Evolution Mining (ASX:EVN) reported its December 2025 quarter results with management highlighting an eighth consecutive quarter of delivering “to plan,” supported by improved production, lower costs, and sharply higher cash generation as the company benefited from strong metal prices.
Quarter production and cost performance
Managing Director and CEO Lawrie Conway said the company produced 191,000 ounces of gold and 18,000 tons of copper during the quarter, with an all-in sustaining cost (AISC) for continuing operations of AUD 1,275 per ounce. Conway added that gold production improved 10% and AISC improved 26% during the period.
On safety, Conway said the company’s TRIF remained low at 5.8. O’Neill noted a “small increase” in total recordable injury frequency during the quarter, driven by elevated injuries at Cowal and Mungari in October, but said the company remained focused on leading safety indicators.
Cash flow momentum and balance sheet
Management emphasized that cash generation “gained momentum” in the quarter. Conway said underlying group cash flow improved 176% to AUD 541 million when normalizing for an FY25 annual tax payment made during the quarter, while reported cash flow rose 110% to AUD 412 million. He also noted the cash flow outcome was achieved at a gold price around AUD 800 below current spot levels.
Conway said record mine cash flows supported the performance, with operating cash flow up 57% to “just over AUD 1 billion” and net mine cash flow doubling to AUD 727 million, with operations increasing cash flows in a range of 55% to 140%.
The company ended the quarter with a cash balance of AUD 967 million after repaying AUD 110 million of debt and paying AUD 116 million in net dividends. Conway said no debt was due until FY29 and that gearing had fallen to 6% from 11% at September and 30% two years earlier. He said Evolution was “well on track” to being net cash this year, which would increase flexibility for capital allocation and shareholder returns.
Guidance update and Ernest Henry weather event
Evolution reiterated it remains on track to deliver its original production guidance of 710,000–780,000 ounces of gold and 70,000–80,000 tons of copper. However, Conway said group copper production is expected to be at the low end of guidance due to a major weather event at Ernest Henry late in the quarter.
On 29 December, Ernest Henry recorded 300 millimeters of rain in 24 hours, contributing to 420 millimeters over 72 hours—the region’s average annual rainfall, management said. The event caused water ingress to the underground mine and a temporary suspension. O’Neill said all personnel were safely evacuated via the shaft and that dewatering systems operated as designed, with water diverted away from key infrastructure. Conway said the event is expected to reduce FY26 production by about 7,000–8,000 ounces of gold and 4,000–5,000 tons of copper, with only short-term impacts anticipated.
To align with remediation work, O’Neill said the scheduled February plant shutdown was moved forward to January, with the processing plant shutdown underway and expected to be completed by the end of January. He said the operation was dewatering at around 35 megaliters per day and that infrastructure impacts were minor, describing “pockets” of flooding and limited remediation needs.
The company updated AISC guidance to AUD 1,640–AUD 1,760 per ounce, which Conway said represents a 6% improvement on original guidance reflecting continued cost control. Management said higher byproduct credits helped, partially offset by the Ernest Henry weather impacts.
Operational highlights and project progress
Conway highlighted several asset-level results:
- Cowal delivered AUD 361 million of operating cash flow (about AUD 4,500 per ounce) and AUD 284 million of net cash for the quarter, even while investing in the OPC project. Conway said the operation has at least 16 more years ahead of it. O’Neill noted minor wet-weather interruptions in the open pit but said plant performance saw only minor variations.
- Mungari delivered record net mine cash flow of AUD 104 million, a 142% quarterly improvement, which management said represented nearly 50% of plant expansion project capital. Mungari moved to commercial production, and the Castle Hill Mining Hub establishment was completed following full sealing of the haul road.
- Red Lake produced 33,000 ounces and doubled net mine cash flow to AUD 80 million. Conway said the site is settling into a rhythm of 30,000–40,000 ounces per quarter and positive net cash flow, adding it has delivered over AUD 200 million of net cash flow in the past 18 months.
- Northparkes completed the E26 sublevel cave after 10 years and successfully ramped up the E48 sublevel cave. Management also said studies for E22 at Northparkes and Bert at Ernest Henry are complete and will go to the board for assessment during the March quarter.
On Cowal’s OPC project, Conway said it remains on plan and budget and is “ahead of schedule.” He said the lake is receding and is anticipated to be dry by the middle of the year, which may provide an opportunity to consider bringing forward the Southern Bund work that was originally scheduled later.
Capital allocation, dividends, and operating strategy
During Q&A, Conway said the board targets paying 50% of cash flow under its dividend policy and reviews the policy annually. He emphasized discipline in capital allocation, with the board set to consider major growth studies (E22 and Bert) in the March quarter.
Management also discussed operational decision-making in a high gold price environment. O’Neill said the company is cautious about lowering cut-off grades in a way that would displace higher-grade planned material, but noted there can be opportunities to take advantage of additional economic material where capacity exists. He pointed to Northparkes as a key area of focus in the current copper and gold price environment.
On capital returns, Conway said buybacks remain part of the company’s toolkit but indicated they are unlikely to be considered in the current half-year period, citing a preference to prioritize projects with stronger shareholder returns and the flexibility already provided through the dividend framework.
About Evolution Mining (ASX:EVN)
Evolution Mining Limited engages in the exploration, mine development and operation, and sale of gold and gold-copper concentrates in Australia and Canada. The company also explores for copper and silver deposits. It owns and operates mines, including Cowal in New South Wales; Ernest Henry and Mt Rawdon in Queensland; Mungari in Western Australia; and Red Lake in Ontario, Canada. The company was formerly known as Catalpa Resources Limited and changed its name to Evolution Mining Limited in November 2011.
