EVOLUTION MINING LIMITED — Regulatory Filings 2018

Feb 14, 2018

Appendix 4D (Listing Rule 4.2A.3) EVOLUTION MINING LIMITED ACN 084 669 036

AND CONTROLLED ENTITIES

HALF-YEAR FINANCIAL REPORT For the half-year ended 31 December 2017

Results for Announcement to the Market

Key Information

	31 December 2017 $'000 31 December 2016 $'000 Up / (down) $'000 % increase/ (decrease)	31 December 2017 $'000 31 December 2016 $'000 Up / (down) $'000 % increase/ (decrease)	31 December 2017 $'000 31 December 2016 $'000 Up / (down) $'000 % increase/ (decrease)
Revenues from ordinary activities SPACE Earnings before Interest, Tax, Depreciation, Amortisation & Fair value adjustments (EBITDA) SPACE Statutory profit before income tax SPACE Profit from ordinary activities after income tax attributable to members	782,139 399,099 175,091 122,518	711,150 345,298 121,017 136,670	70,989 10% 53,801 16% 54,074 45% (14,152) (10)%

Dividend Information

		Franked
	Amount	amount per
	per share	share
	Cents	Cents
Space
Interim dividend for the year ended 30 June 2018
Dividend to be paid on 30 March 2018	3.5	3.5
Space

Net Tangible Assets

	31 December 2017 $ 31 December 2016 $	31 December 2017 $ 31 December 2016 $
Net tangible assets per share	1.29	1.21

Earnings Per Share

	31 December	31 December
	2017	2016
	Cents	Cents
Basic earning per share	7.25	8.56
Diluted earnings per share	7.21	8.50

Additional Appendix 4D disclosure requirements can be found in the notes of this Half-Year Financial Report and the Directors' Report attached thereto. This report is based on the consolidated Half-Year Financial Report which has been subject to review by PricewaterhouseCoopers.

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report

Corporate Information

ABN 74 084 669 036

Directors

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

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

Company Secretary

Evan Elstein

Registered Office

Level 30, 175 Liverpool Street SYDNEY NSW 2000

Postal Address

Level 30, 175 Liverpool Street SYDNEY NSW 2000

T: +61 2 9696 2900 F: +61 2 9696 2901

Share Register

Link Market Services Level 12, 680 George Street SYDNEY NSW 2000

T: +61 2 9315 2333 F: +61 2 9287 0303

Auditor

PricewaterhouseCoopers One International Towers Sydney SYDNEY NSW 2000

T: + 61 2 8266 0000 F: + 61 2 8266 9999

Website

www.evolutionmining.com.au

Stock Exchange Listing

Evolution Mining Limited (EVN) shares are listed on the Australian Securities Exchange.

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report

Table of Contents

Table of Contents
	Page
Directors' Report	1
Auditor's Independence Declaration	12
Half-Year Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income	13
Consolidated Balance Sheet	14
Consolidated Statement of Changes in Equity	15
Consolidated Statement of Cash Flows	16
Notes to the Consolidated Financial Statements	17
Directors' Declaration	33
Independent Auditor's Review Report to the Members	34

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Directors' Report

The Directors present their report together with the consolidated financial report of the Evolution Mining Limited Group ("the Group") consisting of Evolution Mining Limited ("the Company") and the entities it controlled at the end of, or during, the half-year ended 31 December 2017 ("the period").

Directors

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

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

Company Secretary

The name of the Company Secretary during the whole of the half-year ended 31 December 2017 and up to the date of this report is as follows:

Evan Elstein

Principal activities

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

Key highlights for the period

Key highlights for the half year ended 31 December 2017 include:

• Safety of our people is of paramount importance and our focus has been demonstrated through maintaining a steady total recordable injury frequency rate (TRIFR) of 6.2 and lost time injury frequency rate (LTIFR) of 0.4.

• The Group recorded a statutory net profit after tax of $122.5 million for the period to 31 December 2017. Underlying net profit after tax increased to $124.7 million (31 December 2016: $115.0 million).

• A record low AISC of $785/oz representing a decrease of 20% on the prior period ($978/oz) despite a 4% fall in production to 407,459 ounces.

• The Directors have approved a fully franked dividend of 3.5 cents per fully paid ordinary share. The aggregate amount of the proposed dividend to be paid on 30 March 2018 is $59.2 million.

• In December 2017, the Group made its first income tax payment of $36.2 million related to the 30 June 2017 financial year.

1

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Key highlights for the period (continued)

• In September 2017, the Group repaid the outstanding balance of $40.0 million on the Senior Secured Term Loan ("Facility B") using the upfront cash payment received on the sale of the Edna May Operation. No additional repayments have been made to the existing $395.0 million Senior Secured Term Loan (“Facility D”). The Senior Secured Revolving Loan ("Facility A") remains fully repaid at 31 December 2017.

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

• On 4 August 2017, the Group agreed to subscribe for a $2.5 million investment in the initial public offering of Riversgold Ltd, a new gold-focussed exploration company whose strategy is to build a portfolio of high quality mineral projects with a view to sell or enter into a joint venture at an appropriate time in the project life cycle.

Operating and Financial Review

Overview

As at 31 December 2017, the Group consisted of five wholly-owned operating gold mines; Cowal in New South Wales; Cracow, Mt Carlton and Mt Rawdon in Queensland; Mungari in Western Australia, and an economic interest in the Ernest Henry Copper-Gold Operation (100% of gold and 30% of copper and silver) in Queensland.

The Group posted a statutory profit after tax of $122.5 million for the half year ended 31 December 2017 (31 December 2016: $136.7 million) largely due to a full six month contribution from the Ernest Henry Copper-Gold Operation compared to two months in the previous half year. The prior year statutory profit included a non-cash deferred tax benefit of $30.9 million which was related to the recognition of previously unrecognised tax losses.

The following graph shows the movements in the Group's statutory profit after tax for the half year ended 31 December 2017.

==> picture [452 x 217] intentionally omitted <==

2

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Operating and Financial Review (continued)

Overview (continued)

The Group recorded an underlying net profit after tax of $124.7 million for the period ended 31 December 2017 (31 December 2016: $115.0 million). The statutory net profit after tax includes one-off transactions and non-operating costs which have been excluded from the Group's underlying profit after tax.

The table below shows the differences of statutory profit before tax to the underlying profit after tax.

	2017	2016	2016
	$'000	$'000
Statutory profit before income tax	175,091	121,017
Fair value (gain)/expense	(3,142)	964
Loss on sale of subsidiary	-	2,378
Transaction and integration costs	1,192	6,107
Underlying profit before income tax	173,141	130,466
Income tax (expense)/benefit	(52,573)	15,653
Tax expense on sale of subsidiary	4,165	-
Tax effect of adjustments	-	(289)
Recognition ofpreviouslyunrecognised tax losses	-	(30,880)
Underlying profit after income tax (*)	124,733	114,950

(*) 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.

Operating cash flow increased 9% against a 2% decline in the gold price to $1,621/oz, with all operations producing positive operating mine cash flows totalling $415.1 million (31 December 2016: $339.4 million). Total capital expenditure decreased 3% to $122.6 million (including all sustaining and major capital expenditure, rehabilitation costs and capital stripping). The decrease in capital expenditure is attributable to the disposal of Edna May, contributing savings of roughly $3.1 million on the prior year.

3

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

==> picture [72 x 49] intentionally omitted <==

Operating and Financial Review (continued)

Overview (continued)

Key Results

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

	31 December	31 December	% Change	% Change
Key Business Metrics	2017	2016	(iii)
Total underground ore mined (kt)	3,878	1,700	128%
Total underground lateral development (m)	6,835	5,017	36%
Total open pit ore mined (kt)	7,768	9,957	(22)%
Total open pit waste mined (kt)	18,011	16,622	8%
Processed tonnes (kt)	10,942	9,335	17%
Gold grade processed (g/t)	1.36	1.63	(17)%
Gold production (oz)	407,459	423,120	(4)%
Unit cash operating cost (A$/oz) (i)	507	667	24%
All in sustaining cost (A$/oz) (i)	785	978	20%
All in cost($/oz) (i)	993	1,120	11%
Gold price achieved (A$/oz)	1,621	1,656	(2)%
Silver price achieved (A$/oz)	21.48	24.32	(12)%
Copperprice achieved(A$/t)	8,997	7,456	21%
Total Revenue	782,139	711,150	10%
Cost of sales (excluding D&A and fair value adjustments (i))	(365,234)	(348,661)	(5)%
Corporate, admin, exploration and other costs (excluding D&A)	(17,806)	(17,191)	(4)%
EBITDA (i) (ii)	399,099	345,298	16%
EBIT (i) (ii)	203,598	173,471	17%
Statutory profit before income tax	175,091	121,017	45%
Statutory profit after income tax	122,518	136,670	(10)%
Underlying profit after income tax	124,733	114,950	9%
Mine operatingcash flow	415,113	339,426	22%
Capital expenditure	(122,583)	(125,990)	3%
Net mine cash flow	292,530	213,646	37%

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

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

Mining Operations

Cowal

Cowal was the highest producer in the Group, achieving gold production of 132,425oz at an average C1 cash cost of $607/oz and AISC of $779/oz. Capital expenditure in the period was $40.2 million, of which $25.4 million relates to the Stage H and Float Tails (Dual) Leach projects.

Cowal ore mining activities focussed on the E42 Stage G cutback to a current operating level of 867mRL. All pre-work required to facilitate the Stage H cutback was completed during the period to 31 December 2017 and full-scale mining activity has now commenced.

4

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

==> picture [72 x 49] intentionally omitted <==

Operating and Financial Review (continued)

Mining Operations (continued)

Cowal (continued)

Contracts were awarded for the project management and construction of the Float Tails Leach project during the period. An engineering design review was completed and bulk earth works commenced. Major construction works are expected to start in the second half of the financial year. The project remains on schedule and on budget and is expected to increase recoveries by 4-6% once commissioned in the December 2018 half year.

Key Business Metrics	31 December 2017 31 December 2016 Change % Change	31 December 2017 31 December 2016 Change % Change	31 December 2017 31 December 2016 Change % Change
Net mine cash flow ($'000) Major capital ($'000) Sustaining capital ($'000) Gold production (oz)	87,330 25,410 14,810 132,425	97,082 - 26,760 135,935	(9,752) (10)% - -% (11,950) (45)% (3,510) (3)%
All in sustaining cost ($/oz) All in cost($/oz)	779 971	862 865	(83) 10% 106 (12)%

Mungari

Mungari produced a total of 58,509oz of gold at an average C1 cash cost of $936/oz and an AISC of $1,169/oz. Capital expenditure in the period was $28.2 million, of which $4.3 million relates to underground mine development at Frog’s Leg underground mine and $17.3 million related to capital waste stripping on the White Foil open pit.

Frog’s Leg underground mine produced 244kt ore tonnes at a grade of 5.12g/t gold. Total development was reduced on the prior year after scaling back for development and rehabilitation operations at the start of the 2018 financial year. White Foil open pit completed mining Stage 2b, and has commenced mining the Stage 3 cutback and Stage 2X.

The process plant performed well with 842kt of ore processed at an average grade of 2.31g/t gold. Increased gold recoveries of 93.6% were achieved through the successful commissioning of an additional Knelson concentrator allowing for increased recoveries by the gravity circuit. Plant utilisation was impacted by adverse weather and power interruptions in the period, and a full mill reline was completed on schedule in October.

Investment in discovery and resource definition programs across the Mungari tenements continued during the period. Successful follow-up drilling was completed at regional resource targets Burgundy and Emu confirming extended high-grade mineralisation outside of existing resources. Full results from resource definition drilling beneath the White Foil pit are outstanding at the period end. A decision whether to move to a second phase of drilling is expected in the second half of the year based on the initial drilling results.

Key Business Metrics	31 December 2017 31 December 2016 Change % Change	31 December 2017 31 December 2016 Change % Change	31 December 2017 31 December 2016 Change % Change
Net mine cash flow ($'000) Sustaining capital ($'000) Major capital ($'000) Gold production (oz)	11,330 6,500 21,650 58,509	42,750 9,010 13,270 79,940	(31,420) (73)% (2,510) (28)% 8,380 63% (21,431) (27)%
All in sustaining cost ($/oz) All in cost($/oz)	1,169 1,664	1,047 1,285	122 (12)% 379 (29)%

5

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

==> picture [72 x 49] intentionally omitted <==

Operating and Financial Review (continued)

Mining Operations (continued)

Mt Carlton

Mt Carlton produced 59,921oz at a C1 cash cost of $242/oz and AISC of $464/oz. The gravity circuit continues to contribute value reflected in the production of 10,138oz of gold during the period. Doré production is expected to increase in the second half of the financial year following successful ongoing optimisation work. Payback of the A$4 million project capital is expected to be achieved in the second half of the year, fewer than 12 months from when the project was fully commissioned.

Mining of the Stage 3a western end of the V2 open pit has focussed on accessing high-grade ore to blend with low to medium grade Run of Mine (ROM) stocks. Mining of the eastern end Stage 3b pre-strip continued on schedule.

The Definitive Feasibility Study on either an underground mine or stage 4 of the pit continued during the period. The resource definition drilling program was completed in December with the updated Mineral Resource estimation model currently underway.

	31 December	31 December
Key Business Metrics	2017	2016	Change	% Change
Net mine cash flow ($'000)	57,500	39,070	18,430	47%
Sustaining Capital ($'000)	4,430	10,570	(6,140)	(58)%
Major Capital ($'000)	10,550	7,200	3,350	47%
Gold production (oz)	59,921	51,218	8,703	17%
All in sustaining cost ($/oz)	464	682	(218)	32%
All in cost($/oz)	656	834	(178)	21%

Mt Rawdon

Mt Rawdon produced 43,183oz at a C1 cash cost of $873/oz and AISC of $1,070/oz. Production has been negatively impacted in the period by an extreme weather event in October and a ball mill engine failure in December which resulted in an eight day unplanned shutdown of the plant.

Mining activities were focussed on the progression of the Stage 4 cutback. Ore was sourced from the western and northern section of the open pit with waste movement activities concentrated in the southern and western sections of the pit.

6

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Operating and Financial Review (continued)

Mining Operations (continued)

Mt Rawdon (continued)

Drilling activities have identified targets immediately to the west and north of the current pit and are currently being incorporated into the upcoming Mineral Resource and Ore Reserve estimate. This drilling was aimed at the conversion of unclassified mineral inventory into Inferred or Indicated Resources.

	31 December	31 December
Key Business Metrics	2017	2016	Change	% Change
Net mine cash flow ($'000)	11,330	18,400	(7,070)	(38)%
Sustaining capital ($'000)	4,080	7,020	(2,940)	(42)%
Major capital ($'000)	8,050	11,280	(3,230)	(29)%
Gold production (oz)	43,183	50,862	(7,679)	(15)%
All in sustaining cost ($/oz)	1,070	833	237	(28)%
All in cost($/oz)	1,253	1,058	195	(18)%

Cracow

Cracow produced 43,612oz at an average C1 cash cost of $787/oz and AISC of $1,136/oz. Safety continues to be a key focus with the operation passing 1,600 days without a lost time injury during the period.

A total of 259kt of ore was mined at an average grade of 5.40 g/t gold. Primary ore sources were the Kilkenny, Griffin and Empire ore bodies. Grades are expected to increase in the second half of the year with the commencement of production from the Coronation ore body as well as Kilkenny and Empire stopes.

The success of the resource definition and exploration drill programs in 2017 has resulted in a high level of confidence in mine life extensions beyond the current four year life of mine plan.

	31 December	31 December
Key Business Metrics	2017	2016	Change	% Change
Net mine cash flow ($'000)	17,020	14,310	2,710	19%
Sustaining capital ($'000)	6,410	10,340	(3,930)	(38)%
Major capital ($'000)	6,790	6,860	(70)	(1)%
Gold production (oz)	43,612	41,317	2,295	6%
All in sustaining cost ($/oz)	1,136	1,267	(131)	10%
All in cost($/oz)	1,228	1,365	(137)	10%

Ernest Henry

Attributable production from Ernest Henry was 48,169oz of gold, 28,569oz of silver and 10,772t of copper at a negative average C1 cash cost of $(956)/oz and a negative AISC of $(621)/oz.

Ore mined was 3,376kt at an average grade of 0.57g/t gold and 1.14% copper. Underground development was 3,498m. Ore processed was 3,419kt at an average grade of 0.56g/t gold and 1.14% copper. Gold recovery of 80.5% and copper recovery of 95.9% was achieved with mill utilisation at 89.4%.

7

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Operating and Financial Review (continued)

Mining Operations (continued)

Ernest Henry (continued)

	31 December	31 December
Key Business Metrics	2017	2016	Change	% Change
Net mine cash flow ($'000)	107,410	1,630	105,780	6,490%
Sustaining capital ($'000)	8,820	3,200	5,620	176%
Gold production (oz)	48,169	14,257	33,912	238%
All in sustaining cost ($/oz)	(621)	(114)	(507)	(445)%
All in cost($/oz)	(621)	(114)	(507)	(445)%

Edna May

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

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

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

Financial Performance

Profit or Loss

Revenue for the period ended 31 December 2017 increased by 10% to $782.1 million (31 December 2016: $711.2 million). This is largely due to the inclusion of results from Ernest Henry totalling $175.3 million (31 December 2016: $24.1 million). This is comprised of $97.4 million for copper and silver revenue and $77.9 million for gold revenue. A 21% increase in the copper price achieved to A$8,997/t has favourably impacted on revenue in the period. This is partly offset by the disposal of the Edna May Operation which resulted in a decrease of $27.5 million on the prior year.

Total gold sold equalled 409,705oz which included deliveries into the hedge book of 95,995oz at an average price of $1,550/oz (31 December 2016: 127,501oz, $1,578/oz). The remaining 313,710oz were sold at spot price achieving an average price of $1,645/oz (31 December 2016: 277,139oz, $1,656/oz). The Group's hedge book totals 362,500oz as at 31 December 2017 at an average price of $1,670/oz for quarterly deliveries out to June 2020.

Operating costs (excluding depreciation, amortisation and fair value adjustments of $211.0 million) increased to $365.2 million (31 December 2016: $348.3 million) largely as a result of the first year inclusion of Ernest Henry which accounted for operating costs of $59.1 million offset by $19.5 million following the sale of Edna May during the year. The operating costs for the remaining five existing mine sites remained consistent at $271.6 million (31 December 2016: $268.1 million).

The Group’s All in Sustaining Cost decreased by 20% to $785/oz (31 December 2016: $978/oz) despite a 17% drop in the average grade processed during the year. The decline in grade was offset by the inclusion of Ernest Henry which contributed an AISC of $(621)/oz for the period.

8

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Operating and Financial Review (continued)

Financial Performance (continued)

Profit or Loss (continued)

The Group posted an increase of 45% in profit before income tax driven by increased sales, offset by an income tax expense of $52.6 million (31 December 2016: benefit of $15.7 million). Statutory profit after tax was $122.5 million (31 December 2016: $136.7 million) and underlying profit after tax totalled $124.7 million (31 December 2017: $115.0 million).

Balance Sheet

Total assets at the end of period, were in line with 30 June 2017 at $2.9 billion (30 June 2017: $2.9 billion). An increase in cash of $126.1 million since 30 June 2017 to $163.5 million combined with the recognition of deferred consideration on the Edna May disposal of $33.1 million has been offset by the disposal of total assets attributable to Edna May of $114.0 million as well as a reduction in the net carrying amount of property plant and equipment and producing mines due to a depreciation charge of $196.1 million outstripping capital additions of $145.4 million. Non-current inventories increased by $39.3 million to $40.2 million and include ore stockpiles at Mt Rawdon ($20.7 million) and Cowal ($18.6 million) not expected to be processed within 12 months. The Cowal ore stockpile has been reclassified from Mine Development.

Total liabilities for the Group decreased by $88.9 million or 11% to $728.3 million at 31 December 2017. The decrease is in part attributable to the $40.0 million final repayment of the Senior Secured Term Loan (“Facility B”) established for the Cowal acquisition. The remaining decrease is due to the disposal of total liabilities of $37.6 million related to the sale of Edna May.

The Group ended the period with a cash balance of $163.5 million and available credit of $300.0 million in Facility A as part of its Senior Secured Syndicated Revolving and Term Facility.

Taxation

During the period, the Group made its first income tax payment of $36.2 million and recognised an income tax expense of $52.6 million (31 December 2017: benefit of $15.7 million). On the balance sheet the Company recognised a current tax liability of $26.0 million (30 June 2017: 36.2 million) and a deferred tax liability of $10.2 million (30 June 2017: asset of $16.4 million). The tax payment made in respect of the 30 June 2017 financial year combined with tax instalments expected to be paid during the 2018 financial year have enabled the declaration of a fully franked interim dividend.

Capital Expenditure

Capital expenditure for the period to 31 December 2017 totalled $122.6 million (31 December 2016: $126.0 million). This consists of sustaining capital, including near mine exploration and resource definition of $47.1 million (31 December 2016: $71.3 million) and mine development of $75.5 million (31 December 2016: $54.7 million). The main capital projects include the Stage H and Float Tails (Dual) Leach projects at Cowal, underground mine development at Cracow and Mungari, and capital waste stripping at Mt Carlton, Mt Rawdon and Mungari.

9

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

==> picture [72 x 49] intentionally omitted <==

Operating and Financial Review (continued)

Financial Performance (continued)

Financing

Total finance costs for the year were $12.3 million (31 December 2016: $13.9 million), a decrease of 12%. Included in total finance costs is interest expense of $10.0 million (31 December 2016: $10.0 million), amortisation of debt establishment costs of $0.2 million (31 December 2016: $2.1 million) and discount unwinding on mine rehabilitation liabilities of $2.2 million (31 December 2016: $1.5 million).

In September 2017, the Group fully repaid the outstanding balance of $40.0 million on the Senior Secured Term Loan ("Facility B").

No changes have been made to the existing Senior Secured Term Loan ("Facility D"), the $155.0 million Performance Bond Facility ("Facility C") or the Senior Secured Revolving Loan ("Facility A").

The repayment periods and outstanding balances as at 31 December 2017 on each facility are set out below:

Facility	Term date	Outstanding
		balance
Senior Secured Revolving Loan - Facility A	31 July 2018	$ nil
Performance Bond Facility - Facility C	20 July 2018	$131 million
Senior Secured Term Loan - Facility D	31 October 2021	$395 million

Dividends

In August 2017, the Directors approved a change to the dividend policy of whenever possible paying a dividend equivalent to 50% of the Group's after tax earnings. The change was effective immediately and was applied to the final dividend for 2017 and interim dividend for 2018.

The Board has confirmed that Evolution is in a sound position to meet its commitment under the new policy to pay a final fully franked dividend for the current period of 3.5 cents per share, totalling $59.2 million. Evolution shares will trade excluding entitlement to the dividend on 23 February 2018, with the record date being 26 February 2018 and payment date of 30 March 2018.

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

Matters subsequent to the end of the financial year

No matter or circumstance has occurred subsequent to the period end that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations or state of affairs of the Group or economic entity in subsequent financial periods.

10

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Report 31 December 2017

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 12 .

Rounding of amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the Directors' Report. Amounts in the Directors' Report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

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

==> picture [71 x 39] intentionally omitted <==

Jacob (Jake) Klein Executive Chairman

==> picture [112 x 50] intentionally omitted <==

Graham Freestone Non-Executive Director

Sydney

11

==> picture [77 x 59] intentionally omitted <==

Auditor’s Independence Declaration

As lead auditor for the review of Evolution Mining Limited for the half-year ended 31 December 2017, I declare that to the best of my knowledge and belief, there have been:

• (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (b) no contraventions of any applicable code of professional conduct in relation to the review.

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

==> picture [170 x 84] intentionally omitted <==

Marc Upcroft Partner PricewaterhouseCoopers

Sydney 15 February 2018

==> picture [456 x 15] intentionally omitted <==

PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

12

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 31 December 2017

Notes 31 December 2017 $'000 31 December 2016 $'000	Notes 31 December 2017 $'000 31 December 2016 $'000
Sales revenue 3 Cost of sales 3 Gross Profit Interest income Other income Share based payments expense Corporate and other administration costs Transaction and integration costs Exploration and evaluation costs expensed 7 Loss on sale of subsidiary Finance costs Profit before income tax Income tax (expense)/benefit 4 Profit after income tax expense Other comprehensive (loss)/income Items that may be reclassified subsequently to profit or loss Changes in the fair value of available-for-sale financial assets Changes in the fair value of cash flow hedges Exchange differences on translation of foreign operations Blank Other comprehensive (loss)/income, net of tax Total comprehensive income Total comprehensive income for the period is attributable to: Owners of Evolution Mining Limited Earnings per share for profit attributable to the ordinary equity holders of the Company: Basic earnings per share Diluted earnings per share	782,139 711,150 (576,235) (551,496)
	205,904 159,654 860 1,288 366 419 (4,589) (371) (12,631) (13,912) (1,192) (6,107) (1,307) (3,715) - (2,378) (12,320) (13,861)
	175,091 121,017 (52,573) 15,653
	122,518 136,670
	(1,349) 3,199 - 127 42 40
	(1,307) 3,366
	121,211 140,036
	121,211 140,036
	121,211 140,036
	Cents Cents 7.25 8.56 7.21 8.50

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

13

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Consolidated Balance Sheet As at 31 December 2017

Notes 31 December 2017 $'000 30 June 2017 $'000	Notes 31 December 2017 $'000 30 June 2017 $'000
ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Total current assets Non-current assets Inventories Available-for-sale financial assets Property, plant and equipment 6 Mine development and exploration 7 Deferred tax assets Other non-current assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Interest bearing liabilities 8 Current tax liabilities Provisions Other current liabilities Total current liabilities Non-current liabilities Interest bearing liabilities 8 Provisions Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Issued capital 9 Reserves Accumulated losses Capital and reserves attributable to owners of Evolution Mining Limited Total equity	163,500 37,385 83,429 63,119 241,547 276,869
	488,476 377,373 40,183 827 6,112 4,962 644,368 741,189 1,716,225 1,801,479 - 16,448 36,329 3,191
	2,443,217 2,568,096
	2,931,693 2,945,469
	132,570 156,627 98,774 53,401 25,982 36,214 30,179 30,173 63 3,206
	287,568 279,621 295,075 382,723 135,519 154,873 10,157 -
	440,751 537,596
	728,319 817,217
	2,203,374 2,128,252
	2,183,727 2,183,727 42,077 38,795 (22,430) (94,270)
	2,203,374 2,128,252
	2,203,374 2,128,252

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

14

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Consolidated Statement of Changes in Equity For the half-year ended 31 December 2017

Notes Issued capital $'000 Share- based payments $'000 Fair value revaluation reserve $'000 Cash flow hedges $'000 Foreign currency translation $'000 Accu- mulated losses $'000 Total equity $'000	Notes Issued capital $'000 Share- based payments $'000 Fair value revaluation reserve $'000 Cash flow hedges $'000 Foreign currency translation $'000 Accu- mulated losses $'000 Total equity $'000
Balance at 1 July 2016 Profit after income tax expense Other comprehensive income Total comprehensive income Transactions with owners in their capacity as owners: Contributions of equity 9 Dividends provided for or paid 5 Recognition of share-based payments Balance at 31 December 2016 Balance at 1 July 2017 Profit after income tax expense Other comprehensive expense Total comprehensive income Transactions with owners in their capacity as owners: Dividends provided for or paid 5 Recognition of share-based payments Balance at 31 December 2017	1,770,987 29,496 (110) (127) 104 (248,917) 1,551,433
	- - - - - 136,670 136,670 - - 3,199 127 40 - 3,366
	- - 3,199 127 40 136,670 140,036
	406,547 - - - - - 406,547 - - - - - (29,380) (29,380) - 1,611 - - - - 1,611
	406,547 1,611 - - - (29,380) 378,778
	2,177,534 31,107 3,089 - 144 (141,627) 2,070,247
	2,183,727 37,149 1,589 - 57 (94,270) 2,128,252
	- - - - - 122,518 122,518 - - (1,349) - 42 - (1,307)
	- - (1,349) - 42 122,518 121,211
	- - - - - (50,678) (50,678) - 4,589 - - - - 4,589
	- 4,589 - - - (50,678) (46,089)
	2,183,727 41,738 240 - 99 (22,430) 2,203,374

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

15

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Consolidated Statement of Cash Flows For the half-year ended 31 December 2017

Notes 31 December 2017 $'000 31 December 2016 $'000	Notes 31 December 2017 $'000 31 December 2016 $'000
Cash flows from operating activities Receipts from sales Payments to suppliers and employees Other income Interest received Interest paid Income taxes paid Net cash inflow from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for mine development and exploration Proceeds from sale of property, plant and equipment Proceeds from sale of subsidiary Payments for stamp duty related to business disposal Cash disposed through business combination Payments for available-for-sale financial assets Transfer from term deposits Transaction costs related to business disposal Payment for economic interest in Ernest Henry Net cash outflow from investing activities Cash flows from financing activities Proceeds from interest bearing liabilities - Senior Secured Syndicated Revolving and Term Facility Repayment of interest bearing liabilities - Senior Secured Syndicated Revolving and Term Facility Proceeds from short term borrowings Repayment of short term borrowings Payment of finance lease liabilities Dividends paid Proceeds from issues of shares Payment of transaction costs for issuing shares Net cash (outflow)/inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of period	767,083 687,228 (398,436) (382,003) 366 419 496 1,288 (10,000) (10,219) (36,200) -
	323,309 296,713
	(37,097) (35,610) (103,391) (105,198) 80 - 40,000 41,900 - (3,272) (13) - (2,500) - - (2) (1,192) (2,836) - (884,004)
	(104,113) (989,022)
	- 475,000 (40,000) (160,000) 66,121 80,054 (67,701) (78,197) (854) (4,574) (50,688) (25,323) - 408,808 - (6,315)
	(93,122) 689,453
	126,074 (2,856) 37,385 17,295 41 40
	163,500 14,479

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

16

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

1 Significant changes in the current reporting period

The financial position and performance of the Group was particularly affected by the following events and transactions during the period:

• The Group made its first income tax payment in December 2017, enabling the declaration of fully franked dividends.

• Completion of a $2.5 million investment in the initial public offering of Riversgold Ltd.

• The sale of the Edna May asset to Ramelius Operations Pty Ltd.

For a detailed discussion about the Group’s performance and financial position please refer to the Operating and Financial review on page 2 to 10.

17

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

2 Performance by Mine

(a) Description of segments

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

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

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

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

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

(b) Segment information

The segment information for the reportable segments for the half-year ended 31 December 2017 is as follows:

	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000
31 December 2017 SPACE Revenue 221,251 EBITDA 128,606 Sustaining Capital 14,811 Major Capital 25,408		96,390 35,674 6,495 21,648	110,714 73,801 4,434 10,546	72,817 29,034 4,079 8,047	68,451 30,890 6,412 6,786	175,345 116,287 8,824 -	37,171 2,629 1,599 3,072	- - - -	- - 782,139 (1,310) (16,512) 399,099 - 422 47,076 - - 75,507

The segment information for the reportable segments for the half-year ended 31 December 2016 is as follows:

	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000	Cowal $'000 Mungari $'000 Mt Carlton $'000 Mt Rawdon $'000 Cracow $'000 Ernest Henry $'000 Edna May $'000 Pajingo $'000 Explo- ration $'000 Corp- orate $'000 Total $'000
31 December 2016 SPACE Revenue 228,436 EBITDA 135,944 Sustaining Capital 26,765 Major Capital -		129,981 59,483 9,005 13,272	94,713 62,459 10,572 7,199	84,542 48,627 7,020 11,276	67,160 30,224 10,339 6,857	24,085 12,410 3,200 -	64,715 10,728 1,175 12,562	17,518 2,614 2,824 3,559	- - 711,150 (3,715) (13,476) 345,298 - 365 71,265 - - 54,725

18

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

2 Performance by Mine (continued)

(c) Segment Reconciliation

	31 December 2017 $'000 31 December 2016 $'000
Reconciliation of profit before income tax expense SPACE EBITDA Depreciation and amortisation Interest income Transaction costs Loss on sale of subsidiary Fair value amortisation Fair value unwinding Finance costs Profit before income tax expense	399,099 345,298 (195,501) (171,827) 860 1,288 (1,192) (6,107) - (2,378) (18,997) (30,432) 3,142 (964) (12,320) (13,861)
	175,091 121,017

3 Revenue and expenses

	31 December 2017 $'000 31 December 2016 $'000
Sales revenue Gold sales Silver sales Copper sales	663,959 670,077 11,147 12,722 107,033 28,351
	782,139 711,150

19

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

3 Revenue and expenses (continued)

	31 December 2017 $'000 31 December 2016 $'000
Cost of sales Mine operating costs Depreciation and amortisation expense Royalty and other selling costs Fair value amortisation Fair value (gain)/expense Corporate and other administration costs Depreciation and amortisation expense Operating lease payments Corporate wages and salaries expense Contractor, consultants and advisory expense Other administrative expense Transaction and integration costs Contractor, consultants and advisory expense Corporate and administration expense Stamp duty on business combinations Finance costs Finance lease interest expense Amortisation of debt establishment costs Unwinding of discount on provisions Interest expense Depreciation and amortisation Cost of sales (excluding Ernest Henry) Cost of sales (Ernest Henry) Corporate and other administration costs	332,074 318,433 195,146 171,439 33,160 30,228 18,997 30,432 (3,142) 964
	576,235 551,496
	355 388 589 466 3,566 2,751 1,635 2,006 6,486 8,301
	12,631 13,912
	219 1,664 973 1,171 - 3,272
	1,192 6,107
	17 254 161 2,131 2,159 1,511 9,983 9,965
	12,320 13,861
	131,828 161,950 63,318 9,489 355 388
	195,501 171,827

20

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

4 Income tax

(a) Income tax

	31 December 2017 $'000 31 December 2016 $'000
Current tax on profits for the period Deferred tax Previously unrecognised tax loss now recognised Adjustments for current tax of prior periods Total income tax expense/(benefit) (b) Numerical reconciliation of income tax to prima facie tax payable Profit before income tax Tax at the Australian tax rate of 30% SPACE Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Loss on sale of subsidiary Share-based payments Costs of business acquisitions Deferred tax expense on sale of subsidiary Adjustments for current tax of prior periods Other Tax loss recognised to reduce deferred tax expense Tax losses used to reduce current tax expense Total income tax benefit	38,875 7,605 17,677 7,622 - (30,880) (3,979) -
	52,573 (15,653)
	175,091 121,017 52,527 36,305 - 713 1,376 111 - 982 4,165 - (3,979) - (1,516) 330 - (30,880) - (23,214)
	52,573 (15,653)

(c) Tax losses

The Group has unrecognised available tax losses of $48.530 million as at 31 December 2017. These tax losses have not been recognised due to the uncertainty of their recoverability in future periods.

21

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

5 Dividends

(a) Ordinary Shares

	31 December 2017 $'000 31 December 2016 $'000
Final dividend - 2017 Final dividend for the year ended 30 June 2017 of 3 cents per share fully franked (30 June 2016: 2 cent per share unfranked) per fully paid share paid on 26 September 2017	50,678 29,365
	50,678 29,365

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

In June 2017, the Directors approved a change to the dividend policy of whenever possible paying a dividend equivalent to 50% of the Group's earning. The change was effective immediately and has been applied to the final dividend for 2017 and interim dividend for 2018.

	31 December 2017 $'000 31 December 2016 $'000	31 December 2017 $'000 31 December 2016 $'000
In addition to the above dividends, since period end the Directors have approved the payment of an interim fully franked dividend of 3.5 cents per fully paid ordinary share (31 December 2016 - 2 cents unfranked). The aggregate amount of the proposed dividend expected to be paid on 30 March 2018 out of retained earnings at 31 December 2017, but not recognised as a liability at the period end is: 59,241 59,241		33,595
	59,241	33,595

22

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

6 Property, plant and equipment

	Freehold land $'000 Plant and equipment $'000 Total $'000
At 30 June 2017 Cost Accumulated depreciation Net carrying amount Half-year ended 31 December 2017 Carrying amount at beginning of period Additions Reclassification Disposals Depreciation Depreciation relating to fair value uplift on business combinations Disposal of subsidiary Carrying amount at the end of the period At 31 December 2017 Cost Accumulated depreciation Net carrying amount Included in above Carrying amount of lease assets Carrying amount of assets under construction	16,841 1,640,294 1,657,135 - (915,946) (915,946)
	16,841 724,348 741,189
	16,841 724,348 741,189 - 37,097 37,097 - (110) (110) - (80) (80) - (59,247) (59,247) - (2,358) (2,358) (2,580) (69,543) (72,123)
	14,261 630,107 644,368
	14,261 1,525,863 1,540,124 - (895,756) (895,756)
	14,261 630,107 644,368
	- 489 489 - 79,378 79,378
	- 79,867 79,867

23

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

7 Mine development and exploration

	Producing mines $'000 Exploration and evaluation $'000 Total $'000
At 30 June 2017 Cost Accumulated amortisation Net carrying amount Half-year ended 31 December 2017 Carrying amount at beginning of period Additions Amortisation Amortisation recognised in inventory Amortisation relating to fair value uplift on business combinations Asset write-off Reclassifications Disposal of subsidiary Reclassification to long term inventory Carrying amount at the end of the period At 31 December 2017 Cost Accumulated amortisation Net carrying amount	2,959,137 128,128 3,087,265 (1,285,786) - (1,285,786)
	1,673,351 128,128 1,801,479
	1,673,351 128,128 1,801,479 92,719 15,630 108,349 (136,254) - (136,254) (599) - (599) (16,639) - (16,639) - (1,307) (1,307) 110 - 110 (20,108) (172) (20,280) (18,634) - (18,634)
	1,573,946 142,279 1,716,225
	2,916,606 142,279 3,058,885 (1,342,660) - (1,342,660)
	1,573,946 142,279 1,716,225

24

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

8 Interest Bearing Liabilities

	31 December 2017 $'000 30 June 2017 $'000
Current Bank loans Less: Borrowing costs Finance lease liabilities Other borrowings Non-Current Bank loans Less: Borrowing costs Total interest bearing liabilities	95,000 50,000 (2,005) (4,813) 489 1,344 5,290 6,870
	98,774 53,401
	300,000 385,000 (4,925) (2,277)
	295,075 382,723
	393,849 436,124

In September 2017, the Group repaid the outstanding balance of $40 million on the Senior Secured Term Loan ("Facility B") using the upfront cash payment received on the sale of the Edna May Operation. This repayment was made 7 months ahead of the facility repayment schedule. No additional repayments have been made to the existing $300 million Senior Secured Revolving Loan ("Facility A"), the $155 million Performance Bond Facility ("Facility C") or the $395 million Senior Secured Term Loan (“Facility D”).

The repayment periods and outstanding balances as at 31 December 2017 on each facility are set out below:

	Term date	Outstanding
		balance
Senior Secured Revolving Loan - Facility A	31 July 2018	$ nil
Performance Bond Facility - Facility C	20 July 2018	$131 million
Senior Secured Term Loan - Facility D	31 October 2021	$395 million

25

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

8 Interest Bearing Liabilities (continued)

(a) Financing arrangements

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

	31 December 2017 $'000 30 June 2017 $'000	31 December 2017 $'000 30 June 2017 $'000
Bank loans - revolving credit facility Expiring within one year Expiring beyond one year	300,000 -	- 300,000
	300,000	300,000

(b) Contractual maturities of interest bearing liabilities

The tables below analyse the Group's interest bearing liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows, which also includes interest and commitment fees.

	Less than 1 year $'000 Between 1 and 2 years $'000 Between 2 and 5 years $'000 Over 5 years $'000 Total contractual cash flows $'000 Carrying amount $'000
At 31 December 2017 Bank loans Finance lease liabilities Other borrowings At 30 June 2017 Bank loans Finance lease liabilities Other borrowings	109,635 138,846 174,184 - 422,665 395,000 489 - - - 489 489 5,290 - - - 5,290 -
	115,414 138,846 174,184 - 428,444 395,489
	64,356 163,660 233,036 - 461,052 435,000 1,344 - - - 1,344 1,344 6,870 - - - 6,870 6,870
	72,570 163,660 233,036 - 469,266 443,214

26

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

8 Interest Bearing Liabilities (continued)

(c) Debt covenants

The Senior Secured Revolving and Term Loan have covenants in place based on the current ratio, leverage ratio, debt service ratio and the tangible net worth ratio. The Group has complied with these covenants during the period.

9 Issued Capital

(a) Share capital

	31 December 2017 Shares 31 December 2017 $'000 30 June 2017 Shares 30 June 2017 $'000
Fully paid ordinary shares	1,692,612,049 2,183,727 1,682,798,626 2,183,727
	1,692,612,049 2,183,727 1,682,798,626 2,183,727

(b) Contributed equity

Movements in ordinary share capital

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

	Number of shares $'000
Balance at 1 July 2016 Shares issued on vesting of performance rights Shares issued under DRP for final dividend Shares issued under Institutional Component of Entitlement Offer Shares issued under Retail Component of Entitlement Offer Shares issued under Employee Share Scheme Shares issued on exercise of unlisted share options Less: Transactions costs arising on share issue Balance at 31 December 2016 Balance at 1 July 2017 Shares issued on vesting of performance rights Shares issued under Employee Share Scheme Shares issued under NED Equity Plan Balance at 31 December 2017	1,468,262,821 1,770,987 7,961,146 - 1,927,526 4,055 151,914,603 311,425 44,976,448 90,134 511,192 - 4,178,661 7,249 - (6,316)
	1,679,732,397 2,177,534
	1,682,798,626 2,183,727 9,214,401 - 501,234 - 97,788 -
	1,692,612,049 2,183,727

27

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

10 Related party transactions

(a) Transactions with other related parties

Directors fees in the amount of $57,500 were paid to International Mining and Finance Corp, a company of which Mr James Askew is a Director for services provided during the period (31 December 2016: $56,250).

Directors fees in the amount of $150,000 were paid to DAK Corporation, a company of which Mr Jacob Klein is a Director for services provided during the period (31 December 2016: $100,000).

Directors fees in the amount of $67,500 were paid to Lazy 7 Pty Ltd, a company of which Mr Colin Johnstone is a Director for services provided during the period (31 December 2016: $65,783).

Directors fees in the amount of $47,500 were paid to Mr Naguib Sawaris as a Director for services provided during the period (31 December 2016: $47,500).

Directors fees in the amount of $52,500 were paid to Mr Sebastien de Montessus as a Director for services provided during the period (31 December 2016: $51,875)

11 Contingencies

(a) Contingent liabilities

The Group had contingent liabilities at 31 December 2017 in respect of:

(i) Claims

At the date of this report the Group was unaware of any material claims, actual or contemplated.

(ii) Guarantees

The Group has provided bank guarantees in favour of various government authorities and service providers with respect to site restoration, contractual obligations and premises at 31 December 2017. The total of these guarantees at 31 December 2017 was $131.425 million with various financial institutions (30 June 2017: $125.183 million).

12 Gold Delivery Commitments

	Gold for physical delivery oz Contracted sales price A$/oz Value of committed sales $'000
As at 31 December 2017 Within one year Later than one year but not greater than five years As at 30 June 2017 Within one year Later than one year but not greater than five years	187,500 1,622 304,114 175,000 1,721 301,130
	362,500 3,343 605,244
	208,495 1,567 319,156 250,000 1,711 427,705
	458,495 3,278 746,861

28

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

12 Gold Delivery Commitments (continued)

The counterparties to the physical gold delivery contracts are Macquarie Bank Limited ("Macquarie"), Australia and New Zealand Banking Group Limited ("ANZ"), National Australia Bank Limited ("NAB"), Westpac Banking Corporation ("WBC"), Commonwealth Bank of Australia ("CBA"), Citibank N.A ("Citibank") and Societe Generale ("SG"). Contracts are settled on a quarterly basis by the physical delivery of gold per the banks instructions. The contracts are accounted for as sale contracts with revenue recognised once the gold has been delivered to Macquarie, ANZ, NAB, WBC, CBA, Citibank, SG or one of their agents. The physical gold delivery contracts are considered a contract to sell a non-financial item and is therefore out of the scope of AASB 139 Financial Instruments: Recognition and Measurement . As a result, no derivatives are required to be recognised. The Company has no other gold sale commitments with respect to its current operations.

13 Events occurring after the reporting period

No matter or circumstance has occurred subsequent to period end that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or economic entity in subsequent financial periods.

29

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

14 Basis of preparation of half-year report

This consolidated Half-Year Financial Report for the half-year ended 31 December 2017 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This consolidated Half-Year Financial Report does not include all the notes of the type normally included in an Annual Financial Report. Accordingly, this report is to be read in conjunction with the Annual Financial Report for the period ended 30 June 2017 and any public announcements made by Evolution Mining Limited during the half-year ended 31 December 2017 in accordance with the continuous disclosure requirements of the Corporations Act 2001 and Australian Securities Exchange.

The accounting policies adopted are consistent with those of the previous Annual Financial Report and corresponding Half-Year Financial Report in the prior period.

(a) Impact of standards issued but not yet applied by the Group

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2017 reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new standards and interpretations is set out below.

	Title	of	Nature of change	Impact						Mandatory
	standard									application
										date/ Date	of
										adoption	by
										group
	AASB 15		The AASB has issued a new	Management	has	assessed	the	effects	of	Mandatory for
	Revenue		standard for the recognition of	applying the	new	standard	on	the group's		financial years
	from		revenue. This will replace AASB 118	financial statements		and has	determined that			commencing on
	Contracts		which covers contracts for goods	as of 1 July 2018, the impact is not				expected to		or after 1
	with		and services and AASB 111 which	be material.						January 2018.
	Customers		covers construction contracts.
										Expected date
			The new standard is based on the							of adoption by
			principle that revenue is recognised							the Group is 1
			when control of a good or service							July 2018.
			transfers to the customer - so the
			notion of control replaces the
			existing notion of risks and rewards.
			The standard permits a modified
			retrospective approach for the
			adoption. Under this approach
			entities will recognise transitional
			adjustments in retained earnings on
			the date of initial application (eg. 1
			July 2017), i.e. without restating the
			comparative period. They will only
			need to apply the new rules to
			contracts that are not completed as
			of the date of initial application.

30

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

14 Basis of preparation of half-year report (continued)

(a) Impact of standards issued but not yet applied by the Group (continued)

	Title	of	Nature of change				Impact	Mandatory
	standard							application
								date/ Date of
								adoption by
								group
	AASB 9		AASB 9 addresses	the classification,			While the Group has yet to undertake a	Must be applied
	Financial		measurement and	derecognition of			detailed assessment of the debt instruments	for financial
	Instruments		financial assets	and	financial		currently classified as available-for-sale	years
			liabilities and introduces		new rules		financial assets, it would appear that they	commencing on
			for hedge accounting.				would satisfy the conditions for classification as	or after 1
			In December 2014, further changes to and measurement	the AASB made the classification rules and also			at fair value through other comprehensive income (FVOCI) and hence there will be no change to the accounting for these assets.	January 2018. Based on the transitional
			introduced a new impairment model.				There will also be no impact on the Group’s	provisions in the
			These latest amendments			now	accounting for financial liabilities, as the new	completed IFRS
			complete the	new	financial		requirements only affect the accounting for	9, early adoption
			instruments standard.				financial liabilities that are designated at fair	in phases was
							value through profit or loss and the Group does	only permitted
							not have any such liabilities.	for annual
							The new hedging rules align hedge accounting more closely with the Group’s risk management practices. As a general rule it will be easier to	reporting periods beginning before 1
							apply hedge accounting going forward as the standard introduces a more principles-based	February 2015. After that date,
							approach. The new standard also introduces	the new rules
							expanded disclosure requirements and	must be
							changes in presentation.	adopted in their
							The new impairment model is an expected credit loss (ECL) model which may result in the earlier recognition of credit losses.	entirety. The Group does not intend to early adopt.
							To date no material measurement differences
							have been identified under conversion to AASB
							9.

31

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Notes to the Consolidated Financial Statements

14 Basis of preparation of half-year report (continued)

(a) Impact of standards issued but not yet applied by the Group (continued)

Title of Nature of change Impact Mandatory standard application date/ Date of adoption by group AASB 16 AASB 16 was issued in February The standard will affect primarily the Mandatory for Leases 2016. It will result in almost all accounting for the Group’s operating leases. financial periods leases being recognised on the To date, work has focussed on the commencing on balance sheet, as the distinction identification of the provisions of the standard or after 1 between operating and finance which will most impact the Group. In FY18 work January 2019. leases is removed. Under the new on these issues and their resolution will At this stage, standard, an asset (the right to use continue, detailed review of contracts will the Group does the leased item) and a financial begin, and financial reporting impacts and not intend to liability to pay rentals are assessment of process impact will commence. adopt the recognised. The only exceptions are standard before short-term and low-value leases. Some of the commitments may be covered by its effective the exception for short-term and low-value date. The Group leases and some commitments may relate to does not intend arrangements that will not qualify as leases to early adopt. under AASB 16.

32

==> picture [72 x 49] intentionally omitted <==

Evolution Mining Limited Half-Year Financial Report Directors' Declaration 31 December 2017

In the Directors' opinion:

• (a) the financial statements and notes set out on pages 13 to 32 are in accordance with the Corporations Act 2001 , including:

• (i) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 , and

• (ii) giving a true and fair view of the consolidated entity's financial position as at 31 December 2017 and of its performance for the half-year ended on that date, and

• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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

==> picture [71 x 39] intentionally omitted <==

Jacob (Jake) Klein Executive Chairman

==> picture [112 x 50] intentionally omitted <==

Graham Freestone Non-Executive Director

Sydney

33

==> picture [77 x 59] intentionally omitted <==

Independent auditor's review report to the members of Evolution Mining Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Evolution Mining Limited (the Company), which comprises the consolidated balance sheet as at 31 December 2017, the consolidated statement of changes in equity, consolidated statement of cash flows and consolidated statement of profit or loss and other comprehensive income for the half-year ended on that date, selected explanatory notes and the directors' declaration for Evolution Mining Limited. The consolidated entity comprises the Company and the entities it controlled during that half-year.

Directors' responsibility for the half-year financial report

The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Australian Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Evolution Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Evolution Mining Limited is not in accordance with the Corporations Act 2001 including:

==> picture [465 x 15] intentionally omitted <==

PricewaterhouseCoopers, ABN 52 780 433 757

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

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

Liability limited by a scheme approved under Professional Standards Legislation.

34

==> picture [77 x 59] intentionally omitted <==

1. giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and of its performance for the half-year ended on that date;

2. complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

PricewaterhouseCoopers

==> picture [144 x 71] intentionally omitted <==

Marc Upcroft Partner

Sydney 15 February 2018

35