Evolution Mining shares slipped following its business update

Evolution Mining Limited (ASX: EVN) witnessed a drop in its share price post the release of the business update. At AEST 12:03 PM, EVN shares are trading at AU$2.710, down ~20% from the previous close.

In June 2022, the Company was expecting that its production would be 15% higher than March 2022 quarter. The transformation at Red Lake is ongoing and EVN assumes production to rise 15% from the March 2022 quarter to produce ~ 38,000 ounces in the June 2022 quarter.

However, due to wet weather in May the production at Cowal was influenced which restricted access to the open pit. Also, Mungari production is impacted as the staff was absent due to COVID.

Now, the Company expects FY2022 gold production to be ~640,000 ounces. FY2022 All-in Sustaining Cost (AISC) would be ~AU$1,250/oz. However, the final report for AISC would depend on the closing copper price for June 2022. At the current copper price, this adjustment will negatively impact FY2022 AISC. This negative impact will result in the group AISC being above the guidance range of AU$1,135 – AU$1,195/oz.

Sustaining and major capital are anticipated to be at the lower end of their guidance ranges, which was AU$150 – AU$175 million and AU$440 - AU$505 million respectively.

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