EVOLUTION MINING LIMITED — Regulatory Filings 2018

Feb 14, 2018

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Financial Results

15 February 2018 Jake Klein – Executive Chairman Lawrie Conway – Finance Director and CFO

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Forward looking statement

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

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

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

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

Non-IFRS Financial Information

• The Company results are reported under International Financial Reporting Standards (IFRS). This presentation also includes non-IFRS information including EBITDA and Underlying profit. The non-IFRS information has not been subject to audit or review by the Company’s external auditor and should be used in addition to IFRS information.

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Su erior financial erformance p p

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Consistent operational performance Global leader in low-cost production

Continued significant cash generation Increasing shareholder returns

Strong balance sheet

Quality of portfolio delivering superior financial performance

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Safet y

• Group total recordable injury frequency rate at end of December 2017 reduced to 6.2 and lost time injury frequency rate reduced to 0.4

• Major risk reduction project is underway to implement critical control plans for the top ten principal hazards

• NSW Mines Rescue challenge successfully hosted by Evolution (Cowal) in the local community of West Wyalong

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Total Recordable Injury Frequency Rate
(TRIFR)
24.4
19.9
12.0
9.6 9.7
8.0
6.2
FY12 FY13 FY14 FY15 FY16 FY17 H1 FY18
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Lost Time Injury Frequency Rate
(LTIFR)
5.3
3.7
2.1 1.8
1.0
0.4 0.4
FY12 FY13 FY14 FY15 FY16 FY17 H1 FY18
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Evolution’s Mines Rescue Group who participated in the NSW Mines Rescue Challenge 2017

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Financial hi hli hts
g g
Financials Units H1 FY18 H1 FY17 Change
Statutory Profit before tax A$M 175.1 121.0 45%
Statutory Profit after tax [1] A$M 122.5 136.7 10%
Underlying Profit after tax [1] A$M 124.7 115.0 9%
EBITDA A$M 399.1 345.3 16%
Operating Cash Flow A$M 415.1 339.4 22%
Group Cash Flow A$M 176.8 147.1 20%
EBITDA Margin [2] % 53 50 6%
AIC Margin A$/oz 628 536 17% Gold bar from Mungari operation
Gearing % 9.5 22.0 57%
Interim dividend [3] cps 3.5 2.0 75%
1. Refer to slides 17 and 18 for the statutory and underlying profit after tax reconciliations
2. H1 FY18 excludes Edna May; H1 FY17 excludes Pajingo
3. H1 FY18 fully franked; H1 FY17 unfranked
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Grou EBITDA p

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• Record group half year EBITDA (cash profit) up 16% to A$399.1M

• Low operating unit costs driving increased cash profit

• Driving efficiencies to offset any cost pressures

• Investment in Ernest Henry delivering value with A$116.3M contribution

FY18 Half Year EBITDA (A$M)

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72.7 4.4 399.1
345.3 8.2
(16.6) (0.6)
(14.3)
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EBITDA December 2016

Gold Volume

Gold Price By Product By Product Price Volume

Mine Operating Exploration, EBITDA Costs Corporate & Other December 2017

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EBITDA mar ins g

 Site EBITDA margins of 37% to 67% able to support capital programs

• Group EBITDA margin up 8% to 53%[(1)]

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Site EBITDA Margin
FY17
66% 67%
64% H1 FY18 [(1)]
61%
59% 58%
55%
49%
45%
40% 39% 37%
Cowal Ernest Henry Mt Carlton Mt Rawdon Mungari Cracow
10+ years [(2)] 6-8 years [(2)] 3-6 years [(2)]
EBITDA Contribution EBITDA Contribution EBITDA Contribution
3-6
3-6
years
years16%
6-8 16%
10+ 6-8 years
years years25%
59% 25%
10+ years
62%
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Group EBITDA Margin (%)

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53%
49%
46%
40%
33%
(1)
FY14 FY15 FY16 FY17 H1 FY18
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• Group margin up 60% from FY14

• H1 FY18 drivers: lower unit costs; higher copper price; Edna May sale and lower achieved gold price

(1) FY18 excludes Edna May

(2) Indicative reserve life based on FY18 production guidance mid-point

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Discover and resource definition y

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• Continued investment in organic growth at A$27.8M

• Discovery investment of A$16.2M with majority directed to Mungari

• Resource definition investment of A$11.6M across all sites

• Cowal – developing gold and copper targets at E41 along with proof of (geological) concept drilling along GalwayRegal-E46 trend

• Mungari – White Foil Phase 1 infill concluded at north extension target with initial results in line with expectations. Aggressive regional drilling campaign ongoing

• Cracow – Coronation-Imperial-Empire corridor continuing to deliver strong infill and step-out results

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Discovery spend by site Resource definition investment by site
Mt Carlton
Mt Rawdon
3%
5% Mt Carlton
20%
Tennant
Creek/South
Gawler
20% Mungari
26%
Cracow
Mungari Cracow 33%
66% 7%
Cowal
Cowal 16%
4%
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Cowal - Isometric view showing >0.4g/t gold outlines of the major identified resources (E41 and E42), resource targets E46 and Galway-Regal, and recent drill hole locations

Cowal exploration results are extracted from the report entitled “Quarterly Report for the period ending 31 December 2017” released to ASX on 30 January 2018 and is available to view on www.evolutionmining.com.au. The reported intervals are a downhole width as true widths are not currently known. An estimated true width (“etw”) is provided. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Report

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Grou cash flow p

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• All operations cash positive after capital investment

• Sustaining and major capital remain in line with FY18 guidance

• First tax payment of A$36M for FY17 income generating franking credits

• Banking high cash generation to continue to reduce net debt

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Operating Cash Flow (A$M) Free Cash Flow (A$M) Net Cash (A$M)
53% of revenue 23% of revenue 11% of revenue
Discovery
A$16M
Working
Prior year Tax Capital
payment Movement
A$36M A$40M
Dividends Paid
Interest A$51M
Operating A$11M
Operating Cash Corporate
Costs A$415M A$12M Free Cash Net Cash
A$367M A$177M A$86M
Capital Debt
A$123M Repayments
A$40M
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1. Net cash excludes A$40M proceeds from Edna May sale

Deliverin value from investments g

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Assets Developed or Acquired

Asset Cost - A$358M Capital Investment - A$127M Average ROI - 16% p.a.

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Asset Cost - A$263M Asset Cost - A$756M Asset Cost - A$358M Asset Cost - A$901M
Capital Investment - A$127M Capital Investment - A$146M Capital Investment - A$127M Capital Investment - A$15M
Average ROI - 25% p.a. Average ROI - 23% p.a. Average ROI - 16% p.a. Average ROI - 21% p.a.
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7 344 12 712
28
6
412 2 228
263 4 130 2 189 1
A$M Years A$M Years A$M Years A$M Years
Mt Carlton Cowal Mungari Ernest Henry
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Net Payback* ($M) Remaining ($M) Years Owned Remaining LOM Surplus above Asset Cost

• Net payback is net of capital investment subsequent to commissioning / ownership

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Balance sheet continues to stren then
g
 Significant improvement in liquidity Cash and Liquidity
 164
Cash and undrawn debt of A$463.5M
37

Term Facility B fully repaid during the half-year –
17
approximately three years ahead of schedule 53 300 300
205
113

Bank debt at 31 December 2017 of A$395.0M for Term
Loan Facility D Jun-15 Jun-16 Jun-17 Dec-17
Undrawn Debt Cash
 FY18 remaining debt payment obligation of A$30M Gearing Gearing and Leverage Ratio Net Debt to EBITDA
60% 2.0
1.56

Gearing reduced by 40% from June 2017 to 9.5%
50% 1.5
 Adequate hedging in place out to June 2020 40% 0.56 1.0
0.45
0.30
30% 0.5

Total of 362,500oz at A$1,670/oz average
20% 0.0
 32.0%
FY18 H2 112,500oz at A$1,578/oz average 10% 15.1% 15.9% -0.5
9.5%
 Restricted tax loss asset of A$11.5M available for use to 0% -1.0
offset future profits Jul-15Gearing Jun-16Leverage Ratio (Net Debt to EBITDA)Jun-17 Dec-17 Annualised
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Dividends
 Dividends Declared Cents per Share
New dividend policy increasing returns to shareholders

Fully franked interim dividend up 75% to 3.5 cents
3

Total FY18 interim dividend of A$59.2M to be paid on
30 March 2018 2
3.5
1 1
2
1 1 1 1
Dividends Declared A$M (Pre-DRP)
FY13 FY14 FY15 FY16 FY17 FY18
Interim Final
Cumulative Dividends Declared A$M (Pre-DRP)
51
230
29 59
171
34
14
7 87
7 7 7 15 7 21 43
FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18
Interim Final
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Cowal ro ects u date p j p

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• Significant investment in Cowal’s future

• Investing ~A$300 million over four years

• Delivers mine life through to 2032

• Cornerstone asset with further extension opportunities

• Stage H cutback on track

• All pre-work complete

Stage H cutback

• Ramped up to full scale mining activity

• Cutback scheduled to be completed in FY21

• Float Tails Leach project on time and on budget

• Commissioning in December 2018 half-year

• Expected to increase recoveries by 4 – 6%

Float Tails Leach project

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Generatin su erior financial returns g p

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20% AISC 11% AIC Low cost A$785/oz A$993/oz 6% EBITDA margin 17% AIC margin High margin 53% A$628/oz High cash 20% Group cash flow 20% Cash flow per share generation A$176.8M 21 cents Strong 57% Gearing 75% Interim dividend balance sheet fully 9.5% franked 3.5 cents

Note: All movements are compared to H1 FY17

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Appendix

ASX code: EVN

www.evolutionmining.com.au

Statutor rofit reconciliation y p

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• Transaction costs of A$1.2M after tax relate to Edna May sale

• Deferred tax effect of Edna May sale of A$4.2M

• Non-cash fair value gain on unwind of derivative contracts (Mungari) of A$3.1M

Reconciliation of Underlying to Statutory Profit A$M

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3.1
124.7
122.5
(1.2)
(4.2)
Underlying Profit Transaction Costs Gain on Fair Value Tax on sale of Edna May Statutory Profit December
December 2017 Revaluation 2017
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Underl in net rofit reconciliation y g p

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Underlying Net Profit After Tax A$M

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72.7 4.4
15.5
0.5
(16.6)
8.2 124.7
115.0 (23.7) (4.2)
(32.9)
(14.3)
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Underlying Gold Volume Gold Price By Product By Product Mine D&A Exploration, Other Fair value Tax Underlying Profit Volume Price Operating Corporate & Cowal / Profit December Costs Interest Mungari December 2016 2017

*[Consistent with the 30 June 2017 financial statements, underlying profit includes the fair value amortisation related to the acquisition of Cowal and Mungari. For consistency, the 2016 ] underlying profit has been amended to reflect this treatment. No change to statutory profit was required. Underlying profit is a non-IFRS measure. Refer also to the Appendix 4E and Annual Financial Report for the year ended 30 June 2017

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Taxation

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▪ All unrestricted tax losses utilised during the year to June 2017

▪ Tax payment for 2017 tax year of A$36M paid in December 2017

▪ Restricted tax losses recorded on balance sheet as an asset amount as at December 2017 is A$11.5M

▪ A$10.1M of La Mancha acquired tax losses restricted by an available fraction of 16.4%

▪ A$1.4M of Phoenix Gold acquired tax losses restricted by an available fraction of 2.7%

• Conquest acquired tax losses are now fully utilised

Income Tax Expense Reconciliation A$M

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17.6 52.5
38.9
(4.0) (17.6) 26.0
(8.9)
Current Tax Expense Adjustments for current Deferred Tax Expense Income Tax Expense Deferred Expense Tax Losses Utilised Tax Payable
tax on prior periods Timing
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1. The available fraction limits the annual rate at which losses may be recouped against taxable income

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