Evolution Mining Reaches Net Cash, Boosted by Record Mungari and Red Lake Cash Flows

• Net cash position of $42 million with $1.37 billion cash balance
• Record net mine cash flows at Mungari ($175M) and Red Lake ($104M)
• March quarter gold production of 170koz and copper of 11kt at AISC $2,220/oz
• Ernest Henry copper output impacted by weather, expected at low end of guidance
• Board approved growth projects at Northparkes and Ernest Henry progressing on schedule

Strong Cash Generation Pushes Evolution to Net Cash

Evolution Mining has crossed a significant financial milestone, reporting a net cash position of $42 million at the close of the March 2026 quarter. The company’s cash balance soared 42% quarter-on-quarter to $1.371 billion, bolstered by robust operating mine cash flows of $769 million and a group cash flow of $406 million. Notably, Evolution faces no debt repayments until FY29, providing substantial financial flexibility amid ongoing market uncertainties.

The company’s Managing Director Lawrie Conway highlighted the rapid deleveraging achieved over the past two years, stating, “We have rapidly deleveraged by more than 31% in just over two years, reaching a net cash position by the end of March.” This financial strength underpins Evolution’s capacity to fund organic growth projects while maintaining disciplined capital allocation.

Operational Highlights: Mungari and Red Lake Shine

Mungari and Red Lake mines delivered record net mine cash flows of $175 million and $104 million respectively, underscoring their role as cash flow engines within Evolution’s portfolio. Mungari’s performance was driven by a successful mill ramp-up to 4.2Mtpa, achieving record gold production of 51koz at an AISC of $2,154/oz. Red Lake maintained consistent production above 30koz for the fourth consecutive quarter, with the highest mined grade in two years (5.33g/t), lifting metallurgical recoveries to 91%.

These operational results contribute to Evolution’s confidence in meeting full-year guidance, with March quarter gold production at 170koz and copper at 11kt, sustaining an all-in sustaining cost (AISC) of $2,220/oz. The company expects FY26 operating mine cash flow to reach approximately $3.6 billion, with further cash flow upside anticipated in the June quarter at current spot prices.

Weather Disruptions Weigh on Ernest Henry Copper Output

Ernest Henry mine experienced significant weather-related disruptions, with above-average rainfall in February and March delaying production recovery from the December 2025 weather event. Copper production for the quarter dropped to 4kt from typical levels of around 11kt, pushing FY26 copper output toward the low end of guidance at 6-8kt. Gold production was similarly impacted, now estimated at 9-11koz for the year.

Despite these challenges, Ernest Henry completed its biannual planned shutdown successfully and returned to normal operations by quarter’s end. The company anticipates improved cost performance in the June quarter as the operation stabilises.

Growth Projects Advance on Schedule and Budget

Evolution’s Board approved investments in several high-return organic growth projects during the quarter, including the E22 block cave and Coarse Particle Flotation at Northparkes, and the Bert orebody at Ernest Henry. These projects have commenced and remain on track for delivery within budget parameters. The Cowal Open Pit Continuation (OPC) project also progressed as planned, with capital investment budget steady at $430 million across seven years to FY31.

Notably, the company recently secured a significant capital injection and reduced streaming rates through an amended agreement with Triple Flag, unlocking development potential at Northparkes’ gold-rich E44 deposit. This deal, detailed in the February announcement, aligns with the ongoing feasibility studies and supports Evolution’s strategic expansion in New South Wales.

Exploration Delivers High-Grade Results and New Targets

Exploration expenditure of $17 million in the quarter yielded promising high-grade drilling results at Mungari’s Kundana underground and new opportunities at Cowal’s E41 open pit and Oban underground. Multiple drill-ready targets are advancing in North Queensland and Canada, with further results expected over the next 12 months. This exploration momentum complements Evolution’s organic growth strategy and could extend mine life across key assets.

Evolution continues to benefit from a low hedging position, achieving approximately 97% of the average gold spot price year-to-date. The remaining 18koz of gold hedging commitments are scheduled for delivery within the June quarter at an average price of $3,284/oz, with no copper hedging in place.

For investors tracking Evolution’s dividend policy, the company paid its 26th consecutive dividend of $406 million on 2 April 2026, largely in cash with a minor portion via the Dividend Reinvestment Plan. This follows recent announcements confirming fully franked dividends and DRP pricing, reflecting Evolution’s commitment to shareholder returns amid strong cash generation.

Bottom Line?

Evolution’s robust cash flow and net cash position provide a strong platform, but weather-induced production risks at Ernest Henry and execution of growth projects will be pivotal in the coming quarters.

Questions in the middle?

• How will Ernest Henry’s weather-impacted copper production affect full-year guidance and margins?
• What are the timelines and expected returns for the newly approved growth projects at Northparkes and Ernest Henry?
• Can ongoing exploration success at Mungari and Cowal translate into meaningful resource extensions or new mine developments?