Rising Gold Prices and Debt Repayment: What Risks Lie Ahead for Evolution Mining?
Evolution Mining delivered a record $366 million net mine cash flow in the September quarter, advancing key projects and reducing gearing to 11%, positioning itself strongly for FY26.
- Record net mine cash flow of $366 million
- Gearing reduced to 11% with all bank term loans repaid
- On track for FY26 production and cost guidance with 174koz gold and 18kt copper
- Mungari mill expansion completed under budget, commercial production imminent
- Projected cash flow upside of ~$570 million from current spot gold and copper prices
Strong Operational Performance Drives Record Cash Flow
Evolution Mining Limited has reported a robust September 2025 quarter, marked by a record net mine cash flow of $366 million, a nearly 20% increase from its previous best. This performance reflects consistent operational delivery across its portfolio, including standout contributions from Northparkes and Red Lake mines. The company produced 174,000 ounces of gold and 18,000 tonnes of copper during the quarter, maintaining sector-leading all-in sustaining costs (AISC) of $1,724 per ounce.
Safety remains a priority, with the total recordable injury frequency (TRIF) holding steady below 5, underscoring Evolution’s commitment to operational excellence and workforce wellbeing.
Project Milestones and Capital Discipline
Key projects are progressing well, notably the Mungari mill expansion, which is on track for commercial production in October and has come in 15% below its original $212 million budget. The Cowal Open Pit Continuation (OPC) project is advancing as planned and within budget, supporting the company’s medium-term growth strategy.
Capital expenditure remains focused and disciplined, with sustaining and major capital investments aligned to operational priorities. The company’s exploration spend of $10.2 million continues to support discovery drilling across multiple sites, including Northparkes, Cowal, and Red Lake.
Balance Sheet Strength and Market Tailwinds
Evolution has accelerated its deleveraging efforts, reducing gearing to 11% from 15% in the previous quarter. All bank term loans have been repaid, with no debt repayments due until FY29, providing significant financial flexibility. The cash balance increased to $780 million following $170 million in early debt repayments during the quarter, supplemented by a further $110 million repayment post-quarter.
The company is well positioned to benefit from the rising gold price environment, with spot gold reaching approximately $6,100 per ounce; nearly $1,000 above the quarter’s average achieved price. This price strength supports a projected cash flow upside of around $570 million for FY26, enhancing Evolution’s capacity to invest and return value to shareholders.
Looking Ahead
Managing Director and CEO Lawrie Conway highlighted the company’s strong foundation for FY26, emphasizing safe, reliable operations and strategic project execution. With key projects nearing completion and a robust balance sheet, Evolution is poised to sustain its operational momentum and capitalize on favourable market conditions.
Bottom Line?
Evolution Mining’s record cash flow and debt reduction set the stage for a confident FY26, but market volatility and project execution remain watchpoints.
Questions in the middle?
- How will Evolution manage potential volatility in gold and copper prices through FY26?
- What impact will the ramp-up of the Mungari mill have on overall production and costs?
- How might the completion of the Cowal OPC project influence medium-term growth and cash flow?
