Evolution Mining Limited · ASX:EVN
Evolution Mining — Diggers & Dealers Forum 2014
26 slides from Evolution Mining's conference presentation, Aug 5, 2014
Slide 1: Evolution Mining – Diggers & Dealers Forum 2014
Evolution Mining Diggers & Dealers Forum 2014 5 August 2014 Jake Klein - Executive Chairman
Slide 2: Forward looking statements
Forward looking statements These materials prepared by Evolution Mining Limited (or “the Company”) include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”
Slide 3: Australian mid-tier gold producer
Australian mid-tier gold producer Corporate Information ASX Code EVN Shares 712M Market Capitalisation1 A$555M Daily Turnover2 A$1.8M Major Shareholders Newcrest 32.4% Production Guidance FY15 Van Eck 9.3% Allan Gray 8.8% 400koz - 440koz AuEq Cash & unsold dore3 A$41.3M C1 cost A$750/oz - A$820/oz D
Slide 4: July 2011 merger proposal
July 2011 merger proposal Creation of a leading growth focused, asset diversified, Australian mid-cap gold producer Portfolio of four producing mines and a development asset providing a defined growth pathway Operations to produce 400-450koz gold equivalent once Mt Carlton in full production r
Slide 5: Health check
Health check FY14 production of 428koz AuEq 11 straight quarters of achieving guidance Development of Mt Carlton Strong financial position Exciting exploration pipeline 5
Slide 6: Growing production
Growing production Gold Production FY2011 – FY2014 427,703 oz 392,886 oz 346,979 oz 302,842 oz FY2011 FY2012 FY2013 FY2014 * Assumes pro forma ownership of current assets over FY11 and FY12 Group Gold Equivalent Production We say, We do, We deliver 6
Slide 7: Consistent outperformance
Consistent outperfomance Evolution vs ASX All Ords Gold Index EVN (A$/sh) XGD (pts) since creation in November 2011 10,000 2.25 9,000 2.00 8,000 1.75 7,000 1.50 6,000 1.25 5,000 1.00 0.75 4,000 0.50 Gold’s GFC 3,000 0.25 2,000 0.00 1,000 EVN XGD 7
Slide 8: Gold mining – a business
Gold mining – a business Create shareholder value through three pillars – Operations, Discovery, M&A Disciplined approach to capital management – value accretive growth opportunities only Upgrade portfolio – acquire lower cost / longer mine-life assets and divest underperforming assets Focus
Slide 9: Three pillars
Three pillars Creating shareholder value Operations Discovery M&A Act like owners to Using science and Improve the quality of technology to asset portfolio maintain a cost and through opportunistic, improve probability productivity focus of transformational logical, value over the longer term discov
Slide 10: Cost reductions
Cost reductions A$93 million in mine operating cash flow generated in FY14 1 2 Group AISC (A$/oz) FY13 vs FY14 Total spend (A$m) A$1,200 $160 A$m FY13 Actual A$m FY14 Actual A$1178 $140 A$1,150 Total Spend (A$M) $120 $100 A$1,100 $80 $60 A$1,050 A$1070 $40 $20 A$1,000 $0 FY13 Actual FY14 Actual 1.
Slide 11: Shift to owner miner
Shift to owner miner Substantial cost savings following successful transition to owner-miner at Cracow (July 2013) of A$18M in FY14 (or A$190/oz AISC1 saving) Transitioned to owner-miner at Mt Rawdon in July 2014 Cracow - Empire ore heading Mt Rawdon open pit 1. AISC (All-in Sustaining Cost) inc
Slide 12: Smarter drill & blast at Mt Rawdon
Smarter drill & blast at Mt Rawdon Estimated ~A$5Mpa cost reductions following drill and blast optimisation project Large diameter (203mm) blast holes, 15m benches (from 10m), plus electronic detonation (Unitronic600) has improved productivity 45% decrease in production blast holes, allowing a 3
Slide 13: Mill ball recycling
Mill ball recycling Worn mill balls (30 - 60mm diameter) rejected from Mt Carlton SAG for nil value Opportunity for the Pajingo ball mill to utilise smaller balls discarded by Mt Carlton – an initiative identified by site personnel Estimated savings of around A$280k pa Mill balls rejected by M
Slide 14: Reduction in voluntary turnover
Reduction in voluntary turnover Voluntary turnover¹ has halved since March 2013 Reflects a more competitive labour force and increased focus on quality of hire Group Voluntary Turnover (%) 30% 25% 20% 15% 10% Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Voluntary Turnover 1. Voluntary turnover (12
Slide 15: Gold discoveries increasingly rare
Gold discoveries increasingly rare Gold discovered, gold produced and gold prices - 1990 to 2013 250 $1,800 Gold discovered, gold produced (Moz) Average annual gold price (US$) $1,600 200 $1,400 $1,200 150 $1,000 $800 100 $600 50 $400 $200 0 $0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Slide 16: Einstein quote on insanity
“The definition of insanity is doing the same thing over and over again, but expecting a different result.” Albert Einstein 16
Slide 17: Discovery strategy
Discovery strategy Investing A$20M per year to target transformational discoveries through brownfields and greenfields exploration Recognition of intrinsic potential of early stage projects and de-risking using science and technology to guide superior target generation Acquire or establish JV’
Slide 18: Scientific approach to discovery
Scientific approach to discovery Build 80,000m competent, Innovative 3D 4D modelling Alteration and Framework & exploration experienced seismic integrating Asset priority geochemical proof of drilling in FY15 team viewing geological and ranking mapping at Mt concept testing targets structures at tim
Slide 19: Cracow exploration
Cracow exploration 3D Seismic survey completed: first-pass processing very promising Seismic calibration drilling identified new epithermal structure – Anomalous gold, silver and tellurium results – Quartz-adularia veining identified 3D paleo-stress model completed Depth slice of 3D seismic su
Slide 20: Pajingo exploration
Pajingo exploration 2D seismic line proof of concept drilling 3D seismic survey completed – processing and interpretation underway Exploration review and targeting underway Location of Vera Nancy fault 3km depth 2D seismic image of Pajingo field 20
Slide 21: Mt Carlton exploration
Mt Carlton exploration Capsize IP chargeability, alteration zone Castle IP chargeability, alteration zone High sulphidation deposits targeted - favourable structural setting, alteration and stratigraphic unit - drilling at Castle prospect underway IP program extends the Capsize chargeability fea
Slide 22: Tennant Creek exploration
Tennant Creek exploration JV agreement with Emmerson Resources over Tennant Creek gold-copper project Historically one of Australia’s highest grade gold and copper fields with production of 5.5Moz gold and 470,000t copper Application of new technology could uncover many more high grade deposit
Slide 23: Portfolio management
Portfolio management Global M&A deal success in unlocking value Create value through logical, (all industries) opportunistic acquisitions Leverage off strong operational 17% performance to upgrade the quality of the portfolio over time 53% 30% Make geological calls backing discovery team Div
Slide 24: FY15 outlook
FY15 outlook Guidance FY2015 Gold Equiv. Production C1 Cash Costs All-in Sustaining Cost (oz) (A$/oz) (A$/oz) Cracow 90,000 – 95,000 660 – 730 1,000 – 1,080 Pajingo 65,000 – 72,500 700 – 770 1,050 – 1,120 Mt Rawdon 100,000 – 110,000 660 – 730 880 – 950 Edna May 80,000 – 90,000 980 – 1,060 1,120 – 1,
Slide 25: Gold ETF liquidation ceased
Gold ETF liquidation ceased In 2013 a major source of Tonnes SPDR GLD Gold in Trust physical supply were the 1,400 gold ETFs with over 850 tonnes liquidated over the 1,200 12 month period 1,000 550 tonnes dumped from the GLD ETF in 2013 800 In 2014 ETF physical gold 600 holdings have stabilise
Slide 26: The Evolution value proposition
The Evolution value proposition Low risk - First World jurisdiction Australia Second largest gold producer globally Globally competitive on costs - and improving Delivering on guidance since creation Delivery Delivering a significant growth project Delivering on exploration upside Gold d