Evolution Mining (ASX:EVN) highlighted record first-half FY26 financial results and announced board approval of two major growth projects during its earnings call, positioning the company to reinvest in higher-return assets while increasing shareholder payouts.
Record earnings, cash flow, and dividend
Managing Director and CEO Lawrie Conway described the period as a “milestone day,” pointing to a portfolio he said is “in great shape” and benefiting from consistent delivery and higher gold and copper prices. The company reported underlying profit after tax of AUD 785 million, more than double the prior period, and group cash flow of AUD 608 million, up 123%. Underlying EBITDA reached AUD 1.6 billion, up 59%, with an underlying EBITDA margin of 57%, an improvement of 14%.
The board approved a fully franked interim dividend of AUD 0.20 per share, which management said was a record and 186% higher than the FY25 interim dividend. Summerhayes said the interim dividend totals AUD 406 million and represents nearly 20% of the total dividends declared over the company’s 13-year history. Evolution will continue offering its dividend reinvestment plan with no discount.
Balance sheet strengthens as debt is reduced
Summerhayes highlighted a sharp improvement in leverage, with gearing reduced from 30% to 6% since December 2023. During the half, the company repaid its remaining bank-term loans, including a final AUD 280 million repayment, leaving only a U.S. private placement as debt. She said the private placement carries an average fixed interest rate of 4.47%, with the next payment due in FY29.
Evolution ended the period with AUD 967 million in cash and net debt of AUD 362 million, down from AUD 1.6 billion over the last two years. The company also has an undrawn revolver credit facility of AUD 525 million, taking total liquidity to AUD 1.5 billion. Management reiterated it expects to reach net cash by the end of FY26, assuming continued strong cash generation.
Major projects approved at Northparkes and Ernest Henry
Evolution approved the E22 block cave at Northparkes and the BERT project at Ernest Henry, which Chief Technical Officer Nancy Guay said align with the company’s strategy to invest in high-quality assets and increase copper exposure.
At Northparkes, Guay said E22 is intended to underpin production for the next decade. The project has a capital estimate of approximately AUD 545 million on Evolution’s share, with first production planned for the end of FY30 and sustained mill feed of about 7.4 million tonnes per annum. In Q&A, management said E22 is permitted, and the project design is for 6 million tonnes per annum of ore haulage capacity, with optionality to go above that. Conway said the broader E22 capital envelope includes roughly AUD 50 million that provides additional optionality.
Evolution also approved a modular coarse particle flotation (CPF) circuit at Northparkes, a AUD 75 million investment (Evolution share) intended to deliver a 2% increase in copper recovery versus current performance. In addition, the board approved a AUD 14 million budget (Evolution share) for a full expansion study to evaluate future processing scale, mine-to-mill integration, and development sequencing. Management said the expansion study is expected to be completed by the end of FY27.
At Ernest Henry, Evolution approved the BERT project with a capital budget of AUD 160 million. Guay described BERT as a near-surface, high-grade deposit that integrates into the existing operation and is designed to be mined using sublevel stoping with backfill. Commercial production is scheduled to begin in FY29. During Q&A, Guay said BERT’s planned production is expected to run for about four and a half years, with grades “more or less double what the cave is,” citing approximately 0.9% copper and around 0.8 gold (as stated on the call). Management said operating costs are expected to be broadly in line with typical stoping operations, with additional detail to be provided offline.
Triple Flag agreement amended to improve flexibility at Northparkes
Conway said an amended agreement with Triple Flag was key to maximizing value at Northparkes. He said the updated arrangement provides greater flexibility to evaluate multiple ore bodies and creates a pathway to develop additional gold-rich deposits. Under the amendment, Evolution will receive a AUD 120 million payment in December and expects to receive a materially higher proportion of metal from the potential E44 deposit.
In Q&A, Conway said the previous structure would have made E44 difficult to develop because it was gold-only and Evolution would have borne 100% of the cost. He said the revised framework establishes a process for assessing future deposits, although Triple Flag would still need orebody, mining method, and metal attribution details before committing to involvement.
Capital outlook rises; Cowal remains a major cash generator
Evolution updated its major capital guidance for FY26 to AUD 500 million to AUD 605 million, reflecting the start of investment in newly approved projects and the Cowal open pit continuation (OPC) project running ahead of schedule. Conway emphasized the change was driven by project scale and new work such as coarse particle flotation and the Northparkes expansion study, and not by cost overruns.
The company lifted planned total capital investment for FY27 to FY30 to AUD 900 million to AUD 1.1 billion per year. In response to analyst questions, Conway provided examples of items contributing to the increase, including E22 scope and optionality at Northparkes, additional work at E48, CPF, the expansion study, regrind capacity work, and BERT-related changes at Ernest Henry. He also said Cowal timing changes could bring some mine development forward into FY29 and FY30, and noted the company acquired a second-hand village at Cowal that reduced capital costs versus a new build.
Conway said Cowal continued to generate substantial cash while Evolution invests in mine life extensions through OPC, noting Cowal delivered more than AUD 130 million of operating cash flow in January alone. He said OPC remains on budget at AUD 430 million, despite schedule adjustments. In Q&A, he said the schedule lead was “only a couple of months” and that the operation would still largely process stockpile ore through next year, with open pit feed from E46 expected toward the back end of the year.
Management also disclosed the addition of two exploration targets in British Columbia, saying the company plans extensive drilling over the next 12 to 15 months. Conway said this drilling would be incremental rather than redirected from existing operations, estimating roughly AUD 10 million to AUD 15 million of spend depending on program success.
Closing the call, Conway said the company is “banking the benefits” of higher metal prices through record cash flow, enabling Evolution to reward shareholders, reduce leverage, and fund the next phase of growth.
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.
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