1,832 proactive rehabilitation interventions taken
Onsite gym facilities and access to health professionals at our remote camps
Group exercise activities at remote camps

Everyone is empowered to stop at risk behaviour and control unsafe conditions

Multi-purpose sporting court built at Mt Carlton
Deployment of technology to assist people in monitoring their health
Employee Assistance Program (EAP) available to all employees and immediate family members
More than 75% workforce participation in our Health and Wellbeing program

Everyone takes accountability for his/her own safety and for the safety of those around them

1,205 Epworth sleep assessments
6,273 one-on-one health consultations

All injuries and incidents are preventable

No task is so important that it cannot be done safely

Working safely is a condition of employment

km 142,384

��

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371

“100,000KM” CHALLENGE Successful health initiative rollout – the distance walked by Evolution employees combined over 6 weeks

KEY HEALTH METRIC AVERAGES REDUCED including BMI, weight and blood glucose levels

FLU VACCINATIONS administered

Evolution Mining Limited Annual Report 2016

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Our Assets

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Cowal, New South Wales, Australia

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Evolution ownership: 100%

Location: 350km west of Sydney, 40km north-east of West Wyalong

Ore Reserves (at 31 December 2015): 99.40Mt at 0.89g/t gold for 2.85Moz gold

Mineral Resources (at 31 December 2015): 164.12Mt at 0.96g/t gold for 5.05Moz gold

FY17 production guidance: 245,000 – 260,000oz gold at AISC of A$885 – A$945/oz

Highlights and improvements achieved during the year included:

Evolution completed the transformational acquisition of Cowal on 24 July 2015. The Cowal gold mine is a world-class gold mining operation which has produced more than 2.5Moz of gold since production commenced in 2006.

An increase in Ore Reserves from 1.56Moz to 2.85Moz (+83%)
An increase in Mineral Resources from 3.26Moz to 5.05Moz (+55%)

operational performance finishing the year with attributable gold production of 237,940oz, with unit cash operating costs in the lowest cost quartile globally at A$591/oz, and an AISC and AIC of A$776/oz and A$789/oz respectively.

E42 Resource Development drilling is currently in progress in support of the Stage H cutback feasibility study – seven drill rigs are now in position and initial assays supporting prior interpretations and identifying new zones of mineralisation

Evolution was successful at reducing operating costs in its first year of ownership. This was largely driven by lower unit mining costs, lower unit processing costs and increased recoveries. This strong performance led to an achieved unit cash operating cost and AISC well below the improved full year guidance of A$650 – A$750/oz and A$800 – A$850/oz respectively. Total ore processed for the 11 months of ownership was 6,666kt at a grade of 1.33g/t with a gold recovery of 83.5%. Gold production was also above plan for the year due to higher grades processed and increased recoveries.

Shorter shut down times which reduced mill maintenance costs by A$6.8 million below budget

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increased recoveries. This strong performance led to an
achieved unit cash operating cost and AISC well below
the improved full year guidance of A$650 – A$750/oz
and A$800 – A$850/oz respectively. Total ore processed
for the 11 months of ownership was 6,666kt at a grade
of 1.33g/t with a gold recovery of 83.5%. Gold production
was also above plan for the year due to higher grades
processed and increased recoveries.
In FY16 Cowal generated A$193.06 million and A$163.6
million in operating and net mine cash flow respectively.
This outstanding result confirms the quality of the asset
and the strategic rationale of Evolution’s acquisition.
Production Cash flow Resources and
costs Reserves
700 200 6000
591
195
190 5 000
185
400 180 4 000
175
3 000
170
100 165 2 000
160
155 1 000
150
-200
FY16 FY16 FY16
Production gold (oz) Operating Mine Cash Flow (A$M) R esource (koz)
C1 (A$/oz) Net Mine Cash Flow (A$M) Reserve (koz)
2,848
163.6
193.1 5,046
237,940oz
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In FY16 Cowal generated A$193.06 million and A$163.6 million in operating and net mine cash flow respectively. This outstanding result confirms the quality of the asset and the strategic rationale of Evolution’s acquisition.

Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Mungari, Western Australia, Australia

Evolution ownership: 100%

Location: 600km east of Perth, 20km west of Kalgoorlie

Ore Reserves (at 31 December 2015): 7.92Mt at 2.61g/t gold for 665koz gold

Mineral Resources (at 31 December 2015): 79.33Mt at 1.77g/t gold for 4.53Moz gold

FY17 production guidance: 150,000 – 160,000oz gold at AISC of A$970 – A$1,030/oz

The acquisition of Mungari was completed on 24 August 2015 and saw the establishment of a strong strategic partnership with the La Mancha Group and its owner Naguib Sawaris. Mungari finished the year as the Group’s second highest producer with 137,193oz from just over 10 months of ownership following its successful integration. Mungari is a quality, low cost asset which achieved a unit cash operating cost of A$756/oz and AISC of A$1,024/oz in FY16. Underground ore mined at Frog’s Leg for the year totalled 563kt at an average grade mined of 5.89g/t gold. Production was predominantly sourced from the Fog, Dwarf, Mist and Rocket orebodies. Open pit ore mined from White Foil for the year was 1,121kt at an average grade mined of 1.47g/t gold. Total material mined from the pit was 8,590kt. Production focused on the completion of Stage 2A, progression of Stage 2B and the commencement of the northern Stage 3 cutback.

Highlights achieved during the year included:

Strong progress on extending the life of the Frog’s Leg mine as a result of well planned and executed diamond drilling programs
The ramp up of regional exploration following the acquisition of Phoenix Gold tenements
A live online data monitoring system was introduced to the mine which resulted in improving the average payload of trucks by 4% in the commissioning phase
Mungari moved to owner-operator for shotcrete activities during the year. This resulted in reduced ground support costs by combining these activities with the paste-fill operations

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Produ c tio n Cash flow Resources and
cost s Reserves
70 0 20 0 60 00
1 95
756 1 9 0 5 00 0
1 85
400 18 0
1 7 5
1 7 0
100 1 65
1 60
1 55
1 50
-200
FY1 6 F Y16 FY16
Production gold (o z) O p era ting Mine Cash Fl ow (A $M) Res ource (koz)
C1 (A$/oz) N et Mi ne Cash Flow (A$ M) R es erv e (koz)
530
16.9
1 4.0 4, 65
8 6
137,193oz
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Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Mt Carlton, Queensland, Australia

Evolution ownership: 100%

Location: 150km south of Townsville

Ore Reserves (at 31 December 2015): 4.62Mt at 4.78g/t gold for 709koz gold Mineral Resources (at 31 December 2015): 8.62Mt at 3.19g/t gold for 885koz gold

FY17 production guidance: 90,000 – 100,000oz gold at AISC of A$675 – A$725/oz

Our Mt Carlton operation commenced commercial production in July 2013 and was the first new gold mine opened in Queensland in more than a decade. Ore is sourced from the V2 gold-silver-copper deposit which is processed on site to produce a concentrate.

Mt Carlton produced a record of 113,056oz in payable gold (45% increase on FY15) at a record low unit cash operating cost of A$463/oz and an AISC of A$742/oz (FY15: 77,658oz, A$687/oz, A$912/oz). These record results for the year were driven by a combination of increased average grade mined of 5.55g/t (FY15: 4.42g/t) along with lower mining costs as a result of the transition to owner-maintainer of the mining fleet.

Mining activity focused on the medium and high-grade zones in Stage 2 of the V2 pit which resulted in higher tonnes mined and higher average grade. Productivity improvements and cost reductions achieved during the year included:

A$6.36/t (FY15: A$8.60/t) largely as a result of the transition to owner-maintainer for the mining fleet
The ongoing plant optimisation project has seen improved filtration circuit performance

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Pr o du c tion Cash flow Resources and
c ost s Reserves
700 200 6000
195
675 68 7 190 5 000
185
4 6 3 400 180
175
170
100 165
160
155
150
F Y14 FY15 FY16 FY1 4 FY15 FY16 FY14 F Y15 FY16
Productio n g old (oz) Mine C as h F low (A$M) Resource (ko z)
C1 (A$/oz) Ne t Mine Cash Flo w (A $M ) Reserve (koz )
oz 1.3 5 47.8 .3 625 709
,056 26.1 22.2 125.2
87,952oz 77,658oz 113 103 1,278 947 871 885
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Note:

FY16 is gold ounces. Commercial production was declared as at 1 July 2013

Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Mt Rawdon, Queensland, Australia

Evolution ownership: 100%

Location: 75km south-west of Bundaberg

Ore Reserves (at 31 December 2015): 34.43Mt at 0.78g/t gold for 864koz gold Mineral Resources (at 31 December 2015): 56.09Mt at 0.69g/t gold for 1,238koz gold

FY17 production guidance: 90,000 – 100,000oz gold at AISC of A$960 – A$1,040/oz

The Mt Rawdon operation is a single open pit that has produced around 1.5 million ounces of gold since first production in 2001.

focused on completing the Stage 4 cutback. Seasonal storms across Central Queensland resulted in heavy rainfall and limited access to high-grade ore from the Stage 3 pit floor. This led to the processing of low grade stockpiles during the affected periods. Despite these issues, gold production of 85,002oz was achieved at a unit cash operating cost of A$726/oz and an AISC of A$1,024/oz (FY15: 102,162oz, A$631/oz, A$873/oz). A total of 3,307kt of ore was mined at an average grade of 0.88g/t (FY15: 3,283kt, 1.04g/t).

Productivity improvements and cost reductions achieved during the year included:

Ongoing grinding and cyanide consumption initiatives delivered a 6% saving in unit processing costs
Unit mining costs continued to trend lower averaging A$3.19/t for the year (FY15: A$3.41/t). This was driven by improvements in mining productivity, lower fuel prices and production drilling initiatives

The Stage 4 cutback has now accessed ore and initial reconciliations against the resource model have been positive. The accelerated stripping capital program at Mt Rawdon is almost complete. The strip ratio is expected to drop from approximately 4.4:1 in FY16 down to approximately 2.1:1 in FY17.

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P ro duction Cash flo w Resources and
c osts Reserves
726
613 6 7 0 632
FY13 FY14 FY15 FY 16 FY13 F Y1 4 FY15 F Y 16 FY13 F Y1 4 FY15 FY16
Producti on gold (oz) Operating Min e Ca sh Flow (A$M) Resource ( ko z)
C1 (A$/oz) Ne t Mine Cash Fl ow (A $M ) Reserve (koz)
2oz
089oz 06, 1 103,756oz 16 02, 1 85,002oz 91.1 4.0 2 67.0 11.7 83.7 32.9 6 2.2 8 .4 1,288 1,026 1,234 862 1,156 879 1,238 864
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Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Edna May, Western Australia, Australia

Evolution ownership: 100%

Location: 45km east of Merredin

Ore Reserves (at 31 December 2015): 9.66Mt at 1.51g/t gold for 471koz gold Mineral Resources (at 31 December 2015): 19.14Mt at 1.37g/t gold for 840koz gold

FY17 production guidance: 80,000 – 85,000oz gold at AISC of A$1,140 – A$1,220/oz

The Edna May open pit operation produced 71,028oz of gold for the year at a cash operating cost of A$1,407/oz and an AISC of A$1,504/oz (FY15: 98,766oz, A$747/oz, A$898/oz). Significant rainfalls throughout the year restricted access to the high grade area of the pit resulting in a substantial decrease in production. Operating waste mined was substantially higher than the prior 12 months at 5,550kt (FY15: 1,639kt). This resulted in a significantly higher mining cost than the previous year. Gold grades mined were significantly lower than the prior period at 0.91g/t (FY15: 1.27g/t).

Key achievements during the year included:

The Stage 1 Underground Development received board approval during the March 2016 quarter and development commenced in June 2016. The Stage 1 project involves a A$16.0 million capital investment and targets an initial resource of approximately 200,000oz
A feasibility study is currently being undertaken for Stage 2 of the underground development

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Production Cash flow
costs
1,407
1,017
900
747
FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16
Production gold (oz) Operating Mine Cash Flow (A$M)
C1 (A$/oz) Net Mine Cash Flow (A$M)
74.2
16.2 13.5
86,216oz 80,165oz 98,766oz ,028oz71 43.3 9.3 33.6 35.8 1.9
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Resources and
Reserves
FY13 FY1 4 FY15 FY16
1,643
1,145 1,056 840
709
402 387 471
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Re source (koz)
Reserve (koz)
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Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Cracow, Queensland, Australia

Evolution ownership: 100%

Location: 500km north-west of Brisbane

Ore Reserves (at 31 December 2015): 1.06Mt at 5.59g/t gold for 190koz gold

Mineral Resources (at 31 December 2015): 2.42Mt at 6.48g/t gold for 504koz gold

FY17 production guidance: 80,000 – 85,000oz gold at AISC of A$1,100 – A$1,160/oz

The Cracow operation has been a consistent producer and since mining began in 2004, the mine has produced more than 1 million ounces of gold. In FY16 Cracow produced 90,626oz of gold at a unit cash operating costs of A$746/oz and AISC of A$1,065/oz (FY15: 93,064oz, A$726/oz, A$1,050/oz).

A total of 499kt of ore was mined at an average grade of 5.92g/t Au (FY15: 541kt, 5.85g/t Au). The primary ore sources were the Kilkenny, Empire and Klondyke ore bodies. Production drilling focused on improving stoping flexibility with ore development at Klondyke and Tipperary. Capital development focused on accessing the Klondyke remnants and lower levels of the Empire stopes. Narrow vein mining techniques were successfully trialled.

Productivity improvements and cost reductions achieved during the year included:

Transfer of surplus equipment between sites delivered reduced costs and reduced contractor dependency
Reduced power costs with the plant and mine feeder being switched over to a new power factor conversion capacitor bank. This change also enabled the ventilation fans at the Empire and VR1 decline to be changed from diesel to grid power

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P ro duction
c osts
867
72 8 726 746
FY13 FY14 FY15 FY 16
Producti on gold (oz)
C1 (A$/oz)
4oz
560oz 6
02, 1 95,064oz 93,0 90,626oz
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Cash flo w
FY13 F Y1 4 FY15 F Y 16
0 .2
65. 59.7 61.9 66
40.5
30.2 33.4
17.8
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Operating Min e Ca sh Flow (A$M) Ne t Mine Cash Fl ow ( A$M )

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Resources and
Reserves
FY13 F Y1 4 FY15 FY16
842
725 707
504
273 260 248 190
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Resource ( ko z)
Reserve (koz)
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Evolution Mining Limited Annual Report 2016

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Riley Kammholz – Graduate Mining Engineer,
Mt Rawdon operations
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Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Pajingo, Queensland, Australia

Evolution ownership: 100%

Location: 50km south of Charters Towers

Ore Reserves (at 31 December 2015): 0.55Mt at 5.97g/t gold for 107koz gold Mineral Resources (at 31 December 2015): 2.54Mt at 7.04g/t gold for 574koz gold (excl. Twin Hills)

FY17 production guidance: 10,000oz gold at AISC of A$1,230 – A$1,270/oz

Pajingo delivered a strong result in FY16, doubling its net mine cash flow for the year to A$26.5 million. Ore mined and tonnes processed increased by 10% and 13% respectively. Costs remained flat against a lower processed grade which resulted in steady unit cash operating costs of A$785/oz (FY15: A$787/oz) and AISC of A$1,161/oz (FY15: A$1,163/oz). Gold production increased 5% to 68,630oz (FY15: 65,919oz).

Pajingo’s primary ore sources were the Sonia East, Sonia Splay, Zed East and Zed West orebodies. Total ore mined was 418kt at an average grade of 5.50g/t Au (FY15: 379kt, 5.78g/t Au). The completion of the Camembert underground platform and an associated diamond drilling program allowed for the development of the Camembert deposit to commence during the year.

Productivity improvements and capital projects commissioned during the year included:

Reductions in processing unit rates were achieved due to improved management of the processing tanks for campaign milling as well as the processing of an historic low grade laterite stockpile which was located at the mill
A new tailings facility was permitted during the March quarter to provide approximately 2.5 years of tails storage

On 1 September 2016 Evolution announced the completion of the sale of the Pajingo gold mine and surrounding exploration tenements to Minjar Gold Pty Ltd for total proceeds up to A$52.0 million including an upfront cash payment of A$42.0 million.

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P ro duction Cash flo w Resources and
c osts Reserves
8 94
807 787 785
FY13 FY14 FY15 FY 16 FY13 F Y1 4 FY15 F Y 16 FY13 F Y1 4 FY15 FY16
Producti on gold (oz) Operating Min e Ca sh Flow (A$M) Re source (koz) ( exc l. Twin Hills)
C1 (A$/oz) Ne t Mine Cash Fl ow (A $M ) Res erv e (koz)
5,9 18oz8 60,766oz 9oz 5,91 6 68,630oz 1.5 5 33.7 6.8 38.4 13. 5 51.1 6.3 2 1,306 329 923 155 823 98 574 107
-6.4
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Evolution Mining Limited Annual Report 2016

Our Assets (continued)

Ernest Henry, Queensland, Australia

Evolution economic interest: 30% copper, 100% gold, 30% of future production costs

Location: 35km north-east of Cloncurry

Ore Reserves (100% interest at 31 December 2015): 57.9Mt at 1.06% copper and 0.54g/t gold for 612kt copper and 1,011koz gold Mineral Resources (100% interest at 31 December 2015): 96.1Mt at 1.17% copper and 0.59g/t gold for 1,124kt copper and 1,839koz gold FY17 production guidance: 55,000 – 65,000oz gold at AISC of A$100 – A$150/oz for eight months of attributable production

On 24 August 2016 Evolution announced the acquisition of an economic interest in the Ernest Henry copper-gold operation. This is a large-scale, long-life asset owned and operated by Glencore. This acquisition is expected to deliver Evolution gold production at an extremely low AISC (after copper and silver credits), generate significant free cash flow and provide Evolution with exposure to mine life extension potential from a high quality Australian copper-gold mine.

Evolution is acquiring 100% of future gold produced from the agreed 11 year life of mine area (LoM Area) and 30% of future copper and silver produced from the LoM Area. In addition to an upfront A$880 million payment, Evolution will contribute 30% of future production costs in respect of the LoM Area.

In the 12 months to 30 June 2016, Ernest Henry produced 67,000t of copper and 88,000oz of gold in concentrate. On a pro-forma basis, Evolution’s interest in Ernest Henry would have delivered an FY16 AISC of negative A$(59.0) per ounce (after copper and silver credits) and generated a net mine cash flow of A$142.0 million.

The transaction is subject to Foreign Investment Review Board approval and is expected to complete in the December 2016 quarter.

Pro-forma metrics of Evolution’s new asset portfolio following the divestment of the Pajingo gold mine and assuming completion of the Ernest Henry transaction are shown below. These metrics clearly demonstrate that Evolution is delivering on its objective of upgrading the quality of its asset portfolio.

FY16 pro-forma metrics

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FY16A production (Koz, Au only)
803 69 88 822
Evolution Pajingo Ernest Henry Evolution
(pre deals) divestment acquisition (pro-forma)
FY16A AISC (A$/oz, Au)
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1,161
1,014
926
(59)
Evolution Pajingo Ernest Henry Evolution
(pre deals) divestment acquisition (pro-forma)
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December 2015 ore reserves (%) [(1)(2) ] FY16A Sustaining and major capital expenditure (%)
Cracow Pajingo, 2% Ernest Henry, 14.9% Pajingo, 12.4% Cowal Edna May Ernest Henry, 4.5% Cowal
Edna May Edna
Mungari Edna May May Cracow
5.9Moz Cracow 6.8Moz Cowal Cracow A$200M Mungari A$184M Mungari
Cowal
Mt Mt
Carlton Rawdon Mungari Mt Carlton
Mt Rawdon Mt Carlton Mt Rawdon Mt Rawdon Mt Carlton
FY16A Net mine cash flow (%)
Edna May Pajingo, 6.9%
Cracow Ernest Henry, 26.0% Cowal
Mt Rawdon
Cowal
A$428M Edna May A$544M
Mt Carlton Cracow
Mt Rawdon Carlton Mt
Mungari
Mungari
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This information is extracted from the report entitled “Annual Mineral Resources and Ore Reserve Statement” released by Evolution to ASX on 21 April 2016 and is available to view on ww.asx.com.au
to Raise A$400 Million” released by Evolution to ASX on 24 August 2016 and is available to view on www.asx.com.au

Evolution Mining Limited Annual Report 2016

FY16 Production Summary

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July 2015 – June 2016 Units Cowal Mungari Mt Carlton Mt Rawdon Edna May Cracow Pajingo Group
UG lat dev - capital m - 1,157 - - - 1,988 2,272 5,416
UG lat dev - operating m - 1,629 - - - 3,000 1,867 6,496
Total UG lateral development m - 2,785 - - - 4,988 4,138 11,912
UG ore mined kt - 563 - - - 499 418 1,479
UG grade mined g/t - 5.89 - - - 5.92 5.50 5.79
OP capital waste kt - 825 1,411 12,044 1,295 - - 15,575
OP operating waste kt 3,937 6,644 1,460 1,959 5,550 - - 19,550
OP ore mined kt 8,714 1,121 838 3,307 2,351 - - 16,331
OP grade mined g/t 1.16 1.47 5.55 0.88 0.91 - - 1.31
Total ore mined kt 8,714 1,684 838 3,307 2,351 499 418 17,810
Total tonnes processed kt 6,666 1,441 837 3,421 2,945 511 422 16,242
Grade processed g/t 1.33 3.16 5.71 0.86 0.82 5.92 5.36 1.77
Recovery % 83.5 93.7 88.4 90.4 91.7 93.1 94.4 88.2
Gold produced oz 237,940 137,193 113,056 85,002 71,028 90,626 68,630 803,476
Silver produced oz 229,439 22,457 307,252 136,911 32,972 50,531 65,989 845,552
Copper produced t - - 1,164 - - - - 1,164
Gold sold oz 232,968 145,577 118,906 83,883 74,040 90,531 69,684 815,588
Achieved gold price A$/oz 1,590 1,594 1,615 1,590 1,609 1,584 1,604 1,597
Silver sold oz 229,439 22,457 314,753 136,911 32,972 50,531 65,989 853,053
Achieved silver price A$/oz 21 21 22 21 21 21 21 21
Copper sold t - - 1,243 - - - - 1,243
- - - - - -
Achieved copper price A$/t 6,563 6,563
Cost Summary
Mining A$/prod oz 254 503 137 235 645 451 451 352
Processing A$/prod oz 371 237 237 434 634 212 234 329
Administration and selling costs A$/prod oz 97 64 223 122 146 109 131 120
Stockpile adjustments A$/prod oz (110) (44) (1) (31) (9) (13) (11) (47)
By-product credits A$/prod oz (20) (3) (132) (34) (10) (12) (20) (33)
C1 Cash Cost (produced oz) A$/prod oz 591 756 463 726 1,407 746 785 722
C1 Cash Cost (sold oz) A$/sold oz 604 713 441 736 1,350 746 773 711
Royalties A$/sold oz 45 37 120 81 69 87 83 68
Gold in Circuit & other
A$/sold oz (14) 77 40 (11) 14 (6) 14 16
adjustments
Sustaining capital [1,2] A$/sold oz 126 176 116 196 58 229 279 160
Reclamation & other adjustments A$/sold oz 15 13 26 21 14 8 12 16
Administration costs [3] A$/sold oz 8 42
All-in Sustaining Cost A$/sold oz 776 1,024 742 1,024 1,504 1,065 1,161 1,014
Major project capital A$/sold oz 0 50 69 446 99 54 77 86
Discovery A$/sold oz 14 54 9 1 2 45 37 33
All-in Cost A$/sold oz 789 1,128 820 1,471 1,605 1,164 1,275 1,134
Depreciation & Amortisation [4] A$/prod oz 251 515 503 479 419 485 279 401
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Sustaining Capital for WGC purposes includes 60% of the underground mine development capital
Group Sustaining Capital includes a reduction of A$1.04/oz for Corporate capital expenditure from project capitalisations
Includes Share Based Payments
Group Depreciation and Amortisation includes Corporate Depreciation and Amortisation of A$1.25/oz

Evolution Mining Limited Annual Report 2016

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Photography courtesy of Joseph Booth -
Geology Superintendent, Cowal Gold Mine
Mark Le Messurier – Chief Operating Officer,
and Aaron Hills , leading hand Fixed Plant Maintenance Mining,
Mt Rawdon operations
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Evolution Mining Limited Annual Report 2016

Outlook for FY17

On 24 August 2016, Evolution announced that it was acquiring an economic interest in the Ernest Henry copper-gold operations in Queensland. Assuming completion of this transaction, Evolution has guided FY17 Group gold production guidance to 800,000 – 860,000 ounces at an AISC of A$900 – A$960 per ounce. A mine-by-mine breakdown of production and cost forecasts is provided in the table below.

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Gold production All-in sustaining cost
Updated FY17 Guidance
(oz) (A$/oz)
Cowal 245,000 – 260,000 885 – 945
Mungari 150,000 – 160,000 970 – 1,030
Mt Carlton 90,000 – 100,000 675 – 725
Mt Rawdon 90,000 – 100,000 960 – 1,040
Edna May 80,000 – 85,000 1,140 – 1,220
Cracow 80,000 – 85,000 1,100 – 1,160
Pajingo [1] 10,000 1,230 – 1,270
Ernest Henry [2] 55,000 – 60,000 100 – 150
Corporate – 30 – 35
Revised Group 800,000 – 860,000 900 – 960
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Three Year Outlook

Evolution expects to achieve incremental production growth for at least the next three years[3] . All-in sustaining costs (AISC)[4] are expected to trend lower over this period.

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Produc t ion (Koz) AISC (A$ /o z)
8 60 880 890
96 0 900 900
FY15A FY16A FY 17 FY18 FY19 FY15A FY16A FY 1 7 FY18 FY19
Production ac tu a l AISC actual
Production L ow AISC Low
Production Hig h AISC High
803 800 820 830 1,036 1,014 900 840 830
438
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Of Evolution’s production outlook, 2% is comprised of an exploration target. The potential quantity and grade of this exploration target is conceptual in nature and there has been insufficient exploration to determine a Mineral Resource and there is no certainty that further exploration work will result in the determination of Mineral Resources or that production target itself will be realised.

Pajingo sale completion 1 September 2016
Assumed completion of Ernest Henry transaction 1 November 2016. Copper price assumption A$2.72/lb
Refer to ASX release on 24 August 2016 entitled “Acquisition of Economic Interest in Ernest Henry and AREO” and ASX release on 21 April 2016 entitled “Mineral Resources and Ore Reserves Statement” for additional information on the production target including the material assumptions upon which the production target is based. Both documents are available to view at www.asx.com.au. Evolution confirms that all the material assumptions underpinning the production target and the forecast financial information derived from the production target continue to apply and have not materially changed
Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense. Calculated per ounce sold

Evolution Mining Limited Annual Report 2016

Performance History - Key Indicators

PRODUCTION VS. GUIDANCE

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803,476
8, 00 0
6, 00 0
4, 00 0
2, 00 0
427,703
392,920
0
280,401 437,570
FY12 FY13 FY14 FY15 FY16
Guidance
Actual
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EVN SHARE PRICE VS. GOLD PRICE

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A$1,773
A$1,558 A$1,521
A$1,359 A$1,395
FY12 FY13 FY14 FY15 FY16
EVN Share Price (30 June)
A$ Gold Price
A$0.70
A$0.57 A$2.33
A$1.48
A$1.15
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MINE CASH FLOW

GROUP COSTS

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FY13 FY14 FY15 FY16
Ops Mine Cash Flow (A$M)
Net Mine Cash Flow (A$M)
245.3
168.0 628.4
90.9 306.0 137.8 428.2
10.8
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FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16
Ops Mine Cash Flow (A$M) Total C1 Costs (A$/oz)
Net Mine Cash Flow (A$M) Total AISC Costs (A$/oz) [1]
MINERAL RESOURCES ORE RESERVES
2. 50
2. 00
1. 00
1. 50
FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16
Mineral Resources (Koz) Ore Reserves (Koz)
245.3
168.0 628.4 1,228
90.9 306.0 137.8 428.2 790 781 1,083 711 1,036 722 1,014
10.8
14,015 5,853
12,736 5,198
7,691 3,570
5,700 2,625
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Note:

FY16 will be gold ounces

Attributable Au eq ounces

Evolution Mining Limited Annual Report 2016

Act Like an Owner

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In FY15 we launched an initiative encouraging people to nominate their colleagues who Act Like an Owner , with the best nominations receiving an award. Acting Like an Owner includes showing pride and commitment; being open to new ideas; supporting each other; being courageous, and doing the right thing for the long term.

Since inception, we have received more than 60 ideas which have saved us more than A$6 million per annum. Below are the list of winners in FY16 winners who strongly demonstrated what it means to Act Like an Owner at Evolution.

Winners of ALO awards in FY16

Removing and reusing redundant ladderway tubes (Cracow)

David Dooley, Underground Supervisor, and Aaron Longden, Underground Superintendent

in redundant escapeways which were causing significant restriction to the vent circuit and negatively affecting underground working conditions.

Cost saving of ~A$220,000 up front with further cost savings to be realised in future.

Reducing site freight costs (Cowal)

Carl, Beakey, Supply Chain and Contracts Superintendent

was underutilised and had the idea to use Cowal Stores personnel to utilise the truck to collect freight from the consolidation yard in town saving an estimated A$180,000 per year and reducing the number of contractors accessing site.

Helping other departments when needed (Mt Rawdon)

Josh Curtis, Boilermaker – Mobile Maintenance, and Mick Williams, Production Supervisor – Mining

Reduced the potential downtime of the milling plant from over 24 hours to 11 hours by stepping in when mandatory fatigue breaks prevented the processing team from completing unplanned urgent tasks. This collaboration saved Mt Rawdon around A$195,000.

Remote vibration monitoring (Cowal)

David Shiel, Reliability Engineer

Detected excessive vibration on the Vertimill motor bearing using his personal iPad whilst at home and contacted the shift fitter to grease the motor before damage occurred. Had this gone undetected, the damage would have caused a process interruption and required an expensive repair estimated to be in excess of A$185,000.

(Cracow)

Alan Matthysen, Engineering and Maintenance team

The Cracow team negotiated with Weir Warman (WW) to trial their 150EE-MCR pump at a cost of A$1 and that

Cracow would only pay the cost of the pump once it had exceeded the run time and performance of the GravelMax. WW agreed. The pump is still in operation and is expected to achieve in excess of 6,000 run hours (from 1,150 hours) saving on cost of purchase of up to A$200,000; reduced cost of stock holding of up to A$69,000; reduced labour hours for rebuilds of up to 96 hours per year; less power (Kw) used for the same performance duty.

(Cracow)

Clint Wilson, Underground Maintenance

Mining personnel suggested that an unused service truck could be converted into a delivery truck. The converted truck would be used for delivering explosives, mesh and other mining consumables underground, enabling a greater load underground than previous delivery truck. Clint fabricated a new flatbed tray for approximately A$5,000 saving A$25,000 compared to the external quote of A$30,200. The benefits included reduced travel time, reduced frequency of underground delivery trips, reduced maintenance costs and time freed up for maintenance team.

(Mt Carlton)

Kim Barnicoat, Open Pit Supervisor and Rheed Eberle, Trainee and Assessor

Following their research and discussions with the wider mining group, Kim and Rheed agreed that the fabrication and installation of sacrificial whiskers welded into the sides of the rock breaker would protect the hydraulic hoses from making contact with the sides of the ROM bin and would eliminate the need for a spotter to stand on the apron of the crusher. The annualised cost benefit of A$240,000 includes machine down time, parts, labour and perceived ore contamination.

(Mungari)

Richard Ross and Glen Noble, Operators in the Frog’s Leg Underground pastefill team

Their supervisors approved a trial which resulted in the new paddles lasting four times as long and costing half the price. This equated to a saving of A$250,000 per year.

Evolution Mining Limited Annual Report 2016

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Bradley McGinniss – Trainee Truck Operator,
Mt Rawdon operations
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Guy Grant – Electrical Supervisor, Mungari operations
Maurie Costello – U/G Supervisor, Mungari operations
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Evolution Mining Limited Annual Report 2016

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Act Like an Owner (continued)

Recovery of lost string of drill rods (Mungari)

Proactive response to power outage (Mungari)

Luke Bailey, Longhole Driller, and Luke Haysom, Production Engineer

Guy Grant, Electrical Supervisor, Frog’s Leg Maintenance

During an electrical storm, power was lost to the Frog’s Leg mine when lightning struck the power line. Whilst not on call over that weekend, Grant located the fault (assisted by Ryan Watts) and advised what equipment to mobilise for the repair. He also arranged for a grader from the mine to ensure access to the fault (muddy conditions) and IT to assist. As a result, the return to full underground production was at least four hours faster.

A string of drill rods had become stuck in a hole whilst drilling blast holes. Luke Bailey drilled a nearby relief hole 22m up to the end of the stuck rods. Luke contacted Luke Haysom and suggested using a drill hole camera, purchased to inspect broken ground and blocked pastefill holes, to get an exact picture of the end of the stuck rods. A plan was then devised and executed resulting in the successful retrieval of A$20,000 worth of rods. The camera had not previously been used for this application.

Solution to cap boreholes on exploration pads (Pajingo)

Stewart Burton, Field Technician

Dart valve design (Mt Carlton)

Stewart sourced a custom made tool that could be used in the process of capping exploration boreholes to prevent potential harm to fauna, negating the need for external contractors at an estimated cost saving of A$72,000.

Glenn Jarvis, Maintenance Supervisor, and Robert Payne, Maintenance Fitter

Glenn and Robert developed a new dart valve and seat design which was engineered and manufactured by Metso for trial at Mt Carlton. The new valves improved the maintainability and reliability of the dart valve mechanism with an estimated annual savings of A$35,000 in planned maintenance costs and A$175,000 in lost production where the original valves had failed in service.

Collaboration between sites to save money (Edna May and Cowal)

Luke Cox (Edna May Mine Manager), Tim Nicholson, Cowal Digger Operator, Greg Evans and Andrew Jennings, Cowal Workshop Supervisors

Idea to combine shutdowns (Cowal)

Abrasive rock at Edna May was wearing down the teeth and armour of the EX3600 excavator bucket resulting in significant unplanned downtime. Luke had noticed a spare EX3600 bucket at Cowal while on a visit. As Cowal uses 994B diggers, this part was not a critical spare. Following the approval of both sites GMs, this part was shipped to Edna May saving approximately A$350,000.

Ivo Bonekamp, Process Superintendent

During the planning phase of the March 2016 shutdown, the Supply department advised that the required SAG mill liners would not be delivered on time. Rather than switch the April shut to March and vice versa, Ivo suggested that the March, April and May shutdowns be combined and executed in April. This initiative saved 55 hours of production downtime at an approximate cost of A$1.71 million and also provided the opportunity to trial an eight week shut cycle instead of the usual four weekly cycle. Moving the eight week cycle forward from January 2017 provided the added benefit of approximately 300 hours in production up-time.

Assisting with breakdown whilst on parental leave

(Cowal)

Brad Harrison, Fixed Plant Maintenance

Both recirculation crushers failed moments before planned maintenance on the discharge screen and replacement of the discharge line was to occur. The maintenance department was not equipped to deal with the multiple breakdowns. Whilst on parental leave, Brad came in on night shift to help out and 12 hours later, both crushers were running again.

Commitment and excellence in getting the job done

Tammie consistently exhibits Act Like an Owner principles by going above and beyond what’s needed to ensure all Evolution employees are paid on time.

Evolution Mining Limited Annual Report 2016

Discovery

Evolution Mining is committed to growth through discovery and has assembled a world-class team of geoscientists with global experience across a broad range of deposit styles. Our tenements are located in well-endowed geologic terranes where we are confident we can unlock new high-value discoveries.

Our landholding encompasses 10,000km[2] which includes an option on 2,500km[2] in the Tennant Creek joint venture with Emmerson Resources Limited. Evolution’s portfolio includes brownfield opportunities around our existing operations along with several greenfield projects in Australia and New Zealand.

We understand that exploration success in covered terranes like Australia requires application of innovative technology to shorten the timeframe to discovery. We are pioneers in 2D and 3D seismic geophysics in gold exploration. Our integrated approach employs novel geochemical processing and visualisation with advanced geophysical imagery to deliver quality targets across our exploration portfolio.

FY16 Highlights

Positive results from Cowal E42 Stage H cutback resource definition drilling. Broad zones of consistent grade showing strong correlation with grade predicted in the resource model. New zones of mineralisation have been encountered along with extensions of existing zones outside the current cutback design. Seven diamond rigs are currently drilling onsite
high-grade mineralization beyond the current open pit design. Results of the drilling will be incorporated in an assessment of potential development options including a pit extension or underground to access deeper mineralisation
New discovery at Johnson’s Rest, Mungari, with a best intersection of 10m (8.66m etw) grading 22.32g/t Au from 118m[1] . Drilling has continued to test for the continuity of mineralisation up to 1,500m along strike. The structure is open at depth and to the south
mineralisation at the Frog’s Leg underground orebody and at the White Foil open pit
14) from resource definition drilling. Best intersection returned was 12.9m (10.9m etw) grading 10.35g/t Au in hole CNU1121[2]
At the Tennant Creek joint venture, exploration drilling at Edna Beryl West tested depth and strike extensions of high-grade ironstone hosted gold mineralisation. Best results from the drilling returned intervals of 5m at 27.12g/t Au from 103m downhole (EBWRC003) and 13m at 8.7g/t Au from 133m downhole (EBWRC001)[2]
FY17 exploration budget of A$25 – A$30M
This information is extracted from the report entitled “Quarterly Report for the period ending March 2016” released to the ASX on 21 April 2016 and available to view on www.asx.com.au. Intervals are down hole widths as true widths are not currently known. An estimated true width (etw) is provided
This information is extracted from the report entitled “Quarterly Report for the period ending June 2016” released to the ASX on 21 July 2016 and available to view on www.asx.com.au. Intervals are down hole widths as true widths are not currently known

Evolution Mining Limited Annual Report 2016

Discovery (continued)

Cowal

Immediate focus on further near mine reserve expansion

Overview

Ore Reserves increased from 1.56Moz to 2.85Moz (+83%) under Evolution ownership in FY16
Prioritising E42 Stage H cutback and assessing upside in cutback
Current Life of Mine Plan includes Stage H cutback to access an additional 1.4Moz (adding five to six years to Life of Mine Plan)
Potential beyond Stage H pit design
Exploring potential to extend cutback further west of the Stage H design pit (and evaluating potential for an underground scenario)
~20,000m planned for FY17 – additional capital gated contingent on results of Stage H drilling
Satellite pits
- Galway-Regal deposits to inform future studies on lake bund placement and infrastructure and provide additional information for future resources and reserves
- Approximately 2,000m of diamond drilling and 2,700m of aircore completed in FY16
E46 Deeps underground
- Timing of this drilling will be dependent on results from the programs beyond the Stage H design and pending review of site priorities

E42 Stage H Cutback

drilling is well underway to achieving an upgrade in resource classification and overall increase in Ore Reserves. Seven diamond drill rigs are currently undertaking surface drilling from the crest of the south-west wall of the E42 pit. The program continues to return excellent results and is scheduled for completion by the end of October. The resource model will be updated in January 2017.

of mineralisation within the Stage H cutback design. Step-out drill holes have intersected new zones of mineralisation as well as extended the limits of mineralisation to the south-west of E42.

The occurrence of strong grades in the assay results is encouraging and indicates potential to improve the tenor of mineralisation in the deeper parts of the current mineral resource. Mineralisation remains open down plunge.

Galway-Regal

Six holes (E46D3244 – E46D3246 and 1535DD310 – 1535DD312) were drilled within the Galway-Regal area. The holes tested for depth extensions of rim-style mineralisation around the E42 complex. Drilling has intersected higher grades than previously predicted by the model; increased the confidence of the resource in the areas targeted; and intersected mineralisation outside of the Mineral Resource.

E46 West

Five holes were drilled to the west of E46 to test strike extensions of gold mineralisation along the west-dipping sediment-diorite contact. A number of holes intersected alteration and zones of mineralisation and warrant future follow up.

Drilling of the E42 Stage H cutback - 2016

Evolution Mining Limited Annual Report 2016

Discovery (continued)

Mungari

Tenement package increased to ~880km[2] (from ~350km[2] ) post Phoenix Gold acquisition
Land position in a world-class terrane with historic production of >10Moz gold
Potential for discovery of new high-grade underground resources
Initial focus on resource model updates and drilling 15km of the highly prospective Zuleika Shear Zone
Major drilling programs commenced March 2016 at Johnson’s Rest and Innis, follow-up drilling planned at Strzelecki and along the Kunanalling Shear Zone
Ore Reserve limits

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Regional exploration

The acquisition of Phoenix Gold by Evolution has produced a consolidated land position of approximately 880km[2] in the world-class Kalgoorlie Terrane. This combined land position includes tenements that cover 45 strike km of the fertile Zuleika Shear Zone and associated structures.

A number of drill programs were undertaken which included drilling at Johnson’s Rest, Strzelecki and the Innis prospect. 4D studies commenced to fast track targeting and support the next phases of exploration in and around this highly prospective gold corridor. A depth of cover model and a detailed regolith map have highlighted a number of areas for further work.

Three 2D seismic lines were completed for a total 60 line km. The surveys traversed the southern part of the Mungari Project from the Kunanalling Shear Zone in the west across to the Zuleika Shear Zone in the east. The results have provided valuable insight to the deep geological architecture and has led to the development of a number of new target concepts that will be tested in FY17.

Evolution Mining Limited Annual Report 2016

Discovery (continued)

Mungari (continued)

Frog’s Leg and White Foil resource definition drilling

Johnson’s Rest/Broad’s Dam

Exploration drilling has focused on the Johnson’s Rest/Broad’s Dam area located 30km north-west of the Mungari processing plant. Drilling has defined a mineralised zone of 1,500 strike metres along the Zuleika Shear Zone. The best intersection returned is 10.0m (8.7m etw) grading 22.3g/t Au from 118m in BDRC086. Further work is ongoing to understand the significance of these results.

In addition to the Johnson’s Rest drilling, a framework reverse circulation (RC) drilling campaign (104 holes for 20,947m) was undertaken to better understand the Broad's Dam/Zuleika geology.

Diamond drilling to test the strike and down-plunge extensions of mineralisation at Frog’s Leg has confirmed the extension of high-grade mineralisation up to 80m below and 80m north beyond the limits of the December 2015 Ore Reserve.

mineralisation up to 200m along strike and 40m below the southern limits of the December 2015 Ore Reserve. New assay results will be evaluated to determine the economic viability of a cut-back to the south of the White Foil open pit. Further resource definition drilling to test extensions of mineralisation below the centre and north of the current reserve pit is planned.

Strzelecki

Five diamond holes were drilled during the quarter targeting a continuation of the Strzelecki structure between White Foil and Frog’s Leg. RC pre-collar MERC673 returned 8m grading 2.2g/t Au from 17m and diamond hole LGDD011 returned 5.3m grading 1.3g/t Au from 15.7m[1] .

This information is extracted from the report entitled “Quarterly Report for the period ending December 2015” released to the ASX on 27 January 2016 and available to view on www.asx.com.au

Note: Reported intervals are down hole widths as true widths are not currently known

Innis

Innis, located directly south of Frog’s Leg, has been an area of continued exploration efforts in recent years. In 2015 hole PDRC0104D intersected 1.8m grading 29.5g/t Au from 155m including 1m grading 53.1g/t Au[1] . A follow-up hole failed to repeat the high grades however there is no drilling within 500m of this significant intercept. Further work will be undertaken in FY17.

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Evolution Mining Limited Annual Report 2016

Discovery (continued)

Mt Carlton

Opportunity for a pit extension and underground options to the V2 orebody

A major review of the geology, structure and mineralisation to enhance the understanding of the mineral controls at the Mt Carlton high-sulphidation deposit was undertaken during H2 FY16. This identified three high priority targets beneath the V2 pit, the West, East and Link zones. The best intersections returned to date include[1] :

15m (12.99m etw) grading 3.45g/t Au from 118m including 5m (4.33m etw) grading 6.84g/t Au (HC16DD1183) – East zone
15m (12.29m etw) grading 4.81g/t Au from 176m including 2m (1.88m etw) grading 17.20g/t Au (HC16DD1189) – East/Link Zone
13m (11.26m etw) grading 2.72g/t Au from 224m (HC16DD1193) – West zone

Drilling also tested for the repetition and extension of the V2 mineralisation along the north-east trending structural corridor. Results were encouraging with significant intersections being returned some 125m below surface and 200m east of the 2015 Ore Reserve pit.

Results of the drilling will be utilised to assess a range of future development options to access deeper mineralisation in feeder structures beneath the pit.

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This information is extracted from the report entitled “Quarterly Report for the period ending June 2016” released to the ASX on 21 July 2016 and available to view on www.asx.com.au

Note: Reported intervals are down hole widths as true widths are not currently known. An estimated true width (etw) is provided

Cracow

Near mine exploration

Phoenix South Corridor returned some high-grade, narrow gold intersections.

Regional exploration

targets within the exploration permit minerals (EPM) was completed.

significant mineralised structure (a mineralised linking structure between Zone 10 and 12). Continued drilling of Coronation will result in an upgrade of Coronation Inferred Mineral Resources to the Indicated category in FY17. The best intersection returned was 12.9m (10.9m etw) grading 10.35g/t Au (CNU112). Resource definition drilling was also undertaken at Kilkenny, Killarney and Empire.

Evolution Mining Limited Annual Report 2016

Discovery (continued)

Tennant Creek JV

traditionally small to medium sized, they have very high value owing to historically mined grades that have exceeded 10 to 15g/t gold.

At the Tennant Creek joint venture, exploration drilling at Edna Beryl West testing depth and strike extensions of high-grade ironstone-hosted gold mineralisation returned significant intersections including[1] :

5m grading 27.12g/t Au (incl. 2m at 51g/t Au) from 103m (EBWRC003)
13m at 8.7g/t Au (incl. 7m at 15g/t Au) from 133m (EBWRC001)
6m grading 13.2g/t Au from 120m, (incl. 3m at 15.7g/t Au) (EBWRC0015)
3m at 11.2g/t Au from 126m; and 9m at 5.33g/t Au from 135m (incl. 3m at 10.4g/t Au) (EBWRC018)

A follow-up drill program of 6,500m RC has commenced. The program will test extensions at Edna Beryl along with a number of new targets included in the recently acquired tenement along the Warrego-Orlando Corridor.

Full details of these exploration results are provided Emmerson Resource’s ASX releases entitled “High-grade gold intersected at Edna Beryl West – Major drill program to commence immediately” lodged 19 May 2016 and “High-grade gold intersected at Edna Beryl – further results to follow” lodged 5 July 2016 Reported intervals are down hole widths as true widths are not currently known

Evolution Mining Limited Annual Report 2016

Discovery (continued)

Puhipuhi

Evolution acquired 100% of the Puhipuhi project in May 2015 which covers 81km[2] in the Northland region of the North Island of New Zealand.

We believe this region is highly prospective for high-grade, low-sulphidation, epithermal gold and silver mineralisation. Very limited exploration utilising modern techniques and models has been deployed in the region since the 1980s.

Since acquiring the project we have undertaken extensive geophysics, stakeholder engagement and completed a comprehensive baseline environmental study in preparation for drilling.

system potentially capable of producing gold and silver mineralisation. Within this area rock chips and limited (mostly) shallow drilling have returned a handful of high-grade gold assays.

Our geology model indicates that at surface we are seeing high levels of the epithermal system preserved. The gold rich parts, if present, are likely to be preserved deeper in the hydrothermal system.

Realising that target depths may be between 200 and 600m below surface we undertook in excess of 36 line km of CSAMT, (controlled source audio frequency magneto telluric) surveys.

potentially quartz veins whereas conductors may indicate areas of clay alteration associated with this mineralisation style.

ten holes for 4,000m of diamond drilling.

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Evolution Mining Limited Annual Report 2016

People and Culture

“We want our people’s time at Evolution to be the highlight of their career. A time when they are challenged, rewarded and inspired.”

Evolution Executive Chairman,

Jake Klein

Evolution Mining continues to strive towards our goal of being a globally relevant mid-tier gold company. FY16 was a transformational year on this journey, with the acquisition and successful integration of two new assets, as well as acquiring Phoenix as a strategic landholding in support of the Mungari acquisition.

The successful execution of our long-term strategy requires full alignment and engagement from all parts of the business. We work hard to ensure we have the right people, in the right roles, with the right mindset.

We also aim to live and breathe our values of Safety, Excellence, Accountability and Respect. We encourage our employees to act like owners and work hard to ensure we consistently meet our public commitment of ‘we say, we do, we deliver’.

In FY16, we continued to embed our values, shape our culture and provide an environment where people can succeed. Our focus has been on:

The successful integration of the Cowal and Mungari assets
Improvements to the core people processes of recruitment, on-boarding, performance planning and review and remuneration and benefits

In addition to this, Evolution Mining continued its focus on making Evolution a great place to work. With this in mind, Evolution undertook an employee engagement survey. Participation rates were high and the feedback was very encouraging. A total of 98% of the participants said that they were willing to go above and beyond to get the job done and 92% said that they would recommend Evolution as a great place to work.

As well as creating development and career opportunities for existing employees, Evolution continues to look for opportunities to bring talented individuals into the organisation through the two year targeted Graduate program. Evolution has recruited nine new graduates that will commence in February 2017, in the disciplines of Mining, Geology, Geotechnical, OH&S, Environment, Finance, People and Culture and IT. Evolution Mining is confident that this investment will produce future leaders within the business in years to come.

FY17 will see a number of continuing and new initiatives that will help drive Evolution’s strategy and achievement of key goals. These will include:

The successful divestment of the Pajingo Gold Mine
A continued focus on employee engagement via an engagement survey to ensure we continue to focus in areas that will enhance the workplace experience for our employees
A renewed focus on the development and growth of our employees
The continuation of the GOLD and Act Like an Owner programs
culture system to drive efficiency, and productivity, as well as enhancing our people Leaders ability to effectively lead their people

Evolution believes that the above initiatives will contribute to a motivated and engaged workforce and ultimately drive achievement of our business objectives and shareholder value.

Continuing our focus on talent succession and development, with the introduction of a targeted front-line leader program designed to equip them with key skills to effectively lead their teams
The Act Like an Owner program has continued to get focus and is now part of the DNA, with employees thinking and acting like owners and being recognised by their peers and managers. We again offered employees the opportunity to become actual owners, or increased owners, through an employee share offer
Continuing to enhance our leadership capability across the organisation through the delivery of a number of Leadership programs

Evolution Mining Limited Annual Report 2016

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Evolution Mining Limited Annual Report 2016

Environmental Responsibility

In FY16 we maintained an outstanding environmental performance across all our sites

Progressive rehabilitation activities have occurred at all operations over the past financial year including:

Edna May – Southern Waste Rock Dump and farmland offsets near Corsini Waste rock stockpile
Mt Carlton – Developed a Tailings Storage Facility (TSF) Cover Trial project that will be used to develop the most appropriate capping method for the TSF
Pajingo – Venue/VNU waste rock stockpile areas

This year we focused on integrating the new Evolution Operations into the business and continued our focus on environmental stewardship and assurance. This included the roll out and implementation of Evolution Environmental Protocols for the new sites (Cowal and Mungari) and an assurance audit program across all project sites.

Cracow – pit areas
Mt Rawdon – The Northern Waste Rock Dump benches and we developed a Waste rock stockpile capping trial
Mungari – Frog’s Leg and White Foil Waste rock stockpile progressive rehabilitation
Cowal – Northern Waste rock stockpile

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

The implementation of the Environmental Protocols continues to drive strong levels of focus and environmental stewardship across the Evolution Group.

Group-wide or regional environmental initiatives during FY16 included:

Implementing the MonitorPro data management system across all operations
Undertaking regular Assurance Audits at all operations
Enhanced monthly environmental reporting processes
Standardised Environmental Authority Project to align permit conditions across our Queensland operations
Implementation of an environmental enhancement project at Edna May, where over 70,000 native species trees were planted around our operations
Appointment of an Senior HSE Manager to the Board of the Lake Cowal Foundation to work with local stakeholders on protecting and enhancing Lake Cowal
and the International Cyanide Management Code during FY16
Compliance with the Commonwealth National Pollution Inventory and National Greenhouse and Energy Reporting requirements
Participation in a mine rehabilitation working group with other resource companies in Regional Queensland

Evolution Mining Limited Annual Report 2016

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Evolution Mining Limited Annual Report 2016

Community Spirit

Evolution Mining is committed to building relationships with our community stakeholders based on trust, mutual respect and genuine partnership.

We aspire to run and grow our operations, not just with the permission of our community stakeholders, but with their active support. Underpinning this relationship is our desire to always leave a positive legacy in the communities in which we operate. We recognise that to protect and enhance our ‘social license’ we have to go above and beyond what is simply required by way of regulation and legislation, by playing our part in developing strong and sustainable communities.

We seek to partner with our community stakeholders, listen to and understand their needs and work together towards a common purpose. Our partnership approach to community relations goes to the core of our values of Accountability, Excellence, Respect and Safety.

Local Employment

Local Employment LOCA L The majority of our people live in or around the communities in which we operate. We provide work >70 % E MPLOYMENT experience, scholarships, training and employment opportunities to our local communities. We aim to maximis aim to maximis to maximis maximis e local e e mp loyment at all our operations operations and exploration sites

We aim to maximis aim to maximis to maximis maximis e local e e mp loyment at all our operations operations and exploration sites

Sustainable Community Development Projects (SCDP)

We are working with our community stakeholders to identify opportunities to partner on projects that deliver long-term, sustainable outcomes for the community. These are legacy projects aimed at providing benefits that last beyond the life of the mine, enabling the community to be resilient, to thrive and to be sustainable for the long term. Our first SCDP was with Gudjuda Aboriginal Reference Group in Home Hill, near our Mt Carlton operation and is already delivering benefits beyond those initially envisaged.

Local Procurement

Where possible we prioritise local procurement, ensuring our tender process enables local suppliers to participate and, importantly, working with them to develop their capability so they can compete and grow not only at Evolution but in the broader marketplace.

A$43M DIRECT SPEND WITH LOCAL BUSINESSES

Partnership Approach

Our exploration project in Puhipuhi, New Zealand is an example of our partnership approach to community relations. Before commencing any exploration activity we introduced ourselves to key stakeholders, taking the approach to “seek to understand before being understood”. In response to community concerns we commissioned a comprehensive environmental baseline study (including flora, fauna, surface and ground water, and stream sediment) to inform what we do and what we don’t do and what environmental controls we need to put in place. Where possible we have procured locally in Northland, utilising local contractors and suppliers and employing local people.

Listening to Our Community

We conducted our second stakeholder perception survey across all our operations sites. We sought feedback from a broad range of stakeholders on their level of satisfaction with Evolution and level of support for the mine and on our performance in the areas of engagement, inclusiveness, business conduct, responsiveness, transparency and our community commitment and contribution. This was used to assess our performance against the 2014 baseline survey, to identify opportunities to improve our community relations, and to implement actions in response to this community feedback.

STA KE HOLDER PERC EP TION SU RVE Y

85 % felt p osit ive or very positive toward Evo lution

Evolution Mining Limited Annual Report 2016

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Sustainable Community Development Project Gudjuda Aboriginal Reference Group

21 New Indigenous jobs created

25 New Indigenous traineeship opportunities

A$350k in additional Queensland Government funding

Nine trainees completed Cert I in Conservation & Land Management Eight of these trainees subsequently secured employment at the end of their traineeship program

Evolution Mining Limited Annual Report 2016

Mineral Resources and Ore Reserves

Group Ore Reserves as at 31 December 2015 are estimated at 158 million tonnes at 1.15g/t gold for 5.85 million ounces compared with the estimate at 31 December 2014 of 134.9 million tonnes at 1.20g/t gold for 5.20 million ounces. The net increase of approximately 12% or 654,000 ounces is after accounting for mining depletion of 979,000 ounces.

Mineral Resources Highlights

An increase of approximately 2.26 million ounces prior to mining depletion including:
Mungari Regional (+2,765,000oz) – acquisition of Phoenix Gold Mineral Resources
Cowal (+270,000oz) – new model integrating E42, E41, E46, and Galway/Regal

Ore Reserves Highlights

Replacement of approximately 1.63 million ounces with increases at each individual operation (prior to mining depletion) including:

Cowal (+976,000oz) – pit design changes and reduced cost assumptions
Mt Carlton (+211,000oz) – improved understanding of the deportment of high-grade mineralisation
Edna May (+174,000oz) – conversion of Underground Mineral Resources to Underground Ore Reserves following successful drilling programs

Group Mineral Resources as at 31 December 2015 are estimated at 337 million tonnes at 1.29g/t gold for 14.01 million ounces compared with the estimate at 31 December 2014 of 306 million tonnes at 1.29g/t gold for 12.73 million ounces. The net increase of approximately 10% or 1,281,000 ounces after accounting for mining depletion of 979,000 ounces is primarily due to the acquisition of Phoenix Gold Limited’s Mineral Resources. This was partially offset by the application of Evolution’s more conservative estimation methodologies and economic constraints at White Foil (Mungari).

Mt Rawdon (+190,000oz) – model changes and pit slope optimisation
decreases prior to mining depletion:
Mungari (-700,000oz) – model changes (grade estimation technique) at White Foil to align with Evolution methodologies and improved understanding of the geology following the acquisition of La Mancha’s Australian assets and the application of economic constraints (A$1,800/oz pit optimisation shell). This material has not previously been considered part of the Life of Mine plan
Pajingo (-180,000oz) – application of mining parameters
Cracow (-115,000oz) – application of sterilisation zones (geotechnical) around historical workings and remnant material, and geological re-interpretation and re-estimation
Edna May (-125,000oz) – removal of Mineral Resources in open pit optimisation due to decision to develop an underground mine which resulted in the addition of 202,000oz of Underground Ore Reserves

Mineral Resources are reported inclusive of Ore Reserves and include all exploration and resource definition drilling information up to 31 December 2015 and have been depleted for mining to 31 December 2015.

�12%

5.8Moz

ORE RESERVES INCREASE after mining depletion

ORE RESERVES

Note: FY16 Mineral Resources include Pajingo and Twin Hills and Ore Reserves include Pajingo (as at 31 December 2015) - divested on 1 September 2016

Evolution Mining Limited Annual Report 2016

Mineral Resources and Ore Reserves (continued)

Commodity Price Assumptions

Commodity price assumptions used to estimate the December 2015 Mineral Resources and Ore Reserves are either unchanged or similar to those used previously (December 2014 Mineral Resources and Ore Reserves):

■ Gold: A$1,350/oz (A$1,350/oz)

Divestment of Pajingo Gold Mine

The divestment of the Pajingo gold mine and surrounding exploration tenements on 1 September 2016 occurred outside of the reporting period (ASX release entitled “Completion of Pajingo Sale”). This change will be incorporated in Evolution’s December 2016 Mineral Resources and Ore Reserves statement.

■ Silver: A$20.00/oz (A$20.00/oz)

■ Copper: A$2.70/lb (A$3.00/lb)

JORC 2012 and ASX Listing Rules Requirements

The Mineral Resources and Ore Reserves statement included with this Report have been prepared in accordance with the JORC Code 2012 for all projects other than Twin Hills. The Twin Hills Mineral Resource was first disclosed under JORC Code 2004 requirements and has not been updated to JORC Code 2012 requirements as it is not currently classified as a material mining project. Following acquisition of Phoenix Gold Limited, Evolution commenced a systematic update of Mineral Resources over the former Phoenix tenements (renamed Mungari Regional) by applying the same estimation practices and assumptions as at other Evolution projects. Evolution’s December 2015 Mineral Resources and Ore Reserves include an update of Castle Hill Stage 1 (Mick Adams and Wadi) at Mungari Regional. Evolution will constrain open pit resources to within an A$1,800 per ounce pit optimisation shell. As previously stated, this work is anticipated to reduce the current Mineral Resources at Mungari Regional. However, the potential to increase Mineral Resources with further drilling and potential for new discoveries at Mungari Regional is high. Norton Gold has the right to mine the Castle Hill Stage 1 deposit and Evolution will receive 50% of profits.

Group Mineral Resources and Ore Reserves summaries are tabulated on the following pages.

�10%

14.0Moz

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1
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MINERAL RESOURCES INCREASE

MINERAL RESOURCES

FY16 Mineral Resources include Pajingo and Twin Hills (as at 31 December 2015) – divested on 1 September 2016

Evolution Mining Limited Annual Report 2016

Mineral Resources and Ore Reserves (continued)

DECEMBER 2015 GROUP ORE RESERVE STATEMENT

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Gold Proved Probable Total Reserve
Gold Gold Gold Gold Gold Gold
Tonnes Tonnes Tonnes
Project Type Cut-off Grade Metal Grade Metal Grade Metal
(Mt) (Mt) (Mt)
(g/t) (koz) (g/t) (koz) (g/t) (koz)
Cowal [1] Open pit 0.40 39.93 0.71 906 59.47 1.02 1,941 99.40 0.89 2,848
Cracow [1] Underground 3.50 0.50 6.11 98 0.56 5.12 92 1.06 5.59 190
Pajingo [1] Underground 3.30 0.17 6.82 37 0.39 5.60 70 0.55 5.97 107
Edna May [1] Open pit 0.50 - - - 8.32 1.00 269 8.32 1.00 269
Edna May [1] Underground 2.50 - - - 1.34 4.69 202 1.34 4.69 202
Edna May [1] Total - - - 9.66 1.51 471 9.66 1.51 471
Mt Carlton [1] Open pit 0.80 - - - 4.62 4.78 709 4.62 4.78 709
Mt Rawdon [1] Open pit 0.30 0.51 0.53 9 33.92 0.78 855 34.43 0.78 864
Mungari [1] Underground 2.90 1.42 5.57 254 0.57 5.60 103 1.99 5.58 357
Mungari [1] Open pit 0.70 0.65 1.00 21 5.28 1.69 288 5.93 1.62 309
Mungari [1] Total 2.07 4.13 275 5.85 2.07 390 7.92 2.61 665
Total 43.18 0.95 1,325 114.47 1.23 4,528 157.64 1.15 5,853
December 2015 Group Mineral Resource Statement
Gold Measured Indicated Inferred Total Resource
Gold Gold Gold Gold Gold Gold Gold Gold
Tonnes Tonnes Tonnes Tonnes
Project Type Cut-off (Mt) Grade Metal (Mt) Grade Metal (Mt) Grade Metal (Mt) Grade Metal
(g/t) (koz) (g/t) (koz) (g/t) (koz) (g/t) (koz)
Cowal [1] Total 0.40 39.93 0.71 906 95.68 1.05 3,226 28.51 1.00 913 164.12 0.96 5,046
Cracow [1] Total 2.80 0.34 10.57 115 1.00 6.53 210 1.08 5.15 178 2.42 6.48 504
Pajingo Open pit 0.75 - - - 0.09 2.30 7 0.06 4.34 8 0.15 3.09 14
Pajingo [1] Underground 2.50 0.09 11.54 32 0.63 7.91 161 1.67 6.82 367 2.39 7.28 560
Pajingo Total 0.09 11.54 32 0.72 7.22 168 1.73 6.74 375 2.54 7.04 574
Edna May [1 ] Open pit 0.40 - - - 15.38 0.97 479 2.53 0.73 59 17.92 0.94 539
Edna May Underground 2.50 - - - 1.13 7.68 278 0.10 7.62 23 1.22 7.67 301
Edna May Total - - - 16.51 1.43 757 2.63 0.98 83 19.14 1.37 840
Mt Carlton [1] Open pit 0.35 0.08 9.09 24 8.38 3.09 834 - - - 8.46 3.15 858
Mt Carlton Underground 2.50 - - - - - - 0.16 5.35 27 0.16 5.35 27
Mt Carlton Total 0.08 9.33 24 8.38 3.10 834 0.16 5.35 27 8.62 3.19 885
Mt Rawdon [1] Total 0.20 0.51 0.53 9 50.58 0.70 1,138 5.00 0.57 91 56.09 0.69 1,238
Mungari [1 ] Open pit 0.50 0.67 1.16 25 9.10 1.54 451 - - - 9.77 1.52 476
Mungari [1 ] Underground 2.5/1.2 1.80 6.94 403 7.99 2.51 645 4.02 1.85 236 13.81 2.90 1,287
Mungari [1] Total 2.47 5.39 428 17.09 1.99 1,096 4.02 1.85 236 23.58 2.33 1,763
Mungari Total 0.49 1.96 31 27.43 1.46 1,289 26.85 1.60 1,385 55.75 1.54 2,767
Regional
Twin Hills [+] Open pit 0.50 - - - - - - 3.06 2.10 204 3.06 2.10 204
Twin Hills [+] Underground 2.30 - - - - - - 1.56 3.90 194 1.56 3.90 194
Twin Hills [+] Total - - - - - - 4.62 2.68 398 4.62 2.68 398
Total 43.91 1.09 1,545 217.39 1.25 8,718 74.60 1.54 3,686 336.88 1.29 14,015
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Includes stockpiles + Twin Hills has not changed as it is being reported as 2004 JORC Code

Due to depletion of A39 at Mt Carlton and lower grade Ag, Cu for remaining resource at Mt Carlton, the 2014 Mineral Resources and Ore Reserves statement has been reported in gold ounces

Mungari Regional Mineral Resources: Evolution has updated Castle Hill Stage 1 only. Norton Gold has the right to mine Castle Hill Stage 1 and Evolution to receive 50% of the profits

Mineral Resources are reported inclusive of Ore Reserves

Evolution Mining Limited Annual Report 2016

Competent Person Statement

The information in this statement that relates to the Mineral Resources and Ore Reserves listed in the table below is based on work, and fairly represents, information and supporting documentation prepared by a competent person whose name appears in the same row, who is employed on a full-time basis by Evolution Mining Limited and is a member of the institute named in that row. 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. Noting however that the Twin Hills Mineral Resource was first disclosed under JORC Code 2004 requirements and has not been updated to JORC Code 2012 requirements as it is not a material mining project and has not materially changed since last reported. Each person named in the table below consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.

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Activity Competent Person Institute
Cowal Mineral Resource Joseph Booth Australasian Institute of Mining and Metallurgy
Cowal Ore Reserve Jason Floyd Australasian Institute of Mining and Metallurgy
Mungari Mineral Resource Andrew Engelbrecht Australasian Institute of Mining and Metallurgy
Mungari Ore Reserve Matt Varvari Australasian Institute of Mining and Metallurgy
Mungari Regional Resource
Michael Andrew Australasian Institute of Mining and Metallurgy
(Castle Hill Stage 1)
Mt Carlton Mineral Resource Matthew Obiri-Yeboah Australasian Institute of Mining and Metallurgy
Mt Carlton Ore Reserve Anthony Wallace Australasian Institute of Mining and Metallurgy
Edna May Mineral Resource Greg Rawlinson Australasian Institute of Mining and Metallurgy
Edna May Open Pit Ore Reserve Guy Davies Australasian Institute of Mining and Metallurgy
Edna May Underground Ore Reserve Ian Patterson Australasian Institute of Mining and Metallurgy
Cracow Mineral Resource Christopher Wilson Australasian Institute of Mining and Metallurgy
Cracow Ore Reserve Ian Patterson Australasian Institute of Mining and Metallurgy
Pajingo Mineral Resource Andrew Engelbrecht Australasian Institute of Mining and Metallurgy
Pajingo Ore Reserve Ian Patterson Australasian Institute of Mining and Metallurgy
Mt Rawdon Mineral Resource Hans Andersen Australasian Institute of Mining and Metallurgy
Mt Rawdon Ore Reserve Ross McLellan Australasian Institute of Mining and Metallurgy
Twin Hills Mineral Resource Michael Andrew Australasian Institute of Mining and Metallurgy
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The information in this statement that relates to the Mineral Resource estimate for Castle Hill Stage 3, Mungari Regional, is based on information compiled by Mr Brian Fitzpatrick, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and is employed by Cube Consulting Pty Ltd.

The information in this statement that relates to the Mineral Resource estimates for Red Dam and Burgundy, Mungari Regional, is based on information compiled by Dr Sia Khosrowshahi, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and is employed by Golder Associates Pty Ltd.

All other Mineral Resources estimated by Phoenix Gold Limited (Phoenix), Mungari Regional, other than those mentioned above are based on information compiled by Mr Ian Copeland, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and is a former employee of Phoenix.

and types of deposits under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the JORC Code 2012 and consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

Evolution Mining Limited Annual Report 2016

Board of Directors

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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 along with Mr Askew (director from 2002 and Chairman from 2005 of Sino Gold) 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. Mr Klein is currently a Non-Executive Director of Lynas Corporation Limited (since August 2004), a company with operations in Australia and Malaysia, and formerly a Non-Executive Director of OceanaGold Corporation, a company with operations in the Philippines, USA and New Zealand. Both Lynas Corporation and OceanaGold are ASX-listed companies.

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Lawrie Conway, BBus, CPA

Mining Limited with effect from 1 August 2014 (previously a Non-Executive Director). Mr Conway has more than 26 years' experience in the resources sector across a diverse range of commercial, financial and operational activities. He has held a mix of corporate and operational 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.

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Colin (Cobb) Johnstone, BEng (Mining)

Lead Independent Director, Chairman of the Risk Committee and Member of the Audit Committee

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. International experience includes Senior Vice President and Chief Operating Officer for the Iron Ore Company of Canada and Joint Venture General Manager for Alumbrera, a major open cut copper-gold mine in Argentina. Mr Johnstone was Vice President of Operations and Chief Operating Officer at Equinox Minerals Limited, a company with operations in Zambia, prior to the C$7.3 billion acquisition by Barrick Gold Corporation in 2011. Prior to that role, Mr Johnstone was Chief Operating Officer of Sino Gold Mining Limited, where he oversaw the development and operation of gold mines in China.

Evolution Mining Limited Annual Report 2016

Board of Directors (continued)

Naguib Sawaris

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Non-Executive Director

Mr Sawiris is Chairman of the advisory board of La Mancha, Chairman of the Board of Orascom TMT Investments S.a r.l., and Executive Chairman and Chief Executive Officer of Orascom Telecom Media and Technology Holding S.A.E. The Sawiris Family have substantial interests in the telecom, construction and fertiliser, cement, real estate and hotel development industries and other businesses. Mr. Sawiris founded Orascom Telecom Holding and developed it into a leading regional telecom player until a merger with Vimpelcom Ltd created the world’s sixth largest mobile telecommunications provider. Mr. Sawiris has received a number of honorary degrees, industry awards and civic honours, including the Legion d’honneur the highest award given by the French Republic for outstanding services rendered to France, the Honor of Commander of the Order of the Stella della Solidariet Italiana, the prestigious Sitara-e-Quaid-e-Azam award for services rendered to the people of Pakistan in the field of telecommunication, investments and social sector work. Mr. Sawiris serves on a number of additional Boards, Committees and Councils including the Advisory Committee to the NYSE Board of Directors, the International Advisory Board to the National Bank of Kuwait, the Egyptian Council for Foreign Affairs and the Arab Thought Foundation. Mr Sawiris holds a diploma of Mechanical Engineering with a Masters in Technical Administration from the Swiss Federal Institute of Technology Zurich ETH Zurich and a Diploma from the German Evangelical School, Cairo, Egypt.

James Askew, BEng (Mining), MEngSc, FAusIMM, MCIMM, MSME (AIME), MAICD

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Non-Executive Director, Member of the Risk Committee and Member of the Nomination and Remuneration Committee

Mr Askew is a mining engineer with more than 40 years’ broad international experience as a Director and Chief Executive Officer for a wide range of Australian and international publicly listed mining, mining finance and other mining related companies. Mr Askew has served on the boards of numerous mining and mining services companies, which currently include OceanaGold Limited (chairman since November 2006), a company with operations in the Philippines, USA and New Zealand, Asian Mineral Resources (since 2012), a company with operations in Vietnam, and Syrah Resources Limited (chairman since October 2014), a company with operations in Mozambique and plans for operations in the USA.

Sébastien de Montessus

Non-Executive Director, Member of the Nomination and Remuneration Committee

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Mr de Montessus is the Executive Director and CEO of Endeavour Mining Corporation. He was previously the Chief Executive Officer of the La Mancha Group since 2012, and under his leadership La Mancha doubled its production through optimization efforts before undergoing a portfolio restructure which enabled the Sawiris family to become the main shareholder of Evolution Mining, a leading Australia gold miner, and of Endeavour Mining in November 2015. In September 2015, Mr de Montessus was appointed to the board of Evolution Mining. Mr de Montessus was previously a member of the Executive Board and Group Deputy CEO of AREVA Group (a world leader in nuclear energy) and CEO of AREVA Mining (uranium). Mr de Montessus was a Board member of ERAMET, a world leader in alloying metals, between 2010 and 2012. Before joining AREVA in 2002, Mr. de Montessus was an investment banker at Morgan Stanley in London (Mergers and Acquisition and Equity Capital Markets). Mr de Montessus is a business graduate from ESCP-Europe Business School in Paris.

Evolution Mining Limited Annual Report 2016

Board of Directors (continued)

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Graham Freestone, BEc (Hons)

Chair of the Audit Committee and Member of the Risk Committee

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.

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Thomas (Tommy) McKeith, BSc (Hons), GradDip Eng (Mining), MBA

Non-Executive Director, Chair of the Nomination and Remuneration Committee and Member of the Audit Committee

Mr McKeith is a geologist with more than 25 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 ABM Resources NL.

Amr El Adawy

Alternate Non-Executive Director for Sebastien de Montessus

experience in finance and management in telecoms and retail sectors. Prior to joining La Mancha he served as Chief Financial Officer of WIS Telecom (since 2010) and at the same time was Chief Executive Office of the Italian subsidiary, MENA SCS SpA (since 2011). Prior to joining the Orascom group, Mr Adawy held senior finance management positions in several multinational companies, such as Adler-France, Pepsi Cola – France and in a JV of Carrefour – France with Majid Al Futtaim group for its activity in the Middle East. Mr Adawy holds a Finance Management and Accounting degree from CNAM of Paris.

Vincent Benoit

Alternate Non-Executive Director for Naguib Sawaris

Mr Benoit has over 25 years of Corporate Finance, Investors Relations, and M&A experience in the mining, energy, and telecom sectors. Prior to joining Endeavour, he was EVP Strategy and Business Development of La Mancha where he successfully led the group’s portfolio restructuring which repositioned La Mancha as a leading private mining investor through the strategic alliances formed with Evolution Mining Limited and Endeavour Mining. Previously, as EVP Merger and Acquisitions at Orange, he was responsible for the development of the group’s African footprint, its European portfolio restructuring, and forming strategic partnerships. At Orange, he was also Head of Strategy and Investor Relations. Mr Benoit held various finance positions including with Areva, Bull Information System, and PwC. He holds a business degree from ESC-Bordeaux Business School and is a registered Chartered Accountant. He is a Board member of Euronews.

John Rowe, BSc (Hons) ARSM, MAusIMM

Non-Executive Director

Evolution Mining Limited Annual Report 2016

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Total production for the year increased 84% to 803,476oz despite a 9% decline in the average grade processed to 1.77g/t. This higher gold production was largely achieved as a result of the first year of inclusion of Cowal and Mungari which contributed 29% and 17% of Evolution’s total production respectively. Mt Carlton was the largest contributor of the original assets, accounting for 14% of Evolution’s total production following a 45% increase in production from the mine on the prior year.

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Record mine operating cash flow of A$628.4 million and record net mine cash flow of A$428.2 million were achieved during the year, representing improvements of 105% and 211% respectively from the prior year. All operations were cash flow positive after all sustaining and major capital expenditure, including capital stripping. The strong free cash flow generation of Evolution’s asset portfolio enabled the repayment of A$322.0 million of debt during the 2016 financial year.

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Revenue for the year ended 30 June 2016 was up 100% to A$1.3 billion which was largely as a result of the first year of inclusion of Cowal and Mungari. These operations contributed revenues of A$375.3 million and A$232.5 million respectively. The original five mine sites contributed A$720.7 million which is an increase on the prior year of 8%. This can be largely attributed to an outstanding performance at Mt Carlton, which offset operational issues at two other sites, along with a 7% increase in the average achieved gold price to A$1,597/oz.

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It is with great pleasure that we were able to report our strongest financial performance on record in the 2016 financial year. These results are a testament to the efforts of all our employees and contractors during this time.

Deliveries into the hedge book were 274,879oz at an average price of A$1,593/oz. The remaining 540,710oz were sold at spot price achieving an average price of A$1,599/oz. Additionally, the Company acquired a further 245,985oz of gold delivery contracts as part of the La Mancha acquisition, with scheduled quarterly deliveries from September 2015 through to December 2017. Evolution’s outstanding hedge book as at 30 June 2016 was a total of 706,989oz at an average price of A$1,624/oz for deliveries each quarter out until June 2020.

The business once again delivered on production and cost guidance. Evolution posted a record underlying profit after tax of A$226.9 million for the year ended 30 June 2016, an increase of 114% on FY15. This increase in underlying profit after tax was driven by record production, a strong focus on cost control and a favorable Australian dollar gold price. The acquisition and integration of two new operating assets, Cowal and Mungari, at the start of the financial year drove a lot of the change in the financial performance of the business.

Operating costs, excluding depreciation, amortisation and fair value adjustments of A$422.8 million, increased to A$674.2 million as a result of the first year of inclusion of Cowal and Mungari. These two new assets accounted for operating costs of A$153.1 million and A$117.5 million respectively. The operating costs for the existing five mine sites were A$403.6 million, an increase of 12% on prior year operating costs. The main increase in operating costs were at Edna May and Mt Rawdon as they transitioned to operating waste stripping in the open pits from capital waste stripping in the previous year. Evolution continues to place a strong focus on cost control over operating activities and anticipates further efficiencies in FY17.

Evolution reported a statutory net loss after tax of A$24.3 million in the 2016 financial year. This included one-off transaction and non-operating costs which have been excluded from our underlying profit after tax. These costs included acquisition and integration costs of A$54.7 million – of which the majority were one-off stamp duty costs, fair value amortisation and expenses of A$88.3 million incurred on the Cowal and Mungari acquisitions. We wrote off A$35.3 million of goodwill on the Mungari acquisition (all script transaction) which related to the appreciation in the Evolution share price from the date of announcing the transaction to the date of the transaction completing. Evolution also incurred an impairment on assets of A$77.3 million as a result of reclassifying Pajingo to assets held for sale following the receipt of binding offers post the end of the financial year.

Evolution Mining Limited Annual Report 2016

(continued)

Evolution’s all-in Sustaining Costs (AISC) decreased 2% to A$1,014/oz in the 2016 financial year despite the 9% drop in average grade mined. Mt Carlton was Evolution’s lowest cost asset with an AISC of A$742/oz representing a decrease of 23% on the prior year. The two new assets, Cowal and Mungari, delivered low cost ounces with an AISC of A$776/oz and A$1,024/oz respectively.

Total exploration expenditure for the year ended 30 June 2016 was A$27.8 million with an exploration expense of A$13.8 million.

Capital expenditure increased by 19% to A$200.2 million driven by the two new assets, Cowal and Mungari, which added A$29.4 million and A$33.0 million respectively. Capital expenditure consisted of sustaining capital, including near mine exploration and resource definition of A$107.0 million and mine development of A$93.2 million.

Our balance sheet is an extremely strong position. On closing the Cowal transaction our gearing peaked at 32% last July. Since then we have reduced gearing to 15% by the end of the year. This not only reflects the quality of the portfolio but more significantly demonstrates our commitment to ensure that our balance sheet is protected. We repaid A$322 million during the year to be 15 months ahead of our commitments on our term facility and we had cash and undrawn debt available of A$220 million at the end of the year.

Following completion of the sale of Pajingo in September 2016, we received A$42 million in cash which increases our liquidity. We intend to direct these proceeds to our debt facility.

A total of 3 cents in dividends was declared during the year. There have now been seven consecutive dividends paid in each half-year since Evolution introduced its revenue-linked dividend policy in February 2013.

Following the sale of Pajingo and the acquisition of the economic interest in Ernest Henry, Evolution is forecasting Group production in FY17 of 800,000 – 860,000 ounces gold equivalent at All-in Sustaining Cost in the range of A$900/oz – A$960/oz.

year for Evolution. We are pleased to have been able to leverage this operating and financial success to continue to upgrade the quality of our asset portfolio. We are committed to maintaining our discipline in driving down costs which will see a continued focus on cash generation. We are also actively investing in the future to ensure the sustainability of our business and are confident in our ability to continue to deliver superior shareholder returns.

LAWRIE CONWAY FINANCE DIRECTOR and CHIEF FINANCIAL OFFICER

In June 2016, the Directors approved a change to the dividend policy of whenever possible paying a half-yearly dividend equivalent to 4% of the Evolution’s sales revenue. The change in policy doubled the payout ratio from the previous level of 2% to 4% of revenue (relating to sales in the six month period to 30 June 2016). The new policy was applied to the final dividend for 2016.

Evolution Mining Limited Annual Report 2016

(continued)

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GOLD SALES (KOZ)1 AIC (A$/OZ)2,3
(UP 91%) (DOWN 12%)
816
1,293
427
1134
FY15 FY16 FY15 FY16
2
EBITDA MARGIN UNDERLYING PROFIT (A$M)
(UP 15%) (UP 114%)
46% 227
40%
106
FY15 FY16 FY15 FY16
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Gold sales are gold only – not gold equivalent

Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense, growth (major project) capital and discovery expenditure. Calculated on per ounce sold basis

Evolution Mining Limited Annual Report 2016

Evolution Mining Limited Annual Financial Report

Contents
	Page
Directors' Report	51
Auditor's Independence Declaration	98
Financial Statements
Consolidated Statement of Proft or Loss and Other Comprehensive Income	99
Consolidated Balance Sheet	100
Consolidated Statement of Changes in Equity	101
Consolidated Statement of Cash Flows	102
Notes to the Consolidated Financial Statements	103
Directors' Declaration	171
Independent Auditor's Report to the Members	172

Evolution Mining Limited Annual Report 2016

Directors' Report

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Directors' Report

The Directors pre sent their report on the consolidated entity ("the Group") consisting of Evolution Mining Limited ("the Company") a nd the entities it controlled at the end of, or during, the year ended 30 June 2016 ("the period").

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Directors

The following persons were Dir ectors of E volution Mining Limited during the financial year and until the date of this report. Directors were in office for this entire pe riod unless oth erwise stated.

Jacob (Jake) Klein Executive Chairman Lawrie Conway Finance Director and Chief Fin ancial Officer James (Jim) Askew Non-Executive Director Grah am Freestone Non-Executive Director Colin ( Cobb) Jo hnstone (i) Lead Independent Director Thomas (Tomm y) McK eith Non-Executive Director N aguib Sa waris (ii) Non-Executive Director Sebastien de Mon tessus (ii) Non-Executive Director Vincent Benoit (iii) Alterna te Non-Executive Director for Naguib Sawaris Amr El Adawy (iii) Alterna te No n-Executive Director for Sebastien de Montessus John Rowe (iv) N on-Executiv e Dir ector

(i) Appointed as Lead Independent Dire ctor eff ective 25 No vemb er 2015. (ii) Appointed as Non-Executive Director effecti ve 1 S eptember 2 015.

(iii) Appointed as Alternate Non-Executive Director effe ctive 1 Septemb er 201 5. (iv) R esigned as Non-Executive Director effective 31 March 2 016.

Company S ecre tary

The name of the C omp any Secretary during the whole of the year ended 30 June 2016 a nd u p to the date of this report is as follows:

Evan Elstein

Principal activities

The Group's principal activities during t he fi nancial year were operating, identifying and developing go ld rela ted mining projects in both Australia and New Zeal and.

There were no significant changes in the nature of th e activities of the Group during the period, other than th ose included in the key highlights on page 54.

Dividends - Evolution Mining Limited

In June 2016, the Directors approved a change to the dividend p olicy of whenever possible paying a half-yearly dividend equivalent to 4% of the Group's sales revenue. The change in p olicy doubled the payout ratio from the previous level of 2% to 4% of revenue (relating to sales in the six month per iod to 30 June 2016). The change is effective immediately and has been applied to the final dividend for 2016.

The Board has confirmed that Evolution is in a position to pay a final dividend for the current period to 30 June 2016 of 2 cents per share unfranked, totalling $29.365 million. Evolution shares will tra de excluding entitlement to the dividend on 24 August 2016, with the record date being 26 August 2016 and paym en t date of 23 September 2016.

In relation to Evolution’s dividend policy, the Board of Directors approved the implementatio n of a Dividend Reinvestment Plan (“DRP”). The DRP allows shareholders to elect to reinvest all or part of an y dividends payable on their Evolution shares to acquire additional Evolution shares. The allotted shares in respect o f the FY16 final dividend will be issued at a 5.0% discount to the daily VWAP for the 5 days immediately after t h e record date.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Dividends - Evoluti on Mining Limited �continued�

The Company paid a final unfranked dividend (r elatin g to s ales in the six month period to 30 June 2015) of $14.405 milli on in October 2015 and an interi m u nfran ked d ividend (relating to sales in the six month period to 31 Decembe r 20 15) of $14.65�million in Ma rch 2016.

Divid end s paid, pre DRP, to membe rs d urin g the financial year were as follows:

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	��une �� �'�� ��une �� �'��
Final dividend Final dividend fortheyear ended 30 June 2015 of 1cent per share unfranked (30 June 2014: 1centper share unfranked) perfullypaid share paid on 2 October 2015 Space Interim dividend Interimdividendfor the period ended 31December 2015 of 1 cent per share unfranked (31December 2014: 1 centper share unfranked) per fully paid sharepaidon 29 March 2016	�� �,132 �� �,149
	�� 14,2�1

Revie � o� o perations

Over v ie w

Evol u tio n is a leading, growth-fo cu se d Australian gold miner. T h e G ro up consists of seven wholl y-o wned ope r ati ng gold mines: Cowal in N ew S outh Wales, Cracow, P aj ing o, Mt Carlton and Mt Rawdo n in �ueensland and M un gari and Edna May in W es te rn Australia.

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Th e G ro up’s strategy is to deli ve r sh areholder value throug h effi c ient gold production, gro wi ng gold reserves and de v elo p ing or acquiring assets to i m prove the quality of th e por tf olio. Since its formation i n November 2011, the Gr o up has built a strong reput a tio n for operational predict a bilit y and stability through a r ec ord of consistently ac h iev i ng production and cost gui d ance. This has been a c hie v ed primarily as a result of the Group owning a nu m b e r of similar si�ed mine s , ra t her than a single mine o r o n e dominant mine like m an y of its peers. This po rt fol io approach to producti o n p rovides Evolution with a Gr o up-wide level of operati o nal stability and pre d ict a bility. The Group’s hi g h-p e rformance team cultur e , c le arly defined business pl ans and goals, and loc a tio n s within Australia and Ne w Zealand, further cont ri bu te to delivering reliable a n d consistent results.

To bu il d a sustainable busine s s, t h e Group maintains a s tro n g commitment to grow th through exploration and a disci p lin e d methodical approa c h t o business developme n t t h rough opportunistic, lo g ical, value-accretive acqui s iti on s. The Group is acti v el y involved in these acti v itie s within Australia and m ost recently New Zealand. Both j u ris d ictions are highly att ra ct iv e destinations due t o th e location of the Group’ s asset base and manag e m en t knowledge, low p o liti ca l risk, high gold end o w m ent, weakening Austr a lian dollar (which benefits �S dollar d en o m inated gold revenu e) a nd an environment of lo w i nflation.

The Grou p p os ted a record under ly in g profit after tax of $2 2 6. �� 4 million (30 June 2 0 15: profit $106.050 million) and a stat uto r y n et loss after tax o f $ 2 4.3 49 million (30 Jun e 20 1 5: profit $100.115 mi llion) for the year ended 30 June 2016. Th is in crease in underly in g pr ofit after tax was d riv e n by record productio n , a strong focus on cost control and a fa v ou rable Australian d ol lar g old price.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

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Revie�o�operations �continued�

Overvi ew (continued)

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The statutory net loss after tax incl udes one-off transaction and non-operating costs which have been excluded from the Grou p's underlying profit after tax. Th ese costs include acquisition and integration costs of $54.6�1 million, impair ment of goodw ill of $35.2�0 milli on, and fa ir value amortisation and expenses of $��.31�million incurred on the Cowal, Mung ari and Ph oenix acquisition s. The G roup also incurred an impairment on assets of $��.330 million as a result of reclassifyi ng the Paj ingo asset to h eld for s ale.

Total production for the year increased �4% to �03,4�6o �despit e a decline i n the av erage grade processed by 9% to 1.��g�t (30 June 2015: 43�,5�0o�, 1.94g�t). This was large ly achie ved as a re sult of the first year inclusion of Cowal and Mungari which contributed 29% and 1�% of the Groups tot al resp ectively. M t Carlt on was the large st contributor of the existing assets with 14% of the Groups total, a 45% in crease on the pri or yea r.

A record n et mine c ash flow of $42�.203 million (30 June 2015: $13�.�93 million) was als o achi eved duri ng th e year, r epresenting a 211% improvement over the prior year. All operations were cash flow positi ve af ter all sustai ning and major capit al expe nditure, including capital stripping.

The consolidated o peratin g and finan cial re sults for the current and prior period are summarised below. All $ figures refer to Australian thousa nd dollars (A$'00 0) unless otherwise stated.

	�ey �usiness Metrics	��une �� ��une �� �C�ange
	Total underground ore mined (kt) Total underground lateral development (m) Total open pit ore mined (kt) Total open pit waste mined (kt) Processed tonnes (kt) Gold grade processed (g�t) �old production �o��	1,4�9 920 61% 11,912 11,1�9 �% 16,331 6,306 159% 35,125 22,950 53% 16,242 �,932 105% 1.�� 1.94 (9)% �� �� ��
	�nit cash operating costs(A$�o�) (i) All in sustaining cost ($�o�) (i) All in cost($�o�) (i)	�22 �11 (2)% 1,014 1,036 2% 1,134 1,293 12%
	Gold price achieved (A$�o�) Silverprice achieved(A$�o�)	1,59� 1,4�9 �% 21.3� 20.�3 3%
	Total revenue Cost of sales (excluding D�A and fair value adjustments) Corporate, admin, exploration and other costs (excluding D�A) EBIT (i) EBITDA (i) Statutory pro�it a�ter income ta�e�pense �nderlying pro�it a�ter income ta�e�pense	1,32�,614 665,95� 100% (6�4,226) (360,525) (��)% (46,�3�) (32,��) (43)% 2�2,100 119,935 12�% 60�,551 2�2,656 123% �� �� �� �� �� ��
	Capital expenditure	200,214 16�,231 (19)%
	Net mine cash flow	42�,203 13�,�93 211%

(i) EBITDA, EBIT, �nit cash operating cost, All in sustaining cost (AISC), and All i n c ost (AIC) are non-IFRS financial information and are not subject to audit.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Revie�o�operatio ns � continued�

�e��i��i�� t� �or t�e �e�r

Key highl igh ts for the year ended 30 Jun e 2 016 i nclu de:

Saf ety of our people is of para mou nt im por tance and our focus has been de monst rated thr ough ma intaining a s teady total recordable injur y fr eque ncy rate (TRIFR) of 9.�(30 June 2 015: 9 .6).
During the year the Gro up reac hed a record production mileston e of �03,4 �6o� . This was the mid range of upgraded guidance f or t he y ear of ��0,000 - �20,000o�.
All in Costs reduc ed 12 % to $1,134�o�during the year, as a res ult o f a sustained focus on cost reduction and productivity imp rov em ent s. The Group achieved sa ving s on a n umber of supply contracts in addition to the successful int eg ratio n of Cowal and Mungari ass ets .
All mines c on trib ute d a positive cash flow for the ye ar re sulting in a record mine cash flow of $42 �.203 million.

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During t h e y ea r the Group strengthene d it s ba lan ce sheet through the volun tary and ear ly repayments of $322 mi llio n o n the Senior Secured S yn dica ted Revolving and Term Faci lity ("Th e Fa cility). As at 30 June 2016, t he G roup was 15 months ah ead of th e Term Facility repayment sc hed ule and had a total of $2�5 milli on o uts tanding on The Facility.
Th e co m pletion of the Cowal an d M un ga ri transactions during th e y ear ha d a significant and immediate im p ac t o n reducing Group cost s a nd in creasing cash generatio n. Th e C owal gold mine is one of Aus tralia ’s mo st a ttractive gold assets an d its l ar ge scale, long life and l ow cos t p rofile providing a strong str ateg ic fit w ith th e Group’s long term ob je cti ve of pursuing value accre tiv e a cq uisition assets which impro ve the quality o f th e Group’s asset portfolio . Co w al has contributed gold pr odu ct ion of 23�,940o�with a fir st q uartile unit c os t of $591�o�. The Munga ri op e rations high quality inte gr ate d o perating assets provide a st rong strategic fit w it h the Group’s long term ob je ct ive of pursuing value a cc reti ve acquisition opportunities w hich improve the qu a lity of the Group’s asse t po rt folio. Mungari, contribut e d g ol d production of 13�,193o �w ith a unit cash cost of $ �56�o�from 10 month s of o wnership.
D u ring the year the Comp a ny c ompleted the takeover o f Ph oenix Gold Limited. The re is a clear commercial lo g ic in combining with Ph o e ni x’s assets given the clo s e pr oximity to the Mungari o p erations and covers a si g nificant strike length of t he highly prospective Zule ik a S hear and Kunanalling S he ar.

�i n in � O�er�tion�

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Co w al

The a c qu isition of Cowal was c o m pleted on 24 July 201 5 . T h is transformational ac qu isition saw Cowal continue its hi s tor ic ally strong performa n ce f inishing the year with gol d production of 23�,94 0o �, a unit cash operating cost in the f irs t cost quartile at $591 � o�, and an AISC and AI C of $ ��6�o�and $��9�o�r e spectively.

Mining c o nt inued in the Stage G cu tb ack with 12,651kt o f m at erial mined, comprise d of �,�14kt of ore mined at an aver a ge g rade of 1.16g�t and 3 ,9 3 �kt of operating was t e. � igher ore mined tonn e s were driven by positive ore reconcili at io ns and a focus on mi n in g i n high grade areas.

Reduced co st s w ere driven by a c om b in ation of higher volu m e s of material moved, hi gher than anticipated grade, higher reco ve ri es , lower mining cos ts , l ow er capital spend a nd l ow er processing cost s . This impressive performance du ri ng the year led to th e u nit cash operating co s ts an d AISC being well b elow the improved full year guidance of $ 65 0 - $�50�o�and $� 00 - $�50�o�respecti ve ly. T otal ore processed f or the year was 6,666kt at a grade of 1.3 3g �t w ith gold recovery of � 3.5 %. Gold producti on wa s also above plan fo r the year due to in creases in grad e p ro ce ssed and higher re c ove ries.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Revie�o�operations �continued�

�inin� O�er�tion�(continued)

Cowal (continued)

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Cowal g enerated $193.0 5�million and $1 63.646 mil lion in operating and net mine cash flow respectively since its acquisition, which is an o utstanding result and confir ms the as set quality acquired.

Productivity improvements and cost reducti ons achie ved during the year in cluded:

Since ownership, the Ore Reserves have been upgr aded fro m 1.56Mo�t o 2.�5 Mo�, an increase of �3% and Ore Resources have been upgraded from 3.263Mo�to 5 .046Mo �, and incr ease o f 55%.
E42 Resource Development drilling is currently in progress in suppo rt of the Stage � cutbac k feasibility study. Seven drill rigs are now in position with initial assays supporting prio r interp retations and id entifying n ew �on es of mineralisation.
�se of hig h shoc k energy products in blasts has seen higher dig rates improving minin g prod uction a nd softe r mill feed im provin g mill production.
Shor ter shut times durin g the y ear reduced mill maintenance costs by $6.�million against plan.

Mungari

The acquisition of Mungari was co mplete d on 24 Au gust 2 015 and saw the establishment of a strong strategic partnership with the La Mancha Group a nd its o wner Nag uib Sa waris. Mungari finished the year as the Groups second highest producer with 13�,193o�from j ust ov er 10 mon ths of ownership following its successful integ ration. Mungari is a low cost quality asset with a unit c ash oper ating c ost of $�56�o�and AISC of $1,024�o�.

�ndergr ound ore mined at Frogs Leg for the year totaled 563kt at an averag e gra de mined of 5.�9g�t targeting the Fog, Dw arf, Mist and Rocket orebodies. �nderground developm ent o f 2,��5m was completed during the year and comprised 1 ,62 9m of operating development and 1,15�m of capital devel opment. A m ilestone was achieved with ground support reh abilitation of ore drives completing in the Mist orebod y follo wing a geo technical review. This allowed jumbos to res ume focus on face advance, albeit with the increased l evel of supp ort.

Open pit ore mined from Wh ite F oil for the year was 1,121kt at an average grade mined of 1 .4�g�t with total material mined of �,590kt. Prod ucti on focused on the completion of Stage 2A, progression of St age 2 B a nd the commencement of the northern St age 3 cutback.

Productivity improvements and cost redu ctio ns achieved during the year included:

Progress has been made on extending t he l ife of the Frog’s Leg mine as a result of well planned and executed diamond drilling programs combin ed w ith the ramp up of regional exploration.
A live online data monitoring system was introd uce d to the mine during the year which resulted in improving the average payload of trucks by 4% in t he c ommissioning phase.
Mungari moved to an owner-operator for shotcrete acti vitie s during the year. This will result in reduced ground support costs going forward by combining these a ctivi ties with the paste-fill operations.

Mt Carlton

The Group’s only concentrate producing mine, Mt Carlton produced a record of 113,056 o�in payable gold at a record low unit cash operating cost of $463�o�and a record low AISC of $�42�o �(3 0 June 2015: ��,65�o�, 6��o�, $912�o�). These record results for the year were driven by a combination of in creased average grade mined of 5.55g�t (30 June 2015: 4.42g�t) being achieved and the realisation of lower min ing costs as a result of the transition to owner-maintainer of the mining fleet.

Mining activity focused on the medium and high grade �ones in Stage 2 of the V2 pit which re sulted in higher tonnes mined and higher average grade. Despite developing an improved resource model, t he mined tonnes variance was attributed to defining and mining additional ore outside of the Ore Reserve and t h e mining and processing of incremental ore below the Ore Reserve cut-off grade.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Revie�o�operatio ns � continued�

�inin�O�er�t ion �(continued)

Mt Carlton (co ntinued)

Produ ctiv ity improvements and cost r edu ction s ac hieved during the year included:

Mining unit costs were si gnif icantl y re duced for year at $6.36�t (30 Ju ne 20 15: $� .60�t) a s a result of cost reductions and produc tivit y im pro vements captured through the trans ition t o own er-maintainer for the mining fleet.
The ongoing plant op timi sat ion project has seen improv ed fi ltratio n cir cuit performance due to a new preventative ma int ena nce regime ensuring more con sist ent fil ter f eed slurry density along with improved stability of the flo tati on circuit with ongoing modific atio ns t o the process control logic and a new desi gn of dart valve th at imp ro ves tank level control.
A new wei gh to met er was installed to correct a p ersi sten t mill feed tonnage measureme nt pro blem.

Mt �awdon

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Mt Rawdon ha d a d ifficult year which focuse d hea vily on completing the Stage 4 cutb ack while processing low grade stoc kp ile. A dditionally, seasonal sto rm s ac ro ss Central �ueensland res ulte d in hea vy rainfall limiting access to h igh -g rade ore from the Stage 3 pit fl oo r. Despite the issues enc oun tere d go ld production of �5,002o� was achi e ved a t a unit cash operating cos t of $ �26�o�and an AISC of $1 ,02 4�o �(3 0 June 2015: 102,162o�, $631�o �, $� �3 �o�).

A total o f 3 ,3 0�kt of ore was mined at an av erage grade of 0.��g�t ( 30 Ju ne 2015: 3,2�3kt, 1.04g�t). Proce ssed tonna g es re mained consistent with t he pr ior year at 3,421kt (30 J un e 20 15 : 3,405kt).

Mini ng a c tivity continued to focus o n t he Stage 4 cutback which h as no w accessed ore and initial rec onciliations agai n st th e resource model have b ee n positive.

Pro d uc t ivity improvements and c ost r eductions achieved dur in g t he year included:

O ngoing improvement i n itia ti ves around grinding an d cya n ide consumption have d eliv ered a 6% saving in unit processing costs.
�nit mining costs have c on t inued to trend lower av e ragi n g $3.19�t for the year re pr esenting a significant improvement over the p rio r period unit mining cost o f $ 3 .41�t. This has been as a result of incremental improvements in minin g p ro ductivity, low fuel price s a nd production drilling imp ro vement initiatives.
T he accelerated strippi n g c apital program at Mt R a wd o n is almost complete. T h e strip ratio is expected to d rop from approximate l y 4 . 4:1 in FY16 down to a p pro x imately 2.1:1 in FY1�

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�d na Ma �

Edn a M a y produced �1,02�o � of g old for the year at a u n it ca sh operating cost of $ 1 ,40��o�and an AISC of $1,5 04 �o � (30 June 2015: 9�, �6 6 o� , $�4��o�, $�9��o�). T hi s outcome was largely d riven by the increased diffic ult y i n accessing the curre n t h ig h grade area of the p it d u e to tight working are a s and significant rainfalls throug h ou t spring and summer.

The wa st e pr ofile of Stage 2 tran s iti on ed from predomina nt ly c apital waste to opera t ing waste during the year in line with th e i n creased ore tonne s bei n g mined from Stag e 2. O perating waste mine d was 5,550kt (30 June 2015: 1,639kt), re sul ti ng in a significantl y h ig h er mining cost than t he p revious year. Gold m ined grades were significantl y l o we r than the prior pe rio d at 0.91g�t (30 June 20 1 5: 1.2�g�t) contributin g to the lower production during the y ea r. A return to higher gr ad e o re at the base of t he c ut back is anticipated in FY1�.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Revie�o�operations �continued�

�inin� O�er�tion�(continued)

�dna Ma�(continued )

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Key achie vements durin g the year included:

The stage 1 �nderground Developm ent received bo ard app roval during the March 2016 quarter and development commenced in June 20 16 with c ontractors star ting gro und preparation for the portal and surface water reticulation pipework. The capit al investm ent of $16.0 million targets an initial resource of approximately 200,000o�.
A feasibility study is currently being undertaken for Stage 2 of t he unde rground de velop ment with portal development and installation of gen-set and power reticulation is plann ed in e arly FY1�.

Cracow

Cracow p roved its reli ability o nce again and repeated a strong gold production and cost result wit h 90,6 26o�at a unit cash operatin g costs of $�46�o �and AISC of $1,065�o�(30 June 2015: 93,064o�, $�26�o�, $1,05 0�o�).

A total of 499kt of ore was m ined at an averag e grade of 5.92g�t (30 June 2015: 541kt, 5.�5g�t), with the prima ry ore sources being the Kilken ny, Em pire and Kl ondyk e ore bodies. The slight reduction in production was primarily driven by a decrease in ore proces sed th rough the mill of 511kt (30 June 2015: 541kt) and lower plant utilisation of 95.�% compared with 9�.6% in the pri or yea r. This was offse t by a higher grade mined driven by stope dilution management, selective mining and access to hi gher g rades wh en de veloping ore levels.

�n dergr ound development during the year comprised of 4,9�� m split be twee n operating development of 3,000m and cap ital d evelopment of 1,9��m (30 June 2015: 3,105m, 2, 599m ). Produ ction drilling focused on improving stoping flexi bility with ore development at Klondyke and Tipperary. Capita l develo pme nt focused on accessing the Klondyke re mna nts and lower levels of the Empire stopes with the su cces sful trial of n arrow vein mining techniques.

Productivity improvement s a nd cost reductions achieved during the year included:

Transfer of surplus equi pme nt between sites delivered reduced costs and reduced cont ractor dep endency
� Reduced power costs with the plant and mine feeder being switched over to a new po wer f actor conversion capacitor banks. T his c hange also allowing for the ventilation fans at the Empir e a nd VR 1 decline to be connected to mains pow er no longer requiring diesel.

�a�ingo

Pajingo exceeded internal benchmarks, doubling its net m ine cash flow for the year to $26.515 million. Pajin go was able to increase ore mined and tonnes processed b y 10 % and 13% respectively, while keeping costs flat against a lower processed grade to result in steady unit cas h op erating costs of $��5�o�(30 June 2015: $��o �) and AISC of $1,161�o�(30 June 2015: $1,163�o�). Gold produc tion increased 5% to 6�,630o�(30 June 2015: 65,919o�), driven by higher processed tonnes which helped to offs et lo wer planned gold grades.

Pajingo's primary ore sources continued to be the Sonia East, Sonia Spl ay, Z ed East and Zed West orebodies with total ore mined of 41�kt at an average grade of 5.50g�t (30 June 2015: 3�9 kt, 5.��g�t). Additional targets continued to be identified in the upper remnant areas of these lodes following a n en gineering and geological review.

�nderground development of 4,13�m comprised of 1,�6�m in operating development and 2,2�2m in capital development (30 June 2015: 3,133m, 2,342m). The completion of the Camembert under gro und platform and associated diamond drilling program allowed for the development of the Camembert deposi t t o commence during the year.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Revie�o�operatio ns � continued�

�inin�O�er�t ion �(continued)

�a�ingo (c onti nued)

Produ ctiv ity improvements and capit al p roject s co mmissioned during the year includ ed:

Reductions in processing un it rat es w ere achieved due to improved mana gemen t of the processing tanks for campaign milling a s w ell a s th e processing of a historic low g rade laterit e stoc kpile which was located at the mill and thus only attr act ing the incremental processin g co sts fo r trea tment.
A new tailings faci lity wa s pe rmitted during the March qu arte r to p rovid e approximately 2.5 years of tails storage.

�in�nci��er�or� �n ce

�ro�it or �o��

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Revenue for t he ye ar ended 30 June 2016 was u p 10 0% to $1.329 billion (30 June 2 015: $665. 95�m illion) largely as a re sult o f the first year inclusion o f C owa l a nd Mungari which contribut ed re ven ues o f $3�5.346 million and $232.5 49 m illi on respectively. The orig ina l fiv e m ine sites contributed $�2 0.�1 9 mil lion which is an increase on the pri or ye ar of �%. This can be large ly attri bu ted to an outstanding perf orm anc e at Mt Carlton which offset operatio na l is su es at a couple of the oth er sit es along with a �% increase in the ach ieved gold price to $1,59��o� (30 Jun e 20 15 : $1,4�9�o�).

Delive rie s i n to the hedge book were 2 �4, �� 9o�at an average price of $1, 593 �o�(30 June 2015: �5,14�o�, $1,5� 1� o� ). The remaining 540,�10 o� w er e sold at spot price achi ev ing an average price of $1,599�o�( 30 J une 2015 : 2� 9, 646o�, $1,526�o�). Addi ti on all y, the Company acquire d a fu rth er 245,9�5o�of gold delive ry c ontracts as p a rt o f the La Mancha acquisit io n, w ith scheduled quarterly de live rie s from September 2015 thr ou gh to Dec e m be r 201�. The Group's ou ts ta nd ing hedge book as at 3 0 Jun e 2016 totals �06,9�9o�at an average price of $ 1 ,6 24 �o�for deliveries to Ju ne 2 02 0.

Op e rat i ng costs (excluding dep r eci a tion, amortisation and f ai r va lu e adjustments of $422.� 66 million) increased to $ 6� 4 .226 million (30 June 2 0 15: $360.525 million) as a r e sul t o f the first year inclusion of Cowal and Mungari wh i ch a ccounted for operating c o st s of $153.10�million a nd $ 11 �.4��million respectivel y . The operating costs for the existing five mine sites w e re $403.631 million, an i n cre a se of 12% on the prior y ea r. This increase is lar g el y due to the transition of the Edna May Stage 2 cut b ac k from capital waste to op e rating waste during the ye a r. D espite the increase, th e G r oup continues to place a st r ong focus on cost contr ol over operating activities an d a nt icipates efficiencies in FY 1 �.

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Th e Gr o up's AISC decreased 2% to $1,014�o�(30 June 2 01 5 : $1,036�o�) despite a 9 % drop in average grade min e d d uring the year. This g r ad e decline was offset by t he b enefits of the new low c ost assets, Cowal and Mun g ar i which contributed $� � 6� o� and $1,024�o�respe c tiv e ly. Mt Carlton was the l argest contributor with an AIS C of $ �42�o�representing a d e crease of 23% on the pri o r year (30 June 2015: $ 912�o�).

Total e xpl o ration expenditure f o r t he year ended 30 Jun e 20 1 6 was $2�.�23 million (30 June 2015: $23.9�1 million ) wit h an exploration exp e ns e of $13.�01 million (3 0 J u ne 2015: $6.96�milli on ).

The Gro u p po sted a record unde rl yi ng profit after tax of $ 22 6. � �4 million (30 June 20 15: $106.050 million) and a statutory n et lo ss after tax of $24. 3 49 m illion (30 June 201 5 : p ro fit $100.115 million) f or the year ended 30 June 2016. This in c re ase in underlying pr ofi t w as driven by recor d pr o duction, a strong fo cu s on cost control and an improved A us tr ali an dollar gold pric e.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

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Revie�o�operations �continued�

�in�nc i��er�or��nce (continued)

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The following table sh ows the reco nciliation of statutory (loss)�profit after income tax expense to the underlying profit after inc ome tax expense.

	��une �� �'�� ��une �� �'��
Statutory (loss)�profit after income tax expense Fair valueamortisation Fair value expense Acquisition and integrationcosts Gain on revaluation of available-for-sale assets Impairment ofassets Impairment of goodwill �nderlying profit after incometax expense �alance ��eet	�� 100,115 �� - �� - �� 5,935 �� - �� - �� -
	�� 106,050

In J uly 2015, the Group's gearing ratio peaked at 3 2.0% a s a result of dr awing down on the Senior Secured Sy ndica ted Revolving and Term Facility ("The Facility") t o fund the Cow al acq uisition. This was subsequently reduced to 1 5.1% as at 30 June 2016 as a result of a total of $ 322 m illion in volun tary and early repayments during the y ear. As at 30 June 2016, the Group was 15 months ahe ad of the Ter m Fa cility repayment schedule.

The Group’s net a sset s increased by 3�% to $1.551 billion (30 June 2015: $1.12 5 billion ), pr imarily due to the completion of the Co wal, Mungari and Phoenix acquisitions which contributed n et as sets of $1.0 65 billion, offset by the resulting draw do wn o f $60�million on The Facility and impairment of assets of $� �.330 mill ion. At 30 June 2016, the Group held a ca sh balance of $1�.2�9 million and total net debt of $296. 455 million . To tal net debt comprises $2�5 million out stan ding on The Facility (less $6.6��million of capitalised b orro wing cost s), $9.660 million of finance leases an d $� .4�2 million of other short-term debt. The Group also re clas sified net assets of $45 million for the Pajingo a sset to held for sale as a result of the subsequent divestmen t .

Total assets increased during the period to $2.1� �billion (30 June 2015: $1.312 billion), representing a 6� % movement. Excluding the Cowal, Mungari and P hoe nix transactions, which account for the majority of the increase, total assets decreased by 2�% which can be attributed to the reduction in cash, property, plant an d equipment and mine development and exploration of 9 4%, 1�% and 25% respectively. Capital additions for property, plant and equipment totalled $�0.260 million, whil e de preciation totalled $134.556 million. Mine development and exploration additions totalled $164.455 millio n as a result of continued stripping at Cowal, Mt Rawdon and Edna May, while amortisation totalled $200.�94 milli on.

Total liabilities for the Group increased to $635.�26 million as at 30 Jun e 20 16 from $1��.6��as at 30 June 2015. This increase is largely due to the $60�million drawing of The Facilit y w hich was used to fund the acquisition of the Cowal asset. The balance of The Facility as at 30 June 2016 wa s $2�5 million with scheduled repayments on the Revolving Facility out to July 201�and the Term Facility out t o Ju ly 2020.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Revie�o�operatio ns � continued�

�in�nci��er� or� �nce (continued)

Ca��lo w

The Gro up ended the year with a c ash bala nce of $1�.295 million and available credit of $205 million thr ough the Re vo lving Facility.

N et cash inflow from operati ng acti vitie s was $5�4.0�4 million, an in crea se of $2�9. 34�million (30 June 2015: $2�4.�3�million). The m ajo rity o f th e increase can be attributed to th e firs t yea r inclusion of the Cowal and Mungari assets which c on tribu ted net receipts of $239.04�m illio n and $11 2.024 million respectively. The remaining increase is a res ult o f the increase in achieved gol d pric e.

Net cash outflows fro m i nv estment activities were $9 99. 3�0 milli on, a $�04.309 million increase ( 30 June 2015: $195.0�1 million ) c ons ist ing of payments for the a cqu isitio n o f Cowal and Phoenix of $�34.6 46 mi llion and the payment of sta m p d uty on the Cowal and Mung ari t rans ac tion of $4�.091 million. Capital inve stme nts for t he period includ e p ro per ty plant and equipment o f $ �0.2 60 million and mine developme nt a nd ex plora tion of $164.455 mi lli on.

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Net cash i nf lo ws from financing activities we re $23 6.�03 million, an increas e of $15 2.2� �million (30 June 2015: outflow $ �4 .5 15 million). Financing for t he pe rio d included the drawing of $6 0� millio n on The Facility and the subseq ue nt vo luntary and early repay me nts o n The Facility of $322 mill ion an d L a Mancha Debt Facility of $124 million. A ls o i ncluded are net procee ds rec ei ved on the issue of shar es to th e L a Mancha Group of $111.46� million , div id end payments of $23.� 34 mil lio n and a net drawing of $3 .062 m illion for Mt Carlton shipment refina n cin g and insurance premiu ms .

Tota l ca sh outflows for the year a m ou nt ed to $1��.493 million ( 30 Ju ne 2015: inflow $1�4.1�1 mill ion ).

�a� a tio n

As a t t h e year ended 30 June 2 0 16 , the balance sheet carri ed a de ferred tax liability as a re su lt of timing diff e re n ces of $0.0�9 million.

Th e C o mpany recognised a $ 1 �.2 4 4 million tax benefit in th e cu rrent period from previo us ly unrecognised tax los s es to reduce the current t a x e x pense. The Group has a vai la ble tax losses as at 30 Ju ne 2016. These tax los s es have not been recogni s ed d ue to the uncertainty o f th e ir recoverability in future p eriods.

Ca � ita l ��enditure

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Ca p ital expenditure has incre a se d 19% to $200.214 milli o n (3 0 June 2015: $16�.19 � million). This consists of sus ta in in g capital, including n e ar m ine exploration and r e so u rce definition of $106.9 � 0 million (30 June 2015: $��. 0 1 2 million) and major pr o jec t s, including mine develop m ent of $93.244 million ( 30 June 2015: $91.1�5 milli on ). T his increase can be a ttri b uted to the Stage 4 c u tb ac k at Mt Rawdon and t h e Stage 2 cutback at Edna May fo r t h e open pit operation s an d continuing capital d ev el o pment at the undergro u nd operations.

�inanc in g

Total fin a nc e costs for the year we re $ 43.��5 million (30 J u n e 2015: $14.3�2 millio n ). Included in total finance costs is I nt er es t expenses of $26. 3 14 m illion (30 June 201 5 : $ � .622 million), debt e st ablishment fee amortisation of $11.623 m ill io n (30 June 2015: $1 .2 2 5 million) and disco u nt u nwinding on mine r eh abilitation liabilities of $3.406 milli on ( 30 June 2015: $2.0 9� m ill ion).

In May 2015, t he Gro up entered into a r efi na ncing arrangeme nt b y w ay of a letter of c om mitment. The Facility comprises $30 0 m ill ion Senior Secured R e vo lving Loan (“Facili ty A ”), a $400 million Se n ior Secured Term Loan ( “Facility B”), and a $1 55 million Perform an c e B ond Facility (“Fa cil ity C ”).

T he Facility was exe cu te d o n 20 July 2015 an d wa s effective from t ha t da te.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Revie�o�operations �continued�

�in�nc i��er�or��nce (continued)

�inancing (continued)

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The Facili ty was drawn down on 23 July 20 15 on com pletion of the Cowal acquisition and is repayable over the following periods:

Facility A: 31 July 201�
Facility B: 20 July 2020
Facility C: 20 July 201�

�uture out�oo�

��te ri��u� ine��ri��

The G roup prepare s its bu siness plans using estimates of production and financial performance base d on a range of assum ptions and foreca sts. There is uncertainty in these assumptions and forecasts, and ris k tha t variation from t hem co uld result i n actua l performance being different to expected outcomes. The uncertai nties arise from a range of factors , including t he nat ure of the mining industry and general economic factors. The material business risks face d by th e Group th at may have an impact on the operating and financial prospects of the Group as at 30 June 2016 are:

�luctuation�in t�e gold �rice and �u�tralian dollar

T he G roup’s revenues are exposed to fluctuations in bo th the gold pric e and the Australian dollar. Volatility in the gold p rice a nd Australian dollar creates revenue uncertainty and re quires c arefu l management of business performan ce to ensure that operating cash margins are maintaine d sho uld the Austr alian dollar gold price fall.

Declining gold pri ces can also impact operations by requiring a reassessm ent o f the fe asib ility of a particular exploration or develo pm ent project. Even if a project is ultimately determined to be e conom ical ly viable, the need to conduct such a reass ess ment could cause substantial delays and�or may interru pt op eratio ns, w hich may have a material adverse effect o n ou r results of operations and financial condition.

�re �e�er�e�and Mineral �e�o urce �

The Group’s Ore Reserves and Minera l Re sources are estimates, and no assurance can be given tha t the estimated reserves and resources are acc urat e or that the indicated level of gold, silver or any other min eral will be produced. Such estimates are, in large par t, ba sed on interpretations of geological data obtained fro m d rill holes and other sampling techniques. Actual min erali sation or geological conditions may be different from tho se predicted. No assurance can be given that any part o r all of the Group’s Mineral Resources constitute or will be converted into Ore Reserves.

Market price fluctuations of gold and silver as well as increase d pr oduction and capital costs may render the Group’s Ore Reserves unprofitable to develop at a particular site o r sit es for periods of time or may render Ore Reserves containing relatively lower grade mineralisation uneconomi c. Es timated reserves may have to be re-estimated based on actual production experience. Any of these factor s ma y require the Group to reduce its Ore Reserves and Mineral Resources, which could have a negative impact on t he Group’s financial results.

�e�lace�ent o�de�leted re�er�e�

The Group must continually replace reserves depleted by production to maintain prod uct ion 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 ris ks and are frequently unsuccessful. Once a site with mineralisation is discovered, it may take several years from t he initial phases of drilling until production is possible.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Revie�o�operatio ns � continued�

��teri��u�in e�� ri��(continued)

�e�lace� ent o�de�leted re�er�e�(contin ued)

As a r esu lt, there is no assurance th at cu rrent or future exploration programs will be succe ssful. Ther e is a risk that de pletion of reserves will not be o ffset by discoveries or acquisitions or tha t dive stitures of asset s will lead to a l ow er reserve base. The min eral bas e of the Group may decline if reser ves a re min ed with out adequate re placement and the Group ma y not be able to sustain production be yond the c urrent mine lives, based on current production rates.

Mining ri��and in�ur anc e ri ��

The mining industr y is su bje ct to significant risks and h a�a rds, i ncl uding environmental ha�ards, indus trial accidents, unusu al o r u ne xpected geological conditi ons , un ava ilability of materials and equipme nt, pit wall failures, rock bu rs ts, s ei smic events, cave-ins, an d w eath er conditions (including flooding a nd bu sh fire s), most o f which are bey on d th e Group’s control. These ri sks and ha �ards could result in significa nt co sts o r delay s that could have a m ate ria l adverse effect on the G ro up’s fin ancial performance, liquidity and res ults o f operation.

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The Group m ai nta ins insurance to cover t he mos t c ommon of these risks and ha� ard s. Th e insurance is maintaine d in am ounts that are consider ed rea so nable depending on the ci rcu mst anc es surrounding each identified r isk . � owever property, liabilit y and ot her insurance may not pr ovi de s uffi cient coverage for losses related to th es e or other risks or ha�ar d s.

�rodu ct ion a nd co�t e�ti�ate�

The G rou p prepares estimates of fu tur e p roduction, cash costs a nd ca pit al costs of production for its ope rations. No a s su ra nce can be given that s u ch es timates will be achieve d. Fail ur e to achieve production or cos t estimates or ma te ri al increases in costs co u ld h a ve an adverse impact o n the G roup’s future cash flows, p rof itability, results of o p er a tions and financial cond it ion.

Th e G ro up’s actual production a nd c osts may vary from esti m at es for a variety of reasons, i nc luding: actual ore mi n ed v arying from estimates o f g ra de, tonnage, dilution a nd m e tallurgical and other char ac teristics�short-term op e rat i ng factors relating to th e or e reserves, such as the n eed f or sequential developm en t of ore bodies and the pr o ce s sing of new or different o re g rades�revisions to mi ne pl a ns�risks and ha�ards as s ociated with mining� na t ura l phenomena, such as i n cl e ment weather condition s , w a ter availability and flood s� and unexpected labour sh o rta g es or strikes.

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Co s ts o f production may also be a ffected by a variety of f act o rs, including: changing w aste-to-ore ratios, ore gra d e m etallurgy, labour cost s , c o st of commodities, gen e ra l inflationary pressures an d currency exchange rates.

�n� ir on � ental��ealt�and �a �e t� � �er�it�

The G ro u p’s mining and proce s si ng operations and expl o rat i on activities are subje ct to extensive laws and regul at io ns governing the prot ec ti on of the environment, w a st e disposal, worker sa fe ty, mine development and protec ti on o f endangered and o t he r special status specie s . Th e Group’s ability to o b tain permits and approvals and to su c ce ssfully operate ma y be a dversely impacted by r ea l or perceived detrim e ntal events associated with the Gro up ’s a ctivities or those of o th er mining companies a ffe c ting the environment , human health and safety or the surro un di ng communities. Del a ys in obtaining or failur e to o btain government p er mits and approvals may adversely af fe ct the Group’s opera ti on s, including its ability t o co ntinue operations.

While the Gr ou p ha s implemented e xt en si ve health, safety a nd c o mmunity initiatives a t its sites to ensure the health and sa fet y of its employees, co nt ra ct ors and members of t he community affect ed by its operations, there is no guarantee th at s uc h measures will e lim i na te the occurrence o f a cc idents or other in cid ents which may result in p ersonal injuries or d am age to property, an d in certain instances s uc h occurrences coul d give rise to regulatory fin es and�or civil lia bil ity.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Revie�o�operations �continued�

��teri� ��u�ine��ri��(continued)

Co��un it�relation�

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The Group has an e stablished c ommunity relation s functio n, both at a Group level and at each of its operations. The Group function has develop ed a comm unity engagem ent frame work, including a set of principles, policies and procedures designed to provide a struc tured and consistent ap proach to community activities across our sites whilst recognising that, fundamentally, Communi ty Relati ons is about people connecting with people. The Group recognises that a failure to appropriately manage local commun ity stakehol der ex pectations may lead to dissatisfactions which have the potential to disrupt production and expl oration activities.

�i��a nage�ent

The Group ma nages t he risks listed above, and other day-to-day risks through an establishe d ma nagemen t framewor k which conf orms to Australian and international standards and guidance. The Group’s r isk re porting and contr ol mech anisms are design ed to ensure strategic, operational, legal, financial, reputational an d oth er risks are identifie d, asse ssed and a ppropr iately managed. These are reviewed by the Risk Committee thro ugho ut the year.

The financial reporting and control mecha nisms are review ed during the year by management, the internal audit process, the Audit Committee and the ex ternal auditors.

The Group has policies in place to manage risk in t he are as of �eal th an d Safety, Environment and Equal Em ploym ent Opportunity.

The Leade rship Team, the Risk Committee and the Board regularl y rev iew the ri sk p ortfolio of the business and the effectivene ss o f the Group’s management of those risks.

Events occurring a� ter t�e reporting period

No matter or circumstance ha s occurred subsequent to the year end that has significa ntly affecte d, o r may significantly affect, the operati ons of the Group, the results of those operations or state of affa irs of t he Group or economic entity in subsequent fi nanc ial years except for the following matters:

(�) �ive�t�ent o��in�o ��et

On 16 August, the Company signed a Sale a nd Purchase Agreement with Minjar Gold Pty Limited for t he sale of the Pajingo asset for $45 million. The considera tion comprises of $42 million in cash and $3 million in def err ed consideration. The sale is expected to settle in early Se ptember.

Li�ely developments and e�pected results o�operatio ns

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

Environmental regulation

The Group is subject to the reporting requirements of the �ational �reen�ou�e a nd � nerg��e�orting �ct �� .

The �ational �reen�ou�e and �nerg��e�orting �ct �� requires the Group to repor t it s annual greenhouse gas emissions and energy use. The Group has implemented systems and processes for th e collection and calculation of the data required and submitted its 2014�15 report to the Greenhouse and E ne rgy Data Officer on 31 October 2015.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

�n�ormation on Dire cto rs

The following in for mation is current as at the dat e of this re port :


	Experience and expertise
	Other current directorships
	Former directorships in last 3 years
	Specialresponsibilities
	Interests inshares and options	OrdinaryShares - Evolution mining Limited (EVN)
		Optionsoverordinary shares (EVN)

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)


	Experience and expertise
	Other current directorships
	Former directorships in last 3 years
	Special responsibilities
	Interests in shares and options	Ordinary Shares - Evolution mining Limited (EVN)
		Options over ordinary shares (EVN)

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

�n�ormation on Dir ecto rs �continued�


	Experience and expertise
	Othercurrent directorships
	Formerdirectorships in last 3 years
	Specialresponsibilities
	Interests inshares and options	Ordinary Shares - EvolutionminingLimited (EVN)
		Optionsover ordinary shares (EVN)

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)


	Experience and expertise
	Other current directorships
	Former directorshipsin last 3 years
	Special responsibilities
	Interests in shares and options	Ordinary Shares - Evolution mining Limited (EVN)
		Options over ordinary shares (EVN)

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

�n�ormation on Dir ecto rs �continued�

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Experience and expertise	Experience and expertise
Other currentdirectorships
Formerdirectorships in last 3 years
Special responsibilities
Interestsin shares and options	OrdinaryShares - Evolution mining Limited (EVN)
	Options over ordinary shares (EVN)

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)


	Experience and expertise
	Other current directorships
	Former directorships in last 3 years
	Special responsibilities
	Interests in shares and options	Ordinary Shares - Evolution mining Limited (EVN)
		Options over ordinary shares (EVN)

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

�n�ormation on Dir ecto rs �continued�

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

�o�n Ro�e�� Sc � �ons��RSM�M�us�MM��on-E �ecu tive Di rect or
Experienc e an d expertise Mr Rowe resi gned as a Direc tor on 31 March 2016. �p until this date he was the C hair of the
Nomination an d Rem une ration Committee and a Member of the Ris k Com mittee.
Mr R owe has som e 40 years' experience within the gold , nick el and cop per indus tries. �e
ha s h eld a vari ety of positions in mine managemen t, exp loration and bu siness development.
M r Ro we was appointed as a Non-Executiv e Dir ector o f Wes tonia Mines Limited on 12
Oct obe r 2006. Through a series of corp orat e trans actio ns, Westonia Mines subsequently
c ha nged name to Catalpa Resource s Li mited and then Evolution Mining Limited.
Mr Rowe is also a Non-Execut ive Direct or o f Panoramic Resources Limited and was for merly
Non-Executive Director of S ou thern Cro ss Goldfields Limited.
Other current dir ec torsh ip s Non-Executive Director of Pano ram ic Resources Limited
Former direct ors hip s in last 3 None
years
Special re sp ons ib ilities None
Interests i n s ha res and options Ordinary S ha res - E volution mining Limited (EV N) 160,1��
Options o ver ord inary shares (EVN) -
Right s o ver o rdinary shares (EVN) -
Co mp a ny Secretary
----- End of picture text -----

Evan Elstein��Com ��ccounting and �inance��C��radDip�C�
Company Secretary and Vice President Information Technologyand Community Relations
Experience and expertise Mr Elstein the Company Secretary andVice President for Information Technology and Community Relations. �e is aChartered Accountant and a Chartered Secretary, and a member of the Institute of CharteredAccountants, the InstituteofChartered Secretaries and Administrators and the GovernanceInstitute of Australia. MrElstein has over 20 yearsexperience in senior financial, commercial and technology roles, where his responsibilitieshave included the roll out of ITprojects and services, business improvement initiativesand merger and acquisitionactivities. �e has held senior positions with IT consulting companies in Australia, and previously served as the Chief Financial Officer and Company Secretary of �artec Limited.Prior to that, he was employed
byDimension Data and GrantThornton in South Africa.

Evolution Mining Limited Annual Report 2016

Directors' Report (continued)

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Meetings o�directors

The nu mbers of meetings of the Company's board of Directors and of each board committee held during the ye ar ended 30 June 2016, and the numbers of meetings attended by each Director were:

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

Meetings o�committees
�o ard �udit Ris� �omination and
Management Remuneration
� � � � � � � �
Jacob (Jake) Klein � � - - - - - -
Lawrie Conway � � - - - - - -
James (Jim) Askew � � - - 2 2 4 4
Graham Freestone � � 5 5 1 1 - -
Colin (Co bb) Johnstone � � 5 5 2 2 - -
Thomas ( Tommy ) McKeith � � 5 5 - - 4 4
Nag uib Sawaris 2 6 - - - - - -
Seb astien de Montessus 6 6 - - - - 1 1
Vincent Ben oit 2 4 - - - - - -
- - - - - - - -
Amr El Adawy
John Rowe 5 5 - - 1 1 3 3
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A �Number of meetings attended

B �Number of meetings held during the time the Di rector held office or was a member of the committee during the year

S�are s und er option

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At the date of this report, the Company has 5,203,344 unissued share s und er optio n wit h exercise prices ranging between $1.4�2 a nd $ 2.412 and with expiry dates between 1�November 2016 and 25 Nov ember 2016.

The holders of these op tion s, which are unlisted, do not have the right, by virtue of the option, to p articipate in any share issue of the Co mpa ny.

Details of shares issued during and up to the date of this report as a result of exercise of unli ste d and l iste d options issued by the Company are:

Date	Details	�alance at	�um�er	�mount	�mount	�ptions	�alance at
		��uly ��	Converted	Paid �or	�npaid �or	E�pired	��une
			into	S�ares	S�ares		��
			S�ares
	�nlisted Options	�,649,�3�	-	-	-	-	�,649,�3�
06�10�2015	Expired	-	-	-	-	165,000	�,4�4,�3�
25�11�2015	Expired	-	-	-	-	1,546,394	5,93�,344
01�04�2016	Expired	-	-	-	-	555,000	5,3�3,344
13�05�2016	Exercised	-	90,000	165,600	-	-	5,293,344
16�05�2016	Exercised		90,000	165,600	-	-	5,203,344
��	�otal	��	��	��	-	��	��

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited�

�ntroduction

The Remu ner ation Report forms part of th e Di recto rs' R eport for the year ended 30 June 2016. This rep ort contains de tails of the remuneration pai d to the Dire ctor and Key Management Personn el (“KM P”) as well as the remu ner ation strategy and policies t hat were ap plicable in the 2016 financial year. The re munerati on philoso phy of t he Board is to ensure that the Co mpa ny r emunerates fairly and responsibl y. It i s desig ned to e nsure that the l eve l and composition of remu ner ation is competitive, reasonable and ap prop riate f or the results delivered and to at tract and retain appropriat ely exp erie nced Directors and employee s. Th e re muner ation strategies and practices in place have been desig ned to sup port this philosophy.

The remuneration rep ort is p res ented under the following s ecti ons:

(a) Director a nd Ke y M anagement Personnel De tails
(b) Summar y o f K ey Terms
(c) Remun er atio n Governance
(d) Indus try C on text
(e) Re mu ner at ion Strategy and Philoso phy

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(f) Re m un era tion Policy
(g) R e lati on ship between Remunera tio n a nd Performance
(h) Re m un eration of Directors and K ey Ma nagement Personnel
(i) E xe cu tive Service Agreement s

(i) Executive Service Agre	ments
(j) Share-based CompensationandPerformance Rights
(k) Director and Key Management Personnel Equity �oldings
�a�Directors and �ey ManagementPersonnel
E�ecutive and �on-e�ecutive	Directors
�ame	Position
Jacob (Jake) Klein	Executive Chairman
LawrieConway	Finance Director andChiefFinancial Officer
James(Jim) Askew	Non-Executive Director
Graham Freestone	Non-Executive Director
Colin (Cobb) Johnstone (i)	Lead Independent Director
Thomas (Tommy) McKeith	Non-Executive Director
Naguib Sawaris (ii)	Non-Executive Director
Sebastien de Montessus (ii)	Non-Executive Director
Vincent Benoit (iii)	Alternate Non-ExecutiveDirector for Naguib Sawaris
Amr ElAdawy (iii)	Alternate Non-ExecutiveDirector for Sebastiende Montessus
JohnRowe(iv)	Non-Executive Director

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(i) A ppointed as Lead Inde p en de nt Director effective 25 N ov e mber 2015.
(ii) Ap pointed as Non-Execu t ive D irector effective 1 Sept e mb e r 2015.
(iii) A p pointed as Alternate N o n-E x ecutive Director effecti ve 1 S eptember 2015.
(iv) Re s igned as Non-Executi ve Di r ector effective 31 Marc h 20 1 6.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�	Remuneration Report ��udited��continued�
*�a��irector��nd �e��n��e�ent �er�onne�(continued)***
�ey Management Personnel
�ame	Position
Aaron Colleran	Vice President BusinessDevelopment �Investor Relations
Paul Eagle (i)	Vice President People �Culture
Evan Elstein	Company Secretary �VicePresident InformationTechnology �Community Relations
Mark Le Messurier	Chief Operating Officer
Glen Masterman (ii)	Vice President Discovery �Chief Geologist
Roric Smith(iii)	Former Vice President Discovery�Chief Geologist

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(i) Appointed as Vice President People �Culture effective 1 July 2016, Previously G eneral Manager P eople �Culture. (ii) Appoint ed as Vice President Discovery �Chief Geologist effective 1 August 2016.

( iii) Changed positio n to part-time role effective 1 July 2016. Ceased as Vice President Discovery � Chie f Geologist e ffective 30 June 2016 .

��Summary o ��ey � erms

Below is a list of key terms with de finitions us ed with in the Director’s Report:

	�ey �erm	De�inition
	��e �oard o�Directors ��t�e �oard�	The Board of Directors, the list of persons under the relevant section above.
	or �t�e Directors��
	�ey Management Personnel	Senior executives have the authorityand responsibility for planning, directing and
	��MP��	controlling the activities of the Companyand are members of the senior leadership
		team. KMP for the financial year ended 30 June 2016are listed above.
	�otal �i�ed Remuneration ��R��	Total Fixed Remuneration comprises a base salary plus superannuation. This is
		currently positioned at the median (50th percentile) of theindustry benchmarking
		report.
	S�ort �erm �ncentive ��S��and	STI is the short-term incentive component of Total Remuneration.The STIusually
	S�ort �erm �ncentive Plan ��S��P��	comprises a cash payment that is only received by the employee if specifiedannual
		goalsare achieved. STIP refers to the plan under which the incentives are granted
		and paid.
	Long �erm �ncentive ��L��and	LTI is the long-term incentive component of Total Remuneration. The LTI comprises
	Long term �ncentive Plan ��L��P��	Options or Performance Rights, usually with a three year vesting period that are
		subject to specifiedvesting conditions established by the Board. Further details of
		the vesting conditionsassociated with the performance rights are detailed in the
		Vesting Conditions of Performance Rights section. Options and Performance Rights
		cannot be exercised unless the vesting conditions have been satisfied. LTIP refers to
		the plan under which LTIs are grantedand is aimed at retaining and incentivising
		KMP and senior managers to achieve business objectives that are aligned with
		shareholder interests, and are currentlyprovided via Performance Rights.
	�otal �nnual Remuneration	Total Fixed Remuneration plus STI.
	�otal Remuneration	Total Fixed Remuneration plus STI and LTI.
	Superannuation �uarantee C�arge	This is the employer contribution to an employee nominated superannuation fund
	��S�C��	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.

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�� �u��r� o�� e��er��(continued)

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�ey �erm	De�inition
Employees and Contractors �ption	Theplanpermits the Company, at the discretion of the Directors, to grant Options
Plan ��EC�P��	over unissued ordinary shares of the Companyto 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 S�are �ption and	The plan permits the Company,at the discretion of the Directors, to grant both
Per�ormance Rig�ts Plan ��ES�P��	Options and PerformanceRights overunissued ordinary shares of the Company to
	eligible Directors and members ofstaff as specified in the plan rules.
�otal S�are�olderReturn��SR��	TSR is the total returnon anordinary share to an investor arising fromgrowthin the
	share price plusanydividends received.
�ey Per�ormance �ndicators	A form of performance measurement for individual performance against a
��P�s��	pre-defined set ofgoals.
Peer �roup	20 comparatorgold mining companies selectedto be included in the Peer Group to
	measure theCompany’s performance withinthisselectedGroup.
�olume�eig�ted �verage S�are	A30dayvolume weighted average share pricequote on the Australian Stock
Price ��P��	Exchange(AS�). The VWAP is to beused whenassessing Company performance
	for TSR.
�ees	Feespaid to Executive and Non-ExecutiveDirectors for services as a Director,
	including sub-committee fees as applicable.

�c� R e m uneration �overnanc e

Th e Bo a rd of Directors (“the Bo a rd” ) has an established No mi nati o n and Remuneration Co mm ittee, consisting sol e ly o f Non-Executive Direct or s, w ith the delegated respo n sibi lit y to report on and make re commendations to the Bo a rd on the:

appropriateness of the r em u neration policies and s y ste m s, having regard to whe th er they are: � relevant to the Co m pany’s wider objective s an d strategies�
legal and defe n si b le�
in accordance wit h the human resource o b je ct ives of the Company�

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p erformance of the Ex e cu t ive Directors (on an an n ual basis) and ensure ther e is a process for determining k ey performance indic a tor s for the ensuing period � a nd
r e muneration of the Ex e cu t ive, Non-Executive Di re ct o rs and Key Manageme n t Personnel, in accordance wi th approved Board p o lici e s and processes.

�d�� n du s try Conte�t

After t wo ex tremely challenging y e ar s, the industry bega n to e xperience a recovery in 2015. Improved sentiment toward s t h e s ector, which has b ee n e videnced by rising s h ar e prices of Australian go ld miners, has been driven by two ma jo r t ailwinds.

Firstly, the d e clin e in the Australia n dol la r from 2011 highs of � S $1.10 to the current l evel of around �S$0.�5 has provided a na tu ra l hedge against th e � S dollar gold price. T he Au stralian dollar gold p rice is now back at close to record highs of a ro und A$1,�50 per ou n ce , with the recent ra lly i n t he �S$ gold price to �S$1,350, from its recent low of �S $1 ,0 40 per ounce.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

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Remuneration Report ��udited��continued�

�d� �ndu�tr��onte�t (continued)

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Secondly, costs in th e Australian g old industry have been reduced substantially in recent years, albeit back to what can be b est described as nor mal levels. Throughout the decade-long commodities bull run, which ended around the end of 2012, Aus tralian resources companie s experienced the highest cost inflation in the world relative to their global peers. The sharp sell-off in comm odities p rices in recent years has seen costs come down rapidly towards more normalised levels. With larg e reductions in the num ber of workers across the broader resources industry, competition for labour has eas ed. As a result, gold c ompan ies have benefited from reduced voluntary staff turnover and an increase in productivity.

Mining services companies are also now competing much more aggressi vely fo r business which is further redu cing the cost base of Australian gold miners.

The pendul um has swung back in favour of Australian gold miners. After many years of de liverin g new pr oject s above budget and behind schedule, companies are now delivering projects below budget and a head of sched ule.

The combin ation of the Australi an do llar and rapidly declining costs have meant many of the Australian mid-t ier gold producers are able to generate s trong cash margins in the current environment.

Since the mid-2013 it has bee n estim ated that a round 23% of Australia’s annual gold production has changed hands. Offshore companies have div ested many of th eir non -core Australian assets and a group of Australian mid-tier miners who have purchased these assets are being rewa rded by the market.

Over the last few years, from a remuneration perspec tive, w e have c ontin ued to take active steps in prudent finan cial m anagement, in particular with regards to our fixe d cost base, as well as moving performance awards more wei ghte d towards the variable elements of the remuneratio n mix .

The latest McDo nald ’s remuneration benchmarking report (April 2016 - � �com panies , 24 9 positions surveyed, made up of 3�,12�i ndi vidual employees) has the following key findings:

In November 2015 , th ose employed in the Resources industry were still recei ving the hig hes t Full-Time Adult Average Weekl y Or dinary Time Earnings reported in Australia at $2,523.00. Th e equi vale nt figure for the Construction industr y wa s $1,500.1��
The predominant rosters re main at the even roster (23%), however both the 5�2 and the ��6 roste rs cumulatively have increased wh en looking at rostering arrangements across all incumbents (2 1% an d 20% respectively), with those on a 2�1 roster being paid a premium for longer stints�
Despite the continuation of media cove rag e with regards to WA wide redundancies (B�P, Rio Ti nto , Sou th 32), WA continues to be pay a premium (a long with NT) to the eastern states, with unemployment i n W A jumping from 5.�% to 6.2% in 2015-2016�
Year-on-year actual annual remuneration percent age increases reduce significantly over the last 5 year s from 5% in 2011-2012 to 0.�% in 2015-2016�
Forecast salary increase budgets - including salary free� es - have seen upper quartile budgets reduce from 3% in 2014-2015, to 1.5% in 2016-201�.

We firmly believe we have the right company vision and strategy and our rem uneration strategy aims to ensure that we have the right mix of responding to the prevailing market conditions, rec ognising and rewarding the good work done over the last 12 months and ensuring that we have motivated and e nga ged employees to enable the successful delivery of short term goals and longer term strategic objectives.

�e�Remuneration Strategy and P�ilosop�y

The remuneration strategy was set in the year ended 30 June 2012 with the assistance of Me rcer Australia (“remuneration consultants”), which included the setting of short term (“STIP”) and long term in centive plans (“LTIP”) to align with objectives of the newly established entity. For the year ended 30 June 2 01 6, new STIP and LTIP measures were agreed and aligned to the key objectives for the Group.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�e� �e�uner� tion �tr�te��nd ��i�o�o��( cont inue d)

The Group ’s t arget remuneration philosop hies are:

�o tal �i�ed Remuneration ( TFR bein g ba se salary plus superannuation) po sitione d at the m edian (50th percentile) based on the in dus try b ench mark McDonald report (an indus try re cognise d gold a nd general mining remuneration be nch mark ing survey covering over �0 organi satio ns with in the industry)�
�otal �nnual Remun era tion (T FR plus STI) at the �5th perce ntile for hi gh pe rformers�and
�otal Remuneratio n (TF R pl us STIP plus LTI) at the �5th perc entile , with flexibility to provide up to the 90th percentile le ve ls fo r hi gh performers and critical ro les.

The overarching obj ect ives an d principles of the Group’s rem une ratio n strategy are that:

total remu ne ratio n f or each level of the workf orce is a ppr opriate and competitive�
total rem un era tio n comprises a competitive fix ed c om ponent and a si�eable “at risk” com ponent based on perform an ce hu rdles�
short t er m i nc entives are appropriate with hur dle s that are measureable, tra nspa rent and a chievable�

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ince nti ve pla ns are designed to moti vat e an d incentivise for high perform anc e an d de livery on org an isa tio nal objectives�
th e c or po rate long term incentive s a re f oc used on shareholder valu e�a nd
th e pri n ciples and integrity of th e r em un eration review process d eliv er fa ir a nd equitable outcomes.

�� Re m u ne ration Policy

��ec u tiv e �irector��nd �e�� n� �e � ent �er�onne��e�un er� tio n � o�ic�

The G ro u p remuneration policy h as b ee n designed to align Exe cu tiv e D irectors and Key Manage men t Personnel obje c tiv e s with shareholder and b usi ne ss objectives by providi n g a TF R component and offerin g s pecific “at risk” sho r t a n d long-term incentives b a se d on key performance ar ea s a ffe cting the Group’s overall pe rformance. The No m in a tion and Remuneration c om m ittee was formed to rev ie w t he specifics of Directors an d KMP remuneration an d ov e rsee all Group compen s ati o n changes and principle s . T he Board believes the rem un eration policy to be str a te g ic, appropriate and effe c tiv e in its ability to attract an d re ta in Executive Directors a nd KMP and to operate an d m a nage the Group effecti v ely .

Th e G r oup defines and applie s it s remuneration policy an d el e ments by considering th e overall business plan, ex te rn a l market conditions, k e y e m ployee value drivers, i n di vi dual employee perform an ce and industry be n ch m ark data.

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All K M P receive a remunerati o n p ackage in line with the o ve r all Group policy and ad d itionally takes into account fact o rs s uch as length of serv ic e a nd experience. The N o mi n ation and Remuneratio n Committee reviews exe c uti ve packages annually b y r e ference to the Group’ s performance, individual K M P performance and com p ar ab le information from i n du s try sectors and surve y s, a s well as other listed c o mpanies in similar industries.

The r e mu n eration elements off e re d by the Group includ e TF R , which consists of a b ase salary plus super an nu a tion and a variable o r “ at risk” remuneration c o m p onent provided throu g h short and long term incentiv e pl a ns. Every permane nt e m ployee has eligibility un d er the Group’s annua l and quarterly bonus STI program s .

Executive D ire ct ors and KMP rece iv e a superannuation gu ar an te e contribution (“SG C ”) required by law, of 9.5% and capped in li ne with the SGC m ax im um quarterly payme nt , a n d do not receive an y other retirement benefits. Some individ ua ls , h owever, may cho os e to sacrifice part of t he ir sa lary to increase pa y ments towards superannuatio n.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�� �e�uner�tion �o�ic�(continued)

��ecutive �irector� �nd �e�� n��e�ent �er�onne��e�uner�tion �o�ic�(continued)

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The at Ta rget achievem ent remuneration mix for Exe cutive Directors and KMP for the 2016 Financial year and prior year is as follows:

	�i�ed Remuneration	�i�ed Remuneration		�t Ris�- S��		�t Ris�- L��
	��	��	��	��	��	��
E�ecutive Directors
Jacob Klein	33.3%	33.3%	20.0%	20.0%	46.�%	46.�%
Lawrie Conway	4�.6%	4�.6%	23.�%	23.�%	2�.6%	2�.6%
�ey Management Personnel
Aaron Colleran	4�.6%	4�.6%	23.�%	23.�%	2�.6%	2�.6%
Paul Eagle	55.6%	55.6%	22.2%	22.2%	22.2%	22.2%
Evan Elstein	4�.6%	4�.6%	23.�%	23.�%	2�.6%	2�.6%
Mark Le Messurier	4�.6%	4�.6%	23.�%	23.�%	2�.6%	2�.6%
Roric Smith(i)	4�.6%	4�.6%	23.�%	23.�%	2�.6%	2�.6%

(i) Changed position to part-time r ole effe ctive 1 July 2016. Ceased as Vice President Discovery �Chief Geologist effective 30 June 2016.

Ther e were two key changes to the remuneration str ucture approved by th e Board that are aligned with shifting our r emun eration mix to having a larger variable componen t. Wit h this in mind, effective 1 July 201�, the STI target lev el wi ll shift from 50% to 60% and the LTI target level wil l shif t from 60 % to 100%.

Refer to the tabl e be low demonstrating the shift in the fixed and variable elem ents eff ectiv e from 1 July 2016.

��	��R	S��	L��	�otal	�t Ris��
�arget
Executive Chairman	33.3%	20.0%	46.�%	100.0%	66.�%
Executive Directors �KMP	3�.5%	23.0%	3�.5%	100.0%	61.5%
Ma�imum
Executive Chairman	25.0%	22.5%	52.5%	100.0%	�5.0%
Executive Directors �KMP	29.4%	26.5%	44.1%	100.0%	�0.6%

The following table shows key performance indica tors for the Group over the last five year:

	��	��	��	��	��
Statutory (loss)�profit for the year ($'000)	(24,349)	100,115	50,01�	(30�,421)	3�,313
�nderlying profit for the year ($'000)	226,��4	106,050	50,01�	44,443	63,395
EBITDA ($'000)	60�,551	2�2,656	20�,556	211,�25	1�9,25�
Basic earnings per share (cents)	(1.�5)	13.�1	�.06	(43.43)	�.10
Dividend payments ($'000)	29,062	14,2�1	14,1�3	-	-
Dividend payments (cents per share)	4	2	2	-	-
Shareprice($)	2.33	1.15	0.�	0.5�	1.46

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Evolution Mining Limited Annual Report 2016

Directors' Report (co ntinued)

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Remuneration Rep ort ��udited��continued�

�� �e�uner� tion �o�ic�(continued)

��ecutive �ir ector��nd �e��n��e� ent � er� onne ��e�uner�tion �o�ic�(continued)

�on� �� ecutive �irector��e�un er� tion �o�i c�

T he Board policy is to remune rate No n-Ex ecutive Directors at market rat es fo r com parabl e companies for time, co mmitment and responsibil itie s. T he Nomination and Remuneratio n Co mmitt ee de termines Non-Executive Directors fees and review s t his a nn ually, based on market practi ce, t heir duties and areas of responsibility. Independent external a dv ice i s so ught when required. The m axim um aggr egate amount of fees that can be paid to Non-Executive Dir ect ors i s s ubject to approval by shar ehol ders (cur rently $950,000 per annum). Fees for Non-Executive Dire cto rs are not linked to the performa nce of t he G roup and they currently do not parti cipate i n the Group’s STIP or LTI P.

�g�Relations �i p � et� een Remuneration and Pe r�or ma nce

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The relative pr op ort ions of actual remunerati on rec eive d by the Directors and KM P of the Group is calculated based on t he Re m uneration of Directors an d KM P ta ble presented on page ��. Th e At Ris k - LTI component comprises t he fa ir value of options and p erf orm an ce rights expensed during the ye ar. T he breakdown between fixed and p erf or mance related remuner ati on r ec eived for the current and prio r ye ar is as follows:


	�i�ed Remuneration			�t Ris�- S��		�t Ris�- L��
	��	��	��	��	��	��
Directors
Jacob Klein	35.6%	35.2%	31.0%	30.6%	33.4%	34.2%
LawrieConway	4�.2%	56.0%	43.1%	39.�%	9.�%	4.4%
JamesAskew	100.0%	100.0%		-	-	-
GrahamFreestone	100.0%	100.0%	-	-	-	-
ColinJohnstone	100.0%	100.0%	-	-	-	-
Thomas McKeith	100.0%	100.0%	-	-	-	-
JohnRowe (i)	100.0%	100.0%		-	-	-
Naguib Sawaris	100.0%	-	-	-	-	-
Sebastien de Montessus	100.0%	-	-	-	-	-
�ey Management Personnel
AaronColleran	3�.4%	44.6%	36.5%	32.1%	25.1%	23.3%
PaulEagle	4�.2%	55.0%	32.�%	30.9%	20.0%	14.1%
EvanElstein	42.�%	46.�%	31.4%	33.2%	25.�%	20.1%
MarkLeMessurier	33.�%	45.3%	45.0%	32.0%	21.3%	22.6%
RoricSmith(ii)	45.4%	45.6%	25.�%	31.5%	2�.�%	22.9%

(i) R esigned as Non-Execu ti ve D irector effective 31 Mar c h 2 0 16.

(ii) C h anged position to part- t ime role effective 1 July 201 6 . C e ased as Vice President D iscovery �Chief Geologist eff e ctive 30 June 2016.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�g� �e��tion��i��etween �e�uner�tion �nd �er�or��nce (continued)

��o rt �er��ncentive ��n�

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(i) ��e �rou��lan

The Group STIP applies to employees a t the level of Manager a nd abov e across the Group. The Group STIP is a cash bonus, up to a maximum percentage of TFR, based o n the employ ee job b and. It is assessed and paid annually conditional upon the achievement of key corporate objectiv es, which fo r the c urrent financial year were in the areas of safety, group cash contribution, production, costs an d a boa rd discretio nary e lement, as well as individual key performance indicators (“KPI"). The Group STIP is currently set at b etween 20 % and 60% of TFR for at Ta rget achievement, with a maximum of 1.5 x Target at 30%-90% of TFR fo r Stret ch achiev ement , dependi ng on the employee job band.

Details of Group STIP ’s and bonuses paid to the Directors and KMP are shown in the Remunerati on T able on page ��.

The Group's performa nce ag ainst the S TI Sco recard for FY16 is as follows:

S��P Scorecard �arget �� S��P �eig�ting Result ��ard	S��P Scorecard �arget �� S��P �eig�ting Result ��ard
�SE	Safety Indicator (TRIFR) 12.3 10% 9.� 15.00% Vehicle �Mobile Equipment(Incidents) 193 10% 102 15.00%
Pro�ita�ility	Group Cash Contribution ($ million) 110 15% 349 22.50% Group Total Mine Costs ($ million) 925 15% 900 1�.��% Production(ko�) ��5 15% �03 19.2�%
Discretionary	Discretionary 100% 35% 130% 45.50%
�otal	�� ��

The discretionary component w as a llocated a high weighting to provide the Board with more inp ut into the overall business performance and to addr ess f actors outside of the operational performance (safety, p rod uction, co sts and cash).

At the time of setting the FY16 STIP measur es, t he Board determined it would consider the following fa cto rs when awarding the score for this measure:

Overall business performance�
Successful integration of the Cowal and Mungari a sset s�
Discovery outcomes that contribute to the growth of th e co mpany�and
Continuing the development of the core culture and value s of the Group.

The Board approved a discretionary score of 130.00% for a number of rea sons, including:

Overall business performance on a Group basis met or exceeded set targ ets. A number of records have been achieved throughout the business this year. The weighted average res ult of the four (4) business performance measures in the STIP was 139.31%�
The integration of the Mungari and Cowal assets has gone to schedule and th ey are well embedded in the Group now. There is still work to be done to ensure the ongoing success of the i nte gration but the performance of these assets and their buy-in to the Evolution way of business has be en very pleasing�
The implementation of improvements in our planning area through the province plan s, more timely completion of the MROR program and higher quality Life of Mine plans have made us b etter positioned to be able to develop a longer term outlook for the business�
The successful completion of the Phoenix acquisition was an important step in creating a more prospective and longer term future for the Mungari asset�

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�g� �e��tion� �i� �etween �e�uner�tion �nd �er �or�� nce (continued)

��ort �er ��n centive ��n�(continued)

A s ustained focus on cash ma nag eme nt a nd debt has enabled us to capture all the benefits o f higher production, lower costs, an d hi gher pric es to reduce our debt position fr om $6 0�milli on upon closing the Cowal transaction to $2� 5 m illio n at the end of June 2016�
In terms of Discovery not all outc omes were achieved, but goo d pro gress was made in Tennant Creek JV, Puhipuhi, and brow nfie lds pro grams in the portfolio�and
Work has been o ng oing on the core culture and values of t he co mpa ny. The outcomes of the engagement survey were ve ry posi tive with �1% response rate, 9 4% over all s atisfaction and a �6% engagement score. The successf ul Act Lik e Owner program and the em ploy ee s hare offer (92% acceptance rate) are other examples o f c onti nu ed development of the cor e c ultur e in the business.

(ii) ��e �er�or �a nce � onu�

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The Perform an ce Bo nus is a cash award whi ch appl ies to all employees at Operati ng S ites who a re not eligible for the Grou p ST IP . It is determined on a qu ar terly ba sis based on the achieve ment of e ach Operating Site’s KPIs. The P erf orm ance Bonus is currentl y s et a t 1 0% of TFR for at target ac hiev eme nt, with a maximum of 20% of TFR fo r stre tc h achievement.

(iii) ��e � n nu al �er�or�ance �onu�

The A nn u al Performance Bonus ap pli es t o corporate employees an d thos e e mployees who, by exception, are not includ e d i n a Group STIP or Perfor m an ce Bonus Plan. The Annu al P erf orm ance Bonus is targeted at u p to a maxi m u m of 20% for stretch achie v em en t (target of 10%), as a ca sh b on us on TFR, paid annually a gai nst the outc o me s of individual KPIs.

�o n��e r��ncentive ��n�

Th e C o mpany has two long ter m in c entive plans currently i n e xi ste nce, specifically the Em plo yees and Co n tra c tors Option Plan (“EC OP ”) a nd the Employee Shar e Op ti on and Performance Rig hts Plan (“ESOP”), to ge th e r and separately also r e fer re d to as the Long Term I nc en tive Plan (“LTIP”). The E C OP is now effectively do r ma n t with no new options t o b e issued under this plan.

(i) � � �lo�ee�and Contract o r� � �tion �lan (��C��)

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Th e E C OP was established a n d a pproved at the Annual G e n eral Meeting on 2�Nov e mber 200�. The plan per m it s the Company, at the d isc r etion of the Directors, to g ra nt Options over unissu e d ordinary shares of the Co m pa n y to eligible Directors , m e mbers of staff and con t ra ct ors as specified in the p lan rules.

��ti o n� u nder �C��

As at 3 0 J une 2016, there wer e 5 2, 954 Options outstan di ng ( 30 June 2015: 4��,65 1 ), all of which were on issue to Dir ec to rs .

The mo v e me nt in the Options u nd e r t his plan is summari se d in the table below:

	�� �� �um�er �um�er 4��,651 4��,651 - - - - (435,69�) - �� ��

Outstandingbalance at the beginningofthe year Issued duringthe period Exercised during theperiod Expired duringthe period �utstanding �alance at t�e end o�t�eyear

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�g� �e��tion��i��etween �e�uner�tion �nd �er�or��nce (continued)

�on��er��ncentiv e ��n�(con tinued)

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(ii) ��e ��lo�ee ��are ��tion and �er�or�anc e �ig�t � lan (��)

The ESOP was established and approve d at the A nnual General Meetin g on 23 November 2010, and re-approved at the Annual General Meeting on 26 Novemb er 2014. The plan pe rmits the Company, at the discretion of the Directors, to grant both Options and Perfor mance R ights over u nissue d ordinary shares of the Company to eligible Directors and members of staff as specified in t he plan rules.

�nde r the ESOP, the Options and Performance Rights, issued for nil considerati on, ar e granted i n acc ordance with p erforman ce guidelines established by the Board. In exercising their discretion un der th e rules, th e Dir ectors will take into a ccount matters such as the position of the eligible person, the role they play in the G roup, the nature or terms of thei r empl oyment or contract and the contribution they make to the Group as a whol e. The Options a nd Perf ormance Ri ghts ar e issued for a specified period and each Option or Performance Ri ght is convertible into o ne ord inary share. The e xercise price of the Options, determined in accordance with the r ules of the plan, is based on th e mark et price of a share on grant date or another specified date after grant close. All Options and Performance Rig hts exp ire on the earlier of their expiry date or termination of the employee’s employment subject to Director discr etion. Options an d Perf ormance Rights do not vest until a specified period after granting and their exercise is conditio nal on the achiev emen t of certain performance hurdles that are aligned with shareholder interests.

Ther e are no voting or dividend rights attached to the Optio ns or Perform ance Rights. Voting rights will attach to the ordin ary s hares when the Options have been exercised or th e Per formanc e Rig hts vested. �nvested Options and Performa nce Rights cannot be transferred and will not be quoted on th e AS�.

��tion�under ��

During the year 1�0,000 Opt ions were exercised at an exercise price of $1.�4 per o ption , 1,�30 ,69� Options expired and there were 5,15 0,39 0 Options outstanding at 30 June 2016 (30 June 2015: �,16 1,0��) , of which 5,060,390 were issued to Direct ors and KMP (30 June 2015: 5,562,436).

The movement in the Options under t his plan is summarised in the table below:

	�� ��
	�um�er �um�er
Outstanding balance at the beginning of the year Issued during the period Exercised during the period Expired during the period �utstanding �alance at t�e end o�t�eyear	�,161,0�� �,�95,0�� - - (1�0,000) - (1,�30,69�) (1,�34,000)
	�� ��

�er�or�ance �ig�t�under ��

The ESOP approved by shareholders on 23 November 2010 provided for the iss uance of Performance Rights to Executive Directors and eligible employees. This LTIP was introduced for emplo yee s at the level of Manager and above, effective from 1 July 2011 and provides equity based “at risk” remuneration, up to maximum percentages, based on, and in addition to, each eligible employee’s TFR. These incentives are aim ed a t retaining and incentivising KMP and senior managers on a basis that is aligned with shareholder inter est s, and are provided via Performance Rights.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�g� �e��tion� �i� �etween �e�uner�tion �nd �er �or�� nce (continued)

�on��er ��n centive ��n�(continued)

The m ove ment in Performance Right s u nder this plan is summarised in the table bel ow:

	�� ��
	�um�er �um�er
Outstanding balance at the beginning of the year Performance rights granted during the period Retention rights grantedduringthe period (i) Vested during theperiod Lapsed during the period Forfeited duringthe year �utstanding �alance at t�e end o�t�eyear	21,3�2,111 14,316,��9 �,141,26� 10,�04,3�0 3,�50,000 - (2,262,954) (�24,�09) (923,22�) (522,�66) (65�,3�6) (2,491,5�3)
	�� ��

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(i) The G roup e ntered into a Retention Agre em ent wit h the Executive Chairman durin g the year. Pur suant to this agr ee me nt 3,�50,000 Retention Rights w ill be iss ued on the terms and conditio ns o f the Com pany's current Employee S ha re Op tion and Performance Righ ts Plan, s ubject to shareholder approval at the Com pany's next shareholder me eti ng . The Retention Rights will be issu ed for nil consideration and will on ly ve st th ree years from the date of the A gre e ment if the Executive Chair ma n is an employee of the Company at that ti me .

The P er for m ance rights awarded du rin g t he 2013 financial year wer e t este d a s at 30 June 2015 and vested on 2 Septe m b er 2015. 2,262,954 Perfor m anc e Rights met the perform anc e mea sures and vested whilst 923, 22� Perfo r ma n ce Rights did not meet t h e p er formance measures an d l aps ed . This equates to a vesting r ate of �1.0 2 % a nd a lapsing rate of 2�. 9� %.

The Pe rf ormance Rights award ed d ur ing the 2014 financial y ea r w er e tested as at 30 June 20 16 . As at the date of t h is re port, all �,961,146 Perf o rm a nce Rights eligible for t es ting h ave met the performance m easures and have be e n a p proved by the Board to v es t . This equates to a vesti n g r at e of 100%.

Th e re w ere 10,�04,3�0 Perfor m a nc e Rights granted durin g the 2 015 financial year, with 9, �39,�12 outstanding aft e r a c counting for forfeitures , w hi ch will be subject to pe rf or ma nce testing as at 30 Jun e 201�.

Th e re w ere �,141,26�Perfor m an c e Rights granted durin g th e 2016 financial year, wit h �,9��,�53 outstanding aft e r a c counting for forfeiture s , w h ich will be subject to p e rfo rm ance testing as at 30 J u ne 201�. Additionally, the r e w ere 3,�50,000 Retenti o n R ights granted during th e 2 0 16 financial year to the E xecutive Chairman, subject to sh ar e holder approval, whic h w i ll vest subject to the E xe cu t ive Chairman being an e mployee of the Company at 16 D ec e mber 201�.

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The o ut st anding balance of e a ch g rant of Performance R igh t s is summarised in the table below:

		�� �� �� �� �otal �um�er �um�er �um�er �um�er �um�er 4,943,�� 10,49�,40� 10,�04,3�0 �,141,26� 34,3��,�23 - - - 3,�50,000 3,�50,000 (2,262,954) - - - (2,262,954) (923,229) - - - (923,229) (1,�5�,594) (2,53�,262) (1,064,55�) (162,415) (5,521,929) - �� �� �� ��

	Performance rights granted Retention rights granted Vested Lapsed Forfeited �utstanding �alance

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�g� �e��tion��i��etween �e�uner�tion �nd �er�or��nce (continued)
�on��er��ncentiv e ��n�(con tinued)

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�e�ting C ondition�o�� er�or�ance �ig�t�

Performance Rights issued unde r the LTIP generally have a term o f up to 3 years and vest based on the achievement of specific targets.

Refer below for a summary of the specific targets that Perfo rmance Rights will b e teste d against:

	Per�ormance �arget	Description �eig�ting �or �� grants �eig�ting �or ��and ��grants
	(i) TSR Performance (ii) Absolute TSR performance (iii) Growth in Earnings per share (iv) Increase in ore reservesper share	TheGroup’s relative total shareholder return (TSR) measuredagainst the TSR for a peer Company of 20 comparator goldmining companies (Peer Group) 33.33% 25% The Group’s absolute TSRreturn 33.33% 25% Growth in the Group’s Earnings pershare 33.33% 25% Increasing the ore reserves per share over a 3year period - 25%

The performance testing d ate (hereinafter referred to as the “Relevant Date”) for the v ario us gra nts a re summarised below:

Year ended 30 June 2014: Perfo rmance Rights that were granted in the financial year e nde d 30 J une 2014 were tested as at 30 June 201 6. The relevant Peer Group for the Performance Rights iss ued i n th e financial year ended 30 June 2014 is a s follows:

Alacer Gold Corp Dundee Precious Met als Inc New Gold Inc Resolute Mining Lt d Alamos Gold Inc Endeavour Mining Corpo ratio n Northern Star Resources Semafo Inc Aurico Gold Inc Golden Star Resources Ltd Oceana Gold Corp Silver Lake Resources Beadell Resources Limited Kingsgate Consolidated Ltd P erseus Mining Ltd St Barbara Ltd Centamin Egypt Inc Medusa Mining Ltd Regi s Resources NL Troy Resources

Year ended 30 June 2015: Performance Rights that were gr ante d in the financial year ended 30 June 2015 will be tested as at 30 June 201�. The relevant Peer Grou p fo r the Performance Rights issued in the financial year ended 30 June 2015 is as follows:

Alacer Gold Corp Centamin Egypt Inc Medusa Mining Ltd Regis Resources NL Alamos Gold Inc Dundee Precious Metals Inc New Gold Inc Resolute Mining Ltd Argonaut Gold Inc Endeavour Mining Corporation Northern Star Resources N L Semafo Inc Aurico Gold Inc Golden Star Resources Ltd Oceana Gold Corp S ilver Lake Resources Beadell Resources Limited Kingsgate Consolidated Ltd Perseus Mining Ltd Tro y Resources

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�g� �e��tion� �i� �etween �e�uner�tion �nd �er �or�� nce (continued)
�on��er ��n centive ��n�(continued)
Ye ar ended 30 June 2016: Pe rfor man ce R ights that were granted in the finan cial ye ar ended 30 June 2016 will be tested as at 30 Ju ne 2 01� . The relevant Peer Group for the Perfo rmance Rights issued in the financial year ended 30 Jun e 20 16 is as follows:

Acacia Mining PLC	CentaminEgypt Inc	IAMGOLD Corp	Oceana Gold Corp
Alacer Gold Corp	Centerra Gold	Kingsgate Consolidated Ltd	Perseus Mining Ltd
Alamos Gold Inc	Detour Gold Corp	Medusa Mining Ltd	Regis Resources NL
Argonaut Gold Inc	Dundee Precious Metals Inc	New GoldInc	Resolute Mining Ltd
B2Gold Corp	Endeavour MiningCorporation	Northern Star Resources NL	Semafo Inc

Year end ed 30 Ju ne 201�: Performance Ri ght s tha t ar e to be granted in the financial year e nded 3 0 June 201�wil l b e t est ed as at 30 June 2019. T he rele van t Peer Group for Performance Rig hts th at will b e issued in th e f inancial year ended 30 J une 201 � is as follows:

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Acacia MiningPLC	Centerra Gold	Gold Fields	Regis Resources NL
Alacer GoldCorp	Detour GoldCorp	IAMGOLD Corp	Resolute Mining Ltd
AlamosGold Inc	Dundee PreciousMetals Inc	New Gold Inc	Saracen
B2GoldCorp	EndeavourMining Corporation	Northern StarResources NL	Semafo Inc
CentaminEgypt Inc	EldoradoGold	Oceana GoldCorp	St Barbara

(i) � � � �e r�or�ance

A pr op or tio n of Performance Righ ts wil l b e tested against the Gr ou p’s TS R performance relative to t he Peer Gro up o n the Relevant Date.

The Gr o up’s TSR will be based o n t he percentage by which it s 30- d ay volume weighted avera ge share price qu ot ed o n AS�(“VWAP”) at th e clo s e of trade on the Relev an t D at e (plus the value of any di vi dends paid during the pe rf ormance period) has in c re as ed over the Group’s ap p lica b le 30-day VWAP at the cl os e of trade, relating to th e g rant of Performance Ri g hts for that period.

Th e T S R for the Peer Group w ill be based on the percent a ge b y which the Peer Group’ s 30-day VWAP at the clo s e o f trade on the Relevan t Da t e (plus the value of an y divi d ends paid during the pe rf ormance period) has inc r ea s ed over that Group’s a p pli c able 30-day VWAP at th e c lose of trade, relating to th e grant of Performance Ri g hts for that period.

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Th e B oa rd has the discretion t o a d just the composition a n d n umber of the companie s in the Peer Group to take into ac co unt events including, bu t not limited to, takeove r s, m ergers and de-merger s that might occur during the perf o rm a nce period.

The pr op o rtion of the TSR Per fo r m ance Rights that will ve st w ill be based on the R e levant Date TSR as comp a re d to the Peer Group T S R s. The proportion of th e T S R Performance Rights that will vest will be deter mi ne d as follows:

Levelo�per�ormance	Evolution �SR per�ormance as	�o��SRPer�ormance Rig�ts vesting
ac�ieved	compared to t�e Peer �roup �SR
��res�old	Top 50thpercentile	33%
	Above thetop50th percentile andbelow	Straight-line pro-rata between 33% and
	the top25thpercentile	66%
�arget	Top 25th percentile	66%
	Above the top 25thpercentile and below	Straight-line pro-ratabetween 66% and
	the top10thpercentile	100%
E�ceptional	Top10thpercentileor above	100%

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�g� �e��tion��i��etween �e�uner�tion �nd �er�or��nce (continued)
�on��er��ncentiv e ��n�(con tinued)

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(ii) ��ol ute ��e r�or�ance

A proportion of Performance Rig hts granted during the yea rs ended 30 June 2014, 30 June 2015, 30 June 2016 and those to be granted during the financial year end ed 30 June 20 1�, will be tested against the Group’s Absolute TSR performance relative to the 30 days V WAP (Abs olute TSR P erform ance Rights) as at 30 June 2016, 30 June 201�, 30 June 201�and 30 June 2019 respecti vely, me asured as t he cum ulative annual TSR over the three year performance period.

Level o�per�ormance ac�ieved	Evolution ��solute �SR per�ormance �o��solute �SR Per�ormance Rig�ts vesting
��res�old	10% Per Annum Return 33% Above 10% Per Annum Return and below 15% PerAnnum Return Straight-line pro-rata between 33% and 66%
�arget	15%Return PerAnnum 66% Above 15% Per Annum Returnand below 20% Per Annum Return Straight-line pro-rata between 66% and 100%
E�ceptional	Above 20% Per Annum Return 100%

(iii) �r owt� in �arning��er ��are

A proportion o f Pe rformance Rights granted during the year ended 30 June 2014, 3 0 Ju ne 2015, 30 June 2016 and those to be g rant ed during the year ended 30 June 201�,will be tested aga inst the Gro up’s growth in Earnings Per Share, calc ulated by excluding any Non-Recurring Items, and me asur ed as t he c umulative annual growth rate over the thr ee y ear performance period.

Level o�per�ormance	Evolution Earnings per s�are	�o�Earnings Per S�are Per�ormance
ac�ieved	per�ormance	Rig�ts vesting
��res�old	�% Per Annum Growth in EPS	33%
	Above �% PerAnnum Growth in EPS	Straight-line pro-rata between33%and
	and below 11% Per Annum Growth in	66%
	EPS
�arget	11% Per Annum Growth in EPS	66%
	Above 11% Per Annum GrowthinEPS	Straight-line pro-rata between 66% and
	and below 15% Per Annum Growthin	100%
	EPS
E�ceptional	Above 15% Per Annum Growth in EPS	100%

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�g� �e��tion� �i� �etween �e�uner�tion �nd �er �or�� nce (continued)
�on��er ��n centive ��n�(continued)

(i�) �r ow t�in �re �e�er�e��er ��a re

A pro portion of Performance Rig hts gra nted during the year ended 30 June 2015 , 30 Ju ne 201 6 and those to be gra nted during the year ende d 3 0 Ju ne 2 01�, will be tested against the Gro up’s a bility to grow its Ore Reserves, c alculated by measuring th e g rowt h o ver the three year performan ce pe riod by co mparing the baseline measure of the Ore Reserves as a t 3 1 D ece mber 2013, 31 December 2 014 and 3 1 De cember 2015 (“Baseline Ore Reserves”) to the Ore Re serv es as at 31 December 2016, 3 1 D ece mber 201�and 31 December 201�on a per share basis, with tes tin g to be performed at 30 June 201 �, 3 0 Ju ne 2 01�and 30 June 2019 respectively.

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Level o�per�ormance	Evolution �ro�t�in�re Reserves per	�o��ro�t�in �re Reserves
ac�ieved	s�are per�ormance	Per�ormance Rig�ts vesting
��res�old	�0% of BaselineOre Reserves	33%
	Above �0% of Baseline Ore Reserves	Straight-line pro-rata between 33% and
	but below 100% Baseline Ore Reserves	66%
�arget	100% BaselineOre Reserves	66%
	Above 100%ofBaseline Ore Reserves	Straight-line pro-rata between 66% and
	and below 120% of Baseline Ore	100%
	Reserves
E�ceptional	120%andabove of Baseline Ore	100%
	Reserves

�er �o r �a nce �ig�t��aluation � or � �� rant�

Th e P er formance Rights have f o ur p erformance component s : tw o market-based TSR condi tio ns, being a relative an d an absolute TSR condition , an d two non-market based c on di tions, being the EPS gro wt h condition, the inc r ea s ed ore reserve conditio n in a ddition to continued e mp lo ym ent at the vesting date.

Th e fa i r value of the TSR Perf o rm a nce Rights (market-ba s ed c ondition) was estimated a t the date of grant using M o nte Carlo simulation, takin g int o account the terms an d co n ditions upon which the a w ards were granted.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�g� �e��tion��i��etween �e�uner�tion �nd �er�or��nce (continued)

�on��er��ncentiv e ��n�(con tinued)

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The follo wing tables list the model inputs fo r the Perf ormance Rights granted during the financial year, the fair value of Performance Ri ghts at gran t date and numb er of Per formance Rights granted during the year:

	�SR	��solute �SR	�ro�t�in EPS	�ro�t�in �re
				Reserves
Septem�er ��rig�ts issue
Number of rights issued	1,451,192	1,451,192	1,451,192	1,451,192
Spot price ($)	1.155	1.155	1.155	1.155
Risk-free rate (%)	1.�3	1.�3	1.�3	1.�3
Term (years)	2.�	2.�	2.�	2.�
Volatility(%)	60-65	60-65	60-65	60-65
Fair value at grant date ($)	0.620	0.��5	1.100	1.100
�ovem�er ��rig�ts issue
Number of rights issued	433,10�	433,10�	433,10�	433,10�
Spot price ($)	1.255	1.255	1.255	1.255
Risk-free rate (%)	2.09	2.09	2.09	2.09
Term (years)	2.5	2.5	2.5	2.5
Volatility (%)	60-65	60-65	60-65	60-65
Fairvalueat grant date ($)	0.�05	0.990	1.210	1.210
�e�ruary ��rig�ts issue
Number of rights issued	151,01�	151,01�	151,01�	151,01�
Spot price ($)	1.525	1.525	1.525	1.525
Risk-free rate (%)	1.�5	1.�5	1.�5	1.�5
Term (years)	2.4	2.4	2.4	2.4
Volatility (%)	55-65	55-65	55-65	55-65
Fair value at grant date ($)	1.035	1.010	1.460	1.460
For details of Director and KMP	interests in options at year end, refer to		page 94.

Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

��Remunera tion o�Directors and �ey Mana gem ent Perso nnel

The followi ng tables show details of the re mun erati on re ceived by the Directors and the KMP of the Gro up for the current and previous financial year.

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	�otal �i�ed	�otal �i�ed	Post	S��	L��
	Remuneration		Employment
			�ene�its
��	�ase	�on-	Super-	�onus	�mortised	�t�er	�otal
	Salary	Monetary	annuation		�alue �iv�	�ene�its
	and �ees	�ene�its				�v�
		�iii�
Directors
Jacob Klein	9�4,492	-	19,30�	6�6,000	942,4�4	200,000	2,�22,2�4
Lawrie Conway	525,692	-	19,30�	31�,000	112,406	1�0,000	1,154,406
James Askew	110,000	-	-	-	-	-	110,000
Graham Freestone	11�,6�3	-	11,051	-	-	-	12�,�24
Colin Johnstone	119,43�	-	-	-	-	-	119,43�
ThomasMcKeith	111,02�	-	10,54�	-	-	-	121,5�5
John Rowe(i)	�4,3�5	-	-	-	-	-	�4,3�5
NaguibSawaris	�9,16�	-	-	-	-	-	�9,16�
Sebastiende Montessus	�1,042	-	-	-	-	-	�1,042
�ey Management Personnel
AaronColleran	39�,642	-	19,30�	2�2,000	2�3,159	125,000	1,0��,109
PaulEagle	325,692	-	19,30�	1�3,000	135,601	40,000	�03,601
EvanElstein	350,962	-	19,30�	232,000	223,223	40,000	�65,493
Mark LeMessurier	431,21�	10,10�	19,30�	29�,000	290,5�4	31�,631	1,366,�4�
RoricSmith(ii)	405,692	10,10�	19,30�	24�,000	2�5,�65	-	95�,9�3
	��	��	��	��	��	��	��

(i) Resigned as Non-Execu t ive D irector effective 31 March 2 01 6. (ii) Changed position to par t -tim e role effective 1 July 2016 . Ce a sed as Vice President Disc ov ery �Chief Geologist effective 30 June 2016.

(iii) Non-monetary benefits r elat e to car parking benefits p ro vid e d by the Company.

(iv) Amortised value of sha re b a sed rights comprises the f a ir v a lue of options and perform a nce rights expensed during the year.

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(v) Other benefits include a on e -off bonus awarded by th e bo a rd for overall business pe rf ormance and transformation. Also included are reloc at ion c osts for Mark Le Messu ri er.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�	Remuneration Report ��udited��continued�	Remuneration Report ��udited��continued�
*���e�uner�tion o��irector��nd �e�***		*��n��e�ent �er�onne�(continued)*
	�otal �i�ed		Post	S��	L��
	Remuneration		Employment
			�ene�its
�� �ase		�on-	Super-	�onus	�mortised	�t�er	�otal
Salary		Monetary	annuation		�alue �iv�	�ene�its
and �ees		�ene�its				�v�
		�iii�
Directors
JacobKlein	9�5,01�	-	1�,��3	�00,000	��0,403	150,000	2,643,203
LawrieConway(i)	536,601	-	1�,102	325,000	35,�39	320,240	1,235,6�2
James Askew	111,��5	-	-	-	-	-	111,��5
Graham Freestone (ii)	124,155	-	10,�45	-	-	-	135,000
Colin Johnstone	111,��5	-	-	-	-	-	111,��5
Thomas McKeith (ii)	109,��6	-	9,4�9	-	-	-	119,3�5
John Rowe	112,500	-	-	-	-	-	112,500
�ey Management Personnel
Aaron Colleran	39�,16�	-	1�,��3	300,000	21�,2�0	125,000	1,059,220
Paul Eagle	301,21�	-	1�,��3	1�0,000	�2,133	-	5�2,133
Evan Elstein	326,21�	-	1�,��3	245,000	14�,169	-	�3�,169
Mark Le Messurier	431,21�	10,10�	1�,��3	325,000	229,�0�	�5,000	1,0�9,�16
Roric Smith	406,21�	10,10�	1�,��3	300,000	21�,541	-	953,649
�	��	��	��	��	��	��	��

(i) Appointed a s Fin ance Director and Chief Financial Officer on 1 August 2014, prev iously a Non- Executive Director. (ii) Included in Base Sa lary and Fees is an amount for work performed on the Entitlem ent Offer Du e D iligence Committee.

(iii) Non-monetary benefits rela te to car parking benefits provided by the Company.

(iv) Amortised value of share b ased rights comprises the fair value of options and performance righ ts e xpense d d uring the year.

(v) Other benefits include a one-off bo nus awarded by the board for overall business performance and tr ansf ormati on. Also included are relocation costs for L awr ie Conway.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�� e�uner� tion o��irector��nd �e��n� �e� ent �er�o nne�(continued)

The followi ng tables show details of the S TIP g rant ed by the Directors and the KMP of the Grou p for the current and pre viou s financial year.

��	�otal S��P	�o�Ma�imum	�o�Ma�imum
	�ranted ��	Entitlement	Entitlement
		�ranted	�or�eited
Directors
Jacob Klein	6�6,000	93.4%	6.6%
Lawrie Conway	31�,000	93.9%	6.1%
�ey Management Personnel
Aaron Colleran	2�2,000	��.0%	13.0%
Paul Eagle	1�3,000	��.4%	11.6%
Evan Elstein	232,000	�3.6%	16.4%
Mark Le Messurier	29�,000	��.0%	12.0%
Roric Smith (i)	24�,000	��.5%	22.5%

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(i) Ch an ge d position to part-time role eff ecti ve 1 July 2016. Ceased as Vice Pr eside nt D iscovery �Chief Geologist e ffe cti ve 30 June 2016.

��	�otal S��P	�o�Ma�imum	�o�Ma�imum
	�ranted ��	Entitlement	Entitlement
		�ranted	�or�eited
Directors
JacobKlein	�00,000	96.�%	3.2%
LawrieConway (i)	325,000	96.3%	3.�%
�ey Management Personnel
AaronColleran	300,000	95.9%	4.1%
PaulEagle	1�0,000	93.�%	6.2%
Evan Elstein	245,000	94.�%	5.3%
Mark Le Messurier	325,000	96.3%	3.�%
Roric Smith	300,000	94.1%	5.9%

(i) Appointed as Finance D irec t or and Chief Financial Of fi cer o n 1 August 2014, previou s ly a Non-Executive Director.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

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Remuneration Report ��udited��continued�

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�i� E�ecutive Service �greements

Remuneration and ot her key terms of employment for the Executive Directors and KMP are formalised in the Executive Ser vices Agreements ta ble below:

	�ame �erm o� agreementand noticeperiod �otal �i�ed Remuneration �otice Period �y E�ecutive �otice period �y Evolution �ermination payments �ii�
	E�isting E�ecutive Directors and �ey Management Personnel
	Jacob Klein Executive Chairman Open �00,000 200,000 fixed Director's Fees 6 months 6 months 12 month Total Fixed Remuneration AaronColleran Vice PresidentBusiness Development and InvestorRelations Open 415,955 3 months 6 months 6 months Total Fixed Remuneration Lawrie Conway Finance Directorand Chief Financial Officer Open 450,000 95,000 fixed Director's Fees 3 months 6 months 6 months Total Fixed Remuneration Paul Eagle Vice President People and Culture Open 355,000 3 months 6 months 6 months Total Fixed Remuneration Evan Elstein Company Secretary and VicePresident InformationTechnology and Community Relations Open 3�0,000 3 months 6 months 6 months Total Fixed Remuneration Mark Le Messurier Chief Operating Officer Open 450,000 3 months 6 months 6 months Total Fixed Remuneration Glen Masterman (i) Vice President Discovery and Chief Geologist Open 415,000 3 months 6 months 6 months Total Fixed Remuneration

�ame
�erm o�
agreementand
noticeperiod
�otal �i�ed
Remuneration
�otice Period �y
E�ecutive
�otice period �y
Evolution
�ermination
payments �ii�

E�isting E�ecutive Directors and �ey Management Personnel

Jacob Klein
Executive Chairman
Open
�00,000
200,000 fixed
Director's Fees
6 months
6 months
12 month
Total Fixed
Remuneration
AaronColleran
Vice PresidentBusiness
Development and
InvestorRelations
Open
415,955
3 months
6 months
6 months
Total Fixed
Remuneration
Lawrie Conway
Finance Directorand
Chief Financial Officer
Open
450,000
95,000 fixed
Director's Fees
3 months
6 months
6 months
Total Fixed
Remuneration
Paul Eagle
Vice President People
and Culture
Open
355,000
3 months
6 months
6 months
Total Fixed
Remuneration
Evan Elstein
Company Secretary and
VicePresident
InformationTechnology
and Community Relations
Open
3�0,000
3 months
6 months
6 months
Total Fixed
Remuneration
Mark Le Messurier
Chief Operating Officer
Open
450,000
3 months
6 months
6 months
Total Fixed
Remuneration
Glen Masterman (i)
Vice President Discovery
and Chief Geologist
Open
415,000
3 months
6 months
6 months
Total Fixed
Remuneration

(i) Appointed as Vice President Disc overy �Chief Geologist effective 1 August 2016.

(ii) For a change of control event, th e ter mination payment is 12 months TFR for Executive Directors an d K MP

Fixed salary, inclusive of the required super ann uation contribution amount, is reviewed annually by th e Bo ard following the end of the financial year. The amo unts set out above are the Executive Directors and KMP t ota l fixed remuneration as at the date of this report.

�� S�are-�ased Compensation and Per�ormance Rig �ts

��tion�

The following share Options granted to Directors and KMP as remun erat ion lapsed before the end of the year. No grants of share-based payment compensation to Directors and KMP wer e ex ercised during the financial year. No share Options were granted to Directors and KMP during the year.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�� ��re�� ed �o��en��tion �nd �er�or� �nce �i� �t�(c ontinued)

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	��arded	�rant Date	E�piry	�air �alue	�air �alue	E�ercise	�ested
	�um�er		Date	per ��ard	o��ptions	Price
					at �rant
					Date
�ey Management	Personnel
Jim Askew	53,902	1��10�2011	25�11�2015	$0.�24	44,415	$1.39�	100%
Jim Askew	5�2	1��10�2011	25�11�2015	$0.�21	420	$1.�0�	100%
Jim Askew	200,042	1��10�2011	25�11�2015	$0.�15	143,030	$1.�2�	100%
Jim Askew	46,��6	1��10�2011	25�11�2015	$0.�10	33,21�	$1.�4�	100%
Jim Askew	1,405	1��10�2011	25�11�2015	$0.699	9�2	$1.��6	100%
Jim Askew	5�,�66	1��10�2011	25�11�2015	$0.693	40,�25	$1.�05	100%
Jim Askew	42,09�	1��10�2011	25�11�2015	$0.6��	2�,500	$1.�62	100%
Jim Askew	32,11�	1��10�2011	25�11�2015	$0.641	20,5��	$1.99�	100%
Mark LeMessurier	450,000	1��10�2011	01�04�2016	$0.�23	10�,450	$1.��3	100%
Evan Elstein	105,000	1��10�2011	01�04�2016	$0.�23	25,305	$1.��3	100%

(i) �er �o r� an ce rig�t�

The fol lo wi ng Performance Rights w er e g ra nted to Executive Direct ors an d K MP as remuneration during the year.

�ame	�rant date	Ma��o�o�	�alue o�	�alue o�
		Per�ormance	Per�ormance
		Rig�ts �ranted	Rig�ts at �rant
			date
Directors
JacobKlein (i)	25�11�2015	1,39�,19�		1,43�,366
JacobKlein (ii)	19�12�2015	3,�50,000		�,166,9�2
LawrieConway (i)	25�11�2015	335,232		344,��0
�ey Management Personnel
AaronColleran	09�09�2015	310,611		2��,�03
PaulEagle	09�09�2015	1�1,341		15�,�05
EvanElstein	09�09�2015	2�5,635		255,30�
MarkLeMessurier	09�09�2015	335,232		310,509
RoricSmith(iii)	09�09�2015	316,60�		293,25�

(i) G rant of Performance Ri g hts w as subject to sharehol de r a p proval at the Annual Ge n eral Meeting, which occurred on 2 5 November 2015.

(ii) Gr a nt of Retention Rights w as is sued on the terms an d co nd itions of the Company's current Employee Share Option a nd P erformance Rights Pl a n, an d is subject to shareh o lde r approval at the Compa ny 's next shareholder meeting. (iii) Ch a ng ed position to part-ti me ro le effective 1 July 2016. C e as ed as Vice President Di scovery �Chief Geologist ef fe cti ve 30 June 2016.

Details of th e Pe rfo rmance Rights pl a n an d vesting condition s ar e provided on page �1 of this report.

The value of s ha re -ba sed payments g ra nt ed during the period is r ec ognised in compe ns ation over the vesting period of the gra nt , i n a ccordance with Au str al ian Accounting St an d ar ds.

Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�	Remuneration Report ��udited��continued�	Remuneration Report ��udited��continued�
��Director and �ey Management Personnel E�uity �oldings
(i) �ull��aid �rdina*r��are�*
	�alance att�e	Received	Received	�t�er c�anges	�alance at t�e
	start o�t�e	during t�e	during t�e		end o�t�e
	year	year on	year on		year
		conversion o�	e�ercise o�
		per�ormance	options
		rig�ts
Directors
Jacob Klein	6,9�4,6�2	�50,�94	-	2,413	�,�3�,9�9
Lawrie Conway	13�,462	-	-	-	13�,462
James Askew	669,231	-	-	-	669,231
Graham Freestone	9�,4�3	-	-	1,4�0	9�,953
Colin Johnstone	93,554	-	-	�61	94,415
Thomas McKeith	13�,462	-	-	-	13�,462
Naguib Sawaris (i)	-	-	-	-	-
Sebastien de Montessus	-	-	-	-	-
John Rowe(ii)	15�,�92	-	-	2,396	160,1��
�ey Management Personnel
Aaron Colleran	120,529	166,940	-	(103,940)	1�3,529
Paul Eagle	-	30,�40	-	-	30,�40
EvanElstein	6�,0�1	��,��1	-	(13,009)	132,�33
Mark LeMessurier	224,295	1�4,9�5	-	4,350	403,630
Roric Smith(iii)	10,125	166,940	-	(154,343)	22,�22

(i) Mr Sawaris is the controlling shareholder of La Mancha Group International BV. (ii) Resigned as Non- Exe cutive Director effective 31 March 2016.

(iii) Changed position to part- time role effective 1 July 2016. Ceased as Vice President Disc overy �Chie f G eologist effective 30 June 2016.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

Remuneration Rep ort ��udited��continued�

�� �irector � nd � e��n��e�ent �er�onne� ��u it�� o�din ��(continued)

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(ii) �er� or� ance �ig�t�


(ii) �er�*or�*ance �ig�t�
					�t end	o�t�eyear
	�alance	�ranted	Converted	�t�er	�alance	�ested	�nvested
	at t�e	as		c�anges	at t�e end	and
	start o�	compen-			o�t�e	e�ercisa�le
	t�e year	sation			year
Directors
Jacob Klein	5,532,416	5,14�,19�	(�50,�94)	(306,405)	9,622,314	2,245,152	�,3��,162
Lawrie Conway	536,34�	335,232	-	-	��1,5�9	-	��1,5�9
James Askew	-	-	-	-	-	-	-
Graham Freestone	-	-	-	-	-	-	-
Colin Johnstone	-	-	-	-	-	-	-
Thomas McKeith	-	-	-	-	-	-	-
Naguib Sawaris	-	-	-	-	-	-	-
SebastiendeMontessus	-	-	-	-	-	-	-
John Rowe(i)	-	-	-	-	-	-	-
�ey Management Personnel
AaronColleran	1,229,9�5	310,611	(166,940)	(6�,120)	1,305,526	499,145	�06,3�1
PaulEagle	529,693	1�1,341	(30,�40)	(12,5�5)	65�,609	232,000	425,609
EvanElstein	910,�05	2�5,635	(��,��1)	(31,�35)	1,0�6,�34	390,000	6�6,�34
MarkLe Messurier	1,305,936	335,232	(1�4,9�5)	(�1,403)	1,394,��0	523,201	��1,5�9
Roric Smith(ii)	1,240,�56	316,60�	(166,940)	(6�,120)	1,322,304	499,145	�23,159
	11,2�5,�2�	6,�91,�56	(1,36�,3�0)	(55�,36�)	16,250,946	4,3��,643 11,�62,303

(i) Resigned as Non-Executi v e D ir ector effective 31 March 2 01 6.

(ii) Resigned as Vice Presid e nt Di scovery �Chief Geologist a nd ch anged position to part-time ro le effective 1 July 2016.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

Remuneration Report ��udited��continued�

�� �irector �nd �e��n��e�ent �er�onne��uit��o�din��(continued)

(iii) � � tion�

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		�t end o�t�eyear
	�alance at t�e start o� t�eyear �ranted as compen- sation E�ercised �t�er c�anges �alance at t�e end o�t�e year �ested and e�ercisa�le �nvested
	Directors
	Jacob Klein 4,6��,435 - - - 4,6��,435 4,6��,435 - Lawrie Conway - - - - - - - James Askew 4��,651 - - (435,69�) 52,954 52,954 - Graham Freestone - - - - - - - ColinJohnstone - - - - - - - Thomas McKeith - - - - - - - Naguib Sawaris - - - - - - - Sebastien de Montessus - - - - - - - John Rowe(i) - - - - - - -
	�ey Management Personnel
	Aaron Colleran 330,000 - - - 330,000 330,000 - PaulEagle - - - - - - - Evan Elstein 105,000 - - (105,000) - - - Mark LeMessurier 450,000 - - (450,000) - - - Roric Smith(ii) - - - - - - -
	�� - - �� �� �� -

(i) Resigned as Non -Ex ecutive Director effective 31 March 2016.

(ii) Resigned as Vice Pr esid ent Discovery �Chief Geologist and changed position to part-ti me r ole effe ctive 1 July 2016.

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Evolution Mining Limited Annual Report 2016

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Directors' Report (co ntinued)

�ndemni�ication o� o��i cers and auditors

During the fina ncia l year the Company paid a pr emiu m in r espe ct of a contract insuring the Directors of the Company, th e c ompany secretaries and all e xec utive office rs of the Company and of any related bod y corporate against a l iab ility incurred as such a Dire ctor, secr etary or executive officer to the extent per mitted by the Cor�or atio n��ct �� . The contract o f in suran ce p rohibits disclosure of the nature of t he liab ility and the amount of th e p remium.

T he Company has entered int o a Dee d of Indemnity, Insurance and Acc ess w ith ea ch Dire ctor. In Summary the D eed provides for:

Access to corpor ate rec ord s for each Director for a peri od a fter ceas ing to hold office in the Company�
� The provision o f D irec tor s and Officers Liability Insu ranc e�a nd
Indemnity for le gal cos ts incurred by Directors in car rying out the business affairs of the Company.

Except for the ab ov e th e Company has not otherwi se, duri ng o r since the financial year, excep t to th e amount permitted by la w, ind em nified or agreed to indem nif y an off icer or auditor of the Company or of any r elated bo dy corporate aga in st a lia bility incurred as such an o ffice r or auditor.

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Proceedin gs on � e�al�o�t�e company

No perso n has a pplied to the Court unde r s ecti on 23�of the Cor�oration� �ct �� fo r leave to bring proceedi n gs on behalf of the Company, o r to in tervene in any proceedin gs t o w hich the Company is a party, for the pur po se o f taking responsibility on b eha lf of the Company for all or pa rt of th ose proceedings.

No pr oc ee d ings have been brought o r int er vened in on behalf of th e C om pa ny with leave of the Court und er sectio n 2 3� of the Cor�oration��c t � ��

�on -a u di t services

The Co m pany may decide to e mp lo y t he auditor on assignme n ts a dd itional to their statutory a ud it duties where the a u di tor's expertise and exp er ien c e with the Company an d� or t he Group are important.

De t ail s of the amounts paid or p ay a ble to the auditor (Price w ate rh ouseCoopers) for non-a ud it services provided du r ing t he year are set out bel o w. D etails of the amounts p a id or payable to the auditor f or audit services pr o vid e d during the year are s e t o u t in note 19(a).

Th e b o ard of Directors has co n si d ered the position and, i n ac c ordance with advice rec e ived from the audit co m mi t tee, is satisfied that th e pr o vision of the non-audit s er v ices is compatible with t h e general standard of ind e pe n dence for auditors im p os e d by the Cor�oration� � ct � �� . The Directors are s atisfied that the provision of no n -au d it services by the aud i tor, as set out below, did n o t c o mpromise the auditor i n dependence requirements of t h e C or�oration��ct �� f or t h e following reasons:

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a ll non-audit services h a ve been reviewed by the a udit committee to ensure t hey do not impact the i mp artiality and objectiv it y of the auditor
no n e of the services un d er m ine the general princi p le s relating to auditor ind e pendence as set out in APES 1 1 0 Code o��t�ic��or �r o� e� �ional �ccountant��

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Evolution Mining Limited Annual Report 2016

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Directors' Report (continued)

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�on-audit services �continued�

During the period the following fees were paid or payable for non-audit services provided by the auditor of the parent en tity, its related p ractices and non-related audit firms:

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	�t�er assurance services PricewaterhouseCoopers firm: Assurance related services Non PricewaterhouseCoopers audit firms Due diligence services Internal audit services *�ot��re�uner�tion �or ot�er ��ur�nce �ervice�* SP�CE �a�ation services PricewaterhouseCoopers firm: Tax compliance services Non PricewaterhouseCoopers audit firms Tax compliance services Tax advisory services *�ot��re�uner�tion �or t��tion �ervice�* SP�CE SP�CE *�ot��re�uner�tion �or non��udit �ervice�*

�t�er assurance services
PricewaterhouseCoopers firm:
Assurance related services
Non PricewaterhouseCoopers audit firms
Due diligence services
Internal audit services
�ot��re�uner�tion �or ot�er ��ur�nce �ervice�
SP�CE
�a�ation services
PricewaterhouseCoopers firm:
Tax compliance services
Non PricewaterhouseCoopers audit firms
Tax compliance services
Tax advisory services
�ot��re�uner�tion �or t��tion �ervice�
SP�CE
SP�CE
�ot��re�uner�tion �or non��udit �ervice�

�uditor's indepen den ce declaration

A copy of the auditor's in dep endence declaration as required under section 30�C of the Cor�or atio n��ct �� is set out on page 9�.

Rounding o�amounts

The Company is of a kind referred to in ASI C Corporations (Rounding in Financial�Directors Report s) Instru me nt 2016�191, issued by the Australian Securiti es a nd Investments Commission, relating to the 'rounding off' of amounts in the Directors' Report. Amounts in t he D irectors' Report have been rounded off in accordance w ith th at ASIC Corporations Instrument to the nearest thou sand dollars, or in certain cases, to the nearest dollar.

This report is made in accordance with a resolution of Di rect ors.

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Jacob (Jake) Klein Executive Chairman

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Graham Freestone Non-Executive Direct or

Sydney 1�August 2016

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Evolution Mining Limited Annual Report 2016

Auditor's Independence Declaration

Auditor’s In dep e nde nce Declaration

As lead auditor f or the a ud it of Evolution Mining Limite d fo r the yea r ended 30 June 2016, I declare that to the bes t o f my kn owledge and belief, there ha ve b een:

no c on trav en tions of the auditor indepe nde nce req uirements of the Corporations Act 200 1 in rel at ion to the audit; and
n o co n traventions of any applica ble cod e o f professional conduct in relat ion to the aud it.

Thi s dec la ration is in respect of Evo lu tion M ining Limited and the entiti es i t con tro lled during the p er iod.

T im Goldsmith P artner PricewaterhouseCooper s

Sy dney 17 A ugu st 2016

Pricewat erh ouseCoopers, AB N 52 7 80 433 757 Darling Park To wer 2, 201 Sussex St ree t , G PO BOX 2650, S YD NE Y N SW 1171 T: +61 2 8266 00 00, F: +61 2 8266 9 999 , w ww .pwc.com.au

i a i l i t y l i m i t e b a s u P i o a L i s l a t i o

Evolution Mining Limited Annual Report 2016

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Other Comprehensive Income



	Sales revenue Cost of sales �ross Pro�it Interest income Other income Share based payments expense Corporate and other administration costs Acquisition and integration costs Gain on revaluationof available-for-sale assets Exploration and evaluationcosts expensed Impairment of assets Impairment of goodwill Finance costs �Loss��pro�it �e�ore incometa�e�pense Income tax expense �Loss��pro�it a�ter income ta�e�pense �t�er compre�ensive �e�pense��income �te��t�at �a*��e*recla��i�ied �u��e�uentl�to �ro�it or lo�� Changes in the fair value of available-for-sale financial assets Changes in the fair value of cash flow hedges Exchange differences ontranslation of foreign operations Blank �t�er compre�ensive �e�pense��income�net o�ta� �otal compre�ensive �e�pense��income Total comprehensive (expense)�income for theperiod is attributable to: Owners of Evolution Mining Limited �Loss��earning per s�are �or �loss��pro�it attri�uta�le to t�e ordinary e�uity �olders o�t�e Company� Basic (loss)�earning per share Diluted (loss)�earning per share	2 3 1� 3 3 13(c) 6(c) 13(a) 3 4 �(b) �(b) �(b) 20 20

��e a�o�e Con�olidated �tate�ent o��ro�it or �o��and �t�er Co��re�en�i�e �nc o�e ��ould �e rea d in con�unction wit�t�e acco��an�ing note��

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Evolution Mining Limited Annual Report 2016

Consolidated Balance Sheet	Consolidated Balance Sheet	Consolidated Balance Sheet


�SSE�S Current assets Cashand cash equivalents Trade and other receivables Inventories Derivative financial instruments Assets classified as held for sale �otal current assets �on-current assets Inventories Available-for-salefinancial assets Property, plant andequipment Mine developmentand exploration Other non-currentassets �otal non-current assets �otal assets L��L��ES Current lia�ilities Tradeandother payables Interest bearing liabilities Derivativefinancial instruments Provisions Liabilitiesdirectly associated withassets classified as held forsale Other current liabilities �otal current lia�ilities �on-current lia�ilities Interestbearing liabilities Provisions Deferred tax liabilities Othernon-current liabilities �otalnon-current lia�ilities �otal lia�ilities �et assets E�� Issuedcapital Reserves Accumulated losses Capitalandreserves attributabletoowners of EvolutionMining Limited �otal e�uity	5(a) 5(b) 6(a) 10(a) 6(c) 6(a) 5(c) 6(d) 6(e) 6(b) 5(d) 5(e) 10(a) 6(f) 6(c) 5(e) 6(f) 4(c) �(a) �(b) �(c)	�� �� �� - ��
		�� �� �� �� �� ��
		��
		��
		�� �� �� �� �� ��
		�� �� �� �� ��
		��
		��
		��

��e a�o�e Con�olidat ed � alance ��ee t �� ou ld � e read in con �unc ti on w it�t�e acco ��an �i ng n ote��

Evolution Mining Limited Annual Report 2016

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Consolidated Statement of Changes in Equity


			S�are-	�air value		�oreign	�ccu-
		�ssued	�ased	revaluation	Cas��lo�	currency	mulated	�otal
		capital	payments	reserve	�edges	translation	losses	e�uity
	�otes	�'��	�'��	�'��	�'��	�'��	�'��	�'��
�alanceat ��uly ��		1,04�,424	1�,9�2	(600)	(153)	-	(2�1,339)	��5,304
Profit after income tax expense		-	-	-	-	-	100,115	100,115
Changes in fair value of
available-for-sale financial
assets		-	-	444	-	-	-	444
Changes in fair value of cash
flow hedges		-	-	-	6,915	-	-	6,915
�otal compre�ensive income		-	-	��	��	-	��	��
�ransactions �it�o�ners in
t�eir capacity as o�ners�
Contributions ofequity	�(a)	244,196	-	-	-	-	-	244,196
Dividends provided foror paid	11(b)	-	-	-	-	-	(14,2�2)	(14,2�2)
Recognition of share-based
payments	1�	-	1,�6�	-	-	-	-	1,�6�
		244,196	1,�6�	-	-	-	(14,2�2)	231,��2
�alance at ��une ��		��	��	��	��	-	��	��
�alance at ��uly ��		1,292,620	20,�40	(156)	6,�62	-	(195,506)	1,124,560
Loss after income tax expense		-	-	-	-	-	(24,349)	(24,349)
Changes in fair value of
available-for-sale financial
assets		-	-	46	-	-	-	46
Changes in fair value of cash
flow hedges		-	-	-	(6,��9)	-	-	(6,��9)
Exchange differences on
translation of foreign operations		-	-	-	-	104	-	104
�otal compre�ensive
e�pense		-	-	��	��	��	��	��
�ransactions �it�o�ners in
t�eir capacity as o�ners�
Contributions of equity	�(a)	4��,36�	-	-	-	-	-	4��,36�
Dividends provided for or paid	11(b)	-	-	-	-	-	(29,062)	(29,062)
Recognition of share-based
payments	1�	-	�,656	-	-	-	-	�,656
		4��,36�	�,656	-	-	-	(29,062)	45�,961
�alance at ��une ��		��	��	��	��	��	��	��

��e a�o�e Con�olidated �tate�ent o�C�ange�in ��uit��ould �e read in con�unc tion wit�t�e acco ��an �i ng note��

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Evolution Mining Limited Annual Report 2016

Consolidated Statement of Cash Flows



	Cas��lo�s �rom operating activities Receiptsfrom sales Payments to suppliers and employees Other income Interest received Interest paid �et cas�in�lo��romoperating activities Cas��lo�s �rom investing activities Payments for property,plant and equipment Payment for minedevelopment and exploration Proceeds from saleof property, plant and equipment Payments foravailable-for-sale financial assets Paymentsfor acquisition and integration costs Paymentsfor stamp duty related to business combinations Cash acquiredthrough business combinations Paymentsforsubsidiaries acquired throughbusiness combinations Transferfromterm deposits �et cas�out�lo��rom investingactivities Cas��lo�s �rom �inancing activities Proceedsfrom interest bearing liabilities - Senior Secured Syndicated Revolving and Term Facility Repayment of interest bearing liabilities - Senior Secured Syndicated Revolving and Term Facility Repayment of interest bearingliabilities - La Mancha DebtFacility Repayment of short term borrowings Proceeds from short term borrowings Payment of finance lease liabilities Dividends paid Proceeds from issues of shares Payment of transaction costsfor issuing shares �et cas�in�lo��rom �inancingactivities �et�decrease��increase in cas�and cas�e�uivalents Cashandcash equivalents atthebeginning of the period Cas�andcas�e�uivalents at end o�period	�(a) 5(a)

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�� 205
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��e a�o�e Con�olidat ed �tate�ent o� Ca� � �low ��ould �e r ead in con �unction wit� t�e a cco� �an�ing not e��

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements

Contents o�t�e �otes to t�e Consolidated �inancial Statements	Contents o�t�e �otes to t�e Consolidated �inancial Statements
		Page
	�o�num�ers are calculated	104
1	Segment information	105
2	Revenue	106
3	Expenses	10�
4	Income tax expense	10�
5	Financial assets and financial liabilities	110
6	Non-financial assets and liabilities	11�
�	Equity	124
�	Cashflow information	12�
	Ris�	129
9	Criticalestimates, judgements and errors	130
10	Financial riskmanagement	131
11	Capital management	135
	�roup structure	13�
12	Interests in other entities	13�
13	Business combinations	13�
	�nrecognised items	143
14	Contingentliabilities and contingent assets	144
15	Commitments	144
16	Events occurringafter the reporting period	146
	�t�er in�ormation	14�
1�	Related party transactions	14�
1�	Share-based payments	149
19	Remuneration of auditors	153
20	Earnings per share	154
21	Deed of cross guarantee	155
22	Parent entity financial information	156
23	Summary of significant accounting policies	15�

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

�o�num�e rs are calculated

This section p rov ides additional information ab out those indiv idual line items in the financial statements tha t the Directors c ons ider most relevant in the con text of th e ope rations of the Group, including:

(a) a cco unting policies that are rele vant for a n un derstanding of the items recognise d in th e financial sta tements. These cover situ atio ns w here the accounting standards either allow a choic e or do n ot deal with a particular type of transac tion
(b) analysis and sub-totals, inc ludin g s egment information
( c) information about esti ma tes and judgements made in relation to p articu lar ite ms.

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1	Segment information	105
2	Revenue	106
3	Expenses	106
4	Income taxexpense	10�
5	Financial assets and financial liabilities	110
6	Non-financial assets and liabilities	11�
�	Equity	124
�	Cash flow information	12�

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

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� Segment in�ormation

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�a�Descrip tion o�segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive Chairm an and the Senior L eadership Team (the chief business decision makers) in assessing performance and i n determinin g the allocation of resource s.

The Group’s seven operational mine si tes, Explo ration and Cor porate a re each treated as individual operating segments. Management monitors the operating r esults of its business u nits se parately for the purpose of making decisions about resource allocation and performance asse ssment.

Corporate includes share-based payment expenses and other corporate expen ditures su pportin g the business duri ng the period.

Segment p erforma nce is evaluated based on earnings before interest, tax, depreciation a nd am ortisation (EBIT DA).

The Group’ s opera tions are all condu cted in the mining industry in Australia and New Zealand.

��Segment in�ormat ion

The segment information for the r eportab le segmen ts for the year ended 30 June 2016 is as follows:

	Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��	Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��	Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��	Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��	Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��
��une �� SP�CE Segment Revenue EBITDA Capital additions (i)	3�5,346 232,549 206,916 136,323 222,23� 115,062 119,631 65,�19 3�,01� 40,565 19,945 4�,60�	119,�19 12,911 11,640	144,506 6�,�� 20,�53	113,155 50,940 2�,146	- - �� (13,�01) (33,036) �� 2�,�23 1,521 ��

(i) Capital additions include a sse ts that were acquired under finance leases during the period.

The segment information for the repo rtab le segments for the year ended 30 June 2015 is as follo ws:

Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��	Co�al �'�� Mungari �'�� Mt Carlton �'�� Mt Ra�don �'�� Edna May �'�� Craco� �'�� Pa�ingo �'�� E�plo- ration �'�� Corp- orate �'�� �otal �'��
��une �� Space Segment revenue - - 120,464 EBITDA - - 4�,�92 Capital additions (i) - - 2�,09�	156,�� 153,462 13�,55� 96,69� - - �� �2,546 �3,051 61,�23 39,121 (6,96�) (25,�09) �� 4�,��3 41,329 24,052 24,5�9 23,9�1 3�2 ��

(i) Capital additions include assets that were acquired under finance leases durin g th e period.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� Segment in �orm ation �continued�

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�c�Segment Rec onciliation


�c�SegmentReconciliation

Reconciliation o��loss��pro�it �e�ore income ta�e�pense SP�CE EBITDA Depreciation and amortisation Interest income Acquisition and integrationcosts Gain on revaluationofavailable-for-sale assets Fair value amortisationand unwinding expense Impairment lossonassets Impairment lossongoodwill Finance costs �Loss��pro�it�e�ore income ta�e�pense

� Revenue
	��une �� �'�� ��une �� �'�� �� 634,9�6 �� 23,9�5 �� 6,9�� �� 665,95�
*��e�revenue* Goldsales Silversales Coppersales	�� �� ��
	��

Finance costs �Loss��pro�it�e�ore income ta�e�pense	�� ��	(14,3�2) 100,115
� Revenue
	��une	��une
	��	��
	�'��	�'��
*��e�revenue*
Goldsales	��	634,9�6
Silversales	��	23,9�5
Coppersales	��	6,9��
	��	665,95�

�a�R e cognising revenue �r o m m a�or �usiness activi ti es

Re v en u e is recognised for th e m a jor business activities u sin g the methods outlined be low.

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Me ta l �a le�

Rev e nu e from sales of refine d m et als is recognised whe n th e significant risks and r e wards of ownership have pass e d t o the buyer and can be r el iably measured.

�t�er r e� e nue

See no te 2 3 (e) for the recogniti on a n d measurement of o t he r revenue.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

�
E�penses
�rea�do�n o�e�penses �y nature

�o�t o��e�
Mine operating costs
Depreciation and amortisation expense
Royalty and other selling costs
Fair value amortisation
Fairvalue expense
�or�or�te �nd ot�er �d�ini�tr�tion co�t�
Depreciation and amortisation expense
Operating lease payments
Corporate wages and salaries expense
Contractor, consultants and advisory expense
Other administrative
Loss on disposal of assets
�c�ui�ition �nd inte�r�tion co�t�
Contractor, consultants and advisory expense
Corporate and administration expense
Stamp duty on businesscombinations
�in�nce co�t�
Finance lease interest expense
Amortisation of debt establishment costs
�nwinding of discount on provisions
Write off of debt establishment costs
Interest expense
�e�reci�tion �nd ��orti��tion
Cost of sales
Corporate and other administration costs

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �ncome ta� e�p ense

�a��ncome ta �e �pense

	��une �� �'�� ��une �� �'��
Deferred tax Previously unrecognised taxlossnowrecognised	�� 30,622 �� (30,622)
	�� -

��umerical re co ncil ia tion o�income ta�e�pen se to p rim a �acie ta�paya�le

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	��une �� �'�� ��une �� �'�� �� 100,115 �� 30,035 �� 560 �� 2� �� - �� - �� (30,622) �� - �� (100,115)
(Loss) �profitbefore income tax expense Tax at theAustralian tax rate of 30% space Tax effectofamounts which are notdeductible (taxable) in calculating taxable income: Share-based payments Other Costsof business acquisitions Impairment loss on goodwill Previously unrecognised tax lossnowrecognised Incometax expense

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

	� �ncome ta�e�pense �continued� �c�Recognised de�erred ta��alances	��une �� �'�� ��une �� �'�� �� 2�9 �� (29,969) �� (3,263) �� (2�,0�4) �� �,2�5 �� 5,346 �� - �� (1,191) �� - �� (2,409) �� (50,996) - 30,622 �� 20,3�4 - -

	Inventories Exploration and evaluation expenditure Property, plant and equipment Mine development Employee benefits Provisions Share issue costs Capitalised interest Share based payment transactions Other Deferred tax balances from temporary differences Adjustments for deferred tax of prior periods Tax losses carried forward Tax assets

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�d�M ovem ent in de�erred ta��alances during t�e year


Inventories Exploration and evaluation expenditure Property, plant and equipment Mine development Employee benefits Provisions Share issue costs Capitalised interest Shared based payment transactions Other Tax losses carried forward Deferred tax assets � (liabilities)	2�9 - 431 - (9,916) - (1,39�) - �,1�� - (�,�06) - (25,612) - 39,094 - �,2�5 - 1,3�5 - 5,346 1�,244 1,022 - - - - 1,539 (1,191) - - - - - 3�4 - (2,409) - (1,624) - 19,031 - (43,643) -
	- 1�,244 (13,0�4) 1,539

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �ncome ta� e�p ense �continued�

�e��a�losse s

The Grou p ha s available tax losses as at 30 J une 2016 . These tax losses have not been reco gnised d ue to the uncertai nty of their recoverability in fut ure perio ds.

� � inancial assets and �i na nci al l ia�ilities

Th e Group holds the followin g f inan cial instruments:


��une �� Space �inancial�ssets Cash andcash equivalents Trade andother receivables Available-for-sale financial assets �inancial Lia�ilities Tradeandother payables Interestbearing liabilities Derivative financial instruments Other liabilities ��une �� Space �inancial �ssets Cashand cash equivalents Tradeand other receivables Derivative financial instruments Available-for-sale financial assets �inancial Lia�ilities Trade and other payables Interestbearing liabilities	5(a) 5(b) 5(c) 5(d) 5(e) 10(a) 5(a) 5(b) 10(a) 5(c) 5(d) 5(e)	- - ��	- - -
		��	-
		- - - -	- - �� -
		-	��
		- - - ��	- - �� -
		��	��
		- -	- -
		-	-

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

� �inancial assets and �inancial lia�ilities �continued� �a�Cas�and cas�e�uivalents	��une �� �'�� ��une �� �'�� �� 205,2�2 �� 506 �� 205,��

Current assets Cash at bank Short term deposits

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(i) �ec onciliat ion to ca��low �tate�ent

The ab ove figures are reco nciled to cash at the end of the financial year as shown in the Consol idate d Statem ent of Cas h Flow s as follows:

	��une �� �'�� ��une �� �'��
Balances as above Balances per Consolidated Statement of Cash Flows	�� 205,��
	�� 205,��

(ii) Cla��i�i catio n a�ca��e�ui�alent�

Term deposits a re p resented as cash equivalents if they have a maturity of thr ee mont hs o r less from the date of acquisition and are r epa yable with 24 hours notice with no loss of interest. Se e not e 23(i) for t he Group’s other accounting policies on cas h and cash equivalents.

(iii) �i��e��o�ure

The Group’s exposure to various risk s associated with the financial instruments is discussed i n n ote 10 . T he maximum exposure to credit risk at t he e nd of the reporting period is the carrying amount of eac h cl ass of financial assets mentioned above.

��rade and ot�er receiva�les

	��une	��une
	��	��
	�'��	�'��
Current assets
Trade receivables	��	3,969
Accrued interest income	-	13
GST refundable	��	4,�25
Prepayments	��	1,555
Other receivables	��	252
	��	10,514

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �inancial as set s and �inancial lia�ilitie s �co nti nued�

��rade and ot �er receiva�les

(i) Cla��i �ica tion a�trade and ot�er recei �a� le�

Trade rec eivables are amounts due fr om cust ome rs for goods sold or services perfor med in the ordina ry course of bu sin ess. Loans and other recei vab les a re n on-derivative financial assets wit h fixe d or det erminable payments th at a re not quoted in an active ma rket. If c ollection of the amounts is expe cted in one year or less they are cla ssified as current assets. I f no t, th ey are presented as non-current asset s. Tra de rec eivables are generally due f or settlement within 30 da ys and the refore are all classified as cur rent . The Grou p’s impairment and other accounting policies for tr ad e an d o ther receivables are outlined in notes 10(c ) and 23(j) respectively.

(ii) �t�er recei�a�le �

These amounts ge ne rall y a rise from transactions outs ide the usu al operating activities of the Grou p .

(iii) �air �alue o �t rad e a nd ot�er recei�a�le�

Due to the na tu re o f t hese receivables, their c arry ing am ount is assumed to approxim ate their f air va lue.

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(i�) ��air �e nt an d ri��e��o�ure

Informatio n ab ou t the impairment of trad e a nd oth er receivables, their credit qu ality and the Group’s exposure to credit ris k can b e found in note 10.

�c��vaila�le-�or-sale �inancial assets	��une �� �'�� ��une �� �'�� �� 300 �� 1,3�6 - 4,�40 �� 6,516

Listed securities - �on-current Shares in Shareroot Limited (formerly Monto Mineral Limited) Sharesin Emmerson ResourcesLimited Sharesin Phoenix Gold Limited

(i) Cl a ��i�ication o��inancial a �� e t�a�a�aila�le��or��ale

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Inv e st m ents are designated a s a v ailable-for-sale financi a l as s ets if they do not have fix ed maturities and fixed or det e rm i nable payments, and m a n agement intends to hol d th e m for the medium to lo n g-term. Financial assets tha t ar e not classified into an y of t he other categories (at FV T PL, loans and receiva bl es or held-to-maturity inv es tm e nts) are also include d in t he available-for-sale c a te g ory.

The fi na n cial assets are prese n te d as non-current asset s un l ess they mature, or m a nagement intends to dispose of the m wi thin 12 months of th e en d of the reporting peri o d.

(ii) �� � air � ent indicator��or a �a il a� le��or��ale �inancial a �� e t� A securi ty i s c onsidered to be im p air e d if there has been a si gn ificant or prolonged d ecline in the fair value below its cost. Se e no te 23(l) for further d et ai ls about the Group’ s im p airment policies for fi n ancial assets

(iii) ��ou nt� r ec ogni�ed in �ro�it o r l o� � and ot�er co��re �e n �i� e inco�e

During the y ea r, th e following gains�( lo ss es ) were recognise d i n pr ofit or loss and oth er comprehensive income.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

ontinued)
� �inancial assets and �inancial lia�ilities �continued� �c��vaila�le-�or-sale �inancial assets	��une �� �'�� ��une �� �'�� �� 444 �� 444

Gains�(losses) recognised in other comprehensive income

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(i�) �air �alue�i��air�ent and ri��e��o�ure

Informati on abou t the methods and assumptions used in determining fair value is provid ed in n ote 5(f) b elow . No ne of the finan cial ass ets are either past due or impaired.

All availa ble-for-s ale financial asset s are denominated in Australian dollars. For an analysis of the sens itivity of available-for-sale financ ial assets t o price and interest rate risk refer to note 10(b).

�d��rade and ot�er paya� les

	��une �� �'�� ��une �� �'��
Current lia�ilities Trade creditors Other payables and accruals	�� 43,663 �� 20,591
	�� 64,254

Trade payables are unsecur ed a nd are paid on normal commercial terms.

The carrying amounts of trade and oth er payables are assumed to be the same as their fair val ues , due to t heir short-term nature.

(i) �i��e��o�ure

Information about the Group's exposure to foreig n ex change risk is provided in note 10.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �inancial as set s and �inancial lia�ilitie s �co nti nued�

�e��nterest � ear ing lia�ilities

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	��une �� �'�� ��une �� �'��
Current lia�ilities Finance lease liabilities Other borrowings �on-current lia�ilities Bank loans - CorporateCredit Facility Less: Borrowingcosts Finance leaseliabilities �otal interest �earing lia�ilities	�� 11,9�2 �� 5,409
	�� 1�,391
	�� - �� (1,�50) �� �,2�5
	�� 6,525
	�� 23,916

In May 2 01 5 , the Group entered into a ref in ancing arrangement by way of a l etter of commitment. The Facili ty comp ris es $ 300 million Senior Sec ur ed Re volving Loan (“Facility A”) , a $ 40 0 million Senior Secured Ter m Lo an (“Fac il ity B ”), and a $155 million p er for ma nce bond facility (“Facili ty C”).

The F ac il ity was executed on 20 J uly 2 015 and was effective fr o m t ha t date.

The Fa c ility was drawn down o n 23 J uly 2015 on completion o f th e Cowal acquisition and is r ep ayable over the foll o wi ng periods:

Fa c ility A: 31 July 201�
Fa c ility B: 20 July 2020
F ac ility C: 20 July 201�

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In J uly 2015, the Group's gea r ing ratio peaked at 32.0% a s a r esult of drawing down on The Facility to fund the Co w al a cquisition. This was s u bs e quently reduced to 15. 1 % a s at 30 June 2016 as a r esult of a total of $322 mill i on i n voluntary and early r ep a yments during the yea r. A s at 30 June 2016, the G ro up was 15 months ahead of t h e Fa cility B repayment sc h ed u le.

(i) � e cu red lia�ilitie�and a� � et� � ledged a��ecurit�

Leas e li ab ilities are effectively s e cu red as the rights to th e l ea sed assets recognise d in the financial statements rever t to th e lessor in the even t of d efault.

Securi ty o n The Facility is held i n th e form of a General S e cu r ity Agreement and S ha re Security Agreement over the Gro up s o perating assets. Th e c ar rying amounts of as s ets pledged as general s e curity for current and non-curr en t bo rrowings is $1.3�� b illi o n. The share capital p le d ged as share securit y for current and non-current borrowing s is $ 1.992 billion.

(ii) Co��li an ce w it�loan co�enant �

Evolution Mini ng Lim ited has complie d wit h the financial cove na nt s of its borrowing fa ci lities as at the financial years ended 30 J un e 2016 and 30 Jun e 2 0 15 , see note 11 for de ta ils .

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

� �inancial assets and �inancial lia�ilities �continued�

�e��nterest �earing lia�ilities

(iii) �inance lea�e�

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The Group leases var ious plant and equi pment with a carrying amount $13.52�million (30 June 2015: $1�.54� million) based on the c ost of the a ssets. These leas es expire within one to five years and under the terms of the leases, at the expiry the ownership of the lea sed assets will transfer to the Group.

	��une �� �'�� ��une �� �'��
Commitments in relation to finance leases are payable as follows: Within one year Later than one year but notlater than five years Minimumlease payments Future finance charges Total lease liabilities Representing lease liabilities: Current Non-current	�� 12,�11 �� �,5��
	�� 21,3�9 �� (1,132)
	�� 20,25�
	�� 11,9�2 �� �,2�5
	�� 20,25�

(i�) �air �alue

Interest bearing liabilitie s a re initially recognised at fair value, net of transaction co sts in curred and subsequently measured at amortised co st us ing the effective interest rate method.

(�) �i��e��o�ure�

Details of the Group’s exposure to ri sks arising from current and non-current borrowings are set out in not e 1 0.

�� Recognised �air value measuremen ts

(i) �air �alue �ierarc��

This section explains the judgements and estimates mad e in determining the fair values of the financial instruments that are recognised and measured at fair val ue i n the financial statements. To provide an indicatio n about the reliability of the inputs used in determining fair valu e, t he Group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath the table.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �inancial as set s and �inancial lia�ilitie s �co nti nued�

�� Recognis ed �air value measurements

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		Level	�	Level �	Level �	�otal
	�otes	�'��	�	�'��	�'��	�'��
��une ��
Space
�inancial assets
Other financial assets
Shares available for sale	5(c)	��	�	-	-	��
		��	�	-	-	��
�inancial Lia�ilities
Derivative financial instruments
Derivativesusedfor hedging	10(a)		-	��	-	��
			-	��	-	��

		Level �		Level�	Level �	�otal
	�otes	�'�	��	�'��	�'��	�'��
��une ��
Space
�inancial assets
Derivativefinancial instruments
Derivatives used for hedging	10(a)		-	6,�62	-	6,�62
Other financial assets
Shares available for sale	5(c)	6,516		-	-	6,516
		6,516		6,�62	-	13,2��

Th e re w ere no transfers betw e en l evels 1 and 2 for recur ri ng fa ir value measurements d uring the year.

Th e G r oup did not measure a n y f i nancial assets or liabilit i es o n a non-recurring basis a s at 30 June 2016.

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Le v el � � The fair value of fina n ci a l instruments traded in a cti v e markets (such as pu bl icly traded derivatives, and tra di ng a nd available-for-sale s ec u rities) is based on qu ot ed market prices at the en d of the reporting period. The quo te d m arket price used for f ina n cial assets held by th e Gr o up is the current bid pr ic e. These instruments are inclu d e d in level 1.

Leve l �� T he fair value of finan c ial i nstruments that are n o t t r aded in an active mar k et (for example, over-t he - co unter derivatives) is d et e rmined using valuati o n t e chniques which maxi m ise the use of observable market d at a and rely as little as p os s ible on entity specifi c es ti mates. If all significa nt inputs required to fair value an instr um e n t are observable, th e in st rument is included i n le v el 2.

Level �� I f o n e or more of the sign if ic an t inputs is not base d o n observable market d a ta, the instrument is included in le v el 3. This is the case f or u nlisted equity secur it ie s.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

� �inancial assets and �inancial lia�ilities �continued�

�� Recogn ised �air value measurements

(ii) �aluation tec�ni�ue �u�ed to det er�ine �air �alue�

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Specifi c valuation tec hniques used to val ue financi al instruments include:

The use of quoted market prices or dealer quotes fo r similar instruments.
The fair value of interest rate swaps is calc ulated as the present v alue of the estimated future cash flows based on observable yield curves.
The fair value of forward foreign exchange contracts is determined using forward ex chang e rates at the balance sheet date.
the f air value of the remaining financial instruments is determined using discounted cash f low analy sis.

All of the re sulting fair v alue e stimates are included in either level 1 or 2. There are no financial ins trume nts included in level 3 for the year ended 30 June 2016.

� �on-�inancial asset s and lia �ilitie s

�a��nventories

	��une �� �'�� ��une �� �'��
Current Stores Ore Dore and concentrate Metal in circuit �on-current Stores �otal inventories	�� 2�,655 �� 20,664 �� 9,52� �� �,649
	�� 66,496
	�� �2�
	�� �2�
	�� 6�,323

(i) ��igning co�t�to in�entorie�

Inventory is valued at the lower of cost or net realisable value. Cost r epre sents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable pro duc tion overhead expenditure, including depreciation and amortisation, incurred in converting material into finished g ood s.

(ii) ��ount�recogni�ed in �ro�it or lo��

Write-downs of inventories to net realisable value amounted to $1.443 million (30 Ju ne 2015: $5.35�million). These were recognised as an expense during the year ended 30 June 2016 and includ ed in 'cost of sales' in profit or loss.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �on-�inanci al a ssets and lia�ilities �co ntin ued�

��t�er non -cu rrent assets

	��une �� �'�� ��une �� �'��
Tenement security bonds Administration and office bonds	�� 65 �� 15
	�� �0

�c��ssets and lia �i litie s o �disposal group classi�i ed as � eld �or sale

The following as se ts a nd liabilities were reclassifie d a s he ld f or sale as at 30 June 2016:

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	��une �� �'�� ��une �� �'��
�ssets Trade and other receivables Inventories Property,plant and equipment Minedevelopment and exploration Less:Impairment of assets Otherassets Lia�ilities Tradeand other payables Interest bearing liabilities Provisions Netassets held for sale	�� - �� - �� - �� - �� - �� -
	�� -
	�� - �� - �� -
	�� -
	�� -

(i) � � �a ir�ent

An i m pa ir ment is recognised w he n the carrying amount o f a c ash-generating unit e x ceeds the recoverable amou n t. T he recoverable amo u nt fo r the Pajingo asset c a sh - generating unit has be e n determined based on its fair va lu e le ss cost to dispose.

On 16 Au g us t, the Company sig n ed a Sale and Purchase A g re ement with Minjar G o ld Pty Limited for the sale of the Pajin g o as set for $45 million. T h e c onsideration comp ri se s of $42 million in cas h and $3 million in deferred considera tio n . T he sale is expect ed to s ettle in early Septe m b er .

(ii) �on�re cu rri ng �air �alue �ea�u re � en t�

The recovera ble am ount of the Pajin go a ss et has been deter m in ed based on the fair va lue less cost to dispose.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

(continued)
� �on-�inancial assets and lia�ilities �continued�
�d�Property�plant and e�uipment
		Plant and
	�ree�old land	e�uipment	�otal
	�'��	�'��	�'��	�
�t ��uly ��
Cost	10,355	6�6,950	6��,305
Accumulated depreciation	-	(216,��3)	(216,��3)
Net carrying amount	10,355	460,16�	4�0,522
�ear ended ��une ��
Carrying amountat the beginning of the year	10,355	460,16�	4�0,522
Additions	-	�0,260	�0,260
Amounts acquired in a business combination	6,1�2	429,339	435,521
Reclassifications	524	(51�)	6
Disposals	-	(4,024)	(4,024)
Depreciation relating to fair value uplifton business combinations	-	(2,�41)	(2,�41)
Depreciation	-	(134,556)	(134,556)
Classified as held for sale	(6,535)	(3�,5�3)	(45,11�)
Carrying amount at the end of the year	10,526	��9,244	��9,��0
�t ��une ��
Cost	10,526	1,565,2�0	1,5�5,�96
Accumulated depreciation	-	(��6,026)	(��6,026)
Net carrying amount	10,526	��9,244	��9,��0
�ncluded in a�ove
Carrying amount of lease assets	-	13,52�	13,52�
Carrying amount of assets under construction	-	42,43�	42,43�
	-	55,965	55,965

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �on-�inanci al a ssets and lia�ilities �co ntin ued�

�d�Property� pla nt and e�uipment

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�t ��uly �� Cost Accumulated depreciation Net carrying amount �ear ended ��une �� Carrying amount at thebeginning of the year Additions Exchange differences Reclassifications Disposals Depreciation Carryingamount at the end of the year �t ��une �� Cost Accumulated depreciation Netcarrying amount �ncluded in a�ove Carryingamount of lease assets Assets in the course of construction	10,365 -
	10,365
	10,355
	10,355 -
	10,355
	- -
	-

(i) � o n�current a��et��ledg e d a ��ecurit�

Re f er to note 5(e) for informa t ion o n non-current assets p led g ed as security by the G ro up.

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(ii) �e � reciation �et�od�an d u � e�ul li�e�

Lan d is n ot depreciated. Depr e ci a tion of plant and equip m e n t is calculated using th e straight line method to allo ca te t heir cost, net of their r esi d ual values, over their estimated useful lives. The rates vary between 10% and 33% p er a nnum.

See n o te 2 3(o) for the other ac c ou n ting policies relevant t o pr operty, plant and equi p ment.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

(continued)	(continued)
� �on-�inancial assets and lia�ilities �continued�
�e�Mine development and e�ploration
			E�ploration
		Producing	and
		mines	evaluation	�otal
		�'��	�'��	�'��
�t ��uly ��
Cost		�9�,163	52,00�	950,1�0
Accumulated amortisation		(393,051)	(12,3�6)	(405,43�)
Net carrying amount		505,112	39,621	544,�33
�ear ended ��une �	��
Carrying amount at the	beginning of the year	505,112	39,621	544,�33
Additions		13�,934	2�,�23	166,�5�
Amounts acquired in a	business combination	64�,154	69,90�	�1�,061
Amortisation relating to	fair valueuplift on business combinations	(55,326)	-	(55,326)
Amortisation		(200,�94)	-	(200,�94)
Reclassifications		(6)	-	(6)
Asset write-off		-	(13,�01)	(13,�01)
Classified as held for sale		(��,139)	(13,212)	(101,351)
Carryingamount at the	end of the year	94�,�35	110,33�	1,05�,1�3
�t ��une ��
Cost		1,962,��2	122,�24	2,0�5,606
Accumulated amortisation		(1,015,04�)	(12,3�6)	(1,02�,433)
Net carrying amount		94�,�35	110,33�	1,05�,1�3

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �on-�inanci al a ssets and lia�ilities �co ntin ued�

�e�Mine dev elop ment and e�ploration

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	Producing mines �'�� E�ploration and evaluation �'�� �otal �'��	Producing mines �'�� E�ploration and evaluation �'�� �otal �'��
�t ��uly �� Cost Accumulated amortisation Net carrying amount �ear ended ��une�� Carrying amountatthebeginning of the year Additions Asset write-off Amortisation Reclassifications Asset write-off Carryingamount at the end of the year �t ��une �� Cost Accumulated amortisation Netcarrying amount	�69,03� 40,56� �09,606 (304,025) (12,3�6) (316,411)
	465,013 2�,1�2 493,195
	465,013 2�,1�2 493,195 121,4�3 23,9�1 145,464 2,06� - 2,06� (�9,026) - (�9,026) 5,5�4 (5,5�4) - - (6,96�) (6,96�)
	505,112	39,621 544,�33
	�9�,163 52,00� 950,1�0 (393,051) (12,3�6) (405,43�)
	505,112 39,621 544,�33

(i) � on �current a��et��ledge d a �� ecurit�

Re f er to note 5(e) for informati o n on non-current assets pl ed ge d as security by the Group .

(ii) � � orti�ation �et�od�an d u� e �ul li�e�

Mi n e d evelopment costs are a mo r tised on a units of prod u cti o n basis over the life of th e area to which they relate. In a pp ly ing the units of produ c tio n method, amortisation i s c al culated using the expec te d total contained ounces wit h in t he mine to achieve a co ns i stent amortisation rate p er o unce. To achieve this, th e amortisation rate is ba se d o n the ratio of total min e d e velopment costs (incu r red and anticipated) over th e expected total contained oun c es .

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See n ot e 23(n) for the other a c co u nting policies relevant to m ine development and e xploration.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

ontinued)
� �on-�inancial assets and lia�ilities �continued� �� Provisions	��une �� �'�� ��une �� �'�� �� 12,31� �� 12,31� �� 3,��5 �� �3,416 �� - �� ��,191 �� 99,50�

Current Employee entitlements �on-current Employee entitlements Rehabilitation provision Other long term provision �otal provisions

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(i) �n�or�ation a�out indi�idual �ro�i�ion�a nd �ig ni�icant e� ti�ate �

�� lo�ee entitle�ent�

The p rovis ion for employee benefits relates to the Group's li ability for long servi ce leave and annual leave.

See note 23( v) fo r the other accounting policies relevant to employee ben efits.

�e�a�ilitation �ro�i �ion

Site restoration costs in clud e the dismantling and removal of mining plant, equipm ent a nd buil ding structures, waste removal and rehabili tati on of the site in accordance with the requirements of the min ing pe rmit s. Such costs are determined using es tim ates of future costs, current legal requirements and tech nolo gy.

See note 23(t) for the other account ing policies relevant to site restoration costs.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� �on-�inanci al a ssets and lia�ilities �co ntin ued�

�� Provision s

(ii) Mo�e �e nt�in �ro�i�ion�

Move men ts in each class of provision du ring t he f inancial year are set out below:

	Employee
	�ene�its	Re�a�ilitation	�t�er	�otal
	�'��	�'��	�'��	�'��
��une ��
Space
Carrying amount at the beginning of the year	16,092	�3,416	-	99,50�
Charged�(credited)toprofit or loss
- unwindingof discount	-	3,406	-	3,406
Re-measurement of provision	3,3�9	1,316	-	4,�05
Acquired throughbusiness combination	15,995	�4,520	200	90,�15
Classifiedasheldfor sale	(4,494)	(16,�42)	-	(21,236)
Carryingamountat the end of the year	30,9�2	145,916	200	1��,09�
��une ��
Space
Carryingamount at the beginningof theyear	11,136	�9,2��	-	90,424
Charged�(credited) to profit or loss
-unwinding of discount	-	2,09�	-	2,09�
-additional provisions recognised	4,956	-	-	4,956
Re-measurement of provision	-	2,9�2	-	2,9�2
Othermovements	-	(942)	-	(942)
Carrying amount at the end oftheyear	16,092	�3,416	-	99,50�
� E�uity
�a�Contri�uted e�uity

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	��une	��une	��une	��une
	��	��	��	��
	S�ares	S�ares	�'��	�'��
Ordinaryshares
Fullypaid ordinary shares	��	992,435,234	��	1,292,620
	��	992,435,234	��	1,292,620

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

� E�uity �continued�

�a�Contri� uted e�uity

(ii) Mo�e�ent�in ordina r��are ca� ital

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		��une �� S�ares ��une �� �'�� ��une �� S�ares ��une �� �'��	��une �� S�ares ��une �� �'�� ��une �� S�ares ��une �� �'��
	Opening balance Issue of shares as consideration for Phoenix Gold Limited Issue of shares to La Mancha Group International BV oncompletion of business acquisition Sharesissued on vesting of performance rights Shares issued under DRP for final dividend Shares issued under DRP for interim dividend Shares issued to La ManchaGroupInternational BV under Entitlement Offer Shares issued under Institutional Component of Entitlement Offer Shares issued under Retail Component of Entitlement Offer Shares issued on exercise of unlisted share options Employee share scheme issues Issue of sharesto Emmerson Resources Limited Less: Transactionscosts arising on share issue	�� �� �� �� �� �� �� - - �� �� - -	�� �09,9�9,453 1,04�,424 �� - - �� - - - �24,�11 - �� 1,�03,000 1,140 �� 1,�40,92� 1,503 �� - - - 192,463,�33 1�3,21� - �3,20�,�2� �4,�� �� - - - - - - 2,504,3�3 2,000 - - (�,552)
		��	�� 992,435,234 1,292,620

(iii) �rdinar��are�

Ordinary shares entitle the hold er t o participate in dividends and the proceeds on winding u p of the C om pany in proportion to the number of and a mou nts paid on the shares held.

On a show of hands every holder of ordi nary shares present at a meeting in person or by proxy, is e ntit led to on e vote, and upon a poll each share is entitled t o o ne vote.

Ordinary shares have no par value and the Comp any does not have a limited amount of authorised capital.

(i�) �i�idend rein�e�t�ent �lan

The Company has established a dividend reinvestment plan und er which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the iss ue o f new ordinary shares rather than by being paid in cash. Shares are issued under the plan based on the daily V WA P for the 5 days immediately after the record date. Any DRP or discount are subject to Board approval.

(�) ��lo�ee ��are �c�e�e

Information relating to the employee share scheme, including details of shares is sue d under the scheme, is set out in note 1�.

��t�er reserves

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� E�uity �con tinu ed�

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��t�er rese rv es


��t�er reserves

Fair value revaluation reserve Cash flow hedge reserve Share-based payments Foreign currency translation

Movements� �air �aluere�aluation re�er�e Balanceat the beginning of the year Changein fair value of available-for-salefinancial assets Balance atthe end of the year Ca���low�edge� Balance at the beginning of the year Change in the fair value of cashflow hedges Balanceat the end of the year ��are��a�ed �a��ent� Balance at the beginningoftheyear Share based payments expense Balance at the end of the year �oreigncurrenc�tran�lation Currency translation differences arising during the year Balanceat the end of the year	5(c) 1�

(i) �a tu re and �ur�o�e o�ot� e r r e� er�e�

�inanc ia l a� �et�at �air �alue t� ro u g� ot�er co��re�en�i �e i nc o�e

As expl ai ne d in note 23(l), the G ro u p has elected to reco gn is e changes in the fair v a lue of certain investments in equity se c uri tie s in other compre he n siv e income. These c ha n ge s are accumulated i n a separate reserve within equity. Th e en tit y does not have a ny p o licy on transferring a m ou nts from this reserv e to another reserve or to retained ea rn in gs when the relevan t e q ui ty securities are so ld .

Ca��low �e dg e�

The hedging re se rv e i s used to record ga in s o r losses on deriv ati ve s that are designate d and qualify as cash flow hedges and are r ec og ni sed in other com pr eh en sive income, as de sc rib ed in note 23(m). A mounts are rec lassified to profi t o r l oss when the asso cia te d h edged transacti on a ffe cts profit or loss.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

� E�uity �continued�

��t�e r reserves

��are��a�ed �a��ent�

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The o ption reserve co mprises the consid eration rec eived for the issue of Options over unissued ordinary shares of the Company and th e fair value of Options over unissued ordinary shares granted as employee remuneration until the Options are exercised or expire .

�oreign currenc�tran�lation

Exchange differences arising on translation of the foreign contr olled en tity are reco gnised in other comprehensive income as described in note 23(d) and accumulated in a separate reser ve with in equity. The cu mulative amount is r eclassified to profit or loss when the net investment is disposed of.

�c�Retai ned ear nings

M ovement s in retained earnin gs were as follows:


	Balance at the beginning of the year Net (loss)�profit for the period Dividends paid and shares issued under the DRP 11(b) Balance at the end of the year

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� Cas��lo�in �or mation

�a�Reconcili atio n o��loss��pro�it a�ter inco me ta �to net c as�in�lo��rom operating activities

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	��une	��une
	��	��
	�'��	�'��
(Loss)�profit for the period	��	100,115
Acquisition and integrationcosts	��	-
Depreciation and amortisation	��	152,�35
�nwind of discount onprovisions	��	2,09�
Amortisation of debtestablishment costs	��	2,323
Share-based paymentsexpense	��	1,�6�
Write off of debtestablishment costs	��	-
Loss on disposalofassets	��	2�4
Fair value adjustment to available-for-sale financial assets	��	-
Explorationand evaluation costs expensed	��	6,96�
Impairment of goodwill	��	-
Impairmentofassets	��	-
Fair valueamortisation and expense	��	-
Changein operating assets and liabilities:
(Increase) �decrease in operating receivables	��	1�,260
(Increase) �decrease in inventories	��	(4,026)
(Increase) �decrease in financialassets at fair value throughprofitor loss	��	-
(Decrease) �increase in operatingpayables	��	(1,9�9)
(Decrease) �increase in borrowingcosts	��	(2,049)
(Decrease) �increase in otherprovisions	��	9,150
Net cashinflow from operatingactivities	��	2�4,�3�
��on-cas�investing and�inancing activities

	��une	��une
	��	��
	�'��	�'��
Acquisition of plant and equipment by means of finance leases	-	5,�1�
Acquisition of available-for-sale asset by means of shareswap	-	2,000
	-	�,�1�

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements

(continued)

Ris�

This section of th e notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial p osition and pe rformance.

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9 Critical estimates, judgements and errors 130 10 Financial risk management 131 11 Capital management 135

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

� Critical esti mat es��udgements and err ors

In the applicati on of Australian Accounting Stan dard s, ma nage ment is required to make judgements, estimates and assump tion s about carrying values of a sset s and liab ilities that are not readily apparent from ot her source s. The esti mate s and associated assumpti ons are b ased on historical experience and various other fa ctors that are believe d t o be reasonable under the circu mst ance , the results of which form the basi s of ma king the ju dgements. Actu al results may differ from thes e e stima tes .

The estimates and underlying as sum ptio ns are reviewed on an ongoing bas is. Re visions to accounting estimates a re recognised in the perio d in whi ch t he estimate is revised if the r evisi on aff ects o nly that period or in the period of the revision and future pe riod s if the revision affects both curr ent and f uture periods.

The judgements, esti ma tes and assumptions that manage me nt ha s ma de in the process of applying the Group’s accounting policies an d th at have the most significant e ffec ts o n th e amounts recognised in the financial statements are dis cu sse d below.

�a�Determina tio n o� mineral resources and o re res erv es

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The Group e st ima te s its Mineral Resources and Or e R eserves in accordance with the Aust ralas ian Code of Reporting o f Exp lo ration Results, Mineral R es our ces and Ore Reserves (“the J ORC Co de”) . The information on mineral re so ur ce s and ore reserves is pre pa red by or under the supervision of C om pete nt Persons as defined in the JOR C Co de . The amounts presente d are ba sed on the Mineral Resou rce s a nd O re Reserves determined under th e JO R C Code.

There a re nu merous uncertainties in he re nt in estimating mineral res ou rces a nd ore reserves and assumptio ns that a re v al id at the time of estimati on w hic h may change significa ntl y wh en new information becomes a vaila ble. Chan g es in the forecast prices of co m mo dities, exchange rates, pro du ctio n costs or recovery rates m ay change the ec on o mic status of reserves an d ma y, ultimately, result in th e res er ves being restated. Such c han ges in rese r ve s could impact on deprec ia tio n and amortisation rates, a sset c arrying values, impairment as sessments and pro v isions for decommissio n ing a nd restoration.

��Es t imation o�t�e provisi o n � o r re�a�ilitation and di sm a nt ling

Pr o visi o n for rehabilitation and dis m antling property, plant a nd eq uipment is estimated ta kin g into consideration fa ct s a nd circumstances avail a ble at the balance sheet da te . Th is estimate is based on th e expenditure required to u nd e rtake the rehabilitation an d dismantling, taking int o co ns ideration time value of m oney. Factors that will aff e ct t his liability include futu r e d is turbances caused by f u rth e r development, change s in technology, changes in re g ula t ions, price increases a n d c hange in the timing of ca sh flows. When these facto r s change or become kn o wn in the future, such diff e ren c es will impact the min e re h abilitation provision in t he period in which they ch an g e or become known.

�c� R e c overa�ility o�de�err e d ta �

Defe r red tax assets are recog n ise d for tax losses and d e du c tible temporary differe n ces to the extent mana g e me nt considers that it i s p ro bable that future tax a ble profits will be availabl e to utilise those tax losses and te m p or ary differences.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

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� Critical estimates��udgements and errors �continued�

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�d��mpairm ent o�non-current assets

The group undertakes an impairment review to determine whether any indicators of impairment are present. Where an indicato r of impairment exis ts, an esti mate of the recoverable amount of the CG�is made. Each mine is considered to be a separate CG�.

In 2013, the group recognised significa nt impairm ent losses in e ach CG �following the significant decline in the gold price, and related market valuations and sen timent ar ound gold eq uities. A t 30 June 2016, there were no indicators of potential impairment expense or previous imp airment reversals, w ith the exception of the Pajingo asset, refer to note 6(c) for details.

The recoverable amount has been determined based on the higher of the CG� ’s fair v alue less costs of disposal and value in use. These assessments require the use of estimates and assumptions such a s reserve s and anticipated m ine ope rating lives, discount rates, exchange rates, commodity prices, grade o f ore mined, re cove ry percenta ge, operatin g perfo rmance, costs and capital estimates. Given the impairment expense recog nised in 2013, a significa nt negative chang e in these assumptions in isolation would likely result in an additiona l impairment expe nse.

��inancial ris�man agem ent

The Group’s activities expose it to a var iety of financial ri sks: m arket risk (including interest rate risk and price risk), credit risk and liquidity risk. The Group’s overa ll risk man agem ent program focuses on the unpredictability of f inancial markets and seeks to minimise potential adve rse effects on t he financial performance of the Group. The Gro up has used derivative financial instruments such as in terest rat e swa ps to hedge interest rate risk exposure s .

Risk managem ent is carried out at a corporate level under policies appr oved by the Boar d of Directors. Management identi fies , evaluates and hedges financial risks in close co-ope ratio n with t he G roup’s operating units. The Board of Di rect ors approves written principles for overall risk manage ment , as wel l as policies covering specific areas, such as in tere st rate risk, credit risk, gold price risk and use of derivati ve f inancia l ins truments and non-derivative financial instr ume nts, and investment of excess liquidity.

The Group holds the following fina ncia l instruments:

	��une	��une
	��	��
	�'��	�'��
�inancial �ssets
Cash and cash equivalents	��	205,��
Trade and other receivables (excluding GST refundable)	��	5,��9
Derivative financial instruments	-	6,�62
Available-for-sale financial assets	��	6,516
	��	224,�55
�inancial Lia�ilities
Trade and other payables	��	64,254
Interest bearing liabilities	��	23,916
Derivative financial instruments	��	-
	��	��,1�0

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��inancial ri s�m anagement �continue d�

�a�Derivative s

Derivative s a re only used for economic h edgi ng pu rpos es and not as trading or speculative in vestmen ts. The group h as the following derivative fina ncia l inst rum ents:

	��une �� �'�� ��une �� �'��
Current assets Forward foreign exchangecontracts - cash flow hedges Current lia�ilities Diesel swapcontracts - cash flow hedges	- 6,�62
	- 6,�62
	�� -
	�� -

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(i) Cla� � i�ic at ion o�deri�ati�e�

Derivat iv es a re classified as held for t ra din g and accounted for at fair va lue thro ugh profit or loss unless they are design a ted a s hedges. They are pre se nt ed as current assets or liab ilit ies i f th ey are expected to be settled with in 12 m on th s after the end of the rep ort ing p eriod.

The G ro u p’s accounting policy fo r i ts ca sh flow hedges is set ou t in n ote 23(m). For hedged foreca st t ransactions that r es u lt in the recognition of a n on- fi nancial asset, the Grou p has e lected to include related h edg ing gains and loss e s i n the initial measuremen t of t h e cost of the asset.

(ii) �a ir �alue �ea�ure�ent�

Fo r inf o rmation about the met ho ds and assumptions used i n de te rmining the fair value of de rivatives please refer to n ot e 5(f).

��M a r�et ris�

(i) � o reign e�c�ange ri��

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Fo re ig n exchange risk arises f ro m future commercial tra n sa ct ions and recognised as s ets and liabilities de no m in ated in a currency th a t is not the entity’s functio n al. A s at 30 June 2016, the Group held �S$0.2�9 milli o n (3 0 June 2015: �S$0. 1 �2 m illion) in a �S dollar c urr e ncy bank account and o utstanding receivables of �S$ 9 .� 4 �million (30 June 20 1 5: � S$1.�5�million) relat i ng t o the Mt Carlton opera t ion. The Group also held NZ$ 0 .06 0 million (30 June 20 1 5: N Z$ nil) in a NZ dollar c urr e ncy bank account.

Mana g e me nt has set up a poli cy t o manage their foreign ex ch ange risk against their functional currency. The risk is mea s ur ed using sensitivity a na ly si s and cash flow fore c as ti ng. An increase�decr ea se in A�D:�SD foreign exchan ge r at es of 5% will result in a $ 13,950 (30 June 20 1 4: $ �,600) increase�decr e ase in �S dollar currency bank ac co un t balances and a $4 �� ,4 0 0 (30 June 2015: $ 92 ,9 0 0) increase�decreas e in �S dollar receivables. An increase� de cr ea se in A�D:NZD fo re ig n exchange rates of 5 % w ill result in a $3,150 ( 30 June 2015: $ nil) increase�d ec re as e in NZ dollar cur re nc y bank account bala nc e s.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��inancial ris�management �continued�

��Mar� et ris�

(ii) �rice ri��

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The G roup is currently exposed to the ris k of fluctu ations in prevailing market commodity prices on the gold and silver currently produc ed from its g old mines and m arket sha re prices on the available-for-sale assets. The Group has in place physical gold delivery contracts as at 30 June 2 016 cov ering sales of �06,9��o�(30 June 2015: 306,�20o�) of gold at an average flat forward price of $ 1,623�o�(30 June 20 15: $1,536�o�). An increase�decrease in market share prices on available- for-sale assets of 10 % will r esult in a $2�0,�06 (30 June 2015: $651,603) increase�decrease in available-for-sale assets.

(iii) Ca��low and �air �alue intere�t rate ri��

The Group’s interest rate risk arises from variable interest rates on interest bearing li abilitie s. As at 3 0 Jun e 2016, the Group h eld inter est bearing liabilities of $2�5 million (30 June 2015: $ nil) which incurs intere st at a va riable rate. An increase�de crease of variable interest rates of 0.25% will result in a $1.�54 million(30 J une 20 15: $ nil ) increas e�decrea se in intere st expe nse relating to interest bearing liabilities.

�c�Credit ris�

Credit risk is the risk of financia l loss t o the Grou p if a c ustomer or counterparty to a financial instrument fails to meet its contractual obligations and a rises p rincipally fr om th e Group’s receivables from customers and investment securities. At the balance sheet date th ere were no sig nificant concentrations of credit risk given cu stomers and banks have investment grade cred it ratin gs. The t otal tr ade and other receivables outstanding at 3 0 Jun e 2016 was $19.262 million (30 June 2015: $5.� �6 mil lion).

�d�Li�ui dity ris�

Liquidity risk is t he ri sk that the Group will not be able to meet its financial oblig ations as th ey fall due. Prudent liquidity risk manage me nt implies maintaining sufficient cash and term deposit s, th e availa bility of funding through an adequate amount of com mitted credit facilities and the ability to close out mark et po sitions. Th e Group manages liquidity risk by c onti nuously monitoring forecast and actual cash flows and matc hing th e m aturity profiles of financial assets an d lia bilities.

(i) �inancing arrange�ent�

The Group had access to the following undr awn borrowing facilities at the end of the reporting perio d:

	��une	��une
	��	��
	�'��	�'��
�an�loan��re�ol�ing credit �acilit�
Expiring beyond one year	��	200,000
	��	200,000

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��inancial ri s�m anagement �continue d�

�d�Li�uidity ris�

(ii) Maturi tie �o��inancial lia�ilitie�

The ta bles below analyses the Group' s fi nanci al li abilities into relevant maturity group ings b ased on their contr ac tual maturities for:

( a) all non-derivative fina nci al lia bilit ies, and
(b ) net and gross settl ed deriv ativ e financial instruments for w hich the co ntrac tual maturities are essential for an understandin g o f the tim ing of the cash flows.

The amounts disclose d in th e t able are the contractual und isc ounte d c ash flows. Balances due within 12 months equal their carrying ba lan ces as the impact of discounti ng is no t sig nificant.

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�t ��une �� Space �on-derivatives Tradeandother payables Finance lease liabilities Otherborrowings Bankloans - Corporate Credit Facility �t��une �� Space �on-derivatives Tradeand other payables Financelease liabilities Otherborrowings	�� �� �� ��	- �� - ��	- - - ��	- - - -
	��	��	��	-
	55,�02 12,�11 5,409	- �,0�5 -	- 1,503 -	- - -
	�3,922	�,0�5	1,503	-

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��Capital management

�a�Ris�ma nagement

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The Group’s objectives when manag ing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong c apital base sufficient to maintain future exploration and development of its projects. In order t o maintain o r adjust the capita l structur e, the Group may return capital to shareholders, issue new shares or sell assets to re duce debt. The Group’s foc us has b een to raise sufficient funds through equity and debt capital markets to fund capital invest ment in wo rking capital a nd exp loration and evaluation activities.

The Group monitors its liquidity through analysis of regular cash flo w forecasts.

(i) �oan co�enant�

The len ders have placed covenants over the revolving credit facility based on the curre nt ratio, le verag e ratio, interest coverag e ratio and the gearing ratio. The Group has complied with these coven ants d uring the year .

��Di vidends

(i) �rdinar� ��are�

	��une �� �'�� ��une �� �'��
Final dividend Final dividend for the year ended 30 June 2015 of 1cent per shareunfranked (30June2014: 1 cent per share unfranked) per fully paidsharepaid on2 October2015 Space Interim dividend Interim dividend for theperiod ended 31 December 2015 of 1 cent per share unfranked (31 December2014: 1 cent per share unfranked) per fully paid share paid on 29 March 2016	�� �,132 �� �,149
	�� 14,2�1

The Board of Directors approved the imp lem entation of a DRP as part of the Groups existing divide nd policy. Th e DRP allows shareholders to elect to reinvest all or part of any dividends payable on their Evolution sha res to acquire additional Evolution shares. The partici patio n rate in the final dividend for the year ended 30 Jun e 2 015 was 1�.�% of the Company's ordinary shares, with 2,49 2,00�shares issued at $1.0�63 per share. The cas h payment amount for the final dividend for the year end ed 3 0 June 2015 was $11.653 million. The participation rate in the interim dividend for the half-year ended 31 Dec emb er 2015 was 1�.6% of the Company's ordinary shares, with 1,525,313 shares issued at $1.6�64 per share. T he c ash payment amount for the interim dividend for the half-year ended 31 December 2015 was $12.1�1 million. As at 30 June 2016, the Group held an amount for unclaimed dividends of $0.196 million. Total cash paid for dividen ds d uring the year was $23.�34 million.

(ii) �i�idend�not recogni�ed at t�e end o�t�e re�orting �eriod

In June 2016, the Directors approved a change to the dividend policy of whene ver possible paying a half-yearly dividend equivalent to 4% of the Group's sales revenue. The change in policy dou ble d the payout ratio from the previous level of 2% to 4% of revenue (relating to sales in the six month period to 30 Ju ne 2016). The change is effective immediately and has been applied to the final dividend for 2016.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements

(continued)

��Capital man age ment �continued�

��Dividends

	��Dividends

	Inaddition to the above dividends, sinceperiod end the Directors have recommended the payment of a finaldividend of 2 cents per fullypaidordinary share (30 June 2015: 1cent), unfranked. The aggregate amount of theproposed dividend expected tobepaidon23 September 2016 out ofretainedearnings at 30 June 2016, but notrecognised as a liability at periodend, is

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements

(continued)

�roup structure

This section prov ides information which will help users understand how the Group structure affects the financial position and perfor mance of the Group as a whole. In particular, there is information about:

ch anges to the st ructure that occurre d during th e year as a result of business combinations and the disposal of a discontinued o peration

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transactions with non-controllin g interests , and
interests in joint operations.

A list of significant subsidiaries is provided in note 12. This not e also d iscloses de tails ab out the Group’s equity accounted investments.

12 In terests in oth er ent ities

1 3� 13�

13 Bu siness combinations

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��nterests in ot� er entities

�a�Signi�ican t in vestments in su�sidiaries

The conso lida ted financial statements inc orpo rate the a ssets, liabilities and results of the follo wing pri ncipal subsidi arie s in accordance with the ac cou nting poli cy described in note 23(b):

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	Country o�
�ame o�entity	incorporation	Classo�s�ares	E�uity �olding
			��	2015
			�	%
Evolution Mining Management Services Pty Ltd	Australia	Ordinary	��	100
Conquest Mining PtyLtd(i)(ii)	Australia	Ordinary	��	100
CGT Gold Aust PtyLtd(i)	Australia	Ordinary	��	100
C�T �oldingsPtyLtd (i)	Australia	Ordinary	��	100
N�M Gold 2PtyLtd (i) (ii)	Australia	Ordinary	��	100
Edna May OpsPty Ltd (i) (ii)	Australia	Ordinary	��	100
Mt RawdonOperations Pty Ltd (i) (ii)	Australia	Ordinary	��	100
WestoniaMinesMinerals Pty Ltd (i)	Australia	Ordinary	��	100
Lion SelectionPty Ltd (i)	Australia	Ordinary	��	100
AuselectPtyLtd (i)	Australia	Ordinary	��	100
Lion MiningPty Ltd (i) (ii)	Australia	Ordinary	��	100
SedgoldPtyLtd (i)	Australia	Ordinary	��	100
FernysidePty Ltd (i)	Australia	Ordinary	��	100
EvolutionTennant Creek Pty Ltd (ii)	Australia	Ordinary	��	100
EvolutionMining NZ Pty Ltd (ii)	Australia	Ordinary	��	100
EvolutionMining (Cowal) Pty Ltd(i) (ii)	Australia	Ordinary	��	-
Toledo�olding (Ausco) Pty Ltd(i)	Australia	Ordinary	��	-
Evolution Mining Mungari Pty Ltd(i)(ii)	Australia	Ordinary	��	-
Evolution Mining (Mungari East)PtyLtd (i) (ii)	Australia	Ordinary	��	-
Evolution Mining (Phoenix) PtyLimited (i) (ii)	Australia	Ordinary	��	-
�aysMining Pty Ltd (i)	Australia	Ordinary	��	-

(i) These subsidiaries h a ve b een granted relief fro m the necessity to prepare fin an cial reports in accordance with Cla s s O rder 9��141�issued by t he A ustralian Securities an d Investments Commission. For further informatio n r e fer to note 21.

(ii) These entities are co n si d ered to be the material co n trolled entities of the Gr o up. Their principal activities are identifying, devel o pi n g and operating gold r e lat e d projects in both Austr a lia and New Zealand.

�nl es s o therwise stated, they h a ve share capital consist i ng s olely of ordinary share s that are held directly by the Grou p , an d the proportion of o w n e rship interests held e q ual s the voting rights held b y the Group. The country of incor po r at ion or registration is a ls o their principal place o f b us iness.

�� u si n ess com�inati on s

The acc ou nt in g for the Mungari a n d C owal acquisitions h as b e en finalised as at 30 J une 2016.

The Phoe nix a cq uisition remains o n a pr ovisional basis as th e fa ir values assigned t o the acquiree's identifiable assets and l ia bil iti es have only bee n d et e rmined provisionall y . A n y adjustments to th es e provisional values as a result of com ple ti ng work on the fair va lu es of assets and liab ili tie s acquired will be re co gnised within 12 months of the acquisiti on d at e and will be reco gn is ed as if they had oc cu rr ed as at the date of th e acquisition.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��usiness com�inations �continued�

�a�Summa ry o�ac�uisition - La Manc�a

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On 20 April 2015, the Gr oup announc ed that it had entered into a binding agreement with La Mancha Group International BV ( “La Mancha”) to acq uire 100% of La Mancha’s Australian operations (“La Mancha Australia”) in exchange for the i ssuance of 3 22.024 million Ev olution sh ares. The transaction was effected via the acquisition by Evolution of all of the shares in Toledo �oldings (Ausc o) Pty Lt d, the holding company of La Mancha Australia. La Mancha Australia’s operations compris e the Frog ’s Leg underg round g old mine, the White Foil open-pit gold mine, and the newly constructed Mungari CIL proce ssing pla nt.

The transaction was subject to a number of conditions, including E volution sharehold er app roval at an Extraordinary General Meeting held on 30 July 2015. The transaction was approv ed at the Extrao rdinary General Meetin g and FIRB approval was received on 21 August 2015 with the transaction comp leted on 2 4 Aug ust 2015. Effectiv e 1 Sept ember 2015, Naguib Sawaris and Sebastien de Montessus were appoin ted a s Director s with Vincent Benoit and Am r El Adawy appointed as their Alternate Directors

Details o f the pu rchase con siderat ion, the net assets acquired and goodwill are as follows:

�' �� Purchase consideration (refer to (d) below ): Ordinary shares issued �� Total purchase consideration ��

The as sets a nd liabilities recognised as a result of the acquisiti on ar e as foll ows:

	�air value �'��
Cash and cash equivalents Trade and other receivables Inventories Property, plant and equipment Mine development and exploration Deferred tax asset Trade and other payables Interest bearing liabilities Provisions Deferred tax liability Other liabilities Net identifiable assets acquired Goodwill Net assets acquired	�� �� �� �� �� �� �� �� �� �� ��
	�� ��
	��

At 31 December 2015, the Directors carried out an impairment review on the Good will amount of $35.2�0 million and determined that it was impaired.

(i) �e�enue and �ro�it contri�ution

The acquired business contributed revenues of $232.549 million and net profit of $49.662 mi lli on to the Group for the period from 25 August 2015 to 30 June 2016.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��usiness c om� inations �continued�

��Summary o� ac�uisition - Co�al

On 25 Ma y 2 015, the Group announced t hat it had ente red into an agreement with Barrick (A ustralia P acific) Pty Limited (“B arrick”) to acquire the Cowa l go ld mi ne t hrough the purchase of 100% of the share s in Barrick ( Cowal) Pty Li mi ted (“Cowal”) for a price of �S$ 550 mill ion. Completion of the Cowal Tran sactio n was c onditional upon Ba rric k obtaining written consent (e ither with out conditions or on conditions reaso nably s atisfac tory to Evolution h av ing regard to the materialit y o f tho se c onditions in the entirety of the sale of the Cowa l shares) under the M ining Act 1992 (NSW) fro m t he N SW Minister for Resources and Ener gy to the c hange in control and foreign acquisition of substantial co ntrol in Cowal, in relation to EL 159 0 an d EL ��50 . Ministerial consent was obtained on 1�July 2015 and th e t rans ac tion completed on 24 July 2 015 .

Details of the purch as e co ns ideration, the net assets a cqu ired and goodwill are as follows:

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	�'��
Purchase consideration (refer to (d) below): Cash paid Total purchaseconsideration The assets and liabilities recognised asa result of the acquisition are as follows:	��
	��

	�airvalue �'��
Cashandcash equivalents Tradeand other receivables Inventories Property, plant and equipment Mine development and exploration Deferred tax asset Tradeand other payables Provisions Deferred tax liability Netidentifiable assets acquired Goodwill Netassets acquired	�� �� �� �� �� �� �� �� ��
	�� -
	��

(i) �e � en ue and �ro�it contri �u ti on

The a cq ui re d business contrib ut ed r evenues of $3�5.34 6 mil l ion and net profit of $ 1 61.504 million to the Group for the p eri o d from 25 July 2015 t o 30 June 2016.

�c�Su mm a ry o�ac�uisition - P� o en i�

On 20 Aug u st 20 15, the Group an no u nc ed its intention to ma k e a n off-market takeo ve r offer ("the Offer") to acquire all of th e o rdinary shares of P ho e nix Gold Limited (" P ho en ix") that it did not c u rrently own. At the date of the Offer the G ro up held approximat ely 1 9. �% of the shares i n P ho enix.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��usiness com�inations �continued�

�c�Summa ry o�ac�uisition - P�oeni��continued�

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On 10 November, the Gr oup issued a revised off-market takeover offer ("the Revised Offer") which entitled the Group to pursue c ompulsory acquisiti on of all re maining shares held in Phoenix once the relevant interest of 90% was obtained. The Group reac hed this milestone on 21 D ecember 2015 and exercised its right for compulsory acquisition. The compulsory ac quisition w as completed on 2�Jan uary 2016.

Details of the purchase consideration, the net as sets acqu ired and goo dwill are as follows:


	Purchase consideration (refer to (d) below): Cash paid Ordinary shares issued Fair value uplift onpreviously held interest Total purchase consideration The assets and liabilities recognised as a result of the acquisition are as follows:

	Cash andcash equivalents Trade and other receivables Property, plant and equipment Mine development and exploration Other assets Trade and other payables Provisions Net identifiable assets acquired Goodwill Net assets acquired

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��usiness c om� inations �continued�

�d�Purc�ase co nsideration - cas�out�lo�

	��une �� �'�� ��une �� �'��
Outflow of cash to acquire subsidiary, net of cash acquired Cash consideration Less: balances acquired Cash Outflow of cash-investing activities	�� 3,300 �� -
	�� -
	�� 3,300

�c�ui�ition�r el ate d co�t�

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Acquisition a nd in tegration costs of $54.61 9 milli on that were not directly attri buta ble t o th e issue of shares are included i n ac qu isition and integration co st s in th e profit or loss and in oper atin g c ash flows in the statement of cash flo ws .

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements

(continued)

�nrecognised items

This section of the notes provides information about items that are not recognised in the financial statements as they do not (yet) s atisfy the reco gnition criteria.

In addi tion to the item s and transactions disclosed below, there are also:

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(a) �nrecognised tax amount s �see no te 6 (b) Non-cash investing and financing tra nsactions �see note 10( b) .

13 Contingent liabilities and contingent assets 144 14 Commitments 144 15 Events o ccurring after the reporting period 146

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Contingent lia� ilities and contingent a sset s

�a�Continge nt li a�ilities

The Grou p ha d contingent liabilities at 30 Jun e 201 6 in respect of:

(i) Cl ai� �

Ed na May Operations Pty Ltd, a wh olly o wn ed subsidiary of Evolution Minin g Lim ited, re ceived a Writ of Sum mons from the Supreme Cou rt of W estern Australia on 9 July 2014 toge ther w ith a S tatement of Claim filed b y Mineral Crushing Servic es (WA ) Pt y Ltd claiming damages of ap prox imate ly $3 million in relation to contract crushing services provid ed a t th e E dna May operation. The Gro up i s vigo rous ly defending the claim.

(ii) �uarantee�

The Group has p rov ide d b ank guarantees in favour of v ario us g overnment authorities and servi ce pro viders with respect to site r es tora tio n, contractual obligations an d pr em ises at 30 June 2016. The total of th ese gu arantees at 30 June 2016 wa s $14 1.62�million with variou s fi nan cial institutions (30 June 2015: $ 64.3 20 mil lion).

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��Com mi tm e nts

�a�Capit a l a nd lease commitments

(i) �� lo rat io n e��enditure co��it� en t�

In orde r to m aintain current rights of te nur e t o exploration tenements th e G rou p is required to perform minimu m explor a tio n work to meet minimum ex pe nd iture requirements speci fie d b y v arious government authorities . Th ese oblig at ion s are subject to renegoti at ion w hen application for a mi nin g le as e is made and at various ot her t imes. Thes e o bl igations are not provide d for in the financial report and a re pay able:

	��une �� �'�� ��une �� �'��	��une �� �'�� ��une �� �'��
Within one year Later than one year but not later than five years Later than five years	�� �� ��	2,549 5,24� 2,564
	��	10,360

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(�) Ca � ital co��it�ent�

The G r ou p has the following ca pi ta l commitments in rela t ion to capital projects and jo int venture requirements at eac h of th e sites.

		��une �� �'�� ��une �� �'�� �� �,602 �� �,602
	Within oneyear	��
		��

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��Commitments �continued�

�a�Capital and lease commitments

(c) �on�can cella�le o�erating lea �e�

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The Group leases mining equi pment, office spa ce and sm all items of office equipment under operating leases. The leases typically run for one month to five years with a n option to renew at the expiry of the lease period. None of these leases include contingent r entals.

	��une �� �'�� ��une �� �'��	��une �� �'�� ��une �� �'��
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within one year Later than oneyear but not laterthan five years	�� ��	22,3�2 3,110
	��	25,4�2

��old delivery commitments

	�old �or p�ysical delivery o� Contracted sales price ��o� �alue o� committed sales �'��	�old �or p�ysical delivery o� Contracted sales price ��o� �alue o� committed sales �'��	�old �or p�ysical delivery o� Contracted sales price ��o� �alue o� committed sales �'��
�s at ��une �� Within one year Later than one year but notgreater than five years �s at ��une �� Within one year Later than one year but not greater than five years	�� ��	�� ��	�� ��
	��	��	��
	94,320 212,500	1,601 1,514	150,�50 320,539
	306,�20	3,115	4�1,2�9

The counterparties to the physical gold delivery contracts are M acqu arie Bank Limited ("Macquarie"), Australia and New Zealand Banking Group Limited ("ANZ"), National Australi a B ank Limited ("NAB"), Westpac Banking Corporation ("WBC"), Commonwealth Bank of Australia ("CBA"), Citiba nk N.A ("Citibank") and Societe Generale ("SG"). Contracts are settled on a quarterly basis by the physical delivery of go ld per the banks instructions. The contracts are accounted for as sale contracts with revenue recognised once t he g old has been delivered to Macquarie, ANZ, NAB, WBC, CBA, Citibank, SG or one of their agents. The phy sica l gold delivery contracts are considered a contract to sell a non-financial item and is therefore out of the scope o f A ASB 139 �inancial �n�tru�ent��ecognition and Mea�ure�ent . As a result no derivatives are required to be recognised. The Company has no other gold sale commitments with respect to its current operations.

The Company acquired a further 245,9�5o�of gold delivery contracts as part of the La Man ch a acquisition, with scheduled quarterly deliveries from September 2015 through to December 201�.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Events occ urri ng a�ter t�e reporting p eriod

No matter or ci rcu mstance has occurred subse quen t to th e ye ar end that has significantly affected, or may significantly aff ect, the operations of the Gro up, the re sults of those operations or state of affairs of the Group or economic en tity in subsequent financial year s exc ept for the following matters:

(�) �iv e�t�ent o��in�o ��et

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O n 16 August, the Company si gne d a Sal e and Purchase Agreement wit h Min jar Go ld Pty Limited for the sale of th e Pajingo asset for $45 mil lio n. Th e c onsideration comprises of $4 2 mil lion in cash and $3 million in deferred consideration. The sale is ex pect ed to settle in early September.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

�t�er in�ormation

This section of the notes includes other information that must be disclosed to comply with the accounting standards and oth er pronouncem ents, but that is not immediately related to individual line items in the financial stateme nts.

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16	Related party transactions	14�
1�	Share-based payments	149
1�	Remuneration of auditors	153
19	Earnings per share	154
20	Deed of cross guarantee	155
21	Parent entity financial information	156
22	Summary of significant accounting policies	15�

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Related par ty t ransactions

�a�Parent ent itie s

The ultima te parent entity within the Grou p is Evol ution Mining Limited.

��S u� sidiaries

Int er ests in subsidiaries are set ou t in n ote 12.

�c ��ey management per so nnel co mpensation

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�c��ey management personnelcompensation
	��une �� � ��une �� � �� 6,350,160 �� 151,134 �� 6�0,240 �� 1,�11,962 �� �,��3,496
Short-term employeebenefits Post-employment benefits Other benefits Share-basedpayments	�� �� �� ��
	��

Detaile d re mu neration disclosures are p rovi de d in the remuneration re po rt on pa ges �2 to 95.

�d�� ra ns a ctions �it�ot�er relat ed pa rt ies

Direc to rs f ees in the amount of $1 10 ,0 00 were paid to Internatio na l Mi nin g and Finance Corp, a com pan y of whic h M r James Askew is a Dire cto r f or services provided durin g the pe riod (30 June 2015:$111, ��5 ).

Dir ec to rs fees in the amount of $� 4, 3� 5 were paid to John Ro w e a nd Associates, a company of w hich Mr John Ro w e i s a Director for services p rov id ed during the period (3 0 Ju ne 2015: $112,500).

Dir e ct o rs fees in the amount of $2 00 ,000 were paid to DAK C or po ration Pty Ltd, a compa ny of which Mr Jacob Kl e in i s a Director for services p ro v ided during the period ( 3 0 J u ne 2015: $200,000).

Di re ct o rs fees in the amount of $119,43�were paid to La �y � P ty Ltd, a company of wh ic h Mr Colin Johnstone is a D ire c tor for services provid ed d u ring the period (30 Jun e 2 01 5: $111,��5).

Dir e ct o rs fees in the amount o f $ � 9,16�were paid to Mr N ag u ib Sawaris as a Directo r for services provided du ri ng t he period (30 June 20 1 5: $ nil).

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Dir ec to rs fees in the amount o f $ � 9,16�were paid to Mr S e b astien de Montessus a s a Director for services pro vi de d during the period (3 0 Ju n e 2015: $ nil).

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��S�are-�ased payments

�a��ypes o�s�are �ased payment plans

The Group has two Optio n and Perfo rmance Rights plans in existence:

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(�) ��lo�e e ��are ��tio n and �er�or�anc e �ig�t�� lan (��)

The ESOP was established an d approved at the Annual General Meeting on 23 November 2010, and amended on 19 October 2011. The latest plan was approved at the Annual Genera l Meeting on 26 November 2014 and permits the Company, at the discretion of the Direct ors, to gr ant both Opti ons an d Performance Rights over unissued ordinary shares of the Company to eligible Director s and m embers of s taff as specified in the plan rules.

(�) ��lo�ee�and Contractor��tion �lan (�C��)

An ECOP was established and approved at the Annual General Meeting on 2�No vembe r 200�. Th e pla n permits the Comp any, at t he discretion of the Directors, to grant Options over unissued ordinary shares of the C ompa ny to el igible Director s, mem bers of staff and contractors as specified in the plan rules. No further Optio ns will be issue d under this plan.

��Recognised s�are � ased pay ment e�penses

	��une �� �'�� ��une �� �'��
Expense arising from equity settled share based payment transactionsrecognised inprofitand loss �� 1,�6�

�c�Summar y an d movement o��ptions on issue

The following table illus trates the number and weighted average exercise pri ces ( “WAEP ”) in Australian Dollars ($) of, and movements in, share Options issued during the year.

	�um�er ��une �� ��EP�� �um�er ��une �� ��EP��	�um�er ��une �� ��EP�� �um�er ��une �� ��EP��	�um�er ��une �� ��EP�� �um�er ��une �� ��EP��
Outstanding at the beginning of the year Excercised during the year Expired during the year Outstanding at the end of the period Exercisable at the end of the period	�� �� �� �� �� �� �� ��		9,3�3,�3� 1.�9 - - (1,�34,000) 1.39 �,649,�3� 1.��
	��	��	�,649,�3� 1.��

The weighted average remaining contractual life of Options ou tsta nding as at 30 June 2016 was 0.90 years (30 June 2015: 1.13 years) with exercise prices ranging from $1.4�2to $2 .412.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��S�are-�ase d pa yments �continued�

�c�Summary an d movement o��ptions on i ssu e �co ntinu ed�

The outst and ing balance as at 30 June 2 016 is rep rese nted by:

�ptio ns issued as part o�EC�P

52,954 Options with an e xer cise pric e ranging from $1.99�to $2.33 �

� ptions issued as part o� ES �P

5�2,141 Options wi th a n e xercise price of $1.4�2
3,596,520 Opti on s wi th an exercise price ranging fr om $1.� �2 to $1.936
9�1,�29 Opti on s wi th an exercise price ranging from $2. 0�2 to $2.412

�d�Summary a nd m ov ement o�per�ormance ri g� ts o n is sue

The following ta ble illu strates the number and mo vem ent s in, Performance Rights iss ued d uring the y ear.

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	�� ��
	�um�er �um�er
Outstandingbalance at the beginningof theyear Performancerights granted during the period Retentionrights granted during theperiod(i) Vestedduring the period Lapsedduring the period Forfeitedduring the year �utstanding �alance at t�e end o�t�eyear	21,3�2,111 14,316,��9 �,141,26� 10,�04,3�0 3,�50,000 - (2,262,954) (�24,�09) (923,22�) (522,�66) (65�,3�6) (2,491,5�3)
	�� ��

(i) The Group entered into a R ete nt ion Agreement with the Ex ec utiv e Chairman during the year. Pu rs uant to this agreement 3,�50,000 Ret e ntio n Rights will be issued on t he ter ms and conditions of the Comp an y's current Employee Share Option and Perfor m an ce Rights Plan, subject to sh a reh old er approval at the Compan y's next shareholder meeting. The Retention R igh ts will be issued for nil consi d era tio n and will only vest three y ea rs from the date of the Agreement if the Executi v e C hairman is an employee of t he C ompany at that time.

Th e P e rformance rights awar d ed d uring the 2013 financi al ye a r were tested as at 30 J un e 2015 and vested on 2 Se p te m ber 2015. 2,262,954 P erf o rmance Rights met the per fo rmance measures and v ested whilst 923,22� Pe r for m ance Rights did not m eet the performance meas u re s and lapsed. This equat es to a vesting rate of �1. 0 2 % and a lapsing rate of 2 �. 9 �%.

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The Pe rf ormance Rights awa r de d during the 2014 finan c ial y ear were tested as at 3 0 June 2016. As at the date of th i s r e port, all �,961,146 P er for m ance Rights eligible fo r t e sting have met the per f ormance measures and have bee n ap p roved by the Board t o v es t. This equates to a v e sti n g rate of 100%.

There w e re 10,�04,3�0 Perfor m an c e Rights granted duri n g th e 2015 financial year, with 9,�39,�12 outstanding after a cc o un ting for forfeitures, w hi ch will be subject to p e rfo rm ance testing as at 3 0 June 201�.

There w e re � ,141,26�Performa nc e R ights granted durin g th e 2016 financial year, w ith �,9��,�53 outstanding after acc ou nt in g for forfeitures, w hi ch w ill be subject to per fo r ma nce testing as at 30 June 201�. Additionally, there wer e 3 ,� 50 ,000 Retention Ri g ht s g ranted during the 20 1 6 financial year to the E xecutive Chairman, subject to sharehol de r ap proval, which will ve st s ubject to the Exec ut ive C hairman being an e mployee of the Company at 16 Decembe r 2 0 1� .

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

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��S�are-�ased payments �continued�

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�d�Summa ry and movement o�per�ormance rig�ts on issue �continued�

The outstanding balance of each gra nt of Performance Rights is summarised in the table below:

	�� �� �� �� �otal
	�um�er �um�er �um�er �um�er �um�er
Performance rights granted Retention rights granted Vested Lapsed Forfeited �utstanding �alance	4,943,��� 10,49�,40� 10,�04,3�0 �,141,26� 34,3��,�23 - - - 3,�50,000 3,�50,000 (2,262,954) - - - (2,262,954) (923,229) - - - (923,229) (1,�5�,594) (2,53�,262) (1,064,55�) (162,415) (5,521,929)
	- �� �� �� ��

�e� �air value d eterm ination

During th e period , the Comp any iss ued two allotments of performance rights that will vest on 30 June 201� . They have four perfor mance component s being a Total Shareholder Return (“TSR”) condition, an absolute TSR condition, a Growth in Earning s per shar e (“EPS ”) condition and a Growth in Ore Reserves condition.

(i) ��er�or�ance �ig�t �alu ation

The fair value of the TSR Performance Rig hts (m arket-bas ed con dition) was estimated at the date of grant using Monte Carlo simulation, taking into account the t erms a nd conditi ons u pon which the awards were granted.

(ii) ��o lute ��er�or�ance �ig�t �aluation

The Absol ute T SR Performance Right Valuation will be measured as th e cumul ative annual TSR over the three year period en ding 30 June 201�.

(iii) �rowt�in �arni ng� �er ��are

The growth in Earnings per Share is measured as the cumulative annual growth rat e in EPS, e xclu ding non recurring items over the thr ee y ear period ending 30 June 201�.

(i�) �rowt�in �re �e�er�e��er ��a re

The growth in Ore Reserves per shar e is measured by comparing the Baseline measure of the or e re serve s a s at 31 December 2014, to the Ore Reserves as a t 31 December 201�on a per share basis, with testing to be performed at 30 June 201�.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��S�are-�ase d pa yments �continued�

�e��air value de termination �continued�

The follow ing tables list the inputs to the mod els us ed f or the Performance Rights granted for the perio d:

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	�SR	��solute �SR	�ro�t�in EPS	�ro�t�in �re
				Reserves
Septem�er ��rig�ts issue
Number of rights issued	1,451,192	1,451,192	1,451,192	1,451,192
Spot price ($)	1.155	1.155	1.155	1.155
Risk-free rate (%)	1.�3	1.�3	1.�3	1.�3
Term (years)	2.�	2.�	2.�	2.�
Volatility (%)	60-65	60-65	60-65	60-65
Fair value at grant date($)	0.620	.0��5	1.10	1.10
�ovem�er��rig�ts issue
Number ofrights issued	433,10�	433,10�	433,10�	433,10�
Spot price ($)	1.255	1.255	1.255	1.255
Risk-free rate(%)	2.09	2.09	2.09	2.09
Term (years)	2.5	2.5	2.5	2.5
Volatility(%)	60-65	60-65	60-65	60-65
Fair valueat grant date ($)	0.�05	0.99	1.21	1.21
�e�ruary ��rig�ts issue
Number of rights issued	151,01�	151,01�	151,01�	151,01�
Spotprice ($)	1.525	1.525	1.525	1.525
Risk-free rate (%)	1.�5	1.�5	1.�5	1.�5
Term(years)	2.4	2.4	2.4	2.4
Volatility (%)	55-65	55-65	55-65	55-65
Fair value at grant date ($)	1.035	1.01	1.46	1.46

Th e v o latility above was deter m in e d with reference to hist o ric al volatility but also incorp o rates factors that m a na g ement believes will im p act t he actual volatility of th e C o mpany’s shares in futur e periods.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��Remuneration o�auditors

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

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� a �Price�ater�o useCoopers

	��	��
	�	�
�udit and ot�er a��urance �er�ice�
Audit and review of financial statements	��	256,�29
Other assurance services
Assurance related services	��	45,000
Total remuneration for audit and other assurance services	��	301,�29
�a�ation �*er�ice*�
Tax compliance services	��	-
Total remuneration for taxationservices	��	-
Total remuneration for other services	-	-
Total remuneration of PricewaterhouseCoopers	��	301,�29
��on-Price�ater�ouseCoopers related audit �irms
	��	��
	�	�
�udit and ot�er a��urance �er*�ic*e�
Other assurance services
Due diligence services	��	��,000
Internal audit services	��	94,514
Total remuneration for audit and other assurance services	��	1�2,514
�a�ation �er�ice�
Tax compliance services	��	12,000
Tax advisory services	��	51,565
Total remuneration for taxation services	��	63,565
Total remuneration of non-PricewaterhouseCoopers audit firms	��	236,0�9
�otal auditors' remuneration	��	53�,�0�

Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Remunerati on o�auditors �continued�

It is the Grou p p olicy to employ Pricewaterho use Coop ers o n assignments additional to their statutory audit duties where Pri cew aterhouseCoopers expertis e an d exp erie nce with the Group are important. The se assig nments are principa lly tax advice and due diligenc e re porti ng o n acquisitions, or where Pricewater houseC oopers is a warded assig nm ents on a competitive basi s. It is th e Gr oup's policy to seek competitive t ender s for all major con sulting pro jec ts.

� �Earnings per s�a re

�a��asic �loss��earni ng per s� are

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�a��asic �loss��earning pers�are

	��une	��une
	��	��
	Cents	Cents
From continuing operations attributable to theordinaryequity holders of the
company	��	13.�1
Total basic (loss)�earning per share attributabletothe ordinary equity holdersof
the Company	��	13.�1

Total basic (loss)�earning per share attributabletothe ordinary equity holdersof the Company	�� 13.�1
��Diluted�loss��earning per s�are	��une �� Cents ��une �� Cents �� 13.44 �� 13.44

Fromcontinuing operations attributable to the ordinary equityholders of the company Total diluted (loss)�earning pershare attributable to the ordinaryequity holders of theCompany

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)



	�a�ic (lo��)�earning �er ��are (Loss)�profit attributable to the ordinary equity holders of the Company used in calculating basic (loss)�earning per share: From continuing operations �iluted *(lo��)�*earning �er ��are (Loss)�profit from continuing operations attributable to the ordinary equity holders of the Company �sed in calculating basicearnings per share �sed in calculating diluted (loss)�earning per share (Loss)�profit attributable to the ordinaryequity holders ofthe company used in calculating diluted (loss)�earning per share �d��eig�ted average num�er o�s�ares used as t�e denominator

	Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Adjustments for calculation of dilutedearnings per share: Share Options and PerformanceRights Weighted average number of ordinary andpotential ordinary shares used as the denominator in calculating diluted earningspershare

��Deed o�cross guarantee

Evolution Mining Limited and those entities identified in not e 12 are parties to a deed of cross guarantee under which each Company guarantees the debts of the others. By e nte ring into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial re port and Directors' Report under Class Order 9��141�(as amended) issued by the Australian Securities and Invest men ts Commission.

The companies identified above represent a 'closed group' for the purpose s of the Class Order, and as there are no other parties to the deed of cross guarantee that are controlled by Evolutio n M ining Limited, they also represent the 'extended closed group'.

The Consolidated Balance Sheet, Consolidated Statement of Profit or Loss and Other Co mprehensive Income, and summary of movements in consolidated retained earnings for the year ended 30 Ju ne 2016 of the closed group is equal to the Consolidated Balance Sheet, Consolidated Statement of Profit or Los s and Other Comprehensive Income, and Consolidated Statement of Changes in Equity of the Group.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Parent entit y �i nancial in�ormation

�a�Summary �in ancial in�ormation

The indivi dua l financial statements for the par ent e ntity show the following aggregate amounts:

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�alance s�eet Space �ssets Current assets Non-current assets Total assets Lia�ilities Current liabilities Non-current liabilities Total liabilities Net assets S�are�olders' e�uity Space Issuedcapital Reserves FairValue revaluation reserve Share based payment reserve Cash flow hedge reserve Other reserves Accumulated losses Statement o�Pro�it or Lossand �t�er Compre�ensive �ncome Space Profitforthe year Othercomprehensive income Totalcomprehensive income	�� ��
	��
	�� -
	��
	��

��u a ra n tees entered into �y t �e parent entity

The par en t e n tity has provided b an k gu arantees, as detail e d i n note 14.

�c�Conti ng e nt lia�ilities o�t�e pa re n t entity

The parent e nt ity d id not have any c on tin ge nt liabilities as at 30 J u ne 2016 or 30 Jun e 2 015. For information about guarant ee s giv en by the parent en ti ty, please see abov e.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��Summary o�signi�icant accounting policies

This note pr ovides a list of all significant accounting policies adopted in the preparation of these Consolidated Financial Stat ements. These policies have been consistently applied to all the years presented, unless otherwise stated . The financial stateme nts are for t he Group consisting of Evolution Mining Limited and its subsidiaries.

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�a��asis o�prep aration

These general purpose financial state ments have been prepare d in acc ordance with Australian Accounting Standards and interpretations issued by the Aust ralian Acc ounting Stan dards B oard and the Cor�oration��ct �� . Evolution Mining Limited is a for-profit entity for the purpose of preparing the fin ancial statements.

The presentation or classification of certain comparatives has been ame nded to be consis tent w ith current year pres entation.

(i) Co��l iance w it��

The con solidated fin ancial s tatements of the Evolution Mining Limited Group also comply with Int ernat ional Financia l Repor ting Standa rds (IF RS) as issued by the International Accounting Standards Board (IA SB).

(ii) �i�torical co�t c on�en tion

These financial statements h ave be en prepare d unde r the historical cost basis, except for the following:

available-for-sale financial assets, fi nancia l assets an d liab ilities (including derivative instruments) certain classes of property, plant and equipment and m ine develo pmen t and exploration - measured at fair value
ass ets held for sale - measured at fair value less co st of d isposal, a nd
retire ment benefit obligations - plan assets measured at fair v alue.

(iii) �ew and a� end ed �tandard�ado�ted ��t�e grou�

The Group has appli ed th e following standards and amendments for the first ti me in their a nnua l reporting period commencing 1 January 201 4:

The adoption of AASB 2014-1 ha s resulted in additional disclosures required in our segm ent n ote. T he adoption of the other standards did not ha ve a ny impact on the current period or any prior period and i s no t likely to affect any future periods.

The Group has not elected to early adopt any standards.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

�a��asis o�p rep aration

(i�) �ew �tan dard�and inter�retation�no t �e t ado �ted Certain ne w accounting standards an d in terpr etat ions have been published that are n ot ma ndatory for 30 June 201 6 re porting periods and have n ot b een ear ly adopted by the Group. The Gro up’s a ssessm ent of th e impact of th ese new standards and interp reta tion s is set out below.

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�itle o�
standard
�ature o�c�ange
�mpact
Mandatory
application
date�Date o�
adoption �y
group

��
�e�enue
�ro�
Contract�
wit�
Cu�to�er�
TheAASBhas issued a new
standardfor the recognition of
revenue. This will replace AASB 11�
which covers contracts for goods
andservices and AASB 111 which
covers construction contracts.
The new standard is basedon the
principle that revenue is recognised
when control of a goodorservice
transfers to the customer - so the
notion of control replaces the
existing notion of risksandrewards.
The standard permitsamodified
retrospective approachfor the
adoption. �nder this approach
entities will recognisetransitional
adjustments in retainedearnings on
the date of initialapplication (eg. 1
July 201�), i.e.without restating the
comparative period.They will only
need to apply thenew rules to
contracts that are not completed as
of the date of initialapplication.
Management is currently assessing the impact
of thenew rules and has identified the following
areasthat are likely to be affected:
Metal and concentrate sales where recognition
of revenue will depend on thepassingof
control rather than the passingof risksand
rewards.
At this stage, the Groupis not able to estimate
the impact of the newrules on the Group's
financial statement. TheGroup will make more
detailed assessmentsofthe impact over the
next twelve months.
Mandatory for
financial years
commencing on
or after 1
January 201�.
Expected date
of adoption by
the Group is
1July 201�.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

Notes to the Consolidated Financial Statements (continued)
��Summary o�signi�icant accounting policies �continued�
�a��asis o�preparation �itle o� standard �ature o�c�ange �mpact Mandatory application date�Date o� adoption �y group
AASB 9 �inancial �n�tru�ent� AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces new rules for hedge accounting. In December 2014, the AASB made further changes to the classification and measurement rules and also introduced a new impairment model. These latest amendments now complete the newfinancial instruments standard. Following the changes approved by the AASB in December 2014, the Group no longer expects any impactfrom thenew classification, measurement and derecognition rules on the Group’s financial assets and financial liabilities. While the Group has yet to undertake a detailed assessment of the debt instruments currently classified as available-for-sale financial assets, it would appear that they would satisfy the conditions for classification as at fair value through other comprehensive income (FVOCI) and hence there will be no change tothe accounting for these assets. There will also be no impact on the Group’s accounting for financialliabilities, as the new requirementsonly affect theaccounting for financial liabilitiesthat are designated at fair value through profit orloss and the Group does not have any such liabilities. The new hedging rules align hedgeaccounting more closely with the Group’s riskmanagement practices. As a general rule it will be easierto apply hedge accounting going forward as the standard introduces a more principles-based approach. The new standard also introduces expanded disclosure requirements and changes in presentation. The new impairment model is an expected credit loss (ECL) model which may result in the earlierrecognition of credit losses. The Group has not yet assessed how its own hedging arrangements and impairment provisions would beaffected by the new rules. Must be applied for financial years commencing on or after 1 January 201�. Based on the transitional provisions in the completed IFRS 9, early adoption in phases was only permitted for annual reporting periods beginning before 1 February 2015. After that date, the new rules must be adopted in their entirety.

There are no other standards that are not yet effective and that would be ex pec ted to have a material impact on the entity in the current or future reporting periods and on foreseeable future tra nsa ctions.

��Principles o�consolidation

(i) �u��idiarie�

Subsidiaries are all entities (including structured entities) over which the Group has control. T he Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvemen t w ith the entity and has the ability to affect those returns through its power to direct the activities of the entity. Sub s idiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidat e d from the date that control ceases.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

��Principles o� consolidation

The acqui sitio n method of accounting is u sed to ac cou nt for business combinations by the Gr oup.

Interc om pany transactions, balance s an d un real ised gains on transactions betwee n Grou p compa nies are elim ina ted. �nrealised losses are als o eli min ated unless the transaction provi des e vidence of the i mpairment of th e asset transferred. Accounti ng polic ies of subsidiaries have been cha nged where neces sary to ensure co nsistency with the policies ad opt ed b y the Group.

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Non-controlling interests in the res ults and equity of subsidiari es a re sh own separately in the consolidated income statement, sta tem ent of comprehensive income, st atem ent of ch anges in equity and balance sheet respectively.

�c�Segment re po rtin g

Operating seg me nts a re reported in a manner c on siste nt with the internal reporting pro vided to th e chief operating de cis ion m aker.

The board of Ev ol ution Mining Limited has ap poi nte d a strategic steering com mitt ee w hich assesses the financial performa nc e a nd position of the Group, and m ake s strategic decisions. The ste erin g c ommittee, which has been identified a s be ing the chief operating d ec isio n maker, consists of the Ex ecu tive Ch airman and the Senior Leaders h ip Te am.

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�d�� or ei gn currency translation

(i) �u nc ti onal and �re�entation c ur ren c�

Item s in cl uded in the financial sta te m en ts of each of the Group' s enti tie s are measured using the cur rency of the prim a ry e conomic environment i n wh ic h the entity operates ('t he fu nc tional currency'). The cons oli dated financial stat e m e nts are presented in Au st rali a n dollars ($), which is E vo luti o n Mining Limited's functio nal and presentation cur r en cy .

(ii) �r a n�action�and �alance �

Fo r eig n currency transactions a re t ranslated into the funct io na l currency using the exch an ge rates prevailing at th e da t es of the transactions. F or e ign exchange gains an d los s es resulting from the set tl ement of such tra n sa c tions and from the tra ns la ti on at year end exchan g e r at es of monetary assets a n d liabilities denominated in fo re ig n currencies are reco g ni se d in profit or loss, exc e pt w hen they are deferred in equity as qualifying cash flo w h e dges and qualifying n e t in v estment hedges or are att ri butable to part of the n et investment in a foreign op e rati o n.

For e ign exchange gains and l o ss e s that relate to borrow i ng s are presented in the c o nsolidated income stat em e n t, within finance cost s . A ll other foreign exchan g e g ains and losses are pr es ented in the consolidated inco m e st atement on a net ba s is w ithin other income or o th e r expenses.

Non- mo n et ary items that are m e as u red at fair value in a f ore i gn currency are transl a ted using the exchange rates at the da te w hen the fair value w as d etermined. Translati o n d ifferences on assets a n d liabilities carried at fair value ar e re p orted as part of the fa ir v alue gain or loss. F or e xa mple, translation dif fe rences on non-monetary assets a nd li ab ilities such as equi ti es h eld at fair value thr ou g h profit or loss are rec o gnised in profit or loss as part of the fa ir v alue gain or loss a nd t ra nslation difference s on n on-monetary asset s such as equities classified as availabl e-f or -s ale financial asset s ar e recognised in othe r c o m prehensive income.

�e�Revenue re c og nition

Revenue is mea su re d at the fair value o f t he c onsideration rece iv ed o r receivable. Amo un ts disclosed as revenue a re net of returns, tra d e a llowances, reba tes and amounts collect ed o n behalf of third pa rtie s.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

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��Summary o�signi�icant accounting policies �continued�

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�e�Revenu e recognition

The Group recognises re venue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entit y and spe cific criteria have been met for each of the Group's activities as described below. T he Group b ases its estimates on histor ical results, taking into consideration the type of customer, the type of transactio n and the specifics of eac h arrang ement.

The specific accounting policies for the group’s m ain types of revenue a re expl ained in note 2. Revenue for other business activities is recognised on the following basis:

(i) �ntere�t inco�e

Interes t income is recognised using the effective interest method. When a receiv able is impaired, the G roup reduce s the car rying amount to its recoverable amount, being the estimated future cash flow discounte d at t he original effectiv e intere st rate of the instrument, and continues unwinding the discount as inte rest in come. In teres t in come on impaired loa ns is r ecognised using the original effective interest rate.

�� ncome ta�

The income tax expense or reven ue for the p eriod is the tax payable on the current period's taxable income based on the applicable income t ax rate for each ju risdict ion adjusted by changes in deferred tax assets and liabilities attributable to temporary differ ences and to unu sed ta x losses.

Th e current income tax charge is calculated on th e basis of the ta x laws enacted or substantively enacted at the en d of t he reporting period in the countries where the C ompan y's subsi diarie s and associates operate and genera te tax able income. Management periodically evaluates posit ions take n in t ax returns with respect to situations in wh ich applicable tax regulation is subject to interpretati on. It establis hes provisions where appropriate on t he basis of amounts expected to be paid to the tax auth oritie s.

Deferred income tax i s p rovided in full, using the liability method, on temporary differ ences arisi ng between the tax bases of assets and l iab ilities and their carrying amounts in the consolidated fin ancia l state men ts. �owever, deferred tax liabilities are n ot re cognised if they arise from the initial recognition of good will. Deferr ed income tax is also not accounted for if it ari ses from initial recognition of an asset or liability in a transa ction other tha n a business combination that at the ti me of the transaction affects neither accounting nor taxable pro fit or lo ss . Deferred income tax is determined usi ng t ax rates (and laws) that have been enacted or substanti ally enac ted by the end of the reporting period and are ex pec ted to apply when the related deferred income tax asse t is reali sed or the deferred income tax liability is settled.

The deferred tax liabilities in relation to investment prop erty that is measured at fair value is determined as sum ing the property will be recovered entirely through sale.

Deferred tax assets are recognised only if it is probable that futu re taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary dif fere nces between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not rever se in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable rig ht t o offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authori ty. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and inte nd s either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Evolution Mining Limited and its wholly-owned Australian controlled entities have implement ed the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and th e deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

�� ncome ta �

Current a nd d eferred tax is recognised in prof it or l oss, except to the extent that it relates to it ems reco gnised in other c omp rehensive income or directl y in equi ty. In this case, the tax is also recognise d in ot her compreh ensive inco me or directly in equity, respect ive ly.

� g� Leases

L eases of property, plant a nd equ ipm ent where the Group, as les see, has s ubsta ntially all the risks and rewards of ownership are classifi ed as fi na nce leases. Finance leases are capita lised at the lease's inception at the fair value of the leased pr ope rty or, if lower, the present value of th e mi nimu m lease payments. The corresponding rental obligations, n et o f fin an ce charges, are included i n ot her s hort -term and long-term payables. Each l ease payment is allocat ed bet we en the liability and finance co st. T he f inance cost is charged to profit or loss ov er the lease period so as to p ro duce a constant periodic r ate of i nter est on the remaining balance of the l iability fo r each period. The pro pe rty, p lant and equipment acqui red und er finance leases is depreciated over the as set's us eful life or over th e s ho rte r of the asset's useful life an d th e le ase term if there is no reaso nab le cer tainty that the Group will o bt ain ow nership at the end of th e le ase te rm.

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Leases in w hic h a significant portion of th e risks a nd rewards of ownership a re not t rans ferred to the Group as lessee ar e cla ss ified as operating lease s ( not e 1 5). Payments made unde r o pera ting leases (net of any incentiv es re ce ived from the lessor) ar e cha rge d to profit or loss on a st rai ght-l ine basis over the period of the lease.

�� m pai rm ent o�assets

At e ac h re porting date, the Group r evi ew s the carrying amounts o f its ta ngible and other intangible ass ets to dete r mi ne whether there is any i nd ica ti on that those assets ha ve suf fe red an impairment loss. If any such indi c ati on exists, the recoverabl e am o unt of the asset is estim a ted i n order to determine the ex ten t of the imp a ir m ent loss (if any). Where t he a sset does not generate c ash in -flows that are independ ent from other as se ts, the Group estimates th e re co verable amount of the C G� t o which the asset belong s.

Re c ov e rable amount is the hig h er o f fair value less costs t o sell a nd value in use. In asse ss ing value in use, the es t im at ed future cash flows ar e di s counted to their presen t val u e using a post-tax disco un t rate that reflects cu r ren t market assessments of th e time value of money a n d t h e risks specific to the as se t for which the estimates of f utu r e cash flows have not b ee n adjusted.

If t h e r e coverable amount of a n a s set (or CG�) is estima t ed t o be less than its carryi ng amount, the carrying am o un t of the asset (CG�) is red u ced to its recoverable a m o unt. An impairment los s is recognised in profit or los s im m ediately.

Wh er e an impairment loss su b se q uently reverses for as s ets other than goodwill, th e carrying amount of the asset (CG � ) is increased to the revi s ed e stimate of its recover a bl e amount, but only to th e extent that the increased carryi n g am ount does not exc ee d th e carrying amount th a t w ould have been deter m ined had no impairment loss been re co g nised for the asset ( C G � ) in prior years. A re ve rs a l of an impairment los s is recognised in profit or loss im m e dia tely.

�i� Cas � a nd cas�e�uivalents

For the pu rp os e of presentation in th e st atement of cash flo w s, c ash and cash equiv a lents includes cash on hand, depo sit s he ld at call with fina nc ial in stitutions, other s ho rt- te rm, highly liquid in ve stments with original maturities of t hr e e m onths or less tha t a r e r eadily convertible to k no wn amounts of ca sh and which are subject to an insignificant ri sk o f changes in valu e, a nd bank overdrafts.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

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��Summary o�signi�icant accounting policies �continued�

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�� rad e receiva�les

Trade receivables are re cognised init ially at fair value and subsequently measured at amortised cost using the effective interest method, less provisi on for impa irment. See note 5(b) for further information about the group’s accounting for trad e receivable s and note 10(c) f or a desc ription of the Group's impairment policies.

��nventories

Gold in solution form, gold dore, refined gold bullion, st ockpiled ore, concent rates a nd work in progress are physically measured or estimated and valued at the lower of cos t and ne t realisable value . Cost represents the weighted average cost and includes direct costs and an appropriate por tion of f ixed and v ariable production ove rhead expenditure, including depreciation and amortisation, incurred in con verting materials into f inished goo ds .

Mate rials and supp lies are valued at the lower of cost and net realisable value. Any provision fo r obs olescenc e is deter mined by reference t o spec ific stock items identified. A regular and ongoing review is undertake n to establish the extent o f surplus it ems an d a provision is made for any potential loss on their disposal.

Net realisable value is th e estim ated selling price in the ordinary course of business, less estimated costs of completion and estimated costs neces sary to ma ke the sale.

�l� �nvestments and ot�er �inancial ass ets

(i) Cla��i�ication

The Group classifies its financial assets in the following cate gorie s:

financi al a ssets at fair value through profit or loss,
loans and rec eivables,
held-to-maturi ty i nvestments, and
available-for-sal e fin ancial assets.

The classification depends o n th e purpose for which the investments were acquired. Man age ment dete rmines the classification of its investments at in itial recognition and, in the case of assets classified as h eld- to-mat urit y, re-evaluates this designation at the end of each reporting period. The Group may choose to recl ass ify the financial assets depending on change i n in tentions and circumstances.

�inancial a��et�at �air �alue t�roug��ro�it o r lo� �

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for th e pu rpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as h edges. Assets in this category are classified as current assets if they are expected to be settled within 12 mo nth s�otherwise they are classified as non-current.

�oan�and recei�a�le�

Loans and receivables are non-derivative financial assets with fixed or dete rminable payments that are not quoted in an active market. They are included in current assets, except for tho se with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loa ns and receivables are included in trade and other receivables and receivables in the balance sheet.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

�l� �nvestmen ts and ot�er �inancial assets

�eld�to�� atu rit�in�e�t�ent�

�eld-to -m aturity investments are non -der ivativ e fin ancial assets with fixed or determi nable p ayments a nd fixed matu riti es that the Group's manag eme nt h as th e positive intention and ability to hold to maturi ty. If the Group w ere to sell other than an insign ific ant a mo unt of held-to-maturity financial asse ts, the whole c ategory would be tai nted and reclassified as av aila ble- for- sale. �eld-to-maturity financial ass ets ar e inclu ded in non-current assets, except for those with matu ritie s le ss t han 12 months from the end of th e rep orting period, which are classified as current assets.

��aila�le��or��ale �in anc ial a�� et�

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Available-for-sale f ina nci al assets, comprising princip ally mar keta ble equity securities, are non-deri vatives that are either design at ed i n t his category or not classifi ed in a ny o f the other categories. They are inclu ded in non-current as set s u nle ss the investment mature s o r m ana gement intends to dispose of t he in vestm ent with in 12 months of the e nd of the reporting period. Inve stm ent s a re designated as available-fo r-sa le if t hey do not have fixed maturiti e s a nd fixed or determinable pa ym ent s a nd management intends to hold the m for the medium to long-term.

(ii) �ec og niti on and derecognition

Regular p ur ch ases and sales of financ ia l as se ts are recognised on trad e- date , w hich is the date on which the Group co m m its to purchase or sell th e ass et . Investments are initially re cog nis ed at fair value plus transaction costs fo r a ll financial assets not carr ie d a t f air value through profit o r lo ss. Fi nancial assets carried at fair v alue throu gh p ro fit or loss is initially rec og nis ed at fair value and transa ct ion co sts are expensed to profit or loss . Fina nc ial a ssets are derecognise d w h en the rights to receive ca sh flo ws from the financial assets h ave expired or hav e be e n transferred and the G ro up h as transferred substanti al ly al l t he risks and rewards of o wne rship.

Wh e n s e curities classified as av a ila bl e-for-sale are sold, the ac cu mu lated fair value adjustme nts recognised in oth e r c o mprehensive income a re re c lassified to profit or loss a s g a ins and losses from inves tm ent securities.

(iii) M e a�ure�ent

At i niti a l recognition, the Grou p m e asures a financial asse t at i ts fair value plus, in the ca s e of a financial asset no t at f air value through profit o r l o ss, transaction costs th a t a re directly attributable to t he acquisition of the fin a nci a l asset. Transaction c o sts of financial assets carri e d at fair value through profit o r loss are expensed in pr o fit o r loss.

Lo a ns a nd receivables and h e ld- to -maturity investments a re s ubsequently carried at a mortised cost using the eff ec tiv e interest method.

Avai l abl e -for-sale financial as s ets and financial assets a t fai r value through profit or l oss are subsequently carried at fai r va lu e. Gains or losses ar isi n g from changes in the fai r value of the 'financial a ssets at fair value through profit o r l o ss' category are pre se nt e d in profit or loss with i n ot her income or other e x penses in the period in which they a ri se . Changes in the fair va lu e of securities classifi e d as Available-for-sale ar e recognised in the other compr eh e ns ive income. Divide nd in c ome from financial a s se t s at fair value through profit or loss is recognised in profit or lo s s a s part of revenue f ro m c ontinuing operation s w h en the Group's right t o receive payments is establish e d. In terest income from t he s e financial assets is i ncl u ded in the net gains� ( losses).

Details on ho w th e fair value of fin an ci al instruments is dete rm i ne d are disclosed in no te 5(f).

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

��Summary o�signi�icant accounting policies �continued�

�l� �nve stments and ot�er �inancial assets

(i�) ��air�ent

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The G roup assesses at each balance dat e whethe r there is objective evidence that a financial asset or group of financial assets is imp aired. In the case of equity se curities c lassified as available-for-sale, a significant or prolonged decline in the fair value of a secur ity below its cos t is cons idered as an indicator that the securities are impaired. If any such evidence exists for avail able-for-s ale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the cur rent fair value, less a ny impa irment loss on that financial asset previously recognised in profit or loss - is removed from e quity an d recognise d in pr ofit or loss. Impairment losses recognised in profit or loss on equity instruments classified as av ailable -for-sale ar e not reversed through the Statement of Comprehensive Income.

�m�Deriv atives a nd �edging activities

D erivatives are initially recogn ised at fair value on the date a derivative contract is entered into and are subsequen tly reme asured to t heir fa ir value at the end of each reporting period. The accounting for sub sequ ent changes in fair val ue dep ends on w hether the derivative is designated as a hedging instrument, and if so, th e nature of the item being hedged . The Grou p curr ently only designates derivatives as cash flow hedges (hedges of a particular risk associated w ith the cash flows of rec ognised assets and liabilities and highly probable forecast transactions). There are no fair value hedge s or net inv estme nt hedges, nor are there any derivatives that do not classify for hedge accounting.

The G roup documents at the inception of the hedging transa ction the relat ionship between hedging instruments and h edge d items, as well as its risk management objective and s trategy f or un dertaking various hedge transactio ns. T he Group also documents its assessment, both at hedg e incepti on a nd on an ongoing basis, of whether the d eriva tives that are used in hedging transactions have be en an d will co ntinu e to be highly effective in offsetting change s in fair values or cash flows of hedged items.

The fair values of vario us d erivative financial instruments used for hedging purpos es a re discl ose d in note 5(f). Movements in the hedging res erve in shareholder's equity are shown in note �(b). The full fair val ue of a hedging derivative is classified as a no n-c urrent asset or liability when the remaining maturity of th e he dged i tem is more than 12 months�it is classified as a c urrent asset or liability when the remaining maturity of th e he dged item is less than 12 months. Trading derivati ves are classified as a current asset or liability.

(i) Ca��low �edge

The effective portion of changes in the fair valu e of derivatives that are designated and qualify as cash fl ow hedges is recognised in other comprehensive inco me a nd accumulated in reserves in equity. The gain or l oss relating to the ineffective portion is recognised immedi ately in profit or loss within other income or other expenses.

Amounts accumulated in equity are reclassified to profit or loss i n th e periods when the hedged item affects profit or loss (for instance when the forecast sale that is hedged takes pla ce) . The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recog nise d in profit or loss within 'finance costs'.

When a hedging instrument expires or is sold or terminated, or when a hedge n o lo nger meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remai ns i n equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a foreca st t ransaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediatel y re classified to profit or loss. �owever, when the forecast transaction that is hedged results in the recognition of a no n-financial asset (for example, fixed assets) the gains and losses previously deferred in equity are transferred fro m equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recog n ised in profit or loss as depreciation in the case of fixed assets.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

�n�Mine dev elop ment and e�ploration

(i) Mine de� elo��ent

In ope n p it mining operations, it is ne cess ary t o re move overburden and other waste materi als to acce ss ore from whic h m inerals can be extracted e con omic ally . The process of mining overburd en an d waste materials is referred to as stripping. During the devel opm ent of a mine (or pit), before productio n com menc es, strip ping costs are ca pitalised as mine develop men t.

During the production sta ge of s om e pits, further development o f the pit may r equire a phase of unusually high overburden removal ac tiv ity th at is similar in nature to pre-pr odu ction pit d evelopment. This typically occurs when �cut-backs’ are made to gai n a ccess to a specific section of t he or e bo dy. The costs of such unusually high overburden remov al a ctiv ity are also capitalised as mi ne d evel opm ent.

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Mine developme nt co sts are amortised on a units of prod ucti on basis over the life of the pit t o wh ich they relate. In applying the u nits of production method, amo rtis atio n is calculated using the expecte d tot al con tained ounces within the pit to ac hie ve a consistent amortisa tio n rat e p er ounce. To achieve this, t he a morti sation rate is based on the ratio of tot al pit development costs (i ncu rre d a nd anticipated) over the ex pect ed to tal c ontained ounces.

(ii) ��lo ra tio n and e�aluation e��endit ure

Explorati o n a nd evaluation activity invo lv es t he search for mineral resou rce s, th e d etermination of technical feasibili ty an d the assessment of com m erci al viability of an identified r eso urc e. E xploration and evaluation activity include s :

re se arching and analysing h is tori c al exploration data�
g at hering exploration data th rou g h topographical, geoche m ical a nd geophysical studies�
e x ploratory drilling, trenchi n g a n d sampling�
de termining and examini ng th e volume and grade of th e res ou rce�
s urveying transportation a nd in frastructure requireme nt s�a nd
c onducting market and fi n an c e studies.

Ea r ly st age exploration expen d itur e on new areas of intere s t ar e expensed as incurred. E xp loration and ev a lu at ion expenditure is capi ta lis e d in relation to areas o f inte re st in or around producin g mines or where m a na g ement believes the cos t s a r e recoverable.

Ex p lor a tion expenditure for e a ch a rea of interest is carrie d fo rw ard as an asset provid e d the rights to tenure of th e ar e a of interest are curre nt a n d one of the following c o nd i tions is met:

th e exploration and ev a lu at ion expenditures are e x pe c ted to be recouped thr o ugh successful development a nd exploitation of the a re a of interest, or alternat i vel y , by its sale�and
e x ploration and evalua ti on a ctivities in the area o f int e rest have not at the re p orting date reached a stage w h ich permits a reason a bl e assessment of the ex i ste n ce or otherwise of eco n omically recoverable re se rves, and active an d si g nificant operations in, or i n relation to, the area o f interest are continuing.

An im pa ir me nt review is perfor m ed, either individually or a t t h e CG�level, when th e re are indicators that the carryin g a m o unt of the assets m a y ex ceed their recovera b le a mounts. To the exten t that this occurs, the excess is fully p ro vi de d against, in the fin a nc ia l year in which this is d e termined. Exploratio n and evaluation assets are reassess ed o n a regular basis an d th es e costs are carried fo r wa rd provided that at l e ast one of the conditions outlined ab o ve is met.

Administratio n co st s that are not dire ct ly at tributable to a spe cif ic ex ploration area are c harged to the Statement of Comprehen siv e In come. Expenditu re is tra nsferred to mine de v elo pment assets on ce the work completed to date supports th e f ut ur e development o f th e pr operty and such de v elo pment receives a pp ropriate approvals.

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Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

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��Summary o�signi�icant accounting policies �continued�

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�o�Propert y�plant and e�uipment

Land is carried at historic al cost. All o ther plant and equipment is stated at historical cost less depreciation. �istorical cost eq uals the fair value of the item a t acquisition date and includes expenditure that is directly attributable to the acquisition o f the items.

Subsequent costs are included in the a sset's car rying amount o r recogn ised as a separate asset, as appropriate, only when it is probable that future economic ben efits asso ciated with t he item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any c omponent a ccoun ted for as a separate asset is derecognised when replaced. All other repairs and maintenance are cha rged to pro fit or lo ss during the reporting period in which they are incurred.

The deprecia tion methods and periods used by the group are disclosed in note 6(d).

The a ssets' residu al value s and useful lives are reviewed, and adjusted if appropriate, at the en d of e ach report ing perio d.

An asset's carrying amou nt is written down immediately to its recoverable amount if the asset's carrying am ount is greater than its estimat ed rec overable a mount (note 23(h)). These are included in the Statement of Comprehensive Income.

�p��ntangi�le assets

(i) Mining tene�ent��ining rig�t�and �ining in�o r�atio n

Minin g ten ements have a finite useful life and are carried at cost l ess, whe re ap plicable, any accumulated amortisati on a nd accumulated impairment losses. The carrying v alues of minin g ten ements and mining rights are reviewed to en sure they are not in excess of their recoverable amount s. Am ortisatio n of mining tenements and mining rights com men ces from the date when commercial production com menc es or in the case of the acquisitions, from the dat e of acquisition and is charged to the profit or loss. Min ing t eneme nts are amortised over the life of the mine usin g units of production basis in ounces.

Mining information has a finite use ful life and is carried at cost less accumulated amortisat ion. Minin g in formation amortisation is recognised over t he p eriod that the information is expected to remain relevant.

The amortisation of the above intangibl es i s classified as a cost of sale.

��rade and ot�er paya�les

These amounts represent liabilities for goods and s ervi ces provided to the Group prior to the end of financi al y ear which are unpaid. The amounts are unsecured and are pa id on normal commercial terms.

�r� �orro�ings

Borrowings are initially recognised at fair value, net of transaction and establishment costs incurred. Borrowings are subsequently measured at amortised cost. Any difference betwee n the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of th e borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recogni sed as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the balance sheet when the obligation specified in the co ntr act is discharged, cancelled or expired. The difference between the carrying amount of a financial liability th at has been extinguished or transferred to another party and the consideration paid, including any non-c as h assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance co st s.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

�r� �orro�in gs

Borrowing s a re classified as current liabili ties unles s th e Group has an unconditional right to d efer set tlement of the liabi lity for at least 12 months after the repo rting period.

�s� �o rro�ing costs

Ge neral and specific borrowi ng cost s th at are directly attributable to th e ac quisiti on, co nstruction or production of a qualifying asset are capit ali sed dur ing the period of time that is r equ ired to com plete and prepare the asset for its intended use or sale. �u alif ying assets are assets that nec essa rily ta ke a substantial period of time to get ready for their intende d u se or s ale.

�t� Site restoratio n

Site restoration co sts i nc lude the dismantling and rem ova l of mining plant, equipment and b uildin g struct ures, waste removal a nd r eh abilitation of the site in a cco rda nce with the requirements of the minin g per mits. S uch costs are det er min ed using estimates of futur e c osts , c urrent legal requirements an d tec hnol ogy.

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Costs of sit e res to ration are recognised in fu ll at pre sent value as a non-curre nt lia bilit y. A n equivalent amount is capitalise d as pa rt of the cost of the asse t w he n a n obligation arises to dec omm issi on or restore a site to a certain c on dit io n after abandonment as a res ult of bringing the assets to i ts pres ent location. The capitalised cost is amort is ed o ver the life of the project a nd the provision is accreted pe rio dica lly as the discounting of the liability unwind s . T he unwinding of the disco un t is re corded as a finance cos t.

Any c h an ge s in the estimates for th e co st s or other assumptions aga ins t th e cost of relevant assets are acco u nte d for on a prospective ba s is. I n determining the costs o f s ite r es toration there is uncertainty reg arding the na tu re and extent of the resto ra tio n due to community expe ct atio ns and future legislation.

�u� R o y alties

W es te rn Australian State gove rn m en t royalties and other ro ya lti es payable under existing a gr eements are pa y abl e on production and are t he re fore recognised on deli v ery o f gold dore to the refiner y. New South Wales an d � u eensland State govern m e nt royalties are payable o n a re venue basis and therefo re recognised at the time of r ev e nue recognition.

�v�E m ployee �ene�its

(i) � a ge�and �alarie��ann u al le a�e and ot�er e��lo� e e �e ne�it� Pr ov isi o n is made for employ e e b enefits accumulated a s a r e sult of employees rend e ring services up to the rep o rti ng date. These benefit s in c lude wages and salari e s, a nnual leave, and long s e rvice leave.

Liab il itie s arising in respect of w a g es and salaries, annu a l le a ve and any other shor t -term employee benefits are mea su re d at their nominal am o un ts based on remunerat i on r ates which are expect e d to be paid when the liability is set tle d. A ll other employee b e ne f it liabilities are meas ur ed at the present value o f the estimated future cash outflo w to b e made in respect o f se rv ices provided by em p lo y ees up to the reportin g date. In determining the present v al ue of future cash out flo w s , the market yield as a t t h e reporting date on n a tional government bonds, which h av e te rms to maturity ap pr oxi m ating the terms of t h e r e lated liability, are us ed .

(ii) ��are �� a �e d �a��ent�

The Group pr ovi d es benefits to its e m pl oy ees (including Ke y M a n agement Personnel ) in the form of share-based payments, w he re by employees rend er se rv ices in exchange fo r s h ares or rights over sh ares (equity-settled transactions). Th e Gr oup provides aw ard s to its employees an d Di re ctors through the Co mpany’s Employee Share Option an d P erfo rmance Rights Pla n. S hares and option s may also be issued dir ec tly to other parties.

Evolution Mining Limited Annual Report 2016

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Notes to the Consolidated Financial Statements (continued)

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��Summary o�signi�icant accounting policies �continued�

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�v�Employ ee �ene�its

Vesting conditions that a re linked to t he price of shares of the Company (market conditions) are taken into account when det ermining the fair val ue of equit y settled transactions. Other vesting conditions such as service conditions are excl uded from t he measurement of fair val ue but are considered in estimating the number of investments that may ultimately vest .

The cost of these equity-settled transactions is m easured by reference t o the fa ir value of the equity instruments at the date at which they are granted. A Monte Carlo simul ation in conjunction with th e Black Scholes model is applied to take into account any market conditions associated with an awa rd and dete rmine its fair value at grant date.

The cost of e quity-settled transactions is recognised, together with a corresponding in creas e in equit y, ove r the period in whi ch the p erformance and�or service conditions are fulfilled (“the vesting period”).

At ea ch subse quent repor ting da te until vesting, the cumulative charge to the statement of compreh ensive income is the produc t of:

The grant date fair value of the awar d�
The current best estimat e of the number o f awar ds that will vest, taking into account such factors as the likelihood of employee turnover during the vestin g per iod and the likelihood of non-market performance conditions being met�and
The expired portion of the vesting period.

The c harg e to the statement of comprehensive income for th e per iod is the cum ulative amount as calculated above les s the amounts already recognised in previous periods. There is a corr espo nding entry to equity.

�ntil an award h as v ested, any amounts recorded are contingent and will be ad justed i f mo re or fewer awards vest than were origin ally anticipated to do so. Any award subject to a market c ondit ion or n on- vesting condition is considered to vest irres pec tive of whether or not that market condition or non-vesti ng is fulfille d, p rovided that all other conditions are satisfi ed.

If a non-vesting condition is withi n th e control of the Company or the participant, the failure t o sa tisfy th e c ondition is treated as a cancellation. If a non -ves ting condition within the control of neither the Group, Co mp any n or employee is not satisfied during the ve sting period, any expense for the award not previously reco gnis ed is recognised over the remaining vesting peri od, unless the award is forfeited.

If the terms of an equity-settled award are modifi ed, a s a minimum an expense is recognised as if the ter ms had not been modified. An additional expense is recogni sed for any modification that increases the total fair valu e o f the share-based payment arrangement, or is otherwise bene ficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is tre ated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognise d im mediately. �owever, if a new award is substituted for the cancelled award and designated as a replacem ent a ward on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award.

The dilutive effect, if any, of outstanding options is reflected as additional sh are dilution in the computation of diluted earnings per share.

��Contri�uted e�uity

Ordinary shares are classified as equity. Incremental costs directly attributable to the iss ue of new shares, options or performance rights are shown in equity as a deduction, net of tax, from the proc ee ds.

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Evolution Mining Limited Annual Report 2016

Notes to the Consolidated Financial Statements (continued)

��Summary o �sig ni�icant accounting po licie s �c ontin ued�

��Earnings per s�are

(i) �a�ic ea rning��er ��are

Basic ear nings per share is calculate d by divid ing :

the profit attributable to o wne rs of the Company, excluding any costs of se rvicing equity o ther than ordinary shares
by the weighted aver ag e nu mb er of ordinary shares outstan ding during the financial year, adjusted for bonus elements in or dina ry s hares issued during the yea r an d excl udin g treasury shares.

(ii) �iluted earning� �e r �� are

Diluted earnings pe r s har e a djusts the figures used in the dete rmi nation of basic earnings per share t o take i nto account:

the afte r in co me tax effect of interest and ot her f ina ncing costs associated with di lutiv e pote ntial o rdinary shares , and

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the we ight ed average number of addi tio nal ord inary shares that would ha ve b een outs tanding assuming the co nv er sion of all dilutive potenti al ordi na ry shares.

�y��oo d s a nd Services �a��S��

Reven ue s, ex penses and assets are re cog ni sed net of the amount of as soci ate d GST, unless the GST incurred is not re co ve rable from the taxation au tho ri ty. In this case it is recog nis ed as part of the cost of acquisition of the asset o r a s part of the expense.

Rec ei va bl es and payables are st ate d i n clusive of the amount of G ST re ceivable or payable. The n et a mount of GS T re co verable from, or payabl e to, t he taxation authority is i nc lud ed with other receivables or pa yables in the bal an c e sheet.

Ca s h fl o ws are presented on a g ro ss basis. The GST comp on en ts of cash flows arising fro m investing or fin a nci n g activities which are r ec o ve rable from, or payable to th e taxation authority, are pr es ented as operating ca s h fl o ws.

��R o unding o�amounts

Th e C o mpany is of a kind ref e rre d to in ASIC Corporatio n s ( R ounding in Financial�Dir e ctors Reports) Instrument 20 1 6�1 9 1, issued by the Aust r ali a n Securities and Invest m e nt s Commission, relating to the 'rounding off' of am o un t s in the financial state m e n ts. Amounts in the fina n cia l statements have been r ounded off in accordance wit h th a t ASIC Corporations I n str u ment to the nearest th o us a nd dollars, or in certain cases, the nearest dollar.

�aa� P ar e nt entity �inancial i n� or m ation

The f in a nc ial information for th e p a rent entity, Evolution M ini n g Limited, disclosed i n note 22 has been prepared on th e sa m e basis as the cons o lid at ed financial stateme n ts.

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Evolution Mining Limited Annual Report 2016

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Directors' Declaration

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In the Directors' opinion:

(a) the financial statements and notes set out on pages 99 to 1�0 are in accordance with the Cor�oration� �ct � �� , including:
(i) complying with Accoun ting Standard, the Cor�oration��egulation�� and other mandatory pro fessional reporting r equiremen ts, and

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(ii) givin g a true and fair view of the c onsolidat ed entity's financial position as at 30 June 2016 and of its performance f or the yea r ended on that date, an d
(b) there are reasonable grounds to beli eve that t he Company will be a ble to pay its debts as and when they become due and payable.
(c) at the date of this declaration, there are reasonable gro unds to believe tha t the m embers of the extended closed group identified in note 21 will be able to meet any oblig ations or liabilities to wh ich they are, or may become, subject by virtue of the deed of cross guarantee describ ed in n ote 21.

Note 23(a) co nfirms th at the financial statements also comply with International Financial R eportin g Standa rds a s issued by the Internati onal A ccounting Standards Board.

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The Directors have be en given th e decl arations by the chief executive officer and chief financial officer re quire d by section 295A of the Cor� oration��c t �� .

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This declaration is made in acco rdanc e with a res olutio n of Directors.

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Jacob (Jake) Kl ein Executive Chairma n

Graham Frees tone Non-Executive Dire ctor

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Sydney 1�August 2016

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Evolution Mining Limited Annual Report 2016

Independent Auditor's Report to the Members

�nde�enden t � � dit� �� e��t t� t�e mem �e �� ti�n Mining Li mi te d

Report o n t he fi nancial report

We have a ud ited th e accompanying financial r ep ort of Ev olution Mining Limited (the com pany) , which co m pris es the consolidated balance s hee t as at 30 June 2016, the consolidated s tate ment of profit o r l oss an d other comprehensive in com e, c on solidated statement of changes in equity and conso lid ate d statement of cash flows fo r th e y ear ended on that date, a summ ary o f sig nifica nt acco un tin g policies, other explanator y n otes an d the directors’ declaration for Evol ution Mining Li mi ted (t he consolidated entity). T he con so lidated entity comprises the co mpa ny a nd the entities it co n trol le d at year’s end or from ti me to t im e during the financial yea r.

D ir ec tors' responsibility for th e f inancial report

T he d irectors of the company a re r es ponsible for the preparati on of t he financial report that gives a tr ue and fair view in accorda nc e wit h Australian Accounting St and ard s and the Corporations Act 2 00 1 a nd for such internal contro l as t h e directors determine is ne cess ar y to enable the preparation o f th e fi n ancial report that is free f ro m m aterial misstatement, w h ethe r due to fraud or error. In Not e 23, the di rectors also state, in acc or da nc e with Accounting Stan da rd AA SB 101 Presentation of Fin an cial S tatements , that the fina nc ial s tatements comply with I nt ern at ional Financial Reporting St andards.

A uditor’s responsibi li ty

Our responsibility is to ex pr e ss an opinion on the fin an cia l report based on our audit . W e conducted our audit in accordance w it h Australian Auditing Sta n da rd s. Those standards requi re that we comply with relevant ethical re q uir e ments relating to audit en ga g ements and plan and per fo rm the audit to obtain reasonable assu ra nc e whether the financial r e po rt is free from material mi ss tatement.

A n audit involves perfo r mi n g procedures to obtain a udi t evidence about the amo u nts and disclosures in the financial report. T he p rocedures selected dep e nd on the auditor’s judgem e nt, including the as sessment of the risks o f m aterial misstatement of t he f inancial report, whethe r due to fraud or error. I n making those risk ass e ss m ents, the auditor cons id er s internal control releva n t to the consolidated e nt ity’s preparation and f air p resentation of the fin a nci a l report in order to desi g n audit procedures th at are appropriate in t he ci r cumstances, but not f o r t he purpose of expressing an opinion on the e ffe c tiveness of the entity ’s in t ernal control. An audi t al so includes evaluating t h e appropriateness of ac co un ting policies used a n d t h e reasonableness of a c co u nting estimates made b y the directors, as well as e v alu ating the overall pr es e nt ation of the financial r ep o rt.

We be li ev e that the audit evi de nc e we have obtained is s uf fic ient and appropriat e to provide a basis for our a ud it op inion.

Indepe nd e nc e

In conduct in g o ur audit, we have c om pl ied with the indepe nd en ce requirements of t he Corporations Act 2001 .

Pricewaterhou seC oopers, ABN 5 2 7 80 433 757

Darling Park Tower 2, 2 01 Sussex Street, GP O BOX 2650, SYDNEY NS W 1 171 T: +61 2 8266 0000, F: + 61 2 8266 9999, ww w.p wc. com .au Liability limited by a scheme approved und er P rofessional Standards Le gislat ion.

Evolution Mining Limited Annual Report 2016

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Independent Auditor's Report to the Members (continued)

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Auditor’s opinion

In our opinion:

(a) the financial report of Evolution Mining Limited is in acco rdanc e with the Corpo rations Act 2001, including:
(i) giving a true and fair view of the consolidated entity's financial position as at 30 June 201 6 and of its performance for the year ended on that date; and
(ii) complying with A ustralian Accounting Standards and the Corporations Regulations 2 001 .
(b) the financial report and n otes also co mply with International Financial Reporting Standards as disclosed in Note 23.

Report on the Remuneration Re port

We have audited the remuneration report included i n pag es 72 to 95 o f the directors’ report for the ye ar ended 30 June 2016. The directors of the company ar e re sponsible fo r the preparation and p rese ntation of the remuneration report in accordance with se ctio n 300A of th e Corporations Act 2001 . Ou r responsibility is to express an opinion on the remunerat ion report, bas ed on our audit conduct ed i n accordance with Australian Auditing Standards.

Auditor’s op inio n

In our opinion, the r em uneration report of Evolution Mining Limited for the year end ed 30 Ju ne 2016 complies with section 3 00A of the Corporations Act 2001 .

PricewaterhouseCoopers

Tim Goldsmith Partner

Sydney 17 August 2016

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Evolution Mining Limited Annual Report 2016

Shareholder Information

Capital (as at 4 October 2016)

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Share Capital 1,675,553,736
Ordinary sh areholders 19,032
Sha reh oldings with less than a market ab le par cel of $500 worth of ordinary shares 884
M arket price A$2.53
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Distributio n of F ully Paid Share s (a s a t 4 October 201 6)

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Range Sec uri ties % No . of Holders %
100,001 and O ver 1,53 5,4 51,940 91. 64 307 1.61
10,001 to 1 00 ,0 00 95,893,367 5.72 3,757 19.74
5,001 to 1 0 ,00 0 21,583,329 1.2 9 2,949 15.49
1,001 to 5 ,00 0 20,425,567 1.22 7,653 40.21
1 to 1,0 0 0 2,199,533 0.13 4, 36 6 22.94
Total 1,675,553,736 100.00 19 ,032 100.00
Unma rk etable Parcels 39,629 0.00 884 4.64
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Sub s t a ntial Shareh o ld e rs (as at 21 S ep tember 2016)

	Fully Paid Ordinary Shares	Fully Paid Ordinary Shares
	Number	%
La Mancha GroupInternational BV	460,629,192	28.28
Van Eck Global	112,770,365	6.92
Total	573,399,557	35.20

Evolution Mining Limited Annual Report 2016

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Shareholder Information (continued)

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Twenty Largest Shareholders (as at 4 October 2016)
Fully Paid Ordinary Shares
Name
Current balance Issued capital %
CITICORP NOMINEES PTY LIMITED 585,626,652 34.95
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 276,8 32,228 16.52
NA TIONAL NOMINEES LIMITED 243,112,204 14.51
J P MORGAN N OMINE ES AUSTRALIA LIMITED 176,8 65,51 4 10.56
BNP PA RIBAS NOMS PTY LTD 40,094,911 2.39
AMP LIFE LIMITED 30,137,230 1.80
HSBC CUSTODY NOMINEES (AUSTRA LIA) LIMITED-GSCO ECA 29,318,464 1. 75
CITICORP NOMINEES PTY LIMITED 9,222,348 0.55
NATIO NAL NOMINEES LIMITED 8,671,924 0.52
NATIONAL NOM INEES LIMITED 7,920,180 0.47
HSBC CUSTODY NO MIN EES (AUSTRALIA) LIMITED - A/C 3 6,117,627 0.37
TRINITY MANAGEMENT PT Y LT D 5,65 6,71 7 0.34
BOND STREET CUSTODIANS LIMI TED (MACQ HIGH CONV FUND)
4,81 5,917 0.29
& BOND STREET CUSTODIANS LIMIT ED
LUJETA PTY LTD 4,428,723 0.26
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 4,392,310 0.26
ROXI PTY LIMITED 4,138,799 0. 25
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED 3,634,148 0.2 2
PACIFIC CUSTODIANS PTY LIMITED 3,360,376 0 .20
BNP PARIBAS NOMINEES PTY LTD 2,871,000 0.1 7
BNP PARIBAS NOMINEES PTY LTD 2,695,454 0.16
Total 1,449,912,726 86.53
TOTAL 1,449, 91 2,726 86.53
Balance of Register 225,641, 01 0 13.47
Grand TOTAL 1,675,553,73 6 100.00
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1.5 Share Buy-Backs

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

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2. Other Information

Evolution Mining Limited, incorporated and domiciled in Australia, is a publi c listed Compa ny li mite d b y Shares.

Evolution Mining Limited Annual Report 2016

Corporate Information

ABN 74 084 669 036

Board of Directors

Jacob ( Ja ke) Klein Executive C hairm an Lawri e Conway Financ e Direct or and Chief Financial Officer Col in (Cobb) Johnstone Lea d Inde pen dent Director Na guib Sawaris No n-Ex ec utive Director James (Jim) Askew Non- Ex ecutive Director Sébastien de Montessus No n -Executive Director Graham Freestone No n-Executive Director Thomas (Tommy) M cK eith Non-Executive Director Amr El Adawy Alternate Non-Executiv e Direc to r for Sébastien de Montessus Vincent Benoit Alternate Non-Execu tiv e Dir ec tor for Naguib Sawaris

Compa n y S ecretary

Evan Elstei n

Regi st e r

Auditor

Pricewaterh o use Co opers 201 Sussex S tre et SYDNEY N SW 2 000 T: + 6 1 2 8 266 0000 F: + 61 2 8 266 9999

Level 3 0, 17 5 Liverpool Street SYDNE Y N S W 2000

Pos t al Address

Level 3 0, 1 7 5 Liverpool Street SYDN E Y N SW 2000 T: +61 2 9696 2900 F: + 61 2 9696 2901

We b si t e

www.e v ol u tionmining.com.au

Shar e R egister

Sto c k Exchange Lis t ing

Link Mark e t S e rvices Level 12, 6 80 Ge orge Street SYDNEY N SW 20 00 T: +61 13 0 0 55 4 474 F: +61 2 9 2 87 0 303

Evoluti o n M ining Limited (EVN) s h ares are listed o n t h e Australian Securities Exchange

Email: registrar s@ li nk marketservices.co m .a u

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Evolution Mining Limited Annual Report 2016

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Australia’s Melbourne Cup 2016, crafted from gold mined from Evolution’s Cowal Gold Mine

mined, refined and crafted wholly in Australia

A$175k

18carat

250hour

TROPHY VALUE

GOLD weighs 1.65 kilograms

PRODUCTION PROCESS contains 44 pieces

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 Level 30, 175 Liverpool Street SYDNEY NSW 2000  +61 2 9696 2900  +61 2 9696 2901  www.evolutionmining.com.au

AI assistant

EVOLUTION MINING LIMITED — Regulatory Filings 2016

64885_rns_2016-10-23_444fb844-cb7e-4b4a-85c0-fe6c28448bfe.pdf

Contents

Forward Looking Statements

Creating Australia’s premier gold mining company

Evolution – Australia’s second largest gold producer

Note:

FY17 GUIDANCE

FY17 GUIDANCE

DEC15 RESOURCE

DEC15 RESERVE

AU EQ PRODUCED

Our Achievements in FY16

�84%

33%�

A$1,014/oz

�211%

FY16 AISC

Executing a clear and sound strategy

First world jurisdiction

Mid-tier

Low cost

Reliability

Organic growth

M&A

Superior returns

Executive Chairman’s Report

Executive Chairman’s Report (continued)

Safety and Health

We are very proud of our FY16 safety achievements

Note:

Safety and Health (continued)

FY16 health achievements

Our Assets

Cowal, New South Wales, Australia

Our Assets (continued)

Mungari, Western Australia, Australia

Our Assets (continued)

Mt Carlton, Queensland, Australia

Note:

Our Assets (continued)

Mt Rawdon, Queensland, Australia

Our Assets (continued)

Edna May, Western Australia, Australia

Our Assets (continued)

Cracow, Queensland, Australia

Our Assets (continued)

Pajingo, Queensland, Australia

Our Assets (continued)

Ernest Henry, Queensland, Australia

FY16 pro-forma metrics

FY16 Production Summary

Outlook for FY17

Three Year Outlook

Performance History - Key Indicators

PRODUCTION VS. GUIDANCE

EVN SHARE PRICE VS. GOLD PRICE

GROUP COSTS

Note:

Act Like an Owner

Winners of ALO awards in FY16

Removing and reusing redundant ladderway tubes (Cracow)

Reducing site freight costs (Cowal)

Helping other departments when needed (Mt Rawdon)

Remote vibration monitoring (Cowal)

David Shiel, Reliability Engineer

(Cracow)

Clint Wilson, Underground Maintenance

(Mt Carlton)

(Mungari)

Act Like an Owner (continued)

Recovery of lost string of drill rods (Mungari)

Proactive response to power outage (Mungari)

Solution to cap boreholes on exploration pads (Pajingo)

Stewart Burton, Field Technician

Dart valve design (Mt Carlton)

Idea to combine shutdowns (Cowal)

Assisting with breakdown whilst on parental leave

Commitment and excellence in getting the job done

EVOLUTION MINING LIMITED Regulatory Filings 2016