Slide 1: 2020 Investor Day Presentation (ASX Announcement)
ABN 74 084 669 036 Sydney Office P +61 2 9696 2900 For personal use only F +61 2 9696 2901 Level 24 ASX Announcement 175 Liverpool Street Sydney NSW 2022 1 SEPTEMBER 2020 www.evolutionmining.com.au 2020 INVESTOR DAY PRESENTATION Evolution Mining Limited (ASX: EVN) is today hosting its biennial Inves
Slide 2: Investor Day September 2020
For personal use only INVESTOR DAY 1 September 2020
Slide 3: Acknowledgement of Country
ACKNOWLEDGEMENT OF COUNTRY For personal use only “We are all visitors to this time, this place. We are just passing through. Our purpose here is to observe, to learn, to grow, to love… and then we return home.” - Aboriginal Proverb 2
Slide 4: Forward Looking Statement
FORWARD LOOKING STATEMENT For personal use only 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
Slide 5: Production Target & Forecast Financials
PRODUCTION TARGET & FORECAST FINANCIALS For personal use only Cautionary statement concerning the proportion of Exploration Targets1 Of Evolution’s Production Outlook, 1.8% is comprised of Exploration Targets. The potential quantity and grade of this exploration target is conceptual in nature and th
Slide 6: Investor Day Agenda - Session One
INVESTOR DAY AGENDA 8.30am AEST Session One - Strategy For personal use only Bryan O’Hara Jake Klein Fiona Murfitt Lawrie Conway General Manager Executive Chairman VP Sustainability Finance Director and Investor Relations CFO Overview Strategy Sustainability Financials and Outlook 5
Slide 7: Investor Day Agenda - Session Two
INVESTOR DAY AGENDA Session Two – Operations, Discovery and Growth For personal use only Lawrie John Penhall Glen Andrew Millar Bob Fulker Amber Adams Conway GM Cowal Masterman GM Mungari Chief Operating Officer Interim GM Red Lake Finance Director and VP Discovery and CFO Glen Masterman Business De
Slide 8: Strategy
For personal use only STRATEGY Quality drives value
Slide 9: Marching Towards the Debt Precipice
MARCHING TOWARDS THE DEBT PRECIPICE For personal use only US National Debt Gold price US$2,070/oz US$26.7T US$0.4T US$35/oz 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Sources: worldometers; usdebtclock.org 8 8
Slide 10: Rising Political Risk
RISING POLITICAL RISK For personal use only Gold mining policy chaos in Philippines 9
Slide 11: Quality Drives Value
Gold Equivalent Ore Reserves per share QUALITY DRIVES VALUE (ounces per 1,000 shares) For personal use only 5.5 ▪ Increasing reserves and resources per share 3.1 4.0 4.6 4.6 4.8 without diluting quality ▪ Higher gold price delivering higher cash margins Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 + Co
Slide 12: Portfolio Improvements Creating Value
PORTFOLIO IMPROVEMENTS CREATING VALUE FY20 For personal use only FY19 FY18 FY17 FY16 Red Lake FY15 Edna acquisition Cracow Mungari Ernest May divested acquisition Henry divested Acquisition of economic interest Cowal Pajingo acquisition divested Mungari acquisition Evolution Mining share price chart
Slide 13: Clear and Consistent Strategy
CLEAR AND CONSISTENT STRATEGY A portfolio of 6 to 8 assets generating superior returns with For personal use only an average mine life of at least 10 years Embed financial discipline across the business An active pipeline of quality exploration and development projects Open to all quality gold, silv
Slide 14: Sustainability
“It’s my privilege to have been directly involved in the maturing of Evolution’s Sustainability culture. We are deeply committed to further For personal use only enhancing our efforts as a socially responsible, sustainable gold miner.” Jim Askew Board Risk & Sustainability Committee Chair SUSTAINABI
Slide 15: Sustainability Principles
SUSTAINABILITY PRINCIPLES The objective of our sustainability efforts is to deliver long-term stakeholder value through For personal use only safe, low-cost gold production in an environmentally and socially responsible manner Be an employer of choice Demonstrate robust risk Contribute positively to
Slide 16: Creating Value
CREATING VALUE ▪ 40% more Safety Interactions ▪ 18% improvement in TRIF (FY20) For personal use only ▪ 6,800+ voluntary health sessions ▪ COVID-19 proactive management Economic ▪74% local workforce Healthier ▪ A$1.8B economic contribution1 Contribution and Safer ▪ A$1.2B supplier contribution2 ▪ 7%
Slide 17: People, Health and Safety
For personal use only PEOPLE, HEALTH and SAFETY COVID business & community Robust Tailings Governance & Efficiency and Learning Teams to Response Global Tailings Standard improve performance ENVIRONMENT and CULTURAL HERITAGE POSITIVE LEGACY Mt Rawdon: CSIRO Wetlands Mt Carlton: Technology for Extrem
Slide 18: Financial Position and Three-Year Outlook
For personal use only FINANCIAL POSITION AND THREE-YEAR OUTLOOK Discipline driving returns
Slide 19: Capital Management
Dividends CAPITAL MANAGEMENT 0.16 0.14 (% of Revenue vs cents per share declared) 14% 20 18 16 0.12 11% For personal use only Balance Sheet Supports Strategy 14 0.1 8% 12 ◼ Balance Sheet in excellent shape 9 0.08 10 6% ◼ Disciplined capital management to support strategy 0.06 8 6 6 ◼ Strong banking
Slide 20: Debt and Equity
DEBT AND EQUITY Debt Gearing (%) For personal use only Treat both as source of funds which must be repaid ◼ Debt 32% 25% ◼ Willing to leverage up for acquisitions (~35%) 15% 16% 14% ◼ Pathway back to <20% in short time frame 7% 3% ◼ Demonstrated with last three acquisitions CGO Jun-16 EHO Jun-17 Jun
Slide 21: Production and Cost Outlook
PRODUCTION AND COST OUTLOOK For personal use only ◼ Production planned to increase to >800koz over the next 3 years Production (koz) ◼ FY21 lower as Cowal processes stockpiles and Red Lake 850 invests in mine development to access to higher volumes of ore 770 ◼ Cowal underground to provide substanti
Slide 22: Cost Drivers and Sensitivities
COST DRIVERS AND SENSITIVITIES For personal use only ◼ Top six expense groups account for ~85% of total costs FY21 Key Cost Drivers (%) ◼ Labour is largest expense at 53% Grinding Media/ Other Explosives Diesel 8% ◼ No material increases expected in next few years 4% 4% ◼ Preference is to reward via
Slide 23: Return on Investment
RETURN ON INVESTMENT For personal use only ◼ Assets required to fund own capital programs; generate appropriate returns and repay investment ◼ Cowal and Ernest Henry expected to be fully repaid by end of FY21 ◼ Average annual returns of 13 – 24%1 across portfolio ◼ Longest life assets generating hig
Slide 24: Cash Flow
FY20 Free Cash Flow CASH FLOW 800 700 726 693 (A$/oz produced) 600 551 For personal use only 500 467 460 Group is sustaining high cash generation 439 400 ◼ Record FY20 group cash flow of A$542M 300 217 ◼ Peer leading cash flow per ounce produced 200 164 100 ◼ Group cash flow at A$726/oz - Evolution
Slide 25: Q&A
For personal use only Q&A 24
Slide 26: Investor Day Session Two
For personal use only INVESTOR DAY SESSION TWO
Slide 27: Ernest Henry
ERNEST HENRY For personal use only ◼ Consistent operational performance ◼ Annual gold production of 85 – 90koz ◼ Attractive copper exposure of ~20kt p.a. ◼ Excellent margin and returns ◼ Free cash flow of A$779 million ◼ Repaid 87% of invested capital ◼ Average annual return of 24% ◼ Three levels of
Slide 28: Cowal
For personal use only COWAL Building towards a sustainable 350,000 ounces per annum of safe, reliable, low-cost production
Slide 29: Cowal Overview
OVERVIEW Mineral Resources: 264.6Mt at 1.06g/t Au for 9.0Moz1 For personal use only Ore Reserves: 142.2Mt at 0.97g/t Au for 4.4Moz1 Total tenement package: 1,583km2 Cowal Ore Reserves (koz) 4,437 3,881 3,633 3,201 3,047 2,847 1,555 Evolution ownership since 2015 Ore Reserves 1.6Moz 4.4Moz Jun 2015 D
Slide 30: Cowal Gold Operations
COWAL GOLD OPERATIONS DRONE FLIGHT PATH For personal use only E42 open pit Integrated Waste Landform Processing plant Water storage 2929
Slide 31: Sustainability
SUSTAINABILITY For personal use only Health and Safety ▪ Strong health and safety culture targeting an injury free workplace ▪ Proactive COVID-19 management ▪ Focus on critical and material risk controls and integrated mine planning Integrated Waste Landform Environment ▪ Water security significantl
Slide 32: Processing
PROCESSING 2.3 Mill Throughput (Mt per quarter) 3-quarter moving average 2.2 For personal use only Current throughput of ~9.0Mtpa 2.1 ▪ Increased plant availability and throughput 2.0 ▪ Duplication of critical pumps completed 1.9 ▪ Change from three to six monthly planned 1.8 major shutdowns 1.7 Mar
Slide 33: E42 Open Pit
E42 OPEN PIT For personal use only ▪ Stage H ▪ Increasing ore volumes and grade mined as cutback accelerates in the second half of FY21 ▪ Strip ratio to fall below 1:1 in FY23 ▪ Reducing re-handling volumes and costs ▪ Open pit future growth ▪ Pre-feasibility Study underway for E42 extensions at dep
Slide 34: Pathway to Underground Production
PATHWAY TO UNDERGROUND PRODUCTION For personal use only Local workforce upskilling Low-risk mining Accommodation Accommodation method Low-risk mining village village Minor plant upgrades method Non-processing Technology In principle support Technology e infrastructure Non-processing enabled Incounci
Slide 35: Underground Potential
UNDERGROUND POTENTIAL For personal use only 3D ANIMATED VIDEO PRESENTED BY GLEN MASTERMAN Galway underground resource definition drilling proposal – filling the “gap” 34
Slide 36: The Future of Cowal
THE FUTURE OF COWAL E46 open pit Resource 0.18Moz For personal use only ▪ Building towards sustainable, safe and reliable low- Reserve 0.14Moz cost production of 350koz per annum E42 open pit ▪ Continued growth expected from high-grade Resource 4.53Moz underground ore body which remains open Reserve
Slide 37: Mungari
MUNGARI For personal use only 110,000 – 120,000 ounces of long-term base load annual production
Slide 38: Mungari Overview
OVERVIEW For personal use only Mineral Resources: 50.92Mt at 1.47g/t Au for 2,409koz1 Ore Reserves: 11.63Mt at 1.52g/t Au for 568koz1 ◼ 756km2 footprint in a world-class gold district ◼ Operational turnaround achieved ◼ Mill throughput increased to 2.0Mtpa ◼ Voluntary employee turnover reduced from
Slide 39: Mungari Operations
MUNGARI OPERATIONS DRONE FLIGHT PATH For personal use only F R O G ’S L EG W H ITE FOIL M U N G A RI PR O C ESSIN G PL A N T 38
Slide 40: Sustainability
SUSTAINABILITY For personal use only Health and Safety ◼ Mature health and safety culture with focus on behavioural improvements ◼ Proactive focus on COVID-19 response and robust risk management Environment ◼ Tailings Storage Facility approval received Makeover at Ben Prior Park, Coolgardie by Evolu
Slide 41: Processing – 2Mtpa Throughput Rate
PROCESSING – 2MTPA THROUGHPUT RATE For personal use only Changes made to achieve a sustainable and reliable throughput rate of 2Mtpa ▪ Increased throughput rate achieved for less than A$5M compared to initial estimate of A$35M Operational and maintenance Outcomes Progressive strategy review - Increa
Slide 42: Mining
MINING For personal use only ◼ New mining method at Frog’s Leg to better manage seismicity has resulted in improved delivery to plan ◼ Boomer discovery has potential to extended life of high-grade underground ore beyond Frog’s Leg ◼ Cutters Ridge and regional open pits replace White Foil ore feed ◼
Slide 43: Growth Opportunities
GROWTH OPPORTUNITIES For personal use only Boomer Vein intersected in underground development Note folding and buckling which has resulted in local meso-thickening of vein quartz hosting gold 42 10cm 42
Slide 44: Boomer
For personal use only BOOMER 43
Slide 45: Kunanalling – Castle Hill
KUNANALLING – CASTLE HILL For personal use only Pit shells Drill holes Kintore Tonalite Drill hole gold grade (g/t) outline 0.2 – 0.5 g/t Au Kintore 0.5 – 1.0 g/t Au >1.0 g/t Au Picante Ridgeback Muy Picante Castle Hill 44
Slide 46: The Future of Mungari
THE FUTURE OF MUNGARI For personal use only ▪ Sustainable production of 110,000 – 120,000 ounces p.a. ▪ Continued exploration for high-grade ore ▪ Delivering value from regional resources ▪ Studies on milling solutions ▪ Heap Leach at Castle Hill ▪ New 2.5 – 3.0Mtpa plant at Castle Hill ▪ Existing M
Slide 47: Mt Rawdon
MT RAWDON For personal use only ▪ Strong safety and risk management culture ▪ Record FY20 net mine cash flow of A$59 million ▪ Current Life of Mine: ▪ Stage 4 open pit ore mined through to FY23 ▪ Stockpiles processed until FY28 ▪ Optionality from Stage 5 has the potential to add ~3 years to mine lif
Slide 48: Mt Carlton
MT CARLTON For personal use only ▪ Stakeholder perception score of 4.44 out of 5 in 2020 independent survey – highest ranking of all Evolution operations ▪ Generated over A$665 million of operating cash flow since commencing production ▪ Fully repaid all invested capital with an average return of 19
Slide 49: Red Lake
For personal use only RED LAKE Aspiring to restore the operation to a premier Canadian gold mine with annual production of 300,000 – 500,000 low-cost ounces
Slide 50: Site Location and Overview
SITE LOCATION AND OVERVIEW “TIER 1 MINING JURISDICTION WITH SIGNIFICANT RESOURCE, For personal use only INFRASTRUCTURE & MINING UPSIDE” ▪ Underground gold mine in northwestern Ontario, Canada, with a 70-year history of gold mining ▪ Accessible by major highways with commercial air services to Red La
Slide 51: Red Lake Operations
RED LAKE OPERATIONS DRONE FLIGHT PATH For personal use only Balmer Lake Red Lake Cochenour shaft Campbell mill Airport Campbell shaft Red Lake mill Reid shaft #1 shaft Balmertown #3 shaft Red Lake 505
Slide 52: Sustainability
SUSTAINABILITY For personal use only Health and Safety ▪ Transformation of site health and safety culture focusing on reporting and learning ▪ Improved safety management systems implemented for incident reporting, investigation, and risk management ▪ Sharing industry leading practices ▪ Proactive fo
Slide 53: Delivering the Transformation Plan
DELIVERING THE TRANSFORMATION PLAN For personal use only Workforce Major shut of Rationalising Initiative Hoist automation restructure Campbell Mill Infrastructure Completed June Timing June 2020 quarter March 2021 quarter Ongoing 2020 quarter A$2M per annum Decommissioning two shafts Major investme
Slide 54: Mining Areas – January 2020
MINING AREAS – JANUARY 2020 For personal use only SC Zone Far East Upper Campbell PLM Upper Hanging Wall 7 Sulphides Cochenour R Zone High grade Lower zone Hanging Wall 7 0 metres 300 0 100 Multiple mining fronts from more than 10 spatially dispersed zones 53
Slide 55: Mining Areas – January 2021
MINING AREAS – JANUARY 2021 For personal use only Cochenour Lower Red Lake 0 metres 300 0 100 Fewer, larger, focused work areas with mining fronts in close proximity to each other 54
Slide 56: Critical Path to Stage Transformation
CRITICAL PATH TO STAGE 1 TRANSFORMATION For personal use only Updated Ore Reserve Larger capacity mining fleet Haulage STAGE 2 optimisation WHAT STAGE 1 LONG TERM SUCCESS LOOKS LIKE PRODUCTION SIMPLIFY INCREASE MINING STAGE 1 ✓ Fill Campbell mill ASPIRATION OF CURRENT OPERATION DEVELOPMENT FOCUS OBJ
Slide 57: 11Moz Mineral Resource
11MOZ MINERAL RESOURCE For personal use only 3D ANIMATED VIDEO PRESENTED BY GLEN MASTERMAN Discovery target areas 56 56
Slide 58: The Future of Red Lake
THE FUTURE OF RED LAKE For personal use only ▪ Define and develop large mining fronts in lower areas of mine (Aviation exploration focus) ▪ Embrace technology to improve mining practices ▪ Updated Ore Reserve ▪ Mining and processing studies for new reserve ▪ Commence decline into Upper Campbell (alr
Slide 59: Inspired people creating a premier global mid-tier gold company
For personal use only Inspired people creating a premier global mid-tier gold company
Slide 60: Q&A
For personal use only Q&A 59
Slide 61: Appendix
For personal use only APPENDIX
Slide 62: Evolution Gold Mineral Resources Dec 2019 Updated
EVOLUTION GOLD MINERAL RESOURCES DEC 2019 UPDATED ( W I T H 3 1 D E C E M B E R 2 0 1 9 R E D L AK E AN D 3 0 AP R I L 2 0 2 0 C O WAL M I N E R AL R E S O U R C E S ) For personal use only Measured Indicated Inferred Total Resource Gold Gold Gold Gold Gold Gold Gold Gold Competent Tonnes Tonnes Ton
Slide 63: Evolution Gold Ore Reserves Dec 2019 Updated
EVOLUTION GOLD ORE RESERVES DEC 2019 UPDATED (WITH 30 APRIL 2020 COWAL ORE RESERVES AND EXCLUDING RED LAKE ORE RESERVES) For personal use only Gold Proved Probable Total Reserve Gold Gold Gold Competent Tonnes Gold Tonnes Gold Grade Tonnes Gold Person Project Type Cut-Off Metal Metal Metal (Mt) Grad
Slide 64: Evolution Copper MROR Dec 2019 Updated
EVOLUTION COPPER MROR DEC 2019 UPDATED Group Copper Mineral Resource Statement For personal use only Copper Measured Indicated Inferred Total Resource Copper Copper Copper Copper Competent Tonnes Copper Tonnes Copper Tonnes Copper Tonnes Copper Person Project Type Cut-Off Metal Metal Metal Metal (Mt
Slide 65: Financial Highlights
Financials Units FY20 FY19 Change FINANCIAL For personal use only HIGHLIGHTS Statutory Profit after tax A$M 301.6 218.2 38% Underlying Profit after tax A$M 405.4 218.2 86% EBITDA A$M 1,029.4 730.3 41% Operating Mine Cash Flow A$M 1,121.4 771.5 45% Net Mine Cash Flow A$M 736.0 497.8 48% Group Cash Fl
Slide 66: FY21 Guidance: Production, Costs & Capital
FY21 GUIDANCE: PRODUCTION, COSTS & CAPITAL For personal use only All-in Sustaining Sustaining Gold Production Major Capital FY21 Guidance Cost Capital (oz) (A$/oz) (A$M) (A$M) Cowal 205,000 – 230,000 990 – 1,040 12.5 –17.5 170.0 – 180.0 Red Lake 125,000 – 135,000 2,050 – 2,100 55.0 – 60.0 30.0 – 40.
Slide 67: Capital Outlook
CAPITAL OUTLOOK Sustaining Capital (A$M) 138 135 For personal use only 125 ◼ No material increases in sustaining capital investment expected ◼ Higher sustaining capital in FY21 is investment in Red Lake transformation (A$55 – 60M) ◼ Main investment areas are equipment replacement; tailings 113 110 9
Slide 68: For personal use only
For personal use only Evolution MIINTINE