Rising Costs and Stockpile Processing Pose Challenges for Evolution Mining’s FY26 Margins

Strong Financial Performance Amid High Metal Prices

Evolution Mining Limited (ASX – EVN) has reported a standout financial year for FY25, delivering record Group cash flow of $787 million and operating mine cash flow of $2.3 billion. This performance aligns with the company’s original guidance and has been underpinned by consistent operational delivery and the benefit of elevated gold and copper prices throughout the year.

The June quarter alone saw Group cash flow surge 49% to $308 million, with operating mine cash flow reaching $697 million. Notably, operations such as Mungari and Red Lake posted record quarterly cash flows, signaling a broad-based strength across the portfolio.

Operational Milestones and Safety Improvements

Safety remains a priority, with the Group achieving its lowest total recordable injury frequency (TRIF) of 4.98, a 35% improvement over the previous year. This reflects ongoing commitment to workforce wellbeing and operational discipline.

Operationally, Evolution met its full-year production targets with 751,000 ounces of gold and 76,000 tonnes of copper produced. The company also maintained cost discipline, reporting an All-in Sustaining Cost (AISC) of $1,572 per ounce, which includes a higher royalty cost linked to the strong gold price achieved.

Balance Sheet Strength and Capital Management

Evolution’s balance sheet has strengthened significantly, with gearing reduced to 15% from 25% at the start of the year, following $220 million in debt repayments. The company holds a robust cash balance of $760 million and undrawn revolving credit facilities totaling $525 million, providing ample liquidity and flexibility.

Capital investment for FY25 was disciplined, with guidance for FY26 set at $780-980 million, approximately $200 million lower than FY25, reflecting a focus on efficient capital allocation.

Looking Ahead – FY26 Guidance and Growth Projects

Evolution has provided FY26 guidance anticipating production of 710,000 to 780,000 ounces of gold and 70,000 to 80,000 tonnes of copper. The AISC is expected to rise modestly to between $1,720 and $1,880 per ounce, influenced by controlled inflation and increased processing of stockpiled ore from completed open pits.

Key projects are progressing well. The Mungari mill expansion is on track for commercial production in the first half of FY26, while the Cowal Open Pit Continuation project has received board and regulatory approval, extending mine life and operational capacity. Exploration success continues to support growth potential, with encouraging high-grade drilling results at Mungari and Northparkes.

Management Commentary

Managing Director and CEO Lawrie Conway highlighted the company’s achievements – “We set out to return to safe, reliable, and consistent performance to meet guidance and generate significant cash flow. Thanks to our dedicated team, we have delivered $2.3 billion in operating mine cash flow and $787 million in Group cash flow, while maintaining capital discipline and building cash margins that we expect to sustain in FY26.”