Creating a premier global
mid-tier gold company
Clear and consistent strategy
■ A portfolio of 6 to 8 assets generating
■ Open to all quality gold, silver and copper-gold
superior returns with an average mine life
of at least 10 years
value accretive investments
■ Build a reputation for sustainability, reliability
■ Embed financial discipline across the business
and transparency
■ An active pipeline of quality exploration and
development projects
Ernest
Henry
(economic interest)
Mt Carlton
Mt Rawdon
Mungari
Cowal
,
Canada
Red Lake
Contents
/
/
C
o
n
t
e
n
t
s
Executive Chairman’s report 4 | Sustainability report 6 | Chief Operating Officer’s review 54 | Innovations and asset
optimisation 60 | Discovery 63 | Mineral Resources and Ore Reserves 67 | Chief Financial Officer’s review 75
Annual Financial Report 81 | Shareholder information 189 | Corporate information 193
This report has been authorised for release by the Board of Directors.
Forward looking statements
This report prepared by Evolution Mining Limited (or “the Company”) include forward looking statements. Often, but not always, forward looking statements
can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and
“guidance”, or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated
production or construction commencement dates and expected costs or production outputs. Forward looking statements inherently involve known and
unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance and achievements to differ materially from
any future results, performance or achievements. Relevant factors may include, but are not limited to changes in commodity prices, foreign exchange
fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project
development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks,
changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather
conditions, recruitment and retention of personnel, industrial relations issues and litigation. Forward looking statements are based on the Company and its
management’s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company’s
business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based
will prove to be correct, or that the Company’s business or operations will not be affected in any material manner by these or other factors not foreseen or
foreseeable by the Company or management or beyond the Company’s control. Although the Company attempts and has attempted to identify factors that
would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could
cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable
control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these
materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing
this information the Company does not undertake any obligation to publicly update or revise any of the forward-looking statements or to advise of any
change in events, conditions or circumstances on which any such statement is based.
Evolution Mining Limited // Annual Report 2020 1
Annual Report (Continued)
s
t
n
e
m
e
v
e
h
c
a
0
2
Y
F
i
/
/
FY20 achievements
Delivering safe, low-cost gold production in an environmentally
and socially responsible way
Strategy execution delivering sector leading financials
Transformational acquisition
Red Lake acquisition – an under-capitalised, high-grade,
long-life underground mine located in Ontario, Canada
Consistent gold production
746.5koz
Strong performance in safety
and sustainability
No material impact to operations from COVID-19
Safety interactions
Total Recordable
Injury Frequency
40% 18%reduction
Statutory net
profit after tax
38%
to a record
A$301.6M
EBITDA1
41%
to a record
A$1.03B
Underlying net profit after tax
86%
to a record
A$405.4M
1.
EBITDA - Earnings Before Interest, Taxes, Depreciation, and Amortisation
and is a metric used to evaluate a company’s operating performance
2. All-in Sustaining Cost includes C1 cash cost, plus royalty expense;
sustaining capital; and general corporate and administration expenses on
a per ounce sold basis
3. Calculated using an average AUD:USD exchange rate for FY20 of
US$0.6714
Group delivering strong
EBITDA margins
FY20
FY19
FY184
FY174
FY16
FY15
FY14
53%
48%
53%
49%
46%
40%
33%
4. FY17 excludes Pajingo. FY18 excludes Edna May
2 Evolution Mining Limited // Annual Report 2020
Among the lowest cost gold
producers in the world
AISC2
A$1,043/oz
(US$700/oz)3
Operating mine
cash flow
Net mine
cash flow
45%
to a record
A$1.12B
48%
to a record
A$736M
Group free cash flow
86% to a record A$541.8M
Record full year fully franked
cash dividend payout of
A$273.0M a 68% increase
on FY19
Returning
A$365/oz
produced in dividends
Increasing returns to shareholders
14%
Dividends (% of revenue vs
cents per share declared)
11%
6
8%
4
3.5
3.5
9
7
6%
3
2
2%
1
FY13
2%
1
1
FY14
3%
1
1
FY15
3%
2
1
FY16
FY17
FY18
FY19
FY20
Interim (cps)
Final (cps)
% of Revenue
Annual Report (Continued)
Measurable value creation for our business and our communities
/
/
i
F
Y
2
0
a
c
h
e
v
e
m
e
n
t
s
Contribution to the Australian and
Canadian economies
A$1.56B
Direct spend with local organisations1
A$79M
A$3M donation
Bushfire recovery, drought relief and community support
7
New Sustainability
Projects
Local employment
across our
operations
65%
Improved water security
11%
increase in water reuse
Agreed climate risk mitigation
strategy and targets
Social licence to operate
High approval
rating
Resilience to long-term ESG risks
MSCI ‘A’ rating
Inclusion in the Dow Jones Sustainability
Index – Australia
Diversity
7%
Indigenous
workers2 and
17%
Female workers
A$45.0M
in benefits in FY20
Data Enabled Business Improvements (DEBI)
1.
Local organisations are defined by postcode in relation to
geographical proximity to Evolution mine sites
Includes Red Lake Operation
2.
3. See pages 67-74 of this report for details on the Dec 19 Mineral
Resources and Ore Reserves and www.evolutionmining.com.au
for information on previous results
4. Dec 19 Results exclude the Red Lake Mineral Resource of 11Moz,
addition of 410koz to Cowal UG Mineral Resource and Cowal
Maiden Underground Ore Reserve of 804koz. These resources
and reserves were reported post end of financial year
Dividends declared per
ounce produced (A$)
365
Delivering resource and reserve
growth – Group average mine life
of ~10 years
214
158
100
33
18
49
55
14.01
14.18
14.24
14.73
15.17
5.00
2.24
5.85
6.99
7.05
7.46
6.64
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
DEC 14
DEC 15
DEC 16 DEC 17 DEC 18
DEC 19 3,4
Ore Reserves (Moz)
Mineral Resources (Moz)
inclusive of Ore Reserves
Evolution Mining Limited // Annual Report 2020 3
14.18
t
r
o
p
e
r
s
’
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
Annual Report (Continued)
Executive Chairman’s
report
Inspired people creating a premier, global, mid-tier gold company
On behalf of the Board of Directors of Evolution Mining Limited, I am proud to present you
with the Company’s 2020 Annual Report. This incorporates our annual Sustainability Report
which supports our objective to deliver long-term stakeholder value through safe, low-cost gold
production in an environmentally and socially responsible manner.
When Evolution was formed in 2011, we set out to become
a globally relevant, mid-tier gold company that prospers
through the cycle. The 2020 Financial Year was another
important year for the Company as we continued to
demonstrate commitment to our strategy of upgrading
the quality of our asset portfolio. Despite the challenges
presented by COVID-19, our focus on margin over ounces
delivered record financial results. This strong operational
performance enabled us to execute another transformational
acquisition with the Red Lake gold mine in Ontario, Canada,
becoming part of Evolution in April 2020.
We live in a world where significant geopolitical fault lines
are undeniably growing. The co-operative globalisation
phase that has been present since the end of the Cold
War appears over and the re-emergence of populism and
nationalism should concern every investor.
The past playbook of gold companies looking for expansion
has been to seek growth in developing countries. Places
where the geology is considered prospective and
underexplored, and where labour costs are cheap.
Today, an investor must consider not only the discontent
and instability that has been exacerbated by the COVID-19
pandemic in many developing countries, but also the
growing influence of China, both at a government level and
as a competitor at a corporate level, particularly in Africa.
All seasoned participants in this sector have seen multiple
examples of massive shareholder value destruction because
of unanticipated government intervention. Avoiding these
risks is at the core of Evolution’s decision to focus on the tier
one jurisdictions of Australia and Canada where the rule of
law can be relied on.
Core to our strategy is our belief that margin matters
most. Although all gold companies can sell the gold they
produce at the same price, a low-cost ounce of gold is
much more valuable than a high-cost ounce of gold. We
operate in a very cyclical industry and in the good times we
need to be making exceptional profits, like we did in FY20,
and when the price is lower we still need to be making an
above average return on our shareholders’ capital. This
is no different to any other business – every dollar we
invest of our shareholders’ money must generate a return
commensurate with the risk we are taking – not because
the gold price has gone up, but because we have invested
wisely and added value.
This is why we use a very conservative gold price to
estimate our reserves of A$1,450 an ounce and resources
are constrained at A$2,000 an ounce. The higher the gold
price, the more money we need to be banking and delivering
to shareholders. Every time reserve prices are increased to
mine lower grade material, margins are eroded. We believe
our approach in this area is a key differentiator in the value
proposition we offer our investors.
In FY20 we produced 746,463 ounces of gold at an All-in
Sustaining Cost (AISC) of A$1,043 per ounce (US$700/oz)1.
This continues to rank Evolution as one of the lowest cost
gold producers in the world.
Safety is a core value at Evolution. No amount of financial
or operational success is worth anything if people get
hurt. Performance in this area can never be good enough
but the signs at Evolution are encouraging and our safety
performance has a strong positive trend. Our leaders are
having more quality safety discussions in the field with our
safety interactions increasing by 40%. We’ve established
learning teams, improved the incident review process and
have increased storytelling across all levels of the business.
In FY20 our Total Recordable Injury Frequency (TRIF)
declined by 18% year-on-year to 6.8 (30 June 2019: 8.3).
Our focus on cash generation delivered record results in
FY20 with mine operating cash flow up 45% year-on-year
to A$1.121 billion, net mine cash flow up 48% to A$736.0
million and Group free cash flow up 86% to A$542.0 million.
We also achieved a record underlying net profit after tax of
A$405.4 million and a record statutory net profit after tax of
A$301.6 million.
These results enabled a further increase in dividends with
a total of A$0.16 per share or A$273.0 million declared for
FY20 based on the Company’s policy targeting 50% of free
cash flow. This equated to a sector leading A$365 per ounce
produced being returned to shareholders.
In our nine years as a company we have acquired four assets
and sold three. Following on from the successful acquisitions
of Cowal and Mungari in 2015, and the economic interest in
Ernest Henry in 2016, we believe the acquisition of Red Lake
in April 2020 will prove to be the next transformational step
in Evolution’s short history. Red Lake’s previously published
Mineral Resource estimate issued in February 2020 was
2.9 million ounces. In August 2020 we published our first
Mineral Resource estimate of 11.0 million ounces at a grade
of 7.1 grams per tonne in accordance with the JORC Code.
This is now the largest resource and the highest grade of all
assets in Evolution’s portfolio. Our near-term focus at Red
Lake is on delivering the three-year transformation plan
1. All references to US dollars in this report are calculated using an exchange rate of US $0.6714 except where noted
4 Evolution Mining Limited // Annual Report 2020
Executive Chairman’s
report
Inspired people creating a premier, global, mid-tier gold company
On behalf of the Board of Directors of Evolution Mining Limited, I am proud to present you
with the Company’s 2020 Annual Report. This incorporates our annual Sustainability Report
which supports our objective to deliver long-term stakeholder value through safe, low-cost gold
production in an environmentally and socially responsible manner.
14.18
Annual Report (Continued)
/
/
E
x
e
c
u
t
i
v
e
C
h
a
i
r
m
a
n
’
s
r
e
p
o
r
t
to produce 200,000 ounces per annum at an AISC below
US$1,000 per ounce. However, based on the new Mineral
Resource of 11.0 million ounces we have set ourselves a
longer-term aspirational target of lifting Red Lake’s annual
production to between 300,000 – 500,000 ounces.
projects which are designed to create a tangible, sustainable
legacy in our communities beyond the life of our mines.
We were also pleased to be able to support the bushfire
recovery and drought relief initiatives through a
A$3.0 million donation during the year.
Evolution’s portfolio of assets demonstrated the benefits
of diversification in FY20. Despite experiencing operational
issues at smaller assets Mt Carlton and Mt Rawdon, the
portfolio as a whole delivered a solid result from both a
production and cost perspective.
Our people are our most important asset and I would like
to thank every Evolution employee and contractor for their
contribution in FY20. I also appreciate the ongoing support
that our Leadership Team received from the Board of
Directors this year.
Cowal had another strong operational performance in
FY20 while activities continue to focus on transforming
the operation into an asset that can produce 350,000 low
cost ounces per annum on a sustainable basis. This will be
achieved through the development of the underground mine
which now has a Mineral Resource of 2.9 million ounces and
continues to grow.
Mungari continued its impressive turnaround by
successfully increasing the mill throughput rate to 2.0Mtpa
and delivering to the operational plan to achieve record net
mine cash flow of A$112.7 million. Ernest Henry also had
another strong year generating A$256.6 million in net mine
cash flow for Evolution.
Evolution’s total Mineral Resources have now grown to
26.2 million ounces of gold while Ore Reserves, excluding
Red Lake, stand at 7.3 million ounces. The average reserve life
of the Australian portfolio is in excess of ten years and we are
looking forward to announcing a maiden Ore Reserve at Red
Lake in accordance with the JORC Code in February 2021.
We continue to believe focusing on organic growth at
our current operations and on earlier stage opportunities
presents a tremendous opportunity to create shareholder
value. In FY21 we have committed to A$75.0 – A$100.0
million on discovery with the majority being spent at Cowal
and Red Lake.
The mining industry continues to make a significant
contribution to Australia’s economic prosperity. At Evolution
alone, in the 12 months of FY20, we contributed around
A$1.56 billion to the Australian and Canadian economies
and provided much needed jobs in our country’s regional
areas. We have also commenced seven new sustainability
I would like to thank Colin ‘Cobb’ Johnstone who stepped
down from the Board in March 2020. We sincerely
appreciate the significant contribution Cobb made to the
Company during his time as a Director and wish him all the
best for the future.
Evolution remains focused on prioritising margins over
production growth and is forecasting Group gold production
in FY21 of 670,000 – 730,000 ounces at an AISC in the
range of A$1,240/oz – A$1,300/oz. Production is expected
to rise to 790,000 – 850,000 ounces in FY23 and costs are
expected to decline to A$1,125/oz – A$1,185/oz as the Cowal
underground comes into production and Red Lake delivers
on its transformation plan.
At Evolution, our focus on upgrading the quality of our
portfolio towards long-life, low-cost, high-margin assets in
the safe jurisdictions of Australia and Canada has positioned
us exceptionally well for the current gold price environment
but also to prosper through the inevitable cycle. Our balance
sheet is strong, our assets are generating record cash flow
and our people are inspired to continue to deliver value
for all of our stakeholders. We recognise that we are in the
business of taking geological and financial risks, but we will
never do anything that compromises our reputation, our
social licence to operate or our values – safety, excellence,
accountability and respect.
Yours faithfully
JAKE KLEIN
EXECUTIVE CHAIRMAN
Evolution Mining Limited // Annual Report 2020 5
FY20
6 Evolution Mining Limited // Annual Report 2020
/
/
E
x
e
c
u
t
i
v
e
C
h
a
i
r
m
a
n
’
s
r
e
p
o
r
t
Our culture revolves around the characteristics of humility,
respect, belief and empowerment. Continuing to develop
this culture is core to Evolution’s ongoing success.
Jake Klein
Executive Chairman
Evolution Mining
Evolution Mining Limited // Annual Report 2020 7
Sustainability Report (Continued)
FY20
achievements
s
t
n
e
m
e
v
e
h
c
a
0
2
Y
F
i
/
/
Governance
Environment
■ No material
■ Strategic uplift in the integration of Sustainability Principles,
environmental incidents
Policies and Standards
■
100% of all assets internally and externally audited
and verified with oversight from the Board Risk and
Sustainability Committee
■ Tailings Storage Facility (TSF) Governance Committee
providing effective oversight of TSF management
Healthier and safer
■ 40% increase in safety interactions
■
18% decrease in Total Recordable Injury Frequency (TRIF)1
■ Proactive COVID-19 management with no material
impact on our people or our operations
People
■ 62% female graduate intake (50% target)
■ 7%2 Indigenous workforce
■ 41% job opportunities filled internally
(24% increase from FY19)
Social responsibility
■
65% local employment across our operations
■ A$1.56B contribution to the Australian and
Canadian economies3
■ A$130.0M contribution to local and regional businesses
and organisations including A$79.2M in direct spend4 with
local organisations
■ A$3M donation to bushfire recovery, drought relief
and community support and committed A$1.5M to
Sustainability projects
■
Improved water security with
11% increase in water reuse
■ Agreed climate risk mitigation
strategy and targets, moving from
measuring to planned mitigation
Environmental,
Social and
Governance
(ESG) ratings
■ MSCI rating score of ‘A’ for
the Company’s resilience to
long-term ESG risks
■ SAM Corporate Sustainability
Assessment S&P Global:
Inclusion in 2019 Dow Jones
Sustainability Index Australia
A$1.56B
CONTRIBUTION TO THE
AUSTRALIAN AND
CANADIAN ECONOMIES
“The possibilities in front of us are so
exciting. By harnessing our talent and
experience, and by continuing to be ‘uniquely
Evolution’, I am looking forward to creating
an even bigger positive impact on the lives
of our employees, our communities and the
stakeholders that join us on our journey.”
FIONA MURFITT, VICE PRESIDENT -
SUSTAINABILITY
1.
TRIF: Total recordable injury frequency. The frequency of total recordable injuries per million hours worked.
Results are based on a 12-month moving average. Includes Red Lake Operation as of 1 April 2020
Includes Red Lake Operation
2.
3. Economic contributions include supplier payments, wages, dividend payments, interest, taxes and royalties
4. Local organisations are defined by postcode in relation to geographical proximity to Evolution mine sites
8 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
New sustainability projects in FY20
Ongoing sustainability projects
Jonathon Thurston
JT Academy
University of Queensland’s Research for Early
Cancer Diagnosis Using Gold
/
/
i
F
Y
2
0
a
c
h
e
v
e
m
e
n
t
s
Yalga-binbi Institute for
Community Development
Somewhere Down The Lachlan
Sculpture Trail
Kalgoorlie LoKal
Working Hub
Water Treatment
wetlands project
Lake Cowal Cultural
Heritage Education Centre
Great Barrier Reef Beach
Scrub Protection
Great Barrier Reef Yellow
Zone Research Project
Fitzroy Basin Pest
Management Project
Pumped Hydro
Feasibility Study
Our sustainability
vision is to
deliver long-term
stakeholder value
through safe, low-
cost gold production
in an environmentally
and socially
responsible manner.
Evolution Mining Limited // Annual Report 2020 9
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
s
n
o
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
e
h
T
/
/
Sustainability Report (Continued)
The Executive Chairman
on sustainability at Evolution
On behalf of the Evolution Mining team, I am pleased to present our FY20 Sustainability Report
which reflects our values driven approach to creating measurable value for our stakeholders through
safe and reliable, low-cost gold production in an environmentally and socially responsible way.
We have been maturing in our sustainability journey,
creating value and integrating sustainability into
everything we do. We are energised by our next phase
of improvement - leveraging our increased capability,
experience and passion. This step change and the strategic
importance of sustainability has also been recognised
through the creation of a new role of Vice President of
Sustainability. Fiona Murfitt is responsible for leading
Health, Safety, Environment, Risk and Social Responsibility
across the portfolio.
Our FY20 Sustainability Report describes our approach
and performance in the areas of health and safety,
environmental stewardship (including the management
of climate-related risks), helping our communities thrive,
cultural heritage, innovation and the development of our
people. This is leveraged by our culture which emphasises
doing the right thing because we want to, not because we
have to.
Integral to the sustainability of our business is the health
and safety of our people. Performance in this area is never
good enough, however, we are seeing positive signs and
metrics that our culture of engaging, reporting and learning
is improving, and that our people are healthier and safer.
Our rigorous environmental standards and assurance
meant there were no material events in FY20. We continue
to operate above compliance to reduce our environmental
footprint and support our surrounding ecosystems to
thrive. At Cowal we have taken significant steps to improve
our water security by investing in projects that reduce
our reliance on surface fresh water. We have also applied
science and innovation in the CSIRO wetlands project at
Mt Rawdon, Queensland where we are teaming with global
leading researchers to look at the use of wetlands and tall
gums as a passive way to clean water for reuse or recharge
back into the natural environment.
As the short-term custodians of the land in which we
operate, we consider environmental and cultural heritage
as both an honour and a responsibility. The recent
destruction of culturally sensitive land in Australia made
many of us in the industry challenge and re-validate our
own standards, protocols and processes. We reaffirmed
the importance of the protection of cultural heritage at all
levels of the business.
We made significant social contributions through our
activities including a A$1.56 billion contribution to the
Australian and Canadian economies. We contributed
A$130.0 million to local and regional businesses and
organisations including A$79.2 million in direct spend locally
in the communities in which we operate in Queensland,
New South Wales, Western Australia and Ontario, Canada.
Group-wide, we sourced 65% of our employees from our
local communities, providing community benefits that
endure beyond the life of our mines.
We continued to improve diversity by increased
participation for all people that may face more barriers
than others including Indigenous peoples, females and
the LGBTI+ community. By increasing our graduate intake
of females to 62% in FY20, together with building clearer
career pathways for all, improved diversity will be delivered
in the next generation of miners.
We focused on the management of climate-related risks
around water, energy, waste minimisation, environmental
footprint reduction, and extreme weather and health events.
We continue to successfully manage the Novel Coronavirus
(COVID-19) with no material impact on our people or our
operations in FY20.
Our high levels of transparency have been recognised by
key ratings agencies including the Dow Jones Sustainability
Index Australia and resulted in an upgrade to an ‘A’ rating
from MSCI.
I would like to acknowledge and thank all our staff,
contractors, and partners for their dedication and ongoing
contribution to our sustainability efforts and I look forward
to reporting on significant, planned step changes in FY21.
Yours faithfully
JAKE KLEIN
EXECUTIVE CHAIRMAN
10 Evolution Mining Limited // Annual Report 2020
/
/
O
u
r
b
u
s
i
n
e
s
s
Sustainability Report (Continued)
Our business
Our vision
Inspired people creating a premier, global, mid-tier gold company.
Our corporate strategy
■ A portfolio of six to eight assets generating superior returns with an average mine life of at least 10 years
■ Embed financial discipline across the business
■ An active pipeline of quality exploration and development projects
■ Open to all quality gold, silver and copper-gold value accretive investments
■ Build a reputation for sustainability, reliability and transparency
Our values
Four values guide workforce behaviours and decision-making at Evolution:
Safety
Accountability
think before we act, every job every day
if it is my responsibility, I own it – good or bad
Excellence
Respect
we take pride in our work, deliver our
best and always strive to improve
we trust each other, act honestly
and consider each other’s opinion
Group and report information
This FY20 Sustainability Report for the period from 1 July 2019 to 30 June 2020 is approved for release by our
Board of Directors. It outlines our approach to sustainable development and complements the FY20 Annual Report.
The Sustainability Report covers operations at our 100%-owned gold mines in Australia: Cowal in NSW,
Mt Carlton and Mt Rawdon in Queensland, Mungari in Western Australia and our exploration activities in Australia.
The Cracow gold mine in Queensland, which was divested on 1 July 2020, has also been included in the report.
In FY20, we acquired the Red Lake Operation in Ontario, Canada. We acquired economic interest on 1 January 2020 and
operational control on 1 April 2020. Due to the period of ownership, summaries on Red Lake are provided in relevant
sections. Unless specified, all figures in the report do not include Red Lake Operation.
In addition to these assets, we hold an interest in the Ernest Henry copper-gold mine in Queensland, a large-scale,
long-life asset operated by Glencore. More information on Ernest Henry’s sustainability performance is available on the
Ernest Henry website1.
1. www.ernesthenrymining.com.au/en/Sustainability/Pages/sustainable-development.aspx
Evolution Mining Limited // Annual Report 2020 11
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
S
Sustainability Report (Continued)
Sustainability
at Evolution
“It’s my privilege to have been directly involved in the maturing of Evolution’s sustainability culture. We are deeply
committed to further enhancing our efforts as a socially responsible, sustainable gold miner.”
JIM ASKEW, BOARD RISK & SUSTAINABILITY COMMITTEE CHAIR
Sustainability Principles
The objective of our sustainability efforts is to deliver long-term stakeholder value through safe, low-cost gold production in
an environmentally and socially responsible manner.
Our commitment
Be an employer of choice attracting
the most talented people and foster a
safe, diverse and inclusive workplace
Demonstrate robust risk management
and safety leadership
Contribute positively to local, regional
and national sustainability efforts
by achieving an outstanding level of
environmental stewardship
Actively manage
climate-related risks and
opportunities including improving
energy efficiency and the responsible
management of water
Protect and enhance
our reputation as a trusted partner
and provide community benefits that
endure beyond the life of our mines
Advance the outcomes for
Indigenous peoples and protect
their Cultural Heritage
Respect the human rights
of all our stakeholders
Be transparent at all levels of
Corporate Governance, comply with
applicable laws and regulations and
operate at the highest standards of
financial and ethical behaviour
Relentlessly drive
for operational excellence through
an innovative culture and inspired
people delivering to plan
At Evolution, we integrate our sustainability efforts
into every cycle of the business to ensure we deliver
long-term stakeholder value through safe, reliable, low-
cost gold production in an environmentally and socially
responsible way.
We made a strategic decision to operate in the Tier
1 mining jurisdictions of Australia and Canada, where
community support, our social licence to operate and the
contribution we can bring to our communities are amongst
our most valuable assets. We support the local communities
in which we operate and are determined to leave a positive
legacy once mining operations have been completed.
We have developed nine Sustainability Principles that
provide the foundation for how we approach and integrate
sustainability into everything we do. These principles align
with the United Nations Sustainable Development Goals
and support our drive for improvement as we mature in our
sustainability journey.
Our short-term strategy focuses on value creation to
advance our sustainability performance through:
■ A safe and supportive workplace and improved health
and safety culture
■ A risk-based approach to sustainability and climate-
related risk (focused on water, energy and extreme
weather and health events) supported by integrated
reporting measures and targets
■ Excellence in Environmental Stewardship
■ Robust risk management including climate-related risks
12 Evolution Mining Limited // Annual Report 2020
/
/
S
u
s
t
a
n
a
b
i
i
l
i
t
y
a
t
E
v
o
u
t
i
o
n
l
Sustainability Report (Continued)
■ Partnering with local communities to thrive beyond the
life of our mines
■ Developing effective teams aligned with our approach
to diversity, inclusion and cultural competency
Sustainability Policy and
Strategic Planning Policy
The Sustainability Policy1 and Strategic Planning Policy2
provide our key focus areas for the management of risk
and sustainability in the business and are designed to be
read together. These policies provide guidance on how
to integrate sustainability into the business in the
following areas:
Sustainability Performance Standards
and Strategic Planning Standards
The Sustainability Performance Standards3 and Strategic
Planning Standards support the Sustainability Policy and
Strategic Planning Policy in providing the minimum risk and
sustainability requirements to be met or exceeded in all
areas of our business, including our operations, exploration
and group activities.
In FY20 we completed an internal audit of each asset for
compliance against these standards. While we identified
areas for improvement, we did not identify any material
issues. These findings were independently verified by
third-party auditors.
■ Health and safety
■ Environment
■ Cultural heritage
United Nations Sustainable
Development Goals
■ Risk-based decision making
■ Reporting, learning excellence, innovation and
continuous improvement
■ Crisis and emergency management and corporate
governance
■ Accountabilities for Risk, Sustainability and
Strategic Planning
We recognise the global importance of the United Nations
Sustainable Development Goals (UN SDGs) and have
aligned our Sustainability Principles with these goals where
appropriate. The UN SDGs are the blueprint to achieve a
better and more sustainable future for all. They address
the global challenges we face, including those related
to poverty, inequality, climate change, environmental
degradation, peace and justice.
Sustainability Principles
Integrated risk
management
framework
Sustainability Policy
Strategic Planning Policy
Assurance
program
Sustainability Performance Standards
Strategic Planning Standards
Management System, Operating Processes and Procedures
https://evolutionmining.com.au/env-sustain-policy/
https://evolutionmining.com.au/strat-plan-policy/
1.
2.
3. https://evolutionmining.com.au/wp-content/uploads/2020/09/EVN_COR_STD_001-Sustainability-Performance-Standards.pdf
Evolution Mining Limited // Annual Report 2020 13
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
S
/
/
Sustainability Report (Continued)
Evolution’s Sustainability
Principles
Be an employer of choice
attracting the most talented
people and foster a safe,
diverse and inclusive workplace
Demonstrate robust risk
management and safety
leadership
Respect the human rights of all
our stakeholders
Relentlessly drive for operational
excellence through an innovative
culture and inspired people
delivering to plan
Advance outcomes for
Indigenous peoples and
protect cultural heritage
SDG Goal
SDG Indicator
3.5 Strengthen the prevention and treatment of
substance abuse, including narcotic drug abuse and
harmful use of alcohol
3.D Strengthen the capacity of all countries,
developing countries, for early warning, risk reduction
and management of national and global health risks
5.4 Recognise and value unpaid care and domestic
work through the provision of public services,
infrastructure and social protection policies and
the promotion of shared responsibility within the
household and the family as nationally appropriate
5.5 Ensure women’s full and effective participation
and equal opportunities for leadership at all levels of
decision making in political, economic and public life
3.4 By 2030, reduce by one third premature mortality
from noncommunicable diseases through prevention
and treatment and promote mental health and
wellbeing
3.5 Strengthen the prevention and treatment of
substance abuse, including narcotic drug abuse and
harmful use of alcohol
13.1 Strengthen resilience and adaptive capacity to
climate-related hazards and natural disasters in all
countries
8.7 Take immediate and effective measures to
eradicate forced labour, end modern slavery and
human trafficking and secure the prohibition and
elimination of the worst forms of child labour,
including recruitment and use of child soldiers, and by
2025 end child labour in all its forms
Reference
Section
People
People
Environment
Social
Responsibility
Social
Responsibility
9.4 By 2030, upgrade infrastructure and retrofit
industries to make them sustainable, with increased
resource-use efficiency and greater adoption of
clean and environmentally sound technologies and
industrial processes, with all countries taking action in
accordance with their respective capabilities
Environment
Social
Responsibility
9.5 Enhance scientific research, upgrade the
technological capabilities of industrial sectors in all
countries, in particular developing countries, including,
by 2030, encouraging innovation and substantially
increasing the number of research and development
workers per 1 million people and public and private
research and development spending
10.2 By 2030, empower and promote the social,
economic and political inclusion of all, irrespective of
age, sex, disability, race, ethnicity, origin, religion or
economic or other status
Social
Responsibility
11.4 Strengthen efforts to protect and safeguard the
world’s cultural and natural heritage
14 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
Evolution’s Sustainability
Principles
Contribute positively to
local, regional and national
sustainability efforts by
achieving an outstanding level
of environmental stewardship
Protect and enhance our
reputation as a trusted partner
and provide community
benefits that endure beyond
the life of our mines
/
/
S
u
s
t
a
n
a
b
i
i
l
i
t
y
a
t
E
v
o
u
t
i
o
n
l
Reference
Section
Environment
SDG Goal
SDG Indicator
7.2 By 2030, increase substantially the share of
renewable energy in the global energy mix
12.5 By 2030, substantially reduce waste generation
through prevention, reduction, recycling and reuse
15.1 By 2020, ensure the conservation, restoration and
sustainable use of terrestrial and inland freshwater
ecosystems and their services, in particular forests,
wetlands, mountains and drylands, in line with
obligations under international agreements
15.3 By 2030, combat desertification, restore
degraded land and soil, including land affected by
desertification, drought and floods, and strive to
achieve a land degradation-neutral world
15.5 Take urgent and significant action to reduce
the degradation of natural habitats, halt the loss of
biodiversity and, by 2020, protect and prevent the
extinction of threatened species
1.1 By 2030, eradicate extreme poverty for all people
everywhere, currently measured as people living on
less than $1.25 a day
Social
Responsibility
2.1 By 2030, end hunger and ensure access by all
people, in particular the poor and people in vulnerable
situations, including infants, to safe, nutritious and
sufficient food all year round
4.4 By 2030, substantially increase the number of
youth and adults who have relevant skills, including
technical and vocational skills, for employment, decent
jobs and entrepreneurship
8.3 Promote development-oriented policies that
support productive activities, decent job creation,
entrepreneurship, creativity and innovation, and
encourage the formalisation and growth of micro-,
small- and medium-sized enterprises, including
through access to financial services
12.B Develop and implement tools to monitor
sustainable development impacts for sustainable
tourism that creates jobs and promotes local culture
and products
Evolution Mining Limited // Annual Report 2020 15
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
S
/
/
Sustainability Report (Continued)
Evolution’s Sustainability
Principles
Actively manage climate-
related risks and opportunities
including improving energy
efficiency and the responsible
management of water
Be transparent at all levels of
Corporate Governance, comply
with applicable laws and
regulations and operate at the
highest standards of financial
and ethical behaviour
Reference
Section
Environment
Governance
SDG Goal
SDG Indicator
3.9 By 2030, substantially reduce the number of deaths
and illnesses from hazardous chemicals and air, water
and soil pollution and contamination
6.3 By 2030, improve water quality by reducing
pollution, eliminating dumping and minimising release
of hazardous chemicals and materials, halving the
proportion of untreated wastewater and substantially
increasing recycling and safe reuse globally
6.4 By 2030, substantially increase water-use efficiency
across all sectors and ensure sustainable withdrawals
and supply of freshwater to address water scarcity and
substantially reduce the number of people suffering
from water scarcity
13.1 Strengthen resilience and adaptive capacity to
climate-related hazards and natural disasters in all
countries
13.3 Improve education, awareness-raising and human
and institutional capacity on climate change mitigation,
adaptation, impact reduction and early warning
10.3 Ensure equal opportunity and reduce inequalities
of outcome, including by eliminating discriminatory
laws, policies and practices and promoting
appropriate legislation, policies and action in this
regard
12.6 Encourage companies, especially large and
transnational companies, to adopt sustainable
practices and to integrate sustainability information
into their reporting cycle
16.B Promote and enforce non-discriminatory laws and
policies for sustainable development
Reporting what matters to our stakeholders
High-quality stakeholder relationships are central to creating positive impacts across the communities in which we operate.
Trusted partnerships and relationships are the foundation of our social licence to operate, supporting shared value and
reputational improvement.
Community support and our social licence to operate are among our most valuable assets. In FY20, we undertook our fourth
independent biennial Stakeholder Perception Survey, a targeted independent research project which gauges sentiment
across a wide range of community stakeholders in and around our operating sites.
“Evolution is not at arm’s length - they’re very involved and want to understand. There are no false promises attached.
They’re very realistic and a true partner.” – COWAL COMMUNITY MEMBER
16 Evolution Mining Limited // Annual Report 2020
/
/
S
u
s
t
a
n
a
b
i
i
l
i
t
y
a
t
E
v
o
u
t
i
o
n
l
Sustainability Report (Continued)
Stakeholder mix
Employees
General Public
Local
Communities
Civil Society
Indigenous
Organisations
Media
Shareholders
Education
and Research
Non-
Government
Organisations
Analysts
Suppliers and
Contractors
Local and
Regional
Business
Government
and Regulators
Business and
Professional
Organisations
Industry and
Non-Profit
Organisations
Industry
Bodies
University of Queensland’s research for early cancer diagnosis using gold. One of the ongoing Evolution Mining sustainability projects.
Evolution Mining Limited // Annual Report 2020 17
Sustainability Report (Continued)
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
S
/
/
Material topics
Evolution’s Sustainability Report focuses on the following
social, environmental and economic topics that were
identified as being material to our stakeholders and
business. Materiality is reviewed on an annual basis across
a number of business forums including the Board Risk and
Sustainability Committee. In FY20 materiality was reviewed
using the Evolution Risk Register and particularly for
climate risk in Leadership Team and Board workshops.
All material topics identified were rated according to
the impact on the business versus the importance to
stakeholders by using a materiality matrix.
Stakeholder interests were plotted against the vertical axis
and ranked from low to high importance. Topics material to
our business were plotted against the horizontal axis from
low to high impact.
The material topics that fall into the high stakeholder
interest and high business impact quadrant are listed
below.
Evolution’s material business risks are also referenced
on pages 96 to 99 of this report.
People
Environment
Social responsibility
Health, Safety and Wellbeing
(pg.24,25)
+
Diversity (pg.26)
+
Employment (pg.27-29)
Tailings Storage Facility (pg.35-36)
+
Water (pg.33-35)
+
Effluents and Waste (pg.32,35-36)
+
Energy Use and Renewables (pg.33-34)
+
Emissions and Climate (pg.33-34)
+
Mine Closure and Rehabilitation
(pg.36-37)
+
Biodiversity (pg.37)
Local Communities (pg.42-45)
+
Governance and Compliance (pg.20)
+
Economic Performance (pg.40,42)
+
Indigenous Peoples and
Cultural Heritage (pg.26,30,41-42)
+
Procurement Practices (pg.46)
Case study: First Nation
Groups Collaboration
The Red Lake Operation has two signed Collaboration
Agreements with their First Nation Groups: Lac Seul
First Nation and Wabauskang First Nation. As part of
the new ownership, Red Lake worked with their partners
to transfer both Collaboration Agreements
to Evolution Mining.
An Evolution team led by Chief Operating Officer, Bob
Fulker visited both First Nation communities where they
toured the communities with their Chiefs. Gifts were
exchanged as a sign of respect and Bob spoke about
the importance of the partnerships and Evolution’s plans
to continue strengthening the relationships.
18 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
S
u
s
t
a
n
a
b
i
i
l
i
t
y
a
t
E
v
o
u
t
i
o
n
l
ESG reporting agencies,
benchmarking and memberships
We participate in ESG benchmarking assessments
undertaken by organisations such as SAM Corporate
Sustainability Assessment (CSA) and MSCI and through
membership of leading industry bodies.
In FY20 we continued to improve the transparency of our
disclosures and received a rating of ‘A’, up from a ‘BBB’ in
the MSCI ESG Ratings assessment for resilience to long-
term ESG risks, and ranked among the top five industry
leaders globally for ‘Health and Safety’ and ‘Business Ethics
and Fraud’. We are, at time of publishing, also recognised
as a member of the Dow Jones Sustainability Index
(DJSI) Australia, ranking Evolution in the top performing
Australian mining companies for corporate sustainability in
the annual assessment.
Together with our commitments, partnerships
and stakeholder feedback, these assessments and
memberships allow us to track our ESG performance
against relevant standards and peers to deliver continual
improvement.
Feedback from FY20 Investor Surveys confirmed that the
ESG rating organisations that we report to align with their
preferred ESG assessors. We will continue to prioritise
participation with the following rating agencies on ESG
benchmarking:
We validate our sustainability practices through our association with the following industry organisations:
Board Representation
Health, Environment &
Community representation
New South Wales Minerals Council
Queensland Resource Council
Chamber of Minerals and Energy of
Western Australia
Gold Industry Group (Australia)
Lake Cowal Foundation (Australia)
Ontario Mining Association (Canada)
NSW Government Sustainability
Advantage
Yes
Yes
No
Yes
Yes
No
N/A
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Evolution Mining Limited // Annual Report 2020 19
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
S
/
/
Sustainability Report (Continued)
Corporate Governance
Governance Framework
We support the intent of the ASX Corporate Governance
Council’s Corporate Governance Principles and
Recommendations (4th Edition) unless disclosed
otherwise. Our full Corporate Governance Statement is
available on our website1.
In FY20 we reviewed the following policies to respond to
internal or external factors:
■ Anti-Bribery and Corruption Policy
■ Continuous Disclosure Policy
■ Diversity and Inclusion Policy
■ External Communications Policy
■ Shareholder Communication Policy
■ Sustainability Policy (safety, health and wellbeing,
environment, tailings storage facility, risk, social
responsibility and cultural heritage)
■ Strategic Planning Policy
■ Climate Risk Position Statement
■ Code of Conduct
No material changes were made, except for extreme health
events being added to the Climate Risk Position Statement.
Policies are available to view in the Corporate Governance
section of our website2.
A TSF Governance Committee was established in FY18
to provide effective governance and oversight of our
policies, standards and practices with respect to tailings
management. This committee reports through to the
Leadership Team and the Board Risk and Sustainability
Committee and continues to operate as per its Charter3.
Assurance review outcomes
While areas for improvement were identified during
the audit program which included health and safety,
environment, social responsibility, cultural heritage and
TSF management, no material or critical risk actions
were overdue. There were also no overall significant
rated findings from audits, which was also verified by
independent auditors. The management of assurance
activities and of corrective actions (including the
expectation of no overdue material or critical actions) are
also integrated into the Company scorecard and associated
remuneration strategy.
Quarterly
Tailings Storage Facility Governance meetings
Board of Directors
Executive Chairman
Board Sub
Committees
Nomination and
Remuneration
Audit
Risk and
Sustainability
Group Leadership
Team
Senior Executives
Risk management
We have an established, risk-based decision approach that
is supported by the Sustainability and Strategic Planning
Policies, Standards, Risk Management Framework and
supporting sites processes and procedures that aligns to
the principles of the Australian and international standards
and guidance. The Group risk reporting and assurance
control mechanisms are designed to ensure strategic,
operational, legal, financial, reputational and other risks are
identified, assessed and appropriately managed. Matters
relating to sustainability are recorded in a database and
communicated widely across the organisation on daily,
weekly, monthly, quarterly and annual timelines dependent
on the issue. These are reviewed by our Board Risk and
Sustainability Committee4 throughout the year, supported
by regular reviews by the Leadership Team, site leadership
teams and subject matter experts such as the Tailing
Storage Facility (TSF) Governance Committee. Further, an
integrated three level Line of Defence (LOD) program has
been implemented, supported by subject matter experts
and internal and external audit.
1.
2.
https://evolutionmining.com.au/corporate-governance/
https://evolutionmining.com.au/corporate-governance/
3. https://evolutionmining.com.au/tsf-gov-comm-board-charter/
4. https://evolutionmining.com.au/risk-sustain-charter
20 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
S
u
s
t
a
n
a
b
i
i
l
i
t
y
a
t
E
v
o
u
t
i
o
n
l
Two sites
ISO 14001
accredited
all other assets aligned with ISO principles
The financial reporting and control mechanisms are
reviewed during the year by management, the internal
audit process, the Audit Committee and external auditors.
The Group has policies in place to manage risk in the
area of sustainability, with individual annual Risk and
Governance Assurance confirmation letters submitted at
the end of each financial year by the asset management
to the Chief Operating Officer and the Board Risk and
Sustainability Committee.
The Board delegated committees and Leadership Team
regularly review the risk portfolio of the business and the
effectiveness of the management of those risks.
COVID-19
COVID-19 did not materially impact our people or
operations in FY20 and we continue to proactively respond
to the virus.
We operate under specific business continuity plans
developed to minimise risks to our people and communities
and to support the safe production of gold during
challenging periods. These plans are actively reviewed as
part of our crisis management protocols and meet, as a
minimum, local and national regulatory requirements.
Controls implemented included:
■ Regular Operation and Group Crisis Management
situational reports, trigger action review plans
and reviews
■ Enacting strict social distancing protocols including
reducing face-to-face interactions
■
Implementing specific site relevant visitor and
travel protocols
■ Restricting domestic and international travel
■ Suspending activities across most of the Group’s
greenfields exploration projects
CASE STUDY: Mitigating against extreme
weather events at Mt Carlton
■
■
Evolution has implemented strategies to mitigate
against the impact of extreme weather events such as
Cyclone Oma in 2019 which led to extensive flooding at
the Mt Carlton Operation and surrounding regions. In
response to severe weather, the Mt Carlton operation
has strengthened their business continuity planning
strategy. This included the construction of shelter
areas and creek crossings, increased stockpiling of ore
and water management innovation and procedures,
including the use of evaporation fans to ensure that
mine affected water is not discharged offsite.
Increasing flexible working arrangements
Increasing on-site screening, hygiene protocols and
social distancing
■ Ensuring best practice health management including
mental health support
■ Regular COVID-19 communication with the workforce
and all stakeholders
■ Ongoing community support
■ Business continuity, scenario planning and supply chain
reviews completed
We are working closely with regulators, community and
industry groups and independent specialist medical and
occupational health advisors to ensure all operations
are complying as a minimum with agreed protocols and
requirements. We recognise that we play an important role
in supporting the economic security of our families and
communities as the resource industry works to support
community stakeholders through and beyond
the pandemic.
Evolution Mining Limited // Annual Report 2020 21
18%
reduction in Total Record-
able Injury Frequency
100%
ing
of employees received
Code of Conduct train-
l
n
o
i
t
u
o
v
E
t
a
y
t
i
l
i
i
b
a
n
a
t
s
u
S
/
/
Sustainability Report (Continued)
In our local communities, we have:
■ Donated iPads to aged care facilities to ensure residents stay connected to loved ones and have access to online
telehealth services
■ Provided local schools with supplies to assist students transitioning to online learning
■ Supported vulnerable people in our communities through assistance with local foodbanks and Women’s Refuges
■ Supported local emergency services personnel through the provision of personal protective equipment (PPE) such as
disposable gloves, glasses and masks
COVID-19 approach
People
Structure
■ Driven by our values of safety, excellence,
■ Roles and responsibilities appointed
accountability and respect
■ Continued discipline with health and safety practices
■ Sound reporting culture
■ Regular meetings of Crisis Management Team
■ Central storage of all data and information
Process
Communication
■ Risk assessments and Triggered Action
■
Internal – Our people and contractors
Response Plans (TARPs) with ongoing review
■ External – Communities, Government, Industry
■ Supply Chain regularly reviewed
■ Scenarios modelled through the cycle
■
■
People and site response
Commercial and financials
Ethical business
Our Code of Conduct applies to Directors1 and employees2 including contractors and consultants employed to undertake
work on behalf of or for Evolution and subsidiaries.
All employees, contractors and service providers are required to operate and behave in accordance with Evolution’s values of
Safety, Excellence, Accountability and Respect. In FY20, all employees completed ‘Respect & Dignity’ training that included a
section on the Code of Conduct.
100% of employees received
Code of Conduct training
1.
2.
https://evolutionmining.com.au/board-of-conduct/
https://evolutionmining.com.au/empl-code-conduct/
22 Evolution Mining Limited // Annual Report 2020
/
/
S
u
s
t
a
n
a
b
i
i
l
i
t
y
a
t
E
v
o
u
t
i
o
n
l
Evolution Mining Limited // Annual Report 2020 23
Sustainability Report (Continued)
l
e
p
o
e
P
/
/
People
■ 40% increase in safety interactions1
■
18% decrease in Total Recordable Injury Frequency (TRIF)1
■ 62% female graduate intake (50% target)
■ 7% Indigenous workforce2
“As a result of COVID-19, we’ve needed to
respond to the challenging environment
and it’s demonstrated our adaptive culture
and that regardless of the environment, our
people continue to act and think like owners
and deliver real value”
PAUL EAGLE,
VICE PRESIDENT PEOPLE AND CULTURE
Building an exceptional company
FY20 achievements
We are committed to providing an experience for
employees that they genuinely describe as ‘a highlight of
their career’ in which they:
■ Return home healthy and safe every day
■ Have an opportunity to grow, develop and contribute
their knowledge and skills
■ Experience a real sense of ownership for our business
■ Weekly storytelling, information sharing and incident
review sessions
■
100% of significant incidents reviewed with senior
management and front-line leaders to promote learning
across the business
■ 40% increase in safety interactions (with 54,287
recorded compared with 32,588 in FY19)
■ Strong hazard reporting culture (13,526 recorded
■ Feel proud of the contribution that Evolution is making
compared with 13,040 in FY19)
to the community
We offer as many job opportunities as possible to our local
communities, while managing the need to source critical
skills to ensure the viability of our operations and meet
regulatory requirements.
In FY20, we focused on achieving our goal of amplifying
our high achieving culture to create a work environment
based on trust, empowerment and accountability.
18%
reduction
in Total Recordable Injury Frequency1
Safety
“Imagine a workplace where people go home healthier
and safer than when they arrived - this is why we are
committed to providing a healthy and safe workplace
for all.”
FIONA MURFITT,
VICE PRESIDENT SUSTAINABILITY
■
17% improvement in Take 5 pre-start safety checks
(with 207,910 recorded compared with 173,259 in FY19)
■ All Performance Standards audited at assets with no
material findings identified
■ Practiced crisis management and emergency exercises
at all locations, including scenario planning and supply
chain reviews completed
FY20 performance
We are committed to the highest standards of health
and safety leadership for employees, contractors and the
communities in which we operate. Across our operations,
we aim to investigate all safety incidents, and prioritise
peer and leadership safety interactions as we believe an
increase in field discussion and local operational ownership
leads to improved performance.
Our overall safety performance improved in FY20. There
was increased reporting and investigations to prevent
recurrence and a focus on safety risk management
including audits at all sites with no significant findings
identified. These findings were also verified through
external review and audit.
While TRIF reduced by 18% to 6.8 compared with 8.3 in
FY19, this fell short of our target reduction of 34%.
In July 2019 the Queensland mining industry commenced
a state-wide Safety Reset with the 49,000 mine workers
across the state stopping to reflect on tragic industry
incidents over the last 12 months. We held safety resets at
every mine and exploration site including those outside
1.
Safety statistics include Red Lake from 1 April 2020
2.
Include Red Lake operation
24 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
P
e
o
p
e
l
of Queensland to talk about safety and identify what we
could do together to prevent injuries.
Emergency Response Team
FY21 focus
In FY21, we will continue to drive improvements in health
and safety performance which includes reduction in people
being hurt and increased rigour in our risk management.
Targets have also been incorporated into the business
strategy including improving TRIF, increased reporting
transparency, closing material and critical actions on time,
improving in-field leadership and site interactions and
improved incident investigation transparency and learning.
Crisis Management and
Emergency Response Plans
Emergency Response and
Crisis Management
Emergency response Action: to commence
immediately to prevent loss of life, damage to the
environment or property and to minimise harm
Level 1 Response: Operations Emergency Response
Team (ERT) action at a site level
Level 2 Response: Incident Management Team (IMT)
action from site and local external involvement
Level 2.5 Response: Customised grouping of
Leadership Team (CMT sub-team), if required in
support of a site, operations or exploration IMT
level 2 activation
Level 3 Response: Crisis Management Team (CMT)
Leadership Support and Management
The framework above outlines the manner in which
Evolution responds to an emergency or crisis. This
framework is supported by the Crisis Management Plan
that outlines the roles, responsibilities and processes to be
followed by the corporate crisis management team in the
event of a crisis, both at a site and at a Group level.
A CMT exercise was conducted in FY20 and benchmarked
against other similar organisations. The CMT was well led
and supported, with all team members demonstrating
excellent initiative against the agreed CMT tasks and
priorities.
In February 2020 the CMT and on-site teams were formally
activated to respond to the then emerging issue of
COVID-19. These teams continue to meet on a regular basis
to address the ongoing COVID-19 crisis.
We continue to build the capability of 136 members in our
Emergency Response Team (ERT), using both personnel
and resources to support our operations and to assist our
communities through significant incidents or threatening
situations. In FY20, our ERT responded to offsite
emergency incidents within our local communities which
included an off-site fire, motor vehicle incidents, a tyre fire
and a farm accident.
Our ERT also attended Mines Rescue Competitions in
Victoria and Queensland and hosted the New South Wales
Mine Rescue challenge at West Wyalong. Our Cracow ERT
participated in a joint training exercise with the Queensland
Fire and Emergency Services at the Theodore airport.
Health and wellbeing
A holistic, risk-based health and wellbeing program that
encourages mental and physical good health of our people
is effectively deployed across our business. This is offered
to all employees and permanent contractors.
In FY20 more than 78% of people voluntarily participated
in health programs. One of the benefits included the
reduction in high-risk health categories for some
participants. The following consultations were undertaken:
■ 6,828 voluntary one-on-one consultations
with onsite physiologists
■
■
1,367 employees and contractors attended at
least one, with 921 people attending at least
two consultations
139 confidential counselling sessions for
employees and their family members
Over the long term we have seen an ongoing focus in
people’s health, particularly in high-risk health categories.
This was evidenced with a long term reduction in the high
risk health categories for cholesterol (77%), for blood
pressure (73%) and Body Mass Index (26%).
Additional onsite Health and Wellbeing activities include
‘warm-up for work’ sessions, fatigue prevention, health
education and manual handling education sessions and
mindfulness/breathing training.
78%voluntary participation in health
and wellbeing programs
Evolution Mining Limited // Annual Report 2020 25
Sustainability Report (Continued)
l
e
p
o
e
P
/
/
Red Lake Operation - Health and Safety
■
Increased focus on material and critical risk
management
■
Increased reporting and incident review
Creating a diverse and
inclusive workplace
We believe in growing a rich culture, diverse workforce and a
work environment in which every employee is treated fairly,
respected and able to contribute to the business success.
This work is guided by our Diversity and Inclusion Policy1.
In a truly diverse business, everyone is an individual,
and we recognise how they can bring their very best to
work. Across our 2,099 people, we continued to improve
diversity and inclusion through increased participation
for underrepresented people that may face more barriers
than others including Indigenous people, females and our
LGBTI+ community. In FY20 female Board representation
was increased to 25%, our female workforce representation
increased to 17% and our Indigenous workforce
representation increased to 7%2. To increase diversity in
FY20 we:
■ Built cultural awareness through training and
collaboration with our local Indigenous communities
■ Focused on increasing female participation in our
pipeline programs with 62% of our graduate intake
being female (50% target)
■ 64% of vacation students were female (50% target)
■ Doubled the number of female mentee opportunities
through Women in Mining partners
■ Held a second Women in Mining forum where 12 female
employees from other businesses came to network and
receive professional development on career mobility
Our sites offer unique work opportunities and operating
challenges, and we are committed to maintaining a flexible
and dynamic approach to recruitment within a clear
values framework. To better reflect our community, we
embrace and celebrate our different cultural backgrounds.
We do this by observing and acknowledging various
dates and festivities on the cultural calendar throughout
the year. We also work with community partners to help
solve challenges, with a core focus on reconciliation with
Indigenous Australians.
https://evolutionmining.com.au/diversity-inc-policy/
Includes Red Lake Operation
1.
2.
3. https://evolutionmining.com.au/careers/
26 Evolution Mining Limited // Annual Report 2020
We relaunched our career website3 to reflect our culture
and the opportunities at Evolution.
In FY20 we welcomed 338 new colleagues to our
Australian operations and our most significant onboarding
was the addition of 714 new colleagues at our Red Lake
Operation in Canada.
Given the COVID-19 pandemic has restricted access to the
Red Lake Operation, we would like to publicly acknowledge
the remarkable commitment of our team members in
both Australia and Canada for making the acquisition and
ongoing management of the site a success.
We are delivering diversity and equality in the graduate
pipeline and have a clear understanding of how all
candidates move through our selection process. A fifth
cohort of new graduates were welcomed to the business
in January 2020.
Sustainability Report (Continued)
/
/
P
e
o
p
e
l
“The graduate program has provided a clear pathway for
personal development and building skills in my field”
CHARLESE CONOLLY
GRADUATE METALLURGIST
MT RAWDON OPERATION
“Just wanted to say thank you and great job. I truly
believe that everyone at Red Lake admires, respects and
appreciates being a member of the Evolution team.”
PAUL FAULCONER
TRAINER
RED LAKE OPERATION
Employee engagement
We conduct monthly voluntary employee engagement
surveys through a Culture Pulse Feedback Survey to team
members, giving our people an opportunity to let their
leaders and team members know what is important to
them.
During FY20, an average of 53% of team members
responded to the survey. The results identified that we
successfully sustained or improved over the period against
our key culture measures, which are aligned to our values.
In FY20 we added a question on whether our employees
felt they could have open, honest and courageous
conversations to support our commitment to providing
a work environment based on trust, empowerment and
accountability. This question scored a consistent 76/100,
a 5% increase since the beginning of the year. We were
pleased that engagement was at its highest point during
the peak in the COVID-19 crisis.
The success of any engagement strategy is ultimately
measured by how well we retain our talent and in FY20
we were successful in retaining 88% of our team members.
In FY21, we will maintain our focus on attracting and
retaining high-quality talent and continuing to engage
with and develop our people.
Evolution Mining Limited // Annual Report 2020 27
Sustainability Report (Continued)
l
e
p
o
e
P
/
/
Combined score average 78
Change +5
Response rate 53%
Dashboard Summary
Excellence
Respect
Safety
Accountability
Honest Conversations
79
77
84
77
76
Change +6
Change +4
Change +4
Change +9
CASE STUDY: Act Like an Owner -
Processing at Mt Rawdon
Dan Morton (Processing Coordinator) identified an
improvement opportunity during the changing out
of trash screens in the mill. By changing out the
underflow of the trash screens the site was able to run
on one screen at a production rate of 430t per hour as
opposed to 320t per hour in the original configuration.
This allows the site to change between the screens
for maintenance activities without reducing
throughput, resulting in a production improvement of
approximately 580 ounces or an extra A$220,000 of
cashflow annually. It also improves energy use, reduces
risk during maintenance activities, reduces work
required during mill shutdowns and improves health
and safety outcomes.
Recognising and rewarding
our people
At Evolution, we want our team members to ‘Act Like
an Owner (ALO)’ by treating our business as if it is their
own. We also reward employees by issuing them shares
to ensure they share in Evolution’s success. FY20 saw the
continuing of our Employee Share Scheme into its sixth
year and highest ever participation at 99.1%.
Feeling empowered to contribute and make improvements
is central to team member engagement. We seek to
recognise people who display this behaviour through
initiatives and actions that improve safety, reduce costs,
deliver operational excellence, offer environmental
enhancement and make Evolution a safer or more efficient
business in which to work.
In FY20, 196 ALO initiatives were generated across our
operations that delivered significant value for our business
through change, improved safety and innovation. Our
people are being the best they can be, are really making
a difference and are having a great time doing it – making
Evolution a great place to work.
For us, the strategic importance of sustainability
performance is also recognised and linked to
Management’s short-term incentive process. This
process evaluates Evolution’s performance against
established targets including for health and safety, people,
environment, climate risks (water and emissions), social
responsibility and innovation, including ALO contributions.
28 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
P
e
o
p
e
l
Development and retention
Partnerships
The ongoing challenges posed by the COVID-19 pandemic
demonstrates that the ability to learn, relearn, collaborate
and adapt are more important than ever. We are creating
an operating culture in which ongoing learning is built into
the fabric of how we do business.
Our partnership programs foster an environment where
we deliver on our commitment to diversity as an equal
opportunity employer, supporting our employees’ work-
life integration and providing a stimulating and inclusive
environment.
In FY20 our deliberate focus on development, leadership
and retention was measured through:
Work 180
In FY20, we were thrilled to become an accredited partner
with Work 180, who provide applicants with a directory
of Australian employers who support women in the
workplace. This partnership supports our commitment to
attracting greater diversity and women in the workforce
and across the broader resources sector.
■
■
75% of people fulfilling their stated development goals
Improved continuity in our leadership pipeline
effectively retaining and attracting top talent in our
management group
■ The enrolment and participation of 34 of our leaders in
development program despite COVID-19
■ 41% of roles appointed through succession and internal
candidates, an increase of 24% from FY19
This focus on leadership will continue in FY21 to deliver
improved business continuity and leverage our front-line
leadership talent by increasing the percentage of ‘ready
now’ successors for our employees at superintendent level
roles and above, in addition to our manager pipeline.
We reiterated our leadership development through
a revised leadership training and coaching program,
refreshing our Dignity and Respect Training and
implementing our Cultural Competency Framework for
all team members.
Participants in the school partnerships program visiting Mt Carlton Operation.
Evolution Mining Limited // Annual Report 2020 29
Sustainability Report (Continued)
l
e
p
o
e
P
/
/
Johnathan Thurston (JT) Academy
School partnerships
Our ongoing partnership with the JT Academy supports
our commitment to improving access to employment and
training opportunities for local and Indigenous jobseekers
aged between 16 and 25 across Australia. The JT Academy
team facilitated the JTCommunity program in Theodore,
Queensland near the Cracow Operation. The program is
designed to foster self-belief, courage and confidence
and prepare participants well through the job application
and interview stages. The program attracted a total of 47
applicants, 20 of whom identified as being Aboriginal or
Torres Strait Islander.
“The program made me think about me and what I want
and need to do to achieve my goals.”
PARTICIPANT OF JT ACADEMY EMPLOYMENT
WORKSHOP, THEODORE
In FY20, we offered students and teachers from three
schools in Sydney and ten schools in Brisbane a unique
experience that connected classroom lessons as part of the
science curriculum to applications beyond the classroom.
Participants toured our Cowal and Mt Carlton Operations
and listened to talks on what it is like to work in the
gold industry. The excursions raised awareness of our
operations and our industry and showcased the positive
benefits of mining and the potential for future employment
pathways into the industry. We have expanded the school
partnerships into Western Australia around our Mungari
operation.
“A really well-balanced experience which not only
shows the impressive mine operation and mining career
pathways but also the concern with the maintenance of
the local environment and the preservation of Indigenous
artefacts and the inclusion of the Indigenous community”
TEACHER, CANTERBURY GIRLS HIGH SCHOOL
91%of students reported that their interest in
STEM subjects at school increased as a
result of the mine site experience
30 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
P
e
o
p
e
l
Green tree frog at our Mt Carlton Operation – Photo courtesy of Grace Derrick (Evolution graduate employee)
Evolution Mining Limited // Annual Report 2020 31
Zero
material environmental
incidents in FY20
Sustainability Report (Continued)
Environment
t
n
e
m
n
o
r
i
v
n
E
/
/
■ No catastrophic or major (material) environmental
incidents
■
Improved water security with 11% increase in water
reuse compared to FY19
■ Agreed climate risk mitigation strategy and targets,
moving from measuring to planned mitigation
‘As the short-term custodians of
unique environments, we are
committed to delivering an
outstanding level of environmental
performance to return a positive
legacy for future generations’
FIONA MURFITT
VICE PRESIDENT - SUSTAINABILITY
CASE STUDY: Integrated Waste Landform at Cowal
The Integrated Waste Landform (IWL) currently in
construction at Cowal uses site waste rock to construct
TSF embankments which encapsulate tailings. The
practice of utilising waste rock as it is mined to the final
landform meets remediation principles and benefits
people, planet and process:
■ People: Improved safety through improved structural
stability and storage
■ Planet: Non-polluting; eliminates rehandle of
materials. Rehandle is a major contributing factor
to increased CO2-e emissions. Our environmental
footprint is minimised by combining our waste
streams into one final landform. The IWL includes
surface and sub-surface water management to
optimise capture and re-use of water providing
greater water security
■ Process: Planning, construction, operation,
closure and post mine land use are enhanced –
approximately 70% of waste mined in FY21 will
be used in IWL construction. Controlled seepage
systems enable increased reuse of mine water and
reduced demand on raw water which is in demand
for agriculture and municipal supply
■ Future focus: Waste tailings and rock are the
significant considerations for environmental
management. We continuously work to reduce the
volume of our waste streams and as an improvement
option we want to unlock the value to convert our
waste to assets. In FY21 we will explore partnerships
which though research and development will seek to
extract more minerals from the waste streams and
find alternative uses such as use for grouting and
road base
In accordance with our Sustainability and Strategic
Planning policies, we incorporate environmental
management into all areas of operations to manage
the risks and potential impacts through all cycles of the
business. We operate beyond legal compliance to deliver
against our social licence obligations and strive for leading
practice to meet community expectations.
FY20 achievements
■
Identified and workshopped climate-related risks
(including transition risk) and governance, measures
and mitigation opportunities across its operations
■ First phase of aligning with key Task Force on
Climate-related Financial Disclosures (TCFD) Principles
and UN SDGs through the development of our
Sustainability Principles
■ Embedded accountability for our eight environmental
performance standards to lift the Group’s
environmental performance
■
Improved management, governance and assurance
practices for our TSFs
■ Ongoing quarterly environmental assurance reviews
and environmental team engagement to accelerate our
sustainability performance
■ A$400,000 contributed to improve or enhance
environmental values onsite or in communities adjacent
to our operations
■ Embedded risk mitigation strategies and targets for
FY21 leveraging off the detailed measures captured
from previous years
■ Revised our Climate Risk Position Statement
FY21 focus
■ Balanced Business Plans include the requirement to
accelerate sustainability performance and includes the
introduction of measures and targets associated with
the reduction in use of raw water and emissions against
production metrics
■
Increased focus on innovation, technology and
renewables use
32 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
Zero
material environmental incidents in FY20
Environmental Performance
Standards
Our Sustainability Performance Standards contain eight
key business risk areas related to environment: air quality,
biodiversity, rehabilitation and mine closure, resource
efficiency and emissions, tailings storage facilities, waste,
waste rock and ore, and water.
All our sites and workplaces are required to meet the
Standards which are audited on a regular basis. Details
of the performance of the eight business risk areas are
available on our website1.
Environmental data (water, air emissions and energy)
at our operations is collated and verified by third party
auditors Greenbase. FY20 data can be found on p.49-50.
They are reported monthly and measures have been set to
establish baseline improvements year on year.
Climate-related risks,
emissions and energy
Evolution acknowledges that climate-related risks, both
transitional and physical, have the potential to impact
our business, communities and the environment. We are
committed to understanding and proactively managing
these risks.
Sound risk management practices and strategic planning
are integrated across all areas of our business, leveraging
off technology to ensure projects return long term value.
Comprehensive Board-level governance and oversight
are applied.
In FY20, as a first step towards the TCFD framework,
emerging climate-related risks were identified and included
in the Risk Register.
Climate-related risks are actively reported, and targets have
been developed for FY21 to build on opportunities, improve
energy efficiency and water security, prepare for extreme
weather and health events, (including pandemic and
smoke impacts from fires) and adopt responsible water
management practices. Specific targets have also been
captured in the Balanced Business Scorecard, including
implementing community plans, year-on-year reduction of
1.
https://www.evolutionmining.com.au/environment
/
/
E
n
v
i
r
o
n
m
e
n
t
CO2-e emissions per tonne of material mined, and year-
on-year reduction of raw water demand per dry tonne
milled based on historical data. The case studies for water
efficiency at Cowal, extreme weather at Mt Carlton and
the management of COVID-19 demonstrate our ongoing
commitment and mitigation of climate-related risk.
The climate-related physical risks identified as applicable to
our business are as follows:
■ Energy and emissions: We keep informed of
changing regulations, including policy, codes
and principles to help manage transition
risk. We engage with our community and
stakeholders to ensure we are operating with a
holistic mindset. We remain agile in response to
changing markets and explore innovative technology
including renewables to improve our resilience to
resource financial and supply uncertainty. We aim to
contribute positively to local, regional and national
sustainability efforts
■ Water security: Production is reliant on the
availability of water. In the short term, the
Group is adapting to a changing water security
environment by working towards reducing
demand and reusing a greater portion of water. In
the medium to long term, we are investing in water
recycling and reuse strategies to improve efficiencies
■ Extreme weather events: We ensure we
minimise the impact of extreme weather
events on our operations through business
continuity planning. This includes the
consideration of potential climate impacts in the design
and construction of new and upgraded assets and
alternate supply chains
■ Extreme health events: the events of
COVID-19 this year have impacted globally
and have highlighted the need to act early
and collectively to mitigate loss, both of life
and financial. We also recognise that we
must remain prepared to manage these events and
support the communities in which we operate with
their recovery efforts. We have integrated this into our
scenario plans, supply chain reviews and we have stress
tested our balance sheet and our financial capacity
Evolution Mining Limited // Annual Report 2020 33
Sustainability Report (Continued)
t
n
e
m
n
o
r
i
v
n
E
/
/
CASE STUDY: Pumped hydro
renewable energy at Mt Rawdon
CASE STUDY: Energy efficiency
initiatives at Cowal
During FY20, options were identified to reduce energy
use and emissions at the Cowal Operation. Through
remote monitoring and analysis of the processing
plant using business intelligence software MillROC,
processing efficiency was optimised and electricity and
inputs demand in the processing plant were reduced.
The MillROC efficiency program also identified
opportunities to reduce wear and grinding media
requirements to achieve optimum grind in the milling
circuit for improved gold recovery.
Water management
We recognise the importance of water to our business
and our communities and take a proactive approach
to responsible water management and security. Our
standards aspire to reduce the demand for fresh water and
the overall requirement for water in our operations. The
water management performance standard ensures that
our operations effectively manage water, including process
water, stormwater, discharges and dewatering activities.
FY20 achievements
■ 85% water utilised for operations was recirculated for
reuse onsite
■
11% increase in water reuse between FY19 and FY20
■ 0.74kL average water demand per tonne of ore milled
at all operations
Our total water withdrawn increased by 21% in FY20. The
increase in water withdrawn was due to mine dewatering at
all operations with increases at Mt Carlton and Mungari.
Total water recycled and reused increased by 11% between
FY19 and FY20. We use recycled water primarily to process
ore and in other activities such as paste fill, irrigation, dust
suppression and construction.
Operations prepare for seasonal variations in water flow
and maintain routine dewatering activities to satisfy water
licence conditions. Probabilistic site water balance models
are used to predict water flow and requirements during
droughts and stormwater flows at operations.
In FY20, one uncontrolled release of water of more than
10kL occurred. Cracow had a 11.7kL release of mine affected
water which was contained with no environmental harm or
enforcement action.
We are progressing with the feasibility project to
integrate renewable energy infrastructure at the
Mt Rawdon Operation. The pumped hydro scheme
would entail the use of the open pit void as the lower
reservoir and the construction of an upper reservoir.
There is potential for long-term benefits to the region
and economy should the project become a reality.
Emissions reporting
Each year, we submit annual reports1 for Australia’s National
Pollutant Inventory (NPI) and the National Greenhouse
and Energy Reporting Act 2007 (NGER Act) to estimate
greenhouse gas (GHG) emissions and energy use at our
Australian operations.
In FY20, we developed baseline data and analysis for each
operation to understand the source of peak energy use
and emissions. We will continue this work in FY21 through
a newly formed Resource Efficiency Working Group that
aims to implement strategies to reduce climate-related
risk through analysis of past performance and sharing of
innovation and technology initiatives.
Emissions performance
Overall, the Group’s total GHG emissions increased 3%
compared to FY19, with a 2% increase in Scope 1 emissions
and a 4% increase in Scope 2 emissions. The increase is
largely a result of an increase in activity at Mt Carlton and
an increase in electricity purchased at Cowal. In line with
the increase in emissions, energy consumed also increased
by 3%.
At our Cowal Operation total Scope 1 emissions were stable
compared to FY19 with diesel use (predominantly for
mining) decreasing by 2% and LPG (used in processing)
increasing by 26%. Electricity use increased by 6% in
line with a 7% increase in ore processed. However Scope
2 emissions increased by 5% due to NSW grid factors
increasing. Electricity use increased by 6% in line with a
7% increase in ore processed.
At our Mt Carlton Operation, emissions increased in
FY20 due to underground developments and process
plant upgrades. This resulted in Scope 1 and Scope
2 emissions increasing in comparison to production
metrics. These developments, along with the construction
of a new TSF, support life of mine (LOM) ore processing
and long-term storage of by-products. The use of
enhanced water evaporation powered by diesel has been
an integral part of a new water management system and
has led to Scope 1 emission increases.
1.
https://evolutionmining.com.au/environment
34 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
In FY21, there is a focus on reducing the volume of fresh
water used and increasing the portion of water reuse for
all operations.
CASE STUDY: Cowal water usage
During summer 2019/20, the Lachlan catchment of
NSW in which our Cowal Operation is located faced
Level 3 water restrictions due to prolonged drought
conditions. Although our mining operations were not
materially impacted by the restrictions, agricultural
and municipal areas in the region were. Evolution
responded by adopting a regional mindset to identify
water saving measures at the Cowal Operation. After
polling 300+ employees on ways of decreasing raw
water use and demand, our Cowal Water Strategy
Group introduced a series of initiatives that included:
■
■
Increasing reuse of mine water from current
47% average
Increasing site water storage capacity from
725ML to 1080ML
■ Reducing the operation’s reliance on fresh water by
increasing saline groundwater use from 8% (2ML)
per day to 16-20% (4ML) per day
■ Reducing water demand for the operation from the
current 24ML per day
Waste management
The major waste streams in mining are tailings and
waste rock. Minor waste streams include industrial waste,
organic and inorganic waste. The management of waste
is supported by group wide policies and performance
standards and local operating procedures.
All waste streams are monitored through regular
inspections and waste tracking.
Operations use specialist, licenced waste management
service providers and tracking arrangements for the
approved and safe disposal of transfers of obsolete
or used hazardous materials. Generally, chemicals are
consumed in the process. Regulated waste streams are
transferred off-site for industrial re-refining (for reuse) or
converted into energy.
Operations seek to reduce impact to our communities and
the environment through elimination, reduction, recycling
and reuse of waste streams in favour of disposal.
■ Elimination: waste converted to energy (pre-feasibility
studies in progress)
■ Reduction: 43% reduction in hazardous chemical use
achieved at Cracow and Mt Rawdon has significantly
increased their haul truck hours reducing the
environmental footprint
/
/
E
n
v
i
r
o
n
m
e
n
t
■ Reuse: Waste rock is used for the construction of
TSF embankments at most of our operations forming
Integrated Waste Landforms (IWL) reducing our
environmental footprint
■ Recycle: investigating sustainable recycling of tyres and
PPE clothing options with community partners
43%reduction in hazardous chemical use at Cracow
CASE STUDY: Reduction in reagents
use, Cracow
In FY20, a hazardous chemical reduction project at
the Cracow Operation was completed. This resulted
in a 43% reduction in the consumption of critical
hazardous chemicals in the process plant - hydrogen
peroxide consumption was cut by 75% and cyanide
consumption by 20% relative to FY19. The resulted in
a reduction in exposure to the chemicals within the
local environment of the operation and a reduction
in transport requirements and tailings disposal. This
change was completed without any negative impact
to recovery. In FY21 the learnings from this will be
applied to other operations to increase the benefits to
communities and the environment.
Tailings management
We maintain 11 TSFs in Australia, eight of which are active,
one under construction and two decommissioned.
In producing 746,463oz gold, 15.06Mt of ore was
processed and deposited into storages.
More than 700kt of approximately 1.5Mt tailings were
recovered for reuse at the Mungari Operation.
Our tailings governance and assurance frameworks
incorporate the six key components of the Tailings
Governance Framework as outlined by the International
Council on Mining and Metals (ICMM).
Our Tailings Storage Facility Governance Committee
provides effective oversight of our policies, standards and
practices with respect to tailings management.
A Group Head of Technical Storage Management was
appointed in FY20 to oversee such operations and gain
greater insight into the risks and mitigation potential
associated with TSF management.
Evolution Mining Limited // Annual Report 2020 35
Sustainability Report (Continued)
t
n
e
m
n
o
r
i
v
n
E
/
/
Quarterly performance assessments are completed for
each of our operations, the outcomes of which are reported
to the Board via the Risk and Sustainability Committee.
Dam break studies have been completed for all active
TSFs. Additional monitoring controls are progressively
being implemented with the adoption of Interferometric
Synthetic Aperture Radar (InSAR) technology which uses
satellite data to study deformation. These audits also
ensure that operations meet the requirements for the
characterisation of tailings, protection of wildlife, protection
of groundwater, prevention of uncontrolled releases to the
environment, management of process fluids and planning
for closure and rehabilitation of facilities.
The Board and Leadership Team completed tailings
fundamental training to further develop their knowledge.
Personnel from all operations who are responsible and
accountable for tailings management have commenced
a tailings training program delivered internally in FY20,
supported by sites, subject matter experts and an
independent expert.
Life-of-mine planning has been further integrated into
operations with the continued construction of IWLs,
in-pit deposition and reprocessing of tailings. Risk is
further reduced through annual improvement planning
and removal of tailings liquid for reuse and harvest of
tailings for repurposing. All tailings facilities effectively
contain tailings on land in built impoundments with plans
to expand to in-pit depositions. There are no controlled
tailings releases to natural water bodies (lakes, rivers) or
the ocean.
We regularly audit the Group’s TSFs to ensure that
operations meet the requirements for the characterisation
of tailings, protection of wildlife, protection of groundwater,
prevention of uncontrolled releases to the environment,
management of process fluids and planning for closure and
rehabilitation of facilities.
Ongoing efficient recovery of tailings decant water for
reuse is essential for water security by limiting potential
to impact the environment and reducing demand on raw
water supplies. We adopt cyanide destruction systems to
reduce the concentration of cyanide discharged to our
facilities and Cowal and Red Lake are certified against the
International Cyanide Management Code.
Approximately
45%
of solid tailings at Mungari being
reused as paste fill
1.
https://evolutionmining.com.au/compliance/#cowalpart
36 Evolution Mining Limited // Annual Report 2020
CASE STUDY: Repurposing
tailings at Mungari
Tailings are harvested at the Mungari Operation
for repurposing. This reduces the size of the
operation’s tailings output which creates space and
reduces geotechnical risk. The tailings are used for
grouting underground to improve ground stability.
Over 1.5M tonnes of ore was processed in FY20 with
solids disposed to tailings and over 700kt of tailings
were harvested for reuse, representing approximately
45% of the solids disposed to the facility being reused.
Waste rock and ore management
Significant work is undertaken to reduce and mitigate risks
associated with waste rock at our operations. Material
risks associated with waste rock emplacement include
geochemical risks around potential leachate impacting
environmental values and risk of landform structural failure.
In FY20, the Australian operations produced 31.56Mt waste
rock to extract 15,064Mt ore. This represented a 2.12 ratio of
waste to ore and an improvement on the 2.64 FY19 ratio.
Each operation is unique in terms of potential for acid mine
drainage (AMD), neutral mine drainage (NMD) and saline
drainage (SD) impact on the surrounding environment.
Where Potentially Acid Forming (PAF) waste rock is
suspected or known to occur, the operation implements
progressive rehabilitation activities to ensure the receiving
environment is not impacted by leachate or potential failure.
Rehabilitation and closure
management
As the short term custodians of the land in which we
operate, we recognise mining as a finite resource. As
such, the need to integrate future land use into planning
is acknowledged. We also aspire to relinquish our mining
lands for future sustainable purposes, be it traditional
land use, conservation, agriculture or future clean energy
industries.
■ All operations have mine closure plans. An example of a
Rehabilitation and Land Use Management Plan can be
found for our Cowal Operation on our website1
■ All operations engage with external stakeholders
regarding mine planning
■ 3,437 hectares of land approved for disturbance
covered by rehabilitation liability
■ 3,028 hectares of land disturbed by mining activity
(Australian operations only as of 30 June 2020)
/
/
E
n
v
i
r
o
n
m
e
n
t
$400k
contributed to enhance
environmental values
onsite or adjacent local
communities
Sustainability Report (Continued)
■ All operations are undertaking progressive
rehabilitation and reclamation activities
■ External Assurance Audits have been undertaken in
FY20 to verify and validate closure costs
CASE STUDY: Mt Rawdon wetlands
The Mt Rawdon Operation in central Queensland
continues to collaborate with CSIRO on a biological
water treatment system1 to effectively treat mine
affected waters post closure.
The wetlands are intended to treat water in mine
water ponds. If successful, the wetlands would provide
a sustainable passive water treatment option post
closure. A constructed wetland could potentially be a
cost-effective process to treat water to a stage where
it is safe to release back into the environment. The
Wetland Pilot Project was constructed concurrent with
active mining and is intended to form part of the mine
closure plan.
Vacation Student Elynee Tyson involved in the Wetlands Pilot Project
at Mt Rawdon
Biodiversity
Rich and sensitive biodiversity exists at all our operations.
We believe that everyone has a role to play in demonstrating
our environmental responsibility by identifying biodiversity
related risks and contributing to enduring environmental
benefits at every stage of our operations.
1,467ha
of land managed under biodiversity
management plans
1.
2.
https://ecos.csiro.au/water-treatment/
https://evolutionmining.com.au/compliance/#cowalpart
In FY20:
■ All operations have undertaken biodiversity
assessments prior to disturbance (under our
ownership period)
■ 4,010 hectares of land assessed and mapped for
biodiversity
■
259 hectares of land adjacent to nationally important
biodiversity (Lake Cowal)
■ All operations have fire, pest and weed strategies
to protect biodiversity and Management Plans. An
example of a Management Plan can be found for our
Cowal site on our website2
■
1,467 hectares of land managed under biodiversity
management plans (protected)
■ All operations performed biodiversity self-assessment
and internal assurance audits
Red Lake State of Play - Environment
Top three environmental focus areas:
■ Balmer Lake and Creek management: Recovery
plan in action
■ Arsenic Trioxide: Underground recovery and
stabilisation in autoclave
■ Groundwater management: Implementation plan
for remediation underway
Sustainability projects
We believe in the power of partnerships, which is why we
contribute to projects that are relevant to our communities
and leave a positive environmental impact.
In FY20, over A$400,000 was contributed to improve the
environment at our operations or in communities adjacent
to our operations.
Partnerships with North Queensland Dry Tropics and James
Cook University were developed to support two projects
which aim to protect and enhance the Great Barrier Reef,
the world’s largest coral reef system. We contributed:
■ A$200,000 over two years to a project which enhances
bush scrub tributaries to the Great Barrier Reef
■ A$218,000 over 2-3 years to support the protection
and conservation of the Great Barrier Reef’s
Conservation Park (Yellow) Zone
A$400k
contributed to enhance environmental outcomes
onsite or at adjacent local communities
Evolution Mining Limited // Annual Report 2020 37
Sustainability Report (Continued)
t
n
e
m
n
o
r
i
v
n
E
/
/
Environmental reporting
and compliance
We are pleased to report that there were no material
environmental incidents during FY20.
All environmental incidents, including breaches of any
regulation or law are recorded in a Group wide reporting
system. Incidents are assessed according to their actual
or potential environmental consequence. Environmental
incidents are tracked and managed based on risks factors
such as spill volume, incident location (onsite or offsite)
potential or actual environmental impacts and legal
obligation.
In FY20:
■ No fines were received for environmental events
■ No environmental events which lead to operational
interruptions with substantial (more than US$10,000)
impacts on costs/revenues
■ Quarterly Environmental Assurance Visits were
conducted at each operation, with findings shared
with both site and Group leadership
■ Monthly Environmental Network meetings undertaken
to share and learn from incidents and review
assurance findings
Our Environmental Assurance Audit Program is undertaken
by Group and other subject matter experts with quarterly
assurance visits to each of our operations. Assurance visit
and audit recommendations are tracked and followed up
via our Group-wide incident management system.
"Partnerships with North Queensland Dry Tropics and James Cook University to protect and enhance the Great Barrier Reef"
38 Evolution Mining Limited // Annual Report 2020
/
/
E
n
v
i
r
o
n
m
e
n
t
Rural Aid - Buy A Bale (North Yalgorgrin, NSW) hay drop
Evolution Mining Limited // Annual Report 2020 39
Sustainability Report (Continued)
Social
responsibility
y
t
i
l
i
b
i
s
n
o
p
s
e
r
l
a
i
c
o
S
/
/
■ 65% local employment
across our operations
■ A$79.2M in direct spend
with local organisations
■ Over A$5M in community
contributions1
“At Evolution we are extremely proud of the new and continued
partnerships we have fostered with our local stakeholders including
Indigenous organisations, First Nation Groups and community groups”
BOB FULKER
CHIEF OPERATING OFFICER
We understand that we have an obligation to create shared value for all our stakeholders.
Robust relationships built on a foundation of trust are critical throughout the entire mining cycle, from exploration and
development through to operations and closure. We view them as an essential part of securing and maintaining our social
licence to operate.
FY20 achievements
■ A$1.56B contribution to the Australian and Canadian economies
■ A$955M in goods and services payments to suppliers
■ A$130.0M to local and regional businesses and organisations including A$79.2M in direct spend with local organisations
■
■
100% of Community Plans Actions completed
Increase in ‘social licence to operate’ scores from Stakeholder Perception Survey
■ Committed A$1.5M to support farming families and communities, in collaboration with Rural Aid
■ Seven new Sustainability Projects
Community Principles
Our behaviours are always guided by our Community Principles. This ensures that:
■ Everyone has a role to play in building
■ We work closely with our stakeholders,
positive community relations
■ We consider our community impact
with every decision that we make
■ We aspire for every interaction with our
community stakeholders to be positive
and aligned with our values
■ We listen to and communicate
regularly with our stakeholders about
the things that matter to them, in an honest,
timely and transparent way
sharing ideas and identifying opportunities for
collaboration
■ We value our stakeholders, respect their beliefs,
backgrounds and aspirations and aspire to achieve
outcomes of mutual benefit
■ We strive to always leave a positive
legacy, so that our communities are
better off overall for Evolution having
been there
1.
Includes Sustainability Projects, sponsorships and donations spend in FY20
40 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
CASE STUDY: Project LoKal
Working Hub Kalgoorlie
We are proud to partner with the Kalgoorlie-Boulder
Chamber of Commerce and Industry to provide
Kalgoorlie with its very own co-working space that
promotes retaining skills in the community and
enhancing community liveability. The LoKal Hub in
Kalgoorlie-Boulder aims to foster innovation and
growth by providing the Kalgoorlie community people
and businesses with a smart space equipped with
modern technology in a prime location. The space
boasts a child friendly zone that includes a playroom
and parents coworking area which affords working
parents with an alternative option to childcare.
Listening to our stakeholders
Trusting relationships are built by regularly listening
to, and engaging with, our communities and other key
stakeholders in an honest and transparent manner.
We recognise the important role the operations serve as
catalysts for social and economic development in our host
communities and beyond. Therefore, all our operations
support a wide range of community development
initiatives based on the local socioeconomic environment
and host community needs.
Each of our communities are unique and have different
priorities and goals. It is therefore an imperative that we
identify common goals that foster a collaborative approach
to achieving community resilience and building effective
relationships with all stakeholders.
Community Relations plans
Every Evolution operation and greenfield exploration
project has a targeted plan for partnering with local and
regional stakeholders to generate shared value. Each plan
is developed following a review of:
■ What our stakeholders are telling us through
consultation records
■ Stakeholder Perception Survey results and
recommendations
■ Stakeholder identification and mapping
■ Community/regional projects and priorities
■ Strategic operational and exploration objectives
for each site and for Evolution
■ Progressive rehabilitation planning and current
life-of-mine
/
/
S
o
c
i
a
l
r
e
s
p
o
n
s
i
b
i
l
i
t
y
In FY20, 100% of Community Relation Plans actions were
completed.
Community Relations planning and success is tracked
through our Balanced Business plan reporting.
High
approval
Social Licence to Operate
2020 Stakeholder Perception Survey
In FY20, the fourth biennial Stakeholder Perception Survey
was conducted to gauge stakeholder sentiment within
communities local to our operating sites, focusing on
reputation, quality of relationship and communication.
The Stakeholder Perception Survey was undertaken by
Deloitte acting as an independent external facilitator.
A total of 100 in-depth surveys were undertaken with key
stakeholders, supported by a public opinion poll involving
300 participants contacted and surveyed within the
postcodes of our operational communities.
Each site provided a list of identified stakeholders who
were invited to participate in in-depth telephone interviews.
The stakeholder mix included local community and
environment groups, education providers, employees,
government bodies, local residents and businesses and
Indigenous Groups.
There was widespread acceptance of our activities and an
overall Social Licence to Operate score of 4.21 (FY18: 4.06)
out of 5, placed at the upper end of the ‘high approval’
category. For comparison, Deloitte prescribes the mean
score in over 2,000 cases of social licence studied globally
as 3.39.
Our ‘Reputation’ increased to 4.16 (FY19: 4.08) and the
percentage of stakeholders who think our relationship is
“getting better” increased to 51% (FY19: 38%).
Evolution Mining Limited // Annual Report 2020 41
High approval
revalidate the controls in place
Sustainability Report (Continued)
y
t
i
l
i
b
i
s
n
o
p
s
e
r
l
a
i
c
o
S
/
/
SOCIAL LICENCE LEVELS
Range
5.00
Category
Full trust
4.30
3.93
3.56
3.08
2.40
1.00
Low approval
High acceptance
Low acceptance
Withdrawn
Evolution score 4.21
The Social License to Operate score was strengthened
through stakeholder relationship development and
increased economic and other impacts. In FY21 and beyond,
we will further leverage our social capital and collaborate on
projects to help increase community resilience and broaden
the economic foundations and opportunities within local
communities. We will also build upon our relationships
with local councils and industry bodies to develop regional
solutions for ongoing economic viability.
Respecting the culture of
Indigenous peoples
We respect the role of the traditional custodians of the land
on which we operate, and value the partnerships we have
built with them.
Securing the support of communities in which we operate
is core to our operations and ongoing success as a
business. It is important that we form trusting and mutually
beneficial relationships with our Traditional Custodians and
First Nation Groups, supporting their goals and protecting
their cultural heritage.
How we engage with the Traditional Custodians and
First Nation Groups is outlined in Evolution’s Social
Responsibility Performance Standards.1 Each of our
operations has a dedicated community team that liaises
with our Traditional Custodians and First Nation Groups to
oversee the relationship agreements we have in place and
to ensure that we are focused on enhancing the outcomes
for Indigenous people and protecting their cultural
heritage.
Significant industry-events which occurred in Australia in
FY20 which adversely affected cultural heritage prompted
us to:
■ Review all cultural heritage audit reports including
Board oversight
■ Review our sites’ areas of cultural sensitivity and
■ Engage with communities to acknowledge the
significant impact and to re-affirm our commitment to
our ongoing relationships and continued protection of
cultural heritage
CASE STUDY: Yalga-binbi Training Centre
Based in Bundaberg, Central Queensland, Yalga-
binbi Institute for Community Development is an
Indigenous based training organisation that provides
skills and knowledge to help build confidence amongst
Indigenous and non-Indigenous people as they embark
on new careers and challenges. We are proud to
contribute to the ongoing sustainability of the Institute
by supporting the inclusion of an Alternative School.
The partnership will enable the Institute to grow their
existing Environmental Marine Training Centre facility
by accommodating the Alternative School, providing
at-risk youth more opportunities to engage and learn.
‘It’s critical in the challenging times we live in that
affordable and relevant educational opportunities be
available for the most vulnerable of our community’
CEO, YALGA-BINBI INSTITUTE FOR COMMUNITY
DEVELOPMENT
Investing in and giving back
to our communities
We invest in and partner with our communities to
achieve meaningful outcomes and generate shared value.
We share the economic benefit by, wherever possible,
prioritising local procurement and local employment and
training opportunities, particularly for our local Indigenous
communities.
Investment in our communities includes sponsorship
of local community events and organisations, provision
of local emergency response support, partnering with
community stakeholders on sustainable development
projects and working with their local needs in times of
hardship, such as through COVID-19.
We consider our community investment in two streams:
Group Sponsorship and Donation Programs; and
Sustainability Projects (previously referred to as Shared
1.
These are part of the Sustainability Performance standards and can be found at https://evolutionmining.com.au/wp-content/uploads/2020/09/EVN_COR_
STD_001-Sustainability-Performance-Standards.pdf
42 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
S
o
c
i
a
l
r
e
s
p
o
n
s
i
b
i
l
i
t
y
Value and Environmental Enhancement projects).
We are guided by our Group Sustainability Investment
Framework and have a set of community and business
value drivers.
Sponsorships and Donations
Local sponsorships and donations are managed at an
operational level and aim to make positive impacts to
economic development, youth, health education and
environmental outcomes.
Sustainability Projects
These are key to driving our approach to community
investment which aims to leave a positive legacy. They
differ from the Sponsorship and Donation program
in being more future-focused and seeking to add
sustainable value to the community or region, and
environment beyond the life of mine.
In addition to community or regional outcomes,
we seek to invest in opportunities that go above
and beyond our obligations at an operational level
to support outcomes that will enhance industry
reputation locally, regionally, nationally
or internationally.
Supporting local and regional
economies through Rural Aid
Many of our employees, communities and landholders
have been impacted by the natural disasters that
affected Queensland and New South Wales. Some of
the local communities have been among the hardest hit
having endured one of the longest droughts in Australia’s
recent history.
We partnered with Rural Aid to make a larger impact
across our regions and ensure that mental health and
family support, as well as practical on-the-ground support,
reached the right people through Rural Aid’s extensive
networks and relationships in rural Australia.
We committed A$1.5 million in FY20 to support struggling
farming families and communities. This support provided:
■
■
2,736 large bales of hay to over 200 thankful farmers
199 farmers and their families with financial assistance
to pay bills and spend in their local community,
empowering farmers and their families to buy their
essential items while boosting local economies
■ The gift of music to rural schools through a donation of
instruments to Gayndah children as part of the creation
of a new ensemble aimed at building self-esteem and
self-confidence, developing new skills and a life-long
love of music
“Many thanks for the hay delivery. What a great sight, seeing that road train come through our front gate full of beautiful
hay for our sheep.”
T. MCINTYRE, FARMER, NSW, AUSTRALIA
Participants in the school partnerships program at the Mt Carlton Operation
Evolution Mining Limited // Annual Report 2020 43
y
t
i
l
i
b
i
s
n
o
p
s
e
r
l
a
i
c
o
S
/
/
Sustainability Report (Continued)
We continue to explore ways to provide further support for
Rural Aid in their efforts to meet community needs.
Local employment and procurement
CASE STUDY: Rural Fire Service donations
Evolution donated A$1.5 million to Queensland
Rural Fire Service and New South Wales Rural Fire
Service (A$750,000 each). These volunteer-based
organisations are supported by community generosity
and fundraising, enabling them to provide important
community services including fighting fires, fire
prevention, deployment for assistance during disasters
and community education programs. Evolution’s
donation will assist these Australian fire brigades to
replenish equipment loss, provide vehicle maintenance
and cover volunteer expenses without them having to
seek donations or fundraise in communities already
recovering from recent bushfires.
We recognise that one of the primary benefits of our
operations is the substantial local employment and
business opportunities available for local stakeholders.
By maximising local employment and procurement
expenditure, we can play an even greater role as a catalyst
for social and economic development in our communities.
Recent successes in this area include continuation of safety
equipment supplies from providers in the regions near our
mining operations, awarding of maintenance contracts
to local and regional suppliers, along with various other
businesses continuing to have the opportunity to deliver
goods and services into our operations.
In FY20, A$79M was directly spent with local organisations
and 65% of our employees are local.
Throughout FY21, we will develop systems and
processes to track our local procurement spending more
systematically at all sites.
Group sustainability investment framework
Attraction and Retention
Build Community
Advocacy
Enhance Outcomes for
First Nation Groups and
ATSI* people
Innovation and Industry
Relevance
Raise awareness
and strengthen reputation
of Evolution/mining sector
in broader community
Attract younger
generation to careers with
Evolution/the mining sector
Demonstrate
industry relevance (now and
in the future)
Demonstrate our respect
and accountability for any
disturbance
Unlock value for Evolution/
mining sector
Foster trust in mining/
gold sector
Partnerships that build
capacity for the future
Support leading practice
and new approaches in:
■ Environment
■ Safety
■ Discovery
■ Operations
■ Technology
■ Community outcomes
Grow Evolution’s brand as
an employer of choice
Touch the hearts of
our local, regional and
national communities
Develop/support actions to
help close the gap:
■ Health
■ Education
■ Employment
* Aboriginal or Torres Strait Islander
Grow understanding
of modern mining practices
44 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
S
o
c
i
a
l
r
e
s
p
o
n
s
i
b
i
l
i
t
y
FY20 sustainability projects
Human rights and modern slavery
Shared value at Evolution is a fundamental process of
using business resources and strategic investment to
help drive social, economic and environmental progress
within our local communities. In FY20, we approved seven
Sustainability Projects that are driving social impact across
a number of local community and stakeholder groups
where we operate. Our Sustainability Project Value Drivers1
guide our investment opportunities.
CASE STUDY: Somewhere
Down the Lachlan Sculpture Trail
This project will link Lachlan and Forbes Shire’s to
encourage tourism in the region and promote the
Wiradjuri culture. The project has come to life after
three years of meticulous planning with the 22m long,
5.5m tall galvanised steel goanna named Varganus
(Gugaa) being the first addition to the trail. Coupled
with the annual Grazing Down the Lachlan event, it
also presents an opportunity to showcase the local
produce. Evolution’s partnership with this project will
see another two works of sculpture art to be installed
later in 2020.
1.
https://evolutionmining.com.au/social-responsibility/
Our operations and activities may impact a broad range
of human rights. As part of our commitment to be a
responsible business, we recognise the important role and
responsibility we have in respecting the human rights of
our stakeholders.
In FY20, human rights and modern slavery awareness and
compliance into the various supply chains continued to be
embedded across the Evolution group. We fully endorse
the Modern Slavery Act (MSA) and expect our suppliers
to not only align with our core values of safety, excellence,
accountability, and respect, but ensure our supply chains
are not at risk of modern slavery or other breaches of
human rights.
A Modern Slavery Statement will be developed by
management for approval by the Board in FY21.
Key FY20 initiatives achieved included:
■ Rollout of an MSA awareness and education pack to
each Evolution site
■ Review and update of procurement market
engagement materials to accommodate questions
for suppliers to address MSA compliance and enable
tender evaluation panels to assess
■ Development of an MSA questionnaire for issuance to
new vendors as part of on-boarding compliance, and
distribution to existing vendors in the Evolution supplier
base to assess ongoing compliance
■ Undertaking further questioning and review of suppliers
considered to be at higher risk of modern slavery in
their supply chains
Somewhere Down the Lachlan sculpture trail - steel goanna named Varganus is the first addition to the trail
Evolution Mining Limited // Annual Report 2020 45
Sustainability Report (Continued)
Supply chain and procurement
Contractors and suppliers are a crucial part of our business. We rely on them to support our overall operating strategy and
maximise efficiencies. Our supply chain includes:
y
t
i
l
i
b
i
s
n
o
p
s
e
r
l
a
i
c
o
S
/
/
Exploration & discovery
■ Drilling contractors
■ Geology and geophysical
contractors
■ Analytical laboratories
■ Surveying
■ Earthmoving contractors
■ Environmental and water
consultancy
■ Health and Safety specialists
Transportation
■ Freight services
■ Haulage services
■ Port services
■ Stevedoring
■ Ship
Support Services
■ Accomodation services
■ Power, communication and
Information Technology services
■ Insurance and Workers Compensation
■ Employee benefits
■ Personal protective clothing and
equipment
■ Medical, health and safety services
■ Labour supply
■ Water and waste management
■ Legal and Specialist support
Processing
Mining
■ Shutdown contractors
■ Supply of grinding media and
flocculants
■ Chemical supply and maintenance
■ Lab services
■ Civil contractors
■ Fuel and gas supply
■ Underground contractors
■ Cement supply
■ Explosives supply
■ Fleet, maintenance, parts and
equipment
■ Fuel, oil and tyre supply
■ Blasting software and consultants
■ Mining communications
Our procurement activities include measures to assess
vendors on their social and environmental practices. Market
engagements for tender activities include evaluation of
safety and environmental performance and compliance
to ensure our business engages with socially and
environmentally responsible vendors.
Our procurement considers sustainability as part of our
tender process by assessing potential suppliers through
a questionnaire. Focus areas include environmental
performance, local and Indigenous sourcing, modern
slavery, health and safety and support for the workforce,
contractor management, compliance and governance.
Our supplier contracts require compliance with
stringent safety, environment and social requirements.
Through regular supplier relationship meetings and Key
Performance Indicator reporting, we monitor ongoing
compliance and performance. We also include measures in
the evaluation of new suppliers and monitoring of existing
performance which extends to supplier site visits.
46 Evolution Mining Limited // Annual Report 2020
Red Lake State of Play –
Social Responsibility
■ The operation employs a majority local workforce
■ Collaboration agreements in place with the Lac
Seul and Wabauskang First Nation Groups
■ Well-established local hiring and procurement
initiatives, community donations and investments
■ Financial support for the Municipality of Red Lake’s
Community Improvement Plan for revitalising,
beautifying and promoting economic development
in the region
■ Operation of a recreational facility and
sponsorships of youth programs
/
/
S
o
c
i
a
l
r
e
s
p
o
n
s
i
b
i
l
i
t
y
Evolution Mining Limited // Annual Report 2020 47
Sustainability Report (Continued)
a
t
a
d
e
c
n
a
m
r
o
f
r
e
P
/
/
Performance
data
Safety
Safety performance
Employee fatalities
Contractor fatalities
Total Recordable Incident Frequency (TRIF)
Lost Time Injury Frequency (LTIF )
Significant Safety Occurence Frequency (SSOF)
Safety Incident Frequency (SIF)*
FY201
FY19
FY18
FY17
FY16
FY15
0
0
6.76
2.07
n/a
14.84
0
0
8.31
1.75
n/a
15.97
0
0
5.49
0.50
3.20
0
0
7.96
0.40
4.95
0
0
9.70
1.80
5.9
0
0
9.60
1.00
11.61^
All classifications above include contractors
*In FY19 Evolution changed the definition of significant safety occurrence and renamed to significant incidents. The definition change has resulted in more
incidents being classified as significant incidents
^FY15 figures are for Evolution operated assets. In the FY16 annual report Mungari and Cowal FY15 figures had been added for comparative purposes
(operated by previous owner)
Emergency Rescue Teams (ERT)
Number of ERT members
Community responses
Cowal
Cracow
Mt Carlton
Mungari
Mt Rawdon
Total
Diversity
Profile FY202
28
25
32
28
23
136
0
1
2
1
0
4
Full time
M
F
1,154
202
Part time
Fixed term
Casual
Employees
Contractors
Labour hire Workforce
M
1
F
16
M
38
F
12
M
16
F
9
Total Total
1,209
239
Total
554
Total
97
Total
2,099
* Service providers for specifically required roles ^ Temporary replacements for current Evolution positions
Levels
FY20
Board
Senior Leaders
Manager /
Superintendents
Professionals /
Supervisors
Operations
M
6
F
2
M
16
F
2
M
132
F
28
M
211
F
55
M
850
F
154
New Employees FY20 Age group <36 Age group 36–55 Age group >55
Total
M
116
F
62
M
100
F
34
M
22
F
4
338
Turnover FY20
Age group <36 Age group 36–55 Age group >55
Total
M
25%
F
13%
M
47%
F
9%
M
7%
F
0%
11%
Turnover result for EVN total is voluntary permanent only 12 month moving average result. The split by age bracket and gender is the % of all terminations
(summing up to 100%), rather than turnover rates for each grouping
Site profile FY20
Corporate
Cowal
Mungari
Mt Carlton
Mt Rawdon
Cracow
Total
Employees
M
84
State profile FY20
NSW
Employees
M
442
F
53
F
116
M
358
M
221
WA
F
63
F
61
M
221
QLD
M
546
F
61
F
62
M
152
F
17
M
182
F
25
M
212
F
20
M
F
All
1209
239
1,448
Developing our approach to diversity and inclusion
FY20 target
FY20 Actual
Female graduate intake
Female summer vacation interns
Indigenous and First Nation employees3
50%
50%
7%
62%
64%
7%
FY19
50%
39%
4.8%
Includes Red Lake Operation TRIF from 1 April 2020.
1.
2. Number of employees in Australia as at 30 June 2020
3. FY20 number includes Red Lake Operation
48 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
Environment
Environmental incidents
Incident level
Catastrophic
Major
Moderate
Energy
/
/
P
e
r
f
o
r
m
a
n
c
e
d
a
t
a
FY20
FY19
FY18
FY17
0
0
8
0
0
9
0
0
7
0
0
9
Energy consumption (GJ)
Total
Energy intensity (ore processed - GJ/tonne)*
FY20
4,102,171
FY19
FY18
FY17
FY16
3,986,905
4,075,493
4,402,695
4,415,040
Total
0.270
0.280
0.291
0.272
0.273
*Ore processed does not include our financial stake in Ernest Henry
Emissions
Total direct and indirect emissions
Greenhouse gas emissions Scope 1 (t CO2-e)1
Greenhouse gas emissions Scope 2 (t CO2-e)2
Total of Scope 1 and Scope 2 (t CO2-e)
Sulphur oxide SOx (kg)
Nitrous oxide NOx (kg)
Carbon Monoxide (CO) (kg)
Particulate matter < 10 um (kg)
Particulate matter < 2.5 um (kg)
Total volatile organic compounds (VOC) (kg)
Emissions of lead and lead compounds
Emissions of mercury and mercury compounds
Emissions intensity (ore processed - t CO2-e/tonne)
Total
FY20
157,857
398,187
556,044
932
1,492,143
722,095
4,730,467
96,844
100,959
688
1.29
FY19
155,085
383,449
538,533
916
1,397,676
719,005
4,260,114
88,471
90,036
577
1.55
FY18
159,061
394,144
553,205
926
1,395,277
701,930
FY17
167,734
430,993
598,727
1,002
1,521,718
886,918
4,323,757
5,163,574
86,683
86,380
639
1.48
95,254
97,958
812
2.25
FY16
157,584
472,257
629,841
936
1,627,006
788,636
5,585,918
104,208
110,103
1,147
3.64
0.037
0.038
0.039
0.037
0.039
The energy and emissions boundary is based on operational control as defined by the National Greenhouse and Energy Reporting (NGER) Act 2007. The applied
global warming potential (GWP) rates and emission factors are based on the NGER Act (2007) and the National Pollutant Inventory
1.
Scope 1 refers to emissions produced directly by operations, primarily resulting from combustion of various fuels and includes CO2-equivalent values for
greenhouse gases such as CH4, N20 and SF6
2. Scope 2 refers to indirect emissions resulting from the import of electricity from external parties; commonly the electricity grid
Water withdrawal
Water withdrawal Surface (ML) water
Surface water (ML)
Groundwater - mine dewatering (ML)
Groundwater - borefields (ML)
Rainwater (ML)
Municipal water (ML)
Total water withdrawal
Reused (ML)
% Total reused
Water intensity (ore processed - kL/tonne)
Water discharge
Water discharge (ML)
Surface water
FY20
4,948
3,034
826
2,127
74
11,087
9,475
85%
0.74
FY19
3,506
3,034
1,589
1,000
66
9,194
8,545
93%
0.65
Sewers that
lead to water
Land - Dust
suppression
Land -
Irrigation
Groundwater
Treatment
Facility
Total
1,726
0
915
0
0
0
FY18
2,077
3,212
1,476
1,856
59
8,680
7,018
81%
0.62
Total
2,641
Evolution Mining Limited // Annual Report 2020 49
Sustainability Report (Continued)
a
t
a
d
e
c
n
a
m
r
o
f
r
e
P
/
/
Environment
Waste
Mineral waste
Total*
Waste material
mined (kt)
Solids in tailings
(kt)
Total ore
processed (kt)
Explosives (t)*
31,563
15,011
15,065
11,414
* The reporting period for liquid fossil fuels, lubricants and explosives is July 2019 to June 2020 and reported as part of the National Pollutant Inventory.
Tailings
Asset
Active TSF
Inactive TSF
Construction Type
Non-mineral waste
Tonnes
Cowal
Cracow
Mt Carlton
Mt Rawdon
Mungari
2
0
2
3
1
0
1
0
1
0
Upstream /
IWL
Upstream
Downstream,
HDPE Lined
Upstream /
IWL
Upstream /
IWL
Off-site
Landfill
On-site
landfill
Recycling /
Reuse
Tyres
disposed of
on-site
Tyres
incinerated
Composted
or bio-
remediated
Other –
Septic
waste
Total
3,267
1,573
4,814
9
40
6,027
2,285
Acid-generating seepage
Asset
Predicted to occur
Actively mitigated
Under treatment or remediation
Rehabilitation and closure
Land management (ha)
FY20 only
Total
Cowal
Cracow
Mt Carlton Mt Rawdon
Mungari
-
Yes
-
-
Yes
Yes
-
Yes
-
-
Yes
-
-
Yes
Yes
Land
disturbed
Land
rehabilitated
Sites with protected
conservation status
213
2,193
35
188
1
1
Environmental compliance
Total volume of significant spills
Monetary value of significant fines ($A)
13
0
50 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
P
e
r
f
o
r
m
a
n
c
e
d
a
t
a
Social responsibility
Socioeconomic contribution
(A$) million
Operations
Employees
Region
Wages
Supplier
payments
(Goods and
services)
Payments
to providers
of capital
Dividend
payments to
shareholders
Payments
to financial
Payments to
government
Interest
Taxes
Royalties
Total
contribution
Payments
to political
organisations
Donations
Total*
955
191
221
12
107
75
-
1,562
* Constitutes all payments made to suppliers via internal accounting systems
Economic contribution
Contributed into Australian Economy (A$) billion*
Direct spend with local organisations (A$) million
FY20
FY19
FY18
FY17
1.56
79
1.28
92
1.26
80
1.12
FY16
1.05
FY15
0.60
FY14
0.60
FY13
0.84
FY12
0.50
Total
7.25
* Economic contributions include supplier payments, wages, dividend payments, interest, taxes and royalties
Reconciliation to income tax payable
Profit before income tax expense
Permanent differences
Temporary differences:
– Accounting and tax depreciation differences
– Mine development
– Exploration and evaluation expenditure
– Provisions
– Other
30-Jun-20
(A$) million
408.6
140.9
(177.0)
(6.9)
(58.4)
2.7
(1.5)
Taxable income before utilisation of carried forward restricted tax losses
308.4
Australian income tax payable
Corporate income tax paid during the year ended June 2019
Utilisation of carried forward restricted tax losses
FY19 R&D refund expected
Net income tax payable/(receivable)
Community and cultural heritage
Material Cultural Heritage incidents
Material Community Impact incidents
92.5
(73.5)
(2.5)
(0.8)
15.7
FY20
0
0
Evolution Mining Limited // Annual Report 2020 51
s
m
y
n
o
r
c
a
d
n
a
y
r
a
s
s
o
G
l
/
/
Sustainability Report (Continued)
Glossary and acronyms
“A” rating
Rating credibility used in the DJSI review. The lowest rating of “CCC” to the highest rating of “AAA”
A$
ALO
AMD
B
CMT
CN
COVID-19
CSA
CSIRO
Australian dollars
Act Like an Owner. An internal ongoing award to reward our employees for their supportive
behaviour
Acid mine drainage. When sulphide minerals (predominantly pyrite) are exposed to air, which allows
them to oxidise and break down
Billion. The number equivalent to the product of a thousand and a million
Crisis management team. The CMT provides support through management of crisis level issues
Cyanide. A chemical compound used in the extraction of gold and silver
Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) is the strain of Novel coronavirus
that causes coronavirus disease 2019. A mild to severe respiratory illness that is caused by a
coronavirus and is transmitted chiefly by contact with infectious material (such as respiratory
droplets) or with objects or surfaces contaminated by the causative virus
Corporate Sustainability Assessment. A scoring methodology that companies and investors can
review on a company’s ESG
Commonwealth Scientific and Industrial Research Organisation. An Australian government agency
responsible for scientific research
Dewatering
The act of taking water from an operating mine
DJSI
EAP
ERT
ESG
ESS
Dow Jones Sustainability Indices. These are a family of indices evaluating the sustainability
performance of thousands of companies globally
Employee assistance program. Program available to employees and their families to use to assist
with their health and wellbeing
Emergency Response Team. Teams built at each operation to support both our operations and assist
communities through significant incidents or threatening situations
Environmental, Social and Governance. The three key factors when evaluating the sustainability and
ethical impact of an investment in a company or country
Employee Share Scheme. A scheme introduced by Evolution Mining 6 years ago which supports the
issuing of shares to our full and part-time employees to ensure they share in Evolution’s success
FY20 / FY21
FY meaning financial year. FY20 would then be the period from July 2019 to end of June 2020
GHG
ICMM
Greenhouse Gas. Compound gases that trap heat or longwave radiation in the atmosphere
International Council on Mining and Metals. An international organisation whose purpose bringing
together a safe, fair and sustainable mining and metals industry
ISS ESG
Institutional Shareholder Services (ISS). ISS ESG is a business that provides corporate and company
ESG research and ratings
IWL
JT
kL
Integrated waste landform. A simple definition is a tailings storage facility that is located inside
waste rock storage
Johnathan Thurston. He is an Australian former professional rugby league footballer who has
established an academy to provide employment initiatives and training
Kilolitre. Measurement equivalent to 1,000 litres
LGBTI+
community
Loosely defined grouping of people who are lesbian, gay, bisexual, transgender/gender diverse,
intersex and other minorities
LOD
LoKal
Line of Defence
Name given to a local community initiative in Kalgoorlie
52 Evolution Mining Limited // Annual Report 2020
Sustainability Report (Continued)
/
/
l
G
o
s
s
a
r
y
a
n
d
a
c
r
o
n
y
m
s
M
Million. Number equivalent to the product of a thousand and a thousand
MillROC
Milling Remote Optimisation Consulting & Coaching. Software produced by Orway IQ which is a
cloud-based reporting of all plant data related to circuit performance and optimisation
ML
MSA
MSCI
NGER
NGOs
NMD
NPI
PAF
PPE
Megalitre. Equal to one million litres
Modern Slavery Act. The Commonwealth Modern Slavery Act 2018 (the Act) established Australia’s
national Modern Slavery Reporting Requirement (reporting requirement). The reporting requirement
entered into force on 1 January 2019. The reporting requirement aims to support the Australian
business community to identify and address their modern slavery risks and maintain responsible and
transparent supply chains
Morgan Stanley Capital International. It is an investment research firm
National Greenhouse and Energy Reporting. A national framework for reporting and disseminating
company information and greenhouse gas emissions, energy production and energy consumption
Non-governmental organisation. A non-profit, citizen-based group that functions independently of
government
Neutral mine drainage. In some instances, the acidity produced by sulphide oxidation can be
neutralised in the presence of carbonate minerals
National Pollutant Inventory. The NPI provides the community, industry and government with free
information about substance emissions in Australia
Potentially Acid Forming. Classification of a rock when tested if it has the potential to generate acid
as a result of a metal mining activity
Personal protective equipment. Anything used or worn on our employees to minimise risk to their
health and safety
S&P Global
Company that provides data, research, news and analytics to customers including institutional
investors and corporations
SAM
Scope 1
Scope 2
SD
t
TCFD
TRIF
Title for the Corporate Sustainability Assessment. SAM refers to historic naming when the CSA was
hosted by RobecoSAM AG. It is now transferred to S&P Global Switzerland SA and known as the
SAM Corporate Sustainability Assessment
Category of greenhouse gas emissions. Scope 1 is sometimes referred to as direct emissions and
refers to emissions released to the atmosphere as a direct result of an activity
Category of greenhouse gas emissions. Scope 2 refers to emissions released to the atmosphere
from the indirect consumption of an energy commodity
Saline drainage. This is saline and metal-rich drainage that has been produced by the oxidation of
metal sulphides that do not generate net acidity
tonnes
Task Force on Climate-related Financial Disclosures. An organisation that was established in
December 2015 with the goal of developing a set of voluntary climate-related financial risk
disclosures which may be adopted by companies
Total Recordable Injury Frequency. Usually forms part of the acronym TRIFR and refers to the
number of fatalities, lost time injuries, alternate work, and other injuries requiring medical treatment
per million hours worked
TSF
Tailings storage facility. A facility designed to safely store left over mined minerals
UN SDGs
United Nations Sustainable Development Goals. These are global goals adopted by all United
Nations Member States as a universal call to action to end poverty, protect the planet and ensure
that all people enjoy peace and prosperity by 2030
WORK 180
A recruitment site showing Australian employers who support women in the workplace. Criteria
include flexible work, pay equity and parental leave
Evolution Mining Limited // Annual Report 2020 53
i
w
e
v
e
r
s
’
r
e
c
ffi
O
g
n
i
t
a
r
e
p
O
f
e
h
C
i
/
/
Annual Report (Continued)
Chief Operating
Officer’s review
A year of accomplishments
Having completed another year with Evolution, it gives me great pleasure to acknowledge
the effort and commitment our people have made in FY20 and how these efforts continue
to contribute to making Evolution a globally relevant, premier gold company.
Our Total Recordable Injury Frequency (TRIF) decreased
to 6.8 – a 18% reduction on FY19. This is a material
improvement and puts us on the path to long-term
success. We are extremely proud of our efforts and focus
on safety. Key contributors to our success included: a
targeted cognitive safety program; an increase in visual
field leadership; and Safety Stops conducted across the
organisation which demonstrated the importance of our
Safety value. Notably, our Cowal Operation ended the year
with a TRIF of 1.87, a world-leading performance and an
all-time low for the operation in its 15 years history.
It has been an unusual year for our business managing
drought conditions in New South Wales, an Australian
bushfire crisis, and the ongoing COVID-19 pandemic.
It is more important than ever to keep each other safe
and support everyone’s health and wellbeing. This
remains our highest priority in FY21.
Innovation, technology and entrepreneurialism continue
to drive our business and we are achieving operational
improvements which are delivering value to Evolution, our
employees, shareholders and all external stakeholders.
The 2020 Financial Year was solid from a production
perspective, with 719,035 ounces of gold produced from
our Australian operations (excluding Red Lake’s first
quarter production). Five out of six operations delivered
or exceeded their production guidance. This was achieved
at an All-in Sustaining Cost (AISC) of A$1,008 per ounce
which ensured we remained as one of the lowest cost gold
producers in the world. We are focused on maintaining our
low-cost position in FY21.
At Evolution, a strong sustainability performance is a
prerequisite to our success. We look to deliver long-term
benefits to the regions in which we operate and partner
with local stakeholders to deliver these. Our partnerships
resulted in the commencement of seven new Sustainability
Projects in FY20, focusing on areas such as education
through support for the Yalga-binbi Institute in Bundaberg,
local employment through our partnerships with the
JT Academy in Queensland and the LoKal working hub
in Kalgoorlie. We look to build on this momentum in
FY21 with all sites having targets for new projects to be
implemented.
It is vital to hear the voice of our stakeholders to
understand the issues that affect them. One tool for this
is our biennial Stakeholder Perception Survey, the fourth
iteration of which was conducted in FY20. I am happy to
report that the results of this survey showed improvements
54 Evolution Mining Limited // Annual Report 2020
across the business, particularly in the number of
respondents who believe our relationships are improving.
We recognise the importance of our stakeholders and will
continue to build on this positive momentum.
The ongoing COVID-19 pandemic has placed a strain on
the entire world – including Evolution’s business. I am
extremely proud of our people and their response to this
event. I am pleased to report that none of our operations
to date have experienced a case of COVID-19 and have
been able to maintain their output and safety performance
despite the additional controls required to mitigate this risk.
We continue to review our response plans as the situation
evolves and will keep the safety of our people and our
communities as our highest priority.
Entrepreneurial spirit
Over the last 12 months we have embraced the theme of
‘thinking differently’ as a way we operate. We continue
to break records with our Act Like an Owner initiative
which has been running for four years. The number of
nominations in FY20 was 196 – equating to an increase of
49% on FY19.
Our focus on innovation saw an increase in data-driven
initiatives under our Data Enabled Business Improvement
(DEBI) program. In FY20 a benefit of A$45.0 million was
realised, significantly exceeding our target of A$25.0
million. This represents a remarkable step change from the
A$1.5 million in value achieved in FY19. Our most successful
initiative was Project Boost at Cowal, where an analysis
of the gold grade in different sized material from the
mill enabled us to divert low grade material and achieve
A$16.0 million of benefit. We also used data to optimise
the throughput of the mill at Mungari generating a A$10.0
million benefit, whilst at Mt Carlton, monitoring of blast
movements realised A$4.0 million of value. Data availability
and usability continues to improve and I am excited with
what DEBI will enable us to achieve in the future.
FY20 had its operational highs and lows and whilst we
finished the year strong, in FY21 we will continue our focus
on improving our planning capability, consistency, and
repeatability of delivery. The breakthrough goal in our FY21
business plan is to deliver our plan reliably which will be
key to achieving success.
Some highlights from our operations are provided in the
following text with further details provided in the Directors’
Report section of this Annual Report.
Annual Report (Continued)
/
/
i
C
h
e
f
O
p
e
r
a
t
i
n
g
O
ffi
c
e
r
’
s
r
e
v
e
w
i
Cowal
The Cowal Operation is a world-class, open pit gold
operation located 350km west of Sydney. It is situated
within the Bland, Lachlan and Forbes Shires on the
traditional lands of the Wiradjuri People. Mining approval
has been granted to 2032 and this long mine life provides
a tremendous runway to capture additional upside.
Cowal had another great year in FY20. During the year
the operation was faced with Stage 3 water restrictions
which accelerated the completion of critical projects to
mitigate the effect of the drought conditions. This included:
a pipeline twinning project; advancing several new saline
bores; and completing assessments for the suitability of
newly identified saline bore fields to reduce our reliance
on fresh water sources into the future.
We also completed the Warraga Decline development
and metallurgical bulk sample. Approximately 22,000m
of underground diamond drilling was also completed
improving our orebody knowledge. Also pleasing to
note the ongoing development of the Integrated Waste
Landform and the Stage H cutback progressed as
expected during the year.
Cowal declared an initial underground Ore Reserve of
804kozs and increased the GRE46 Mineral Resources to
2.9Mozs1 in July 2020. I would like to recognise the entire
project team for the enormous amount of work completed
to date that has enabled us to release this great result.
FY20 gold production of 262,035 ounces was within
guidance of 255,000 – 265,000oz. AISC of A$933/oz was
pleasingly at the bottom end of the A$930 – A$980/oz
guidance range. Full year net mine cash flow was
A$235.6 million.
Cowal is a long life, low cost asset that will be a
cornerstone asset of our business for many years to come.
Red Lake
The Red Lake Operation is an underground gold mine in
north western Ontario, Canada. It is located approximately
250km northeast of Winnipeg on the traditional lands of
the Waubuskang and Lac Seul First Nations.
The operation comprises the historic Dickenson, Campbell
and Cochenour mines, with multiple shafts and associated
processing facilities. Since production commenced in 1949,
the combined Red Lake Operation has produced more than
25Moz of gold at an average grade in excess of 20g/t gold.
We completed the acquisition of the Red Lake Operation
on 1 April 2020. FY20 gold production in the first quarter of
Evolution’s ownership was 27,428 ounces which was above
guidance of 25,000 ounces. AISC of A$1,943/oz was under
the A$2,100 – A$2,300/oz guidance range.
An operational transformation is underway to realise
the full potential of this asset. This three-year project
will deliver sustainable, low-cost production of 200,000
ounces per year with an AISC under US$1,000/oz. The
initial focus of the project is on increasing underground
development rates, rationalising workforce numbers and
decommissioning redundant equipment.
Successes in the fourth quarter included: a 37% increase
in monthly development rates; a 16% reduction in site
workforce; winterising the Red Lake mill; commencement
of decommissioning two shafts and rationalising
underground mobile equipment. This project is on track to
deliver and together with the recently announced 11Moz2
Mineral resource estimate, we remain confident in Red
Lake’s long-term success. We have also commenced a
project to unlock the future of Red Lake and envision a
possible sustainable production rate of 300,000 –500,000
ounces per year. It is an exciting future for Red Lake.
Mungari
The Mungari Operation is located 600km east of Perth and
20km west of Kalgoorlie in Western Australia. There are
currently two registered native title claims over the majority
of the Mungari tenements – the Maduwongga People and
the Marlinyu Ghoorlie People. Our local communities are
Kalgoorlie and Coolgardie.
The operation is a key asset in our portfolio and consists
of underground mining at Frog’s Leg, open pit mining at
White Foil and Cutters Ridge with a considerable regional
tenement package to the north around Castle Hill hosting a
total Mineral Resource of 51 million tonnes grading 1.47g/t
gold for 2.4 million ounces.
Mungari underwent a transformation during FY20 with
a complete change in operational strategy. Mungari
completed access development to the newly discovered
Boomer ore body, improved plant throughput to deliver
a 16% improvement above FY20 budget to a sustainable
2Mtpa throughput rate and commenced development of
the Cutters Ridge open pit.
Total FY20 gold production of 133,388 ounces was above
guidance of 115,000 – 125,000oz. AISC of A$1,215/oz was
below the A$1,230 – A$1,280/oz guidance range. Full year
net mine cash flow was a record A$112.7 million.
The operation has a major footprint in the extremely
prosperous gold camp of Kalgoorlie. With a current
mine life of 10 years we are analysing a range of margin
generating options to the north around the Castle Hill area
to deliver long-term value by effectively unlocking the large
resource base.
1.
See page 73 of the Mineral Resources and Ore Reserve section of this report for further information
2. See page 74 of the Mineral Resources and Ore Reserve section of this report for further information
Evolution Mining Limited // Annual Report 2020 55
i
w
e
v
e
r
s
’
r
e
c
ffi
O
g
n
i
t
a
r
e
p
O
f
e
h
C
i
/
/
Annual Report (Continued)
Mt Carlton
Cracow
Mt Carlton is located 150km south of Townsville,
Queensland, on the traditional lands of the Birriah People.
Our local communities are Gumlu, Home Hill, Bowen and
Townsville. The operation was developed by Evolution and
commissioned in 2013.
The Cracow Operation is located 500km north-west of
Brisbane, Queensland, on the traditional lands of the
Wulli Wulli People. Our local communities are Cracow and
Theodore. The operation has been a consistent and reliable
producer since mining began in 2004.
The operation underwent some resource challenges
during the year where the main hydrothermal breccia
zone, which made up the bulk of the mineralisation in the
V2 pit, tapered to a series of narrower, high-grade feeder
structures at shallower depths than anticipated. This
resulted in poor reconciliation between the Ore Reserve
and the grade control models.
Mt Carlton successfully completed the initial underground
mine development and plant upgrades with the
underground operation commencing full production during
March 2020, ahead of schedule and under project costs,
which was a significant milestone for the asset. This work,
along with a strong focus on operating discipline, enabled
the operation to deliver a record mill throughput in FY20
of 894kt.
Total FY20 gold production of 58,962 ounces at an AISC of
$1,453/oz did not meet production or cost guidance.
Mt Rawdon
The Mt Rawdon Operation is located 75km south-west
of Bundaberg, Queensland and is surrounded by the
traditional lands of the Byellee, Gooreng Gooreng, Gurang
and Taribelang Bunda people who make up the Port Curtis
Coral Coast native title claim group. Our local communities
are Mt Perry, Gin Gin, Biggenden and Gayndah. Evolution
has owned and operated Mt Rawdon since November 2011.
FY20 gold production was 82,004oz. Production guidance
was revised lower early in the financial year to 80,000
– 85,000oz (original guidance of 90,000 – 100,000oz)
due to geotechnical issues in the western wall. AISC was
A$1,546/oz which was slightly above the revised guidance
of A$1,490 - A$1,540/oz (original guidance of A$1,210 -
A$1,260/oz).
Despite FY20 challenges, our Mt Rawdon team exemplify
thinking differently when it comes to driving improvements
to their operation from both a safety and production
perspective. They are currently investigating an exciting
sustainability project utilising the post-mining open pit for
a pumped hydro installation, I look forward to sharing with
you in the next report cycle.
Cracow continued to perform well in FY20 with total gold
production of 87,744oz was slightly above the 82,500 –
87,500oz guidance range. AISC of A$1,203/oz was at the
lower end of guidance of A$1,200 – A$1,250/oz. Full year
net mine cash flow was A$87.7 million.
On 4 June 2020 we announced the agreement to divest
Cracow for a consideration of up to A$125 million to
Aeris Resources Limited (ASX:AIS). This is consistent
with the strategic objective of upgrading the quality of
our asset portfolio. The sale was successfully completed
on 1 July 2020.
Ernest Henry
The Ernest Henry copper-gold Operation is a large-scale,
long-life asset operated by Glencore. The operation
employs a sub-level caving ore extraction method. It is
located 38km north-east of Cloncurry, Queensland on the
traditional lands of the Mitakoodi people.
In November 2016 we acquired an economic interest in
Ernest Henry that will deliver 100% of future gold revenue
and 30% of future copper and silver revenue produced
from within an agreed life of mine area. Outside the life
of mine area, we will have a 49% interest in future copper,
gold and silver revenue from Ernest Henry.
Throughout the duration of our partnership, Glencore has
operated the asset exceptionally well and has consistently
delivered results which exceed the agreed mine plan.
The Ernest Henry transaction has materially improved
the quality and longevity of Evolution’s portfolio and
significantly reduced our cost profile.
FY20 gold production of 94,902oz was above the 87,500
– 92,500oz guidance range. A negative AISC of A$(432)/
oz was slightly above guidance of A$(590) – A$(540)/oz
after accounting for copper and silver by-product credits
of (A$1,852/oz). Full year net mine cash flow was a record
A$256.6 million.
BOB FULKER
CHIEF OPERATING OFFICER
56 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
/
/
i
C
h
e
f
O
p
e
r
a
t
i
n
g
O
ffi
c
e
r
’
s
r
e
v
e
w
i
FY20 operational highlights and outlook
Cowal
(100%)
Red
Lake
(100%)3
Mungari
(100%)
Mt
Carlton
(100%)
Mt
Rawdon
(100%)
Cracow
(100%)
Group
Total
Ernest
Henry
(economic
interest)
Gold Reserves (Moz)1
Copper Reserves (kt)1
Gold Resources (Moz)1
Copper Resources (kt)1
Reserve grade (g/t Au)1
Reserve grade (% Cu)1
FY20 Au production
(koz)
FY20 AISC (A$/oz)2
FY20 net mine cash flow
($M)
4.44
371
9.00
560
0.97
0.57
262
933
236
2.1
0.57
10.97
2.41
-
-
27
1,943
(3)
1.52
133
1,215
113
0.31
11
0.42
34
1.37
0.51
59
1,453
(10)
0.54
0.11
1.06
0.34
0.68
5.78
82
88
0.66
150
1.29
356
0.52
1.00
95
1,546
59
1,203
85
(432)
257
746
1,043
736
1.
2.
3.
See pages 67-74 of this report for details on Mineral Resources and Ore Reserves
Includes C1 cash cost, plus royalty expense, sustaining capital, general corporate and administration expense
Red Lake’s first quarter production under Evolution ownership is reported. Ore Reserves of Red Lake are taken from Goldcorp’s Mineral Resources & Ore
Reserves Update as at 30 June 2018, which was released by Goldcorp on 22 February 2019 and is available on www.sedar.com. Those Mineral Resources and
Ore Reserves have been prepared using the Canadian NI 43-101 Standards and are not in accordance with the JORC Code. A new estimate (JORC Code) is
planned to be reported in February 2021
Note: This table includes Cracow Mineral Resources and Ore Reserves. This asset was subsequently divested on 1 July 2020 (see ASX release 1 July 2020 entitled
“Completion of Cracow Gold Mine Divestment” for details. Numbers may not sum accurately due to rounding
Outlook for FY21
We are forecasting FY21 Group gold production of 670,000
– 730,000 ounces with AISC expected to be in the range
of A$1,240 – A$1,300 per ounce. Assuming an AUD:USD
exchange rate of 0.72, our forecast FY21 AISC equates to
approximately US$890 – US$940 per ounce.
Investment in sustaining capital in FY21 is forecast to be
between A$112.5 – A$137.5 million. Red Lake accounts for a
significant amount of Group sustaining capital as we invest
in transforming the operation with key items including:
replacement of mobile fleet (A$10.0 – A$15.0 million);
shaft decommissioning (A$6.0 – A$8.0 million); resource
definition (A$10.0 – A$15.0 million); and major maintenance
and upgrades (A$10.0 – A$15.0 million).
Investment in major capital and exploration is additional to
the costs included in AISC and are reported in All in Cost
(AIC). Major capital in FY21 is expected to be in the range
of A$260.0 – A$290.0 million. A large amount of the major
capital is associated with expansion projects at Cowal
as the operation invests in projects that will contribute
towards achieving its objective of increasing production to
over 300,000 ounces per annum. Major capital at
Cowal includes the final stages of mine development at
Stage H (A$55.0 – A$60.0 million); continuation of the
construction of the Integrated Waste Landform
(A$70.0 – A$75.0 million), and the underground feasibility
study (A$25.0 – A$30.0 million). Major capital investment
at other operations includes accelerated mine development
at Red Lake (A$25.0 – A$30.0 million); and mine
development at Mungari (A$30.0 – A$40.0 million).
FY21 exploration investment is expected to be A$70.0 –
A$100.0 million. Cowal (A$35.0 – A$45.0 million) accounts
for most of this investment with development of a second
exploration decline and continued drilling of the Cowal
underground as it is advanced towards production. This
work is aimed at both resource extensions and infill drilling
to improve understanding of grade distribution in order to
optimise the mine plan. Red Lake (A$15.0 – A$20.0 million)
and Mungari (A$8.0 – A$13.0 million) will also receive a
significant discovery investment in FY21.
A breakdown of production, costs and capital guidance is
provided in the table on the next page.
Evolution Mining Limited // Annual Report 2020 57
i
w
e
v
e
r
s
’
r
e
c
ffi
O
g
n
i
t
a
r
e
p
O
f
e
h
C
i
Annual Report (Continued)
FY21 Guidance
Gold production
(oz)
AISC (A$/oz)1
Sustaining Capital
(A$M)
Major Capital
(A$M)
Cowal
205,000 – 230,000
990 – 1,040
/
/
Red Lake
125,000 – 135,000
2,050 – 2,100
Mungari
Mt Rawdon
Mt Carlton
Ernest Henry
Corporate
Group
12.5 – 17.5
55.0 – 60.0
17.5 – 22.5
10.0 – 15.0
120,000 – 130,000
1,320 – 1,370
87,500 – 92,500
1,290 – 1,340
47,500 – 52,500
1,700 – 1,750
5
85,000 – 90,000
(350) – (300)
10.0 – 15.0
65 – 70
2.5
170.0 – 180.0
30.0 – 40.0
45.0 – 50.0
15.0 – 20.0
0
0
0
670,000 – 730,000
1,240 – 1,300
112.5 – 137.5
260.0 – 290.0
1. AISC assumes A$2,200/oz Au and A$8,400/t Cu for royalties and by-products
Three-year outlook
Production is planned to increase to over 800,000
ounces during the three-year period to FY23. Growth will
be largely driven by the commencement of the Cowal
underground mine in late FY22 and execution of the Red
Lake transformation plan.
Costs are expected to decline over the three-year period.
Red Lake will initially increase Group AISC by A$200 –
A$215 per ounce before trending lower as the benefits of
the transformation plan are realised.
Investment in two significant growth projects at Cowal
and Red Lake will materially increase production and
transform the quality of our asset portfolio. Major capital
at Cowal, to enable production to increase above 300,000
ounces per annum, consists of development of the new
underground (A$100.0 – A$130.0 million in FY22; A$100.0
– A$125.0 million in FY23) and investment in the Integrated
Waste Landform (A$70.0 – A$80.0 million in FY22;
A$15.0 – A$20.0 million in FY23). Red Lake will continue
to invest in mine development (A$30.0 – A$35.0 million in
FY22; A$15.0 – A$20.0 million in FY23) which is planned
to enable annual production to increase to in excess of
200,000 ounces.
Production
(koz)
AISC
(A$/oz)
670-
730
700-
770
790-
850
1,240-
1,300
1,220-
1,280
1,125-
1,185
FY21
FY22
FY23
FY21
FY22
FY23
Sustaining capital
(A$M)
Major capital
(A$M)
112.5-
137.5
110-
135
95-
120
260-
290
250-
280
220-
260
FY21
FY22
FY23
FY21
FY22
FY23
58 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
/
/
i
C
h
e
f
O
p
e
r
a
t
i
n
g
O
ffi
c
e
r
’
s
r
e
v
e
w
i
Cautionary Statement concerning the proportion
of Exploration Target
Of Evolution’s three-year production outlook, 1.8% is
comprised of an Exploration Target. The potential quantity
and grade of this Exploration Target is conceptual in nature
and there has been insufficient exploration to determine
a Mineral Resource and there is no certainty that further
exploration work will result in the determination of Mineral
Resources or that Production Target itself will be realised.
Competent Persons Statement
The estimated Mineral resources and Ore reserves
underpinning the Production Target and Exploration
Target have been prepared by Competent Persons in
accordance with the requirements in Appendix 5A
(JORC Code). The Company confirms that the form and
context in which the Competent Persons findings are
presented have not been materially modified from the
original market announcement.
Production target
Material Assumptions
The material assumptions on which the Production Target
is based are presented in ASX release entitled “Annual
Mineral Resources and Ore Reserves Statement” released
to the ASX on 12 February 2020 and available to view at
www.evolutionmining.com.au. The material assumptions
upon which the forecast financial information is based are:
Gold A$1,450/oz; Silver A$20/oz; Copper A$6,000/t; and
Diesel A$80/bbl.
Relevant Proportions of Mineral Resources and Ore
Reserves underpinning the Production Target
The Production Target comprises 20.8% Proved Ore
Reserves, 61.4% Probable Ore Reserves, 1.7% Indicated
Mineral Resources, 14.2% Inferred Mineral Resources and
1.8% Exploration Targets.
Cautionary Statement concerning the proportion of
Inferred Mineral Resources
There is a low level of geological confidence associated
with Inferred Mineral Resources and there is no
certainty that further exploration work will result in the
determination of Indicated Mineral Resources or that the
production target itself will be realised.
Mungari processing plant. Photo supplied by C.Lucas, Evolution
Evolution Mining Limited // Annual Report 2020 59
Annual Report (Continued)
Innovation and
asset optimisation
Our aim is to differentiate our company through innovation and excellent operational discipline
to deliver value for our stakeholders. We embrace disruption and constant change to ensure our
business continues to evolve. We focus on the few things that make the biggest difference.
n
o
i
t
a
s
i
m
i
t
p
o
t
e
s
s
a
d
n
a
n
o
i
t
a
v
o
n
n
I
/
/
DEBI (Data Enabled Business
Improvement)
Data and technology will play an increasingly important
role in our drive to remain amongst the lowest cost gold
producers in the world. During FY20 this project set out
aiming to deliver tangible data driven benefits of
A$25 million across the group by using data, digital
processes and tools to create value in the form of
operational efficiency and effectiveness improvements.
Many individuals and teams across the business worked
on initiatives to reach this A$25 million target. It is a
testament to the great work of many people that the target
was achieved by the end of March. Over twelve months of
FY20, the benefits totalled A$45 million.
More than 80 potential initiatives were identified by
our operations, with 22 of them contributing significant
benefits. Initiatives included: Project Boost, Mungari
throughput optimisation, Mt Carlton blast monitoring
and ore size sorting at Cowal.
Project Boost
At Cowal we commenced a scats rejection project (Project
Boost) based on an analysis of data which revealed that
oversized material exiting the SAG mill was a lower grade.
■ Typically, the material would be put back in the mill for
a second round of grinding
■ Diverting this material allowed a higher throughput in
the SAG mill and a higher average grade feed to the
ball mill and float circuit
■ Exceptional use of data to drive an operational change
■ The benefit realised through this project during FY20
was close to A$17 million
Mungari throughput optimisation
Processing plant operational data was used to drive higher
gold production. Some of the initiatives the team executed
to achieve this result included:
■ Reviewing and analysing grinding circuit data which
identified instances where capacity was not being
taken advantage of and making changes which led to
increases in mill utilisation
■ Ensuring the availability of crushed ore stock in front of
the mill so that crusher shutdowns have less impact
The $A12.4 million improvement has been achieved due
to higher gold production than previously obtained as a
result of these process improvements through the analysis
of data.
Aerial view of Mungari plant, White Foil open pit in the background
Aerial view of the processing plant and infrastructure at the Cowal Operation
60 Evolution Mining Limited // Annual Report 2020
/
/
I
n
n
o
v
a
t
i
o
n
a
n
d
a
s
s
e
t
o
p
t
i
m
i
s
a
t
i
o
n
Annual Report (Continued)
Mt Carlton blast movement analysis
HoloLens
During FY20 we imported mine models from Cowal and
Mungari into our HoloLens Augmented Reality environment.
These were then used to provide virtual tours of these
two flagship assets to analysts during Diggers n Dealers
in Kalgoorlie, Australia and the BMO Conference in Miami,
United States. We will be extending our use of HoloLens
in FY21 to provide remote assistance to maintenance to
enable faster recovery from downtime events.
A demonstration of HoloLens technology at the Mungari Operation
One of Mt Carlton’s key contributions to the DEBI project
has been the use of blast balls to monitor the movement
of ore and minimise ore-loss. This is based on the blast
balls informing the geologists where the material has
moved to so they can mark out the ore boundaries prior to
excavation with more accuracy.
Some mines factor in a dilution and ore loss estimate,
typically writing down 5% ore loss from the plan when they
compile a schedule. For Mt Carlton, this is not an arbitrary
percentage but calculated based on the analysis of the
blast ball movements.
The benefit reported during FY20 was more than
A$4 million in value of ore that would have been lost
if they did not use the blast monitoring balls to track
movement of the ore through the blasting process.
Titan monitoring system
Mt Carlton and Mt Rawdon have implemented Titan as
a means of using data to deliver improved operational
outcomes. Titan is a system installed within the excavator
cab and provides feedback to the excavator operator
about each scoop of material. Through Titan, the
operators can optimally load trucks due to digital visibility
of the load at the point of loading. This enables load
factors to be maintained in line with design maximums
and above historical performance where such visibility
was previously limited.
Mt Carlton General Manager, Anton Kruger, noted that
the visibility of Titan data has provided some intangible
benefits which have not been quantified but are equally
important. For example, using the Titan system, they can
see how long into the shift it takes before the first ore
is loaded and how close to the end of the shift the last
ore load occurs. This visibility enables the supervisors to
monitor operator productivity and ensure appropriate work
practices are occurring.
At Mt Rawdon, the team is assessing potential
enhancements for Titan. An example is the ability to track
the digging efficiency of blasted material to further assess
blasting practices and effectiveness through the plotting of
“dig-energy”.
In FY20 benefits at Mt Rawdon were more than
A$800,000 and in excess of A$550,000 at Mt Carlton.
Evolution Mining Limited // Annual Report 2020 61
n
o
z
i
r
o
h
e
h
t
n
o
s
t
n
e
m
e
v
o
r
p
m
i
d
n
a
s
n
o
i
t
a
v
o
n
n
I
/
/
Annual Report (Continued)
Innovations and
improvements on
the horizon
IT advancements
Aligning with the DEBI Program, significant focus is being
applied to leveraging advances in Cloud capacity, Machine
Learning, Internet of Things (IoT), Automation, and
Analytics to enable efficiency gains across the business.
This includes seeking to improve Maintenance outcomes
through Condition Monitoring and our Obzervr mobile app,
investigating digital twins to enable optimisation of the
mining and processing value chains, and further use of data
analysis and machine learning to optimise throughput/
recovery at our mills.
Cyanide reduction
GlyCat leaching technology was advanced in FY20
with optimisation test work and Stage 2 continuous
laboratory pilot trials using Cowal flotation concentrate
which have elevated reagent consumptions. Trials were
conducted with MPS (Mining & Process Solutions) who
are the commercialising partner of Curtin University
developed process.
The objective of the project is to achieve effective gold
leach extraction and recovery while delivering significant
reductions in cyanide and overall reagent costs. FY20 pilot
trials were positive with gold extractions approaching
actual plant recovery and achieving reagent consumption
objectives over a continuous campaign simulating plant
conditions and throughput. Future activities include further
process de-risking and optimisation test work prior to
advancing to an onsite demonstration pilot.
In-situ metal extraction
We are a sponsor member of the 3-year MRIWA (Mineral
Research Institute of WA) industry collaborative research
project to progress understanding of the mechanisms of
electrokinetics for in-situ leaching and metal extraction.
In-situ leaching coupled with electrokinetics (EK-ISL)
potentially enables recovery of metals from (sub-
economic) ores with a smaller environmental footprint than
current mining approaches. Sophisticated ISR techniques
will be key to exploiting deep, sedimentary-based deposits.
Reagent saving
We completed further test work and analysis of utilising
nanofiltration on saline process water to improve safety,
increase gold recovery and reduce reagent consumption
and operating cost. Nanofiltration removes problematic
ions such as magnesium and sulphates from hyper saline
process water which increase reagent consumption at
operations such as Mungari.
The HoloLens VR headset is used by the maintenance person to allow faster recovery from downtime events.
62 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
Discovery
/
/
D
i
s
c
o
v
e
r
y
We are committed to organic growth by the discovery of new gold deposits at our existing
operations and across our portfolio of greenfield exploration projects. Our Discovery group had
another outstanding 12 months in the 2020 Financial Year. A key driver underpinning our success
was ensuring we had the right people in the right jobs making the right decisions. Over the last four
years we have built our group and site discovery teams adding quality talent and leadership. This
year we continued embedding and strengthening our early-stage exploration team responsible for
managing our greenfield exploration projects in Queensland and Western Australia. We invested in
the technical development of our people and provided opportunities to upskill and gain experience
across our diverse portfolio of operating assets and greenfield projects.
In November 2019 we hosted our second annual
“Explorathon” where we invited every geologist from
across the company that was able to attend the event in
West Wyalong, NSW. Over 40 participants took part in
Explorathon which included a solid focus on professional
development and the opportunity to work on solving a
number of geological questions we wanted answered at
our Cowal Operation. The 2019 Explorathon stimulated
many new ideas which we hope will lead to some very
interesting and potentially game-changing exploration
results in the future at Cowal. We believe that developing
a collaborative and inclusive culture that fosters curiosity,
freedom to think creatively and to try new things will
continue to lead to successful future.
Our Discovery strategy is simple. We focus on safely and
responsibly finding new deposits that have the potential to
deliver long life, low cost mines that improve the quality of
our portfolio.
We explore mainly for epithermal and greenstone gold
mineralisation because we believe we have the right
combination of skills and expertise to discover these types
of deposits. However, we are also willing to consider other
mineralisation styles if we believe they can deliver high
quality opportunities that improve overall portfolio quality.
In the epithermal class of gold deposits, we are searching
for high-sulphidation deposits like Mt Carlton, carbonate-
base metals deposits like Cowal and low-sulphidation
deposits like the Cracow mine which was divested to
Aeris Resources Limited (ASX:AIS) on 1 July 1 2020. In
the greenstone gold class of deposits, we are exploring
for deposit styles typically mined in the Yilgarn Craton in
Western Australia.
Our area selection and project evaluation methodologies
consider the following technical characteristics to help rank
and prioritise where we are willing to go:
■ Key mineral systems elements such as geologic
architecture, fluid and metal sources, and the
drivers and traps capable of producing
world-class gold deposits
■ Footprint scales demonstrating size and grade
potential for an Evolution-scale mining operation.
Distribution patterns of low-level gold, pathfinder
elements and alteration mineral associations that
demonstrate evidence of large hydrothermal systems
always rank highly
■ Navigating to gold using the right data layers to
enable determination of where we are in a system and
to vector to gold quickly and effectively. We believe
strongly in integrating geological observations with
project-wide multi-element geochemistry, airborne
& handheld spectral analysis and fit-for-purpose
geophysical techniques
It is critical to definitively test the best targets early. Clear
program objectives and results that inform technical and, in
some cases, good judgment calls to persist with a target or
alternatively to walk away, are vital to our strategy.
We hold highly prospective tenements in New South Wales,
Queensland, Western Australia and Ontario, Canada. At the
end of FY20 our Discovery team was exploring 8,570km2 of
granted tenements and mining leases with applications for
1,800km2 pending. These tenement areas are either 100%
owned by Evolution or subject to earn-in or joint venture
agreements.
Total exploration expenditure for the year ended 30
June 2020 was A$82.8 million. Most of the exploration
investment was undertaken at Cowal (A$46.6 million)
which focused on upgrading the classification and
extending the underground resource. A total of 321km of
drilling was completed across the Group.
In FY21, approximately 80% of our discovery investment
will be directed to resource growth and to deliver new
discoveries near our operating mines. Significant discovery
programs are underway at Cowal, New South Wales, Red
Lake in Canada and Mungari, Western Australia. We are
also continuing our discovery programs in Queensland
where we are entering our third year of exploration at
Connors Arc (100%) and completing our second year at
the Drummond Gold Project (Evolution earning 80%).
We will continue our aggressive drilling program at the
prospective Crush Creek project (Evolution earning 100%)
which we believe has the potential to play a significant
role in extending mine life at our Mt Carlton Operation
located 30km away. In Western Australia we will continue
exploration at our Murchison project (Evolution earning
80%) and on the prospective Cue Joint Venture project
(Evolution Earning 75%) which we optioned in the second
half of 2019.
Evolution Mining Limited // Annual Report 2020 63
Annual Report (Continued)
y
r
e
v
o
c
s
i
D
/
/
Cowal
GRE46 and Dalwhinnie generated outstanding growth
in FY20. The underground decline was completed and
extensive drilling from both underground and surface
continued. A 20,000-tonne bulk sample was extracted
and processed with no negative impacts on recoveries.
The geological and resource model at GRE46-Dalwhinnie
was updated in April 2020 for the release of an impressive
maiden Underground Ore Reserve of 804koz and
increasing the Mineral Resource to 2.9Moz1.
Early stage exploration continued on several prospects
with a number of encouraging results requiring follow-up.
Aircore drilling in the Reflector Area east of the mine has
generated several quality projects. There is also potential
for the discovery of porphyry copper-gold deposits on the
wider property package as at A39 and Central Cowal.
Section of Cowal GRE46 Underground area with the red outline showing the
Maiden Underground Ore Reserve area and the yellow showing the updated
Mineral Resource as at April 2020
Red Lake
Red Lake is one of the largest, highest grade gold camps in
North America with historical production of over 25 million
ounces with head grades exceeding 20 grams per tonne.
Red Lake represents some of the greatest resource and
exploration upside in the Evolution portfolio and we
have appropriately committed to spend US$50 million
on exploration in the first three years with a planned drill
program of over 100,000 metres per annum.
Drilling directed by Evolution commenced in January of
2020 with four underground diamond drill rigs which
increased to five by June. Drilling focused on expanding
and converting resource to reserves for the near-term mine
plan. The main areas drilled were Deep Sulphides, Hanging
Wall 7, and the Twin Otter Zones in Lower Red Lake and
the UMZ, BIF, and VOSS zones at Cochenour. Encouraging
extensions have been intersected at Twin Otter and Voss.
A major effort was undertaken to re-establish the Mineral
Resource from first principals to provide the future
platform for mine planning and reserve definition. This
work resulted in a materially higher Mineral Resource
estimate of 48.08 million tonnes grading 7.10 grams per
tonne for 11.0 million gold ounces1, estimated in accordance
with the JORC Code and reported on 13 August 2020.
The small footprint of Red Lake’s historic high-grade ore
bodies enhances the potential for further discoveries across
the operation.
Plan view showing map of the Red Lake Operation – Lower Red Lake and Cochenour
1.
See page 67-74 of this Annual Report for information on the Mineral Resources and Ore Reserves
64 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
/
/
D
i
s
c
o
v
e
r
y
Mungari
Testing of several high-grade targets at Mungari continued
in FY20 as well as continued expansion and definition of
regional resources.
Drilling at Boomer, located 300m west of Frog’s Leg,
successfully resulted in outlining a small high-grade maiden
resource. This was the focus of exploration drilling at
Mungari. To accelerate development and definition of this
new zone an underground access drive from the Frog’s Leg
decline was constructed and intersected the Boomer vein
in May 2020 with mining anticipated in FY21. RC drilling
designed to test a one-kilometre long extension of the
Boomer structure to the north commenced with results
expected in Q1 FY21.
North of Castle Hill excellent results were obtained from
drilling the contact of the Kintore Tonalite on the Picante
trend. This could add significantly to the large mineral
resource around Castle Hill area after further drilling in FY21.
Cue project, WA (earning 75%)
In September 2019 Evolution entered into an earn-in
joint venture agreement with Musgrave Minerals Limited
(ASX:MGV) (“Musgrave”) over the Cue exploration project.
Cue is located in the Murchison Province of central Western
Australia which hosts a gold endowment in excess of
30 million ounces.
The Cue project is approximately 50km south of our
Murchison joint venture with Enterprise Metals Limited
(ASX:ENT) and is prospective for Archaean greenstone
gold deposits. The Cue joint venture covers a prospective
mineralised trend, which includes Musgrave’s Lena and
Break of Day resources to the south. Large parts of the
fertile trend are poorly tested and extend under younger
lake cover which is potentially obscuring mineralisation.
Early diamond drilling (2 holes for 574m) as well as a major
regional aircore drilling program (249 holes for 22,879m)
was completed on Lake Austin. The results have extended
the Lake Austin North gold anomalism to a strike of
over 5.5km where it remains open to both the north and
south-west. The regolith gold target at West Island has
been extended to over 2.3km in strike within a dominantly
doleritic regolith host sequence. At the Mainland East
target, a regolith gold anomaly with over 1km of strike has
been defined within a dominantly mafic sequence. Further
infill and follow-up diamond drilling are planned in the
coming year.
Location plan of the Cue JV project showing Evolution drill holes drilled in
2020 and historical drill holes
Evolution Mining Limited // Annual Report 2020 65
Annual Report (Continued)
y
r
e
v
o
c
s
i
D
/
/
Crush Creek project, QLD
(earning 70% with option for 100%)
Other greenfields
exploration projects
We entered into an earn-in agreement with private entity
Basin Gold Pty Ltd (“Basin Gold”) over the Crush Creek
project in September 2019.
Crush Creek is located 10 km north west of Collinsville,
Queensland, and approximately 30km south-east of
our Mt Carlton Operation (Figure X). Crush Creek hosts
low sulphidation epithermal gold mineralisation which
Evolution believes has significant potential to provide mine
life extensions at Mt Carlton. Diamond drilling commenced
in April completing 27 holes for 3,781m by the end of the
financial year. The drilling confirmed and extended gold
mineral inventories at the Delta and BV7 prospects. The
goal for FY21 is to publish a maiden Mineral Resource for
these prospects in Evolution’s December 2020 Mineral
Resource Update as well as discover additional new
resource areas.
Good progress was made at three other Greenfields
projects even though there were significant work
stoppages and delays related to COVID-19 restrictions.
New high-quality drill targets have been generated on the
Drummond Project (Evolution (EVN) earning 80%) and
Connor’s Arc Project (EVN 100%) in Queensland. These
targets are planned for drilling in FY21. At the Murchison
Project (EVN earning 80%) in Western Australia a large
regional aircore program commenced evaluating the
extensions of the Big Bell and Cuddingwarra Shear Zones.
Location of the Crush Creek project in relation to Evolution’s Mt Carlton Operation
66 Evolution Mining Limited // Annual Report 2020
/
/
i
M
n
e
r
a
l
R
e
s
o
u
r
c
e
s
a
n
d
O
r
e
R
e
s
e
r
v
e
s
Annual Report (Continued)
Mineral Resources and
Ore Reserves
Group Mineral Resources as at 31 December 2019 are estimated at 15.2 million ounces of gold
and 934,000 tonnes of copper compared with the estimate at 31 December 2018 of 14.73
million ounces of gold and 982,000 tonnes of copper. The updated estimate accounts for
mining depletion in 2019 of 890,000 ounces of gold. All Mineral Resources are constrained at
an A$2,000/oz economic threshold at Evolution’s 100% owned assets. Mineral Resources are
reported inclusive of Ore Reserves.
Group Ore Reserves as at 31 December 2019 are estimated
at 6.6 million ounces of gold and 532,000 tonnes of
copper compared with the 31 December 2018 estimate of
7.5 million ounces of gold and 538,000 tonnes of copper
after accounting for mining depletion of 890,000 ounces
of gold.
Commodity price assumptions
At Evolution assets, commodity price assumptions used
to estimate the December 2019 Mineral Resources and
Ore Reserves are provided below. The reserve gold price
assumption has been revised higher from A$1,350 to
A$1,450 per ounce and remains below US$1,000 per ounce
using the average FY20 AUD:USD exchange rate of 0.6571.
Silver and copper price assumptions are unchanged.
■ Gold: A$1,450/oz for Ore Reserves, A$2,000/oz for
Mineral Resources
■ Silver: A$20.00/oz for Ore Reserves, A$26.00/oz for
Mineral Resources
■ Copper: A$6,000/t for Ore Reserves, A$9,000/t for
Mineral Resources
Changes since 31 December 2019
Mineral Resources and Ore Reserves
Statement
Evolution’s Mineral Resources and Ore Reserves as at 31
December 2019 were released to the ASX on 12 February
2020 in the report entitled “Annual Mineral Resources and
Ore Reserves Statement.”
The Red Lake acquisition announced on 26 November 2019
was successfully completed on 1 April 2020 as advised
in ASX release entitled “COVID-19 Update and Red Lake
Acquisition”. A complete revision of the Red Lake Mineral
Resource was undertaken adopting Evolution’s resource
estimation methodology and was reported in accordance
with the 2012 Edition of the Australasian Code for
Reporting of Exploration results and the ASX Listing Rules.
Full details of the Red Lake Mineral Resource estimate are
provided in the report entitled “Red Lake 11 Million Ounce
JORC Code Mineral Resource” released to the ASX on 13
August 2020. Similarly, a revised Red Lake Ore Reserve
estimate is planned to be reported in February 2021.
Evolution Mining Limited // Annual Report 2020 67
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
/
/
Annual Report (Continued)
On 19 June 2020 the ASX report entitled “Mt Carlton
Update” provided notification that an extensive grade
control infill program to inform and update the Mt Carlton
Mineral Resource block model indicated a reduction of
approximately 75,000 ounces from the Life of Mine Plan.
Evolution advised that the divestment of the Cracow
gold mine to Aeris Resources Limited was successfully
completed on 30 June 2020, reported in the ASX release
entitled “Completion of Cracow Gold Mine Divestment” on
1 July 2020.
Evolution announced a Maiden Underground Ore Reserve
and an increase to the Mineral Resource at Cowal on
23 July 2020 in the ASX release entitled “Cowal Maiden
Underground Ore Reserve Supports Mine Development.”
Evolution is not aware of any other new information or data
that materially affects the information contained in the
Annual Mineral Resource and Ore Reserve Statement
31 December 2019 other than changes due to normal mining
depletion during the six months ended 30 June 2020.
An updated Mineral Resource and Ore Reserve statement
for the above changes and relevant ASX releases can be
viewed at www.evolutionmining.com.au.
JORC 2012 and ASX Listing Rules
requirements
The Mineral Resources and Ore Reserves statement
included in this report has been prepared in accordance
with the 2012 Edition of the “Australasian Code for
reporting of Exploration Results, Mineral Resources and
Ore Reserves” (the JORC Code 2012) for all projects.
Governance and internal controls
Evolution reports its Mineral Resources and Ore Reserves
annually. Mineral Resources are inclusive of Ore Reserves.
Reporting is in accordance with the 2012 Edition of the
Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves and the ASX Listing
Rules. All Mineral Resource and Ore Reserve estimates and
procedures are subject to internal and external review by
qualified professionals. All Competent Persons named by
Evolution are suitably qualified and experienced as defined
in the JORC Code 2012 Edition. Prior to the public release
of the Mineral Resource and Ore Reserve estimates, they
are reviewed by the Evolution Board.
Competent Persons Statement
The information in this report that relates to the Mineral
Resources and Ore Reserves listed in Competent Persons
table is based on, and fairly represents, information and
supporting documentation at the time of the release
prepared by the Competent Person whose name appears
in the same row, who is employed on a full-time basis by
Evolution and who is a member or fellow of the Australian
Institute of Mining and Metallurgy or the Australasian
Institute of Geoscientists. Each person named in the table
has sufficient experience which is relevant to the style of
mineralisation and types of deposits under consideration
and to the activity which he has undertaken to qualify as a
Competent Person as defined in the JORC Code 2012. Each
Competent Person consents to the inclusion in this report
of the matters based on their information in the form and
context in which it appears.
Evolution employees acting as a Competent Person may
hold equity in Evolution Mining Limited and may be entitled
to participate in Evolution’s executive equity long-term
incentive plan, details of which are included in Evolution’s
annual Remuneration Report. Annual replacement of
depleted Ore Reserves is one of the performance measures
of Evolution’s long-term incentive plans.
68 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
/
/
i
M
n
e
r
a
l
R
e
s
o
u
r
c
e
s
a
n
d
O
r
e
R
e
s
e
r
v
e
s
Activity
Competent Person
Membership
Membership status
Competent Persons Table
Cowal Mineral Resources
James Biggam
Cowal Open Pit Ore Reserve
Ryan Kare
Cowal Underground Ore Reserve
Joshua Northfield
Red Lake Mineral Resource
Dean Fredericksen
Mungari Mineral Resource
Mungari Ore Reserve
Brad Daddow
Ken Larwood
Mt Carlton Mineral Resource
Ben Coutts
Mt Carlton Open Pit Ore Reserve
Anton Kruger
Mt Carlton Underground Ore Reserve
Anton Kruger
Cracow Mineral Resource
Cracow Ore Reserve
Michael Smith
Matt Gray
Mt Rawdon Mineral Resource
Timothy Murphy
Mt Rawdon Ore Reserve
Thomas Lethbridge
Marsden Mineral Resources
Michael Andrew
Marsden Ore Reserve
Anton Kruger
AusIMM
AusIMM
AusIMM
AusIMM
AIG
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
Member
Member
Member
Member
Member
Member
Member
Fellow
Fellow
Member
Member
Member
Member
Fellow
Fellow
Full details of the Ernest Henry Mineral Resources and Ore Reserves are provided in the report entitled “Glencore Resources and Reserves as at 31 December 2019”
released 4 February 2020 and available to view at www.glencore.com. The information in this statement that relates to the Ernest Henry Mineral Resource and Ore
Reserve is based on, and fairly represents, information and supporting documentation prepared by Jessica Shiels and Mike Corbett respectively. Jessica and Mike
are members of the Australasian Institute of Mining and Metallurgy and are full-time employees of Glencore. The Company confirms that all material assumptions
and technical parameters underpinning the estimates in Glencore’s market release continue to apply and have not materially changed. Jessica Shiels and Mike
Corbett consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.
Evolution Mining Limited // Annual Report 2020 69
Annual Report (Continued)
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
/
/
8
1
c
e
D
e
c
r
u
o
s
e
R
e
c
r
u
o
s
e
R
l
a
t
o
T
l
d
o
G
l
a
t
e
M
)
z
o
k
(
7
7
9
4
,
7
2
0
,
1
1
1
4
,
1
5
1
4
7
,
4
5
4
4
3
6
1
4
1
9
4
3
2
8
6
9
9
2
0
9
,
1
1
1
6
4
1
5
2
,
0
7
4
,
1
3
5
0
,
1
3
P
C
1
2
3
4
5
6
7
l
d
o
G
l
a
t
e
M
)
z
o
k
(
9
2
2
5
,
0
6
8
2
0
5
2
,
1
9
5
8
,
5
4
3
7
4
2
6
9
5
7
8
1
4
2
6
0
,
1
9
4
8
,
1
0
6
5
9
0
4
2
,
8
8
2
,
1
3
5
0
,
1
8
8
0
.
3
6
0
.
2
6
2
.
4
0
.
1
1
2
4
.
0
9
.
1
8
5
0
.
0
7
4
.
5
3
.
1
9
5
0
.
7
2
.
1
8
1
.
3
7
4
.
1
2
6
0
.
7
2
0
.
.
9
7
2
4
.
2
7
9
2
-
2
4
8
,
1
.
6
7
7
5
2
8
6
4
2
,
5
5
2
.
6
9
3
.
9
1
.
5
0
5
0
.
4
6
9
.
.
3
2
6
5
5
4
5
4
.
7
4
5
.
.
2
9
0
5
0
6
4
6
.
.
7
9
2
2
1
1
2
1
4
1
-
5
9
1
7
1
2
7
1
3
3
8
2
0
0
6
7
7
1
2
2
.
5
2
5
8
1
6
2
6
2
9
0
.
9
0
.
1
2
2
0
6
4
,
7
8
0
.
5
1
.
4
6
1
-
-
-
5
3
0
.
t
i
p
n
e
p
O
l
d
o
G
e
d
a
r
G
)
t
/
g
(
s
e
n
n
o
T
)
t
M
(
l
d
o
G
l
a
t
e
M
)
z
o
k
(
d
e
r
r
e
f
n
I
l
d
o
G
e
d
a
r
G
)
t
/
g
(
s
e
n
n
o
T
)
t
M
(
l
d
o
G
l
a
t
e
M
)
z
o
k
(
l
d
o
G
e
d
a
r
G
)
t
/
g
(
s
e
n
n
o
T
)
t
M
(
l
d
o
G
l
a
t
e
M
)
z
o
k
(
l
d
o
G
e
d
a
r
G
)
t
/
g
(
s
e
n
n
o
T
)
t
M
(
ff
O
-
t
u
C
e
p
y
T
j
t
c
e
o
r
P
d
e
t
a
c
i
d
n
I
d
e
r
u
s
a
e
M
l
d
o
G
t
n
e
m
e
t
a
t
S
e
c
r
u
o
s
e
R
i
l
l
a
r
e
n
M
d
o
G
p
u
o
r
G
9
1
0
2
r
e
b
m
e
c
e
D
-
0
5
2
.
4
7
.
1
4
5
2
.
2
1
.
1
-
8
2
3
.
3
3
.
1
2
5
0
.
2
5
.
1
7
7
2
.
3
9
.
1
1
6
0
.
2
2
0
.
0
4
.
1
-
3
9
2
2
.
-
1
6
6
.
2
0
4
4
3
6
2
5
,
8
4
.
1
0
4
0
.
-
4
0
0
.
5
4
0
.
3
9
2
1
.
9
4
6
.
7
1
.
3
6
6
9
.
0
0
9
.
4
1
.
3
1
4
1
3
3
2
4
8
0
7
7
8
3
9
6
7
8
0
5
,
1
7
8
1
5
9
6
,
1
0
5
9
1
3
0
,
1
.
8
6
0
8
6
3
2
0
1
,
-
3
0
3
.
6
9
0
.
8
8
5
.
4
0
2
.
4
5
0
.
3
8
4
.
6
3
.
1
5
6
0
.
2
2
.
1
8
2
3
.
1
3
.
1
2
6
0
.
7
2
0
.
5
7
0
.
-
9
7
6
.
.
4
9
0
7
1
4
7
0
.
5
5
3
.
4
8
4
.
5
4
0
.
5
8
8
.
6
8
6
3
.
8
3
8
3
.
7
7
.
1
5
1
.
0
4
0
9
7
4
.
.
3
8
9
1
1
-
0
6
8
4
8
-
2
1
-
2
1
6
7
4
2
1
9
5
1
1
1
6
1
-
-
3
6
0
.
9
9
7
.
-
6
0
.
1
-
6
0
.
1
7
3
0
.
0
3
.
1
4
3
5
.
2
2
3
.
5
6
0
.
-
.
9
7
2
4
3
3
0
.
-
5
3
0
.
-
5
3
0
.
4
4
6
.
8
5
0
.
3
5
0
.
1
1
.
1
0
7
7
.
-
5
3
0
.
t
i
p
n
e
p
O
n
o
t
l
r
a
C
t
M
e
l
i
p
k
c
o
t
S
n
o
t
l
r
a
C
t
M
5
5
2
.
7
1
.
0
.
5
0
8
.
1
.
9
0
.
2
0
G
U
l
a
t
o
T
l
a
t
o
T
t
i
p
n
e
p
O
G
U
l
a
t
o
T
l
a
t
o
T
l
a
t
o
T
n
o
t
l
r
a
C
t
M
n
o
t
l
r
a
C
t
M
1
n
o
d
w
a
R
t
M
1
i
r
a
g
n
u
M
i
r
a
g
n
u
M
1
i
r
a
g
n
u
M
2
y
r
n
e
H
t
s
e
n
r
E
n
e
d
s
r
a
M
l
a
t
o
T
0
6
8
3
6
0
.
.
9
7
2
4
e
l
i
p
k
c
o
t
S
-
5
.
1
2
2
.
G
U
l
a
t
o
T
l
a
t
o
T
l
a
w
o
C
l
a
w
o
C
l
a
w
o
C
l
a
w
o
C
1
w
o
c
a
r
C
5
2
7
4
1
,
7
6
1
,
5
1
4
8
0
.
.
7
6
4
6
5
4
2
6
3
,
.
7
2
5
2
4
7
0
3
,
1
9
6
0
.
.
2
7
8
5
.
.
m
o
c
e
r
o
c
n
e
g
w
w
w
l
.
t
a
w
e
v
o
t
i
l
e
b
a
l
i
a
v
a
d
n
a
0
2
0
2
y
r
a
u
r
b
e
F
4
d
e
s
a
e
e
r
l
”
9
1
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
a
s
e
v
r
e
s
e
R
d
n
a
s
e
c
r
u
o
s
e
R
e
r
o
c
n
e
G
“
d
e
l
t
i
t
n
e
l
t
r
o
p
e
r
e
h
t
n
i
i
d
e
d
v
o
r
p
e
r
a
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
y
r
n
e
H
t
s
e
n
r
E
e
h
t
f
o
s
l
i
a
t
e
d
l
l
u
F
w
e
r
d
n
A
l
e
a
h
c
M
7
i
.
;
)
e
r
o
c
n
e
G
(
l
i
s
l
e
h
S
a
c
i
s
s
e
J
.
6
;
w
o
d
d
a
D
d
a
r
B
.
5
;
y
h
p
r
u
M
m
T
i
.
4
;
s
t
t
u
o
C
n
e
B
.
3
;
h
t
i
m
S
l
e
a
h
c
M
i
.
2
;
i
m
a
g
g
B
s
e
m
a
J
.
1
o
t
r
e
f
e
r
s
e
t
o
N
)
P
C
(
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
p
u
o
r
G
.
q
E
u
C
%
9
0
ff
o
-
t
u
c
n
o
i
t
a
r
e
p
O
y
r
n
e
H
t
s
e
n
r
E
s
e
l
i
p
k
c
o
t
s
s
e
d
u
c
n
l
I
.
1
.
2
.
3
i
g
n
d
n
u
o
r
o
t
l
e
u
d
y
e
s
i
c
e
r
p
m
u
s
t
o
n
y
a
m
d
n
a
n
o
i
s
i
c
e
r
p
e
t
a
i
r
p
o
r
p
p
a
t
c
e
fl
e
r
o
t
i
s
e
r
u
g
fi
t
n
a
c
fi
n
g
i
s
o
t
d
e
t
r
o
p
e
r
s
i
a
t
a
D
d
n
u
o
r
g
r
e
d
n
u
s
e
t
o
n
e
d
G
U
.
s
e
v
r
e
s
e
R
e
r
O
f
o
e
v
i
s
u
c
n
l
i
d
e
t
r
o
p
e
r
e
r
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
t
s
e
r
e
t
n
i
i
c
m
o
n
o
c
e
n
a
i
i
s
a
h
g
n
n
M
n
o
i
t
u
o
v
E
l
.
t
r
o
p
e
R
e
h
t
m
o
r
f
d
e
fi
d
o
m
y
i
l
l
a
i
r
e
t
a
m
n
e
e
b
t
o
n
e
v
a
h
d
e
t
n
e
s
e
r
p
e
r
a
i
s
g
n
d
n
fi
’
s
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
h
t
h
c
h
w
n
i
i
t
x
e
t
n
o
c
d
n
a
m
r
o
f
e
h
t
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
.
d
e
g
n
a
h
c
y
l
l
a
i
r
e
t
a
m
t
o
n
e
v
a
h
d
n
a
l
y
p
p
a
o
t
e
u
n
i
t
n
o
c
t
r
o
p
e
R
e
h
t
n
i
s
e
t
a
m
i
t
s
e
i
i
e
h
t
g
n
n
n
p
r
e
d
n
u
s
r
e
t
e
m
a
r
a
p
d
n
a
s
n
o
i
t
p
m
u
s
s
a
l
a
i
r
e
t
a
m
l
l
a
t
a
h
t
d
n
a
t
r
o
p
e
R
e
h
t
n
i
d
e
d
u
c
n
l
i
n
o
i
t
a
m
r
o
f
n
i
e
h
t
s
t
c
e
ff
a
y
l
l
a
i
r
e
t
a
m
t
a
h
t
a
t
a
d
r
o
n
o
i
t
a
m
r
o
f
n
i
w
e
n
y
n
a
f
o
e
r
a
w
a
t
o
n
s
i
t
i
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
d
e
e
r
g
a
e
h
t
e
d
i
s
t
u
o
e
c
r
u
o
s
e
R
y
r
n
e
H
t
s
e
n
r
E
e
h
t
m
o
r
f
d
e
c
u
d
o
r
p
r
e
v
l
i
s
d
n
a
r
e
p
p
o
c
,
l
d
o
g
e
r
u
t
u
f
f
o
%
9
4
d
n
a
,
a
e
r
a
d
e
e
r
g
a
n
a
m
o
r
f
d
e
c
u
d
o
r
p
r
e
v
l
i
s
d
n
a
r
e
p
p
o
c
e
r
u
t
u
f
f
o
%
0
3
d
n
a
n
o
i
t
c
u
d
o
r
p
d
o
g
e
r
u
t
u
f
l
m
o
r
f
e
u
n
e
v
e
r
e
h
t
f
o
%
0
0
1
o
t
s
t
h
g
i
r
g
n
n
r
a
e
i
.
l
e
c
r
u
o
s
e
r
d
o
g
y
r
n
e
H
t
s
e
n
r
E
l
a
t
o
t
e
h
t
f
o
%
5
9
7
.
e
t
u
t
i
t
s
n
o
c
s
e
r
u
g
fi
d
e
t
r
o
p
e
r
e
v
o
b
a
e
h
T
.
e
c
r
u
o
s
e
r
i
e
n
m
e
r
i
t
n
e
e
h
t
t
o
n
d
n
a
t
s
e
r
e
t
n
i
i
c
m
o
n
o
c
e
f
o
s
i
s
a
b
e
h
t
n
o
e
r
e
h
d
e
t
r
o
p
e
r
s
i
e
c
r
u
o
s
e
R
y
r
n
e
H
t
s
e
n
r
E
e
h
T
.
a
e
r
a
70 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
8
1
c
e
D
s
e
v
r
e
s
e
R
l
a
t
e
M
d
o
G
l
)
z
o
k
(
3
5
8
2
,
7
2
0
,
1
0
8
8
3
,
7
8
1
5
6
4
9
4
8
0
1
2
2
6
0
7
5
1
2
5
3
1
1
4
3
6
7
4
7
7
1
8
3
P
C
1
1
2
3
3
3
4
5
6
3
l
a
t
e
M
d
o
G
l
)
z
o
k
(
3
7
7
2
,
0
6
8
4
3
6
3
,
4
1
1
4
7
1
6
9
0
4
1
1
3
8
3
5
0
0
5
8
6
8
6
5
0
6
6
7
1
8
8
5
4
7
,
2
4
6
6
,
e
v
r
e
s
e
R
l
a
t
o
T
l
e
b
a
b
o
r
P
d
e
v
o
r
P
e
d
a
r
G
d
o
G
l
)
t
/
g
(
s
e
n
n
o
T
)
t
M
(
)
z
o
k
(
)
t
/
g
(
)
z
o
k
(
)
t
/
g
(
l
a
t
e
M
d
o
G
l
e
d
a
r
G
d
o
G
l
)
t
M
(
s
e
n
n
o
T
l
a
t
e
M
d
o
G
l
e
d
a
r
G
d
o
G
l
)
t
M
(
s
e
n
n
o
T
ff
O
-
t
u
C
l
d
o
G
e
p
y
T
l
t
n
e
m
e
t
a
t
S
e
v
r
e
s
e
R
e
r
O
d
o
G
p
u
o
r
G
9
1
0
2
r
e
b
m
e
c
e
D
6
9
0
.
3
6
0
.
5
8
0
.
8
7
5
.
8
5
3
.
8
5
0
.
4
4
3
.
7
3
.
1
8
6
0
.
0
4
.
1
5
2
4
.
2
5
.
1
2
5
0
.
9
3
0
.
4
7
0
.
3
4
9
8
.
.
9
7
2
4
3
7
7
2
,
-
.
2
2
2
3
1
3
7
7
2
,
1
6
0
.
1
5
.
1
9
1
.
5
6
3
0
.
6
0
7
.
5
6
4
2
.
2
1
.
1
1
0
5
0
.
3
6
.
1
1
0
4
9
3
.
7
1
.
5
6
1
8
2
8
3
4
7
1
4
8
0
4
9
9
2
5
8
4
6
7
4
2
1
9
8
4
5
0
5
7
1
8
6
0
4
5
,
6
9
0
.
-
6
9
0
.
7
6
5
.
8
5
3
.
4
5
0
.
4
4
3
.
8
3
.
1
2
7
0
.
0
4
.
1
5
3
5
.
3
4
.
1
7
4
0
.
9
3
0
.
4
7
0
.
3
4
9
8
.
-
3
4
9
8
.
1
2
0
.
1
5
.
1
4
8
4
.
6
3
0
.
1
7
6
.
.
2
9
0
2
5
5
0
.
1
7
0
0
.
2
6
0
1
.
0
4
3
3
.
7
1
.
5
6
6
2
2
-
0
6
8
0
6
8
4
7
2
1
-
2
1
3
5
4
2
6
5
0
8
6
5
1
-
5
3
2
,
1
-
3
6
0
.
3
6
0
.
5
9
5
.
6
0
.
1
-
6
0
.
1
5
4
0
.
8
2
.
1
5
0
4
.
7
4
2
.
0
8
0
.
-
1
7
0
.
-
.
9
7
2
4
.
9
7
2
4
9
3
0
.
5
3
0
.
-
5
3
0
.
3
7
3
.
8
5
0
.
3
4
0
.
1
0
.
1
0
1
.
6
-
5
4
0
.
t
i
p
n
e
p
O
e
l
i
p
k
c
o
t
S
l
a
t
o
T
1
.
3
8
.
1
d
n
u
o
r
g
r
e
d
n
U
1
w
o
c
a
r
C
t
i
p
n
e
p
O
n
o
t
l
r
a
C
t
M
e
l
i
p
k
c
o
t
S
n
o
t
l
r
a
C
t
M
.
2
3
d
n
u
o
r
g
r
e
d
n
U
n
o
t
l
r
a
C
t
M
4
2
0
.
5
7
0
.
9
2
.
.
9
0
.
3
0
t
i
p
n
e
p
O
1
n
o
d
w
a
R
t
M
t
i
p
n
e
p
O
1
i
r
a
g
n
u
M
l
a
t
o
T
n
o
t
l
r
a
C
t
M
d
n
u
o
r
g
r
e
d
n
U
i
r
a
g
n
u
M
d
n
u
o
r
g
r
e
d
n
U
2
y
r
n
e
H
t
s
e
n
r
E
t
i
p
n
e
p
O
n
e
d
s
r
a
M
l
a
t
o
T
1
i
r
a
g
n
u
M
j
t
c
e
o
r
P
l
a
w
o
C
l
a
w
o
C
l
a
w
o
C
o
t
e
u
n
i
t
n
o
c
s
t
r
o
p
e
R
e
h
t
n
i
s
e
t
a
m
i
t
s
e
i
i
e
h
t
g
n
n
n
p
r
e
d
n
u
s
r
e
t
e
m
a
r
a
p
d
n
a
s
n
o
i
t
p
m
u
s
s
a
l
a
i
r
e
t
a
m
l
l
a
t
a
h
t
d
n
a
s
t
r
o
p
e
R
e
h
t
n
i
d
e
d
u
c
n
l
i
n
o
i
t
a
m
r
o
f
n
i
e
h
t
s
t
c
e
ff
a
y
l
l
a
i
r
e
t
a
m
t
a
h
t
a
t
a
d
r
o
n
o
i
t
a
m
r
o
f
n
i
w
e
n
y
n
a
f
o
e
r
a
w
a
t
o
n
s
i
t
i
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
t
s
e
r
e
t
n
i
i
c
m
o
n
o
c
e
n
a
i
i
s
a
h
g
n
n
M
n
o
i
t
u
o
v
E
l
.
s
t
r
o
p
e
R
e
h
t
m
o
r
f
d
e
fi
d
o
m
y
i
l
l
a
i
r
e
t
a
m
n
e
e
b
t
o
n
e
v
a
h
d
e
t
n
e
s
e
r
p
e
r
a
i
s
g
n
d
n
fi
’
s
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
h
t
h
c
h
w
n
i
i
t
x
e
t
n
o
c
d
n
a
m
r
o
f
e
h
t
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
.
d
e
g
n
a
h
c
y
l
l
a
i
r
e
t
a
m
t
o
n
e
v
a
h
d
n
a
l
y
p
p
a
e
h
t
e
d
i
s
t
u
o
e
c
r
u
o
s
e
R
y
r
n
e
H
t
s
e
n
r
E
e
h
t
m
o
r
f
d
e
c
u
d
o
r
p
r
e
v
l
i
s
d
n
a
r
e
p
p
o
c
,
l
d
o
g
e
r
u
t
u
f
f
o
%
9
4
d
n
a
,
a
e
r
a
e
n
m
i
f
o
e
f
i
l
d
e
e
r
g
a
n
a
m
o
r
f
d
e
c
u
d
o
r
p
r
e
v
l
i
s
d
n
a
r
e
p
p
o
c
e
r
u
t
u
f
f
o
%
0
3
d
n
a
n
o
i
t
c
u
d
o
r
p
d
o
g
e
r
u
t
u
f
l
m
o
r
f
e
u
n
e
v
e
r
e
h
t
f
o
%
0
0
1
o
t
s
t
h
g
i
r
g
n
n
r
a
e
i
/
/
i
M
n
e
r
a
l
R
e
s
o
u
r
c
e
s
a
n
d
O
r
e
R
e
s
e
r
v
e
s
.
l
e
v
r
e
s
e
r
d
o
g
y
r
n
e
H
t
s
e
n
r
E
l
a
t
o
t
e
h
t
.
f
o
%
5
9
8
e
t
u
t
i
t
s
n
o
c
s
e
r
u
g
fi
d
e
t
r
o
p
e
r
e
v
o
b
a
e
h
T
.
e
v
r
e
s
e
r
i
e
n
m
e
r
i
t
n
e
e
h
t
t
o
n
d
n
a
t
s
e
r
e
t
n
i
i
c
m
o
n
o
c
e
f
o
s
i
s
a
b
e
h
t
n
o
e
r
e
h
d
e
t
r
o
p
e
r
s
i
e
v
r
e
s
e
R
y
r
n
e
H
t
s
e
n
r
E
.
a
e
r
a
d
e
e
r
g
a
.
.
m
o
c
e
r
o
c
n
e
g
w
w
w
l
.
t
a
w
e
v
o
t
i
l
e
b
a
l
i
a
v
a
d
n
a
0
2
0
2
y
r
a
u
r
b
e
F
4
d
e
s
a
e
e
r
l
”
9
1
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
a
s
e
v
r
e
s
e
R
d
n
a
s
e
c
r
u
o
s
e
R
e
r
o
c
n
e
G
“
d
e
l
t
i
t
n
e
l
t
r
o
p
e
r
e
h
t
n
i
i
d
e
d
v
o
r
p
e
r
a
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
y
r
n
e
H
t
s
e
n
r
E
e
h
t
f
o
s
l
i
a
t
e
d
l
l
u
F
)
e
r
o
c
n
e
G
(
l
t
t
e
b
r
o
C
e
k
M
i
.
6
;
d
o
o
w
r
a
L
n
e
K
.
5
;
e
g
d
i
r
b
h
t
e
L
s
a
m
o
h
T
.
4
;
r
e
g
u
r
K
n
o
t
n
A
.
3
;
y
a
r
G
t
t
a
M
.
2
;
e
r
a
K
n
a
y
R
.
1
o
t
r
e
f
e
r
s
e
t
o
N
)
P
C
(
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
v
r
e
s
e
R
e
r
O
p
u
o
r
G
i
g
n
d
n
u
o
r
o
t
l
e
u
d
y
e
s
i
c
e
r
p
m
u
s
t
o
n
y
a
m
d
n
a
n
o
i
s
i
c
e
r
p
e
t
a
i
r
p
o
r
p
p
a
t
c
e
fl
e
r
o
t
i
s
e
r
u
g
fi
t
n
a
c
fi
n
g
i
s
o
t
d
e
t
r
o
p
e
r
s
i
.
q
E
u
C
%
9
0
ff
o
-
t
u
c
n
o
i
t
a
r
e
p
O
y
r
n
e
H
t
s
e
n
r
E
s
e
l
i
p
k
c
o
t
s
s
e
d
u
c
n
l
I
a
t
a
D
.
1
.
2
.
3
.
7
3
4
5
l
a
t
o
T
Evolution Mining Limited // Annual Report 2020 71
Annual Report (Continued)
8
1
c
e
D
s
e
c
r
u
o
s
e
R
r
e
p
p
o
C
)
t
k
(
l
a
t
e
M
0
6
5
7
8
3
9
2
6
4
3
2
8
9
8
1
c
e
D
s
e
c
r
u
o
s
e
R
r
e
p
p
o
C
)
t
k
(
l
a
t
e
M
1
7
3
6
3
1
7
2
4
1
3
8
3
5
.
1
2
3
3
P
C
1
2
1
1
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
/
/
.
m
o
c
e
r
o
c
n
e
g
w
w
w
l
.
e
h
t
e
d
i
s
t
u
o
e
c
r
u
o
s
e
R
y
r
n
e
H
t
s
e
n
r
E
e
h
t
m
o
r
f
d
e
c
u
d
o
r
p
r
e
v
l
i
s
d
n
a
r
e
p
p
o
c
,
l
d
o
g
e
r
u
t
u
f
f
o
%
9
4
d
n
a
,
a
e
r
a
e
n
m
i
f
o
e
f
i
l
d
e
e
r
g
a
n
a
m
o
r
f
d
e
c
u
d
o
r
p
r
e
v
l
i
s
d
n
a
r
e
p
p
o
c
e
r
u
t
u
f
f
o
%
0
3
d
n
a
n
o
i
t
c
u
d
o
r
p
d
o
g
e
r
u
t
u
f
l
m
o
r
f
e
u
n
e
v
e
r
e
h
t
f
o
%
0
0
1
o
t
s
t
h
g
i
r
g
n
n
r
a
e
i
y
r
n
e
H
t
s
e
n
r
E
l
a
t
o
t
e
h
t
.
f
o
%
9
3
3
d
n
a
e
c
r
u
o
s
e
r
r
e
p
p
o
c
y
r
n
e
H
t
s
e
n
r
E
l
a
t
o
t
e
h
t
.
f
o
%
4
7
3
e
t
u
t
i
t
s
n
o
c
s
e
r
u
g
fi
d
e
t
r
o
p
e
r
e
v
o
b
a
e
h
T
.
e
v
r
e
s
e
r
i
e
n
m
e
r
i
t
n
e
e
h
t
t
o
n
d
n
a
t
s
e
r
e
t
n
i
i
c
m
o
n
o
c
e
f
o
s
i
s
a
b
e
h
t
n
o
e
r
e
h
d
e
t
r
o
p
e
r
s
i
e
v
r
e
s
e
R
y
r
n
e
H
t
s
e
n
r
E
.
a
e
r
a
d
e
e
r
g
a
.
e
v
r
e
s
e
r
r
e
p
p
o
c
t
s
e
r
e
t
n
i
i
c
m
o
n
o
c
e
n
a
i
i
s
a
h
g
n
n
M
n
o
i
t
u
o
v
E
l
.
s
t
r
o
p
e
R
e
h
t
m
o
r
f
d
e
fi
d
o
m
y
i
l
l
a
i
r
e
t
a
m
n
e
e
b
t
o
n
e
v
a
h
d
e
t
n
e
s
e
r
p
e
r
a
i
s
g
n
d
n
fi
’
s
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
h
t
h
c
h
w
n
i
i
t
x
e
t
n
o
c
d
n
a
m
r
o
f
e
h
t
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
.
d
e
g
n
a
h
c
y
l
l
a
i
r
e
t
a
m
t
o
n
e
v
a
h
d
n
a
l
y
p
p
a
o
t
e
u
n
i
t
n
o
c
t
r
o
p
e
R
e
h
t
n
i
s
e
t
a
m
i
t
s
e
i
i
e
h
t
g
n
n
n
p
r
e
d
n
u
s
r
e
t
e
m
a
r
a
p
d
n
a
s
n
o
i
t
p
m
u
s
s
a
l
a
i
r
e
t
a
m
l
l
a
t
a
h
t
d
n
a
t
r
o
p
e
R
e
h
t
n
i
d
e
d
u
c
n
l
i
n
o
i
t
a
m
r
o
f
n
i
e
h
t
s
t
c
e
ff
a
y
l
l
a
i
r
e
t
a
m
t
a
h
t
a
t
a
d
r
o
n
o
i
t
a
m
r
o
f
n
i
w
e
n
y
n
a
f
o
e
r
a
w
a
t
o
n
s
i
t
i
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
r
e
p
p
o
C
e
d
a
r
G
)
%
(
e
v
r
e
s
e
R
l
a
t
o
T
1
7
3
0
5
1
0
1
1
1
1
2
3
5
7
5
0
.
0
0
.
1
4
5
0
.
9
3
0
.
1
5
0
.
5
6
0
.
s
e
n
n
o
T
)
t
M
(
7
1
.
5
6
0
1
.
5
1
6
8
.
1
6
3
0
.
2
2
2
.
9
4
2
8
.
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
1
7
3
3
2
1
9
1
1
1
5
0
5
l
e
b
a
b
o
r
P
r
e
p
p
o
C
e
d
a
r
G
)
%
(
7
5
0
.
3
9
0
.
1
6
0
.
9
3
0
.
7
5
0
.
3
6
0
.
s
e
n
n
o
T
)
t
M
(
7
1
.
5
6
0
2
3
1
.
1
5
.
1
6
3
0
.
8
8
.
1
.
5
2
0
8
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
-
7
2
1
-
1
8
2
d
e
v
o
r
P
r
e
p
p
o
C
e
d
a
r
G
)
%
(
-
0
5
.
1
1
2
0
.
-
1
2
0
.
9
2
.
1
s
e
n
n
o
T
)
t
M
(
-
0
8
.
1
5
3
0
.
-
5
3
0
.
5
1
.
2
r
e
p
p
o
C
ff
O
-
t
u
C
e
p
y
T
j
t
c
e
o
r
P
.
3
0
.
9
0
8
.
1
.
2
3
l
a
t
o
T
t
i
p
n
e
p
O
1
n
o
t
l
r
a
C
t
M
l
a
t
o
T
2
y
r
n
e
H
t
s
e
n
r
E
d
n
u
o
r
g
r
e
d
n
U
n
o
t
l
r
a
C
t
M
n
e
d
s
r
a
M
l
a
t
o
T
1
n
o
t
l
r
a
C
t
M
t
n
e
m
e
t
a
t
S
e
v
r
e
s
e
R
e
r
O
r
e
p
p
o
C
p
u
o
r
G
9
1
0
2
r
e
b
m
e
c
e
D
i
g
n
d
n
u
o
r
o
t
l
e
u
d
y
e
s
i
c
e
r
p
m
u
s
t
o
n
y
a
m
d
n
a
n
o
i
s
i
c
e
r
p
e
t
a
i
r
p
o
r
p
p
a
t
c
e
fl
e
r
o
t
i
s
e
r
u
g
fi
t
n
a
c
fi
n
g
i
s
o
t
d
e
t
r
o
p
e
r
s
i
a
t
a
D
.
e
v
o
b
a
l
s
e
b
a
t
s
e
v
r
e
s
e
r
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
r
e
p
p
o
C
p
u
o
r
G
e
h
T
o
t
e
t
a
e
r
l
s
e
t
o
n
g
n
w
o
i
l
l
o
f
e
h
T
)
e
r
o
c
n
e
G
(
l
t
t
e
b
r
o
C
e
k
M
i
.
2
;
r
e
g
u
r
K
n
o
t
n
A
.
1
:
o
t
r
e
f
e
r
s
e
t
o
N
)
P
C
(
3
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
v
r
e
s
e
R
e
r
O
p
u
o
r
G
.
s
e
v
r
e
s
e
R
e
r
O
f
o
e
v
i
s
u
c
n
l
i
d
e
t
r
o
p
e
r
e
r
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
l
d
o
g
t
/
g
n
i
d
e
t
r
o
p
e
r
e
r
a
s
e
d
a
r
g
ff
o
-
t
u
c
n
o
i
t
u
o
v
E
l
.
q
E
u
C
%
9
0
ff
o
-
t
u
c
n
o
i
t
a
r
e
p
O
y
r
n
e
H
t
s
e
n
r
E
s
e
l
i
p
k
c
o
t
s
s
e
d
u
c
n
l
I
.
1
.
2
t
a
w
e
v
o
t
i
l
e
b
a
l
i
a
v
a
d
n
a
0
2
0
2
y
r
a
u
r
b
e
F
4
d
e
s
a
e
e
r
l
”
9
1
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
a
s
e
v
r
e
s
e
R
d
n
a
s
e
c
r
u
o
s
e
R
e
r
o
c
n
e
G
“
d
e
l
t
i
t
n
e
l
t
r
o
p
e
r
e
h
t
n
i
i
d
e
d
v
o
r
p
e
r
a
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
y
r
n
e
H
t
s
e
n
r
E
e
h
t
f
o
s
l
i
a
t
e
d
l
l
u
F
e
c
r
u
o
s
e
R
l
a
t
o
T
3
P
C
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
r
e
p
p
o
C
e
d
a
r
G
)
%
(
s
e
n
n
o
T
)
t
M
(
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
0
6
5
6
5
3
4
1
4
8
1
4
3
9
6
4
0
.
.
7
9
2
2
1
6
1
.
1
3
3
0
.
5
7
0
.
8
3
0
.
9
5
0
.
0
6
0
3
.
0
3
4
.
0
5
0
.
0
8
4
.
.
7
3
8
5
1
7
3
8
1
0
1
1
9
d
e
r
r
e
f
n
I
r
e
p
p
o
C
e
d
a
r
G
)
%
(
4
2
0
.
6
1
.
1
8
1
.
0
3
5
0
.
1
2
0
.
5
8
0
.
s
e
n
n
o
T
)
t
M
(
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
r
e
p
p
o
C
e
d
a
r
G
)
%
(
s
e
n
n
o
T
)
t
M
(
r
e
p
p
o
C
l
a
t
e
M
)
t
k
(
r
e
p
p
o
C
e
d
a
r
G
)
%
(
s
e
n
n
o
T
)
t
M
(
ff
O
-
t
u
C
e
p
y
T
j
t
c
e
o
r
P
4
1
.
3
0
1
.
7
0
4
0
.
4
0
0
.
5
4
0
.
3
5
5
3
4
2
3
1
3
6
1
6
4
0
.
.
3
8
9
1
1
6
1
.
1
6
3
0
.
7
7
0
.
1
4
0
.
0
9
0
2
.
5
5
3
.
5
4
0
.
1
0
4
.
-
0
3
1
-
1
9
6
0
1
.
2
1
8
6
5
0
.
.
4
7
4
4
1
1
3
-
7
1
.
1
1
2
0
.
-
1
2
0
.
4
0
.
1
-
0
6
2
.
5
3
0
.
-
5
3
0
.
5
9
2
.
l
a
t
o
T
.
2
0
.
9
0
l
a
t
o
T
l
a
t
o
T
2
y
r
n
e
H
t
s
e
n
r
E
n
e
d
s
r
a
M
5
3
0
.
t
i
p
n
e
p
O
1
n
o
t
l
r
a
C
t
M
5
5
2
.
d
n
u
o
r
g
r
e
d
n
U
n
o
t
l
r
a
C
t
M
l
a
t
o
T
1
n
o
t
l
r
a
C
t
M
d
e
t
a
c
i
d
n
I
d
e
r
u
s
a
e
M
r
e
p
p
o
C
t
n
e
m
e
t
a
t
S
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
r
e
p
p
o
C
p
u
o
r
G
9
1
0
2
r
e
b
m
e
c
e
D
s
t
t
u
o
C
n
e
B
.
3
;
)
e
r
o
c
n
e
G
(
l
i
s
l
e
h
S
a
c
i
s
s
e
J
.
2
;
w
e
r
d
n
A
l
e
a
h
c
M
i
.
1
:
o
t
r
e
f
e
r
s
e
t
o
N
)
P
C
(
3
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
p
u
o
r
G
72 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
e
c
r
u
o
s
e
R
l
a
t
o
T
l
d
o
G
l
a
t
e
M
)
z
o
k
(
2
1
9
2
,
l
d
o
G
e
d
a
r
G
)
t
/
g
(
8
4
2
.
s
e
n
n
o
T
)
t
M
(
.
1
5
6
3
l
d
o
G
l
a
t
e
M
)
z
o
k
(
1
5
4
,
1
d
e
r
r
e
f
n
I
l
d
o
G
e
d
a
r
G
)
t
/
g
(
7
3
2
.
s
e
n
n
o
T
)
t
M
(
8
0
9
1
.
l
d
o
G
l
a
t
e
M
)
z
o
k
(
1
6
4
,
1
d
e
t
a
c
i
d
n
I
l
d
o
G
e
d
a
r
G
)
t
/
g
(
1
6
2
.
s
e
n
n
o
T
)
t
M
(
6
4
7
1
.
l
d
o
G
l
a
t
e
M
)
z
o
k
(
-
d
e
r
u
s
a
e
M
l
d
o
G
e
d
a
r
G
)
t
/
g
(
-
s
e
n
n
o
T
)
t
M
(
ff
O
-
t
u
C
l
d
o
G
e
p
y
T
j
t
c
e
o
r
P
-
5
.
1
G
U
l
a
w
o
C
0
2
0
2
l
i
r
p
A
t
n
e
m
e
t
a
t
S
e
v
r
e
s
e
R
e
r
O
d
n
u
o
r
g
r
e
d
n
U
n
e
d
i
a
M
6
4
E
R
G
l
a
w
o
C
0
2
0
2
l
i
r
p
A
t
n
e
m
e
t
a
t
S
e
c
r
u
o
s
e
R
i
l
a
r
e
n
M
d
n
u
o
r
g
r
e
d
n
U
6
4
E
R
G
l
a
w
o
C
.
n
o
s
i
r
a
p
m
o
c
r
a
e
y
r
a
d
n
e
l
a
c
9
1
0
2
r
e
b
m
e
c
e
D
o
t
8
1
0
2
r
e
b
m
e
c
e
D
f
o
t
r
a
p
m
r
o
f
t
o
n
o
d
w
o
e
b
d
e
b
a
t
l
l
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
i
l
a
r
e
n
M
e
h
T
l
a
t
e
M
d
o
G
l
)
z
o
k
(
4
0
8
e
v
r
e
s
e
R
l
a
t
o
T
e
d
a
r
G
d
o
G
l
)
t
/
g
(
1
5
2
.
s
e
n
n
o
T
)
t
M
(
6
9
9
.
l
a
t
e
M
d
o
G
l
l
e
b
a
b
o
r
P
d
e
v
o
r
P
e
d
a
r
G
d
o
G
l
)
t
M
(
s
e
n
n
o
T
l
a
t
e
M
d
o
G
l
e
d
a
r
G
d
o
G
l
)
z
o
k
(
4
0
8
)
t
/
g
(
1
5
2
.
6
9
9
.
)
z
o
k
(
-
)
t
/
g
(
-
s
e
n
n
o
T
)
t
M
(
-
ff
O
-
t
u
C
8
.
1
l
d
o
G
e
p
y
T
G
U
j
t
c
e
o
r
P
l
a
w
o
C
.
i
g
n
d
n
u
o
r
o
t
l
e
u
d
y
e
s
i
c
e
r
p
m
u
s
t
o
n
y
a
m
d
n
a
n
o
i
s
i
c
e
r
p
e
t
a
i
r
p
o
r
p
p
a
t
c
e
fl
e
r
o
t
i
s
e
r
u
g
fi
t
n
a
c
fi
n
g
i
s
o
t
d
e
t
r
o
p
e
r
s
i
a
t
a
D
.
d
n
u
o
r
g
r
e
d
n
u
s
e
t
o
n
e
d
G
U
.
s
e
v
r
e
s
e
R
e
r
O
f
o
e
v
i
s
u
c
n
l
i
d
e
t
r
o
p
e
r
e
r
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
/
/
i
M
n
e
r
a
l
R
e
s
o
u
r
c
e
s
a
n
d
O
r
e
R
e
s
e
r
v
e
s
i
m
a
g
g
B
s
e
m
a
J
s
i
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
G
U
6
4
E
R
G
l
l
a
w
o
C
d
n
a
d
e
fi
h
t
r
o
N
a
u
h
s
o
J
s
i
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
v
r
e
s
e
R
e
r
O
G
U
6
4
E
R
G
l
a
w
o
C
Evolution Mining Limited // Annual Report 2020 73
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
/
/
Annual Report (Continued)
e
c
r
u
o
s
e
R
l
a
t
o
T
l
d
o
G
l
a
t
e
M
)
z
o
k
(
6
1
1
,
1
l
d
o
G
e
d
a
r
G
)
t
/
g
(
4
9
6
.
s
e
n
n
o
T
)
t
M
(
0
0
5
.
l
d
o
G
l
a
t
e
M
)
z
o
k
(
8
7
4
d
e
r
r
e
f
n
I
l
d
o
G
e
d
a
r
G
)
t
/
g
(
9
3
6
.
s
e
n
n
o
T
)
t
M
(
3
3
2
.
l
d
o
G
l
a
t
e
M
)
z
o
k
(
8
3
6
l
d
o
G
e
d
a
r
G
)
t
/
g
(
3
4
7
.
s
e
n
n
o
T
)
t
M
(
7
6
2
.
9
3
3
4
,
6
4
0
.
1
0
9
2
1
.
4
4
4
,
1
6
2
0
.
1
8
3
4
.
6
9
8
2
,
7
5
0
.
1
2
5
8
.
8
9
3
2
,
0
1
.
6
3
2
2
1
.
4
6
8
2
9
1
,
1
1
1
.
6
6
0
6
.
2
9
1
,
1
7
2
4
2
0
5
,
1
5
4
5
.
4
9
4
.
4
4
2
.
5
4
9
.
7
2
4
1
8
8
1
1
.
6
1
1
.
6
5
4
5
.
9
7
4
.
0
4
4
.
4
3
5
,
1
9
0
6
.
3
8
7
.
6
0
6
.
4
4
2
.
2
7
5
.
-
-
-
-
-
-
0
2
6
7
1
.
5
3
7
3
.
4
7
9
0
1
,
0
1
.
7
8
0
8
4
.
7
8
2
5
,
9
4
6
.
.
3
3
5
2
7
8
6
5
,
7
7
7
.
.
6
7
2
2
d
e
t
a
c
i
d
n
I
d
e
r
u
s
a
e
M
l
d
o
G
9
1
0
2
r
e
b
m
e
c
e
D
1
3
t
a
s
a
s
e
c
r
u
o
s
e
R
i
l
a
r
e
n
M
e
k
a
L
d
e
R
l
d
o
G
l
a
t
e
M
)
z
o
k
(
l
d
o
G
e
d
a
r
G
)
t
/
g
(
)
t
k
(
)
t
/
g
(
s
e
n
n
o
T
ff
O
-
t
u
C
e
p
y
T
j
t
c
e
o
r
P
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3
3
.
3
3
.
3
3
.
3
3
.
.
2
3
0
3
.
G
U
G
U
l
l
e
b
p
m
a
C
r
e
w
o
L
l
l
e
b
p
m
a
C
r
e
p
p
U
G
U
d
e
R
r
e
w
o
L
e
k
a
L
G
U
d
e
R
r
e
p
p
U
G
U
G
U
l
a
t
o
T
g
n
u
o
Y
G
H
r
u
o
n
e
h
c
o
C
e
k
a
L
l
e
b
a
l
i
a
v
a
e
r
a
d
n
a
l
y
e
v
i
t
c
e
p
s
e
r
0
2
0
2
t
s
u
g
u
A
3
1
d
e
s
a
e
e
r
l
”
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
e
d
o
C
C
R
O
J
e
c
n
u
O
n
o
i
l
l
i
M
1
1
e
k
a
L
d
e
R
“
d
n
a
0
2
0
2
l
y
u
J
3
2
d
e
s
a
e
e
r
l
i
l
”
t
n
e
m
p
o
e
v
e
D
e
n
M
s
t
r
o
p
p
u
S
e
v
r
e
s
e
R
e
r
O
d
n
u
o
r
g
r
e
d
n
U
n
e
d
a
M
i
l
a
w
o
C
“
d
e
l
t
i
t
n
e
l
e
s
a
e
e
r
X
S
A
e
h
t
m
o
r
f
d
e
t
c
a
r
t
x
e
e
r
a
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
e
k
a
L
d
e
R
d
n
a
s
e
v
r
e
s
e
R
e
r
O
d
n
a
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
d
n
u
o
r
g
r
e
d
n
U
l
a
w
o
C
i
g
n
d
n
u
o
r
o
t
l
e
u
d
y
e
s
i
c
e
r
p
m
u
s
t
o
n
y
a
m
d
n
a
n
o
i
s
i
c
e
r
p
e
t
a
i
r
p
o
r
p
p
a
t
c
e
fl
e
r
o
t
i
s
e
r
u
g
fi
t
n
a
c
fi
n
g
i
s
o
t
d
e
t
r
o
p
e
r
s
i
a
t
a
D
.
d
n
u
o
r
g
r
e
d
n
u
s
e
t
o
n
e
d
G
U
.
s
e
v
r
e
s
e
R
e
r
O
f
o
e
v
i
s
u
c
n
l
i
d
e
t
r
o
p
e
r
e
r
a
s
e
c
r
u
o
s
e
R
l
a
r
e
n
M
i
n
e
s
k
c
i
r
e
d
e
r
F
n
a
e
D
s
i
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
s
e
c
r
u
o
s
e
R
l
i
a
r
e
n
M
e
k
a
L
d
e
R
t
a
h
t
a
t
a
d
r
o
n
o
i
t
a
m
r
o
f
n
i
w
e
n
y
n
a
f
o
e
r
a
w
a
t
o
n
s
i
t
i
t
a
h
t
s
m
r
fi
n
o
c
n
o
i
t
u
o
v
E
l
.
.
.
i
i
u
a
m
o
c
g
n
n
m
n
o
i
t
u
o
v
e
w
w
w
l
.
t
a
w
e
v
o
t
i
m
r
o
f
e
h
t
t
a
h
t
s
m
r
fi
n
o
c
y
n
a
p
m
o
C
e
h
T
.
d
e
g
n
a
h
c
y
l
l
a
i
r
e
t
a
m
t
o
n
e
v
a
h
d
n
a
l
y
p
p
a
o
t
e
u
n
i
t
n
o
c
s
e
t
a
m
i
t
s
e
i
e
h
t
g
n
n
n
p
r
e
d
n
u
i
s
r
e
t
e
m
a
r
a
p
l
i
a
c
n
h
c
e
t
d
n
a
s
n
o
i
t
p
m
u
s
s
a
l
a
i
r
e
t
a
m
l
l
a
t
a
h
t
d
n
a
e
s
a
e
e
r
l
t
a
h
t
n
i
d
e
d
u
c
n
l
i
n
o
i
t
a
m
r
o
f
n
i
s
t
c
e
ff
a
y
l
l
a
i
r
e
t
a
m
e
h
t
m
o
r
f
d
e
fi
d
o
m
y
i
l
l
a
i
r
e
t
a
m
n
e
e
b
t
o
n
e
v
a
h
d
e
t
n
e
s
e
r
p
e
r
a
i
s
g
n
d
n
fi
’
s
n
o
s
r
e
P
t
n
e
t
e
p
m
o
C
e
h
t
h
c
h
w
n
i
i
t
x
e
t
n
o
c
d
n
a
.
t
n
e
m
e
c
n
u
o
n
n
a
t
e
k
r
a
m
l
i
a
n
g
i
r
o
74 Evolution Mining Limited // Annual Report 2020
/
/
i
C
h
e
f
F
n
a
n
c
i
a
i
l
O
ffi
c
e
r
’
s
r
e
v
e
w
i
Annual Report (Continued)
Chief Financial
Officer’s review
Generating superior returns for our shareholders remains a key priority for our business. In the
2020 Financial Year Evolution’s quality asset portfolio delivered record cash flow, record net profit
and enabled record dividends to be returned to shareholders.
The Group recorded a statutory net profit after tax of
A$372.6 million for the year, an increase of 38% on the
prior year. Underlying profit after tax increased by 86% to
A$405.4 million (30 June 2019 statutory and underlying
net profit: A$218.2 million).
Group gold production was 746,463 ounces at an AISC of
A$1,043 per ounce (US$700/oz) which places Evolution
among the lowest cost producers in the world.
Evolution has guided FY21 gold production of 670,000 –
730,000 ounces at an AISC of A$1,240 – A$1,300 per ounce.
Record mine operating cash flow of A$1,121.4 million
was achieved. Post total capital investment of A$371.0
million a record net mine cash flow of A$736.0 million
was achieved. With the exception of Mt Carlton which
encountered operational issues during FY20, all of our
mines contributed positive cash flows after meeting their
operating and capital requirements.
Evolution continued to invest in extensions of mine life and
production growth. The majority of this investment was
directed towards the long-life assets of Cowal (Stage H
cutback, Integrated Waste Landform, and the underground
project) and Red Lake (underground mine development).
The Group cash balance at 30 June 2020 was A$372.6
million (30 Jun 19: A$335.1 million). During the financial
year A$300.0 million in debt repayments were made to
close-out the facility associated with the investment in
Ernest Henry. A new bank debt facility of A$570.0 million
was drawn down to fully fund the Red Lake acquisition in
March 2020. No repayments were required during FY20
and the balance as at 30 June 2020 was A$570.0 million.
The Senior Secured Revolving Loan of A$360.0 million
remains undrawn at 30 June 2020 and is available until
31 March 2023.
Revenue for the year ended 30 June 2020 increased by
29% to a record A$1,941.9 million (30 June 2019: A$1,509.8
million). The higher achieved gold price of A$2,274/oz was
partially offset by a slight decrease in produced ounces for
the year to 746,463oz (30 June 2019: 753,001oz). Revenue
was comprised of A$1,738.1 million for gold and A$203.7
million for copper and silver revenue (30 June 2019:
A$1,307.5 million of gold and A$202.3m of copper and
silver revenue).
Total gold sold equalled 764,655oz which included
deliveries into the hedge book of 100,000oz at an average
price of A$1,734/oz (30 June 2019: 150,000 oz, A$1,690/oz).
The remaining 664,655oz were sold at spot price achieving
an average price of A$2,320/oz (30 June 2019: 592,964
oz, A$1,777/oz). At 30 June 2020 the Group’s hedge
book totalled 300,000oz at a price of A$1,872/oz for the
Australian operations and 120,000oz at C$2,272/oz for Red
Lake with quarterly deliveries through to June 2023.
Mine operating costs increased by 1.2% (A$8.0 million)
from FY19. The main drivers to the increased operating
costs were a general increase in labour rates of
approximately 4%; a full year of operation of the Float
Tails Leach facility at Cowal (A$4.6 million) and the
commencement of the underground mine at Mt Carlton
(A$9.5 million). These were mostly offset by lower power,
diesel and consumables costs.
Red Lake operating costs for the first quarter of ownership
were A$48.3 million while Cracow operating costs
increased by 3% (A$2.2 million).
Inventory costs expensed were A$48.6 million higher
driven by planned utilisation of ore stockpiles at Cowal,
Mt Rawdon and Mt Carlton.
Royalties were A$9.8 million higher due to the higher
gold price.
During the year, the Group made income tax payments of
A$76.3 million and recognised an income tax expense of
A$107.0 million (30 June 2019: A$96.6 million).
Total exploration expenditure for the year ended 30 June
2020 was A$82.8 million (30 June 2019: A$52.1 million)
with an exploration expense of A$23.7 million (30 June
2019: A$7.2 million). The majority of the exploration
investment was undertaken at Cowal (A$46.6 million)
which focused on upgrading classification and extending
the underground resource which now has an estimated
Mineral Resource of 2.9 million ounces.
The Group acquired the Red Lake gold mine in Ontario,
Canada for US$375.0 million and a contingent component
of US$20.0 million for each one million ounces of gold
resource inventory added up to a maximum of five million
ounces, outside of the agreed resource baseline. Red Lake
is a high-grade, long life, underground gold mine located in
one of Canada’s most prolific gold districts. The acquisition
was completed on 1 April 2020.
After announcing the agreement to sell the Cracow Gold
Mine in Queensland on 4 June 2020, the Group completed
the divestment on 1 July 2020 to Aeris Resources Limited
for a total consideration of up to A$125 million, including
A$60 million cash which was received on completion on
1 July 2020.
In FY20 an impairment of the Mt Carlton asset was
recorded on a post-tax basis of A$101.0 million (A$144.3
million pre-tax) due to the downgrade in the resource and
reserve base.
Evolution Mining Limited // Annual Report 2020 75
Annual Report (Continued)
i
w
e
v
e
r
s
’
r
e
c
ffi
O
l
i
a
i
c
n
a
n
F
f
e
h
C
i
The Board declared a final FY20 fully franked dividend period of 9.0 cents per share, totalling A$153.4 million – a 50%
increase on the FY19 final dividend. Total dividends declared for the 2020 Financial Year were up 68% to 16 cents per
share totalling A$273.0 million. Dividends were declared based on the policy approved by the Board on 15 August 2019 of
whenever possible targeting a dividend of 50% of free cash flow generated during a year.
/
/
In summary, the 2020 Financial Year was great year for Evolution. Looking forward, we remain focused on maintaining low
costs and prioritising strong cash generation over production growth. Our continued investment in capital projects at Cowal
and Red Lake is expected to generate attractive returns on capital, and we are committed to funding our discovery strategy
which is delivering exciting organic growth for our business.
Financials
Statutory Profit after tax
Underlying Profit after tax
EBITDA
Operating Mine Cash Flow
Net Mine Cash Flow
Group Cash Flow1
EBITDA Margin
Underlying EPS
Final dividend (fully franked)
Units
A$M
A$M
A$M
A$M
A$M
A$M
%
cents
cps
1.
Cash flow before dividends, debt repayments and M&A costs
FY20
301.6
405.4
1,029.40
1,121.40
736
541.8
53
23.8
9
FY19
218.2
218.2
730.3
771.5
497.8
291.6
48
12.9
6
Change
38%
86%
41%
45%
48%
86%
10%
84%
50%
“The business delivered record statutory net profit after tax of A$301.6 million and underlying net profit after tax of
A$405.4 million. Free cash flow of A$541.8 million was also a record. Evolution declared a fully franked dividend for
the year of 16 cents per share – a 68% increase on the FY19 dividend”.
LAWRIE CONWAY
FINANCE DIRECTOR AND CHIEF FINANCIAL OFFICER
76 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
Board of Directors
/
/
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
JAKE KLEIN
EXECUTIVE CHAIRMAN
LAWRIE CONWAY
FINANCE DIRECTOR AND CHIEF
FINANCIAL OFFICER
JAMES ASKEW
NON-EXECUTIVE DIRECTOR, CHAIR OF THE
RISK AND SUSTAINABILITY COMMITTEE
AND MEMBER OF THE NOMINATION AND
REMUNERATION COMMITTEE
THOMAS MCKEITH
LEAD INDEPENDENT DIRECTOR,
CHAIR OF NOMINATION AND
REMUNERATION COMMITTEE
ANDREA HALL
NON-EXECUTIVE DIRECTOR,
CHAIR OF THE AUDIT COMMITTEE
AND MEMBER OF THE RISK AND
SUSTAINABILITY COMMITTEE
JASON ATTEW
NON-EXECUTIVE DIRECTOR,
MEMBER OF THE AUDIT COMMITTEE
AND MEMBER OF THE NOMINATION
AND REMUNERATION COMMITTEE
VICKY BINNS
NON-EXECUTIVE DIRECTOR AND
MEMBER OF THE AUDIT COMMITTEE
PETER SMITH
NON-EXECUTIVE DIRECTOR
AND MEMBER OF THE RISK AND
SUSTAINABILITY COMMITTEE
The Board has implemented and is committed to the ASX Corporate Governance Council’s Fourth
Edition Corporate Governance Principles and Recommendations, and to maintaining a high
standard of Corporate Governance which reflects the requirements of the market regulators and
the expectations of the Company’s security holders.
Jacob (Jake) Klein
BCom Hons, ACA, Executive Chairman
Mr Klein was appointed as Executive Chairman in October
2011, following the merger of Conquest Mining Limited and
Catalpa Resources Limited. Previously he served as the
Executive Chairman of Conquest Mining.
Prior to that, Mr Klein was President and CEO of Sino Gold
Mining Limited, where he managed the development of
that company into the largest foreign participant in the
Chinese gold industry. Sino Gold was listed on the ASX
in 2002 with a market capitalisation of A$100 million
and was purchased by Eldorado Gold Corporation in
late 2009 for over A$2 billion. It became an ASX/S&P
100 Company, operating two award-winning gold mines
and engaging over 2,000 employees and contractors in
China. Prior to joining Sino Gold (and its predecessor)
in 1995, Mr Klein was employed at Macquarie Bank and
PricewaterhouseCoopers.
Mr Klein was a Non-Executive Director of the Lynas
Corporation Limited from August 2004 to May 2017, a
company with operations in Australia and Malaysia, and
OceanaGold Corporation from December 2009 to July
2014, a company with operations in the Philippines, USA
and New Zealand.
Lawrence (Lawrie) Conway
B Bus, CPA, MAICD, Finance Director and
Chief Financial Officer
Mr Conway was appointed Finance Director and Chief
Financial Officer of Evolution Mining Limited with effect
from 1 August 2014 (previously a Non-Executive Director).
Mr Conway has more than 30 years’ experience in the
resources sector across a diverse range of commercial,
financial and operational activities. He has held a mix
of corporate, operational and commercial roles within
Australia, Papua New Guinea and Chile with Newcrest
and prior to that with BHP Billiton. He most recently held
the position of Executive General Manager — Commercial
and West Africa with Newcrest Mining where he was
responsible for Newcrest’s group Supply and Logistics,
Marketing, Information Technology and Laboratory
functions as well as Newcrest’s business in West Africa.
Mr Conway is a Non-Executive Director of Aurelia Metals
Ltd (appointed in June 2017).
Evolution Mining Limited // Annual Report 2020 77
s
r
o
t
c
e
r
i
D
f
o
d
r
a
o
B
/
/
Annual Report (Continued)
James (Jim) Askew
BEng (Mining), MEngSc, FAusIMM, MCIMM,
MSME (AIME), MAICD, Non-Executive Director
Mr Askew is a mining engineer with more than 40 years’
broad international experience as a Director and Chief
Executive Officer for a wide range of Australian and
international publicly listed mining, mining finance and
other mining related companies.
Mr Askew has served on the boards of numerous mining
and mining services companies, which currently includes
Syrah Resources Limited (Chairman since October 2014),
a company with operations in Mozambique and in the
USA; and Endeavour Mining Corporation, a company with
operations in Cote d’Ivoire, Mali and Burkina Faso (Non-
Executive Director since July 2017).
Within the last three years Mr Askew has been a Non-
Executive Director of Nevada Copper Limited and Asian
Mineral Resources Ltd.
Mr Askew is the Chair of the Risk and Sustainability
Committee and Member of the Nomination and
Remuneration Committee.
Thomas (Tommy) McKeith
BSc (Hons), GradDip Eng (Mining), MBA,
Lead Independent Director
Mr McKeith is a geologist with 30 years’ experience
in various mine geology, exploration and business
development and executive leadership roles. He
was formerly Executive Vice President (Growth and
International Projects) for Gold Fields Limited, where he
was responsible for global greenfields exploration and
project development.
Mr McKeith was also Chief Executive Officer of Troy
Resources Limited and has held Non-Executive Director
roles at Sino Gold Limited, Avoca Resources Limited and
is currently the Non-Executive Chairman of Prodigy Gold
NL, Genesis Minerals Limited and Non-Executive Director at
Arrow Minerals Limited.
Mr McKeith is the Lead Independent Director effective
1 December 2018 and Chair of the Nomination and
Remuneration Committee.
Andrea Hall
BCom, FCA, M. App Fin, GAICD, Non-Executive Director
Ms Hall is a Chartered Accountant with more than 30
years’ experience in the financial services industry in roles
involved in internal audit, risk management, corporate
and operational governance, external audit, financial
management and strategic planning. Prior to retiring from
KPMG in 2012, Andrea was a Perth based partner within
KPMG’s Risk Consulting Services where she serviced
industries including mining, mining services, transport,
healthcare, insurance, property and government.
Ms Hall is currently a Non-Executive Director and Chair
of the Audit and Risk Committee at ASX-listed Pioneer
Credit Limited. Andrea is also a Non-Executive Director
and Chair of the Audit and Risk Committee at ASX listed
Perenti Group. Further, she is a Non-Executive Director
of Insurance Commission of Western Australia and the
Fremantle Football Club.
Ms Hall is the Chair of the Audit Committee and Member of
the Risk and Sustainability Committee.
Jason Attew
BSc, MBA, Non-Executive Director
Mr Attew is a mining industry veteran who has dedicated
25 years to the mining sector. Jason most recently served
as the Chief Financial Officer at Goldcorp Inc. where, in
addition to leading the finance and investor relations
operations, he was responsible for Goldcorp’s corporate
development and strategy culminating in the US$32 billion
merger with Newmont Mining Corp.
Jason has extensive capital markets experience from his
time in investment banking with the BMO Global Metals
and Mining Group where he was at the forefront of
structuring and raising significant growth capital as well as
advising on both formative and transformational mergers
and acquisitions for corporations that have become
industry leaders over the past two decades. Jason is also
on the board of Directors of Regulus Resources Inc.
Mr Attew is a Member of both the Audit Committee and
the Nomination and Remuneration Committee.
78 Evolution Mining Limited // Annual Report 2020
Annual Report (Continued)
Peter Smith
MBA, FAusIMM, GAICD, Non- Executive Director
Mr Smith is a senior executive with over 43 years’
experience primarily in resources sector. He has worked in a
range of sectors including gold, coal, metals and fertilizers.
Peter has held senior positions with Kestrel Coal Resources,
Israel Chemical Limited, Newcrest Mining, Lihir Gold, WMC
Resources, Western Metals and Rio Tinto.
Mr Smith was a former Non-Executive Director of NSW
Minerals Council and Evolution Mining, Commissioner of
PT NHM Indonesia and Executive Director and Chairman of
Western Metals Limited.
Mr Smith is a Member of the Risk and Sustainability
Committee.
/
/
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
Victoria (Vicky) Binns
BEng (Mining Hons 1), Grad Dip SIA, FAusIMM, GAICD,
Non-Executive Director
Ms Binns has over 35 years’ experience in the global
resources and financial services sectors including more
than 10 years in executive leadership roles at BHP and 15
years in financial services with Merrill Lynch Australia and
Macquarie Equities.
During her career at BHP, Ms Binns’ roles included Vice
President Minerals Marketing, leadership positions in the
metals and coal marketing business, Vice President of
Market Analysis and Economics and was a member of the
first BHP Global Inclusion and Diversity Council.
Prior to joining BHP, Ms Binns held a number of board
and senior management roles at Merrill Lynch Australia
including Managing Director and Head of Australian
Research, Head of Global Mining, Metals and Steel, and
Head of Australian Mining Research. Ms Binns is currently
a Non-Executive Director of ASX-listed company Cooper
Energy. She was also co-founder and Chair of Women in
Mining and Resources Singapore.
Ms Binns is a Member of the Audit Committee.
Evolution Mining Limited // Annual Report 2020 79
80 Evolution Mining Limited // Annual Report 2020
/
/
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
Evolution Mining Limited // Annual Report 2020 81
EVOLUTION MINING LIMITED ACN 084 669 036
APPENDIX 4E
AND CONTROLLED ENTITIES
ANNUAL FINANCIAL REPORT
For the year ended 30 June 2020
Results for Announcement to the Market
Key Information
30 June 2020 30 June 2019 Up / (down) % Increase/
$'000
$'000
$'000 (decrease)
Revenues from contracts with customers
1,941,863
1,509,824
432,039
Earnings before Interest, Tax, Depreciation & Amortisation
(EBITDA)
1,029,432
730,262
299,170
Statutory profit before income tax
408,590
314,826
93,764
Profit from ordinary activities after income tax attributable to
the members
Dividend Information
301,552
218,188
83,364
Final dividend for the year ended 30 June 2020
Dividend to be paid on 25 September 2020
Interim dividend for the year ended 30 June 2020
Dividend fully paid on 27 March 2020
Final dividend for the year ended 30 June 2019
Dividend fully paid on 27 September 2019
Net Tangible Assets
Net tangible assets per share
Earnings Per Share
Basic earnings per share
Diluted earnings per share
Additional Appendix 4E disclosure requirements can be found in the notes to these financial statements and the Directors'
Report attached thereto. This report is based on the consolidated financial statements which have been audited by
PricewaterhouseCoopers.
29%
41%
30%
38%
9.0
7.0
6.0
Amount
Franked amount
per share
Cents
per share
Cents
9.0
7.0
6.0
30 June 2020
30 June 2019
$
$
1.47
1.45
30 June 2020
30 June 2019
Cents
Cents
17.71
17.62
12.86
12.78
s
t
n
e
t
n
o
C
/
/
Contents page tbc
Contents
Evolution Mining Limited
Annual Financial Report
Directors' Report
Auditor's Independence Declaration
Notes to the Consolidated Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Directors' Declaration
Independent Auditor's Report
Shareholder Information
Corporate Information
83
135
136
137
138
139
182
183
189
193
82 Evolution Mining Limited // Annual Report 2020
Directors' Report
APPENDIX 4E
EVOLUTION MINING LIMITED ACN 084 669 036
AND CONTROLLED ENTITIES
ANNUAL FINANCIAL REPORT
For the year ended 30 June 2020
Results for Announcement to the Market
Key Information
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
30 June 2020 30 June 2019 Up / (down) % Increase/
$'000 (decrease)
$'000
$'000
Revenues from contracts with customers
1,941,863
1,509,824
432,039
Earnings before Interest, Tax, Depreciation & Amortisation
(EBITDA)
1,029,432
730,262
299,170
Statutory profit before income tax
408,590
314,826
93,764
Profit from ordinary activities after income tax attributable to
the members
301,552
218,188
83,364
29%
41%
30%
38%
Dividend Information
Final dividend for the year ended 30 June 2020
Dividend to be paid on 25 September 2020
Interim dividend for the year ended 30 June 2020
Dividend fully paid on 27 March 2020
Final dividend for the year ended 30 June 2019
Dividend fully paid on 27 September 2019
Net Tangible Assets
Net tangible assets per share
Earnings Per Share
Basic earnings per share
Diluted earnings per share
Amount
per share
Cents
Franked amount
per share
Cents
9.0
7.0
6.0
9.0
7.0
6.0
30 June 2020
$
30 June 2019
$
1.47
1.45
30 June 2020
Cents
30 June 2019
Cents
17.71
17.62
12.86
12.78
Additional Appendix 4E disclosure requirements can be found in the notes to these financial statements and the Directors'
Report attached thereto. This report is based on the consolidated financial statements which have been audited by
PricewaterhouseCoopers.
Evolution Mining Limited // Annual Report 2020 83
Evolution Mining Limited
Directors' Report
Directors' Report
30 June 2020
Directors' Report
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
The Directors present their report together with the consolidated financial report of the Evolution Mining Limited Group,
consisting of Evolution Mining Limited ("the Company") and the entities it controlled at the end of, or during, the year ended 30
June 2020.
Directors
The Directors of Evolution Mining Limited during the year ended 30 June 2020 and up to the date of this report are set out
below. All Directors held their position as a Director throughout the entire year and up to the date of this report unless otherwise
stated.
Jacob (Jake) Klein
Lawrence (Lawrie) Conway
Thomas (Tommy) McKeith
James (Jim) Askew
Jason Attew (ii)
Andrea Hall
Victoria (Vicky) Binns (iv)
Peter Smith (iv)
Graham Freestone (i)
Colin (Cobb) Johnstone (iii)
Executive Chairman
Finance Director and Chief Financial Officer
Lead Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
(i) Retired as Non-Executive Director effective 28 November 2019.
(ii) Appointed Non-Executive Director effective 1 December 2019.
(iii) Retired as Non-Executive Director effective 30 March 2020.
(iv) Appointed Non-Executive Director effective 1 April 2020.
Company Secretary
Evan Elstein
Principal activities
The principal activities of the Group during the year were exploration, mine development, mine operations and the sale of gold
and gold/copper concentrate in Australia and Canada. There were no significant changes to these activities during the year.
Key highlights for the year
Key highlights for the year ended 30 June 2020 include:
•
The Group's focus and continued effort to improve safety performance has resulted in a lower total recordable injury
frequency (TRIF) of 6.8 as at 30 June 2020 (30 June 2019: 8.3). Evolution’s MSCI ESG rating was upgraded to ‘A’ from
‘BBB’, highlighting the Company’s achievements in sustainability performance. In September 2019, the Group was ranked
in the top performing Australian mining companies for corporate sustainability in the annual assessment of the Dow Jones
Sustainability Index Australia. Evolution was one of only two gold companies recognised in this category.
• Evolution had no material impact to operations from the COVID-19 virus with the Company operating under protocols
developed to minimise risks to our people and communities and ensure we can safely produce gold during this challenging
period. These plans include activation of our crisis management protocols, suspending international travel, restricting
domestic travel, suspending activities across most of the Company’s Greenfields exploration projects, enacting strict social
distancing protocols including reducing face-to-face interactions, increasing flexible working arrangements, ensuring best
practice health management is maintained at all times and regular COVID-19 communication with the entire workforce.
•
•
The Group recorded a record statutory net profit after tax of $301.6 million for the year, a 38.2% increase on the prior year
(30 June 2019: $218.2 million). Underlying profit after tax increased by $187.2 million to a record $405.4 million (30 June
2019: $218.2 million), an 85.8% increase on the prior year.
The Group increased its full year dividend by 68% to 16.0 cents per share fully franked (30 June 2019: 9.5 cents per
share).
•
The Group's key results are as follows:
•
Total gold production of 746,463 oz at an AISC of $1,043/oz.
• Record Operating mine cash flow of $1,121.4 million.
• Record Net mine cash flow of $736.0 million.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Key highlights for the year (continued)
• A total of $221.4 million (30 June 2019: $127.0 million) in fully franked dividends was paid during the year a 74.1%
increase on the prior year. A final dividend of 9 cents per share fully franked ($153.4 million) was declared and will
be paid on 25 September 2020.
•
The Group purchased the Red Lake Gold Complex in Ontario, Canada for US$375.0 million and a contingent component
of US$20.0 million for each 1 million ounces of gold resource inventory added up to a maximum of 5 million ounces,
outside of the agreed resource baseline. Red Lake is a high-grade, long life, underground gold mine located in one of
Canada’s most prolific gold districts. The acquisition completed on 1 April 2020.
• Key highlights of the Red Lake acquisition are as follows:
• High-grade, long life, underground gold mine located in one of Canada’s most prolific gold districts;
•
Identified opportunities for reduction in operating costs and improved efficiencies;
• Outstanding exploration potential with historic high grades of over 20g/t hosted in Archaean greenstone gold
geology;
• Under the terms of the agreement with Newmont, Evolution committed to an investment of US$100.0 million on
existing operations and US$50.0 million in exploration at Red Lake over the first 3 years.
•
In September 2019, the Group entered into an earn-in agreement with private entity Basin Gold over the Crush Creek
project located 30km south east of the Mt Carlton operation. Crush Creek is host to low sulphidation epithermal gold
mineralisation and has potential to provide mine life extensions at Mt Carlton. Key highlights of the agreement are:
• Evolution can earn a 70% interest by sole funding $7.0 million of exploration expenditure over a two year period.
• Once the earn-in is met, either party can elect for Basin Gold’s 30% interest to be sold to Evolution for a
consideration of $4.5 million and a 10% Net Profit Interest on any production above 100koz of gold.
•
In September 2019, the Group entered into an earn-in joint venture with Musgrave Minerals Limited (ASX: MGV) over the
Cue Project located in the Murchison Province of central Western Australia which hosts a gold endowment in excess of 30
million ounces. The Cue joint venture covers a prospective mineralised trend venture and is prospective for Archean
greenstone gold deposits. The key terms of the agreement are as follows:
•
The Group can earn 75% in the joint venture area by sole funding $18.0 million over 5 years with a minimum
expenditure of $4.0 million to be completed in the initial 2 years.
The Group agreed to subscribe for 18.6 million shares in Musgrave at 8.07c per share to raise $1.5 million funds.
The funds will be used for advance drilling at Mainland, Lena and Break of Day.
•
•
•
In January 2020, the Group announced $3.0 million in funding to be provided to Rural Aid Australia, NSW Rural Fire
Service and Queensland Rural Fire Service, supporting their bushfire and drought relief and recovery efforts.
• After announcing the agreement to sell the Cracow Gold Mine in Queensland on the 4 June 2020, the Group completed the
divestment on 30 June 2020 to Aeris Resources Limited for a total consideration of up to A$125 million. The total
consideration consists of:
• A$60 million cash payable upon completion which occurred on 1 July 2020;
• A$15 million payable 30 June 2022; and
• Up to A$50 million contingent consideration payable in the form of a 10% net value royalty, based on gross
revenues less C1 direct cash costs in relation to any gold produced at Cracow in the five-year period from 1 July
2022 to 30 June 2027.
1
2
84 Evolution Mining Limited // Annual Report 2020
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Directors' Report
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Key highlights for the year (continued)
• A total of $221.4 million (30 June 2019: $127.0 million) in fully franked dividends was paid during the year a 74.1%
increase on the prior year. A final dividend of 9 cents per share fully franked ($153.4 million) was declared and will
be paid on 25 September 2020.
•
The Group purchased the Red Lake Gold Complex in Ontario, Canada for US$375.0 million and a contingent component
of US$20.0 million for each 1 million ounces of gold resource inventory added up to a maximum of 5 million ounces,
outside of the agreed resource baseline. Red Lake is a high-grade, long life, underground gold mine located in one of
Canada’s most prolific gold districts. The acquisition completed on 1 April 2020.
• Key highlights of the Red Lake acquisition are as follows:
•
•
• High-grade, long life, underground gold mine located in one of Canada’s most prolific gold districts;
•
Identified opportunities for reduction in operating costs and improved efficiencies;
• Outstanding exploration potential with historic high grades of over 20g/t hosted in Archaean greenstone gold
geology;
• Under the terms of the agreement with Newmont, Evolution committed to an investment of US$100.0 million on
existing operations and US$50.0 million in exploration at Red Lake over the first 3 years.
In September 2019, the Group entered into an earn-in agreement with private entity Basin Gold over the Crush Creek
project located 30km south east of the Mt Carlton operation. Crush Creek is host to low sulphidation epithermal gold
mineralisation and has potential to provide mine life extensions at Mt Carlton. Key highlights of the agreement are:
• Evolution can earn a 70% interest by sole funding $7.0 million of exploration expenditure over a two year period.
• Once the earn-in is met, either party can elect for Basin Gold’s 30% interest to be sold to Evolution for a
consideration of $4.5 million and a 10% Net Profit Interest on any production above 100koz of gold.
In September 2019, the Group entered into an earn-in joint venture with Musgrave Minerals Limited (ASX: MGV) over the
Cue Project located in the Murchison Province of central Western Australia which hosts a gold endowment in excess of 30
million ounces. The Cue joint venture covers a prospective mineralised trend venture and is prospective for Archean
greenstone gold deposits. The key terms of the agreement are as follows:
•
•
•
The Group can earn 75% in the joint venture area by sole funding $18.0 million over 5 years with a minimum
expenditure of $4.0 million to be completed in the initial 2 years.
The Group agreed to subscribe for 18.6 million shares in Musgrave at 8.07c per share to raise $1.5 million funds.
The funds will be used for advance drilling at Mainland, Lena and Break of Day.
•
In January 2020, the Group announced $3.0 million in funding to be provided to Rural Aid Australia, NSW Rural Fire
Service and Queensland Rural Fire Service, supporting their bushfire and drought relief and recovery efforts.
• After announcing the agreement to sell the Cracow Gold Mine in Queensland on the 4 June 2020, the Group completed the
divestment on 30 June 2020 to Aeris Resources Limited for a total consideration of up to A$125 million. The total
consideration consists of:
• A$60 million cash payable upon completion which occurred on 1 July 2020;
• A$15 million payable 30 June 2022; and
• Up to A$50 million contingent consideration payable in the form of a 10% net value royalty, based on gross
revenues less C1 direct cash costs in relation to any gold produced at Cracow in the five-year period from 1 July
2022 to 30 June 2027.
2
Evolution Mining Limited // Annual Report 2020 85
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evolution Mining Limited
Directors' Report
Operating and Financial Review
30 June 2020
(continued)
Evolution is a leading, low cost Australian gold mining company. As at 30 June 2020, the Group consisted of five wholly-owned
operating gold mines: Cowal in New South Wales; Mt Carlton and Mt Rawdon in Queensland; Mungari in Western Australia;
Red Lake in Ontario, Canada; and an economic interest in the Ernest Henry Copper-Gold Operation (100% of gold and 30% of
copper and silver) in Queensland.
Operating and Financial Review
The Group completed the sale of the Cracow Gold mine to Aeris Resources Limited on 30 June 2020.
Evolution is a leading, low cost Australian gold mining company. As at 30 June 2020, the Group consisted of five wholly-owned
operating gold mines: Cowal in New South Wales; Mt Carlton and Mt Rawdon in Queensland; Mungari in Western Australia;
Evolution’s vision is to create a premier global mid-tier gold company which create sustainable returns for our shareholders and
Red Lake in Ontario, Canada; and an economic interest in the Ernest Henry Copper-Gold Operation (100% of gold and 30% of
delivers benefits to our stakeholders. As a business we must prosper through the metal price cycle. We believe that this can be
copper and silver) in Queensland.
best achieved with a portfolio of six to eight assets generating superior returns with an average mine life reserve of at least ten
years. To maintain this long mine life, we require an active pipeline of quality exploration and development projects. We strive
The Group completed the sale of the Cracow Gold mine to Aeris Resources Limited on 30 June 2020.
to build a reputation of sustainability, reliability and transparency. Financial discipline must be core and embedded across the
Evolution’s vision is to create a premier global mid-tier gold company which create sustainable returns for our shareholders and
entire business. We remain open to all quality gold, silver and copper-gold value accretive investments and recognize that
delivers benefits to our stakeholders. As a business we must prosper through the metal price cycle. We believe that this can be
divesting assets is an important component of our strategy. The achievements during the past twelve months clearly reflect our
best achieved with a portfolio of six to eight assets generating superior returns with an average mine life reserve of at least ten
discipline to staying true to our strategy.
years. To maintain this long mine life, we require an active pipeline of quality exploration and development projects. We strive
Profit Overview
to build a reputation of sustainability, reliability and transparency. Financial discipline must be core and embedded across the
entire business. We remain open to all quality gold, silver and copper-gold value accretive investments and recognize that
The Group achieved a record statutory net profit after tax of $301.6 million for the year ended 30 June 2020 (30 June 2019:
divesting assets is an important component of our strategy. The achievements during the past twelve months clearly reflect our
$218.2 million). The Group also achieved a record underlying net profit after tax of $405.4 million for the year (30 June 2019:
discipline to staying true to our strategy.
$218.2 million). The following graph reflects the movements in the Group's profit after tax for the year ended 30 June 2019 to
the year ended 30 June 2020.
Profit Overview
The Group achieved a record statutory net profit after tax of $301.6 million for the year ended 30 June 2020 (30 June 2019:
$218.2 million). The Group also achieved a record underlying net profit after tax of $405.4 million for the year (30 June 2019:
$218.2 million). The following graph reflects the movements in the Group's profit after tax for the year ended 30 June 2019 to
the year ended 30 June 2020.
Mine operating costs increased by 1.2% (A$8.0 million) from FY19. The main drivers to the increased operating costs were a
general increase in labour rates of approximately 4%; a full year of operation of the Float Tails Leach facility at Cowal (A$4.6
million) and the commencement of the underground mine at Mt Carlton (A$9.5 million). These were mostly offset by lower
power, diesel and consumables costs. Red Lake operating costs for the first year were A$48.3 million while Cracow operating
costs increased by 3% (A$2.2 million). Inventory costs expensed were A$48.6 million higher driven by planned utilisation of ore
Mine operating costs increased by 1.2% (A$8.0 million) from FY19. The main drivers to the increased operating costs were a
stockpiles at Cowal, Mt Rawdon and Mt Carlton. Royalties were A$9.8 million higher due to the higher gold price.
general increase in labour rates of approximately 4%; a full year of operation of the Float Tails Leach facility at Cowal (A$4.6
In FY20 an impairment of the Mt Carlton asset was recorded on a post-tax basis of $101.0 million ($144.3 million pre-tax) due
million) and the commencement of the underground mine at Mt Carlton (A$9.5 million). These were mostly offset by lower
to the down grade in the resource and reserve base. Further information on this can be found in the notes to the financial
power, diesel and consumables costs. Red Lake operating costs for the first year were A$48.3 million while Cracow operating
statements.
costs increased by 3% (A$2.2 million). Inventory costs expensed were A$48.6 million higher driven by planned utilisation of ore
stockpiles at Cowal, Mt Rawdon and Mt Carlton. Royalties were A$9.8 million higher due to the higher gold price.
Tax expense for the current year is $10.4 million higher reflecting the higher profit achieved in the year.
In FY20 an impairment of the Mt Carlton asset was recorded on a post-tax basis of $101.0 million ($144.3 million pre-tax) due
The table below shows the reconciliation between the Statutory and Underlying profit.
to the down grade in the resource and reserve base. Further information on this can be found in the notes to the financial
statements.
Tax expense for the current year is $10.4 million higher reflecting the higher profit achieved in the year.
the cost of Ernest Henry's operation.
The table below shows the reconciliation between the Statutory and Underlying profit.
86 Evolution Mining Limited // Annual Report 2020
3
3
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Profit Overview (continued)
Statutory profit before income tax
Gain on sale of subsidiary
Transaction and integration costs
Impairment loss on assets
Underlying profit before income tax
Income tax expense
Tax benefit on sale of subsidiary
Tax effect of adjustments
Tax effects of adjustments on impairment of assets
Recognition of previously unrecognised tax losses
Underlying profit after income tax
Cash Flow
Key Results
2020
$'000
408,590
(11,517)
35,052
144,346
576,471
(107,038)
(3,475)
(10,515)
(43,304)
(6,769)
405,370
2019
$'000
314,826
314,826
(96,638)
-
-
-
-
-
-
-
218,188
Operating mine cash flow increased by 45% totalling $1,121.4 million (30 June 2019: $771.5 million). Total capital investment
was $371.0 million which included $83.4 million of sustaining capital investment and $287.6 million of major capital investment.
The consolidated operating and financial results for the current and prior year are summarised below. All $ figures refer to
Australian thousand dollars (A$'000) unless otherwise stated.
Key Business Metrics
30 June 2020
30 June 2019 % Change (ii)
Total underground lateral development (m)
Total underground ore mined (kt)
Total open pit ore mined (kt)
Total open pit waste mined (kt)
Processed tonnes (kt)
Gold grade processed (g/t)
Gold production (oz)
Silver production (oz)
Copper production (t)
Unit cash operating cost (A$/oz) (i)
All in sustaining cost (A$/oz) (i)
All in cost (A$/oz) (i)
Gold price achieved (A$/oz)
Silver price achieved (A$/oz)
Copper price achieved (A$/t)
Total Revenue
EBIT (i)
EBITDA (i)
EBITDA (%) (i)
Statutory profit/(loss) after income tax
Underlying profit after income tax
Operating mine cash flow
Capital investment
Net mine cash flow
Cost of sales (excluding D&A and fair value adjustments (i)
Corporate, admin, exploration and other costs (excluding D&A)
20,857
8,210
9,726
30,614
22,230
1.27
746,463
671,687
22,471
761
1,043
1,509
2,274
25
8,409
1,941,863
(852,937)
(59,494)
612,544
1,029,432
53%
301,552
405,370
1,121,364
(370,997)
735,976
14,538
7,680
11,703
37,501
21,050
1.32
753,001
709,497
21,846
627
924
1,215
1,760
21
8,587
1,509,824
(735,971)
(43,591)
330,304
730,262
48%
218,188
218,188
771,461
(273,636)
497,825
43%
7%
(17)%
(18)%
6%
(4)%
(1)%
(5)%
3%
(21)%
(13)%
(24)%
29%
19%
(2)%
29%
(16)%
(36)%
85%
41%
5%
38%
86%
45%
(36)%
48%
(i)
EBITDA, EBIT, Unit cash operating cost, All-in Sustaining Cost (AISC), and All-in Cost (AIC) are non-IFRS financial
information and are not subject to audit. EBITDA is reconciled to statutory profit in note 1(c) to the financial
statements.
(ii)
(iii)
Percentage change represents positive/(negative) impact on the business.
Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely
4
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Profit Overview (continued)
Statutory profit before income tax
Gain on sale of subsidiary
Transaction and integration costs
Impairment loss on assets
Underlying profit before income tax
Income tax expense
Tax benefit on sale of subsidiary
Tax effect of adjustments
Tax effects of adjustments on impairment of assets
Recognition of previously unrecognised tax losses
Underlying profit after income tax
Cash Flow
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
2020
$'000
408,590
(11,517)
35,052
144,346
576,471
(107,038)
(3,475)
(10,515)
(43,304)
(6,769)
405,370
2019
$'000
314,826
-
-
-
314,826
(96,638)
-
-
-
-
218,188
Operating mine cash flow increased by 45% totalling $1,121.4 million (30 June 2019: $771.5 million). Total capital investment
was $371.0 million which included $83.4 million of sustaining capital investment and $287.6 million of major capital investment.
Key Results
The consolidated operating and financial results for the current and prior year are summarised below. All $ figures refer to
Australian thousand dollars (A$'000) unless otherwise stated.
Key Business Metrics
30 June 2020
30 June 2019 % Change (ii)
Total underground lateral development (m)
Total underground ore mined (kt)
Total open pit ore mined (kt)
Total open pit waste mined (kt)
Processed tonnes (kt)
Gold grade processed (g/t)
Gold production (oz)
Silver production (oz)
Copper production (t)
Unit cash operating cost (A$/oz) (i)
All in sustaining cost (A$/oz) (i)
All in cost (A$/oz) (i)
Gold price achieved (A$/oz)
Silver price achieved (A$/oz)
Copper price achieved (A$/t)
Total Revenue
Cost of sales (excluding D&A and fair value adjustments (i)
Corporate, admin, exploration and other costs (excluding D&A)
EBIT (i)
EBITDA (i)
EBITDA (%) (i)
Statutory profit/(loss) after income tax
Underlying profit after income tax
Operating mine cash flow
Capital investment
Net mine cash flow
20,857
8,210
9,726
30,614
22,230
1.27
746,463
671,687
22,471
761
1,043
1,509
2,274
25
8,409
1,941,863
(852,937)
(59,494)
612,544
1,029,432
53%
301,552
405,370
1,121,364
(370,997)
735,976
14,538
7,680
11,703
37,501
21,050
1.32
753,001
709,497
21,846
627
924
1,215
1,760
21
8,587
1,509,824
(735,971)
(43,591)
330,304
730,262
48%
218,188
218,188
771,461
(273,636)
497,825
43%
7%
(17)%
(18)%
6%
(4)%
(1)%
(5)%
3%
(21)%
(13)%
(24)%
29%
19%
(2)%
29%
(16)%
(36)%
85%
41%
5%
38%
86%
45%
(36)%
48%
(i)
(ii)
(iii)
EBITDA, EBIT, Unit cash operating cost, All-in Sustaining Cost (AISC), and All-in Cost (AIC) are non-IFRS financial
information and are not subject to audit. EBITDA is reconciled to statutory profit in note 1(c) to the financial
statements.
Percentage change represents positive/(negative) impact on the business.
Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely
the cost of Ernest Henry's operation.
4
Evolution Mining Limited // Annual Report 2020 87
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Evolution Mining Limited
Directors' Report
Directors' Report
30 June 2020
30 June 2020
(continued)
(continued)
Operating and Financial Review (continued)
Operating and Financial Review (continued)
Mining Operations
Mining Operations
Cowal
Cowal
Cowal had another successful year, producing 262,035 ounces (guidance of 255,000-265,000oz) at an average unit cash
Cowal had another successful year, producing 262,035 ounces (guidance of 255,000-265,000oz) at an average unit cash
operating cost of $815/oz and AISC of $933/oz. Cash costs and AISC were at the lower ends of guidance of $810-$860/oz and
operating cost of $815/oz and AISC of $933/oz. Cash costs and AISC were at the lower ends of guidance of $810-$860/oz and
$930-$980/oz respectively. Capital investment for the year was $181.2 million, of which $169.3 million relates to major projects
$930-$980/oz respectively. Capital investment for the year was $181.2 million, of which $169.3 million relates to major projects
consisting of the continuation of the Stage H stripping, the completion of the dual water pipeline, the continuation of the
consisting of the continuation of the Stage H stripping, the completion of the dual water pipeline, the continuation of the
Integrated Waste Landform (IWL) tailings facility construction and the underground Pre-Feasibility Study (PFS).
Integrated Waste Landform (IWL) tailings facility construction and the underground Pre-Feasibility Study (PFS).
The successful completion of the dual water pipeline and increased dam capacity on site has significantly improved Cowal’s
The successful completion of the dual water pipeline and increased dam capacity on site has significantly improved Cowal’s
water security position. The identification of subsurface saline water sources is continuing with the objective of reducing
water security position. The identification of subsurface saline water sources is continuing with the objective of reducing
reliance on fresh water sources.
reliance on fresh water sources.
On 23 July 2020 Cowal declared a maiden underground Ore Reserve of 804,000 ounces and increased Mineral Resources to
On 23 July 2020 Cowal declared a maiden underground Ore Reserve of 804,000 ounces and increased Mineral Resources to
2.9 million ounces. An application for regulatory approval of an underground mine development is expected to be submitted
2.9 million ounces. An application for regulatory approval of an underground mine development is expected to be submitted
early in the December 2020 quarter. In parallel, Evolution will complete a Feasibility Study which will focus on detailed design
early in the December 2020 quarter. In parallel, Evolution will complete a Feasibility Study which will focus on detailed design
and optimisation of the mine plan, capital investment and operating costs.
and optimisation of the mine plan, capital investment and operating costs.
s
d
n
a
s
u
o
h
T
280
275
270
265
260
255
250
245
240
877
258
FY18
995
252
FY19
1200
1000
800
600
400
200
0
933
262
FY20
Gold Production ('000oz)
AISC (A$/oz)
Key Business Metrics
Key Business Metrics
30 June 2020
30 June 2020
30 June 2019
30 June 2019
Change % Change
Change % Change
Operating cash flow ($'000)
Operating cash flow ($'000)
Sustaining capital ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Major capital ($'000)
Total capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
All-in Cost ($/oz)
416,828
416,828
(11,919)
(11,919)
(169,313)
(169,313)
(181,232)
(181,232)
235,596
235,596
262,035
262,035
933
933
1,715
1,715
232,258
232,258
(44,000)
(44,000)
(100,734)
(100,734)
(144,734)
(144,734)
87,524
87,524
251,500
251,500
995
995
1,500
1,500
184,570
184,570
32,081
32,081
(68,579)
(68,579)
(36,498)
(36,498)
148,072
148,072
10,535
10,535
62
62
(215)
(215)
79%
79%
(73)%
(73)%
68%
68%
25%
25%
169%
169%
4%
4%
(6)%
(6)%
14%
14%
5
5
88 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evolution Mining Limited
Directors' Report
Operating and Financial Review (continued)
30 June 2020
Mining Operations (continued)
(continued)
Red Lake (Acquisition Completed 1 April 2020)
Operating and Financial Review (continued)
Red Lake produced 27,428oz of gold at an AISC of A$1,943/oz in its first quarter under Evolution ownership (Guidance: 25,000
ounces at an AISC of A$2,100 - A$2,300/oz). The 3 year transformation program at Red Lake is well underway to restore the
Mining Operations (continued)
operation’s production to above 200,000 ounces per annum at an AISC of less than US$1,000 per ounce.
In order to recapitalise the asset and materially reduce the cost base of the operation, Evolution has committed to an
Red Lake (Acquisition Completed 1 April 2020)
investment of US$100.0 million on existing operations and US$50.0 million in exploration at Red Lake over the next 3 years.
Red Lake produced 27,428oz of gold at an AISC of A$1,943/oz in its first quarter under Evolution ownership (Guidance: 25,000
A restructure of the workforce took place during June with a reduction of 114 full-time employees to a total workforce of around
ounces at an AISC of A$2,100 - A$2,300/oz). The 3 year transformation program at Red Lake is well underway to restore the
740. This is down from a workforce of 911 that were on the payroll during the due diligence phase.
operation’s production to above 200,000 ounces per annum at an AISC of less than US$1,000 per ounce.
Other strategic, transformational milestones achieved in the first quarter of ownership (June 2020) include:
In order to recapitalise the asset and materially reduce the cost base of the operation, Evolution has committed to an
investment of US$100.0 million on existing operations and US$50.0 million in exploration at Red Lake over the next 3 years.
Decommissioned 42 pieces of underground mining equipment
•
A restructure of the workforce took place during June with a reduction of 114 full-time employees to a total workforce of around
740. This is down from a workforce of 911 that were on the payroll during the due diligence phase.
Commenced a A$3 million capital investment project to automate Reid and Balmer hoists which is expected to save
•
A$2 million per annum
Other strategic, transformational milestones achieved in the first quarter of ownership (June 2020) include:
Extensive work on building a new geology and resource model as a basis for releasing an updated Mineral Resource in
Decommissioned 42 pieces of underground mining equipment
the September 2020 quarter
Commenced a A$3 million capital investment project to automate Reid and Balmer hoists which is expected to save
Electrical work and dewatering changes commenced supporting the decommissioning of Campbell shaft
Extensive work on building a new geology and resource model as a basis for releasing an updated Mineral Resource in
the September 2020 quarter
Removal of 48 semi-trailer loads of scrap steel as part of the effort to declutter and simplify the site
Electrical work and dewatering changes commenced supporting the decommissioning of Campbell shaft
A$2 million per annum
Removal of redundant buildings
Removal of redundant buildings
Removal of 48 semi-trailer loads of scrap steel as part of the effort to declutter and simplify the site
•
•
•
•
•
•
•
•
•
•
Key Business Metrics
30 June 2020 30 June 2019
Change % Change
30 June 2020 30 June 2019
(20,873)
Change % Change
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Key Business Metrics
Net mine cash flow ($'000)
Gold production (oz)
Operating cash flow ($'000)
All-in Sustaining Cost ($/oz)
Sustaining capital ($'000)
All-in Cost ($/oz)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30,782
(6,598)
(14,274)
(2,920)
27,428
30,782
1,943
(6,598)
2,378
(14,274)
(20,873)
(2,920)
27,428
1,943
2,378
6
6
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evolution Mining Limited
Directors' Report
Operating and Financial Review (continued)
30 June 2020
Mining Operations (continued)
(continued)
Red Lake (Acquisition Completed 1 April 2020)
Operating and Financial Review (continued)
Red Lake produced 27,428oz of gold at an AISC of A$1,943/oz in its first quarter under Evolution ownership (Guidance: 25,000
ounces at an AISC of A$2,100 - A$2,300/oz). The 3 year transformation program at Red Lake is well underway to restore the
Mining Operations (continued)
operation’s production to above 200,000 ounces per annum at an AISC of less than US$1,000 per ounce.
In order to recapitalise the asset and materially reduce the cost base of the operation, Evolution has committed to an
Red Lake (Acquisition Completed 1 April 2020)
investment of US$100.0 million on existing operations and US$50.0 million in exploration at Red Lake over the next 3 years.
Red Lake produced 27,428oz of gold at an AISC of A$1,943/oz in its first quarter under Evolution ownership (Guidance: 25,000
A restructure of the workforce took place during June with a reduction of 114 full-time employees to a total workforce of around
ounces at an AISC of A$2,100 - A$2,300/oz). The 3 year transformation program at Red Lake is well underway to restore the
740. This is down from a workforce of 911 that were on the payroll during the due diligence phase.
operation’s production to above 200,000 ounces per annum at an AISC of less than US$1,000 per ounce.
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Other strategic, transformational milestones achieved in the first quarter of ownership (June 2020) include:
In order to recapitalise the asset and materially reduce the cost base of the operation, Evolution has committed to an
investment of US$100.0 million on existing operations and US$50.0 million in exploration at Red Lake over the next 3 years.
Decommissioned 42 pieces of underground mining equipment
•
•
A restructure of the workforce took place during June with a reduction of 114 full-time employees to a total workforce of around
740. This is down from a workforce of 911 that were on the payroll during the due diligence phase.
Commenced a A$3 million capital investment project to automate Reid and Balmer hoists which is expected to save
A$2 million per annum
Other strategic, transformational milestones achieved in the first quarter of ownership (June 2020) include:
s
d
n
a
s
u
o
h
T
•
•
•
•
•
•
•
40
•
35
•
30
•
25
20
15
10
5
0
Extensive work on building a new geology and resource model as a basis for releasing an updated Mineral Resource in
Decommissioned 42 pieces of underground mining equipment
the September 2020 quarter
Commenced a A$3 million capital investment project to automate Reid and Balmer hoists which is expected to save
Electrical work and dewatering changes commenced supporting the decommissioning of Campbell shaft
A$2 million per annum
Removal of redundant buildings
Extensive work on building a new geology and resource model as a basis for releasing an updated Mineral Resource in
the September 2020 quarter
Removal of 48 semi-trailer loads of scrap steel as part of the effort to declutter and simplify the site
Electrical work and dewatering changes commenced supporting the decommissioning of Campbell shaft
Removal of redundant buildings
1,943
Removal of 48 semi-trailer loads of scrap steel as part of the effort to declutter and simplify the site
27
2500
2000
1500
1000
500
0
Key Business Metrics
FY18
FY19
Gold Production ('000oz)
30 June 2020 30 June 2019
AISC (A$/oz)
FY20
Change % Change
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Key Business Metrics
Net mine cash flow ($'000)
Gold production (oz)
Operating cash flow ($'000)
All-in Sustaining Cost ($/oz)
Sustaining capital ($'000)
All-in Cost ($/oz)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Change % Change
30 June 2020 30 June 2019
30,782
(6,598)
(14,274)
(20,873)
(2,920)
27,428
30,782
1,943
(6,598)
2,378
(14,274)
(20,873)
(2,920)
27,428
1,943
2,378
6
6
Evolution Mining Limited // Annual Report 2020 89
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evolution Mining Limited
Operating and Financial Review (continued)
Directors' Report
Mining Operations (continued)
30 June 2020
(continued)
Mungari
Mungari produced a total of 133,388 ounces at an average unit cash operating cost of $1,050/oz and an AISC of $1,215/oz.
Operating and Financial Review (continued)
Gold production was above the 115,000-125,000oz guidance range. Cash costs achieved the guidance of $1,030-$1,080/oz
and AISC was below the guidance of $1,230-$1,280/oz. Capital investment in the year was $26.6 million of which $14.2 million
Mining Operations (continued)
was related to mine development at the Frog’s Leg underground mine and advancing the Boomer prospect.
The Frog’s Leg underground mine produced 473kt of ore at an average grade of 3.71g/t. Total development for the year was
Mungari
1,480m which decreased from the prior year (30 June 2019: 1,928m). Total material moved at the White Foil open pit was 7.2
Mungari produced a total of 133,388 ounces at an average unit cash operating cost of $1,050/oz and an AISC of $1,215/oz.
million tonnes at an average grade of 1.97g/t.
Gold production was above the 115,000-125,000oz guidance range. Cash costs achieved the guidance of $1,030-$1,080/oz
The process plant performed well over the course of the year, with 1,841kt of ore processed at an average grade of 2.47g/t.
and AISC was below the guidance of $1,230-$1,280/oz. Capital investment in the year was $26.6 million of which $14.2 million
Strong gold recoveries of 91.4% were achieved despite a slight decrease from the prior year (30 June 2019: 93.8%).
was related to mine development at the Frog’s Leg underground mine and advancing the Boomer prospect.
The record net mine cash flow of $112.7 million reflects an impressive turnaround as the operation again consistently delivers
The Frog’s Leg underground mine produced 473kt of ore at an average grade of 3.71g/t. Total development for the year was
to its operating plan. Mungari experienced strong margin expansion during the year driven by a consistent performance in the
1,480m which decreased from the prior year (30 June 2019: 1,928m). Total material moved at the White Foil open pit was 7.2
mill in terms of throughput, lower sustaining capital and a higher gold price.
million tonnes at an average grade of 1.97g/t.
The process plant performed well over the course of the year, with 1,841kt of ore processed at an average grade of 2.47g/t.
During the June 2020 quarter, Mungari’s Boomer prospect continued to return narrow laminated vein intercepts containing visible
Strong gold recoveries of 91.4% were achieved despite a slight decrease from the prior year (30 June 2019: 93.8%).
gold with a best intersection of 0.79m (0.67 etw) grading 133.8g/t Au. Access to the Boomer mineralisation was achieved an
d a drilling platform established in order to undertake further grade control drilling.
The record net mine cash flow of $112.7 million reflects an impressive turnaround as the operation again consistently delivers
to its operating plan. Mungari experienced strong margin expansion during the year driven by a consistent performance in the
mill in terms of throughput, lower sustaining capital and a higher gold price.
During the June 2020 quarter, Mungari’s Boomer prospect continued to return narrow laminated vein intercepts containing visible
1,320
gold with a best intersection of 0.79m (0.67 etw) grading 133.8g/t Au. Access to the Boomer mineralisation was achieved an
d a drilling platform established in order to undertake further grade control drilling.
1,215
1,181
1400
145
140
s
d
n
a
s
u
o
h
T
135
130
125
120
115
110
105
100
117
121
133
1200
1000
800
600
400
200
0
Key Business Metrics
FY18
FY19
30 June 2020
30 June 2019
FY20
Change % Change
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Key Business Metrics
Gold production (oz)
All-in Sustaining Cost ($/oz)
Operating cash flow ($'000)
All-in Cost ($/oz)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Gold Production ('000oz)
AISC
139,363
(12,478)
(14,189)
(26,667)
112,696
30 June 2020
133,388
1,215
139,363
1,447
(12,478)
(14,189)
(26,667)
112,696
133,388
1,215
1,447
63,864
(11,960)
(16,153)
(28,113)
35,751
30 June 2019
120,535
1,320
63,864
1,536
(11,960)
(16,153)
(28,113)
35,751
120,535
1,320
1,536
75,499
118%
(518)
4%
1,964
(12)%
(5)%
1,446
215%
76,945
Change % Change
11%
12,853
(8)%
105
118%
75,499
(6)%
89
4%
(518)
1,964
(12)%
1,446
(5)%
76,945
215%
12,853
11%
105
(8)%
89
(6)%
90 Evolution Mining Limited // Annual Report 2020
7
7
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Evolution Mining Limited
Mining Operations (continued)
Directors' Report
30 June 2020
Mt Carlton
(continued)
production or cost guidance.
Operating and Financial Review (continued)
Mt Carlton produced a total of 58,962 ounces at a cash cost of $1,055/oz and AISC of 1,453/oz. Mt Carlton did not meet
Over the past 12 months Mt Carlton has experienced continual poor reconciliation between its Ore Reserve and Grade Control
Mining Operations (continued)
models. In order to better define the geology an extensive grade control infill program of 204 drill holes (33,000m) was
completed post the 31 December 2019 Mineral Resources and Ore Reserves Statement to inform an update to the resource
block model. The results identified that the West and East Lode orebodies were narrowing at shallower levels than previously
modelled. A review concluded that the main hydrothermal breccia zone, which constitutes the bulk of the widely developed
Mt Carlton
mineralisation in the V2 pit, tapered to a series of narrower, high-grade feeder structures at shallower depths. A review of the
Mt Carlton produced a total of 58,962 ounces at a cash cost of $1,055/oz and AISC of 1,453/oz. Mt Carlton did not meet
underground Mineral Resource model brought about by the revised geological interpretation in the open pit, resulted in similar
production or cost guidance.
underground geological interpretation. The improved understanding of the geological controls on grade distribution indicated a
Over the past 12 months Mt Carlton has experienced continual poor reconciliation between its Ore Reserve and Grade Control
reduction of approximately 70,000 ounces from the December 2019 Resource was required.
models. In order to better define the geology an extensive grade control infill program of 204 drill holes (33,000m) was
As a result of the reduction in the Mineral Resource, Evolution has taken an impairment in the period for Mt Carlton of $101.0
completed post the 31 December 2019 Mineral Resources and Ore Reserves Statement to inform an update to the resource
million on a post-tax basis ($144.3 million pre-tax).
block model. The results identified that the West and East Lode orebodies were narrowing at shallower levels than previously
modelled. A review concluded that the main hydrothermal breccia zone, which constitutes the bulk of the widely developed
Capital investment of $81.4 million for the year was mainly the development of the underground mine, upgrades to the process
mineralisation in the V2 pit, tapered to a series of narrower, high-grade feeder structures at shallower depths. A review of the
plant and open pit capital stripping.
underground Mineral Resource model brought about by the revised geological interpretation in the open pit, resulted in similar
underground geological interpretation. The improved understanding of the geological controls on grade distribution indicated a
reduction of approximately 70,000 ounces from the December 2019 Resource was required.
As a result of the reduction in the Mineral Resource, Evolution has taken an impairment in the period for Mt Carlton of $101.0
million on a post-tax basis ($144.3 million pre-tax).
Capital investment of $81.4 million for the year was mainly the development of the underground mine, upgrades to the process
plant and open pit capital stripping.
Key Business Metrics
30 June 2020
30 June 2019
Change % Change
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Key Business Metrics
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2020
58,962
106,646
30 June 2019
Change % Change
71,223
(16,103)
(65,380)
(81,483)
(10,260)
1,453
2,519
71,223
(16,103)
(65,380)
(81,483)
(10,260)
58,962
1,453
2,519
120,190
(8,039)
(27,537)
(35,576)
84,614
738
1,015
120,190
(8,039)
(27,537)
(35,576)
84,614
106,646
738
1,015
(48,967)
(8,064)
(37,843)
(45,907)
(94,874)
(47,684)
(715)
(1,504)
(48,967)
(8,064)
(37,843)
(45,907)
(94,874)
(47,684)
(715)
(1,504)
(41)%
100%
137%
129%
(112)%
(45)%
97%
148%
(41)%
100%
137%
129%
(112)%
(45)%
97%
148%
8
8
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Evolution Mining Limited
Mining Operations (continued)
Directors' Report
30 June 2020
Mt Carlton
(continued)
Mt Carlton produced a total of 58,962 ounces at a cash cost of $1,055/oz and AISC of 1,453/oz. Mt Carlton did not meet
production or cost guidance.
Operating and Financial Review (continued)
Over the past 12 months Mt Carlton has experienced continual poor reconciliation between its Ore Reserve and Grade Control
Mining Operations (continued)
models. In order to better define the geology an extensive grade control infill program of 204 drill holes (33,000m) was
completed post the 31 December 2019 Mineral Resources and Ore Reserves Statement to inform an update to the resource
block model. The results identified that the West and East Lode orebodies were narrowing at shallower levels than previously
Mt Carlton
modelled. A review concluded that the main hydrothermal breccia zone, which constitutes the bulk of the widely developed
mineralisation in the V2 pit, tapered to a series of narrower, high-grade feeder structures at shallower depths. A review of the
Mt Carlton produced a total of 58,962 ounces at a cash cost of $1,055/oz and AISC of 1,453/oz. Mt Carlton did not meet
underground Mineral Resource model brought about by the revised geological interpretation in the open pit, resulted in similar
production or cost guidance.
underground geological interpretation. The improved understanding of the geological controls on grade distribution indicated a
Over the past 12 months Mt Carlton has experienced continual poor reconciliation between its Ore Reserve and Grade Control
reduction of approximately 70,000 ounces from the December 2019 Resource was required.
models. In order to better define the geology an extensive grade control infill program of 204 drill holes (33,000m) was
As a result of the reduction in the Mineral Resource, Evolution has taken an impairment in the period for Mt Carlton of $101.0
completed post the 31 December 2019 Mineral Resources and Ore Reserves Statement to inform an update to the resource
million on a post-tax basis ($144.3 million pre-tax).
block model. The results identified that the West and East Lode orebodies were narrowing at shallower levels than previously
modelled. A review concluded that the main hydrothermal breccia zone, which constitutes the bulk of the widely developed
Capital investment of $81.4 million for the year was mainly the development of the underground mine, upgrades to the process
mineralisation in the V2 pit, tapered to a series of narrower, high-grade feeder structures at shallower depths. A review of the
plant and open pit capital stripping.
underground Mineral Resource model brought about by the revised geological interpretation in the open pit, resulted in similar
underground geological interpretation. The improved understanding of the geological controls on grade distribution indicated a
reduction of approximately 70,000 ounces from the December 2019 Resource was required.
As a result of the reduction in the Mineral Resource, Evolution has taken an impairment in the period for Mt Carlton of $101.0
million on a post-tax basis ($144.3 million pre-tax).
Capital investment of $81.4 million for the year was mainly the development of the underground mine, upgrades to the process
plant and open pit capital stripping.
1,453
2000
1500
180
160
s
d
n
a
s
u
o
h
T
140
120
100
80
60
40
20
535
112
738
107
1000
500
0
-500
-1000
-1500
59
Key Business Metrics
0
30 June 2020
30 June 2019
Change % Change
-2000
FY18
FY19
FY20
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Key Business Metrics
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Gold Production ('000oz)
AISC (A$/oz)
71,223
(16,103)
(65,380)
(81,483)
(10,260)
58,962
30 June 2020
1,453
2,519
71,223
(16,103)
(65,380)
(81,483)
(10,260)
58,962
1,453
2,519
120,190
(8,039)
(27,537)
(35,576)
84,614
106,646
30 June 2019
738
1,015
120,190
(8,039)
(27,537)
(35,576)
84,614
106,646
738
1,015
(41)%
(48,967)
100%
(8,064)
137%
(37,843)
129%
(45,907)
(112)%
(94,874)
(47,684)
(45)%
Change % Change
97%
(715)
148%
(1,504)
(41)%
(48,967)
100%
(8,064)
137%
(37,843)
129%
(45,907)
(112)%
(94,874)
(45)%
(47,684)
97%
(715)
148%
(1,504)
8
8
Evolution Mining Limited // Annual Report 2020 91
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Evolution Mining Limited
Mining Operations (continued)
Directors' Report
30 June 2020
Mt Rawdon
(continued)
Mt Rawdon achieved total gold production of 82,004 ounces at a unit cash operating cost of $1,289/oz and an AISC of
$1,546/oz. Production was inline with the revised guidance of 80,000 - 85,000oz (original guidance of 90,000 -100,000oz) while
cash costs and AISC were higher than the revised guidance of $960 - $1,010 and $1,490 - $1,540/oz respectively (original
Operating and Financial Review (continued)
guidance of $1,210 - $1260/oz). Capital investment for the year was $22.1 million with $12.1 million attributable the construction
of the tailings storage facility buttress, tailings storage facility lift and north wall meshing.
Mining Operations (continued)
Mt Rawdon performance for the year was adversely impacted by instability of the western wall during the September 2019
quarter. Stabilisation of the western wall required reducing the wall slope to approximately 38° from the 45° previously. The
Mt Rawdon
restricted access to that part of the pit resulted in a reduction in planned high grade material mined in the first half of FY20.
Mt Rawdon achieved total gold production of 82,004 ounces at a unit cash operating cost of $1,289/oz and an AISC of
Stockpiled ore was processing until access to the higher grade ore in the western wall was regained in the last quarter of FY20
$1,546/oz. Production was inline with the revised guidance of 80,000 - 85,000oz (original guidance of 90,000 -100,000oz) while
resulting in a strong finish to the year.
cash costs and AISC were higher than the revised guidance of $960 - $1,010 and $1,490 - $1,540/oz respectively (original
guidance of $1,210 - $1260/oz). Capital investment for the year was $22.1 million with $12.1 million attributable the construction
of the tailings storage facility buttress, tailings storage facility lift and north wall meshing.
Mt Rawdon performance for the year was adversely impacted by instability of the western wall during the September 2019
quarter. Stabilisation of the western wall required reducing the wall slope to approximately 38° from the 45° previously. The
restricted access to that part of the pit resulted in a reduction in planned high grade material mined in the first half of FY20.
1800
Stockpiled ore was processing until access to the higher grade ore in the western wall was regained in the last quarter of FY20
resulting in a strong finish to the year.
1,546
1600
220
200
s
d
n
a
s
u
o
h
T
180
160
140
120
100
80
60
40
884
105
1,233
95
FY18
FY19
30 June 2020
30 June 2019
Gold Production ('000oz)
81,034
(9,963)
(12,086)
(22,049)
58,985
82,004
30 June 2020
1,546
1,694
AISC (A$/oz)
60,006
(4,446)
(23,921)
(28,367)
31,639
94,647
30 June 2019
1,233
1,490
1400
1200
1000
800
600
400
200
Change % Change
0
35%
21,028
124%
(5,517)
(49)%
11,835
(22)%
6,318
86%
27,346
(12,643)
(13)%
Change % Change
(313)
25%
14%
(204)
82
FY20
Key Business Metrics
20
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Key Business Metrics
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
81,034
(9,963)
(12,086)
(22,049)
58,985
82,004
1,546
1,694
60,006
(4,446)
(23,921)
(28,367)
31,639
94,647
1,233
1,490
21,028
(5,517)
11,835
6,318
27,346
(12,643)
(313)
(204)
35%
124%
(49)%
(22)%
86%
(13)%
25%
14%
FY18
FY19
FY20
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Mining Operations (continued)
Evolution Mining Limited
Ernest Henry
Directors' Report
30 June 2020
of $(743)/oz were above the guidance of $(925) - $(880)/oz.
(continued)
Operating and Financial Review (continued)
and 95.1% respectively were achieved.
Mining Operations (continued)
Ernest Henry gold production of 94,902 oz was above guidance of 87,500 - 92,500oz. A negative AISC of $(432)/oz was below
guidance of $(590) - $(540)/oz, after taking into account copper and silver by-product credits of (1,852)/oz. Negative cash costs
Ore mined was 7,068kt at an average grade of 0.59g/t gold and 1.07% copper. Underground development was 8,691m. Ore
processed was 7,045kt at an average grade of 0.59g/t gold and 1.07% copper. Gold recovery and copper recovery of 74.7%
Drilling below the 1200mRL continued to plan with development of the fourth platform commencing in the June 2020 quarter.
The program will continue with 18,000m of drilling planned through to the end of the 2020 calendar year.
Ernest Henry
Ernest Henry gold production of 94,902 oz was above guidance of 87,500 - 92,500oz. A negative AISC of $(432)/oz was below
guidance of $(590) - $(540)/oz, after taking into account copper and silver by-product credits of (1,852)/oz. Negative cash costs
of $(743)/oz were above the guidance of $(925) - $(880)/oz.
Ore mined was 7,068kt at an average grade of 0.59g/t gold and 1.07% copper. Underground development was 8,691m. Ore
processed was 7,045kt at an average grade of 0.59g/t gold and 1.07% copper. Gold recovery and copper recovery of 74.7%
and 95.1% respectively were achieved.
Drilling below the 1200mRL continued to plan with development of the fourth platform commencing in the June 2020 quarter.
d
The program will continue with 18,000m of drilling planned through to the end of the 2020 calendar year.
95.209
95
FY18
FY18
98.689
99
FY19
FY19
(539)
94.902
95
FY20
FY20
(432)
(432)
Key Business Metrics
-450
(641)
30 June 2020
(539)
30 June 2019
Change % Change
s
d
s
n
a
n
s
a
u
s
o
u
h
o
T
h
T
150
150
50
50
-50
-50
-150
-150
-250
-250
-350
-350
-450
-550
-650
-750
Gold Production ('000oz)
256,619
AISC (A$/oz)
222,181
(i)
Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely
30 June 2020
30 June 2019
Change % Change
the cost of Ernest Henry's operation.
267,817
(11,198)
-
(11,198)
94,902
20,688
(432)
(432)
267,817
(11,198)
-
(11,198)
256,619
94,902
20,688
(432)
(432)
231,821
(9,640)
-
(9,640)
98,689
21,008
(539)
(539)
231,821
(9,640)
-
(9,640)
222,181
98,689
21,008
(539)
(539)
35,996
(1,558)
-
(1,558)
34,438
(3,787)
(320)
107
107
35,996
(1,558)
-
(1,558)
34,438
(3,787)
(320)
107
107
16%
16%
-%
16%
15%
(4)%
(2)%
20%
20%
16%
16%
-%
16%
15%
(4)%
(2)%
20%
20%
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Copper production (t)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Copper production (t)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
(i)
Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely
the cost of Ernest Henry's operation.
92 Evolution Mining Limited // Annual Report 2020
9
9
10
10
Directors' Report (continued)
s
d
n
a
s
u
o
h
T
220
200
180
160
140
120
100
80
60
40
20
884
105
FY18
1,233
95
FY19
1,546
82
FY20
1800
1600
1400
1200
1000
800
600
400
200
0
Gold Production ('000oz)
AISC (A$/oz)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Mining Operations (continued)
FY18
FY19
FY20
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Ernest Henry
Directors' Report
Ernest Henry gold production of 94,902 oz was above guidance of 87,500 - 92,500oz. A negative AISC of $(432)/oz was below
30 June 2020
guidance of $(590) - $(540)/oz, after taking into account copper and silver by-product credits of (1,852)/oz. Negative cash costs
(continued)
of $(743)/oz were above the guidance of $(925) - $(880)/oz.
Ore mined was 7,068kt at an average grade of 0.59g/t gold and 1.07% copper. Underground development was 8,691m. Ore
processed was 7,045kt at an average grade of 0.59g/t gold and 1.07% copper. Gold recovery and copper recovery of 74.7%
Operating and Financial Review (continued)
and 95.1% respectively were achieved.
Mining Operations (continued)
Drilling below the 1200mRL continued to plan with development of the fourth platform commencing in the June 2020 quarter.
The program will continue with 18,000m of drilling planned through to the end of the 2020 calendar year.
Ernest Henry
Ernest Henry gold production of 94,902 oz was above guidance of 87,500 - 92,500oz. A negative AISC of $(432)/oz was below
guidance of $(590) - $(540)/oz, after taking into account copper and silver by-product credits of (1,852)/oz. Negative cash costs
of $(743)/oz were above the guidance of $(925) - $(880)/oz.
Ore mined was 7,068kt at an average grade of 0.59g/t gold and 1.07% copper. Underground development was 8,691m. Ore
processed was 7,045kt at an average grade of 0.59g/t gold and 1.07% copper. Gold recovery and copper recovery of 74.7%
and 95.1% respectively were achieved.
94.902
Drilling below the 1200mRL continued to plan with development of the fourth platform commencing in the June 2020 quarter.
95
The program will continue with 18,000m of drilling planned through to the end of the 2020 calendar year.
FY20
FY20
95.209
95
FY18
FY18
98.689
99
FY19
FY19
s
d
s
n
d
a
n
s
a
u
s
o
u
h
o
T
h
T
150
150
50
50
-50
-50
-150
-150
-250
-250
-350
-350
-450
-450
Key Business Metrics
-550
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Copper production (t)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
(i)
(641)
(539)
(539)
30 June 2020
(432)
(432)
30 June 2019
Change % Change
-650
Operating cash flow ($'000)
Sustaining capital ($'000)
-750
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Copper production (t)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Key Business Metrics
(i)
16%
16%
-%
16%
15%
(4)%
(2)%
20%
20%
Change % Change
Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely
the cost of Ernest Henry's operation.
267,817
(11,198)
-
(11,198)
256,619
94,902
20,688
(432)
(432)
30 June 2020
231,821
(9,640)
-
(9,640)
222,181
98,689
21,008
(539)
(539)
30 June 2019
35,996
(1,558)
-
(1,558)
34,438
(3,787)
(320)
107
107
Gold Production ('000oz)
AISC (A$/oz)
267,817
(11,198)
-
(11,198)
256,619
94,902
20,688
(432)
(432)
231,821
(9,640)
-
(9,640)
222,181
98,689
21,008
(539)
(539)
35,996
(1,558)
-
(1,558)
34,438
(3,787)
(320)
107
107
16%
16%
-%
16%
15%
(4)%
(2)%
20%
20%
Ernest Henry mining and processing statistics are in 100% terms while costs represent Evolution's cost and not solely
the cost of Ernest Henry's operation.
10
10
Evolution Mining Limited // Annual Report 2020 93
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Mining Operations (continued)
Evolution Mining Limited
Cracow
Directors' Report
Cracow produced 87,774oz at a unit cash operating cost of $837/oz both within guidance, and AISC of
30 June 2020
$1,203/oz, slightly above guidance of 82,500-87,500oz, $800-$850/oz and $1,200-$1,250/oz respectively.
(continued)
A total of 484kt of ore was mined at an average grade of 5.63g/t during the year with primary ore sources being the Baz,
Coronation and Imperial ore bodies.
Operating and Financial Review (continued)
Capital investment for the year was $25.7 million comprising $13.3 million attributable towards sustaining capital while a further
$12.4 million was major capital spend on underground mine development.
Mining Operations (continued)
On 4 June 2020 Evolution announced the agreement to divest Cracow for a consideration of up to A$125 million to Aeris
Cracow
Resources Limited (ASX:AIS). This is consistent with the Company’s strategic objective of upgrading the quality of its asset
portfolio. The sale was successfully completed on 1 July 2020.
Cracow produced 87,774oz at a unit cash operating cost of $837/oz both within guidance, and AISC of
$1,203/oz, slightly above guidance of 82,500-87,500oz, $800-$850/oz and $1,200-$1,250/oz respectively.
A total of 484kt of ore was mined at an average grade of 5.63g/t during the year with primary ore sources being the Baz,
Coronation and Imperial ore bodies.
Capital investment for the year was $25.7 million comprising $13.3 million attributable towards sustaining capital while a further
$12.4 million was major capital spend on underground mine development.
1,272
1400
120
1,203
1,181
110
On 4 June 2020 Evolution announced the agreement to divest Cracow for a consideration of up to A$125 million to Aeris
Resources Limited (ASX:AIS). This is consistent with the Company’s strategic objective of upgrading the quality of its asset
portfolio. The sale was successfully completed on 1 July 2020.
1200
100
1000
s
d
n
a
s
u
o
h
T
90
80
70
60
50
90
81
88
800
600
400
200
40
Key Business Metrics
FY18
30 June 2020
FY19
30 June 2019
FY20
0
Change % Change
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Major capital ($'000)
Total capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
Gold Production ('000oz)
AISC (A$/oz)
110,914
(13,309)
(12,354)
(25,663)
85,251
87,744
1,203
1,290
63,326
(15,158)
(12,052)
(27,210)
36,116
80,983
1,272
1,355
47,588
1,849
(302)
1,547
49,135
6,761
69
65
75%
(12)%
3%
(6)%
136%
8%
(5)%
(5)%
30 June 2020
30 June 2019
Change % Change
110,914
(13,309)
(12,354)
(25,663)
85,251
87,744
1,203
1,290
63,326
(15,158)
(12,052)
(27,210)
36,116
80,983
1,272
1,355
47,588
1,849
(302)
1,547
49,135
6,761
69
65
75%
(12)%
3%
(6)%
136%
8%
(5)%
(5)%
94 Evolution Mining Limited // Annual Report 2020
11
11
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Financial Performance
Profit or Loss
Revenue for the year ended 30 June 2020 increased by 29% to a record $1,941.9 million (30 June 2019: $1,509.8 million). The
higher achieved gold price of $2,274/oz was partially offset by a slight decrease in produced ounces for the year to 746,463oz
(30 June 2019: 753,001oz). Revenue was comprised of $1,738.1 million for gold and $203.7 million for copper and silver
revenue (30 June 2019: $1,307.5 million of gold and $202.3m of copper and silver revenue).
Total gold sold equaled 764,655 oz which included deliveries into the hedge book of 100,000oz at an average price of
$1,734/oz (30 June 2019: 150,000 oz, $1,690/oz). The remaining 664,655oz were sold at spot price achieving an average price
of $2,320/oz (30 June 2019: 592,964 oz, $1,777/oz). At 30 June 2020 the Group's hedge book totalled 300,000 ounces at a
price of $1,872/oz for the Australian operations and 120,000 ounces at C$2,272/oz for Red Lake with quarterly deliveries
through to June 2023.
Copper revenue was in line with the prior period at $187.9 million (30 June 2019: $187.9 million). Total copper produced
increased 2% to 22,369 tonnes, with the impact of this slightly offset by a 2% decrease in achieved copper price of $8,409/t.
The Group achieved a record statutory net profit after tax of $301.6 million for the year ended 30 June 2020 (30 June 2019:
$218.2 million). The Group also achieved a record underlying net profit after tax of $405.4 million for the year (30 June 2019:
$218.2 million).
Balance Sheet
Total assets increased 18% during the year to $3,674.6 million (30 June 2019: $3,093.9 million). Cash and cash equivalents
increased $37.2 million driven by the sustained high cash generation of the business ensuring the benefits of the higher gold
price environment flow through to the cash balance. The strong cash generation allowed for the full repayment and close out of
the $300.0 million Senior Secured Term Loan (“Former Facility D”).
Current ore inventory decreased 63% to $53.7 million driven by planned utilisation of ore stockpiles at Cowal and Mt Carlton.
The net carrying amount of property, plant and equipment and producing mines increased $406.1 million due to capital additions
of $496.7 million. The main driver included the acquisition of the Red Lake Operation helping to drive an increase in
total assets of $580.7 million. Total assets also increased with the recognition of the right-of-use asset of $31.5 million to reflect
the new lease accounting standard. The capital additions was partially offset by the divestment of Cracow, resulting in the
disposal of $91.5 million in net book value, an increase in depreciation of $40.9 million, and exploration write-offs of $23.7 million
which was mainly Tennant Creek of $16.4 million.
Total liabilities for the Group increased to $1,210.9 million at 30 June 2020, an increase of $523.5 million, or 76% on the prior
period. The key driver of this is a $268.6 million increase in interest bearing liabilities to $562.1 million at 30 June 2020. This is
attributable to the establishment of the $570.0 million Term Loan ("New Facility B") to fund the Red Lake purchase. Further to
this, a $56.1 million contingent consideration liability attributable to the purchase of the Red Lake Operation has been
recognised at 30 June 2020, and an increase in the deferred tax liability totaling $27.9 million, combined with the recognition of
a current tax liability of $8.9 million to drive a further $28.2 million increase.
Cash Flow
Total cash inflows for the year amounted to $37.2 million (30 June 2019: $11.9 million).
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net movement in cash
Cash at the beginning of the year
equivalents
Cash at the end of the year
Effects of exchange rate changes on cash and cash
30 June 2020
30 June 2019
$'000
$'000
Change
$'000
% Change
1,005,324
(1,003,977)
35,906
37,253
335,164
175
372,592
616,236
(382,187)
(222,111)
11,938
323,226
-
335,164
389,088
(621,790)
258,017
25,315
11,938
175
37,428
63%
163%
(116)%
212%
4%
100%
11%
12
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Financial Performance
Profit or Loss
Revenue for the year ended 30 June 2020 increased by 29% to a record $1,941.9 million (30 June 2019: $1,509.8 million). The
higher achieved gold price of $2,274/oz was partially offset by a slight decrease in produced ounces for the year to 746,463oz
(30 June 2019: 753,001oz). Revenue was comprised of $1,738.1 million for gold and $203.7 million for copper and silver
revenue (30 June 2019: $1,307.5 million of gold and $202.3m of copper and silver revenue).
Total gold sold equaled 764,655 oz which included deliveries into the hedge book of 100,000oz at an average price of
$1,734/oz (30 June 2019: 150,000 oz, $1,690/oz). The remaining 664,655oz were sold at spot price achieving an average price
of $2,320/oz (30 June 2019: 592,964 oz, $1,777/oz). At 30 June 2020 the Group's hedge book totalled 300,000 ounces at a
price of $1,872/oz for the Australian operations and 120,000 ounces at C$2,272/oz for Red Lake with quarterly deliveries
through to June 2023.
Copper revenue was in line with the prior period at $187.9 million (30 June 2019: $187.9 million). Total copper produced
increased 2% to 22,369 tonnes, with the impact of this slightly offset by a 2% decrease in achieved copper price of $8,409/t.
The Group achieved a record statutory net profit after tax of $301.6 million for the year ended 30 June 2020 (30 June 2019:
$218.2 million). The Group also achieved a record underlying net profit after tax of $405.4 million for the year (30 June 2019:
$218.2 million).
Balance Sheet
Total assets increased 18% during the year to $3,674.6 million (30 June 2019: $3,093.9 million). Cash and cash equivalents
increased $37.2 million driven by the sustained high cash generation of the business ensuring the benefits of the higher gold
price environment flow through to the cash balance. The strong cash generation allowed for the full repayment and close out of
the $300.0 million Senior Secured Term Loan (“Former Facility D”).
Current ore inventory decreased 63% to $53.7 million driven by planned utilisation of ore stockpiles at Cowal and Mt Carlton.
The net carrying amount of property, plant and equipment and producing mines increased $406.1 million due to capital additions
of $496.7 million. The main driver included the acquisition of the Red Lake Operation helping to drive an increase in
total assets of $580.7 million. Total assets also increased with the recognition of the right-of-use asset of $31.5 million to reflect
the new lease accounting standard. The capital additions was partially offset by the divestment of Cracow, resulting in the
disposal of $91.5 million in net book value, an increase in depreciation of $40.9 million, and exploration write-offs of $23.7 million
which was mainly Tennant Creek of $16.4 million.
Total liabilities for the Group increased to $1,210.9 million at 30 June 2020, an increase of $523.5 million, or 76% on the prior
period. The key driver of this is a $268.6 million increase in interest bearing liabilities to $562.1 million at 30 June 2020. This is
attributable to the establishment of the $570.0 million Term Loan ("New Facility B") to fund the Red Lake purchase. Further to
this, a $56.1 million contingent consideration liability attributable to the purchase of the Red Lake Operation has been
recognised at 30 June 2020, and an increase in the deferred tax liability totaling $27.9 million, combined with the recognition of
a current tax liability of $8.9 million to drive a further $28.2 million increase.
Cash Flow
Total cash inflows for the year amounted to $37.2 million (30 June 2019: $11.9 million).
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net movement in cash
Cash at the beginning of the year
Effects of exchange rate changes on cash and cash
equivalents
Cash at the end of the year
30 June 2020
$'000
30 June 2019
$'000
Change
$'000
% Change
1,005,324
(1,003,977)
35,906
37,253
335,164
175
372,592
616,236
(382,187)
(222,111)
11,938
323,226
-
335,164
389,088
(621,790)
258,017
25,315
11,938
175
37,428
63%
163%
(116)%
212%
4%
100%
11%
12
Evolution Mining Limited // Annual Report 2020 95
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Financial Performance (continued)
Cash Flow (continued)
Net cash outflows from investment activities were $1,004.0 million, an increase of $621.8 million from the prior period (30 June
2019: $382.2 million outflow). This was mainly due to the acquisition of the Red Lake for $582.3 million. Capital investments for
the year included property, plant and equipment of $124.4 million and mine development and exploration of $342.8 million.
Net cash inflows from financing activities were $35.9 million, an increase of $258.3 million (30 June 2019: $222.1 million
outflow). Financing cash flows for the year included the repayment of $300.0 million to close out the Senior Secured Term Loan
(“Former Facility D”), and dividend payments of $221.4 million.
Taxation
During the year, the Group made income tax payments of $76.3 million and recognised an income tax expense of $107.0
million (30 June 2019: $96.7 million).
The tax payments made in respect of the 30 June 2019 financial year combined with tax instalments paid over the course of the
30 June 2020 financial year have enabled the declaration of fully franked interim and final dividends.
Capital Investment
Capital investment for the year totaled $371.0 million (30 June 2019: $273.6 million). This consisted of sustaining capital,
including near mine exploration and resource definition of $83.4 million (30 June 2019: $93.2 million) and mine development of
$287.6 million (30 June 2019: $180.4 million). The main capital projects included the Cowal Stage H development, Integrated
Waste Landform (IWL) tailings facility and the completion of the underground pre-feasibility study; underground mine
development at Red Lake and Mt Carlton; capital waste stripping at Mt Carlton and Mt Rawdon; tailings storage facility costs at
Mungari, Mt Rawdon and Cracow; and advancing the Boomer deposit at Mungari.
Financing
Total finance costs for the year were $21.3 million (30 June 2019: $22.6 million), a decrease of 6%. Included in total finance
costs are interest expense of $11.6 million (30 June 2019: $18.2 million), amortisation of debt establishment costs of $6.7
million (30 June 2019: $2.5 million), discount unwinding on mine rehabilitation liabilities of $1.8 million (30 June 2019: $1.9
million) and interest expense on lease liability unwinding of $1.1 million (30 June 2019: nil).
The decrease in interest expense in the year is offset by the increase in the amortisation of debt establishment costs
attributable to the remaining capitalised costs associated with the Senior Secured Term Loan (“Former Facility D”) which was
fully repaid during the year. The repayment periods and the outstanding balances as at 30 June 2020 on each facility are set
out below:
Facility
Revolving Credit Facility - Facility A ($360.0 million)
Term Loan - Facility B ($570.0 million)
Performance Bond Facility - Facility C ($175.0 million)
Performance Bond Facility - Facility D (C$125.0 million)
Term date Outstanding balance
$ nil
$570 million
$136 million
C$59 million
31 March 2023
15 January 2025
31 March 2023
31 March 2023
Material business risks
The Group prepares its business plans using estimates of production and financial performance based on a range of
assumptions and forecasts. There is uncertainty in these assumptions and forecasts, and risk that variation from them could
result in actual performance being different to expected outcomes. The uncertainties arise from a range of factors, including the
nature of the mining industry and general economic factors. The material business risks faced by the Group that may have an
impact on the operating and financial prospects of the Group as at 30 June 2020 are:
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Material business risks (continued)
COVID-19
•
•
•
•
•
•
•
•
•
•
Evolution continues to actively respond to the ongoing COVID-19 virus currently impacting people and businesses globally. The
health and safety of every person working at Evolution, their families and our communities remains paramount during this time.
To date there has been no material impact on Evolution’s operations from the COVID-19 virus.
Evolution is operating under protocols developed to minimise risks to our people and communities and ensure we can safely
produce gold during this challenging period. These plans include activation of our crisis management protocols, suspending
international travel, restricting domestic travel, suspending activities across most of the Company’s Greenfields exploration
projects, enacting strict social distancing protocols including reducing face-to-face interactions, increasing flexible working
arrangements, ensuring best practice health management is maintained at all times and regular COVID-19 communication with
the entire workforce.
Evolution has been actively engaging with our communities to share our COVID-19 approach and offer support. Examples of
community assistance include providing educational materials for local school children who are learning remotely, donating
hampers to nurses in local hospitals, donating PPE and hand sanitisers to hospitals and emergency services providers, offering
temporary employment to community members who have lost their jobs, and providing iPads to a local aged care facility.
Additional site specific health and safety initiatives introduced by our operations include:
Extending rosters to reduce movement of people.
Relocation of interstate employees.
Introducing flexible working arrangements with people working from home where possible.
Hiring additional vehicles and charter flights to ensure social distancing is maintained while travelling to site and during
site activities.
Floor markings 1.5 metres apart in pre-start areas to ensure social distancing.
Reduced number of contractors permitted on site to perform mill shutdowns and extending shutdowns to perform tasks
in compliance with required protocols.
Introducing occupancy limits in offices and meeting rooms.
Additional paramedics hired for the duration of the pandemic to ensure at least two paramedics are on site per roster.
Daily temperature testing and screening of all personnel on site, and
Daily COVID-19 briefings to employees.
Fluctuations in the gold price and Australian dollar
The Group’s revenues are exposed to fluctuations in the gold, silver and copper prices and the Australian dollar. Volatility in the
gold, silver and copper prices and Australian dollar creates revenue uncertainty and requires careful management of business
performance to ensure that operating cash margins are maintained should the Australian dollar price fall.
Declining gold, silver and copper prices can also impact operations by requiring a reassessment of the feasibility of a particular
exploration or development project. Even if a project is ultimately determined to be economically viable, the need to conduct
such a reassessment could cause substantial delays and/or may interrupt operations, which may have a material adverse effect
on our results of operations and financial condition.
Mineral Resources and Ore Reserves
The Group’s Mineral Resources and Ore Reserves are estimates, and no assurance can be given that the estimated reserves
and resources are accurate or that the indicated level of gold, silver, copper or any other mineral will be produced. Such
estimates are, in large part, based on interpretations of geological data obtained from drill holes and other sampling techniques.
Actual mineralisation or geological conditions may be different from those predicted. No assurance can be given that any part
or all of the Group’s Mineral Resources constitute or will be converted into Ore Reserves.
13
14
96 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Material business risks (continued)
COVID-19
Evolution continues to actively respond to the ongoing COVID-19 virus currently impacting people and businesses globally. The
health and safety of every person working at Evolution, their families and our communities remains paramount during this time.
To date there has been no material impact on Evolution’s operations from the COVID-19 virus.
Evolution is operating under protocols developed to minimise risks to our people and communities and ensure we can safely
produce gold during this challenging period. These plans include activation of our crisis management protocols, suspending
international travel, restricting domestic travel, suspending activities across most of the Company’s Greenfields exploration
projects, enacting strict social distancing protocols including reducing face-to-face interactions, increasing flexible working
arrangements, ensuring best practice health management is maintained at all times and regular COVID-19 communication with
the entire workforce.
Evolution has been actively engaging with our communities to share our COVID-19 approach and offer support. Examples of
community assistance include providing educational materials for local school children who are learning remotely, donating
hampers to nurses in local hospitals, donating PPE and hand sanitisers to hospitals and emergency services providers, offering
temporary employment to community members who have lost their jobs, and providing iPads to a local aged care facility.
Additional site specific health and safety initiatives introduced by our operations include:
•
•
•
•
•
•
•
•
•
•
Extending rosters to reduce movement of people.
Relocation of interstate employees.
Introducing flexible working arrangements with people working from home where possible.
Hiring additional vehicles and charter flights to ensure social distancing is maintained while travelling to site and during
site activities.
Floor markings 1.5 metres apart in pre-start areas to ensure social distancing.
Reduced number of contractors permitted on site to perform mill shutdowns and extending shutdowns to perform tasks
in compliance with required protocols.
Introducing occupancy limits in offices and meeting rooms.
Additional paramedics hired for the duration of the pandemic to ensure at least two paramedics are on site per roster.
Daily temperature testing and screening of all personnel on site, and
Daily COVID-19 briefings to employees.
Fluctuations in the gold price and Australian dollar
The Group’s revenues are exposed to fluctuations in the gold, silver and copper prices and the Australian dollar. Volatility in the
gold, silver and copper prices and Australian dollar creates revenue uncertainty and requires careful management of business
performance to ensure that operating cash margins are maintained should the Australian dollar price fall.
Declining gold, silver and copper prices can also impact operations by requiring a reassessment of the feasibility of a particular
exploration or development project. Even if a project is ultimately determined to be economically viable, the need to conduct
such a reassessment could cause substantial delays and/or may interrupt operations, which may have a material adverse effect
on our results of operations and financial condition.
Mineral Resources and Ore Reserves
The Group’s Mineral Resources and Ore Reserves are estimates, and no assurance can be given that the estimated reserves
and resources are accurate or that the indicated level of gold, silver, copper or any other mineral will be produced. Such
estimates are, in large part, based on interpretations of geological data obtained from drill holes and other sampling techniques.
Actual mineralisation or geological conditions may be different from those predicted. No assurance can be given that any part
or all of the Group’s Mineral Resources constitute or will be converted into Ore Reserves.
14
Evolution Mining Limited // Annual Report 2020 97
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Material business risks (continued)
Mineral Resources and Ore Reserves (continued)
Market price fluctuations of gold, silver and copper as well as increased production and capital costs may render the Group’s Ore
Reserves unprofitable to develop at a particular site or sites for periods of time or may render Ore Reserves containing relatively
lower grade mineralisation uneconomic. Estimated reserves may have to be re-estimated based on actual production
experience. Any of these factors may require the Group to reduce its Mineral Resources and Ore Reserves, which could have a
negative impact on the Group’s financial results.
Replacement of depleted reserves
The Group must continually replace reserves depleted by production to maintain production levels over the long term. Reserves
can be replaced by expanding known ore bodies, locating new deposits or making acquisitions. Exploration is highly speculative
in nature. The Group’s exploration projects involve many risks and are frequently unsuccessful. Once a site with mineralisation
is discovered, it may take several years from the initial phases of drilling until production is possible.
As a result, there is no assurance that current or future exploration programs will be successful. There is a risk that depletion of
reserves will not be offset by discoveries or acquisitions or that divestitures of assets will lead to a lower reserve base. The
mineral base of the Group may decline if reserves are mined without adequate replacement and the Group may not be able to
sustain production beyond the current mine lives, based on current production rates.
Mining risks and insurance risks
The mining industry is subject to significant risks and hazards, including environmental hazards, industrial accidents, unusual or
unexpected geological conditions, unavailability of materials and equipment, pit wall failures, rock bursts, seismic events, cave-
ins, and weather conditions (including flooding and bush fires), most of which are beyond the Group’s control. These risks and
hazards could result in significant costs or delays that could have a material adverse effect on the Group’s financial performance,
liquidity and results of operation.
The Group maintains insurance to cover the most common of these risks and hazards. The insurance is maintained in amounts
that are considered reasonable depending on the circumstances surrounding each identified risk. However, property, liability and
other insurance may not provide sufficient coverage for losses related to these or other risks or hazards.
Production and cost estimates
The Group prepares estimates of future production, cash costs and capital costs of production for its operations. No assurance
can be given that such estimates will be achieved. Failure to achieve production or cost estimates or material increases in costs
could have an adverse impact on the Group’s future cash flows, profitability, results of operations and financial condition.
The Group’s actual production and costs may vary from estimates for a variety of reasons, including: actual ore mined varying
from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to
the ore reserves, such as the need for sequential development of ore bodies and the processing of new or different ore grades;
revisions to mine plans; risks and hazards associated with mining; natural phenomena such as inclement weather conditions,
water availability and floods; and unexpected labour shortages or strikes.
Costs of production may also be affected by a variety of factors including: changing waste-to-ore ratios, ore grade metallurgy,
labour costs, cost of commodities, general inflationary pressures and currency exchange rates.
Environmental, health and safety, and permits
The Group’s mining and processing operations and exploration activities are subject to extensive laws and regulations governing
the protection of the environment, waste disposal, worker safety, mine development and protection of endangered and
other special status species. The Group’s ability to obtain permits and approvals and to successfully operate may be adversely
impacted by real or perceived detrimental events associated with the Group’s activities or those of other mining companies
affecting the environment, human health and safety or the surrounding communities. Delays in obtaining or failure to
obtain government permits and approvals may adversely affect the Group’s operations, including its ability to continue
operations.
While the Group has implemented extensive health, safety and community initiatives at its sites to ensure the health and safety
of its employees, contractors and members of the community affected by its operations, there is no guarantee that such
measures will eliminate the occurrence of accidents or other incidents which may result in personal injuries or damage to
property, and in certain instances such occurrences could give rise to regulatory fines and/or civil liability.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Material business risks (continued)
Climate Change
Evolution Mining acknowledges that climate change is occurring and its effects have the potential to impact our business. The
highest priority climate related risks include the following: reduced water availability; extreme weather events; changes to
legislation and regulation; reputational risk; technological and market changes; and shareholder activism.
The Group is committed to understanding and proactively managing the impact of climate related risks to our business and our
environment. This includes integrating financial, physical, regulatory, reputational, market, and climate related risks, as well as
energy considerations, into our Life of Mine strategic planning and decision making. The Group works to build the resilience of
our assets, our communities and our environment to climate related impacts. To do this, we work in partnership with a broad
range of stakeholders including representative bodies of the communities in which we operate, industry, government, investors
and non-governmental organisations to share learnings and identify approaches to addressing climate related risks and
The Group transparently reports our emissions and energy consumption performance.
The Group has an established community relations function, both at a Group level and at each of its operations. The Group
function has developed a community engagement framework, including a set of principles, policies and procedures designed to
provide a structured and consistent approach to community activities across our sites whilst recognising that fundamentally.
Community Relations is about people connecting with people. The Group recognises that a failure to appropriately manage
local community stakeholder expectations may lead to dissatisfactions which have the potential to disrupt production and
The Group manages the risks listed above, and other day-to-day risks through an established management framework which
conforms to Australian and international standards and guidance. The Group’s risk reporting and control mechanisms are
designed to ensure strategic, operational, legal, financial, reputational and other risks are identified, assessed and appropriately
managed. These are reviewed by the Sustainability and Risk Committee throughout the year.
The financial reporting and control mechanisms are reviewed during the year by management, the internal audit process, the
Audit Committee and the external auditors.
The Group has policies in place to manage risk in the areas of Health and Safety, Environment and Equal Employment
The Leadership Team, the Sustainability and Risk Committee and the Board regularly review the risk portfolio of the business
and the effectiveness of the Group’s management of those risks.
On 15 August 2019, the Directors approved a change to the dividend policy of whenever possible paying a dividend based on
free cash flow generated during a year. The Directors will assess the group cash flow and outlook for the business with the
intention to return excess cash to shareholders and targeting a level around 50% of cash flow. The Group's free cash flow is
defined as cash flow before debt and dividends. The change was effective immediately and was applied to the final dividend for
The Board has confirmed that Evolution is in a sound position to meet its commitment under the new policy to pay a final fully
franked dividend for the current period of 9.0 cents per share, totalling $153.4 million. Evolution shares will trade excluding
entitlement to the dividend on 24 August 2020, with the record date being 25 August 2020 and payment date of 25 September
The Dividend Reinvestment Plan ("DRP") remains suspended.
Significant changes in the state of affairs
There were no significant changes in the nature of the activities of the Group during the period, other than those included in the
Key Highlights.
opportunities.
Community relations
exploration activities.
Risk management
Opportunity.
Dividends
2019.
2020.
15
16
98 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Operating and Financial Review (continued)
Material business risks (continued)
Climate Change
Evolution Mining acknowledges that climate change is occurring and its effects have the potential to impact our business. The
highest priority climate related risks include the following: reduced water availability; extreme weather events; changes to
legislation and regulation; reputational risk; technological and market changes; and shareholder activism.
The Group is committed to understanding and proactively managing the impact of climate related risks to our business and our
environment. This includes integrating financial, physical, regulatory, reputational, market, and climate related risks, as well as
energy considerations, into our Life of Mine strategic planning and decision making. The Group works to build the resilience of
our assets, our communities and our environment to climate related impacts. To do this, we work in partnership with a broad
range of stakeholders including representative bodies of the communities in which we operate, industry, government, investors
and non-governmental organisations to share learnings and identify approaches to addressing climate related risks and
opportunities.
The Group transparently reports our emissions and energy consumption performance.
Community relations
The Group has an established community relations function, both at a Group level and at each of its operations. The Group
function has developed a community engagement framework, including a set of principles, policies and procedures designed to
provide a structured and consistent approach to community activities across our sites whilst recognising that fundamentally.
Community Relations is about people connecting with people. The Group recognises that a failure to appropriately manage
local community stakeholder expectations may lead to dissatisfactions which have the potential to disrupt production and
exploration activities.
Risk management
The Group manages the risks listed above, and other day-to-day risks through an established management framework which
aligns
conforms to Australian and international standards and guidance. The Group’s risk reporting and control mechanisms are
designed to ensure strategic, operational, legal, financial, reputational and other risks are identified, assessed and appropriately
managed. These are reviewed by the Sustainability and Risk Committee throughout the year.
The financial reporting and control mechanisms are reviewed during the year by management, the internal audit process, the
Audit Committee and the external auditors.
The Group has policies in place to manage risk in the areas of Health and Safety, Environment and Equal Employment
Opportunity.
The Leadership Team, the Sustainability and Risk Committee and the Board regularly review the risk portfolio of the business
and the effectiveness of the Group’s management of those risks.
Dividends
On 15 August 2019, the Directors approved a change to the dividend policy of whenever possible paying a dividend based on
free cash flow generated during a year. The Directors will assess the group cash flow and outlook for the business with the
intention to return excess cash to shareholders and targeting a level around 50% of cash flow. The Group's free cash flow is
defined as cash flow before debt and dividends. The change was effective immediately and was applied to the final dividend for
2019.
The Board has confirmed that Evolution is in a sound position to meet its commitment under the new policy to pay a final fully
franked dividend for the current period of 9.0 cents per share, totalling $153.4 million. Evolution shares will trade excluding
entitlement to the dividend on 24 August 2020, with the record date being 25 August 2020 and payment date of 25 September
2020.
The Dividend Reinvestment Plan ("DRP") remains suspended.
Significant changes in the state of affairs
There were no significant changes in the nature of the activities of the Group during the period, other than those included in the
Key Highlights.
16
Evolution Mining Limited // Annual Report 2020 99
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Significant changes in the state of affairs (continued)
Further information on likely developments in the operations of the Group and the expected results of operations have not been
included in this Annual Financial Report because the Directors believe it would be likely to result in unreasonable prejudice to
the Group.
Events occurring after the reporting period
No matter or circumstance has occurred subsequent to the year-end that has significantly affected, or may significantly affect,
the operations of the Group, the results of those operations or state of affairs of the Group or economic entity in subsequent
financial years.
Environmental regulation and performance
The Executive Chairman reports to the Board on all significant safety and environmental incidents. The Board also has a Risk
and Sustainability Committee which has oversight of the sustainability performance of the Group and meets at least two times
per year. The Directors are not aware of any environmental incidents occurring during the year ended 30 June 2020 which
would have a materially adverse impact on the overall business of the Group.
The operations of the Group are subject to environmental regulation under the jurisdiction of the countries in which those
operations are conducted namely in Australia and as of 1 April, 2020 in Canada. Each mining operation is subject to
environmental regulation specific to their environmentally relevant activities as part of their operating licence, permit and/or,
approvals. Each of our sites are required to also manage their environmental obligations in accordance with our corporate
governance.
The environmental laws and regulations that cover each of our sites, combined with our policies and standards, address the
potential impact of the Group's activities in relation to water and air quality, noise, land, waste, tailings management, and the
potential impact upon sensitive receptors and flora and fauna.
The Group has a uniform internal reporting system across all sites. All environmental incidents, including breaches of any
regulation or law are assessed according to their actual or potential environmental consequence. Given levels of environmental
incidents are tracked based on factors such as spill volume, incident location (onsite or offsite) potential or actual environmental
impacts and legal obligation. These levels include: I (insignificant), II (minor), III (moderate), IV (major), V (catastrophic).
Across the six Evolution Mining Sites, excluding government reporting for vehicular and non-vehicular native fauna deaths and
events reported in previous years which remain under investigation, the Level III reports for the past four years have been:
Number of Level III incidents
FY20
8
FY19
9
FY18
7
FY17
9
Incidents were notified to the relevant government authority and the relevant agreed action was taken. There have been no
Level IV or V incidents.
Of the eight reports to the regulatory authorities in FY20 only three were classified as having actual Level III consequence with
regard for environmental impact and there were no further enforcement action by regulatory authorities in relation to the reports.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Information on Directors
of shareholdings, options and rights.
The following information is current as at the date of this report. Please refer to the Remuneration Report section (e) for details
Jacob (Jake) Klein, BCom Hons, ACA, Executive Chairman
Mr Klein was appointed as Executive Chairman in October 2011, following the merger of Conquest Mining Limited and
Catalpa Resources Limited. Previously he served as the Executive Chairman of Conquest Mining.
Prior to that, Mr Klein was President and CEO of Sino Gold Mining Limited, where he managed the development of that
company into the largest foreign participant in the Chinese gold industry. Sino Gold was listed on the ASX in 2002 with a
market capitalisation of A$100 million and was purchased by Eldorado Gold Corporation in late 2009 for over A$2 billion. It
became an ASX/S&P 100 Company, operating two award-winning gold mines and engaging over 2,000 employees and
contractors in China. Prior to joining Sino Gold (and its predecessor) in 1995, Mr Klein was employed at Macquarie Bank and
PwC.
Mr Klein was a Non-Executive Director of the Lynas Corporation Limited from August 2004 to May 2017, a company with
operations in Australia and Malaysia and of OceanaGold Corporation from December 2009 to July 2014 a company with
operations in the Philippines, USA and New Zealand.
Lawrence (Lawrie) Conway B Bus, CPA, GAICD, Finance Director and Chief Financial Officer
Mr Conway was appointed Finance Director and Chief Financial Officer of Evolution Mining Limited with effect from 1 August
2014 (previously a Non-Executive Director).
Mr Conway has more than 30 years’ experience in the resources sector across a diverse range of commercial, financial and
operational activities. He has held a mix of corporate, operational and commercial roles within Australia, Papua New Guinea
and Chile with Newcrest and prior to that with BHP Billiton. He most recently held the position of Executive General Manager -
Commercial and West Africa with Newcrest Mining where he was responsible for Newcrest's group Supply and Logistics,
Marketing, Information Technology and Laboratory functions as well as Newcrest's business in West Africa.
Mr Conway is a Non-Executive Director of Aurelia Metals Ltd (appointed in June 2017).
James (Jim) Askew, BEng (Mining), MEngSc, FAusIMM, MCIMM, MSME (AIME), MAICD, Non-Executive Director
Mr Askew is a mining engineer with more than 40 years’ broad international experience as a Director and Chief Executive
Officer for a wide range of Australian and international publicly listed mining, mining finance and other mining related
companies.
since July 2017).
Mr Askew has served on the boards of numerous mining and mining services companies, which currently includes Syrah
Resources Limited (Chairman since October 2014), a company with operations in Mozambique and in the USA and
Endeavour Mining Corporation, a company with operations in Cote d’Ivoire, Mali and Burkina Faso (Non-Executive Director
Mr Askew is Chair of the Risk and Sustainability Committee and Member of the Nomination and Remuneration Committee.
Thomas (Tommy) McKeith, BSc (Hons), GradDip Eng (Mining), MBA, Non-Executive Director
Mr McKeith is a geologist with over 30 years’ experience in various mine geology, exploration, business development and
executive leadership roles. He was formerly Executive Vice President (Growth and International Projects) for Gold Fields
Limited, where he was responsible for global exploration and project development.
Mr McKeith was also Chief Executive Officer of Troy Resources Limited and has held Non-Executive Director roles at Sino
Gold Limited, Avoca Resources Limited and is currently the Non-Executive Chairman of Prodigy Gold NL and Genesis
Minerals Limited and Non-Executive Director at Arrow Minerals Limited.
Mr McKeith is the Lead Independent Director effective 1 December 2018 and Chair of the Nomination and Remuneration
Committee.
17
18
100 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Information on Directors
The following information is current as at the date of this report. Please refer to the Remuneration Report section (e) for details
of shareholdings, options and rights.
Jacob (Jake) Klein, BCom Hons, ACA, Executive Chairman
Mr Klein was appointed as Executive Chairman in October 2011, following the merger of Conquest Mining Limited and
Catalpa Resources Limited. Previously he served as the Executive Chairman of Conquest Mining.
Prior to that, Mr Klein was President and CEO of Sino Gold Mining Limited, where he managed the development of that
company into the largest foreign participant in the Chinese gold industry. Sino Gold was listed on the ASX in 2002 with a
market capitalisation of A$100 million and was purchased by Eldorado Gold Corporation in late 2009 for over A$2 billion. It
became an ASX/S&P 100 Company, operating two award-winning gold mines and engaging over 2,000 employees and
contractors in China. Prior to joining Sino Gold (and its predecessor) in 1995, Mr Klein was employed at Macquarie Bank and
PwC.
Mr Klein was a Non-Executive Director of the Lynas Corporation Limited from August 2004 to May 2017, a company with
operations in Australia and Malaysia and of OceanaGold Corporation from December 2009 to July 2014 a company with
operations in the Philippines, USA and New Zealand.
Lawrence (Lawrie) Conway B Bus, CPA, GAICD, Finance Director and Chief Financial Officer
Mr Conway was appointed Finance Director and Chief Financial Officer of Evolution Mining Limited with effect from 1 August
2014 (previously a Non-Executive Director).
Mr Conway has more than 30 years’ experience in the resources sector across a diverse range of commercial, financial and
operational activities. He has held a mix of corporate, operational and commercial roles within Australia, Papua New Guinea
and Chile with Newcrest and prior to that with BHP Billiton. He most recently held the position of Executive General Manager -
Commercial and West Africa with Newcrest Mining where he was responsible for Newcrest's group Supply and Logistics,
Marketing, Information Technology and Laboratory functions as well as Newcrest's business in West Africa.
Mr Conway is a Non-Executive Director of Aurelia Metals Ltd (appointed in June 2017).
James (Jim) Askew, BEng (Mining), MEngSc, FAusIMM, MCIMM, MSME (AIME), MAICD, Non-Executive Director
Mr Askew is a mining engineer with more than 40 years’ broad international experience as a Director and Chief Executive
Officer for a wide range of Australian and international publicly listed mining, mining finance and other mining related
companies.
Mr Askew has served on the boards of numerous mining and mining services companies, which currently includes Syrah
Resources Limited (Chairman since October 2014), a company with operations in Mozambique and in the USA and
Endeavour Mining Corporation, a company with operations in Cote d’Ivoire, Mali and Burkina Faso (Non-Executive Director
since July 2017).
Mr Askew is Chair of the Risk and Sustainability Committee and Member of the Nomination and Remuneration Committee.
Thomas (Tommy) McKeith, BSc (Hons), GradDip Eng (Mining), MBA, Non-Executive Director
Mr McKeith is a geologist with over 30 years’ experience in various mine geology, exploration, business development and
executive leadership roles. He was formerly Executive Vice President (Growth and International Projects) for Gold Fields
Limited, where he was responsible for global exploration and project development.
Mr McKeith was also Chief Executive Officer of Troy Resources Limited and has held Non-Executive Director roles at Sino
Gold Limited, Avoca Resources Limited and is currently the Non-Executive Chairman of Prodigy Gold NL and Genesis
Minerals Limited and Non-Executive Director at Arrow Minerals Limited.
Mr McKeith is the Lead Independent Director effective 1 December 2018 and Chair of the Nomination and Remuneration
Committee.
18
Evolution Mining Limited // Annual Report 2020 101
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evan Elstein, BCom GDA, ACA, FGIA, FCIS
Mr Elstein was appointed as the Company Secretary and Vice President for Information Technology in October 2011
following the merger of Conquest Mining Limited and Catalpa Resources Limited. Previously he served as Company
Secretary of Conquest Mining. He is a member of Chartered Accountants Australia and New Zealand, the Institute of
Chartered Secretaries and Administrators and a fellow of the Governance Institute of Australia.
Mr Elstein has over 26 years' experience in senior financial, commercial and technology roles, where his responsibilities have
included the roll out of IT projects and services, business improvement initiatives and merger, acquisition and divestment
activities. He has held senior positions with IT consulting companies in Australia, and previously served as the Chief Financial
Officer and Company Secretary of Hartec Limited. Prior to that, Mr Elstein held senior finance and operations positions at
Dimension Data in South Africa.
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Information on Directors (continued)
Andrea Hall, BCom, FCA, M. App Fin, GAICD, Non-Executive Director
Ms Hall is a Chartered Accountant with more than 30 years’ experience in the financial services industry in roles involved in
internal audit, risk management, corporate and operational governance, external audit, financial management and strategic
planning. Prior to retiring from KPMG in 2012, Andrea was a Perth-based partner within KPMG’s Risk Consulting Services
where she serviced industries including mining, mining services, transport, healthcare, insurance, property and government.
Ms Hall is currently a Non-Executive Director and Chair of the Audit and Risk Committee at ASX-listed Pioneer Credit Limited.
Andrea is also a Non-Executive Director of ASX listed Perenti Group. Further, she is a Non-Executive Director of Insurance
Commission of Western Australia and the Fremantle Football Club.
Ms Hall is the Chair of the Audit Committee and Member of the Risk and Sustainability Committee.
Jason Attew, BSc, MBA, Non-Executive Director
Mr Attew is a mining industry veteran who has dedicated 25 years to the mining sector. Jason most recently served as the
Chief Financial Officer at Goldcorp Inc. where, in addition to leading the finance and investor relations operations, he was
responsible for Goldcorp’s corporate development and strategy culminating in the US$32 billion merger with Newmont Mining
Corp.
Jason has extensive capital markets experience from his time in investment banking with the BMO Global Metals and Mining
Group where he was at the forefront of structuring and raising significant growth capital as well as advising on both formative
and transformational mergers and acquisitions for corporations that have become industry leaders over the past two decades.
Jason also is on the board of Directors of Regulus Resources Inc.
Mr Attew is a Member of both the Audit Committee and the Nomination and Remuneration Committee.
Peter Smith, MBA, FAusIMM GAICD, Non- Executive Director
Mr Smith is a senior executive with over 43 years’ experience primarily in resources sector. He has worked in a range of
sectors including gold, coal, metals and fertilizers. Peter has held senior positions with Kestrel Coal Resources, Israel
Chemical Limited, Newcrest Mining, Lihir Gold, WMC Resources, Western Metals and Rio Tinto.
Mr Smith was a former Non-Executive Director of NSW Minerals Council and Evolution Mining, Commissioner of PT NHM
Indonesia and Executive Director and Chairman of Western Metals Limited.
Mr Smith is a Member of the Risk and Sustainability Committee.
Victoria (Vicky) Binns, B. Eng (Mining Hons 1) ,Grad Dip SIA, FAusIMM GAICD, Non- Executive Director
Ms Binns has over 35 years’ experience in the global resources and financial services sectors including more than 10 years in
executive leadership roles at BHP and 15 years in financial services with Merrill Lynch Australia and Macquarie Equities.
During her career at BHP, Ms Binns’ roles included Vice President Minerals Marketing, leadership positions in the metals and
coal marketing business, Vice President of Market Analysis and Economics and was a member of the first BHP Global
Inclusion and Diversity Council.
Prior to joining BHP, Ms Binns held a number of board and senior management roles at Merrill Lynch Australia including
Managing Director and Head of Australian Research, Head of Global Mining, Metals and Steel, and Head of Australian Mining
Research. Ms Binns is currently a Non-Executive Director of ASX-listed company Cooper Energy. She was also co-founder
and Chair of Women in Mining and Resources Singapore.
Ms Binns is a Member of the Audit Committee.
19
20
102 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evan Elstein, BCom GDA, ACA, FGIA, FCIS
Mr Elstein was appointed as the Company Secretary and Vice President for Information Technology in October 2011
following the merger of Conquest Mining Limited and Catalpa Resources Limited. Previously he served as Company
Secretary of Conquest Mining. He is a member of Chartered Accountants Australia and New Zealand, the Institute of
Chartered Secretaries and Administrators and a fellow of the Governance Institute of Australia.
Mr Elstein has over 26 years' experience in senior financial, commercial and technology roles, where his responsibilities have
included the roll out of IT projects and services, business improvement initiatives and merger, acquisition and divestment
activities. He has held senior positions with IT consulting companies in Australia, and previously served as the Chief Financial
Officer and Company Secretary of Hartec Limited. Prior to that, Mr Elstein held senior finance and operations positions at
Dimension Data in South Africa.
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
20
Evolution Mining Limited // Annual Report 2020 103
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Meetings of directors
The numbers of meetings of the Company's Board of Directors and of each Board Committee held during the year ended 30
June 2020, and the numbers of meetings attended by each Director were:
Jacob (Jake) Klein
Lawrence (Lawrie) Conway
James (Jim) Askew
Thomas (Tommy) McKeith
Andrea Hall
Jason Attew
Victoria (Vicky) Binns
Peter Smith
Graham Freestone (i)
Colin (Cobb) Johnstone (ii)
Board
Audit
Risk Management Nomination and
Meetings of committees
A
8
8
8
8
8
4
3
3
4
4
B
8
8
8
8
8
4
3
3
4
5
A
-
-
-
-
4
2
1
-
2
2
B
-
-
-
-
4
2
1
-
2
3
A
-
-
3
2
2
-
-
1
-
2
Remuneration
B
-
-
4
4
-
2
-
-
2
-
A
-
-
4
4
-
2
-
-
2
-
B
-
-
4
2
2
-
-
1
-
3
A
B
(i)
(ii)
Number of meetings attended.
Number of meetings held during the time the Director held office or was a member of the committee during the year.
Retired as Non-Executive Director effective 28 November 2019.
Retired as Non-Executive Director effective 30 March 2020.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited)
Dear Fellow Shareholder,
On behalf of the Evolution Board, I am pleased to provide the Remuneration Report for the year ending 30 June 2020.
At Evolution, the Board, the Leadership Team and every employee strive to act like owners each and every day and live by the
Evolution values of Safety, Excellence, Accountability and Respect. This means our strategy, decision-making and daily activity
is always focused on a safe, efficient and sustainable business that delivers superior shareholder returns. This Remuneration
Report will explain how our remuneration framework is linked to our business strategy, overall company performance and
shareholder returns.
FY20 Performance
Evolution has had another strong year of performance during a very challenging time in managing through the COVID-19
pandemic, and in Australia, tough drought conditions and widespread bushfires. It’s a credit to the Evolution Leadership Team
and our dedicated and inspired people that they have remained focused on safely delivering on their targets, advancing the
overall business strategy, paying record dividends, while working closely with all stakeholder groups, be that communities
within which we operate, contractors, suppliers, partners and our shareholders.
Our strategy at Evolution has been clear and consistent, resulting in our current portfolio of 6 assets with an average reserve life
in excess of 10 years, generating sector leading cash flow in FY20 of A$726 per ounce. Over the last five years the Company
acquired Mungari, Cowal, Ernest Henry and Red Lake operations and divested Pajingo, Edna May and Cracow. These
transactions have resulted in increasing the average reserve life of our portfolio from approximately 5 years to more than 10
years while maintaining a low All-in Sustaining Cost (AISC) of around A$1,000 per ounce. Our strategy, which focuses on
sustainable margin over production, has generated exceptional total shareholder returns (TSR) in excess of 430% over the five-
year period.
STI Outcomes
For FY20, Evolution delivered record financial results including A$1,941 million in revenue generating A$542 million of free
cash flow allowing us to return A$221 million in dividends to shareholders and repay A$300 million in debt over the year. The
market supported this performance with a strong TSR result of 47% for the year.
For FY20, STIP outcomes focused on five (5) key measures; safety, critical controls, group cash contribution, group AISC and a
strategic imperatives measure that enables the Board to review overall company performance outside of the key
non-discretionary measures to ensure the overall STI outcomes are reflective of the Company performance for the year.
It was pleasing to see that in FY20 there was an improvement in our safety performance with our Total Recordable Injury (TRI)
frequency ratio reducing by 18%, an improvement in our reporting culture, excellent progress with our critical controls, including
bow tie analysis, agreed actions closed out on time and an external independent audit verifying a satisfactory rating for the
critical controls for each asset. Our business development activity, which for FY20 included the acquisition of Red Lake in
Canada and the divestment of the Cracow gold mine, continues to upgrade the overall asset portfolio quality. Despite the
COVID-19 related travel restrictions, the Cracow sale was completed without completing a site visit and the transformation of
Red Lake into a cornerstone asset for Evolution is off to a promising start.
The Company delivered strongly against our Balanced Business Plan (BBP) objectives for the year. In discovery, two new
greenfields projects were added to the portfolio and pleasingly, we were able to increase our mineral resource and ore reserves
inventory. Our focus on data enabled business improvement initiatives delivered A$45 million in value to the business.
Disappointingly, the Mt Carlton underground resource was materially downgraded after infill drilling showed the orebody
narrowed at depth, limiting the ore reserve. This has resulted in an impairment of the Mt Carlton asset of A$144.3 million.
21
22
104 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited)
Dear Fellow Shareholder,
On behalf of the Evolution Board, I am pleased to provide the Remuneration Report for the year ending 30 June 2020.
At Evolution, the Board, the Leadership Team and every employee strive to act like owners each and every day and live by the
Evolution values of Safety, Excellence, Accountability and Respect. This means our strategy, decision-making and daily activity
is always focused on a safe, efficient and sustainable business that delivers superior shareholder returns. This Remuneration
Report will explain how our remuneration framework is linked to our business strategy, overall company performance and
shareholder returns.
FY20 Performance
Evolution has had another strong year of performance during a very challenging time in managing through the COVID-19
pandemic, and in Australia, tough drought conditions and widespread bushfires. It’s a credit to the Evolution Leadership Team
and our dedicated and inspired people that they have remained focused on safely delivering on their targets, advancing the
overall business strategy, paying record dividends, while working closely with all stakeholder groups, be that communities
within which we operate, contractors, suppliers, partners and our shareholders.
Our strategy at Evolution has been clear and consistent, resulting in our current portfolio of 6 assets with an average reserve life
in excess of 10 years, generating sector leading cash flow in FY20 of A$726 per ounce. Over the last five years the Company
acquired Mungari, Cowal, Ernest Henry and Red Lake operations and divested Pajingo, Edna May and Cracow. These
transactions have resulted in increasing the average reserve life of our portfolio from approximately 5 years to more than 10
years while maintaining a low All-in Sustaining Cost (AISC) of around A$1,000 per ounce. Our strategy, which focuses on
sustainable margin over production, has generated exceptional total shareholder returns (TSR) in excess of 430% over the five-
year period.
For FY20, Evolution delivered record financial results including A$1,941 million in revenue generating A$542 million of free
cash flow allowing us to return A$221 million in dividends to shareholders and repay A$300 million in debt over the year. The
market supported this performance with a strong TSR result of 47% for the year.
STI Outcomes
For FY20, STIP outcomes focused on five (5) key measures; safety, critical controls, group cash contribution, group AISC and a
strategic imperatives measure that enables the Board to review overall company performance outside of the key
non-discretionary measures to ensure the overall STI outcomes are reflective of the Company performance for the year.
It was pleasing to see that in FY20 there was an improvement in our safety performance with our Total Recordable Injury (TRI)
frequency ratio reducing by 18%, an improvement in our reporting culture, excellent progress with our critical controls, including
bow tie analysis, agreed actions closed out on time and an external independent audit verifying a satisfactory rating for the
critical controls for each asset. Our business development activity, which for FY20 included the acquisition of Red Lake in
Canada and the divestment of the Cracow gold mine, continues to upgrade the overall asset portfolio quality. Despite the
COVID-19 related travel restrictions, the Cracow sale was completed without completing a site visit and the transformation of
Red Lake into a cornerstone asset for Evolution is off to a promising start.
The Company delivered strongly against our Balanced Business Plan (BBP) objectives for the year. In discovery, two new
greenfields projects were added to the portfolio and pleasingly, we were able to increase our mineral resource and ore reserves
inventory. Our focus on data enabled business improvement initiatives delivered A$45 million in value to the business.
Disappointingly, the Mt Carlton underground resource was materially downgraded after infill drilling showed the orebody
narrowed at depth, limiting the ore reserve. This has resulted in an impairment of the Mt Carlton asset of A$144.3 million.
22
Evolution Mining Limited // Annual Report 2020 105
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
Remuneration Report (Audited) (continued)
The strategic imperatives element of the STI has a weighting of 30%. For FY20, the Board evaluated progress against the
FY20 BBP, delivery against key projects at Cowal, Mungari and Mt Carlton and improving the overall business aligned to the
strategy, via business development and operational effectiveness. Balancing all factors, the Board awarded a score of 100%
being target for the strategic imperatives measure, resulting in an overall STI outcome of 93.08%, which the Board believes is
an appropriate reflection of the overall performance for FY20. A full breakdown is provided in the report.
LTI Outcomes
Our LTI performance measures directly link to shareholder expectations and reinforce our focus on delivering sustainable and
superior shareholder returns. For the FY18 LTIPs, tested and vesting as at 30 June 2020, the measures focused on Absolute
Shareholder Return, Relative Shareholder Return, Earnings per share (EPS) and Reserve growth per share. Through strong
performance against all measures over the three (3) year period, the Company achieved an overall vesting outcome of 93.7%.
A full breakdown is provided in the report.
FY21 changes
There are two (2) key changes for the FY21 incentives as follows:
•
For the LTI program, the EPS measure is replaced with an AISC cost comparison measure against the comparator peer
group. This is due to the acquisition of Red Lake which moves us up the cost curve in the initial years as we invest to
transform the asset. We are striving to return the Company back towards the low cost position on the curve within three
years and hence the introduction of this measure in the LTI program.
• We have changed the comparator group for the FY21 LTIP issue, to ensure that we maintain a good balance of similar size
companies by market capitalisation and representation across the Australian and Canadian markets in which we operate
and to reflect changes where companies have merged or been acquired.
Board Renewal and KMP changes
During FY20 we continued to renew the Board with the appointments of Jason Attew, Vicky Binns and Peter Smith, while
Graham Freestone and Cobb Johnstone retired. The Board thanks both Graham and Cobb and recognises their valuable
contributions.
The Leadership Team was strengthened with the appointment of Fiona Murfitt as VP Sustainability. This highlights the
organisation’s increased focus and importance placed on the sustainability function.
Signed:
Tommy McKeith
Chair of the Nomination and Remuneration Committee
This Remuneration Report forms part of the Directors' Report for the year ended 30 June 2020. This report contains details of
the remuneration paid to the Directors and Key Management Personnel ("KMP") and is aligned to the Company's overall
remuneration strategy and framework. The Company's remuneration philosophy and strategy is designed to ensure that the
level and composition of remuneration is competitive, reasonable and appropriate for the results delivered and to attract and
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
retain appropriately experienced Directors and employees.
This remuneration report is presented under the following sections:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Remuneration Overview
Remuneration Governance
Remuneration Strategy and Framework
Executive Remuneration Outcomes
Non-Executive Director Remuneration Outcomes
Other Remuneration Information
Summary of Key Terms
(a) Remuneration Overview
(i) First Strike in 2019
At the Company’s 2019 AGM, 26.16% of the votes cast were against the adoption of the FY19 Remuneration Report (Report),
constituting a first strike under the Corporations Act. Shareholder participation in the resolution was 74.9% of Evolution Mining’s
total shares on issue, resulting in 19.5% of the total shares on issue being cast against the resolution.
Following the AGM, the Board undertook a review of the Company’s remuneration philosophy and framework and sought to
better understand from shareholders and proxy advisors the areas of concern which gave rise to the first strike. Two of the
three proxy advisors recommended that shareholders vote in favour of adopting the FY19 Report, whilst the key issues raised
against adopting the Report were the STI cost hurdle being insufficiently challenging, Performance Conditions lowered
(compared to prior years), and internal pay equity. These issues are addressed below.
Issue Raised
Response
Internal Pay Equity: Executive
The Executive Chair’s remuneration for FY19 included an amortised value of the 3,375,000
Chair’s remuneration is
Transition Incentive Plan (TIP) Performance Rights, approved by shareholders at the meeting
excessive compared to the
held on 21 June 2017, with 83% of the votes cast in favour of the resolution. The TIP was a
average remuneration
one-off grant and was tested as at 16 December 2019, which resulted in 2,892,476 (86%) of
reported for other executive
the TIP Performance Rights vesting. These were amortised over the vesting period although
KMP.
a higher portion was amortised in FY19, when a more accurate probability of vesting was able
to be determined. The Executive Chairman’s fixed remuneration has remained unchanged for
over 5 years and the design of the incentive was to provide for a longer term at risk incentive
aligned with the strategic objectives of the Company with respect to the transformative
acquisitions in 2015 (Cowal and Mungari) and 2016 (economic interest in Ernest Henry
copper-gold mine), the expectations of shareholders and the Board’s desire to retain the
services of the Executive Chairman. There was a recognition that following the vesting in
December 2019, the Executive Chairman’s reported remuneration will fall and that pay equity
was of low concern when compared to other similar sized ASX listed companies and/or mining
company peers.
STI outcomes appear
generous for KMP, with
concerns raised on the
In the Company’s Remuneration Strategy and Framework, we target paying at the 75th
percentile (P75) on the achievement of target STI outcomes. That is, we place more of the
remuneration at risk to achieve a P75 outcome. Above target performance will deliver a better
outcomes for group cash
outcome for both the employee and shareholders. The alternative to attract the right talent
contribution and group all-in
would be to pay a higher fixed remuneration closer to P75, but this would mean a reduced at-
cost measures.
risk component in their remuneration and this is not aligned to the Company’s philosophy of
delivering superior returns to shareholders over the medium to long term.
Targeted outcomes are aligned to the overall Company performance, as well as the individual
performance of KMP members. Target is based around the achievement of the budget for the
financial year as approved by the Board. The annual budget is designed to have an element of
stretch within it, aligned to advancing the Company’s performance.
23
24
106 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
This Remuneration Report forms part of the Directors' Report for the year ended 30 June 2020. This report contains details of
the remuneration paid to the Directors and Key Management Personnel ("KMP") and is aligned to the Company's overall
remuneration strategy and framework. The Company's remuneration philosophy and strategy is designed to ensure that the
level and composition of remuneration is competitive, reasonable and appropriate for the results delivered and to attract and
retain appropriately experienced Directors and employees.
This remuneration report is presented under the following sections:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Remuneration Overview
Remuneration Governance
Remuneration Strategy and Framework
Executive Remuneration Outcomes
Non-Executive Director Remuneration Outcomes
Other Remuneration Information
Summary of Key Terms
(a) Remuneration Overview
(i) First Strike in 2019
At the Company’s 2019 AGM, 26.16% of the votes cast were against the adoption of the FY19 Remuneration Report (Report),
constituting a first strike under the Corporations Act. Shareholder participation in the resolution was 74.9% of Evolution Mining’s
total shares on issue, resulting in 19.5% of the total shares on issue being cast against the resolution.
Following the AGM, the Board undertook a review of the Company’s remuneration philosophy and framework and sought to
better understand from shareholders and proxy advisors the areas of concern which gave rise to the first strike. Two of the
three proxy advisors recommended that shareholders vote in favour of adopting the FY19 Report, whilst the key issues raised
against adopting the Report were the STI cost hurdle being insufficiently challenging, Performance Conditions lowered
(compared to prior years), and internal pay equity. These issues are addressed below.
Issue Raised
Response
Internal Pay Equity: Executive
Chair’s remuneration is
excessive compared to the
average remuneration
reported for other executive
KMP.
The Executive Chair’s remuneration for FY19 included an amortised value of the 3,375,000
Transition Incentive Plan (TIP) Performance Rights, approved by shareholders at the meeting
held on 21 June 2017, with 83% of the votes cast in favour of the resolution. The TIP was a
one-off grant and was tested as at 16 December 2019, which resulted in 2,892,476 (86%) of
the TIP Performance Rights vesting. These were amortised over the vesting period although
a higher portion was amortised in FY19, when a more accurate probability of vesting was able
to be determined. The Executive Chairman’s fixed remuneration has remained unchanged for
over 5 years and the design of the incentive was to provide for a longer term at risk incentive
aligned with the strategic objectives of the Company with respect to the transformative
acquisitions in 2015 (Cowal and Mungari) and 2016 (economic interest in Ernest Henry
copper-gold mine), the expectations of shareholders and the Board’s desire to retain the
services of the Executive Chairman. There was a recognition that following the vesting in
December 2019, the Executive Chairman’s reported remuneration will fall and that pay equity
was of low concern when compared to other similar sized ASX listed companies and/or mining
company peers.
STI outcomes appear
generous for KMP, with
concerns raised on the
outcomes for group cash
contribution and group all-in
cost measures.
In the Company’s Remuneration Strategy and Framework, we target paying at the 75th
percentile (P75) on the achievement of target STI outcomes. That is, we place more of the
remuneration at risk to achieve a P75 outcome. Above target performance will deliver a better
outcome for both the employee and shareholders. The alternative to attract the right talent
would be to pay a higher fixed remuneration closer to P75, but this would mean a reduced at-
risk component in their remuneration and this is not aligned to the Company’s philosophy of
delivering superior returns to shareholders over the medium to long term.
Targeted outcomes are aligned to the overall Company performance, as well as the individual
performance of KMP members. Target is based around the achievement of the budget for the
financial year as approved by the Board. The annual budget is designed to have an element of
stretch within it, aligned to advancing the Company’s performance.
24
Evolution Mining Limited // Annual Report 2020 107
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(i) First Strike in 2019 (continued)
Strategic Imperatives: the use
of Board discretion to assess
performance outside of the
non-discretionary measures.
The budget outcomes will vary each financial year, depending on the operational plans of
each asset, the capital programs, which often run over multiple years, exploration activities
and changes to the asset portfolio. These will drive the budgeted cost and cash outcomes to
be higher or lower each year, notwithstanding the goal of year-on-year performance
improvement for the Company.
Overall Company outcomes for the non-discretionary elements in FY19 were the lowest in the
last 6 years, as was the outcome for the strategic imperatives measure. There was a concern
that the vesting outcomes for FY19 for the cash contribution and cost measures were not
adequately justified. The Board has considered the feedback and is committed to elevating
the disclosure of the STI outcomes for performance levels at threshold, target and stretch.
In determining the outcome for this element of the STI program, the Board considered a
range of factors outside of the core non-discretionary KPIs that support the key value creation
deliverables, including increasing mine life, increasing mineral resource and ore reserves
inventory year-on-year, delivery against the Company’s BBP, strategy and delivery of key
projects, which for FY19 (and FY20), includes advancing the transformation our cornerstone
asset (Cowal) into a world-class mine. The objective of this measure is to provide flexibility to
the Board to vary the overall STIP result for other factors outside of the non-discretionary
measures. For FY19, performance between target and stretch was achieved, which the Board
believes is reflective of the improvement achieved by management in the longer term strategic
objectives in the area of mine life (increased to over 10 years average), increase in
ore reserves (net of depletion), advancement of the discovery strategy and capital project
execution success at Cowal.
In considering the issues raised, the Board has remained mindful of the Company’s remuneration philosophy and framework,
which is designed to align business performance and shareholder outcomes with remuneration outcomes for Executive Directors
and KMP, reflective of overall Company performance and which are appropriate and effective to attract and retain our executive
talent to implement the strategic objectives of the Company. The Board is committed to providing a greater level of disclosure
of how remuneration outcomes reflect the overall performance of the Company aligned with shareholder outcomes and
expectations.
Further detail is provided below on the FY19 STI measures and outcomes against threshold, target and stretch performance:
Measure
Definition
Score awarded
TRI Frequency (TRIF)
Total recordable injury frequency measures
the ratio of recordable injuries over a 12
month moving average per 1,000,000 hours
worked.
Critical Controls Assurance
Program
Threshold performance: no site to receive an
Unsatisfactory audit rating.
Target performance: 100% of Priority 1 (P1)
actions closed out by due date.
Due to the TRIF outcome of 8.31 exceeding
threshold performance, an outcome of zero
was achieved. For FY20, the focus has been
on improving the reporting culture and
embedding behavioural safety initiatives to
improve performance.
All audits were completed with all sites
achieving a minimum rating of satisfactory
overall, noting the audit scale is: Effective;
Satisfactory; Requires Improvement; and
Unsatisfactory.
An external auditor was engaged to
participate in the audit and provide
an independent view. The reports indicated
numerous positive aspects and five thematic
improvement observations. Of the six areas
audited by the external auditors, four received
the highest score of Generally Conforms,
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(i) First Strike in 2019 (continued)
Stretch performance: no ineffective controls,
All identified P1 actions at all sites were
confirmed by an external auditor.
closed out by the due date and given no site
two met Partially Conforms, and no area
received the lowest rating of Does Not
Conform.
received an Unsatisfactory rating,
the Threshold and Target measures were
achieved. The reports outlined no
findings of ineffective controls (or significant
items in audit terminology) were evident.
Notwithstanding the fact that all sites achieved
a Satisfactory rating, with no
ineffective critical controls, management
recommended, and the Board accepted a
lower than stretch outcome of between Target
and Stretch.
Against a target of A$260 million and stretch
of A$310 million, we exceeded stretch at
A$326 million, resulting in an award of 150%
for this measure.
offset by lower gold volumes; higher
operating costs; higher royalty costs; higher
interest costs and higher working capital
movements.
slightly above target at A$1215/oz driven by
the underperformance at Mungari and Mt
Rawdon, mostly offset by the performance at
Cowal, Mt Carlton, Ernest Henry and Cracow,
resulting in an award of 95.8% of the
weighted allocation target of 20%.
Group Cash Contribution
This measure is aligned to the business
strategy of being a margin focused
business and delivering strong cashflow
outcomes aligned to the budget.
The outcome was driven by a higher gold
price and lower capital expenditure, being
Group All in Cost (AIC)
Group AIC includes AISC plus growth (major
Against a target of A$1210/oz and stretch of
(A$/oz)
project) capital and discovery expenditure
A$1150/oz, the Company ended the year
and is calculated per ounce sold.
The FY19 STI outcomes are represented in the chart below:
25
26
108 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(i) First Strike in 2019 (continued)
Stretch performance: no ineffective controls,
confirmed by an external auditor.
Group Cash Contribution
This measure is aligned to the business
strategy of being a margin focused
business and delivering strong cashflow
outcomes aligned to the budget.
Group All in Cost (AIC)
(A$/oz)
Group AIC includes AISC plus growth (major
project) capital and discovery expenditure
and is calculated per ounce sold.
The FY19 STI outcomes are represented in the chart below:
two met Partially Conforms, and no area
received the lowest rating of Does Not
Conform.
All identified P1 actions at all sites were
closed out by the due date and given no site
received an Unsatisfactory rating,
the Threshold and Target measures were
achieved. The reports outlined no
findings of ineffective controls (or significant
items in audit terminology) were evident.
Notwithstanding the fact that all sites achieved
a Satisfactory rating, with no
ineffective critical controls, management
recommended, and the Board accepted a
lower than stretch outcome of between Target
and Stretch.
Against a target of A$260 million and stretch
of A$310 million, we exceeded stretch at
A$326 million, resulting in an award of 150%
for this measure.
The outcome was driven by a higher gold
price and lower capital expenditure, being
offset by lower gold volumes; higher
operating costs; higher royalty costs; higher
interest costs and higher working capital
movements.
Against a target of A$1210/oz and stretch of
A$1150/oz, the Company ended the year
slightly above target at A$1215/oz driven by
the underperformance at Mungari and Mt
Rawdon, mostly offset by the performance at
Cowal, Mt Carlton, Ernest Henry and Cracow,
resulting in an award of 95.8% of the
weighted allocation target of 20%.
26
Evolution Mining Limited // Annual Report 2020 109
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(i) First Strike in 2019 (continued)
The Company operates in a highly cyclical industry and a core strategic objective of the Board and management is to build a
company that can prosper through the inevitable cycle. The remuneration strategy and framework are more fully described in
(c) below.
(ii) Response to COVID-19
In response to the COVID-19 pandemic, the Company developed an approach based on the following principles:
(iii) Key Management Personnel
Elements
People
Process
Principles
Driven by our values of Safety, Excellence, Accountability and Respect
Continued discipline with health and safety practices
Sound reporting culture
Strong communication to ensure all employees had clarity on the expectations and approach
to effectively managing through the pandemic
Risk assessments and Triggered Action Response Plans (TARPs) with ongoing review
Supply Chain regularly reviewed
Scenario’s modelled through the cycle
- People and site response
- Commercial and financial considerations
- Community impacts and plans
Structure
Roles and responsibilities defined and appointed
Daily meetings of Crisis Management Teams
Central storage of all data and information
Communication
Internal – our people and contractors
External – Communities, Government and Industry
The Company continues to actively respond to the ongoing COVID-19 pandemic. The health and safety of every person
working at Evolution, their families and our communities remains paramount during this time. The Company is operating under
protocols developed to minimise risks to our people and the communities within which we operate and ensure that we can
continue to safely produce gold during this challenging period. These plans include activation of our crisis management
protocols, suspending international travel, restricting domestic travel, suspending activities across most of the Company’s
greenfields exploration projects, enacting strict social distancing protocols including reducing face-to-face interactions,
increasing flexible working arrangements, ensuring best practice health management is maintained at all times and regular
COVID-19 communication with the entire workforce.
To date there has been no material impact on Evolution’s operations from the COVID-19 pandemic and no Evolution employee
or contractor has tested positive to COVID-19. The Company continues to work closely with regulators and industry groups to
ensure all our operations are complying with agreed protocols and and responsive to changing requirements.
We have also been actively engaging with our communities to share our COVID-19 approach and offer support in a wide range
of areas, including offering temporary employment to community members who have lost their jobs, and some of the site and
group office specific initiatives include extending rosters to reduce movement of people, relocation of interstate employees and
introducing flexible working arrangements with people working from home where possible.
The Nomination and Remuneration Committee (Committee) have considered the impacts of COVID-19 on the performance of
the business and whether any changes to the remuneration outcomes for FY20 are appropriate. In forming a view that no
adjustment was deemed necessary or required, the Committee considered the following:
• Mining has been deemed to be an Essential Service and the level of disruption to Evolution’s operations has been
minimal, with no jobs lost
• No employee or contractor has tested positive to COVID-19
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(ii) Response to COVID-19 (continued)
•
The communities in which we operate have been largely unimpacted due in part to the high level of cooperation,
collaboration and communication between the respective site and community
•
The workforce has been highly engaged, proactive and vigilant in implementing the protocols which has contributed
to the current zero positive test results for employees and contractors
•
The overall performance of the business has not been adversely impacted by COVID-19
The executive remuneration framework covered in this report includes the Executive Directors (Executive Chairman and Chief
Financial Officer) and those executives considered to be Key Management Personnel (“KMP”) named below:
Name
Position
Jacob (Jake) Klein
Executive Chairman
Lawrence (Lawrie) Conway Finance Director and Chief Financial Officer
Paul Eagle
Evan Elstein
Bob Fulker
Vice President People & Culture
Company Secretary & Vice President Information Technology
Chief Operating Officer
Glen Masterman
Vice President Discovery & Business Development
(iv) Key Remuneration Outcomes
Key remuneration outcomes for the 2020 financial year are summarised in the table below:
Remuneration
STIP Outcomes
Description
LTIP Outcomes
Chairman.
The average STIP outcome for the KMP was 72.3% of the maximum opportunity based on the
assessment of business and personal measures. This reflects the Company's strong operating and
financial performance, with profit up 85%, net mine cashflow up 48% year-on-year at $736 million,
EBITDA up 41%, EPS up 38% and the share price up 30% year-on-year, an improvement in the
upgrading of the asset portfolio during the year, with the purchase of the Red Lake mine in Ontario
Canada, and divestment of the Cracow mine in Queensland. The outcomes also reflects the strong
performance of the individual KMP members against their KPIs agreed with the Executive
93.7% of the Performance Rights awarded during the 2018 financial year and tested as at 30 June
2020 vested on 12 August 2020. This reflects the Company's continued strong performance during
the three years to 30 June 2020. 44% of the Tranche 1 Performance Rights awarded during the
2019 financial year to Superintendent and senior technical specialist levels and tested at 31
December 2019, vested on 17 February 2020.
KMP Remuneration
NED Remuneration
There were no increases in fixed remuneration for KMP members during the 2020 financial year.
Non-Executive Directors (NED) received an increase in their fees effective from 1 July 2019 fees
during the year.
(v) What has changed in relation to remuneration during the 2020 financial year
During the 2020 financial year, following Board approval, the target and stretch percentages were increased for the Long-Term
Incentive Plan (increasing the variable reward component from 9-18% for KMP members), aligned to the Company’s philosophy
of having a larger percentage of the overall reward mix at risk and supporting the objective of having senior individuals
focused on delivering sustainable performance over the long term. The NEDs received an increase to their fees in orde
r to better align their remuneration to the target of P75 when compared to the peer group of comparator companies. As
such, both the cash component and the equity component of the fees were increased with effect from 1 July 2019. The NED
fees had not been reviewed since 2015.
27
28
110 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(ii) Response to COVID-19 (continued)
•
•
The communities in which we operate have been largely unimpacted due in part to the high level of cooperation,
collaboration and communication between the respective site and community
The workforce has been highly engaged, proactive and vigilant in implementing the protocols which has contributed
to the current zero positive test results for employees and contractors
•
The overall performance of the business has not been adversely impacted by COVID-19
(iii) Key Management Personnel
The executive remuneration framework covered in this report includes the Executive Directors (Executive Chairman and Chief
Financial Officer) and those executives considered to be Key Management Personnel (“KMP”) named below:
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Position
Executive Chairman
Name
Jacob (Jake) Klein
Lawrence (Lawrie) Conway Finance Director and Chief Financial Officer
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Vice President People & Culture
Company Secretary & Vice President Information Technology
Chief Operating Officer
Vice President Discovery & Business Development
(iv) Key Remuneration Outcomes
Key remuneration outcomes for the 2020 financial year are summarised in the table below:
Remuneration
STIP Outcomes
LTIP Outcomes
KMP Remuneration
NED Remuneration
Description
The average STIP outcome for the KMP was 72.3% of the maximum opportunity based on the
assessment of business and personal measures. This reflects the Company's strong operating and
financial performance, with profit up 85%, net mine cashflow up 48% year-on-year at $736 million,
EBITDA up 41%, EPS up 38% and the share price up 30% year-on-year, an improvement in the
upgrading of the asset portfolio during the year, with the purchase of the Red Lake mine in Ontario
Canada, and divestment of the Cracow mine in Queensland. The outcomes also reflects the strong
performance of the individual KMP members against their KPIs agreed with the Executive
Chairman.
93.7% of the Performance Rights awarded during the 2018 financial year and tested as at 30 June
2020 vested on 12 August 2020. This reflects the Company's continued strong performance during
the three years to 30 June 2020. 44% of the Tranche 1 Performance Rights awarded during the
2019 financial year to Superintendent and senior technical specialist levels and tested at 31
December 2019, vested on 17 February 2020.
There were no increases in fixed remuneration for KMP members during the 2020 financial year.
Non-Executive Directors (NED) received an increase in their fees effective from 1 July 2019 fees
during the year.
(v) What has changed in relation to remuneration during the 2020 financial year
During the 2020 financial year, following Board approval, the target and stretch percentages were increased for the Long-Term
Incentive Plan (increasing the variable reward component from 9-18% for KMP members), aligned to the Company’s philosophy
of having a larger percentage of the overall reward mix at risk and supporting the objective of having senior individuals
focused on delivering sustainable performance over the long term. The NEDs received an increase to their fees in orde
r to better align their remuneration to the target of P75 when compared to the peer group of comparator companies. As
such, both the cash component and the equity component of the fees were increased with effect from 1 July 2019. The NED
fees had not been reviewed since 2015.
28
Evolution Mining Limited // Annual Report 2020 111
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(a) Remuneration Overview (continued)
(vi) What changes are planned for remuneration in the 2021 financial year
There are two planned changes for the FY21 KPIs as follows:
•
For the LTI program, there is a change to one of the measures with the replacement of the EPS measure with a cost
AISC comparison measure against the comparator peer group. This is due to the acquisition of Red Lake which moves
us up the cost curve in the initial years as we invest to transform the asset. We are striving to return the Company back
towards the low cost position on the curve within three years and hence the introduction of this measure in the LTI
program.
• We have changed the comparator group for the FY21 LTIP issue to ensure that we maintain a good balance of similar
size companies by market capitalization and representation across the Australian and Canadian markets in which we
operate and to reflect changes where companies have merged or been acquired.
(b) Remuneration Governance
The Board of Directors (“the Board”) has an established Nomination and Remuneration Committee, consisting solely of
Non-Executive Directors, with the delegated responsibility to report on and make recommendations to the Board on the:
•
Appropriateness of the remuneration policies and systems, having regard to whether they are:
•
•
•
Relevant to the Company’s wider objectives and strategies;
Legal and defensible;
In accordance with the people and culture objectives of the Company;
•
•
Performance of the Executive Directors (on an annual basis) and ensure there is a process for determining key
performance indicators for the ensuing period; and
Remuneration of the Executive Directors, Non-Executive Directors and Key Management Personnel, in accordance with
approved Board policies and processes.
(c) Remuneration Strategy and Framework
The executive remuneration framework has been designed to align Executive Directors and KMP objectives with shareholder
and business objectives by offering a remuneration package based on key performance areas affecting the Company's overall
performance. The Board believes the remuneration framework to be strategic, appropriate and effective in its ability to attract
and retain KMP and to operate and manage the Company effectively.
The Group's target remuneration philosophies are:
•
•
•
Total Fixed Remuneration - TFR (being salary, superannuation, plus regular allowances) positioned at the median
(50th percentile) based on the industry benchmark McDonald report (an industry recognised gold and general mining
remuneration benchmarking survey covering ~80 organisations within the industry) and the Mercer benchmark report,
undertaken from time to time in reviewing KMP remuneration competitiveness;
Total Annual Remuneration - TAR (TFR plus STI) at target at the 75th percentile for on target performance; and
Total Remuneration - TR (TAR plus LTI) at the 75th percentile, with flexibility to provide up to the 90th percentile levels
for high performers and critical roles.
The overarching objectives and principles of the Group’s remuneration strategy are that:
Total remuneration for each level of the workforce is appropriate and competitive;
Total remuneration comprises a competitive fixed component and a sizeable “at risk” component based on performance
Short term incentives are appropriate with hurdles that are measurable, transparent and achievable;
Incentive plans are designed to motivate and incentivise for high performance and delivery on organisational objectives;
The corporate long-term incentives are focused on delivering shareholder value; and
The principles and integrity of the remuneration review process deliver fair and equitable outcomes.
The overarching objectives and principles of the Group’s remuneration strategy are that:
Total remuneration for each level of the workforce is appropriate and competitive;
Total remuneration comprises a competitive fixed component and a sizeable “at risk” component based on performance
Short term incentives are appropriate with hurdles that are measurable, transparent and achievable;
Incentive plans are designed to motivate and incentivise for high performance and delivery on organisational objectives;
The corporate long-term incentives are focused on delivering shareholder value; and
The principles and integrity of the remuneration review process deliver fair and equitable outcomes.
hurdles;
hurdles;
•
•
•
•
•
•
•
•
•
•
•
•
29
112 Evolution Mining Limited // Annual Report 2020
30
30
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
The overarching objectives and principles of the Group’s remuneration strategy are that:
•
•
•
•
•
•
Total remuneration for each level of the workforce is appropriate and competitive;
Total remuneration comprises a competitive fixed component and a sizeable “at risk” component based on performance
hurdles;
Short term incentives are appropriate with hurdles that are measurable, transparent and achievable;
Incentive plans are designed to motivate and incentivise for high performance and delivery on organisational objectives;
The corporate long-term incentives are focused on delivering shareholder value; and
The principles and integrity of the remuneration review process deliver fair and equitable outcomes.
The overarching objectives and principles of the Group’s remuneration strategy are that:
•
•
•
•
•
•
Total remuneration for each level of the workforce is appropriate and competitive;
Total remuneration comprises a competitive fixed component and a sizeable “at risk” component based on performance
hurdles;
Short term incentives are appropriate with hurdles that are measurable, transparent and achievable;
Incentive plans are designed to motivate and incentivise for high performance and delivery on organisational objectives;
The corporate long-term incentives are focused on delivering shareholder value; and
The principles and integrity of the remuneration review process deliver fair and equitable outcomes.
30
30
Evolution Mining Limited // Annual Report 2020 113
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
The following table outlines the remuneration components for all KMP for the 2020 financial year:
Component
Total Fixed Remuneration (TFR)
Performance measure
Key results areas for each role are
determined based on the individual's
position, key business imperatives and
individual KPIs aligned to the business
plan and strategy.
Short Term Incentive (STI)
Long Term Incentive (LTI)
Key Performance indicators are set with
a mix of individual and corporate
elements. The relative weighting of
which is dependent on the individual
employee job banding and position. For
the Executive Chairman, the weighting
is 70% corporate and 30% individual
and for the remainder of the KMP, 60%
corporate and 40% individual. For the
corporate component for FY20, the
measures focused on safety, critical
controls, cash contribution, costs and
strategic imperatives focused on
improving our overall asset portfolio
aligned to the business strategy and
improving operational effectiveness via
the delivery of priority capital projects.
Performance measures agreed with the
Board have a 3 year time horizon and
are focused on enhancing shareholder
value.
Strategic objective
Remuneration is designed to attract,
motivate and retain key personnel.
Considerations include:
• Overall Company strategy and
business plan
• Key skills and knowledge required
• External market conditions
• Key employee value drivers
• Individual employee performance
• Industry benchmark data
The objective is to motivate employees
to achieve key annual targets focused
on safety, risk, operations, cash
contribution, and effective cost
management, improving the overall
quality of the asset portfolio and driving
a high achievement team culture.
The primary objective to deliver industry
leading shareholder returns.
CEO/Executive Chairman
Other Senior Executives (FY19)
(FY19)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
The target achievement remuneration ratio mix for Executive Directors and KMP for the 2020 financial year and prior financial
year is as follows:
CEO/Executive Chairman
Other Senior Executives (FY20)
(FY20)
Target
Stretch
Target
Stretch
TFR STI
LTI
TFR STI
LTI
59%
15%
26%
47%
20%
33%
65%
17%
18%
53%
23%
25%
51%
18%
31%
39%
23%
38%
57%
20%
23%
44%
27%
29%
Target
Stretch
Target
Stretch
Other Senior Executives (FY20)
Target
Stretch
Target
Stretch
Other Senior Executives (FY19)
Target
Stretch
Target
Stretch
TFR STI
LTI
TFR STI
LTI
31
32
114 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
The target achievement remuneration ratio mix for Executive Directors and KMP for the 2020 financial year and prior financial
year is as follows:
CEO/Executive Chairman
(FY20)
Other KMP
Other Senior Executives (FY20)
(FY20)
59%
15%
26%
65%
17%
18%
51%
18%
31%
57%
20%
23%
Target
Stretch
Target
Stretch
TFR STI
LTI
TFR STI
LTI
CEO/Executive Chairman
(FY19)
Other KMP
Other Senior Executives (FY19)
(FY19)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Target
Stretch
Other Senior Executives (FY20)
Target
Stretch
47%
20%
33%
53%
23%
25%
39%
23%
38%
44%
27%
29%
Target
Stretch
Other Senior Executives (FY19)
Target
Stretch
Target
Stretch
Target
Stretch
TFR STI
LTI
TFR STI
LTI
32
Evolution Mining Limited // Annual Report 2020 115
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Evolution Mining Limited
Remuneration Report (Audited) (continued)
Directors' Report
(d) Executive Remuneration Outcomes
30 June 2020
(i) Financial Performance
(continued)
The Group has demonstrated strong performance over the past five years as shown in the following charts.
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes
(i) Financial Performance
The Group has demonstrated strong performance over the past five years as shown in the following charts.
Statutory profit/(loss) ($m)
Underlying profit after tax ($m)
EBITDA ($m)
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
217.6
263.4
218.2
301.6
-24.3
FY16
FY17
FY18
FY19
FY20
Basic EPS (cents)
15.57
13.28
12.86
17.71
-1.75
405.4
1
1
1
0
0
0
206.6
250.8
218.2
134.5
713.9 795.1 730.3
607.6
1,029.4
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
Dividends declared (cents per share)
16.00
9.50
7.50
5.00
3.00
Share price ($) at 30 June
5.67
4.36
3.51
2.33
2.41
0
0
0
0
0
0
0
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
(ii) STIP
0
FY16
Component
Participation
Composition
(ii) STIP
Performance
conditions
Component
Participation
Composition
FY20 STIP
considerations
Performance
conditions
FY20 STIP
considerations
Performance measure
The Overall Group STIP applies to site based employees at the level of Manager and above and all
Group office employees.
The Group STIP is a cash bonus, up to a maximum percentage of TFR, based on the employee job
band.
It is assessed and paid annually conditional upon the achievement of key company objectives and
individual KPIs. For the 2020 financial year, the company objectives were focused on the areas of
Performance measure
safety, risk, group cash contribution, all in sustaining costs and strategic imperatives, designed to
The Overall Group STIP applies to site based employees at the level of Manager and above and all
improve the overall business aligned to the long term business strategy.
Group office employees.
The Group STIP is a cash bonus, up to a maximum percentage of TFR, based on the employee job
At the time of setting the FY20 STIP measures, the Board determined it would consider the following
band.
factors when awarding the score for the strategic imperatives measure:
It is assessed and paid annually conditional upon the achievement of key company objectives and
• Progress relative to the FY20 Balanced Business Plan (BBP);
individual KPIs. For the 2020 financial year, the company objectives were focused on the areas of
• Delivery on key projects - optimisation of Mungari; Cowal (GRE46); Mt. Carlton underground; and
safety, risk, group cash contribution, all in sustaining costs and strategic imperatives, designed to
• Progress on Business Development and operational effectiveness.
improve the overall business aligned to the long term business strategy.
At the time of setting the FY20 STIP measures, the Board determined it would consider the following
factors when awarding the score for the strategic imperatives measure:
• Progress relative to the FY20 Balanced Business Plan (BBP);
• Delivery on key projects - optimisation of Mungari; Cowal (GRE46); Mt. Carlton underground; and
• Progress on Business Development and operational effectiveness.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
Measure and Definition
weighting
Outcome - commentary
Outcome -
score awarded
TRI
Total recordable injury frequency
The aim for FY20 was to return the company to its
10.58%, an
Frequency
measures the ratio of recordable
lowest TRIF recorded. This would be a reduction by
(TRIF)
injuries over a 12 Month moving
one-third from FY19 TRIF of 8.3.
outcome
between
Weighting
average per 1,000,000 hours
Over the FY20 fiscal year there was an escalation in
threshold and
15%
worked
Recordable Injuries through the first quarter, which
target
management took remediation actions to get these
back under control. Since October there has been a
steady reduction of the TRIF measure to 6.98 at the
end of the year.
Extreme Risk
Extreme Risks are Board
For FY20, all bow tie analysis for extreme risks
22.5%, a stretch
controlled risks on the group Risk
controls have been implemented and validated. All
outcome
Controls
Weighting
15%
Register. The plan for FY20 was
actions have been reviewed and reported weekly, as
to ensure for all extreme risk
well as being reported in the monthly Executive Report
controls, bow tie risk analysis had
and there were no overdue actions. Independent
been completed, key actions had
external audits were conducted resulting in all aspects
been identified and closed out
of the business achieving a satisfactory rating. In
within the agreed timeframes and
addition to this, significant incident reporting has been
an independent audit had been
maintained with an increase in overall quality.
completed by an external auditor
to verify this
Group Cash
Contribution
Weighting
20%
This measure is aligned to the
With respect to the cash contribution measure no
30%, a stretch
business strategy of being a
adjustments are made for metal prices. This has been
outcome
margin focused business, and
the position since the inception of the program
delivering strong cashflow
whereby management is expected to adjust their
outcomes aligned to the budget
operating practices to ensure we generate cash
through the cycle. Additionally, no adjustments are
made to the results for any production
underperformance.
Group Unit All As with the cashflow measure, this Against a Target of $915/oz and range of $960/oz
0%, less than
in Sustaining measure is designed to ensure we (Threshold) and $870/oz (Stretch), the company
Cost (AISC)
(A$/oz sold)
Weighting
20%
are focused on margin and aligned achieved an outcome below Threshold at $1008/oz.
to our strategy, have good
The below Threshold outcome can be fully attributed
financial discipline across the
to the performance at Mt Carlton and Mt Rawdon and
business
resulted on a score of zero for this KPI.
threshold
outcome
All other sites delivered close to or better than budget.
Royalties and lower copper prices negatively impacted
the AISC by $30-$35/oz for which no adjustment was
made.
116 Evolution Mining Limited // Annual Report 2020
33
33
34
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Outcome -
score awarded
10.58%, an
outcome
between
threshold and
target
22.5%, a stretch
outcome
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
Measure and Definition
weighting
Outcome - commentary
The aim for FY20 was to return the company to its
lowest TRIF recorded. This would be a reduction by
one-third from FY19 TRIF of 8.3.
Over the FY20 fiscal year there was an escalation in
Recordable Injuries through the first quarter, which
management took remediation actions to get these
back under control. Since October there has been a
steady reduction of the TRIF measure to 6.98 at the
end of the year.
For FY20, all bow tie analysis for extreme risks
controls have been implemented and validated. All
actions have been reviewed and reported weekly, as
well as being reported in the monthly Executive Report
and there were no overdue actions. Independent
external audits were conducted resulting in all aspects
of the business achieving a satisfactory rating. In
addition to this, significant incident reporting has been
maintained with an increase in overall quality.
TRI
Frequency
(TRIF)
Weighting
15%
Total recordable injury frequency
measures the ratio of recordable
injuries over a 12 Month moving
average per 1,000,000 hours
worked
Extreme Risk
Controls
Weighting
15%
Extreme Risks are Board
controlled risks on the group Risk
Register. The plan for FY20 was
to ensure for all extreme risk
controls, bow tie risk analysis had
been completed, key actions had
been identified and closed out
within the agreed timeframes and
an independent audit had been
completed by an external auditor
to verify this
Group Cash
Contribution
Weighting
20%
This measure is aligned to the
business strategy of being a
margin focused business, and
delivering strong cashflow
outcomes aligned to the budget
With respect to the cash contribution measure no
adjustments are made for metal prices. This has been
the position since the inception of the program
whereby management is expected to adjust their
operating practices to ensure we generate cash
through the cycle. Additionally, no adjustments are
made to the results for any production
underperformance.
30%, a stretch
outcome
Group Unit All As with the cashflow measure, this Against a Target of $915/oz and range of $960/oz
in Sustaining measure is designed to ensure we (Threshold) and $870/oz (Stretch), the company
Cost (AISC)
(A$/oz sold)
Weighting
20%
are focused on margin and aligned achieved an outcome below Threshold at $1008/oz.
to our strategy, have good
financial discipline across the
business
The below Threshold outcome can be fully attributed
to the performance at Mt Carlton and Mt Rawdon and
resulted on a score of zero for this KPI.
0%, less than
threshold
outcome
All other sites delivered close to or better than budget.
Royalties and lower copper prices negatively impacted
the AISC by $30-$35/oz for which no adjustment was
made.
34
Evolution Mining Limited // Annual Report 2020 117
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
The successful sale of the Cracow asset, again under the
COVID-19 restrictions including no site visits, reinforcing
Evolution’s desire to upgrade the portfolio;
Both the Red Lake and Cracow transactions have
upgraded the quality of the overall portfolio;
Improvement in the exploration pipeline including 2 new
active projects aligned to the exploration strategy with
promising early drill results; and
Disappointingly, the Mt Carlton underground resource was
materially downgraded after infill drilling showed the
orebody narrowed at depth, limiting the ore reserve. This
has resulted in an impairment of the Mt Carlton asset of
A$144.3 million.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
Measure and Definition
weighting
Strategic
Imperatives
Weighting
30%
At the time of setting the FY20
STIP measures, the Board
determined it would consider the
following factors when awarding
the score for the strategic
imperative measure:
a) Achievement against the
FY20 Balanced Business (BBP)
outcomes;
b) Delivery on key projects -
the optimisation of Mungari;
Cowal’s GRE46 underground; Mt
Carlton’s underground and plant
upgrade; and
Outcome - commentary
Outcome -
score awarded
Performance against the 3 key focus areas were as
follows:
30%, target
outcome
a) FY20 BBP
The BBP is designed to be a balanced scorecard
which has 5 key business pillars: Zero Harm and
Sustainability, People and Organisation, Operations,
Growth and Financial Outcomes;
Against these business pillars the majority of the
measures were achieved while almost all key
projects were successfully delivered during the year.
b) Delivery on Key projects
At Mungari, the focus on the crusher circuit and
throughput has delivered a consistent circa 2 mtpa
throughput. Over the last 5 years Evolution has
increased the Mungari process rate by 33%, from 1.5
mtpa to 2 mtpa. 60% of this increase was during
FY20;
At Mt Carlton, the underground development was
delivered as per scheduled and first stope ore was
delivered 2.5 months early in April 2020. In terms of
the plant upgrade, the upgrade was
delivered with zero recordable injuries and was
completed 3 months early. The additional thickener
and filtration capacity were commissioned with nil
rework and the floatation cell modification culminated
with a significant upgrade in concentration capacity
to the plant, as designed;
Material new additions at Cowal GRE46 and
progress of the underground PFS.
c) Improving the business aligned
to the business strategy, via
business development and
operational effectiveness.
c) Improving the business aligned to the business
strategy, via Business Development and operational
effectiveness;
Successful acquisition and funding of the Red Lake
asset, including extensive due diligence and
integration work. Despite the COVID-19 restrictions
the transaction was closed on time and the company
delivered ahead of schedule on planned changes to
the operation, including a 30% reduction of the
workforce from when the deal was announced in
November 2019. Since the close of the purchase,
the performance in the first three months has been
positive;
35
36
118 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
The successful sale of the Cracow asset, again under the
COVID-19 restrictions including no site visits, reinforcing
Evolution’s desire to upgrade the portfolio;
Both the Red Lake and Cracow transactions have
upgraded the quality of the overall portfolio;
Improvement in the exploration pipeline including 2 new
active projects aligned to the exploration strategy with
promising early drill results; and
Disappointingly, the Mt Carlton underground resource was
materially downgraded after infill drilling showed the
orebody narrowed at depth, limiting the ore reserve. This
has resulted in an impairment of the Mt Carlton asset of
A$144.3 million.
36
Evolution Mining Limited // Annual Report 2020 119
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
Measure and Definition
weighting
Strategic
Imperatives
d) Other
Outcome - commentary
Outcome -
score awarded
d) In addition to the above, the following was achieved:
Evolution maintained its position as one of the lowest
cost gold producers;
Ore reserves, net of depletion, increasing by 1.9moz
ounces to 7.83 million ounces, a 32% uplift and Mineral
Resources by 10.85moz to 26.01moz, an uplift of
71.6%;
Proactive and successful management of drought and
water issues at Cowal, which has materially reduced the
risk of an interruption to the operation;
Effective management of the COVID-19 pandemic with
minimal interruptions to the business;
Exceeding internal target (>25%) of internal placement
with 41% (up from 33% in FY19) of roles filled during
the year by existing Evolution employees;
Improved the overall company culture as demonstrated
through monthly culture survey results, with an average
overall score for the year of 78 (on a 5-point scale, 75
means people are answering “mostly”, with 50 being
“sometimes” and 100 being “always”) which was up
from a baseline of 72 at the start of the year;
We have seen an improvement in the gender
composition of the workforce for 2020, with 17.4%
females and 82.6% males, which is up from 2019,
where we had 15.4% females and 2018, where we had
13.1% females;
For our Graduate Program, we had a 62% female intake
for 2020 and we secured a 53% intake for our upcoming
2021 program;
We continue to look for opportunities to bring talented
females into the business (always with a mindset of
finding the best person for the role) and it’s pleasing to
see we have hired two high calibre senior females at the
General Manager and Vice President level, as well as
the addition of Vicky Binns to the Board.
Overall Result
93.08%,
slightly
below
target
Total STIP Granted
% of Maximum
% of Maximum
($)
Entitlement Granted
Entitlement Forfeited
37
120 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
The outcomes are represented in the chart below:
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
The outcomes are represented in the chart below:
Total STIP Granted
% of Maximum
% of Maximum
($)
Entitlement Granted
Entitlement Forfeited
The outcomes for the KMP are set out in the table below:
Component
Performance measure
Key Management Personnel
The outcomes for the KMP are set out in the table below:
Component
Performance measure
2020
Directors
Jacob Klein
Lawrie Conway
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
2020
Directors
Jacob Klein
Lawrie Conway
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Key Management Personnel
510,000
412,000
271,000
277,000
343,000
302,000
510,000
412,000
271,000
277,000
343,000
302,000
70.4%
73.2%
71.6%
73.2%
70.6%
74.6%
70.4%
73.2%
71.6%
73.2%
70.6%
74.6%
29.6%
26.8%
28.4%
26.8%
29.4%
25.4%
29.6%
26.8%
28.4%
26.8%
29.4%
25.4%
38
38
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
The outcomes are represented in the chart below:
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(ii) STIP (continued)
The outcomes are represented in the chart below:
The outcomes for the KMP are set out in the table below:
Component
Performance measure
2020
Total STIP Granted
($)
% of Maximum
Entitlement Granted
% of Maximum
Entitlement Forfeited
Directors
Jacob Klein
Lawrie Conway
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
The outcomes for the KMP are set out in the table below:
510,000
412,000
271,000
277,000
343,000
302,000
70.4%
73.2%
71.6%
73.2%
70.6%
74.6%
29.6%
26.8%
28.4%
26.8%
29.4%
25.4%
Component
Performance measure
2020
Total STIP Granted
($)
% of Maximum
Entitlement Granted
% of Maximum
Entitlement Forfeited
Directors
Jacob Klein
Lawrie Conway
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
510,000
412,000
271,000
277,000
343,000
302,000
70.4%
73.2%
71.6%
73.2%
70.6%
74.6%
29.6%
26.8%
28.4%
26.8%
29.4%
25.4%
38
38
Evolution Mining Limited // Annual Report 2020 121
Directors' Report (continued)
Directors' Report
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(iii) LTIP
Component
Participation
Performance
period
Composition
Performance
conditions
Performance measure
The Group LTIP applies to employees at the level of Manager, Superintendent / Senior Specialist,
Functional Lead and above across the Group.
Up to 3 years.
The Company has one long term incentive plan currently in operation, the Employee Share Option and
Performance Rights Plan (“ESOP”).
The ESOP (approved by shareholders on 23 November 2010, 26 November 2014 and 23 November
2017) provides for the issuance of Performance Rights to Executive Directors and eligible employees.
This LTIP was first introduced for employees at the level of Manager and above and provides equity
based “at risk” remuneration, up to maximum percentages, based on, and in addition to, each eligible
employee’s TFR. Effective from 1 July 2018, the LTIP was extended to the superintendent and senior
technical level in the Company. These incentives are aimed at retaining and incentivising those eligible
employees on a basis that is aligned with shareholder interests and are provided via Performance
Rights.
The Performance Rights are issued for a specified period and each Performance Right is convertible
into one ordinary share. All Performance Rights expire on the earlier of their expiry date or termination
of the employee’s employment subject to Director discretion. Performance Rights do not vest until a
specified period after granting and their exercise is conditional on the achievement of certain
performance hurdles that are aligned with shareholder interests. There are no voting or dividend rights
attached to the Performance Rights. Voting and dividend rights attach to the ordinary shares when the
Performance Rights vest and shares allocated to the participating employee. Unvested Performance
Rights cannot be transferred and will not be quoted on the ASX.
Award parameters Further details on each of the performance conditions laid out below are detailed in Section f (i) -
'Other Remuneration Information'.
Performance Target
Description
(i)
Relative TSR
Performance
The Group’s relative total shareholder return (TSR)
measured against the TSR for a peer Company of
20 comparator gold mining companies, (FY20 grant:
15) (Peer Group)
(ii)
Absolute TSR
performance
The Group’s absolute TSR return
(iii) Growth in
Growth in the Group’s Earnings per share
Earnings per
share
(iv)
Increase in ore
reserves per
share
Increasing the ore reserves per share over a 3 year
period
Weighting for each
year from FY18 grant
Outcomes for the FY19 Tranche 1 award which vested in February 2020 are set out as follows:
Performance Target
Measure
FY19
% Vested
25%
25%
25%
25%
LTIP eligibility
considerations
Each year an assessment is made by the Directors against performance hurdles and guidelines
established by the Board. In exercising their discretion under the rules, the Directors will take into
account matters such as the position of the eligible person, the role they play in the Group, the nature
or terms of their employment or contract and the contribution they make to the Group as a whole.
Performance measure
Outcomes for the FY17 award which vested during the year are set out as follows:
Component
Award outcome
for the year -
ESOP
Performance
Rights
39
40
122 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(iii) LTIP (continued)
Performance Target
Measure
FY17
Outcome
% Vested
(i)
Relative TSR Performance
Percentile
10th
25.0%
(ii)
Absolute TSR performance
Compound annual return
27.7%
25.0%
(iii) Growth in Earnings per share
Compound annual return
9.9%
14.3%
(iv)
Increase in ore reserves per share
Percentage increase
117.4%
23.9%
Total
out as follows:
Outcomes for the FY18 award which will be approved by the board for vesting in August 2020 are set
Performance Target
Measure
FY18
Outcome
% Vested
(i)
Relative TSR Performance
Percentile
20th
19.3%
(ii)
Absolute TSR performance
Compound annual return
38.3%
25.0%
(iii) Growth in Earnings per share
Compound annual return
18.1%
25.0%
(iv)
Increase in ore reserves per share
Percentage increase
118.6%
24.4%
88.2%
93.7%
Total
(i)
(ii)
(iii)
(iv)
Outcome
(Tranche 1)
Relative TSR Performance
Percentil 58th
Absolute TSR performance
Compoun
9.1%
Growth in Earnings per share
Compoun
17.7%
Increase in ore reserves per sh
Percenta
106.90%
Total
The movement in Performance Rights under this plan is in the table below:
Outstanding balance at the beginning of the year
Performance rights granted during the period
Vested during the period
Lapsed during the period
Forfeited during the period
Outstanding balance at the end of the year
2020
Number
18,643,061
6,038,033
(7,025,612)
(1,126,673)
(2,751,927)
13,776,882
2019
Number
20,942,610
5,699,933
(4,063,412)
(1,797,984)
(2,138,086)
18,643,061
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(iii) LTIP (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Performance Target
Measure
FY17
Outcome
% Vested
(i)
Relative TSR Performance
Percentile
10th
25.0%
(ii)
Absolute TSR performance
Compound annual return
27.7%
25.0%
(iii) Growth in Earnings per share
Compound annual return
9.9%
14.3%
(iv)
Increase in ore reserves per share
Percentage increase
117.4%
23.9%
Total
88.2%
Outcomes for the FY18 award which will be approved by the board for vesting in August 2020 are set
out as follows:
Performance Target
Measure
FY18
Outcome
% Vested
(i)
Relative TSR Performance
Percentile
20th
19.3%
(ii)
Absolute TSR performance
Compound annual return
38.3%
25.0%
(iii) Growth in Earnings per share
Compound annual return
18.1%
25.0%
(iv)
Increase in ore reserves per share
Percentage increase
118.6%
24.4%
Total
93.7%
Outcomes for the FY19 Tranche 1 award which vested in February 2020 are set out as follows:
Performance Target
Measure
% Vested
FY19
Outcome
(Tranche 1)
(i)
(ii)
(iii)
(iv)
Relative TSR Performance
Percentil 58th
Absolute TSR performance
Compoun
9.1%
Growth in Earnings per share
Compoun
17.7%
Increase in ore reserves per sh
Percenta
106.90%
Total
The movement in Performance Rights under this plan is in the table below:
Outstanding balance at the beginning of the year
Performance rights granted during the period
Vested during the period
Lapsed during the period
Forfeited during the period
Outstanding balance at the end of the year
2020
Number
18,643,061
6,038,033
(7,025,612)
(1,126,673)
(2,751,927)
13,776,882
2019
Number
20,942,610
5,699,933
(4,063,412)
(1,797,984)
(2,138,086)
18,643,061
40
Evolution Mining Limited // Annual Report 2020 123
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(iv) TIP (continued)
TIP performance
parameters
on 24 August 2016.
Performance measure
Component
Award outcome -
TIP
Both the TSR Performance and Absolute TSR performance conditions contain the same parameters
as the LTIP. Further details are laid out in section f (i) - Other Remuneration Information'.
The achievement of strategic objectives was determined by the Evolution Board by referencing the Life
of Mine/Stage H cutback and dual leach project as approved by the Evolution Board and announced on
the ASX platform on 16 February 2017 in relation to Cowal asset; and for Ernest Henry, by referencing
the performance of the investment approved by the Evolution Board and announced ASX
Outcomes for the TIP award which vested during the year are set out as follows:
Performance Target
Measure
% Vested
(i)
Relative TSR Performance
Percentile
(ii)
Absolute TSR performance
Compound annual return
34%
(iii) Achievement of strategic objectives*
Determined by Evolution
Achieved
100%
Board
Total
FY17
Outcome
26th
64%
100%
86%
*Below follows the information collated by management on the performance of Cowal and Ernest Henry since acquisition for
consideration by the Board in determining the extent to which vesting conditions have been achieved:
• Cowal had outperformed the Company’s expectation with more than doubling of reserves and extensions of mine life, as well
as discovering a new orebody which will further extend the mine life and cement Cowal as the cornerstone asset for the
company. At the time of testing these performance rights, Stage H remained on track in terms of cost and schedule while the
Flotation Tails Leach projects had been successfully completed and was delivering to the projected 4-6% of improvement in
recovery. In financial terms, Cowal had generated over A$1 billion in operating cash flow and after all capital and exploration
investment had delivered approximately A$560 million in net cash up to the end of September 2019. This had been at an
average annual return on investment of 19% and had paid back 74% of the acquisition. This is with an excess of 16 years of
mine life remaining before additions from the full underground potential.
• The investment in Ernest Henry had shown the alignment to the Company’s strategy in terms of being opportunistic - investing
when there was a distressed owner; investing at a good point in the metal price cycle - copper price had increased materially
since acquisition; and identifying the right JV partner - one who had consistently delivered to, or exceeded plan. Ernest Henry
had underpinned the company’s low-cost and high cash generation. In the December 2019 quarter, Ernest Henry had
commenced drilling below the existing reserves (1200RL) which will provide opportunities to materially extend the mine life. In
financial terms, Ernest Henry had generated approximately A$620 million in operating cash flow and after all capital and
exploration investment had delivered approximately A$590 million in net cash up to the end of September 2019. This had been
at an average annual return on investment of 22% and had paid back 65% of the acquisition.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(iii) LTIP (continued)
The table below reflects the Performance Rights granted, vested, or lapsed in each financial year:
FY16
FY17
FY18
FY19
8,141,368
-
(4,022,944)
(2,338,350)
(2,279,972)
-
30/06/18
-
69.3%
6,797,540
3,375,000
(4,051,551)
(2,892,476)
(542,047)
(482,524)
(2,203,942)
-
30/06/19
16/12/19
88.2%
6,586,571
-
-
-
5,699,933
-
81,585*
(102,102)*
(1,903,862)
4,682,709
30/06/20
-
93.7%
(1,641,692)
3,874,554
30/06/21
-
44.4%*
Granted
Granted - TIP
Vested
Vested - TIP
Lapsed
Lapsed - TIP
Forfeited
Subject to vesting
Testing date
Testing date - TIP
Vesting (%) -
excluding TIP
FY20
Running
Balance
6,038,033 33,263,445
3,375,000
(8,156,080)
(2,892,476)
(2,982,499)
(482,524)
(8,847,882)
(818,414)
5,219,619 13,776,882
-
-
-
30/06/22
-
-
*
These were the award outcomes relating to the FY19 Tranche 1 performance rights which vested in February 2020.
The remaining FY19 Tranche 2 performance rights will be tested on 30 June 2021.
(iv) TIP
Component
Participation
Performance
period
Composition
Performance
conditions
Performance measure
The Transition Incentive Plan (TIP) was entered into by Evolution with the Executive Charmain Mr.
Jake Klein.
Up to 3 years.
Mr. Jake Klein was issued 3,375,000 performance rights subject to the satisfaction of Vesting
Conditions tested as at 16 December 2019 and approved by shareholders at the shareholder meeting
held on 21 June 2017. The primary purpose of the issue of Performance Rights was to provide an
appropriate remuneration framework which is designed to incentivise, reward and retain Mr Klein for
the ongoing transformation of Evolution in a manner which aligns with shareholder expectations and
thereby provide certainty and continuity to Evolution in light of Evolution's recent corporate activities.
The Performance Rights was vested on 16 December 2019. Mr Klein was an employee and executive
director of Evolution up to and including the Vesting Date. The number of Performance Rights which
vested on the Vesting Date depended on the vesting conditions that were satisfied for the relevant
period. Mr Klein was entitled to exercise vested Performance Rights and, following such exercise, was
issued one Evolution Share for each vested Performance Right that was exercised. No amount was
payable by Mr Klein to receive each such Evolution Share.
Award parameters Further details on each of the performance conditions laid out below are detailed in the section below
‘TIP performance parameters’.
Performance Target
Description
(i)
Relative TSR
Performance
The Group’s relative total shareholder return
(TSR)measured against the TSR for a peer
Company of 20 comparator gold mining companies
(Peer Group)
(ii)
Absolute TSR
performance
The Group’s absolute TSR return
(iii) Achievement of
strategic
objectives
Successful integration and delivery of economic
outcomes of the Cowal Gold Mine and Ernest Henry
acquisitions relative to grant date in 2017
Weighting for each
year from FY16 grant
40%
40%
20%
41
42
124 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(d) Executive Remuneration Outcomes (continued)
(iv) TIP (continued)
TIP performance
parameters
Both the TSR Performance and Absolute TSR performance conditions contain the same parameters
as the LTIP. Further details are laid out in section f (i) - Other Remuneration Information'.
The achievement of strategic objectives was determined by the Evolution Board by referencing the Life
of Mine/Stage H cutback and dual leach project as approved by the Evolution Board and announced on
the ASX platform on 16 February 2017 in relation to Cowal asset; and for Ernest Henry, by referencing
the performance of the investment approved by the Evolution Board and announced ASX
on 24 August 2016.
Component
Award outcome -
TIP
Performance measure
Outcomes for the TIP award which vested during the year are set out as follows:
Performance Target
Measure
(i)
Relative TSR Performance
Percentile
FY17
Outcome
26th
(ii)
Absolute TSR performance
Compound annual return
34%
% Vested
64%
100%
(iii) Achievement of strategic objectives*
Determined by Evolution
Board
Achieved
100%
Total
86%
*Below follows the information collated by management on the performance of Cowal and Ernest Henry since acquisition for
consideration by the Board in determining the extent to which vesting conditions have been achieved:
• Cowal had outperformed the Company’s expectation with more than doubling of reserves and extensions of mine life, as well
as discovering a new orebody which will further extend the mine life and cement Cowal as the cornerstone asset for the
company. At the time of testing these performance rights, Stage H remained on track in terms of cost and schedule while the
Flotation Tails Leach projects had been successfully completed and was delivering to the projected 4-6% of improvement in
recovery. In financial terms, Cowal had generated over A$1 billion in operating cash flow and after all capital and exploration
investment had delivered approximately A$560 million in net cash up to the end of September 2019. This had been at an
average annual return on investment of 19% and had paid back 74% of the acquisition. This is with an excess of 16 years of
mine life remaining before additions from the full underground potential.
• The investment in Ernest Henry had shown the alignment to the Company’s strategy in terms of being opportunistic - investing
when there was a distressed owner; investing at a good point in the metal price cycle - copper price had increased materially
since acquisition; and identifying the right JV partner - one who had consistently delivered to, or exceeded plan. Ernest Henry
had underpinned the company’s low-cost and high cash generation. In the December 2019 quarter, Ernest Henry had
commenced drilling below the existing reserves (1200RL) which will provide opportunities to materially extend the mine life. In
financial terms, Ernest Henry had generated approximately A$620 million in operating cash flow and after all capital and
exploration investment had delivered approximately A$590 million in net cash up to the end of September 2019. This had been
at an average annual return on investment of 22% and had paid back 65% of the acquisition.
42
Evolution Mining Limited // Annual Report 2020 125
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
9
1
0
2
l
a
t
o
T
l
a
t
o
T
0
2
0
2
*
e
u
l
a
V
d
e
s
i
t
r
o
m
A
9
1
0
2
0
2
0
2
9
1
0
2
I
T
L
I
T
S
s
u
n
o
B
0
2
0
2
t
n
e
m
y
o
p
m
E
l
-
t
s
o
P
s
t
i
f
e
n
e
B
n
o
i
t
a
u
n
n
a
r
e
p
u
S
9
1
0
2
0
2
0
2
2
4
1
,
9
2
5
,
5
5
1
4
,
0
9
4
,
1
8
9
3
,
3
2
7
,
3
3
4
5
,
9
9
8
,
1
5
1
4
,
8
2
3
2
4
3
,
1
1
6
,
3
3
4
5
,
7
2
7
9
9
5
,
9
0
1
,
2
0
0
0
,
4
4
5
0
0
0
,
7
1
4
0
0
0
,
0
1
5
0
0
0
,
2
1
4
-
-
-
5
9
8
,
2
5
1
5
9
8
,
2
5
1
5
9
8
,
7
5
1
5
4
1
,
4
6
1
5
4
6
,
6
6
1
6
9
7
,
4
2
9
2
6
,
5
2
3
1
1
,
6
0
2
2
8
8
,
0
0
1
9
2
0
,
4
1
2
8
7
8
,
7
3
1
9
3
2
,
7
2
2
-
-
0
0
0
,
5
3
0
0
0
,
5
3
5
8
6
,
1
2
1
5
9
8
,
7
3
5
9
8
,
7
3
5
9
8
,
7
3
5
9
8
,
7
3
5
9
8
,
7
3
9
7
8
,
6
1
9
7
8
,
6
1
6
0
4
,
1
2
8
4
2
8
,
6
0
9
1
2
6
,
3
5
9
6
8
7
,
5
9
9
8
8
9
,
6
3
0
,
1
-
5
3
0
,
5
5
1
,
1
3
8
2
,
3
8
1
,
1
0
9
9
,
9
3
5
,
1
6
3
9
,
5
6
2
,
1
7
0
9
,
0
0
3
4
2
8
,
2
5
2
1
2
1
,
8
6
2
6
8
7
,
2
2
1
8
8
9
,
8
8
2
3
6
3
,
2
4
6
1
2
,
4
3
3
6
3
,
2
4
8
7
3
,
0
5
6
0
9
,
8
4
-
-
2
5
3
,
8
2
-
-
-
5
3
0
,
4
6
4
3
8
2
,
6
8
4
0
9
9
,
6
5
6
6
3
9
,
3
1
5
-
-
-
-
-
-
-
-
-
-
0
0
0
,
2
8
1
0
0
0
,
9
5
2
0
0
0
,
3
7
2
0
0
0
,
8
4
3
0
0
0
,
8
0
3
-
-
-
-
-
-
-
-
-
-
-
0
0
0
,
1
7
2
0
0
0
,
7
7
2
0
0
0
,
3
4
3
0
0
0
,
2
0
3
-
-
-
-
-
-
2
3
5
,
0
2
2
3
5
,
0
2
9
1
5
,
7
1
1
1
4
,
0
1
-
0
7
1
,
1
1
2
3
5
,
0
2
2
3
5
,
0
2
0
0
0
,
5
2
2
3
5
,
0
2
2
3
5
,
0
2
-
-
-
3
0
0
,
1
2
3
0
0
,
1
2
-
4
8
7
,
5
3
9
8
,
4
1
-
2
7
4
,
5
1
7
3
0
,
3
7
3
0
,
3
-
3
0
0
,
1
2
3
0
0
,
1
2
3
0
0
,
1
2
3
0
0
,
1
2
)
d
e
u
n
i
t
n
o
c
(
s
e
m
o
c
t
u
O
n
o
i
t
a
r
e
n
u
m
e
R
e
v
i
t
u
c
e
x
E
)
d
(
)
d
e
u
n
i
t
n
o
c
(
)
d
e
t
i
d
u
A
(
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
l
e
b
a
t
y
r
a
m
m
u
s
n
o
i
t
a
r
e
n
u
m
e
R
)
v
(
d
e
t
i
m
i
L
g
n
i
n
i
M
n
o
i
t
u
l
o
v
E
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
0
2
0
2
e
n
u
J
0
3
)
d
e
u
n
i
t
n
o
c
(
n
o
i
t
a
r
e
n
u
m
e
R
d
e
x
i
F
l
a
t
o
T
9
1
0
2
0
2
0
2
s
e
e
F
d
n
a
y
r
a
l
a
S
e
s
a
B
8
6
2
,
3
8
0
,
1
7
9
7
,
2
8
0
,
1
-
-
-
8
6
4
,
4
2
7
0
0
0
,
5
1
1
1
8
4
,
7
9
9
8
5
,
9
0
1
0
5
2
,
6
2
1
0
8
5
,
7
1
1
7
1
9
,
7
0
5
7
,
8
7
6
9
,
7
1
3
8
6
4
,
4
7
3
0
0
5
,
7
8
3
8
6
4
,
4
0
5
8
6
4
,
9
1
4
7
9
9
,
8
3
7
0
5
7
,
3
6
1
3
8
8
,
0
6
3
7
7
,
6
5
1
0
0
5
,
7
8
2
6
8
,
2
6
1
-
-
3
3
3
,
3
9
3
6
9
,
1
3
3
6
9
,
1
3
-
7
9
9
,
8
9
3
7
9
9
,
8
9
3
7
9
9
,
8
1
5
7
9
9
,
8
2
4
*
*
*
*
e
n
o
t
s
e
e
r
F
m
a
h
a
r
G
y
a
w
n
o
C
e
c
n
e
r
w
a
L
w
e
k
s
A
s
e
m
a
J
*
*
*
*
*
e
n
o
t
s
n
h
o
J
n
i
l
o
C
h
t
i
e
K
c
M
s
a
m
o
h
T
*
*
s
i
r
i
w
a
S
b
u
g
a
N
i
l
l
a
H
a
e
r
d
n
A
*
*
s
u
s
s
e
t
n
o
M
e
d
n
e
i
t
s
a
b
e
S
*
*
*
*
*
*
w
e
t
t
A
n
o
s
a
J
l
i
n
e
K
b
o
c
a
J
s
r
o
t
c
e
r
i
D
*
*
*
*
*
*
*
s
n
n
B
y
k
c
V
i
i
l
e
n
n
o
s
r
e
P
t
n
e
m
e
g
a
n
a
M
y
e
K
*
*
*
*
*
*
*
h
t
i
m
S
r
e
t
e
P
*
*
*
n
a
r
e
l
l
o
C
n
o
r
a
A
l
e
g
a
E
l
u
a
P
n
a
m
r
e
t
s
a
M
n
e
G
l
l
r
e
k
u
F
b
o
B
i
l
n
e
t
s
E
n
a
v
E
126 Evolution Mining Limited // Annual Report 2020
2
8
0
,
9
0
3
,
2
1
1
1
0
,
5
4
8
,
1
1
6
1
6
,
6
9
3
,
5
3
6
9
,
4
0
2
,
5
0
0
0
,
1
3
3
,
2
0
0
0
,
5
1
1
,
2
2
9
2
,
7
8
1
7
3
2
,
8
6
1
4
7
1
,
4
9
3
,
4
1
1
8
,
6
5
3
,
4
.
s
D
E
N
r
o
f
s
t
h
g
i
r
n
o
i
t
n
e
e
r
t
d
n
a
,
P
M
K
r
o
f
r
a
e
y
e
h
t
g
n
i
r
u
d
d
e
s
n
e
p
x
e
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
l
d
n
a
s
n
o
i
t
p
o
f
o
e
u
a
v
r
i
a
f
e
h
t
s
e
s
i
r
p
m
o
c
s
t
h
g
i
r
d
e
s
a
b
e
r
a
h
s
f
o
l
e
u
a
v
d
e
s
i
t
r
o
m
A
.
9
1
0
2
y
r
a
u
n
a
J
1
e
v
i
t
c
e
f
f
e
n
o
i
t
i
s
o
p
P
M
K
e
h
t
d
n
a
9
1
0
2
y
u
J
1
e
v
i
t
c
e
f
f
e
y
n
a
p
m
o
C
e
h
t
l
m
o
r
f
d
e
n
g
s
e
r
i
.
8
1
0
2
t
s
u
g
u
A
1
e
v
i
t
c
e
f
f
e
s
e
o
r
l
r
i
e
h
t
m
o
r
f
d
e
n
g
s
e
r
i
s
u
s
s
e
t
n
o
M
e
d
n
e
i
t
s
a
b
e
S
d
n
a
s
i
r
i
w
a
S
b
u
g
a
N
i
n
a
r
e
l
l
o
C
n
o
r
a
A
.
9
1
0
2
r
e
b
m
e
v
o
N
8
2
e
v
i
t
c
e
f
f
e
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
s
a
d
e
r
i
t
e
r
e
n
o
t
s
e
e
r
F
m
a
h
a
r
G
.
0
2
0
2
h
c
r
a
M
1
1
e
v
i
t
c
e
f
f
e
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
s
a
d
e
r
i
t
e
r
e
n
o
t
s
n
h
o
J
n
i
l
o
C
Remuneration and other key terms of employment for the Executive Directors and KMP are formalised in the Executive
Existing Executive Directors and Key Management Personnel
Total Fixed
Remuneration
Notice Period by
Notice period by
Termination
Executive
Evolution
payments *
803,800
300,000 fixed
Director's Fees
625,000
135,000 fixed
Director's Fees
6 months
6 months
3 months
6 months
Vice President People
Open
420,000
3 months
6 months
Term of
agreement and
notice period
Open
Open
(vi) Executive service agreements
Services Agreements table below:
Name
Jacob Klein
Executive Chairman
Lawrie Conway
Finance Director and
Chief Financial Officer
Paul Eagle
and Culture
Evan Elstein Company
Secretary and
Vice President
Information Technology
Bob Fulker
Chief Operating Officer
Glen Masterman Vice
President Discovery and
Open
Business Development
Fiona Murfitt Vice
Open
420,000
3 months
6 months
Open
540,000
3 months
6 months
450,000
3 months
6 months
12 month
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months Total
Fixed
Remuneration
6 months Total
Fixed
Remuneration
President Sustainability**
Open
390,000
3 months
6 months
*
**
For a change of control event, the termination payment is 12 months TFR for Executive Directors and KMP.
Fiona Murfitt joined the company in January 2020 as the General Manager Sustainability and was promoted to the VP
- Sustainability effective 1 July 2020.
Fixed salary, inclusive of the required superannuation contribution amount, is reviewed annually by the Board following the end
of the financial year. The amounts set out above are the Executive Directors and KMP total fixed remuneration as at the date of
this report.
(e) Non-Executive Director Remuneration Outcomes
The Board policy is to remunerate Non-Executive Directors (NEDs) at market rates for comparable companies for time,
commitment and responsibilities. The Nomination and Remuneration Committee determines Non-Executive Directors fees and
reviews this annually, based on market practice, their duties and areas of responsibility. Independent external advice is sought
when required. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders (currently $1,200,000 per annum). Fees for Non-Executive Directors are not linked to the performance of the
Group and they currently do not participate in the Group’s STIP or LTIP.
Under the NED Equity Plan, NEDs will be granted Share Rights as part of their remuneration. The number of Share
Rights granted will be calculated in accordance with the following formula:
“Equity Amount” ($) for the financial year/Value per Share Right
Where:
•
“Equity Amount” is an amount determined by the Board, having regard to level of board and committee fees paid in cash
and independent advice received. For 2020, the Equity Amount is $65,000 for each NED, other than the Lead Independent
Director (LID), who received an Equity Amount of $80,000. For 2021, the Equity Amount will be $65,000 for each NED, and
$80,000 for the LID.
3
4
.
0
2
0
2
l
i
r
p
A
1
e
v
i
t
c
e
f
f
e
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
s
a
d
e
t
n
o
p
p
a
e
r
e
w
h
t
i
i
m
S
r
e
t
e
P
d
n
a
s
n
n
B
y
k
c
V
i
i
.
9
1
0
2
r
e
b
m
e
c
e
D
1
e
v
i
t
c
e
f
f
e
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
s
a
d
e
t
n
o
p
p
a
s
a
w
w
e
t
t
i
A
n
o
s
a
J
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
44
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
(vi) Executive service agreements
Remuneration and other key terms of employment for the Executive Directors and KMP are formalised in the Executive
Services Agreements table below:
Name
Term of
agreement and
notice period
Total Fixed
Remuneration
Notice Period by
Executive
Notice period by
Evolution
Termination
payments *
Existing Executive Directors and Key Management Personnel
Jacob Klein
Executive Chairman
Open
803,800
300,000 fixed
Director's Fees
625,000
135,000 fixed
Director's Fees
6 months
6 months
3 months
6 months
Open
Lawrie Conway
Finance Director and
Chief Financial Officer
Paul Eagle
Vice President People
and Culture
Evan Elstein Company
Secretary and
Vice President
Information Technology
Bob Fulker
Chief Operating Officer
Glen Masterman Vice
President Discovery and
Business Development
Open
420,000
3 months
6 months
Open
420,000
3 months
6 months
Open
540,000
3 months
6 months
Open
450,000
3 months
6 months
12 month
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months
Total Fixed
Remuneration
6 months Total
Fixed
Remuneration
6 months Total
Fixed
Remuneration
Fiona Murfitt Vice
President Sustainability**
Open
390,000
3 months
6 months
*
**
For a change of control event, the termination payment is 12 months TFR for Executive Directors and KMP.
Fiona Murfitt joined the company in January 2020 as the General Manager Sustainability and was promoted to the VP
- Sustainability effective 1 July 2020.
Fixed salary, inclusive of the required superannuation contribution amount, is reviewed annually by the Board following the end
of the financial year. The amounts set out above are the Executive Directors and KMP total fixed remuneration as at the date of
this report.
(e) Non-Executive Director Remuneration Outcomes
The Board policy is to remunerate Non-Executive Directors (NEDs) at market rates for comparable companies for time,
commitment and responsibilities. The Nomination and Remuneration Committee determines Non-Executive Directors fees and
reviews this annually, based on market practice, their duties and areas of responsibility. Independent external advice is sought
when required. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders (currently $1,200,000 per annum). Fees for Non-Executive Directors are not linked to the performance of the
Group and they currently do not participate in the Group’s STIP or LTIP.
Under the NED Equity Plan, NEDs will be granted Share Rights as part of their remuneration. The number of Share
Rights granted will be calculated in accordance with the following formula:
“Equity Amount” ($) for the financial year/Value per Share Right
Where:
•
“Equity Amount” is an amount determined by the Board, having regard to level of board and committee fees paid in cash
and independent advice received. For 2020, the Equity Amount is $65,000 for each NED, other than the Lead Independent
Director (LID), who received an Equity Amount of $80,000. For 2021, the Equity Amount will be $65,000 for each NED, and
$80,000 for the LID.
44
Evolution Mining Limited // Annual Report 2020 127
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Remuneration Report (Audited) (continued)
(e) Non-Executive Director Remuneration Outcomes (continued)
•
The Value per Share Right equals the volume weighted average price (VWAP) of Evolution’s ordinary shares traded on the
ASX over the 10 trading day period commencing the day after the release of the full year financial results. For 2020, the 10
trading day period to calculate the VWAP used to determine the number of share rights granted to each NED commences
on 14 August 2020.
Providing the NED remains a director of Evolution, Share Rights will vest and automatically exercise 12 months after the grant
date. The Share Rights granted to NEDs under the NED Equity Plan are not subject to performance conditions or service
requirements which could result in potential forfeiture. Vested Share Rights will convert into ordinary shares on a one-for-one
basis. Vested Share Rights will be satisfied by either issuing shares or arranging for shares to be acquired on-market, subject
to the Evolution Securities Trading Policy and the inside information provisions of the Corporations Act.
Upon the transfer to the relevant NED, the shares will be subject to disposal restrictions (Disposal Conditions) under the earlier
of:
•
•
the NED ceasing to be a director of Evolution; or
3 years from the date of grant of the share rights or such longer period nominated by the NED at the time of the offer (up to
a maximum 15 years from the date of grant).
Generally, Share Rights will lapse if a Participant ceases to be a Director of the Company.
Broken out in the table below is a summary of the fee structure by individual as at 30 June 2020. For remuneration outcomes
please refer to table in section d (iv).
Directors
James Askew
Andrea Hall
Thomas McKeith
Peter Smith**
Vicky Binns**
Jason Attew*
Base Fees
Lead
Independent
Cash Component ($)
Sub-Committee Sub-Committee
Member
Chairman
Total Cash
Fees
Equity ($)
NED Equity
Plan Shares
120,000
120,000
120,000
120,000
120,000
120,000
720,000
-
-
15,000
-
-
-
15,000
35,000
40,000
35,000
-
-
-
110,000
20,000
20,000
-
20,000
20,000
40,000
120,000
175,000
180,000
170,000
140,000
140,000
160,000
965,000
65,000
65,000
80,000
65,000
65,000
65,000
405,000
Total per
annum ($)
240,000
245,000
250,000
205,000
205,000
225,000
1,370,000
*
**
Jason Attew was appointed as Non-Executive Director effective 1 December 2019.
Vicky Binns and Peter Smith were appointed as Non-Executive Directors effective 1 April 2020.
(f) Other Remuneration Information
(i) LTIP performance parameters
Component
Relative TSR
Performance
Assessment
Performance Rights will be tested against the Group’s TSR performance relative to a peer group of
comparator gold companies. The Group’s and the peer group’s TSR will be based on the percentage by
which its 30-day volume weighted average share price quoted on the ASX (“VWAP”) (plus the value of
any dividends paid during the performance period) has increased over a three year period ending 30
June 2020, 30 June 2021 and 30 June 2022.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(f) Other Remuneration Information (continued)
(i) LTIP performance parameters (continued)
Performance Rights granted in FY18, FY19 and FY20
Level of
Performance Rights granted in FY18,
% of TSR Performance Rights vesting
performance
FY19 and FY20
achieved
Threshold
Top 50th percentile
the top 25th percentile
Target
Top 25th percentile
the top 10th percentile
Exceptional Top 10th percentile or above
33%
66%
66%
100%
100%
Above the top 50th percentile and below
Straight-line pro-rata between 33% and
Above the top 25th percentile and below
Straight-line pro-rata between 66% and
Absolute TSR
performance
Performance rights will be tested against the Group’s Absolute TSR performance relative to the 30
days VWAP (Absolute TSR Performance) as at 30 June 2020, 30 June 2021 and 30 June 2022
respectively, measured as the cumulative annual TSR over the three year performance period.
Level of performance
Evolution Absolute TSR
performance
% of Absolute TSR
Performance Rights vesting
achieved
Threshold
Target
15% Return Per Annum
66%
10% Per Annum Return
33%
Above 10% Per Annum Return and
Straight-line pro-rata between
below 15% Per Annum Return
33% and 66%
Above 15% Per Annum Return and
Straight-line pro-rata between
below 20% Per Annum Return
66% and 100%
Exceptional
Above 20% Per Annum Return
100%
Growth in
A proportion of Performance Rights granted during the years ended 30 June 2018, 30 June 2019 and
earnings per share 30 June 2020 will be tested against the Group’s growth in Earnings Per Share, calculated by excluding
any Non-Recurring Items, and measured as the cumulative annual growth rate over the three year
performance period.
achieved
Threshold
Level of performance
Evolution Earnings per share
performance
% of Earnings Per Share
Performance Rights vesting
7% Per Annum Growth in EPS
33%
Above 7% Per Annum Growth in EPS
Straight-line pro-rata between 33%
and below 11% Per Annum Growth in
and 66%
Target
11% Per Annum Growth in EPS
66%
Above 11% Per Annum Growth in
Straight-line pro-rata between 66%
EPS and below 15% Per Annum
and 100%
Exceptional
Above 15% Per Annum Growth in
100%
EPS
Growth in EPS
EPS
45
46
128 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(f) Other Remuneration Information (continued)
(i) LTIP performance parameters (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Performance Rights granted in FY18, FY19 and FY20
Level of
performance
achieved
Performance Rights granted in FY18,
FY19 and FY20
% of TSR Performance Rights vesting
Threshold
Top 50th percentile
33%
Above the top 50th percentile and below
the top 25th percentile
Top 25th percentile
Straight-line pro-rata between 33% and
66%
66%
Target
Above the top 25th percentile and below
the top 10th percentile
Exceptional Top 10th percentile or above
Straight-line pro-rata between 66% and
100%
100%
Absolute TSR
performance
Performance rights will be tested against the Group’s Absolute TSR performance relative to the 30
days VWAP (Absolute TSR Performance) as at 30 June 2020, 30 June 2021 and 30 June 2022
respectively, measured as the cumulative annual TSR over the three year performance period.
Level of performance
achieved
% of Absolute TSR
Performance Rights vesting
Evolution Absolute TSR
performance
Threshold
10% Per Annum Return
33%
Target
Above 10% Per Annum Return and
below 15% Per Annum Return
15% Return Per Annum
Straight-line pro-rata between
33% and 66%
66%
Exceptional
Growth in
A proportion of Performance Rights granted during the years ended 30 June 2018, 30 June 2019 and
earnings per share 30 June 2020 will be tested against the Group’s growth in Earnings Per Share, calculated by excluding
Above 15% Per Annum Return and
below 20% Per Annum Return
Above 20% Per Annum Return
Straight-line pro-rata between
66% and 100%
100%
any Non-Recurring Items, and measured as the cumulative annual growth rate over the three year
performance period.
Level of performance
achieved
Evolution Earnings per share
performance
% of Earnings Per Share
Performance Rights vesting
Threshold
7% Per Annum Growth in EPS
33%
Target
Exceptional
Above 7% Per Annum Growth in EPS
and below 11% Per Annum Growth in
EPS
11% Per Annum Growth in EPS
Above 11% Per Annum Growth in
EPS and below 15% Per Annum
Growth in EPS
Above 15% Per Annum Growth in
EPS
Straight-line pro-rata between 33%
and 66%
66%
Straight-line pro-rata between 66%
and 100%
100%
46
Evolution Mining Limited // Annual Report 2020 129
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(f) Other Remuneration Information (continued)
(ii) Director and key management personnel equity holdings (continued)
Performance and Share Rights
Directors
Jacob Klein
Lawrie Conway
James Askew
Graham Freestone*
Andrea Hall
Colin Johnstone**
Thomas McKeith
Jason Attew***
Vicky Binns****
Peter Smith****
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Key Management Personnel
Balance Granted as
Vested
at the
start of
the year
compen-
sation
Lapsed
5,247,954
907,824
550,839 (3,577,330)
305,935
(269,943)
(525,784)
(23,066)
11,447
11,447
11,447
11,447
11,447
-
-
-
12,727
5,303
12,727
12,727
15,664
12,727
-
-
(11,447)
(16,750)
(11,447)
(20,992)
(11,447)
(3,182)
-
-
-
-
-
-
-
12,727
15,664
12,727
-
-
-
-
At end of the year
Balance at Vested and
the end of exercisable
the year
Unvested
1,695,679
920,750
12,727
648,905
345,984
1,046,774
574,766
12,727
-
-
-
-
-
-
-
-
12,727
15,664
12,727
-
-
-
-
992,042
652,650
554,290
698,824
205,588
205,588
264,328
220,273
(221,751)
(243,503)
(14,608) 1,183,022
(15,569)
(20,183)
(16,338)
620,918
798,435
659,256
219,124
233,540
302,736
245,072
9,110,819
1,824,426 (4,384,610)
(618,730) 5,931,905
1,995,361
963,898
387,378
495,699
414,184
3,936,544
-
-
-
-
-
*
**
***
****
Graham Freestone retired as Non-Executive Director effective 28 November 2019.
Colin Johnstone retired as Non-Executive Director effective 11 March 2020.
Jason Attew was appointed as Non-Executive Director effective 1 December 2019.
Vicky Binns and Peter Smith were appointed as Non-Executive Directors effective 1 April 2020.
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(f) Other Remuneration Information (continued)
(i) LTIP performance parameters (continued)
Component
Increase in ore
reserves per share
Assessment
A proportion of Performance Rights will be tested against the Group’s ability to grow its Ore Reserves,
calculated by measuring the growth over the three year performance period by comparing the baseline
measure of the Ore Reserves as at 31 December (“Baseline Ore Reserves”) to the Ore Reserves as at
31 December three years later on a per share basis, with testing to be performed at 30 June 2021, 30
June 2022 and 30 June 2023.
Level of performance
achieved
Evolution Growth in Ore Reserves % of Growth in Ore Reserves
Performance Rights vesting
per share performance
Threshold
90% of Baseline Ore Reserves
33%
Target
Exceptional
Above 90% of Baseline Ore Reserves
but below 100% Baseline Ore
Reserves
100% Baseline Ore Reserves
Straight-line pro-rata between 33%
and 66%
66%
Above 100% of Baseline Ore
Reserves and below 120% of Baseline and 100%
Ore Reserves
120% and above of Baseline Ore
Reserves
100%
Straight-line pro-rata between 66%
(ii) Director and key management personnel equity holdings
Balance at the
start of the year
Received during
the year on
conversion of
performance
Received during
the year on
exercise of
options
Other changes
Balance at the
end of the
year*****
Directors
Jacob Klein
Lawrie Conway
James Askew
Graham Freestone*
Andrea Hall
Colin Johnstone**
Thomas McKeith
Jason Attew***
Vicky Binns****
Peter Smith****
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
11,168,630
925,669
790,284
147,202
16,697
141,964
189,917
-
-
-
167,000
551,084
-
-
14,098,447
rights
3,577,330
269,943
11,447
16,750
11,447
20,992
11,447
-
-
-
-
221,751
-
243,503
4,384,610
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(240,000)
-
(40,000)
-
-
-
-
-
-
-
(217,584)
-
(243,503)
(741,087)
14,745,960
955,612
801,731
123,952
28,144
162,956
201,364
-
-
-
167,000
555,251
-
-
17,741,970
*
**
***
****
*****
Graham Freestone retired as Non-Executive Director effective 28 November 2019.
Colin Johnstone retired as Non-Executive Director effective 11 March 2020.
Jason Attew was appointed as Non-Executive Director effective 1 December 2019.
Vicky Binns and Peter Smith were appointed as Non-Executive Directors effective 1 April 2020.
Reflects the balance at end of the year or at date of retirement.
47
48
130 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(f) Other Remuneration Information (continued)
(ii) Director and key management personnel equity holdings (continued)
Performance and Share Rights
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
At end of the year
Balance at Vested and
the end of exercisable
the year
Unvested
Directors
Jacob Klein
Lawrie Conway
James Askew
Graham Freestone*
Andrea Hall
Colin Johnstone**
Thomas McKeith
Jason Attew***
Vicky Binns****
Peter Smith****
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Balance Granted as
compen-
sation
at the
start of
the year
Vested
5,247,954
907,824
11,447
11,447
11,447
11,447
11,447
-
-
-
550,839 (3,577,330)
(269,943)
305,935
(11,447)
12,727
(16,750)
5,303
(11,447)
12,727
(20,992)
12,727
(11,447)
15,664
-
12,727
-
-
-
-
Lapsed
(525,784)
(23,066)
-
-
-
(3,182)
-
-
-
-
1,695,679
920,750
12,727
-
12,727
-
15,664
12,727
-
-
648,905
345,984
-
-
-
-
-
-
-
-
992,042
652,650
554,290
698,824
9,110,819
205,588
205,588
264,328
220,273
-
(221,751)
-
(243,503)
1,824,426 (4,384,610)
(14,608) 1,183,022
620,918
(15,569)
798,435
(20,183)
659,256
(16,338)
(618,730) 5,931,905
219,124
233,540
302,736
245,072
1,995,361
1,046,774
574,766
12,727
-
12,727
-
15,664
12,727
-
-
963,898
387,378
495,699
414,184
3,936,544
*
**
***
****
Graham Freestone retired as Non-Executive Director effective 28 November 2019.
Colin Johnstone retired as Non-Executive Director effective 11 March 2020.
Jason Attew was appointed as Non-Executive Director effective 1 December 2019.
Vicky Binns and Peter Smith were appointed as Non-Executive Directors effective 1 April 2020.
48
Evolution Mining Limited // Annual Report 2020 131
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Remuneration Report (Audited) (continued)
(g) Summary of Key Terms
Below is a list of key terms with definitions used within the Director’s Report:
Key Term
Definition
The Board of Directors (“the
Board” or “the Directors”)
Key Management Personnel
("KMP")
The Board of Directors, the list of persons under the relevant section above.
Senior executives have the authority and responsibility for planning, directing and
controlling the activities of the Company and are members of the senior leadership team.
KMP for the financial year ended 30 June 2018 are listed above.
Total Fixed Remuneration
("TFR")
Total Fixed Remuneration comprises a base salary plus superannuation. This is currently
positioned at the median (50th percentile) of the industry benchmarking report.
Short Term Incentive ("STI")
and Short Term Incentive Plan
(“STIP”)
STI is the short-term incentive component of Total Remuneration. The STI usually
comprises a cash payment that is only received by the employee if specified annual
goals are achieved. STIP refers to the plan under which the incentives are granted and
paid.
Long Term Incentive ("LTI") and
Long term Incentive Plan
(“LTIP”)
LTI is the long-term incentive component of Total Remuneration. The LTI comprises of
Performance Rights, usually with a three year vesting period that are subject to specified
vesting conditions established by the Board. Further details of the vesting conditions
associated with the performance rights are detailed in the Vesting Conditions of
Performance Rights section. Performance Rights cannot be exercised unless the vesting
conditions have been satisfied. LTIP refers to the plan under which LTIs are granted and
is aimed at retaining and incentivising KMP and senior managers to achieve business
objectives that are aligned with shareholder interests, and are currently provided via
Performance Rights.
Total Annual Remuneration
Total Fixed Remuneration plus STI.
Total Remuneration
Total Fixed Remuneration plus STI and LTI.
Superannuation Guarantee
Charge ("SGC")
This is the employer contribution to an employee nominated superannuation fund
required by law. The percentage contribution was set at 9.5% in the reporting period and
is capped in line with the SGC maximum quarterly payment.
Employees and Contractors
Option Plan ("ECOP")
The plan permits the Company, at the discretion of the Directors, to grant Options over
unissued ordinary shares of the Company to eligible Directors, members of staff and
contractors as specified in the plan rules. The plan is currently dormant and no further
Options will be issued under this plan.
Employee Share Option and
Performance Rights Plan
("ESOP")
The plan permits the Company, at the discretion of the Directors, to grant both Options
and Performance Rights over unissued ordinary shares of the Company to eligible
Directors and members of staff as specified in the plan rules.
NED Equity Plan
The plan permits the Company, at the discretion of the Board and Remuneration
Committee to issue remuneration to Non-Executive Directors through Share Rights.
Total Shareholder Return
("TSR")
TSR is the total return on an ordinary share to an investor arising from growth in the
share price plus any dividends received.
Key Performance Indicators
("KPIs")
A form of performance measurement for individual performance against a pre-defined set
of goals.
Volume Weighted Average
Share Price (“VWAP”)
A volume weighted average share price quote on the Australian Stock Exchange (ASX)
measured over a specified number of trading days. The VWAP is to be used when
assessing Company performance for TSR.
Fees
Fees paid to Executive and Non-Executive Directors for services as a Director, including
sub-committee fees as applicable.
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Indemnification of officers and auditors
During the financial year the Company paid a premium in respect of a contract insuring the Directors of the Company, the
company secretaries and all executive officers of the Company and of any related body corporate against a liability incurred as
such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has entered into a Deed of Indemnity, Insurance and Access with each Director. In Summary the Deed provides
for:
•
•
•
Access to corporate records for each Director for a period after ceasing to hold office in the Company;
The provision of Directors and Officers Liability Insurance; and
Indemnity for legal costs incurred by Directors in carrying out the business affairs of the Company.
Except for the above the Company has not otherwise, during or since the financial year, except to the amount permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability
incurred as such an officer or auditor.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's
expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for non-audit services provided during the year
are set out below. Details of the amounts paid or payable to the auditor for audit services provided during the year are set out in
note 30(a).
The board of Directors has considered the position and, in accordance with advice received from the audit committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set
out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
•
•
objectivity of the auditor.
Ethics for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
Evolution Mining Limited, its related practices and non-related audit firms. Also included are fees paid or payable for non-audit
services by non PricewaterhouseCoopers audit firms, although these firms do not provide audit services to Evolution Mining
Limited.
49
50
132 Evolution Mining Limited // Annual Report 2020
Directors' Report (continued)
/
/
D
i
r
e
c
t
o
r
s
'
R
e
p
o
r
t
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Indemnification of officers and auditors
During the financial year the Company paid a premium in respect of a contract insuring the Directors of the Company, the
company secretaries and all executive officers of the Company and of any related body corporate against a liability incurred as
such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has entered into a Deed of Indemnity, Insurance and Access with each Director. In Summary the Deed provides
for:
•
•
•
Access to corporate records for each Director for a period after ceasing to hold office in the Company;
The provision of Directors and Officers Liability Insurance; and
Indemnity for legal costs incurred by Directors in carrying out the business affairs of the Company.
Except for the above the Company has not otherwise, during or since the financial year, except to the amount permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability
incurred as such an officer or auditor.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's
expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for non-audit services provided during the year
are set out below. Details of the amounts paid or payable to the auditor for audit services provided during the year are set out in
note 30(a).
The board of Directors has considered the position and, in accordance with advice received from the audit committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set
out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor.
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
Evolution Mining Limited, its related practices and non-related audit firms. Also included are fees paid or payable for non-audit
services by non PricewaterhouseCoopers audit firms, although these firms do not provide audit services to Evolution Mining
Limited.
50
Evolution Mining Limited // Annual Report 2020 133
Directors' Report (continued)
t
r
o
p
e
R
'
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Report
30 June 2020
(continued)
Non-audit services (continued)
Other assurance services
PricewaterhouseCoopers firm:
Due dilligence services
Other
Non PricewaterhouseCoopers audit firms
Internal audit services
Other assurance services
Total remuneration for other assurance services
Taxation services
PricewaterhouseCoopers firm:
Tax compliance services
Non PricewaterhouseCoopers audit firms
Tax compliance services
Tax advisory services
Total remuneration for taxation services
Total remuneration for non-audit services
Auditor's independence declaration
2020
$
6,891
149,651
156,542
200,000
205,029
56,244
461,273
103,060
116,600
44,183
393,762
541,005
68,523
538,213
723,336
697,547
1,184,609
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page
135.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191,
issued by the Australian Securities and Investments Commission, relating to the 'rounding otr of amounts in the Directors'
Report. Amounts in the Directors' Report have been rounded off in accordance with that ASIC Corporations Instrument to the
nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of Directors.
Jacob (Jake) Klein
Executive Chairman
Sydney
Andrea Hall
Chair of the Audit Committee
Auditor’s Independence Declaration
As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2020, I declare
that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relationto the audit;and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declarationis in respect of Evolution Mining Limited andthe entities it controlled during the
period.
Marc Upcroft
Partner
PricewaterhouseCoopers
Sydney
13 August 2020
51
134 Evolution Mining Limited // Annual Report 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
52
Directors' Report (continued)99 to 98 are in accordance with the Corporations Act 2001, rporations Regulations 2001 and other mandatory professional entity's financial position as at 30 June 2020 and of its and pany will be able to pay its debts as and when they become due ounds to believe that the members of the extended closed group or liabilities to which they are, or may become, subject by virtue ith International Financial Reporting Standards as issued by the xecutive Officer and Chief Financial Officer required by section ectors. This declaration is made in accordan Evolution Mining Limited Directors' Declaration 30 June 2020 In the Directors' opinion: (a) the financial statements and notes set out on pages 53 including: (i) complying with Accounting Standard, the Co reporting requirements, and (ii) giving a true and fair view of the consolidated performance for the year ended on that date, (b) there are reasonable grounds to believe that the Com and payable. (c) at the date of this declaration, there are reasonable gr identified in note 31 will be able to meet any obligations of the deed of cross guarantee described in note 31. Note 34(a) confirms that the financial statements also comply w International Accounting Standards Board. The Directors have been given the declarations by the Chief E 295A of the Corporations Act 2001. ce with a resolution of Dir Jacob (Jake) Klein Executive Chairman Andrea Hall Chair of the Audit Committee Sydney
Liability limited by a scheme approved under Professional Standards Legislation.
52
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
PricewaterhouseCoopers, ABN 52 780 433 757
PricewaterhouseCoopers
Partner
Marc Upcroft
13 August 2020
Sydney
Auditor’s Independence Declaration
period.
This declarationis in respect of Evolution Mining Limited andthe entities it controlled during the
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
relationto the audit;and
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
(a)
that to the best of my knowledge and belief, there have been:
As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2020, I declare
Auditor’s Independence Declaration
/
/
A
u
d
i
t
o
r
’
s
I
n
d
e
p
e
n
d
e
n
c
e
D
e
c
l
a
r
a
t
i
o
n
Auditor’s Independence Declaration
As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2020, I declare
that to the best of my knowledge and belief, there have been:
Auditor’s Independence Declaration
As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2020, I declare
that to the best of my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relationto the audit;and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relationto the audit;and
(a)
(a)
This declarationis in respect of Evolution Mining Limited andthe entities it controlled during the
period.
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declarationis in respect of Evolution Mining Limited andthe entities it controlled during the
period.
Marc Upcroft
Partner
Marc Upcroft
PricewaterhouseCoopers
Partner
PricewaterhouseCoopers
Sydney
13 August 2020
Sydney
13 August 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
Evolution Mining Limited // Annual Report 2020 135
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
Liability limited by a scheme approved under Professional Standards Legislation.
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
52
52
Evolution Mining Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
30 June
2020
$'000
30 June
2019
$'000
Notes to the Consolidated
Evolution Mining Limited
Financial Statements
Sales revenue
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Cost of sales
For the year ended 30 June 2020
Gross Profit
1,941,863
(1,285,350)
656,513
Notes
2
2
1,509,824
(1,133,046)
376,778
Interest income
Other income
Share based payments expense
Corporate and other administration costs
Transaction and integration costs
Gain on sale of subsidiary
Sales revenue
Exploration and evaluation costs expensed
Cost of sales
Impairment loss on assets - Mt Carlton
Gross Profit
Finance costs
Profit before income tax expense
Interest income
Other income
Share based payments expense
Income tax expense
Corporate and other administration costs
Profit after income tax expense attributable to Owners of Evolution Mining
Transaction and integration costs
Limited
Gain on sale of subsidiary
Exploration and evaluation costs expensed
Impairment loss on assets - Mt Carlton
Finance costs
Other comprehensive income
Profit before income tax expense
Changes in the fair value of equity investments at fair value through other
comprehensive income (FVOCI) (will not be reclassified to profit or loss)
Exchange differences on translation of foreign operations (may be reclassified to
Income tax expense
profit or loss)
Profit after income tax expense attributable to Owners of Evolution Mining
Other comprehensive income for the period, net of tax
Limited
Total comprehensive income for the period
Total comprehensive income for the period is attributable to:
Other comprehensive income
Owners of Evolution Mining Limited
Changes in the fair value of equity investments at fair value through other
comprehensive income (FVOCI) (will not be reclassified to profit or loss)
Exchange differences on translation of foreign operations (may be reclassified to
profit or loss)
Other comprehensive income for the period, net of tax
Earnings per share for profit attributable to Owners of Evolution Mining
Total comprehensive income for the period
Limited:
Basic earnings per share
Diluted earnings per share
Total comprehensive income for the period is attributable to:
Owners of Evolution Mining Limited
Earnings per share for profit attributable to Owners of Evolution Mining
Limited:
Basic earnings per share
Diluted earnings per share
3,540
30 June
4,949
2020
(10,691)
$'000
(32,859)
(35,053)
11,517
1,941,863
(23,719)
(1,285,350)
(144,346)
656,513
(21,261)
408,590
3,540
4,949
(107,038)
(10,691)
(32,859)
301,552
(35,053)
11,517
(23,719)
(144,346)
(21,261)
408,590
19,958
(107,038)
(47,261)
(27,303)
301,552
274,249
274,249
274,249
19,958
Cents
(47,261)
(27,303)
274,249
17.71
17.62
274,249
274,249
7,134
30 June
574
2019
(10,884)
$'000
(27,519)
(1,455)
-
1,509,824
(7,190)
(1,133,046)
-
376,778
(22,612)
314,826
7,134
574
(10,884)
(96,638)
(27,519)
218,188
(1,455)
-
(7,190)
-
(22,612)
314,826
18,845
(96,638)
(103)
18,742
218,188
236,930
236,930
236,930
18,845
Cents
(103)
18,742
236,930
12.86
12.78
236,930
236,930
Cents
Cents
17.71
17.62
12.86
12.78
29
Notes
2
2
2
9
2
10
2
29
3
2
2
9
10
2
13(b)
3
13(b)
13(b)
13(b)
4
4
4
4
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
53
Capital and reserves attributable to owners of Evolution Mining Limited
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
53
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
54
136 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Consolidated Balance Sheet
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivables
Total current assets
Non-current assets
Inventories
Equity investments at fair value
Property, plant and equipment
Mine development and exploration
Right-of-use assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Interest bearing liabilities
Current tax liabilities
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Provisions
Deferred tax liabilities
Lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Retained earnings
Total equity
Notes
11
14
16
16
17(a)
7
9
8
3
18
15
12
20
8
12
20
21
8
19
30 June
2020
$'000
30 June
2019
$'000
3,674,652
3,093,891
372,592
149,040
202,157
-
723,789
86,517
96,195
715,438
1,939,890
31,513
15,197
66,113
2,950,863
192,327
93,453
8,881
39,121
22,000
355,782
468,609
227,386
81,705
21,132
56,243
855,075
335,164
86,207
259,909
1,467
682,747
58,923
66,185
577,053
1,672,068
-
-
36,915
2,411,144
156,828
108,248
29,957
-
-
295,033
185,185
153,376
53,819
-
-
392,380
1,210,857
687,413
2,463,795
2,406,478
13(a)
13(b)
13(c)
2,183,727
50,208
229,860
2,463,795
2,183,727
72,379
150,372
2,406,478
2,463,795
2,406,478
Evolution Mining Limited
Consolidated Balance Sheet
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivables
Total current assets
Non-current assets
Inventories
Equity investments at fair value
Property, plant and equipment
Mine development and exploration
Right-of-use assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Interest bearing liabilities
Current tax liabilities
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Provisions
Deferred tax liabilities
Lease liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Notes
11
14
16
16
17(a)
7
9
8
3
18
15
12
20
8
12
20
21
8
19
30 June
2020
$'000
30 June
2019
$'000
372,592
149,040
202,157
-
723,789
86,517
96,195
715,438
1,939,890
31,513
15,197
66,113
2,950,863
335,164
86,207
259,909
1,467
682,747
58,923
66,185
577,053
1,672,068
-
-
36,915
2,411,144
3,674,652
3,093,891
192,327
93,453
8,881
39,121
22,000
355,782
468,609
227,386
81,705
21,132
56,243
855,075
156,828
108,248
-
29,957
-
295,033
185,185
153,376
53,819
-
-
392,380
1,210,857
687,413
2,463,795
2,406,478
EQUITY
Issued capital
Reserves
Retained earnings
Capital and reserves attributable to owners of Evolution Mining Limited
Total equity
13(a)
13(b)
13(c)
2,183,727
50,208
229,860
2,463,795
2,183,727
72,379
150,372
2,406,478
2,463,795
2,406,478
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
54
Evolution Mining Limited // Annual Report 2020 137
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Evolution Mining Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Issued
capital payments
$'000
Share- Fair value
based revaluation currency Retained
reserve translation earnings
$'000
$'000
$'000
Foreign
$'000
Total
equity
$'000
Notes
Balance at 1 July 2018
2,183,727
45,640
(336)
103
59,260 2,288,394
Profit after income tax expense
Changes in fair value of Equity investments
at FVOCI
Exchange differences on translation of
foreign operations
Total comprehensive income
Transactions with owners in their
capacity as owners:
Dividends provided for or paid
Recognition of share-based payments
5
29
-
-
-
-
-
-
-
-
-
-
-
-
18,845
-
18,845
-
-
218,188
218,188
-
18,845
(103)
-
(103) 218,188
(103)
236,930
-
8,230
8,230
-
-
-
(127,076) (127,076)
-
-
8,230
-
- (127,076) (118,846)
Balance at 30 June 2019
2,183,727
53,870
18,509
-
150,372 2,406,478
Balance at 1 July 2019
2,183,727
53,870
18,509
-
150,372 2,406,478
Adjustment on adoption of AASB 16 (net of
tax)
Restated total equity at the beginning of the
financial year
-
-
-
2,183,727
53,870
18,509
Profit after income tax expense
Changes in fair value of Equity investments
at FVOCI
Exchange differences on translation of
foreign operations
Total comprehensive expense
Transactions with owners in their
capacity as owners:
Dividends provided for or paid
Recognition of share-based payments
5
29
-
-
-
-
-
-
-
-
-
-
-
(688)
(688)
149,684 2,405,790
301,552
301,552
-
19,958
-
19,958
-
-
-
-
-
19,958
(47,261)
-
(47,261) 301,552
(47,261)
274,249
-
5,132
5,132
-
-
-
(221,376) (221,376)
-
-
5,132
-
- (221,376) (216,244)
Net cash inflow from operating activities
6(a)
1,005,324
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for transaction and integration costs
Other income
Interest received
Interest paid
Income taxes paid
Cash flows from investing activities
Payments for property, plant and equipment
Payments for mine development and exploration
Proceeds from sale of property, plant and equipment
Proceeds from sale of subsidiary
Proceeds from contingent consideration
Payments for transaction and integration costs
Payments for stamp duty related to business disposal
Payments for equity investments
Transfer from term deposits
Payments for exploration asset acquisitions
Payments for acquisition of subsidiary, net of cash acquired
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from Term Loan Facility
Repayment of interest bearing liabilities
Lease liability payments (AASB 16)
Dividends paid
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
30 June
2020
$'000
30 June
2019
$'000
Notes
1,967,563
(846,182)
(35,052)
2,428
4,440
(11,568)
(76,305)
(124,386)
(342,814)
317
1,237
-
-
-
-
(1,500)
(2,000)
(534,831)
(1,003,977)
570,000
(300,000)
(12,718)
(221,376)
35,906
37,253
335,164
175
372,592
1,512,675
(794,648)
-
574
7,057
(18,243)
(91,179)
616,236
(105,415)
(218,623)
142
700
-
(1,440)
(15)
(41,803)
(15,750)
17
-
(382,187)
-
-
(95,000)
(127,111)
(222,111)
11,938
323,226
-
335,164
26
12
12
8
5
11
11
Balance at 30 June 2020
2,183,727
59,002
38,467
(47,261) 229,860 2,463,795
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
55
56
138 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for transaction and integration costs
Other income
Interest received
Interest paid
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for mine development and exploration
Proceeds from sale of property, plant and equipment
Proceeds from sale of subsidiary
Proceeds from contingent consideration
Payments for transaction and integration costs
Payments for stamp duty related to business disposal
Payments for equity investments
Transfer from term deposits
Payments for exploration asset acquisitions
Payments for acquisition of subsidiary, net of cash acquired
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from Term Loan Facility
Repayment of interest bearing liabilities
Lease liability payments (AASB 16)
Dividends paid
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
30 June
2020
$'000
30 June
2019
$'000
Notes
1,967,563
(846,182)
(35,052)
2,428
4,440
(11,568)
(76,305)
1,005,324
(124,386)
(342,814)
317
-
1,237
-
-
(1,500)
-
(2,000)
(534,831)
(1,003,977)
570,000
(300,000)
(12,718)
(221,376)
35,906
37,253
335,164
175
372,592
1,512,675
(794,648)
-
574
7,057
(18,243)
(91,179)
616,236
(105,415)
(218,623)
142
700
-
(1,440)
(15)
(41,803)
17
(15,750)
-
(382,187)
-
(95,000)
-
(127,111)
(222,111)
11,938
323,226
-
335,164
6(a)
26
12
12
8
5
11
11
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
56
Evolution Mining Limited // Annual Report 2020 139
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Performance by Mine
Business Performance
1
2 Revenue and Expenses
3
Income tax expense
4 Earnings per share
5 Dividends
6 Other cash flow information
Resource Assets and Liabilities
7 Property, plant and equipment
8 Leases
9 Mine development and exploration
10
Impairment loss on assets - Mt Carlton
Interest bearing liabilities
Capital Structure and Financing
11 Cash and cash equivalents
12
13 Equity and reserves
14 Trade and other receivables
15 Trade and other payables
16
17 Financial assets and financial liabilities
18 Other non-current assets
19 Other non-current liabilities
20 Provisions
21 Deferred tax balances
Inventories
Risk and unrecognised items
22 Financial risk management
23 Contingent liabilities and contingent assets
24 Commitments
25 Events occurring after the reporting period
Other Disclosures
26 Business Combinations
27 Ernest Henry Operation
28 Related party transactions
29 Share-based payments
30 Remuneration of auditors
31 Deed of cross guarantee
32
Interests in other entities
33 Parent entity financial information
34 Summary of significant accounting policies
35 New accounting standards
140 Evolution Mining Limited // Annual Report 2020
141
141
142
145
145
146
147
148
148
149
151
154
156
156
156
157
158
159
159
160
161
161
162
164
166
166
169
169
170
171
171
172
173
174
176
176
177
178
179
180
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
Business Performance
This section highlights the key indicators on how the Group performed during the year.
1 Performance by Mine
(a) Description of segments
the allocation of resources.
and performance assessment.
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive
Chairman and the Senior Leadership Team (the chief business decision makers) in assessing performance and in determining
The Group’s operational mine sites, Exploration and Corporate are each treated as individual operating segments. Management
monitors the operating results of its business units separately for the purpose of making decisions about resource allocation
Corporate includes share-based payment expenses and other corporate expenditures supporting the business during the year.
Segment performance is evaluated based on earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA
also includes financial items not considered to be contributing to underlying profit such as fair value amortisation expenses and
transaction and integration costs. In FY20 non-recurring items such as impairment losses and gain on sale of subsidiary are
The Group’s operations are conducted in the mining industry in Australia and Canada.
also included.
(b) Segment information
The segment information for the reportable segments for the year ended 30 June 2020 is as follows:
Cowal Mungari Carlton Rawdon
Cracow
$'000
$'000
$'000
$'000
$'000
Henry RedLake
$'000
$'000
Mt
Mt
Ernest
Explo-
ration
$'000
Corp-
orate
$'000
Total
$'000
Revenue
EBITDA
Sustaining Capital
Major Capital
Total Capital
618,630
297,401
167,383
195,156
195,887
391,017
369,637 154,092
11,920
169,310
181,230
12,480
14,190
26,670
75,584
16,100
65,380
81,480
79,210 111,398 270,999
9,960
12,090
22,050
13,310
12,350
25,660
11,200
-
11,200
76,389
28,004
6,600
14,270
20,870
(23,719) (35,773) 1,029,432
-
1,941,863
1,810
-
1,810
83,380
287,590
370,970
The segment information for the reportable segments for the year ended 30 June 2019 is as follows:
Cowal
Mungari
Carlton
Rawdon
Cracow
$'000
$'000
$'000
$'000
$'000
Mt
Mt
Ernest
Henry
$'000
Explo-
ration
$'000
Corp-
orate
$'000
Total
$'000
Revenue
EBITDA
Sustaining Capital
Major Capital
Total Capital
435,556 212,881 198,532 166,954 144,475 351,426
- 1,509,824
62,077 231,619
(7,190) (36,401) 730,262
230,674
44,000
100,734
144,734
75,234 120,337
11,960
16,153
28,113
8,039
27,537
35,576
53,912
4,446
23,921
28,367
15,158
12,052
27,210
9,636
-
9,636
1,433
-
1,433
94,672
180,397
275,069
-
-
-
-
-
-
-
-
58
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
Business Performance
This section highlights the key indicators on how the Group performed during the year.
1 Performance by Mine
(a) Description of segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive
Chairman and the Senior Leadership Team (the chief business decision makers) in assessing performance and in determining
the allocation of resources.
The Group’s operational mine sites, Exploration and Corporate are each treated as individual operating segments. Management
monitors the operating results of its business units separately for the purpose of making decisions about resource allocation
and performance assessment.
Corporate includes share-based payment expenses and other corporate expenditures supporting the business during the year.
Segment performance is evaluated based on earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA
also includes financial items not considered to be contributing to underlying profit such as fair value amortisation expenses and
transaction and integration costs. In FY20 non-recurring items such as impairment losses and gain on sale of subsidiary are
also included.
The Group’s operations are conducted in the mining industry in Australia and Canada.
(b) Segment information
The segment information for the reportable segments for the year ended 30 June 2020 is as follows:
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Mt
Cowal Mungari Carlton Rawdon
$'000
$'000
$'000
$'000
Mt
Cracow
$'000
Ernest
Henry RedLake
$'000
$'000
Explo-
ration
$'000
Corp-
orate
$'000
Total
$'000
Revenue
EBITDA
Sustaining Capital
Major Capital
Total Capital
618,630
297,401
369,637 154,092
12,480
14,190
26,670
11,920
169,310
181,230
167,383
75,584
16,100
65,380
81,480
195,156
195,887
391,017
79,210 111,398 270,999
11,200
13,310
-
12,350
11,200
25,660
9,960
12,090
22,050
76,389
28,004
6,600
14,270
20,870
-
-
1,941,863
(23,719) (35,773) 1,029,432
83,380
1,810
287,590
-
370,970
1,810
-
-
-
The segment information for the reportable segments for the year ended 30 June 2019 is as follows:
Cowal
$'000
Mungari
$'000
Mt
Carlton
$'000
Mt
Rawdon
$'000
Cracow
$'000
Ernest
Henry
$'000
Explo-
ration
$'000
Corp-
orate
$'000
Total
$'000
Revenue
EBITDA
Sustaining Capital
Major Capital
Total Capital
435,556 212,881 198,532 166,954 144,475 351,426
62,077 231,619
230,674
9,636
15,158
44,000
-
12,052
100,734
9,636
27,210
144,734
75,234 120,337
8,039
11,960
27,537
16,153
35,576
28,113
53,912
4,446
23,921
28,367
-
- 1,509,824
(7,190) (36,401) 730,262
94,672
1,433
180,397
-
275,069
1,433
-
-
-
58
Evolution Mining Limited // Annual Report 2020 141
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
1 Performance by Mine (continued)
(c) Segment reconciliation
Reconciliation of profit before income tax expense
EBITDA
Depreciation and amortisation
Impairment loss on assets - Mt Carlton
Fair value amortisation expense
Interest income
Transaction and integration costs
Finance costs
Gain on sale of subsidiary
Profit before income tax expense
Recognition and measurement
30 June
2020
$'000
30 June
2019
$'000
1,029,432
(417,251)
(144,346)
(17,988)
3,540
(35,053)
(21,261)
11,517
408,590
730,262
(374,909)
-
(23,594)
7,134
(1,455)
(22,612)
-
314,826
Operating segments are reported in a manner consistent with the internal reporting provided to the chief business decision
maker.
The Board of Evolution Mining Limited has appointed a strategic steering committee which assesses the financial performance
and position of the Group, and makes strategic decisions. The steering committee, which has been identified as being the chief
business decision maker, consists of the Executive Chairman and the Senior Leadership Team (KMP).
2 Revenue and Expenses
Revenue from contracts with customers
Gold sales
Silver sales
Copper sales
Disaggregation of revenue from contracts with customers
Mt
Cowal Mungari Carlton Rawdon
$'000
$'000
$'000
$'000
Mt
30 June
2020
$'000
30 June
2019
$'000
1,738,131
15,833
187,899
1,941,863
1,307,532
14,397
187,895
1,509,824
Cracow
$'000
Ernest
Henry RedLake
$'000
$'000
Total
$'000
30 June 2020
Gold sales
Silver sales
Copper sales
Total Revenue from contracts with
customers
614,199
4,431
-
297,091
310
-
146,657
6,592
14,134
192,865
2,291
-
194,988
899
215,998
1,254
- 173,765
76,333
56
-
1,738,131
15,833
187,899
618,630
297,401
167,383
195,156
195,887
391,017
76,389
1,941,863
Accounting estimates and judgements
59
60
142 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
2 Revenue and Expenses (continued)
Disaggregation of revenue from contracts with customers (continued)
Cowal
Mungari
Carlton
Rawdon
Cracow
$'000
$'000
$'000
$'000
$'000
Mt
Mt
Ernest
Henry
$'000
Total
$'000
30 June 2019
Gold sales
Silver sales
Copper sales
Total Revenue from contracts with customers
435,556 212,881 198,532 166,954 144,475 351,426 1,509,824
430,304 212,556 186,885 164,095 143,674 170,018 1,307,532
5,252
-
325
-
4,143
7,504
2,859
-
801
1,017
- 180,391
14,397
187,895
Assets related to contracts with customers
The Group has recognised the following revenue-related contract assets:
30 June
2020
$'000
49,478
49,478
30 June
2019
$'000
47,574
47,574
Ernest Henry silver and copper accrued revenue (i)
(i) The Group's contract asset relates to silver and copper sales from April to June 2020 production for Ernest Henry. These
amounts are to be settled in July to September 2020.
Recognition and measurement - revenue from contracts with customers
The Group generates sales revenue primarily from the performance obligation to deliver goods such as gold and concentrate to
the buyer. Revenue from contracts with customers is recognised when control of the goods are transferred to the customers at
an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
For gold doré sales, revenue is recognised at the point where the doré leaves the gold room at the Group's mine site to the
buyer or where gold metal credits are transferred to the customer's account. In relation to the Group's economic interest in
Ernest Henry (note 23(a)) gold sales are recognised when the metal is received and sold by Evolution.
For concentrate sales, revenue is recognised generally upon receipt of the bill of lading when the commodity is delivered for
shipment. Copper and silver in concentrates sales in relation to the Group's economic interest in Ernest Henry (note 23(a)) are
recognised as accrued revenue in the same month as their production is reported as the production is in the control of the
customer. The transaction price for each contract is allocated entirely to this performance obligation.
The terms of metal in concentrate sales contracts with third parties, contain provisional pricing arrangements whereby the final
selling price for metal in concentrate is based on prevailing average monthly prices on a specified future period after shipment
to the customer (quotation period). Adjustments to the sales price occur based on movements in quoted marked prices up to
the final settlement price specified in the sales contracts. The period between provisional invoicing and final settlement is
typically one to three months. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total
consideration receivable.
Timing of Revenue Recognition - Ernest Henry Operation
The Group applied significant judgement as to when gold, silver and copper revenue should be recognised from the Ernest
Henry Mine. Gold sales are recognised by the Group when the bullion is delivered to Evolution’s gold account and sold in the
third month after the month of production. Copper and silver sales are recognised as accrued revenue by the Group in the
same month as their production is reported by the operator Glencore. Copper and silver is sold in accordance with the Offtake
Agreement with Glencore where the metal is sold immediately following treatment and refining and is paid for in cash.
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
2 Revenue and Expenses (continued)
Disaggregation of revenue from contracts with customers (continued)
Cowal
$'000
Mungari
$'000
Mt
Carlton
$'000
Mt
Rawdon
$'000
Cracow
$'000
Ernest
Henry
$'000
Total
$'000
30 June 2019
Gold sales
Silver sales
Copper sales
Total Revenue from contracts with customers
430,304 212,556 186,885 164,095 143,674 170,018 1,307,532
14,397
2,859
187,895
-
435,556 212,881 198,532 166,954 144,475 351,426 1,509,824
1,017
- 180,391
5,252
-
4,143
7,504
325
-
801
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Assets related to contracts with customers
The Group has recognised the following revenue-related contract assets:
Ernest Henry silver and copper accrued revenue (i)
30 June
2020
$'000
49,478
49,478
30 June
2019
$'000
47,574
47,574
(i) The Group's contract asset relates to silver and copper sales from April to June 2020 production for Ernest Henry. These
amounts are to be settled in July to September 2020.
Recognition and measurement - revenue from contracts with customers
The Group generates sales revenue primarily from the performance obligation to deliver goods such as gold and concentrate to
the buyer. Revenue from contracts with customers is recognised when control of the goods are transferred to the customers at
an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
For gold doré sales, revenue is recognised at the point where the doré leaves the gold room at the Group's mine site to the
buyer or where gold metal credits are transferred to the customer's account. In relation to the Group's economic interest in
Ernest Henry (note 23(a)) gold sales are recognised when the metal is received and sold by Evolution.
For concentrate sales, revenue is recognised generally upon receipt of the bill of lading when the commodity is delivered for
shipment. Copper and silver in concentrates sales in relation to the Group's economic interest in Ernest Henry (note 23(a)) are
recognised as accrued revenue in the same month as their production is reported as the production is in the control of the
customer. The transaction price for each contract is allocated entirely to this performance obligation.
The terms of metal in concentrate sales contracts with third parties, contain provisional pricing arrangements whereby the final
selling price for metal in concentrate is based on prevailing average monthly prices on a specified future period after shipment
to the customer (quotation period). Adjustments to the sales price occur based on movements in quoted marked prices up to
the final settlement price specified in the sales contracts. The period between provisional invoicing and final settlement is
typically one to three months. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total
consideration receivable.
Accounting estimates and judgements
Timing of Revenue Recognition - Ernest Henry Operation
The Group applied significant judgement as to when gold, silver and copper revenue should be recognised from the Ernest
Henry Mine. Gold sales are recognised by the Group when the bullion is delivered to Evolution’s gold account and sold in the
third month after the month of production. Copper and silver sales are recognised as accrued revenue by the Group in the
same month as their production is reported by the operator Glencore. Copper and silver is sold in accordance with the Offtake
Agreement with Glencore where the metal is sold immediately following treatment and refining and is paid for in cash.
60
Evolution Mining Limited // Annual Report 2020 143
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
2 Revenue and Expenses (continued)
Cost of sales
Mine operating costs
Royalty and other selling costs
Depreciation and amortisation expense
Fair value amortisation
Depreciation and amortisation expense - Right-of-use assets
Corporate and other administration costs
Depreciation and amortisation expense
Corporate overheads
Depreciation and amortisation expense - Right-of-use assets
Transaction and integration costs
Contractor, consultants and advisory expense
Corporate and administration expense
Stamp duty on business combinations
Finance costs
Amortisation of debt establishment costs
Unwinding of discount on provisions
Interest expense unwinding - lease liability
Interest expense
Depreciation and amortisation
Cost of sales (excluding Ernest Henry)
Cost of sales (Ernest Henry)
Corporate and other administration costs
Right-of-use assets - AASB 16
30 June
2020
$'000
30 June
2019
$'000
777,584
75,353
404,029
17,988
10,396
1,285,350
1,465
30,033
1,361
32,859
15,161
19,892
-
35,053
6,734
1,812
1,147
11,568
21,261
277,973
126,056
1,465
11,757
417,251
672,987
62,984
373,481
23,594
-
1,133,046
1,428
26,091
-
27,519
1,209
231
15
1,455
2,468
1,901
-
18,243
22,612
243,578
129,903
1,428
-
374,909
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
3
Income tax expense
(a) Income tax expense
Current tax on profits for the period
Deferred tax
Adjustments for current tax of prior periods
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
Tax at the Australian tax rate of 30%
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Derecognise deferred tax liability on sale of subsidiary
Adjustments for current tax of prior periods
Share-based payments
Gain on sale of subsidiary
Previously unrecognised tax losses
Other
Income tax expense
4 Earnings per share
(a) Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
(b) Earnings used in calculating earnings per share
30 June
2020
$'000
89,548
18,358
(868)
107,038
30 June
2020
$'000
408,590
122,577
(5,347)
(868)
3,207
(3,455)
(6,769)
(2,307)
107,038
30 June
2019
$'000
52,092
45,785
(1,239)
96,638
30 June
2019
$'000
314,826
94,448
(1,239)
3,265
-
-
-
164
96,638
30 June
2020
Cents
17.71
17.62
30 June
2019
Cents
12.86
12.78
30 June
2020
$'000
30 June
2019
$'000
Earnings per share used in the calculation of basic and diluted earnings per share:
Profit after income tax attributable to the owners of the parent
301,552
218,188
61
62
144 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
3
Income tax expense
(a) Income tax expense
Current tax on profits for the period
Deferred tax
Adjustments for current tax of prior periods
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
Tax at the Australian tax rate of 30%
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Derecognise deferred tax liability on sale of subsidiary
Adjustments for current tax of prior periods
Share-based payments
Gain on sale of subsidiary
Previously unrecognised tax losses
Other
Income tax expense
4 Earnings per share
(a) Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
(b) Earnings used in calculating earnings per share
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
30 June
2020
$'000
89,548
18,358
(868)
107,038
30 June
2020
$'000
408,590
122,577
(5,347)
(868)
3,207
(3,455)
(6,769)
(2,307)
107,038
30 June
2019
$'000
52,092
45,785
(1,239)
96,638
30 June
2019
$'000
314,826
94,448
-
(1,239)
3,265
-
-
164
96,638
30 June
2020
Cents
17.71
17.62
30 June
2019
Cents
12.86
12.78
30 June
2020
$'000
30 June
2019
$'000
Earnings per share used in the calculation of basic and diluted earnings per share:
Profit after income tax attributable to the owners of the parent
301,552
218,188
62
Evolution Mining Limited // Annual Report 2020 145
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
4 Earnings per share (continued)
(c) Weighted average number of shares used as the denominator
2020
Number
2019
Number
Weighted average number of ordinary shares used in calculating the basic earnings per
share
Effect of dilutive securities (i)
1,702,328,240
8,718,718
1,696,474,437
10,320,172
Adjusted weighted average number of ordinary shares used in calculating the diluted
earnings per share
1,711,046,958 1,706,794,609
(i)
Performance rights and share rights have been included in the determination of diluted earnings per share.
5 Dividends
(a) Ordinary shares
Interim dividend - 2020
Interim dividend for the year ended 30 June 2020 of 7.0 cents per share fully franked (30
June 2019: 3.5 cents per share fully franked) per fully paid share paid on 27 March 2020
Final dividend - 2019
Final dividend for the year ended 30 June 2019 of 6.0 cents per share fully franked (30 June
2018: 4 cents per share fully franked) paid on 27 September 2019
(b) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since period end the Directors have recommended the
payment of a fully franked final dividend of 9.0 cents per fully paid ordinary share (30 June
2019: 6.0 cents fully franked). The aggregate amount of the proposed dividend expected to
be paid on 25 September 2020 out of retained earnings at 30 June 2020, but not recognised
as a liability at period end, is
30 June
2020
$'000
30 June
2019
$'000
119,552
59,321
101,824
221,376
67,755
127,076
30 June
2020
$'000
30 June
2019
$'000
153,404
101,824
(c) Franked dividends
The final dividend recommended after 30 June 2020 will be fully franked out of the franking credits balance at the end of the
financial year and the franking credits expected to arise from the payment of income tax during the year ending 30 June 2021.
The franking account balance at the end of the financial year is $20.7 million (30 June 2019: $38.1 million).
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
6 Other cash flow information
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
Timing difference on settlement of Ernest Henry sales/costs
Profit after income tax
Transaction and integration costs
Fair value amortisation and expense
Depreciation and amortisation
Unwind of discount on provisions
Amortisation of debt establishment costs
Share-based payments expense
Gain on sale of subsidiary
Exploration and evaluation costs expensed
Impairment loss on assets
Income tax expense
Tax Payments
Change in operating assets and liabilities:
Increase in operating receivables
Increase in inventories
Increase in operating payables
(Decrease)/Increase in borrowing costs
(Decrease)/Increase in other provisions
Net cash inflow from operating activities
(b) Net (debt)/cash reconciliation
Net debt
Cash and cash equivalents
Bank loans
Net (debt)/cash
Year ended 30 June 2019
Net debt at the beginning of the year
Cash flows
Net cash as at end of the year
Year ended 30 June 2020
Net cash as at 1 July 2019
Cash flows
Net debt as at 30 June 2020
30 June
2020
$'000
301,552
-
17,988
417,251
2,959
6,734
6,933
(11,517)
23,719
144,346
(1,011)
107,038
(76,305)
(2,343)
27,529
14,314
(8,106)
34,243
1,005,324
30 June
2019
$'000
218,188
1,455
23,594
373,551
1,901
2,468
8,906
7,190
-
-
2,091
96,638
(91,179)
(14,991)
(13,039)
1,967
-
(2,504)
616,236
30 June
2020
$'000
30 June
2019
$'000
372,592
(570,000)
(197,408)
335,164
(300,000)
35,164
Cash and
Bank loans
Bank loans
cash due within 1 due after 1
equivalent
$'000
year
$'000
year
$'000
Total
$'000
323,226
11,938
335,164
(95,000)
(15,000)
(110,000)
(300,000)
110,000
(190,000)
(71,774)
106,938
35,164
335,164
37,428
372,592
(110,000)
15,000
(95,000)
(190,000)
(285,000)
(475,000)
35,164
(232,572)
(197,408)
This section sets out an analysis of net debt and the movements in net (debt)/cash for each of the periods presented.
63
64
146 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
6 Other cash flow information
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
Profit after income tax
Transaction and integration costs
Fair value amortisation and expense
Depreciation and amortisation
Unwind of discount on provisions
Amortisation of debt establishment costs
Share-based payments expense
Gain on sale of subsidiary
Exploration and evaluation costs expensed
Impairment loss on assets
Timing difference on settlement of Ernest Henry sales/costs
Income tax expense
Tax Payments
Change in operating assets and liabilities:
Increase in operating receivables
Increase in inventories
Increase in operating payables
(Decrease)/Increase in borrowing costs
(Decrease)/Increase in other provisions
Net cash inflow from operating activities
(b) Net (debt)/cash reconciliation
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
30 June
2020
$'000
301,552
-
17,988
417,251
2,959
6,734
6,933
(11,517)
23,719
144,346
(1,011)
107,038
(76,305)
(2,343)
27,529
14,314
(8,106)
34,243
1,005,324
30 June
2019
$'000
218,188
1,455
23,594
373,551
1,901
2,468
8,906
-
7,190
-
2,091
96,638
(91,179)
(14,991)
(13,039)
1,967
-
(2,504)
616,236
This section sets out an analysis of net debt and the movements in net (debt)/cash for each of the periods presented.
Net debt
Cash and cash equivalents
Bank loans
Net (debt)/cash
Year ended 30 June 2019
Net debt at the beginning of the year
Cash flows
Net cash as at end of the year
Year ended 30 June 2020
Net cash as at 1 July 2019
Cash flows
Net debt as at 30 June 2020
30 June
2020
$'000
30 June
2019
$'000
372,592
(570,000)
(197,408)
335,164
(300,000)
35,164
Cash and
Bank loans
Bank loans
cash due within 1 due after 1
year
year
$'000
$'000
equivalent
$'000
Total
$'000
323,226
11,938
335,164
(95,000)
(15,000)
(110,000)
(300,000)
110,000
(190,000)
(71,774)
106,938
35,164
335,164
37,428
372,592
(110,000)
15,000
(95,000)
(190,000)
(285,000)
(475,000)
35,164
(232,572)
(197,408)
64
Evolution Mining Limited // Annual Report 2020 147
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
148 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
7 Property, plant and equipment (continued)
Recognition and measurement
Cost
cost.
Plant and equipment is carried at cost less accumulated depreciation and impairment. Costs equals the fair value of the item at
acquisition date and includes expenditure that is directly attributable to the acquisition of the items. Freehold land is carried at
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and
maintenance are charged to the Statement of Profit or Loss during the reporting period in which they are incurred.
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected
to bring no future economic benefits. Any gain or loss from derecognising the asset is included in the statement of profit or loss
Depreciation of plant and equipment is calculated using either the straight line or units of production method to allocate their
cost, net of their residual values, over their estimated useful lives. The rates vary between 10% and 33% per annum. Freehold
in the period the item is derecognised.
Depreciation
land is not depreciated.
Accounting estimates and judgements
Estimation of remaining useful lives, residual values and depreciation methods involve significant judgement and are reviewed
annually for all major items of plant and equipment. Any changes are accounted for prospectively from the date of
reassessment to the end of the revised useful life.
8 Leases
This note provides information for leases where the Group is a lessee.
The consolidated balance sheet shows the following amounts relating to leases:
30-Jun
2020
$'000
26,265
5,223
25
31,513
30-Jun
2020
$'000
22,000
21,132
43,132
Right-of-use assets (i)
Plant and Machinery
Property
Office Equipment
Lease Liabilities
Current
Non-current
(i)
In the previous period, the Group only recognised lease assets and lease liabilities in relation to leases that were
classified as ‘finance leases’ under AASB 117 Leases. The assets were presented in property, plant and
equipment and the liabilities as part of the Group’s borrowings. For adjustments recognised on adoption of AASB
16 on 1 July 2019, please refer to note 35.
66
65 Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) Freehold land $'000 Plant and equipment $'000 Total $'000 Resource Assets and Liabilities This section provides information that is relevant to understanding the composition and management of the Group's assets and liabilities. 7 Property, plant and equipment At 1 July 2019 Cost 17,529 559,524 577,053 Year ended 30 June 2020 Carrying amount at the beginning of the period 17,529 559,524 577,053 Additions - 124,386 124,386 Amounts acquired in a business combination 3,266 204,161 207,427 Depreciation relating to fair value uplift on business combination - (3,042) (3,042) Disposals (59) (258) (317) Depreciation - (84,879) (84,879) Impairment - (40,531) (40,531) Exchange differences taken to reserve (244) (29,070) (29,314) Divestment of Cracow (2,693) (32,652) (35,345) Carrying amount at the end of the year 17,799 697,639 715,438 At 30 June 2020 Cost 17,799 2,411,653 2,429,452 Accumulated depreciation - (1,714,014) (1,714,014) Net carrying amount 17,799 697,639 715,438 Included in above Assets in the course of construction - 116,338 116,338 At 1 July 2018 Cost 14,261 1,590,847 1,605,108 Accumulated depreciation - (1,033,333) (1,033,333) Net carrying amount 14,261 557,514 571,775 Year ended 30 June 2019 Carrying amount at the beginning of the period 14,261 557,514 571,775 Additions 3,268 102,147 105,415 Depreciation relating to fair value uplift on business combination - (2,460) (2,460) Depreciation - (97,530) (97,530) Disposals - (147) (147) Carrying amount at the end of the year 17,529 559,524 577,053 At 30 June 2019 Cost 17,529 1,682,343 1,699,872 Accumulated depreciation - (1,122,819) (1,122,819) Net carrying amount 17,529 559,524 577,053 Included in above Assets in the course of construction - 87,926 87,926 Freehold land $'000 Plant and equipment $'000 Total $'000 Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
7 Property, plant and equipment (continued)
Recognition and measurement
Cost
Plant and equipment is carried at cost less accumulated depreciation and impairment. Costs equals the fair value of the item at
acquisition date and includes expenditure that is directly attributable to the acquisition of the items. Freehold land is carried at
cost.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and
maintenance are charged to the Statement of Profit or Loss during the reporting period in which they are incurred.
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected
to bring no future economic benefits. Any gain or loss from derecognising the asset is included in the statement of profit or loss
in the period the item is derecognised.
Depreciation
Depreciation of plant and equipment is calculated using either the straight line or units of production method to allocate their
cost, net of their residual values, over their estimated useful lives. The rates vary between 10% and 33% per annum. Freehold
land is not depreciated.
Accounting estimates and judgements
Estimation of remaining useful lives, residual values and depreciation methods involve significant judgement and are reviewed
annually for all major items of plant and equipment. Any changes are accounted for prospectively from the date of
reassessment to the end of the revised useful life.
8 Leases
This note provides information for leases where the Group is a lessee.
The consolidated balance sheet shows the following amounts relating to leases:
Right-of-use assets (i)
Plant and Machinery
Property
Office Equipment
Lease Liabilities
Current
Non-current
30-Jun
2020
$'000
26,265
5,223
25
31,513
30-Jun
2020
$'000
22,000
21,132
43,132
(i)
In the previous period, the Group only recognised lease assets and lease liabilities in relation to leases that were
classified as ‘finance leases’ under AASB 117 Leases. The assets were presented in property, plant and
equipment and the liabilities as part of the Group’s borrowings. For adjustments recognised on adoption of AASB
16 on 1 July 2019, please refer to note 35.
66
Evolution Mining Limited // Annual Report 2020 149
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
8 Leases (continued)
The consolidated statement of profit or loss and other comprehensive income shows the following amounts relating to leases:
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
9 Mine development and exploration
Depreciation charge of right-of-use assets
Plant and Machinery
Property
Office Equipment
Other Items
Interest expense
Expense relating to short-term leases
The total cash outflow for leases in 2019 was $12.7 million.
30-Jun
2020
$'000
10,171
1,550
36
11,757
30-Jun
2020
$'000
1,147
4,236
5,383
The tables below analyse the Group's lease liabilities into relevant maturity groupings based on their contractual maturities.
At 30 June 2020
Lease liabilities
Less than Between 1
and 2 years
$'000
1 year
$'000
Between 2
and 5 years
$'000
Over 5
years
$'000
Total Carrying
contractual amount
cash flows
$'000
$'000
22,000
11,023
4,935
5,174
43,132
43,132
At 1 July 2019
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2020
Carrying amount at the beginning of the period
Additions
Amounts acquired in business combination
Transfers to Mine Development and Exploration
Amortisation relating to fair value uplift on business combinations
Reclassifications
Write-off
Amortisation
Impairment
Exchange differences taken to reserve
Amortisation recognised in inventory
Divestment of Cracow
Carrying amount at the end of the year
At 30 June 2020
Cost
Accumulated amortisation
Net carrying amount
At 1 July 2018
Cost
Accumulated depreciation
Net carrying amount
Amortisation relating to fair value uplift on business combinations
Year ended 30 June 2019
Carrying amount at the beginning of the period
Additions
Reclassifications
Write-off
Amortisation
Amortisation recognised in inventory
Carrying amount at the end of the year
At 30 June 2019
Cost
Accumulated depreciation
Net carrying amount
Producing
Exploration
mines and evaluation
$'000
$'000
Total
$'000
3,253,088
(1,793,430)
1,459,658
212,410
-
212,410
3,465,498
(1,793,430)
1,672,068
1,459,658
262,006
322,133
8,172
(14,945)
-
(985)
(282,779)
(95,500)
(15,511)
(1,150)
(48,335)
1,592,764
212,410
82,808
97,200
(8,172)
(2,900)
(23,719)
(2,618)
(7,883)
347,126
-
-
-
-
1,672,068
344,814
419,333
-
(14,945)
(2,900)
(24,704)
(282,779)
(95,500)
(18,129)
(1,150)
(56,218)
1,939,890
4,384,819
(2,792,055)
1,592,764
347,126
-
347,126
4,731,945
(2,792,055)
1,939,890
Producing
Exploration
mines and evaluation
$'000
$'000
Total
$'000
3,085,507
(1,494,056)
1,591,451
152,301
-
152,301
3,237,808
(1,494,056)
1,743,752
1,743,752
236,407
(21,134)
(1,526)
(7,190)
(1,358)
(276,883)
1,672,068
1,591,451
169,108
(21,134)
(1,526)
(1,358)
(276,883)
1,459,658
-
(7,190)
152,301
67,299
212,410
-
-
-
-
-
3,253,088
(1,793,430)
1,459,658
212,410
212,410
3,465,498
(1,793,430)
1,672,068
67
68
150 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
9 Mine development and exploration
At 1 July 2019
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2020
Carrying amount at the beginning of the period
Additions
Amounts acquired in business combination
Transfers to Mine Development and Exploration
Amortisation relating to fair value uplift on business combinations
Reclassifications
Write-off
Amortisation
Impairment
Exchange differences taken to reserve
Amortisation recognised in inventory
Divestment of Cracow
Carrying amount at the end of the year
At 30 June 2020
Cost
Accumulated amortisation
Net carrying amount
At 1 July 2018
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2019
Carrying amount at the beginning of the period
Additions
Amortisation relating to fair value uplift on business combinations
Reclassifications
Write-off
Amortisation recognised in inventory
Amortisation
Carrying amount at the end of the year
At 30 June 2019
Cost
Accumulated depreciation
Net carrying amount
Producing
Exploration
mines and evaluation
$'000
$'000
Total
$'000
3,253,088
(1,793,430)
1,459,658
212,410
-
212,410
3,465,498
(1,793,430)
1,672,068
1,459,658
262,006
322,133
8,172
(14,945)
-
(985)
(282,779)
(95,500)
(15,511)
(1,150)
(48,335)
1,592,764
212,410
82,808
97,200
(8,172)
-
(2,900)
(23,719)
-
-
(2,618)
-
(7,883)
347,126
1,672,068
344,814
419,333
-
(14,945)
(2,900)
(24,704)
(282,779)
(95,500)
(18,129)
(1,150)
(56,218)
1,939,890
4,384,819
(2,792,055)
1,592,764
347,126
-
347,126
4,731,945
(2,792,055)
1,939,890
Producing
Exploration
mines and evaluation
$'000
$'000
Total
$'000
3,085,507
(1,494,056)
1,591,451
152,301
-
152,301
3,237,808
(1,494,056)
1,743,752
1,591,451
169,108
(21,134)
(1,526)
-
(1,358)
(276,883)
1,459,658
152,301
67,299
-
-
(7,190)
-
-
212,410
1,743,752
236,407
(21,134)
(1,526)
(7,190)
(1,358)
(276,883)
1,672,068
3,253,088
(1,793,430)
1,459,658
212,410
-
212,410
3,465,498
(1,793,430)
1,672,068
68
Evolution Mining Limited // Annual Report 2020 151
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
9 Mine development and exploration (continued)
9 Mine development and exploration (continued)
Recognition and measurement
Mines under construction
This expenditure includes net direct costs of construction, borrowing costs capitalised during construction and an appropriate
allocation of attributable overheads. Expenditure is net of proceeds from the sale of ore extracted during the construction phase
to the extent that this ore extracted is considered material to the development of the mine.
After production commences, all aggregated costs of construction are transferred to producing mines or plant and equipment as
appropriate.
Producing mines - deferred stripping
Stripping (waste removal) costs are incurred both during the development phase and production phase of operations. Stripping
costs incurred during the development phase are capitalised as mines under construction. Stripping costs incurred during the
production phase are generally considered to create two benefits:
•
•
the production of ore inventory in the period - accounted for as a part of the cost of producing those ore inventories; or
improved access to the ore to be mined in the future - recognised under producing mines if the following criteria are
met:
•
Future economic benefits (being improved access to the ore body) associated with the stripping activity are
probable;
The component of the ore body for which access has been improved can be accurately identified; and
The costs associated with the stripping activity associated with that component can be reliably measured.
•
•
The amount of stripping costs deferred is based on the life of component ratio which is obtained by dividing the amount of
waste tonnes mined by the quantity of gold ounces contained in the ore for each component of the mine. Stripping costs
incurred in the period are deferred to the extent that the actual current period waste to contained gold ounce ratio exceeds the
life of component expected 'life of component' ratio.
A component is defined as a specific volume of the ore body that is made more accessible by the stripping activity and is
determined based on mine plans. An identified component of the ore body is typically a subset of the total ore body of the mine.
Each mine may have several components, which are identified based on the mine plan.
The deferred stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the
stripping activity that improves access to the ore within an identified component, plus an allocation of directly attributable
overhead costs.
The deferred stripping asset is depreciated over the expected useful life of the identified component of the ore body that is made
more accessible by the activity, on a units of production basis. Economically recoverable reserves are used to determine the
expected useful life of the identified component of the ore body.
Exploration and evaluation
Exploration and evaluation expenditure related to areas of interest is capitalised and carried forward to the extent that rights to
tenure of the area of interest are current and either:
•
Costs are expected to be recouped through the successful development and exploitation of the area of interest or
alternatively by sale; or
• Where activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to,
the area of interest are continuing.
Such expenditure consists of an accumulation of acquisition costs and direct exploration and evaluation costs incurred, together
with an appropriate portion of directly related overhead expenditure.
The carrying value of capitalised exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying value may exceed its recoverable amount. Any amounts in excess of the recoverable amount are
derecognised in the financial year it is determined.
69
70
152 Evolution Mining Limited // Annual Report 2020
Recognition and measurement
Depreciation and amortisation
The Group uses the units of production basis when amortising mine development assets which results in an amortisation charge
proportional to the depletion of the anticipated remaining life of mine production. Each item's economic life has due regar
d to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at
which it is located. The annual change in ore reserves and mineral resources driving the remaining life of mine production are
accounted for prospectively when amortising existing mine development assets.
From FY21 onwards, the fair value amortisation or unwind associated with the Cowal and Mungari non-current assets on
historical acquisition will be classified under depreciation and amortisation. The Group similarly uses the units of production
basis when amortising these assets.
Impairment of non-financial assets
(i) Testing for impairment
At each reporting date, the Group tests its tangible and other intangible assets for impairment where there in an indication that:
the asset may be impaired; or
•
•
previously recognised impairment (on assets other than goodwill) may have changed.
Where the asset does not generate cash inflows independent from other assets and its value in use cannot be estimated to be
close to its fair value, the asset is tested for impairment as part of the cash generating unit (CGU) to which it belongs. The
Group considers each of its mine sites to be a separate CGU.
If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount is reduced to the recoverable
amount and an impairment loss recognised in the Statement of Profit or Loss. The recoverable amount of an asset or CGU is
determined as the higher of its fair value less costs of disposal or value in use.
(ii)
Impairment calculations
In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining
fair value less costs of disposal, a discounted cash flow model is used based on a methodology consistent with that applied by
the Group in determining the value of potential acquisition targets, maximising the use of market observed inputs. These
calculations, classified as Level 3 on the fair value hierarchy, are compared to valuation multiples, or other fair value indicators
where available, to ensure reasonableness.
Accounting estimates and judgements
Deferred stripping
component ratios are accounted for prospectively.
Exploration and evaluation
The life of component ratio is a function of the mine design and therefore changes to that design will generally result in changes
to the ratio. Changes in other technical or economic parameters that impact reserves will also have an impact on the life of
component ratio even if they do not affect the mine design. Changes to production stripping resulting from a change in life of
Judgement is required to determine whether future economic benefits are likely, from either exploitation or sale, or whether
activities have not reached a stage that permits a reasonable assessment of the existence of reserves. In addition to these
judgements, the Group has to make certain estimates and assumptions such as the determination of a JORC resource which is
itself an estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e.
measured, indicated or inferred). These estimates directly impact when the Group capitalises exploration and evaluation
expenditure. The capitalisation policy requires management to make certain estimates and assumptions as to future events and
circumstances, in particular, the assessment of whether economic quantities of reserves will be found. Any such estimates and
assumptions may change as new information becomes available.
The recoverable amount of capitalised expenditure relating to undeveloped mining projects (projects for which the decision to
mine has not yet been approved at the required authorisation level within the Group) can be particularly sensitive to variations in
key estimates and assumptions. If a variation in key estimates or assumptions has a negative impact on recoverable amount it
could result in a requirement for impairment.
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
9 Mine development and exploration (continued)
Recognition and measurement
Depreciation and amortisation
The Group uses the units of production basis when amortising mine development assets which results in an amortisation charge
proportional to the depletion of the anticipated remaining life of mine production. Each item's economic life has due regar
d to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at
which it is located. The annual change in ore reserves and mineral resources driving the remaining life of mine production are
accounted for prospectively when amortising existing mine development assets.
From FY21 onwards, the fair value amortisation or unwind associated with the Cowal and Mungari non-current assets on
historical acquisition will be classified under depreciation and amortisation. The Group similarly uses the units of production
basis when amortising these assets.
Impairment of non-financial assets
(i) Testing for impairment
At each reporting date, the Group tests its tangible and other intangible assets for impairment where there in an indication that:
•
•
the asset may be impaired; or
previously recognised impairment (on assets other than goodwill) may have changed.
Where the asset does not generate cash inflows independent from other assets and its value in use cannot be estimated to be
close to its fair value, the asset is tested for impairment as part of the cash generating unit (CGU) to which it belongs. The
Group considers each of its mine sites to be a separate CGU.
If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount is reduced to the recoverable
amount and an impairment loss recognised in the Statement of Profit or Loss. The recoverable amount of an asset or CGU is
determined as the higher of its fair value less costs of disposal or value in use.
(ii)
Impairment calculations
In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining
fair value less costs of disposal, a discounted cash flow model is used based on a methodology consistent with that applied by
the Group in determining the value of potential acquisition targets, maximising the use of market observed inputs. These
calculations, classified as Level 3 on the fair value hierarchy, are compared to valuation multiples, or other fair value indicators
where available, to ensure reasonableness.
Accounting estimates and judgements
Deferred stripping
The life of component ratio is a function of the mine design and therefore changes to that design will generally result in changes
to the ratio. Changes in other technical or economic parameters that impact reserves will also have an impact on the life of
component ratio even if they do not affect the mine design. Changes to production stripping resulting from a change in life of
component ratios are accounted for prospectively.
Exploration and evaluation
Judgement is required to determine whether future economic benefits are likely, from either exploitation or sale, or whether
activities have not reached a stage that permits a reasonable assessment of the existence of reserves. In addition to these
judgements, the Group has to make certain estimates and assumptions such as the determination of a JORC resource which is
itself an estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e.
measured, indicated or inferred). These estimates directly impact when the Group capitalises exploration and evaluation
expenditure. The capitalisation policy requires management to make certain estimates and assumptions as to future events and
circumstances, in particular, the assessment of whether economic quantities of reserves will be found. Any such estimates and
assumptions may change as new information becomes available.
The recoverable amount of capitalised expenditure relating to undeveloped mining projects (projects for which the decision to
mine has not yet been approved at the required authorisation level within the Group) can be particularly sensitive to variations in
key estimates and assumptions. If a variation in key estimates or assumptions has a negative impact on recoverable amount it
could result in a requirement for impairment.
70
Evolution Mining Limited // Annual Report 2020 153
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
9 Mine development and exploration (continued)
Accounting estimates and judgements (continued)
Units of production method of amortisation
The Group uses the units of production basis when amortising mine development assets which results in an amortisation
charge proportional to the depletion of the anticipated remaining life of mine production. Each item's economic life, which is
assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable
reserves of the mine property at which it is located. These calculations require the use of estimates and assumptions. The
annual change in ore reserves and mineral resources driving the remaining life of mine production are accounted for
prospectively when amortising existing mine development assets.
Ore reserves and resources
The Group estimates its ore reserves and mineral resources annually at 31 December each year and reports in the following
April, based on information compiled by Competent Persons as defined in accordance with the Australasian code for reporting
Exploration Results, Mineral Resources and Ore Resources (JORC code 2012). The estimated quantities of economically
recoverable reserves are based upon interpretations of geological models and require assumptions to be made regarding
factors such as estimates of short and long-term exchange rates, estimates of short and long-term commodity prices, future
capital requirements and future operating performance. Changes in reported reserves estimates can impact the carrying
amount of mine development (including exploration and evaluation assets), the provision for rehabilitation obligations, the
recognition of deferred tax assets, as well as the amount of amortisation charged to the statement of profit or loss.
Impairment
Significant judgements, estimates and assumptions are required in determining value in use or fair value less costs of disposal.
This is particularly so in the assessment of long life assets. It should be noted that the CGU recoverable amounts are subject to
variability in key assumptions including, but not limited to, gold and copper prices, currency exchange rates, discount rates,
production profiles and operating and capital costs. A change in one or more of the assumptions used to determine value in use
or fair value less costs of disposal could result in a change in a CGU's recoverable amount.
The Group has considered whether past impairment losses should be reversed given the expectation of continued improved
earnings in relation to those CGUs.
10 Impairment loss on assets - Mt Carlton
The carrying amounts of the Group's non-financial assets are reviewed for impairment at each reporting date if facts and
circumstances indicate that impairment may exist. Impairment is assessed at the level of cash-generating units (CGUs) which,
in accordance with AASB 136 Impairment of Assets, are identified as the smallest identifiable group of assets that generates
cash inflows, which are largely independent of the cash inflows from other assets. If the carrying amount of the asset exceeds
its recoverable amount, the asset is impaired and an impairment loss is charged to the income statement so as to reduce the
carrying amount in the balance sheet to its recoverable amount.
The recoverable amount is assessed by reference to the higher of value in use (being the net present value of expected future
cash flows of the relevant cash-generating unit in its current condition) and fair value less costs of disposal (“fair value”). The
best evidence of fair value is the value obtained from an active market or binding sale agreement. Where neither exists, fair
value is based on the best information available to reflect the amount the Group could receive for the cash generating unit in an
arm’s length transaction.
A review conducted on the Mt Carlton carrying value determined a pre-tax non-cash impairment loss of $144.3 million ($101.0
post-tax) to be recognised during the year ended 30 June 2020. The composition of the impairment loss across the Group's
non-financial assets is detailed below.
Impairment losses on assets - Mt Carlton
Producing mines
Plant and equipment
Right-of-use asset
30-Jun
2020
$'000
30-Jun
2019
$'000
95,500
40,531
8,315
144,346
-
-
-
-
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
10 Impairment loss on assets - Mt Carlton (continued)
The primary impairment indicator is the significant downgrade in the Ore Reserve and Mineral Resource following an extensive
grade control infill program recently completed post the 31 December 2019 Mineral Resources and Ore Reserves Statement to
inform an update to the resource block model. The results permitted an improved understanding of the geological controls on
grade distribution and has now indicated a reduction of approximately 70,000 ounces from the December 2019 Resource. As
the recoverable amount of the Mt Carlton cash-generating unit is largely dependent on the life of its orebody and expected
future cash flows from the Life of Mine Plan, the reduced ounces has adversely impacted the level of headroom between the
carrying book value and recoverable amount.
The Group has used the fair value less costs of disposal (“fair value”) methodology to determine Mt Carlton's recoverable
amount. The fair value measurement is categorised in accordance with the level 3 fair value hierarchy. This is estimated using
a discounted cash flow model based on Net Present Value (‘NPV’) of expected future cash flows. Post impairment, the Mt
Carlton CGU carrying book value at 30 June 2020 is $99.0 million and the key assumptions in Mt Carlton's valuation are
outlined below.
Future production profiles from Mt Carlton's Life of Mine Plan. This includes ore sources from the V2 open pit, A39 resource,
Underground mine, Tails retreatment and Crush Creek.
The post-tax discount rate, determined as the risk-adjusted weighted average cost of capital is 7% and the gold price
assumption is based on broker consensus prices of $2,632/oz down to $1,938/oz in the long term.
Sensitivity Analysis
It is estimated that the following reasonably possible changes in the key assumptions would have the following approximate
impact (increase or decrease) on the Fair Value of the Mt Carlton CGU in Australian dollars.
A$100 per ounce change in the gold price
5% increase/decrease in assumed gold ounces sold
0.25% increase/decrease in discount rate
5% increase/decrease in assumed operating costs
It must be noted that each of the sensitivities above assume that the specific assumptions moves in isolation whilst all other
assumptions are held constant. In reality, a change in one of the aforementioned assumptions may accompany a change in
another assumption which may have an offsetting impact. Action is also usually taken by management to respond to adverse
changes in economic assumptions that may mitigate the impact of any such change.
30-Jun
2020
$'000
14,159
21,106
669
10,909
71
72
154 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
10 Impairment loss on assets - Mt Carlton (continued)
The primary impairment indicator is the significant downgrade in the Ore Reserve and Mineral Resource following an extensive
grade control infill program recently completed post the 31 December 2019 Mineral Resources and Ore Reserves Statement to
inform an update to the resource block model. The results permitted an improved understanding of the geological controls on
grade distribution and has now indicated a reduction of approximately 70,000 ounces from the December 2019 Resource. As
the recoverable amount of the Mt Carlton cash-generating unit is largely dependent on the life of its orebody and expected
future cash flows from the Life of Mine Plan, the reduced ounces has adversely impacted the level of headroom between the
carrying book value and recoverable amount.
The Group has used the fair value less costs of disposal (“fair value”) methodology to determine Mt Carlton's recoverable
amount. The fair value measurement is categorised in accordance with the level 3 fair value hierarchy. This is estimated using
a discounted cash flow model based on Net Present Value (‘NPV’) of expected future cash flows. Post impairment, the Mt
Carlton CGU carrying book value at 30 June 2020 is $99.0 million and the key assumptions in Mt Carlton's valuation are
outlined below.
Future production profiles from Mt Carlton's Life of Mine Plan. This includes ore sources from the V2 open pit, A39 resource,
Underground mine, Tails retreatment and Crush Creek.
The post-tax discount rate, determined as the risk-adjusted weighted average cost of capital is 7% and the gold price
assumption is based on broker consensus prices of $2,632/oz down to $1,938/oz in the long term.
Sensitivity Analysis
It is estimated that the following reasonably possible changes in the key assumptions would have the following approximate
impact (increase or decrease) on the Fair Value of the Mt Carlton CGU in Australian dollars.
A$100 per ounce change in the gold price
5% increase/decrease in assumed gold ounces sold
0.25% increase/decrease in discount rate
5% increase/decrease in assumed operating costs
30-Jun
2020
$'000
14,159
21,106
669
10,909
It must be noted that each of the sensitivities above assume that the specific assumptions moves in isolation whilst all other
assumptions are held constant. In reality, a change in one of the aforementioned assumptions may accompany a change in
another assumption which may have an offsetting impact. Action is also usually taken by management to respond to adverse
changes in economic assumptions that may mitigate the impact of any such change.
72
Evolution Mining Limited // Annual Report 2020 155
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
156 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
12 Interest bearing liabilities (continued)
Recognition and measurement
Interest bearing liabilities are initially recognised at fair value less directly attributable transaction costs incurred and
subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the
statement of profit or loss when the liabilities are derecognised.
Ordinary shares are fully-paid and have no par value. They carry one vote per share and the rights to dividends. They bear no
special terms or conditions affecting income or capital entitlements of the shareholders and are classified as equity.
Balance at 30 June 2019
1,697,069,720
2,184
(i)
Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in
Ordinary share capital is classified as equity and is recognised at the fair value of the consideration received by the Group.
Incremental costs directly attributable to the issue of new shares, options or performance rights are shown in equity as a
13 Equity and reserves
(a) Contributed equity
Movements in ordinary share capital
Balance as at 1 July 2018
Shares issued on vesting of performance rights
Shares issued under Employee Share Scheme (i)
Shares issued under NED Equity Plan
Shares issued on vesting of performance rights
Shares issued under Employee Share Scheme (i)
Shares issued under NED Equity Plan
Balance at 30 June 2020
note 25.
Recognition and measurement
deduction, net of tax, from the proceeds.
(b) Other reserves
Fair value revaluation reserve
Share-based payments
Foreign currency translation
Movements:
Fair value revaluation reserve
Balance at the beginning of the year
Change in fair value of equity investments
Balance at the end of the year
Share-based payments
Balance at the beginning of the year
Share based payments recognised
Balance at the end of the year
74
Number of
shares
$'000
1,692,612,049
2,184
4,063,414
287,716
106,541
6,944,027
337,690
62,538
-
-
-
-
-
-
1,704,413,975
2,184
Notes
17(a)
29
30 June
2020
$'000
38,467
59,002
(47,261)
50,208
18,509
19,958
38,467
53,870
5,132
59,002
30 June
2019
$'000
18,509
53,870
-
72,379
(336)
18,845
18,509
45,640
8,230
53,870
73 Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) Capital Structure and Financing This section provides information on the Group's capital and financial management activities. 11 Cash and cash equivalents Current assets Short term deposits - 230,000 Cash at bank 372,592 105,164 372,592 335,164 Recognition and measurement Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and short term deposits with an original maturity of three months or less and are classified as financial assets held at amortised cost. Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates. 12 Interest bearing liabilities Current liabilities Bank loans 95,000 110,000 Less: Borrowing costs (1,547) (1,752) 93,453 108,248 Non-current liabilities Bank loans 475,000 190,000 Less: Borrowing costs (6,391) (4,815) 468,609 185,185 During the year the Group repaid in full the remaining balance on the Senior Secured Term Loan (" Former Facility D") of $300.0 million with the facility now closed. As at 31 March 2020, the Group had entered into a new Syndicated Debt Facility to fund the Red Lake acquisition, consisting of a Revolving Credit Facility (“Facility A”) of $360 million expiring 31 March 2023, a new Term Loan Facility (”Facility B”) of $570.0 million to fund the acquisition of Red Lake with quarterly repayments to 15 January 2025, a refinanced Performance Bond facility (“Facility C”) of $175 million expiring 31 March 2023, and a new Performance Bond Facility (“Facility D”) of Canadian Dollars $125 million expiring 31 March 2023. As at 30 June 2020, the Revolving Facility (“Facility A”) remained undrawn, the Performance Bond Facility (“Facility C”) had an outstanding balance of $135.7 million and the CAD Performance Bond Facility (“Facility D”) had an outstanding balance of CAD $58.5 million. The repayment periods and the outstanding balances as at 30 June 2020 on each Facility are set out below: Revolving Credit Facility - Facility A ($360.0 million) 31 March 2023 $ nil Term Loan - Facility B ($570.0 million) 15 January 2025 $570 million Performance Bond Facility - Facility C ($175.0 million) 31 March 2023 $136 million Performance Bond Facility - Facility D (C$125.0 million) 31 March 2023 C$59 million (a) Secured liabilities and assets pledged as security Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. Term date Outstanding balance 30 June 2020 $'000 30 June 2019 $'000 30 June 2020 $'000 30 June 2019 $'000 Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
12 Interest bearing liabilities (continued)
Recognition and measurement
Interest bearing liabilities are initially recognised at fair value less directly attributable transaction costs incurred and
subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the
statement of profit or loss when the liabilities are derecognised.
13 Equity and reserves
(a) Contributed equity
Movements in ordinary share capital
Ordinary shares are fully-paid and have no par value. They carry one vote per share and the rights to dividends. They bear no
special terms or conditions affecting income or capital entitlements of the shareholders and are classified as equity.
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Balance as at 1 July 2018
Shares issued on vesting of performance rights
Shares issued under Employee Share Scheme (i)
Shares issued under NED Equity Plan
Balance at 30 June 2019
Shares issued on vesting of performance rights
Shares issued under Employee Share Scheme (i)
Shares issued under NED Equity Plan
Balance at 30 June 2020
Number of
shares
1,692,612,049
4,063,414
287,716
106,541
1,697,069,720
6,944,027
337,690
62,538
1,704,413,975
$'000
2,184
-
-
-
2,184
-
-
-
2,184
(i)
Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in
note 25.
Recognition and measurement
Ordinary share capital is classified as equity and is recognised at the fair value of the consideration received by the Group.
Incremental costs directly attributable to the issue of new shares, options or performance rights are shown in equity as a
deduction, net of tax, from the proceeds.
(b) Other reserves
Fair value revaluation reserve
Share-based payments
Foreign currency translation
Movements:
Fair value revaluation reserve
Balance at the beginning of the year
Change in fair value of equity investments
Balance at the end of the year
Share-based payments
Balance at the beginning of the year
Share based payments recognised
Balance at the end of the year
Notes
17(a)
29
30 June
2020
$'000
38,467
59,002
(47,261)
50,208
18,509
19,958
38,467
53,870
5,132
59,002
30 June
2019
$'000
18,509
53,870
-
72,379
(336)
18,845
18,509
45,640
8,230
53,870
74
Evolution Mining Limited // Annual Report 2020 157
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
14 Trade and other receivables (continued)
Recognition and measurement (continued)
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. Trade receivables are generally due for settlement within 30 days and therefore are all
These amounts generally arise from transactions outside the usual operating activities of the Group. They do not contain
impaired assets and are not past due.
For the year ended 30 June 2020, other receivables includes $60.0 million cash consideration receivable due from Aeris
Resources Limited arising from the Cracow divestment. These proceeds were received on 1 July 2020.
15 Trade and other payables
Trade creditors and accruals represent liabilities for goods and services provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured and are paid on normal commercial terms. The carrying amounts of trade
and other payables are considered to be the same as their fair values, due to their short-term nature.
Trade creditors and accruals include accrued costs of $34.6 million (30 June 2019: $32.2 million) relating to the Group's share
of production costs for April to June 2020 for Ernest Henry. These amounts are to be settled in July to September 2020. Refer
to note 2 for further information on the transaction and the financial results for the year ended 30 June 2020.
Accrued Revenue (continued)
Trade receivables
classified as current.
Other receivables
Current liabilities
Trade creditors and accruals
Other payables
Recognition and measurement
Trade creditors and accruals
16 Inventories
Current
Stores
Ore
Doré and concentrate
Metal in circuit
Metal in transit
Total current inventories
Non-current
Ore
Total non-current inventories
30 June
2020
$'000
30 June
2019
$'000
151,631
40,696
192,327
133,264
23,564
156,828
30 June
2020
$'000
30 June
2019
$'000
76,098
53,704
12,557
27,426
32,372
202,157
86,517
86,517
49,895
145,542
7,979
28,496
27,997
259,909
58,923
58,923
158 Evolution Mining Limited // Annual Report 2020
76
75 Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) 13 Equity and reserves (continued) (b) Other reserves (continued) Foreign currency translation Balance at the beginning of the year - 103 Currency translation differences arising during the year (47,261) (103) Balance at the end of the year (47,261) - (i) Nature and purpose of other reserves Fair value revaluation reserve The fair value revaluation reserve records fair value changes on equity investments designated at fair value through other comprehensive income. Share-based payments The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including Non-Executive Directors, Executive Directors and key management personnel as part of their remuneration. Refer to note 25 for further information. Foreign currency translation The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. (c) Retained earnings Movements in retained earnings were as follows: Balance at the beginning of the year 150,372 59,260 Adjustment on adoption of AASB 16 (net of tax) (688) - Dividends provided for or paid (221,376) (127,076) Net profit for the period 301,552 218,188 Balance at the end of the year 229,860 150,372 14 Trade and other receivables 30 June 30 June 2020 2019 $'000 $'000 Current assets Accrued Revenue 49,478 47,574 Trade receivables 14,614 25,748 GST refundable 12,326 6,085 Prepayments 8,510 4,504 Other receivables 64,112 2,296 149,040 86,207 Recognition and measurement Accrued Revenue Accrued revenue of $49.5 million (30 June 2019: $47.6 million) relates to silver and copper sales from April to June 2020 production for Ernest Henry. This balance is the Group's revenue-related contract asset under AASB 15. Revenue from Contracts with Customers (see note 2). These amounts are to be settled in July to September 2020. Refer to note 2 for further information on the transaction and the financial results for the year ended 30 June 2020. 30 June 2020 $'000 30 June 2019 $'000 Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
14 Trade and other receivables (continued)
Recognition and measurement (continued)
Accrued Revenue (continued)
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. Trade receivables are generally due for settlement within 30 days and therefore are all
classified as current.
Other receivables
These amounts generally arise from transactions outside the usual operating activities of the Group. They do not contain
impaired assets and are not past due.
For the year ended 30 June 2020, other receivables includes $60.0 million cash consideration receivable due from Aeris
Resources Limited arising from the Cracow divestment. These proceeds were received on 1 July 2020.
15 Trade and other payables
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Current liabilities
Trade creditors and accruals
Other payables
Recognition and measurement
30 June
2020
$'000
30 June
2019
$'000
151,631
40,696
192,327
133,264
23,564
156,828
Trade creditors and accruals
Trade creditors and accruals represent liabilities for goods and services provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured and are paid on normal commercial terms. The carrying amounts of trade
and other payables are considered to be the same as their fair values, due to their short-term nature.
Trade creditors and accruals include accrued costs of $34.6 million (30 June 2019: $32.2 million) relating to the Group's share
of production costs for April to June 2020 for Ernest Henry. These amounts are to be settled in July to September 2020. Refer
to note 2 for further information on the transaction and the financial results for the year ended 30 June 2020.
16 Inventories
Current
Stores
Ore
Doré and concentrate
Metal in circuit
Metal in transit
Total current inventories
Non-current
Ore
Total non-current inventories
30 June
2020
$'000
30 June
2019
$'000
76,098
53,704
12,557
27,426
32,372
202,157
86,517
86,517
49,895
145,542
7,979
28,496
27,997
259,909
58,923
58,923
76
Evolution Mining Limited // Annual Report 2020 159
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
16 Inventories (continued)
Recognition and measurement
Ore stockpiles, metal in circuit, gold doré, metal in transit, refined gold bullion and concentrate are physically measured or
estimated and valued at the lower of cost and net realisable value. Cost represents the weighted average cost and includes
direct costs and an appropriate portion of fixed and variable production overhead expenditure, including depreciation and
amortisation, incurred in converting materials into finished goods. If the stockpile is not expected to be processed within 12
months after reporting date, it is included in non-current assets.
Materials and supplies are valued at the lower of cost and net realisable value. Any provision for obsolescence is determined by
reference to specific stock items identified. A regular and ongoing review is undertaken to establish the extent of surplus items
and a provision is made for any potential loss on their disposal.
Accounting estimates and judgements
Net realisable value
Net realisable value involves significant judgements and estimates in relation to the selling price in the ordinary course of
business less estimates costs of completion and estimated costs necessary to make the sale.
The total expense relating to inventory write downs to net realisable value for the year ended 30 June 2020 was $25.3 million
(30 June 2019: $15.1 million).
17 Financial assets and financial liabilities
(a) Equity Investments at fair value
Listed securities - Non-current
Tribune Resources Ltd
Musgrave Minerals Ltd (i)
Emmerson Resources Ltd
Riversgold Ltd
Other
30 June
2020
$'000
30 June
2019
$'000
80,828
8,643
5,160
1,558
6
96,195
60,505
-
5,406
267
7
66,185
(i) On 17 September 2019, the Group acquired 18.59 million shares, representing a 4.59% shareholding, in Musgrave Minerals
Limited (“Musgrave”) for a cash consideration of A$1.5 million.
Recognition and measurement
Equity Investments at fair value
Changes in the fair value of equity investments are presented and accumulated in a separate reserve within equity and not
through profit or loss. On disposal of these equity investments, any related balance within the FVOCI reserve is reclassified to
retained earnings. These equity instruments are not held for trading but rather intended to be held over the long-term as
strategic investments and the group considers this classification to be more relevant.
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
18 Other non-current assets
Non-current assets -Other
Contingent consideration attributable to the Pajingo Operation
Contingent consideration attributable to the Edna May Operation
Contingent consideration attributable to Tennant Creek
Contingent consideration attributable to the Cracow Operation
Cash consideration attributable to the Cracow Operation
Other
Total other non-current assets
Recognition and measurement
30 June
30-Jun
2020
$'000
2019
$'000
1,163
34,441
2,790
16,500
10,628
591
2,400
34,441
-
-
-
74
66,113
36,915
30 Jun
30-Jun
2020
$'000
2019
$'000
56,243
56,243
-
-
Contingent consideration amounts classified as a financial asset are remeasured to fair value with changes in fair value
recognised in profit or loss. No fair value gains or losses have been recognised in profit or loss during the year.
Contingent consideration attributable to the Cracow Operation
Cracow was sold on 30 June 2020 to Aeris Resources Limited which included the following non-current purchase
consideration:
•
Contingent consideration receivable in the form of a 10% net value royalty, based on gross revenues less direct cash
operating costs in relation to any gold produced at Cracow in the five-year period from 1 July 2022 to 30 June 2027. This
is capped at a maximum royalty of $50.0 million. The amount recognised is $16.5 million which represents the fair value
discounted to 30 June 2020. As this is the discounted amount as at the end of June 30 2020, the nominal amount
to be received in the future will be different.
19 Other non-current liabilities
Non-current liabilities -Other
Contingent consideration liability to Newmont Corporation
Recognition and measurement
In accordance with AASB 3 Business Combinations, the Group is required to recognise a contingent consideration liability
assumed in a business combination at the acquisition date even if it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation. The contingent consideration liability is subsequently remeasured to
fair value with changes recognised in profit or loss.
The Red Lake purchase consideration includes an additional payment of up to a maximum of US$100 million payable upon the
discovery of new resources outside of the agreed base line, which represents a contingent consideration liability. The Group
would be required to make an additional payment of US$20.0 million per each one million ounces of new Mineral Resources up
to a maximum of five million ounces, discovered outside of the agreed base line and added to the agreed Red Lake resource
base, over a 15-year period.
At initial recognition, the contingent consideration liability was recorded at AUD $62.3 million (see note 26) on 1 April 2020 and
is now carried at AUD $56.2 million at 30 June 2020. The movement in the liability from initial recognition is due to the
USD/AUD foreign exchange movement and associated accretion. A fair value assessment of the contingent consideration
liability including adjustments for foreign exchange movement will be assessed at each reporting date.
77
78
160 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
18 Other non-current assets
Non-current assets -Other
Contingent consideration attributable to the Pajingo Operation
Contingent consideration attributable to the Edna May Operation
Contingent consideration attributable to Tennant Creek
Contingent consideration attributable to the Cracow Operation
Cash consideration attributable to the Cracow Operation
Other
Total other non-current assets
Recognition and measurement
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
30 June
2020
$'000
30-Jun
2019
$'000
1,163
34,441
2,790
16,500
10,628
591
66,113
2,400
34,441
-
-
-
74
36,915
Contingent consideration amounts classified as a financial asset are remeasured to fair value with changes in fair value
recognised in profit or loss. No fair value gains or losses have been recognised in profit or loss during the year.
Contingent consideration attributable to the Cracow Operation
Cracow was sold on 30 June 2020 to Aeris Resources Limited which included the following non-current purchase
consideration:
•
Contingent consideration receivable in the form of a 10% net value royalty, based on gross revenues less direct cash
operating costs in relation to any gold produced at Cracow in the five-year period from 1 July 2022 to 30 June 2027. This
is capped at a maximum royalty of $50.0 million. The amount recognised is $16.5 million which represents the fair value
discounted to 30 June 2020. As this is the discounted amount as at the end of June 30 2020, the nominal amount
to be received in the future will be different.
19 Other non-current liabilities
Non-current liabilities -Other
Contingent consideration liability to Newmont Corporation
Recognition and measurement
30 Jun
2020
$'000
30-Jun
2019
$'000
56,243
56,243
-
-
In accordance with AASB 3 Business Combinations, the Group is required to recognise a contingent consideration liability
assumed in a business combination at the acquisition date even if it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation. The contingent consideration liability is subsequently remeasured to
fair value with changes recognised in profit or loss.
The Red Lake purchase consideration includes an additional payment of up to a maximum of US$100 million payable upon the
discovery of new resources outside of the agreed base line, which represents a contingent consideration liability. The Group
would be required to make an additional payment of US$20.0 million per each one million ounces of new Mineral Resources up
to a maximum of five million ounces, discovered outside of the agreed base line and added to the agreed Red Lake resource
base, over a 15-year period.
At initial recognition, the contingent consideration liability was recorded at AUD $62.3 million (see note 26) on 1 April 2020 and
is now carried at AUD $56.2 million at 30 June 2020. The movement in the liability from initial recognition is due to the
USD/AUD foreign exchange movement and associated accretion. A fair value assessment of the contingent consideration
liability including adjustments for foreign exchange movement will be assessed at each reporting date.
78
Evolution Mining Limited // Annual Report 2020 161
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
20 Provisions (continued)
Recognition and measurement
Employee benefits
Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled.
Long service leave liabilities are measured at the present value of the estimated future cash outflows for the services provided
by employees up to the reporting date.
Liabilities not expected to be settled within twelve months are discounted using market yields at the reporting date on high
quality corporate bonds with terms to maturity that match, as closely as possible to the related liability.
Rehabilitation
rehabilitate locations.
Site restoration costs are recorded at the present value of the estimated future costs of the legal and constructive obligation to
When the liability is initially recorded, the present value of the estimated cost is capitalised as part of the carrying value of the
related mining assets. Over time, the discounted liability is increased for the change in the present value based on a discount
rate that reflects current market assessments. Additional disturbances or changes in rehabilitation costs will be recognised as
additions or changes to the corresponding asset and rehabilitation liability when incurred.
The unwinding of the effect of discounting the provision is recorded as a finance cost in the statement of profit or loss. The
carrying amount is capitalised as part of mine development and amortised on a units of production basis.
The increase in rehabilitation provisions in FY20 is largely driven by the Red Lake acquisition.
Accounting estimates and judgements
Employee benefits
the calculation of long service leave.
Rehabilitation
Management judgement is required in determining the future probability of employee departures and period of service used in
Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many
transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Factors that will affect
this liability include changes in technology, changes in regulations, price increases, changes in timing of cash flows which are
based on life of mine plan and changes in discount rates. When these factors change or become known in the future, such
differences will impact the mine rehabilitation provision in the period in which they change or become known.
162 Evolution Mining Limited // Annual Report 2020
80
79 Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) Recognition and measurement (continued) 20 Provisions 30 June 30 June 2020 2019 $'000 $'000 Current Employee entitlements 39,121 29,957 39,121 29,957 Non-current Employee entitlements 3,945 5,196 Rehabilitation provision 223,019 147,970 Other long term provision 422 210 227,386 153,376 Total provisions 266,507 183,333 (i) Movements in provisions Movements in each class of provision during the financial year are set out below: Employee benefits Rehabilitation Other Total $'000 $'000 $'000 $'000 30 June 2020 Carrying amount at the beginning of the year 35,153 147,970 Charged to profit or loss - unwinding of discount - 1,673 210 183,333 - 1,673 - provision recognised 7,914 22,115 211 30,240 Re-measurement of provision - (282) 2 (280) Amounts recognised in business combinations - 65,853 - 65,853 Exchange differences taken to reserve - (4,350) - (4,350) Divestment of Cracow - (9,962) - (9,962) Carrying amount at the end of the year 43,067 223,017 423 266,507 30 June 2019 Carrying amount at the beginning of the year Charged to profit or loss - unwinding of discount 35,020 - 146,988 1,901 206 - 182,214 1,901 - provision recognised - (1,091) - (1,091) Re-measurement of provision 133 172 4 309 Carrying amount at the end of the year 35,153 147,970 210 183,333 Employee benefits The provision for employee benefits represent wages and salaries, annual leave and long service leave entitlements. Rehabilitation The nature of site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and restoration, reclamation and revegetation of affected areas of the site in accordance with the requirements of the mining permits. Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
20 Provisions (continued)
Recognition and measurement
Employee benefits
Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled.
Long service leave liabilities are measured at the present value of the estimated future cash outflows for the services provided
by employees up to the reporting date.
Liabilities not expected to be settled within twelve months are discounted using market yields at the reporting date on high
quality corporate bonds with terms to maturity that match, as closely as possible to the related liability.
Rehabilitation
Site restoration costs are recorded at the present value of the estimated future costs of the legal and constructive obligation to
rehabilitate locations.
When the liability is initially recorded, the present value of the estimated cost is capitalised as part of the carrying value of the
related mining assets. Over time, the discounted liability is increased for the change in the present value based on a discount
rate that reflects current market assessments. Additional disturbances or changes in rehabilitation costs will be recognised as
additions or changes to the corresponding asset and rehabilitation liability when incurred.
The unwinding of the effect of discounting the provision is recorded as a finance cost in the statement of profit or loss. The
carrying amount is capitalised as part of mine development and amortised on a units of production basis.
The increase in rehabilitation provisions in FY20 is largely driven by the Red Lake acquisition.
Accounting estimates and judgements
Employee benefits
Management judgement is required in determining the future probability of employee departures and period of service used in
the calculation of long service leave.
Rehabilitation
Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many
transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Factors that will affect
this liability include changes in technology, changes in regulations, price increases, changes in timing of cash flows which are
based on life of mine plan and changes in discount rates. When these factors change or become known in the future, such
differences will impact the mine rehabilitation provision in the period in which they change or become known.
80
Evolution Mining Limited // Annual Report 2020 163
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
21 Deferred tax balances (continued)
Accounting estimates and judgements
Judgement is required to determine whether deferred tax assets are recognised in the Balance Sheet. Management must
assess the likelihood that the Group will generate sufficient taxable earnings in future periods in order to recognise and utilise
those deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and existing tax
laws. These assessments require the use of estimates such as commodity prices and operating performance over the life of
the assets. To the extent that cash flows and taxable income differ significantly from estimates, the Group's ability to realise the
deferred tax assets reporting could be impacted.
164 Evolution Mining Limited // Annual Report 2020
82
Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) 81 Utilised to Recognised Balance at 1 July Recognised in reduce tax on business 2019 profit or loss liability combination $'000 $'000 $'000 $'000 Balance at 30 Other June 2020 $'000 $'000 21 Deferred tax balances (a) Recognised deferred tax balances 30 June 30 June 2020 2019 $'000 $'000 Inventories 31,836 31,836 Equity investments at fair value (8,553) - Exploration and evaluation expenditure (84,055) (50,934) Property, plant and equipment (124,077) (69,082) Mine development 9,449 (24,431) Employee benefits 10,347 10,609 Lease liabilities 3,436 - Provisions 63,230 43,875 Share issue costs 379 114 Other 17,593 - Deferred tax balances from temporary differences (80,415) (58,013) Tax losses carried forward 13,907 4,194 Deferred tax (liabilities)/assets (66,508) (53,819) Deferred tax (liabilities)/assets - Australian entities (81,705) (53,819) Deferred tax assets/(liabilities) - Canadian entity 15,197 - Deferred tax (liabilities)/assets (66,508) (53,819) (b) Movement in deferred tax balances during the year Inventories 31,836 - - - - 31,836 Equity investments at fair value - - - - (8,553) (8,553) Exploration and evaluation expenditure (50,934) (33,121) - - - (84,055) Property, plant and equipment (69,082) (54,995) - - - (124,077) Mine development (24,431) 33,880 - - - 9,449 Employee benefits 10,609 (262) - - - 10,347 Lease liabilities - 3,436 - - - 3,436 Provisions 43,875 3,979 - 14,433 943 63,230 Share issue costs 114 265 - - - 379 Tax losses carried forward 4,194 12,206 (2,493) - - 13,907 Other - 17,593 - - - 17,593 Deferred tax assets/ (liabilities) (53,819) (17,019) (2,493) 14,433 (7,610) (66,508) (c) Tax losses The Group has unrecognised available tax losses of $10.3 million as at 30 June 2020 (30 June 2019: $33.4 million). These tax losses have not been recognised due to the uncertainty of their recoverability in future periods. Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
21 Deferred tax balances (continued)
Accounting estimates and judgements
Judgement is required to determine whether deferred tax assets are recognised in the Balance Sheet. Management must
assess the likelihood that the Group will generate sufficient taxable earnings in future periods in order to recognise and utilise
those deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and existing tax
laws. These assessments require the use of estimates such as commodity prices and operating performance over the life of
the assets. To the extent that cash flows and taxable income differ significantly from estimates, the Group's ability to realise the
deferred tax assets reporting could be impacted.
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
82
Evolution Mining Limited // Annual Report 2020 165
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
166 Evolution Mining Limited // Annual Report 2020
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
22 Financial risk management (continued)
(a) Derivatives (continued)
Amounts accumulated in the cash flow hedge reserve are reclassified to the Statement of Profit or Loss and Other
Comprehensive Income in the periods when the hedged item affects profit or loss for instance when the forecast sale that is
hedged takes place.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction
is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain
or loss that was reported in equity is immediately reclassified to profit or loss. However, when the forecast transaction that is
hedged results in the recognition of a non-financial asset (for example, fixed assets) the gains and losses previously deferred in
equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are
ultimately recognised in profit or loss as depreciation in the case of fixed assets.
(b) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the Group's functional currency. Management has set up a policy to manage their foreign exchange risk
against their functional currency and is measured using sensitivity analysis and cash flow forecasting.
As at 30 June 2020, the Group held US$0.7 million (30 June 2019: US$0.2 million) in US dollar currency bank accounts and
outstanding receivables of US$4.9 million (30 June 2019: US$3.8 million) relating to the Mt Carlton operation and US$34.0
million (30 June 2019: US$33.4 million) relating to Ernest Henry. An increase/decrease in AUD:USD foreign exchange rates of
5% will result in an $86,679 (30 June 2019: $9,191) increase/decrease in US dollar currency bank account balances and a $2.7
million (30 June 2019: $1.9 million) increase/decrease in US dollar receivables.
The Group also recognised a USD denominated contingent consideration liability being US$38.44 million as part of the Red
Lake purchase consideration (note 19). An increase/decrease in AUD:USD foreign exchange rates of 5% will result in $3.1
million impact to net assets and pre-tax profit.
The Group is exposed to translation-related risks arising from the Red Lake entity having a functional currency (CAD) different
from the group’s presentation currency (AUD). An increase/decrease in AUD:CAD foreign exchange rates of 5% will result in
$26.8 million impact to net assets and equity reserves.
The Group is currently exposed to the risk of fluctuations in prevailing market commodity prices on the gold, silver and copper
currently produced from its gold mines and market share prices on the available-for-sale assets. The Group has in place
physical gold delivery contracts as at 30 June 2020 covering sales of 300,000 oz (30 June 2019: 400,000 oz) of gold at an
average forward price of $1,871 per ounce (30 June 2019: $1,837 per ounce) and 120,000 oz of gold at an average forward
price of CAD$2,273 (30 June 2019: nil).
The Group is also exposed to market share price movements on its equity investments at fair value. Refer to note 17 for further
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers and investment securities. At the
balance sheet date there were no significant concentrations of credit risk given customers and banks have investment grade
credit ratings. The total trade and other receivables outstanding at 30 June 2020 was $149.0 million (30 June 2019: $88.546
million). Cash and cash equivalents at 30 June 2020 were $372.6 million (30 June 2019: $335.2 million).
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. Prudent
liquidity risk management implies maintaining sufficient cash and term deposits, the availability of funding through an adequate
amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
(ii) Price risk
details.
(c) Credit risk
(d) Liquidity risk
84
83 Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) Risk and Unrecognised Items This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial position and performance as well as providing information on items that are not recognised in the financial statements as they do not (yet) satisfy the recognition criteria. 22 Financial risk management The Group’s activities expose it to a variety of financial risks such as market risk (including interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. Risk management is carried out at a corporate level under policies approved by the Board of Directors. Management identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board of Directors approves written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, gold price risk and use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. The Group holds the following financial instruments: Financial Assets Cash and cash equivalents 372,592 335,164 Trade and other receivables (i) 99,562 38,633 Equity investments at FVOCI 96,195 66,185 568,349 439,982 Financial Liabilities Trade and other payables 192,327 156,828 Interest bearing liabilities 562,062 293,433 754,389 450,261 (i) Excludes Ernest Henry accrued revenue. (a) Derivatives Derivatives are only used for economic hedging purposes and not as speculative investments. The Group has no derivative financial instruments at 30 June 2020 (30 June 2019: nil). Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group currently only designates derivatives as cash flow hedges (hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions). There are no fair value hedges or net investment hedges, nor are there any derivatives that do not classify for hedge accounting. At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge transactions. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income through the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Statement of Profit or Loss and Other Comprehensive Income within other income or other expense. 30 June 2020 $'000 30 June 2019 $'000 Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
22 Financial risk management (continued)
(a) Derivatives (continued)
Amounts accumulated in the cash flow hedge reserve are reclassified to the Statement of Profit or Loss and Other
Comprehensive Income in the periods when the hedged item affects profit or loss for instance when the forecast sale that is
hedged takes place.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction
is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain
or loss that was reported in equity is immediately reclassified to profit or loss. However, when the forecast transaction that is
hedged results in the recognition of a non-financial asset (for example, fixed assets) the gains and losses previously deferred in
equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are
ultimately recognised in profit or loss as depreciation in the case of fixed assets.
(b) Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the Group's functional currency. Management has set up a policy to manage their foreign exchange risk
against their functional currency and is measured using sensitivity analysis and cash flow forecasting.
As at 30 June 2020, the Group held US$0.7 million (30 June 2019: US$0.2 million) in US dollar currency bank accounts and
outstanding receivables of US$4.9 million (30 June 2019: US$3.8 million) relating to the Mt Carlton operation and US$34.0
million (30 June 2019: US$33.4 million) relating to Ernest Henry. An increase/decrease in AUD:USD foreign exchange rates of
5% will result in an $86,679 (30 June 2019: $9,191) increase/decrease in US dollar currency bank account balances and a $2.7
million (30 June 2019: $1.9 million) increase/decrease in US dollar receivables.
The Group also recognised a USD denominated contingent consideration liability being US$38.44 million as part of the Red
Lake purchase consideration (note 19). An increase/decrease in AUD:USD foreign exchange rates of 5% will result in $3.1
million impact to net assets and pre-tax profit.
The Group is exposed to translation-related risks arising from the Red Lake entity having a functional currency (CAD) different
from the group’s presentation currency (AUD). An increase/decrease in AUD:CAD foreign exchange rates of 5% will result in
$26.8 million impact to net assets and equity reserves.
(ii) Price risk
The Group is currently exposed to the risk of fluctuations in prevailing market commodity prices on the gold, silver and copper
currently produced from its gold mines and market share prices on the available-for-sale assets. The Group has in place
physical gold delivery contracts as at 30 June 2020 covering sales of 300,000 oz (30 June 2019: 400,000 oz) of gold at an
average forward price of $1,871 per ounce (30 June 2019: $1,837 per ounce) and 120,000 oz of gold at an average forward
price of CAD$2,273 (30 June 2019: nil).
The Group is also exposed to market share price movements on its equity investments at fair value. Refer to note 17 for further
details.
(c) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers and investment securities. At the
balance sheet date there were no significant concentrations of credit risk given customers and banks have investment grade
credit ratings. The total trade and other receivables outstanding at 30 June 2020 was $149.0 million (30 June 2019: $88.546
million). Cash and cash equivalents at 30 June 2020 were $372.6 million (30 June 2019: $335.2 million).
(d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. Prudent
liquidity risk management implies maintaining sufficient cash and term deposits, the availability of funding through an adequate
amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
84
Evolution Mining Limited // Annual Report 2020 167
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
23 Contingent liabilities and contingent assets
(a) Contingent liabilities
The Group had contingent liabilities at 30 June 2020 in respect of:
(i) Claims
(ii) Guarantees
(iii) Red Lake
At the date of this report the Group was unaware of any material claims, actual or contemplated.
The Group has provided bank guarantees in favour of various government authorities and service providers with respect to site
restoration, contractual obligations and premises at 30 June 2020. The total of these guarantees at 30 June 2020 was $198.1
million with various financial institutions (30 June 2019: $136.3 million).
The Group has recognised a contingent liability on the purchase consideration of Red Lake. Refer to note 19 for further details.
24 Commitments
(a) Capital and lease commitments
(i) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements the Group is required to perform minimum exploration
work to meet minimum expenditure requirements specified by various government authorities. These obligations are subject to
renegotiation when application for a mining lease is made and at various other times. These obligations are not provided for in
the financial report and are payable:
The Group has the following capital commitments in relation to capital projects and joint venture requirements at each of the
Later than one year but not later than five years
Within one year
Later than five years
(ii) Capital commitments
sites.
Within one year
30 June
2020
$'000
10,881
29,986
33,979
74,846
30 June
2020
$'000
24,244
24,244
30 June
2019
$'000
16,438
30,925
35,922
83,285
30 June
2019
$'000
17,828
17,828
In relation to the Group's contingent consideration liability with Newmont (note 19), Evolution has agreed to an investment of
US$100.0 million on existing operations and US$50.0 million in exploration at Red Lake over the first 3 years.
(iii) Non-cancellable operating leases
note 8 for further information.
From 1 July 19, the group has recognised right-of-use assets for these leases, except for short-term and low-value leases, see
168 Evolution Mining Limited // Annual Report 2020
86
85 Evolution Mining Limited Notes to the Consolidated Financial Statements For the year ended 30 June 2020 (continued) 22 Financial risk management (continued) (d) Liquidity risk (continued) (i) Financing arrangements The Group had access to the following undrawn borrowing facilities at the end of the reporting period: Bank loans - revolving credit facility Expiring beyond one year 360,000 350,000 360,000 350,000 (ii) Maturities of financial liabilities The tables below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for: • all non-derivative financial liabilities, and • net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. At 30 June 2020 Non-derivatives Trade and other payables 193,156 - - - 193,156 193,156 Bank loans 95,000 105,000 370,000 - 570,000 570,000 288,156 105,000 370,000 - 763,156 763,156 At 30 June 2019 Non-derivatives Trade and other payables 156,828 - - - 156,828 156,828 Bank loans 118,865 114,770 80,496 - 314,131 300,000 275,693 114,770 80,496 - 470,959 456,828 (e) Risk management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been to raise sufficient funds through equity and debt capital markets to fund capital investment in working capital and exploration and evaluation activities. The Group monitors its liquidity through analysis of regular cash flow forecasts. (i) Loan covenants The lenders have placed covenants over the Group's Senior Secured Revolving and Term Loan Facility based on the leverage ratio and interest coverage ratio and the tangible net worth ratio. The Group has complied with these covenants during the year. Between 1 Between 2 Less than 1 year $'000 and 2 years $'000 and 5 years $'000 Total Over 5 contractual years cash flows $'000 $'000 Carrying amount (assets)/ liabilities $'000 30 June 2020 $'000 30 June 2019 $'000 Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
23 Contingent liabilities and contingent assets
(a) Contingent liabilities
The Group had contingent liabilities at 30 June 2020 in respect of:
(i) Claims
At the date of this report the Group was unaware of any material claims, actual or contemplated.
(ii) Guarantees
The Group has provided bank guarantees in favour of various government authorities and service providers with respect to site
restoration, contractual obligations and premises at 30 June 2020. The total of these guarantees at 30 June 2020 was $198.1
million with various financial institutions (30 June 2019: $136.3 million).
(iii) Red Lake
The Group has recognised a contingent liability on the purchase consideration of Red Lake. Refer to note 19 for further details.
24 Commitments
(a) Capital and lease commitments
(i) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements the Group is required to perform minimum exploration
work to meet minimum expenditure requirements specified by various government authorities. These obligations are subject to
renegotiation when application for a mining lease is made and at various other times. These obligations are not provided for in
the financial report and are payable:
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Within one year
Later than one year but not later than five years
Later than five years
(ii) Capital commitments
30 June
2020
$'000
10,881
29,986
33,979
74,846
30 June
2019
$'000
16,438
30,925
35,922
83,285
The Group has the following capital commitments in relation to capital projects and joint venture requirements at each of the
sites.
Within one year
30 June
2020
$'000
24,244
24,244
30 June
2019
$'000
17,828
17,828
In relation to the Group's contingent consideration liability with Newmont (note 19), Evolution has agreed to an investment of
US$100.0 million on existing operations and US$50.0 million in exploration at Red Lake over the first 3 years.
(iii) Non-cancellable operating leases
From 1 July 19, the group has recognised right-of-use assets for these leases, except for short-term and low-value leases, see
note 8 for further information.
86
Evolution Mining Limited // Annual Report 2020 169
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
24 Commitments (continued)
(a) Capital and lease commitments
(iii) Non-cancellable operating leases
Commitments for minimum lease payments in relation to non-cancellable operating leases
are payable as follows:
Within one year
Later than one year but not later than five years
(b) Gold delivery commitments
30 June
2020
$'000
30 June
2019
$'000
-
-
-
22,389
14,782
37,171
As at 30 June 2020
Within one year
Later than one year but not greater than five years
As at 30 June 2019
Within one year
Later than one year but not greater than five years
As at 30 June 2020
Within one year
Later than one year but not greater than five years
Gold for
physical
delivery
oz
Average
contracted
sales price
A$/oz
Value of
committed
sales
$'000
100,000
200,000
300,000
1,829
1,892
182,909
378,454
561,363
100,000
300,000
400,000
1,737
1,871
173,667
561,363
735,030
Gold for
physical
delivery oz
Average
contracted
sales price
CAD$/oz
Value of
committed
sales
CAD$
40,000
80,000
120,000
2,272
2,271
90,885
181,705
272,590
The counterparties to the physical gold delivery contracts are Australia and New Zealand Banking Group Limited ("ANZ"),
National Australia Bank Limited ("NAB"), Westpac Banking Corporation (“WBC”), Commonwealth Bank of Australia ("CBA") and
Citibank N.A ("Citibank"). Contracts are settled on a quarterly basis by the physical delivery of gold per the banks instructions.
The contracts are accounted for as sale contracts with revenue recognised once the gold has been delivered to ANZ, NAB,
WBC, CBA, Citibank or one of their agents. The physical gold delivery contracts are considered a contract to sell a
non-financial item and is therefore out of the scope of AASB 9 Financial Instruments. As a result no derivatives are required to
be recognised. The Company has no other gold sale commitments with respect to its current operations.
25 Events occurring after the reporting period
No matter or circumstance has occurred subsequent to the year end that has significantly affected, or may significantly affect,
the operations of the Group, the results of those operations or state of affairs of the Group or economic entity in subsequent
financial years.
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
This section covers additional financial information and mandatory disclosures.
Other Disclosures
26 Business Combinations
Business combinations are accounted for using the acquisition method. The consideration transferred for the acquisition of a
subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the
Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date.
The consideration transferred also includes the fair value of any contingent consideration arrangement. Contingent consideration
classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit
or loss. Acquisition-related costs are expensed as incurred.
On 1 April 2020, the Group completed the acquisition of the Red Lake gold mine in Ontario, Canada. The operation comprises
of the Red Lake and Campbell complexes, each consisting of an underground mine, associated processing facilities and the
Details of the purchase consideration and the net assets acquired are as follows:
(i) Summary of acquisition
Cochenour mine.
Purchase consideration
Cash paid (a)
Contingent consideration (b)
(a) Cash paid is comprised of US$375.0 million for the initial purchase, US$14.8 million working capital adjustment payment
and CAD$5.3 million interim operating plan funding.
(b) Contingent consideration includes an additional payment up to US$100.0 million payable upon new resource discovery.
Refer to note 19 for further details.
The provisional assets and liabilities recognised as a result of the acquisition are as follows:
Net assets acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Mine development and exploration
Right-of-use assets
Deferred tax assets
Trade and other payables
Employee entitlements
Lease liabilities
Rehabilitation Provisions
Other non-current assets
Total
the acquisition date.
Please note the initial accounting for the acquisition is determined only on a provisional basis as at 30 June 2020. The Group
will recognise any adjustments to those provisional values as a result of completing the initial accounting within 12 months of
AUD
$'000
582,332
62,255
644,587
Fair
value
$'000
47,501
671
47,743
207,427
419,333
2,765
16,463
(27,077)
(1,078)
(3,895)
(65,853)
587
644,587
87
88
170 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
Other Disclosures
This section covers additional financial information and mandatory disclosures.
26 Business Combinations
Business combinations are accounted for using the acquisition method. The consideration transferred for the acquisition of a
subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the
Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date.
The consideration transferred also includes the fair value of any contingent consideration arrangement. Contingent consideration
classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit
or loss. Acquisition-related costs are expensed as incurred.
(i) Summary of acquisition
On 1 April 2020, the Group completed the acquisition of the Red Lake gold mine in Ontario, Canada. The operation comprises
of the Red Lake and Campbell complexes, each consisting of an underground mine, associated processing facilities and the
Cochenour mine.
Details of the purchase consideration and the net assets acquired are as follows:
Purchase consideration
Cash paid (a)
Contingent consideration (b)
AUD
$'000
582,332
62,255
644,587
(a) Cash paid is comprised of US$375.0 million for the initial purchase, US$14.8 million working capital adjustment payment
and CAD$5.3 million interim operating plan funding.
(b) Contingent consideration includes an additional payment up to US$100.0 million payable upon new resource discovery.
Refer to note 19 for further details.
The provisional assets and liabilities recognised as a result of the acquisition are as follows:
Net assets acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Mine development and exploration
Right-of-use assets
Deferred tax assets
Trade and other payables
Employee entitlements
Lease liabilities
Rehabilitation Provisions
Other non-current assets
Total
Fair
value
$'000
47,501
671
47,743
207,427
419,333
2,765
16,463
(27,077)
(1,078)
(3,895)
(65,853)
587
644,587
Please note the initial accounting for the acquisition is determined only on a provisional basis as at 30 June 2020. The Group
will recognise any adjustments to those provisional values as a result of completing the initial accounting within 12 months of
the acquisition date.
88
Evolution Mining Limited // Annual Report 2020 171
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
26 Business Combinations (continued)
(ii) Revenue and profit contribution
From the date of acquisition to 30 June 2020, revenue of A$76.4 million and a statutory profit after taxation of A$2.8 million was
included in the profit or loss in relation to Red Lake.
(iii) Outflow of cash to acquire subsidiary
Outflow of cash to acquire subsidiary
Cash paid
Less: balance acquired
Total outflow of cash - investing activities
(iv) Acquisition and integration costs
AUD
$'000
582,332
(47,501)
534,831
Acquisition and integration costs of A$30.1 million that were not directly attributable to the cash paid are included in acquisition
and integration cost in the profit or loss and in operating cash flows in the statement of cash flows.
27 Ernest Henry Operation
(a) Description
On 24 August 2016, the Group announced that through a wholly owned subsidiary, it had entered into a transaction with
Glencore plc to acquire an economic interest in the Ernest Henry Copper-Gold Operation for an up-front payment of $880
million. This $880 million up-front payment is recognised as a mine development asset. The Group also announced the entry
into a strategic alliance with Glencore plc in respect of potential future regional acquisitions and the commitment the parties
made to cooperate on exploration activities in the region surrounding Ernest Henry. The transaction was completed on 1
November 2016.
Under the agreement, the Group has a right to the production output when produced in relation to 100% of future gold and 30%
of future copper and silver from the agreed life of mine area. Copper and silver sales revenue are recognised in the same month
as their production is reported as the production is in control of the customer (Glencore). Gold sales and gold revenues are
recognised when the metal is received and sold by Evolution. In addition to the up-front payment, the Group must also
contribute 30% of future production costs in respect of the life of mine area.
The Group has agreed to an ongoing obligation to pay an amount equal to 49% of development and production costs in return
for 49% of future copper, gold and silver production from new reserves extending beyond the mine life at acquisition date.
(b) Financial performance and position
The below information presents the financial performance and balance sheet information of the Ernest Henry operation
included in the Consolidated Financial Statements.
Revenue (note 2)
Cost of sales (excluding amortisation)
Amortisation
Profit before income tax
30 June
2020
$'000
391,017
(120,017)
(126,056)
144,944
30 June
2019
$'000
351,426
(119,806)
(129,903)
101,717
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
27 Ernest Henry Operation (continued)
(b) Financial performance and position (continued)
The carrying amounts of assets and liabilities as at the period end were:
Assets
Accrued Revenue
Inventories
Mine Development
Total assets
Liabilities
Trade and other payables
Total liabilities
Net assets
(a) Parent entities
(b) Subsidiaries
Short-term employee benefits
Post-employment benefits
Share-based payments
28 Related party transactions
The ultimate parent entity within the Group is Evolution Mining Limited.
Interests in subsidiaries are set out in note 32.
(c) Key management personnel compensation
30 June
2020
$'000
30 June
2019
$'000
49,478
32,372
458,254
540,104
34,641
34,641
47,574
27,997
574,937
650,508
32,155
32,155
505,463
618,353
30 June
2020
$
30 June
2019
$
6,471,811
168,237
5,204,963
11,845,011
6,725,174
187,292
5,396,616
12,309,082
Detailed remuneration disclosures are provided in the remuneration report on pages 22 to 49.
(d) Transactions with other related parties
Directors fees in the amount of $163,750 were paid to International Mining and Finance Corp, a company of which Mr James
Askew is a Director for services provided during the period (30 June 2019:$115,000).
Directors fees in the amount of $300,000 were paid to DAK Corporation Pty Ltd, a company of which Mr Jacob Klein is a
Director for services provided during the period (30 June 2019: $300,000).
Directors fees in the amount of $87,500 were paid to Lazy 7 Pty Ltd, a company of which Mr Colin Johnstone is a Director for
services provided during the period (30 June 2018: $126,250).
89
90
172 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
27 Ernest Henry Operation (continued)
(b) Financial performance and position (continued)
The carrying amounts of assets and liabilities as at the period end were:
Assets
Accrued Revenue
Inventories
Mine Development
Total assets
Liabilities
Trade and other payables
Total liabilities
Net assets
28 Related party transactions
(a) Parent entities
The ultimate parent entity within the Group is Evolution Mining Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in note 32.
(c) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
30 June
2020
$'000
30 June
2019
$'000
49,478
32,372
458,254
540,104
34,641
34,641
47,574
27,997
574,937
650,508
32,155
32,155
505,463
618,353
30 June
2020
$
30 June
2019
$
6,471,811
168,237
5,204,963
11,845,011
6,725,174
187,292
5,396,616
12,309,082
Detailed remuneration disclosures are provided in the remuneration report on pages 22 to 49.
105 to 133.
(d) Transactions with other related parties
Directors fees in the amount of $163,750 were paid to International Mining and Finance Corp, a company of which Mr James
Askew is a Director for services provided during the period (30 June 2019:$115,000).
Directors fees in the amount of $300,000 were paid to DAK Corporation Pty Ltd, a company of which Mr Jacob Klein is a
Director for services provided during the period (30 June 2019: $300,000).
Directors fees in the amount of $87,500 were paid to Lazy 7 Pty Ltd, a company of which Mr Colin Johnstone is a Director for
services provided during the period (30 June 2018: $126,250).
90
Evolution Mining Limited // Annual Report 2020 173
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
29 Share-based payments
(a) Types of share based payment plans
The Group has two Option and Performance Rights plans in existence:
(1) Employee Share Option and Performance Rights Plan (ESOP)
The ESOP was established and approved at the Annual General Meeting on 23 November 2010, and amended on 19 October
2011. Shareholder approval was refreshed at the Annual General Meeting on 26 November 2014 and again on 23 November
2017 and permits the Company, at the discretion of the Directors, to grant both Options and Performance Rights over unissued
ordinary shares of the Company to eligible Directors and members of staff as specified in the plan rules.
(2) Non-Executive Director Equity Plan (NEDEP)
The NEDEP was established and approved at the Annual General Meeting on 24 November 2016. The plan permits the
Company, at the discretion of the Directors, to grant NED Share Rights as part of their remuneration.
(b) Recognised share based payment expenses
30 June 2020
$'000
30 June 2019
$'000
Expense arising from equity settled share based payment transactions recognised in profit
and loss
10,691
10,884
(c) Summary and movement of NED Share Rights on issue
The following table illustrates the number and movements in, Share Rights issued during the year.
Outstanding balance at the beginning of the year
Share Rights granted
Vested
Lapsed
Forfeited
Outstanding balance at the end of the year
2020
Number
57,235
71,875
(72,083)
(3,182)
-
53,845
2019
Number
116,879
57,235
(106,541)
(10,338)
-
57,235
There were 71,875 Share Rights granted during the 2020 financial year. Provided the NEDs remain directors of Evolution, Share
Rights will vest and automatically exercise 12 months after the grant date of 23 November 2019 with disposal restrictions
attached to these shares.
(d) Fair value determination
During the year, the Company issued two allotments of performance rights that will vest on 30 June 2022. They have four
performance components being a Total Shareholder Return (“TSR”) condition, an absolute TSR condition, a Growth in
Earnings per share (“EPS”) condition and a Growth in Ore Reserves condition.
(i) TSR Performance Right Valuation
The fair value of the TSR Performance Rights (market-based condition) was estimated at the date of grant using Monte Carlo
simulation, taking into account the terms and conditions upon which the awards were granted.
(ii) Absolute TSR Performance Right Valuation
The Absolute TSR Performance Right Valuation will be measured as the cumulative annual TSR over the three year period
ending 30 June 2022.
(iii) Growth in Earnings per Share
The growth in Earnings per Share is measured as the cumulative annual growth rate in EPS, excluding non recurring items
over the three year period ending 30 June 2021.
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
29 Share-based payments (continued)
(d) Fair value determination (continued)
(iv) Growth in Ore Reserves per Share
The growth in Ore Reserves per share is measured by comparing the Baseline measure of the Ore Reserves as at 31
December 2018, to the Ore Reserves as at 31 December 2021 on a per share basis, with testing to be performed at 30 June
2022.
The following tables list the inputs to the models used for the Performance Rights granted for the period:
September 2019 Performance Rights issue
Number of rights issued
1,425,676
1,399,632
1,425,676
1,399,632
TSR
Absolute TSR
Growth in EPS
Growth in Ore
Reserves
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
February 2020 Performance Rights issue
Number of rights issued
4.54
0.89
2.8
37
3.07
94,764
4.1
0.75
2.38
35
2.3
4.54
0.89
2.8
37
2.06
94,764
4.1
0.75
2.38
35
1.43
4.54
0.89
2.8
37
4.25
94,764
4.1
0.75
2.38
35
3.84
4.54
0.89
2.8
37
4.25
94,764
4.1
0.75
2.38
35
3.84
The volatility above was determined with reference to historical volatility but also incorporates factors that management
believes will impact the actual volatility of the Company’s shares in future periods.
Recognition and measurement
The Group provides benefits to its employees (including Key Management Personnel) in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
Vesting conditions that are linked to the price of shares of the Company (market conditions) are taken into account when
determining the fair value of equity settled transactions. Other vesting conditions such as service conditions are excluded from
the measurement of fair value but are considered in estimating the number of investments that may ultimately vest.
The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at
which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled (“the vesting period”).
The charge to the Statement of Profit or Loss for the period is the cumulative amount as calculated above less the amounts
already recognised in previous periods. There is a corresponding entry to equity.
Accounting estimates and judgements
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments
at the date at which they are granted. The fair value is determined by an external specialist using an option pricing model,
based off the assumptions detailed above.
91
92
174 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
29 Share-based payments (continued)
(d) Fair value determination (continued)
(iv) Growth in Ore Reserves per Share
The growth in Ore Reserves per share is measured by comparing the Baseline measure of the Ore Reserves as at 31
December 2018, to the Ore Reserves as at 31 December 2021 on a per share basis, with testing to be performed at 30 June
2022.
The following tables list the inputs to the models used for the Performance Rights granted for the period:
TSR
Absolute TSR
Growth in EPS
Growth in Ore
Reserves
September 2019 Performance Rights issue
Number of rights issued
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
1,425,676
4.54
0.89
2.8
37
3.07
February 2020 Performance Rights issue
Number of rights issued
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
94,764
4.1
0.75
2.38
35
2.3
1,399,632
4.54
0.89
2.8
37
2.06
94,764
4.1
0.75
2.38
35
1.43
1,425,676
4.54
0.89
2.8
37
4.25
94,764
4.1
0.75
2.38
35
3.84
1,399,632
4.54
0.89
2.8
37
4.25
94,764
4.1
0.75
2.38
35
3.84
The volatility above was determined with reference to historical volatility but also incorporates factors that management
believes will impact the actual volatility of the Company’s shares in future periods.
Recognition and measurement
The Group provides benefits to its employees (including Key Management Personnel) in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
Vesting conditions that are linked to the price of shares of the Company (market conditions) are taken into account when
determining the fair value of equity settled transactions. Other vesting conditions such as service conditions are excluded from
the measurement of fair value but are considered in estimating the number of investments that may ultimately vest.
The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at
which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled (“the vesting period”).
The charge to the Statement of Profit or Loss for the period is the cumulative amount as calculated above less the amounts
already recognised in previous periods. There is a corresponding entry to equity.
Accounting estimates and judgements
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments
at the date at which they are granted. The fair value is determined by an external specialist using an option pricing model,
based off the assumptions detailed above.
92
Evolution Mining Limited // Annual Report 2020 175
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
30 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, Evolution
Mining Limited, its related network firms and non-related audit firms. Also included are fees paid or payable for non-audit
services by non PricewaterhouseCoopers audit firms, although these firms do not provide audit services to Evolution Mining
Limited.
(a) PricewaterhouseCoopers
Audit and other assurance services
Audit and review of financial statements
Red Lake Component Audit
Other
Total remuneration for audit and other services
Taxation services
Tax compliance services
Total remuneration for taxation services
Total remuneration of PricewaterhouseCoopers
(b) Non-PricewaterhouseCoopers related audit firms
Audit and other assurance services
Other assurance services
Internal audit services
Other assurance services
Total remuneration for audit and other assurance services
Taxation services
Tax compliance services
Tax advisory services
Total remuneration for taxation services
2020
$
2019
$
603,473
52,083
6,891
662,447
492,854
-
200,000
692,854
103,060
103,060
116,600
116,600
765,507
809,454
2020
$
2019
$
149,651
-
149,651
44,183
393,762
437,945
205,029
56,244
261,273
68,523
538,213
606,736
Total remuneration of non-PricewaterhouseCoopers audit firms
587,596
868,009
It is the Group's policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers's expertise and experience with the Group are important. These assignments are principally tax advice
and due diligence on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It
is the Group's policy to seek competitive tenders for all major consulting projects.
31 Deed of cross guarantee
Evolution Mining Limited and those entities identified in note 32 are parties to a deed of cross guarantee under which each
Company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the
requirement to prepare a financial report and Directors' Report under Class Order 98/1418 (as amended) issued by the
Australian Securities and Investments Commission.
The companies identified above represent a 'closed group' for the purposes of the Class Order, and as there are no other
parties to the deed of cross guarantee that are controlled by Evolution Mining Limited, they also represent the 'extended closed
group'.
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
31 Deed of cross guarantee (continued)
The Consolidated Balance Sheet, Consolidated Statement of Profit or Loss and Other Comprehensive Income, and summary of
movements in consolidated retained earnings for the year ended 30 June 2020 of the closed group is equal to the Consolidated
Balance Sheet, Consolidated Statement of Profit or Loss and Other Comprehensive Income, and Consolidated Statement of
Changes in Equity of the Group.
32 Interests in other entities
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in
accordance with the accounting policy described below:
Name of entity
Evolution Mining Management Services Pty Ltd
Conquest Mining Pty Ltd (i) (ii)
Mt Rawdon Operations Pty Ltd (i) (ii)
Lion Mining Pty Ltd (i) (ii) (iii)
Evolution Tennant Creek Pty Ltd (ii) (iii)
Evolution Mining NZ Pty Ltd (ii)
Evolution Mining (Cowal) Pty Ltd (i) (ii)
Evolution Mining Mungari Pty Ltd (i) (ii)
Toledo Holding (Ausco) Pty Ltd (i)
Evolution Mining (Mungari East) Pty Ltd (i) (ii)
Evolution Mining (Phoenix) Pty Limited (i) (ii)
Hayes Mining Pty Ltd (i)
Evolution Mining (Aurum 2) Pty Ltd (i) (ii)
Evolution Mining (Connors Arc) Pty Ltd (i) (ii)
Evolution Mining (Cananda Holdings) Ltd (ii)
Evolution Mining Management Services (Canada) Ltd (ii)
Evolution Mining Gold Operations Ltd (iv)
Evolution Red Lake Nominee Ltd (v)
Country of
incorporation Class of shares
Equity holding
2020
%
2019
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Canada
Canada
Canada
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
(i)
These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class
Order 98/1418 issued by the Australian Securities and Investments Commission. For further information refer to note
(ii)
These entities are considered to be the material controlled entities of the Group. Their principal activities are
31.
(iii)
(iv)
(v)
identifying, developing and operating gold related projects.
These entities were divested during this financial year.
This entity was incorporated to acquire the Red Lake Gold Operations.
These entities have been acquired as part of the Red Lake acquisition.
Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the
Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country of
incorporation or registration is also their principal place of business.
93
94
176 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
31 Deed of cross guarantee (continued)
The Consolidated Balance Sheet, Consolidated Statement of Profit or Loss and Other Comprehensive Income, and summary of
movements in consolidated retained earnings for the year ended 30 June 2020 of the closed group is equal to the Consolidated
Balance Sheet, Consolidated Statement of Profit or Loss and Other Comprehensive Income, and Consolidated Statement of
Changes in Equity of the Group.
32 Interests in other entities
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in
accordance with the accounting policy described below:
Name of entity
Evolution Mining Management Services Pty Ltd
Conquest Mining Pty Ltd (i) (ii)
Mt Rawdon Operations Pty Ltd (i) (ii)
Lion Mining Pty Ltd (i) (ii) (iii)
Evolution Tennant Creek Pty Ltd (ii) (iii)
Evolution Mining NZ Pty Ltd (ii)
Evolution Mining (Cowal) Pty Ltd (i) (ii)
Evolution Mining Mungari Pty Ltd (i) (ii)
Toledo Holding (Ausco) Pty Ltd (i)
Evolution Mining (Mungari East) Pty Ltd (i) (ii)
Evolution Mining (Phoenix) Pty Limited (i) (ii)
Hayes Mining Pty Ltd (i)
Evolution Mining (Aurum 2) Pty Ltd (i) (ii)
Evolution Mining (Connors Arc) Pty Ltd (i) (ii)
Evolution Mining (Cananda Holdings) Ltd (ii)
Evolution Mining Management Services (Canada) Ltd (ii)
Evolution Mining Gold Operations Ltd (iv)
Evolution Red Lake Nominee Ltd (v)
Country of
incorporation Class of shares
Equity holding
2020
%
2019
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Canada
Canada
Canada
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
(i)
(ii)
(iii)
(iv)
(v)
These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class
Order 98/1418 issued by the Australian Securities and Investments Commission. For further information refer to note
31.
These entities are considered to be the material controlled entities of the Group. Their principal activities are
identifying, developing and operating gold related projects.
These entities were divested during this financial year.
This entity was incorporated to acquire the Red Lake Gold Operations.
These entities have been acquired as part of the Red Lake acquisition.
Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the
Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country of
incorporation or registration is also their principal place of business.
94
Evolution Mining Limited // Annual Report 2020 177
Notes to the Consolidated Financial Statements (continued)
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
33 Parent entity financial information
The financial information for the parent entity, Evolution Mining Limited has been prepared on the same basis as the
consolidated financial statements.
(b) Summary financial information
The individual financial statements for the parent entity show the following aggregate
amounts:
Balance sheet
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Issued capital
Reserves
Fair Value revaluation reserve
Share based payment reserve
Accumulated losses
Total equity
Statement of Profit or Loss and Other Comprehensive Income
Profit for the year
Other comprehensive expense
Total comprehensive expense
(c) Guarantees entered into by the parent entity
The parent entity has provided bank guarantees, as detailed in note 23.
(d) Contingent liabilities of the parent entity
30 June
2020
$'000
30 June
2019
$'000
399,574
2,515,538
2,915,112
331,341
1,982,504
2,313,845
122,452
632,047
754,499
121,444
261,497
382,941
2,160,613
1,930,904
2,183,727
2,183,727
39,961
58,928
(122,003)
2,160,613
20,003
53,796
(326,622)
1,930,904
272,706
-
272,706
101,824
-
101,824
The parent entity has recognised a contingent consideration liability on the Red Lake purchase consideration as at 30 June
2020. Refer to note 19 for further details.
The parent entity did not have any contingent liabilities as at 30 June 2019. For information about guarantees given by the
parent entity, please see above.
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
34 Summary of significant accounting policies
(a) Basis of preparation
This financial report is a general purpose financial report, prepared by a for-profit entity, in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board (AASB).
The financial report also complies with the International Financial Reporting Standards (IFRS) including interpretations as
issued by the International Accounting Standards Board (IASB).
The financial report has been prepared on a historical cost basis, except for derivative financial instruments and
available-for-sale assets which have been measured at fair value.
The financial report has been presented in Australian (AU) dollars and all values are rounded to the nearest AU$1,000
(AU$'000) unless otherwise stated.
The accounting policies have been consistently applied by all entities included in the Group and are consistent with those
applied in the prior year except for changes arising from adoption of new accounting standards which have been seperately
disclosed.
(b) Principles of consolidation
The consolidated financial statements include the financial statements of the parent entity, Evolution Mining Limited, and its
controlled entities (referred to as 'the Consolidated Entity' or 'the Group' in these financial statements). A list of significant
controlled entities (subsidiaries) is presented in note 32.
Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to one of more of the three elements of control. Specifically
the Group controls an investee if, and only if, the Group has all of the following:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
•
The ability to use its control over the investee to affect its returns.
Non- controlling interests in the results and equity of the entities that are controlled by the Group is shown separately in the
Statement of Profit or Loss or Other Comprehensive Income, Balance Sheet and Statement of Changes in Equity respectively.
(c) Foreign currency translation
(i) Functional and presentation currency
currency for Red Lake is Canadian dollars.
(ii) Transactions and balances
The presentation currency of the Group is Australian dollars. Each entity in the Group determines its own functional currency
and items included in the financial statements of each entity are measured using that functional currency. The functional
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the
transaction. The subsequent payment or receipt of funds related to a transaction is translated at the rate applicable on the date
of payment or receipt. Monetary assets and liabilities are denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate as at the date of the initial transaction.
All exchange differences in the consolidated financial statements are taken to the Statement of Other Comprehensive Income
and accumulated in a reserve.
(iii) Translation
The assets and liabilities of subsidiaries with functional currency other than Australian dollars (being the presentation currency
of the Group) are translated into Australian dollars at the exchange rate at the reporting date and the Statement of Profit or
Loss is translated at the average exchange rate for the period. On consolidation, exchange differences arising from the
translation of these subsidiaries are recognised in Other Comprehensive Income and accumulated in the foreign currency
translation reserve.
95
96
178 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
34 Summary of significant accounting policies
(a) Basis of preparation
This financial report is a general purpose financial report, prepared by a for-profit entity, in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board (AASB).
The financial report also complies with the International Financial Reporting Standards (IFRS) including interpretations as
issued by the International Accounting Standards Board (IASB).
The financial report has been prepared on a historical cost basis, except for derivative financial instruments and
available-for-sale assets which have been measured at fair value.
The financial report has been presented in Australian (AU) dollars and all values are rounded to the nearest AU$1,000
(AU$'000) unless otherwise stated.
The accounting policies have been consistently applied by all entities included in the Group and are consistent with those
applied in the prior year except for changes arising from adoption of new accounting standards which have been seperately
disclosed.
(b) Principles of consolidation
The consolidated financial statements include the financial statements of the parent entity, Evolution Mining Limited, and its
controlled entities (referred to as 'the Consolidated Entity' or 'the Group' in these financial statements). A list of significant
controlled entities (subsidiaries) is presented in note 32.
Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there are changes to one of more of the three elements of control. Specifically
the Group controls an investee if, and only if, the Group has all of the following:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
•
The ability to use its control over the investee to affect its returns.
Non- controlling interests in the results and equity of the entities that are controlled by the Group is shown separately in the
Statement of Profit or Loss or Other Comprehensive Income, Balance Sheet and Statement of Changes in Equity respectively.
(c) Foreign currency translation
(i) Functional and presentation currency
The presentation currency of the Group is Australian dollars. Each entity in the Group determines its own functional currency
and items included in the financial statements of each entity are measured using that functional currency. The functional
currency for Red Lake is Canadian dollars.
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the
transaction. The subsequent payment or receipt of funds related to a transaction is translated at the rate applicable on the date
of payment or receipt. Monetary assets and liabilities are denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate as at the date of the initial transaction.
All exchange differences in the consolidated financial statements are taken to the Statement of Other Comprehensive Income
and accumulated in a reserve.
(iii) Translation
The assets and liabilities of subsidiaries with functional currency other than Australian dollars (being the presentation currency
of the Group) are translated into Australian dollars at the exchange rate at the reporting date and the Statement of Profit or
Loss is translated at the average exchange rate for the period. On consolidation, exchange differences arising from the
translation of these subsidiaries are recognised in Other Comprehensive Income and accumulated in the foreign currency
translation reserve.
96
Evolution Mining Limited // Annual Report 2020 179
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
35 New accounting standards (continued)
• Non-current lease liabilities - increase by $24.5 million;
• Other provisions - increase by $0.2 million;
•
The net impact on retained earnings on 1 July 2019 was a decrease of $0.69 million.
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
i
d
e
t
a
d
i
l
o
s
n
o
C
e
h
t
o
t
s
e
t
o
N
/
/
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
34 Summary of significant accounting policies (continued)
(d)
Intangible assets
(i) Mining tenements, mining rights and mining information
Mining tenements have a finite useful life and are carried at cost less, where applicable, any accumulated amortisation and
accumulated impairment losses. The carrying values of mining tenements and mining rights are reviewed to ensure they are
not in excess of their recoverable amounts. Amortisation of mining tenements and mining rights commences from the date
when commercial production commences or in the case of the acquisitions, from the date of acquisition and is charged to the
profit or loss. Mining tenements are amortised over the life of the mine using units of production basis in ounces.
Mining information has a finite useful life and is carried at cost less accumulated amortisation. Mining information amortisation
is recognised over the period that the information is expected to remain relevant.
The amortisation of the above intangibles is classified as a cost of sale.
35 New accounting standards
AASB 16 will primarily affect the accounting by lessees and will result in the recognition of almost all leases on balance sheet.
The new standard removes the current distinction between operating and finance leases and requires recognition of an asset
(the right to use the leased item) and a financial liability to pay rentals for virtually all lease contracts.
The Group has applied AASB 16 from 1 July 2019 and has adopted the modified retrospective approach, under which the
cumulative effect of the initial application is recognised in retained earnings at 1 July 2019. This is without restating
comparatives for the 2019 reporting period as permitted under the specific transition provisions in the standard.
As a lessee, the Group recognises a right-of-use asset representing its right to use the underlying asset. The right-of-use asset
is initially measured at the present value of the lease liability plus various costs when acquiring the asset. This is subsequently
measured at cost less any accumulated depreciation, impairment losses and adjusted for any remeasurement of the lease
liability.
On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously been classified as
‘operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value of the
remaining lease payments, discounted using the Group's incremental borrowing rate.
In applying AASB 16 for the first time, the group has used the following practical expedients permitted by the standard:
•
•
•
•
short term leases (12 months or less) and low value ($10,000 or less) are excluded from being accounted under
AASB 16 Leases;
applying a single discount rate to all leases;
combine lease and non-lease components and account for these as a single lease component;
excluding initial direct costs for the measurement of the right-of-use asset at the date of initial application.
The Group will recognise lease payments associated with short-term and low value assets as an expense on a straight-line
basis over the lease term.
The operating lease commitments disclosed applying AASB 117 at the end of the annual reporting period immediately
preceding the date of initial application (30 June 2019) was $37.2 million and equals $35.8 million when discounted using the
Group’s discount rate of 4.2% at the initial application on 1 July 2019. The Group’s total lease liability recognised on the date of
initial application was also $35.8 million.
The change in accounting policy affected the following items in the balance sheet on 1 July 2019:
• Right-of-use assets - increase by $33.7 million;
• Mines under construction - increase by $0.02 million;
• Deferred tax asset - increase by $0.29 million;
• Other receivables- increase by $1.3 million;
• Current lease liabilities - increase by $11.3 million;
97
98
180 Evolution Mining Limited // Annual Report 2020
Notes to the Consolidated Financial Statements (continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2020
(continued)
35 New accounting standards (continued)
• Non-current lease liabilities - increase by $24.5 million;
• Other provisions - increase by $0.2 million;
•
The net impact on retained earnings on 1 July 2019 was a decrease of $0.69 million.
/
/
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
98
Evolution Mining Limited // Annual Report 2020 181
Notes to the Consolidated Financial Statements (continued)
n Directors’ Declaration
Directors’ Declaration
o
i
t
a
r
a
l
c
e
D
’
s
r
o
t
c
e
r
i
D
/
/
Evolution Mining Limited
Directors' Declaration
30 June 2020
In the Directors' opinion:
(a)
(b)
(c)
136 to 181
the financial statements and notes set out on pages 53 to 98 are in accordance with the Corporations Act 2001,
including:
(i)
complying with Accounting Standard, the Corporations Regulations 2001 and other mandatory professional
reporting requirements, and
giving a true and fair view of the consolidated entity's financial position as at 30 June 2020 and of its
performance for the year ended on that date, and
(ii)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identified in note 31 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue
of the deed of cross guarantee described in note 31.
Note 34(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Evolution Mining Limited
Directors' Declaration 30
June 2020
In the Directors' opinion:
(a)
(b)
(c)
(ii)
the financial statements and notes set out on pages 53
including:
(i)
complying with Accounting Standard, the Co
reporting requirements, and
giving a true and fair view of the consolidated
performance for the year ended on that date,
there are reasonable grounds to believe that the Com
and payable.
at the date of this declaration, there are reasonable gr
identified in note 31 will be able to meet any obligations
of the deed of cross guarantee described in note 31.
to 98 are in accordance with the Corporations Act 2001,
rporations Regulations 2001 and other mandatory professional
entity's financial position as at 30 June 2020 and of its
and
pany will be able to pay its debts as and when they become due
ounds to believe that the members of the extended closed group
or liabilities to which they are, or may become, subject by virtue
Note 34(a) confirms that the financial statements also comply w
International Accounting Standards Board.
ith International Financial Reporting Standards as issued by the
The Directors have been given the declarations by the Chief E
295A of the Corporations Act 2001.
xecutive Officer and Chief Financial Officer required by section
This declaration is made in accordan
ce with a resolution of Dir
ectors.
Jacob (Jake) Klein
Executive Chairman
Jacob (Jake) Klein
Executive Chairman
Sydney
Andrea Hall
Chair of the Audit Committee
Andrea Hall
Chair of the Audit Committee
Sydney
99
182 Evolution Mining Limited // Annual Report 2020
99
Independent auditor’s report
To the members of Evolution Mining Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
performance for the year thenended
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
What we have audited
The Group financial report comprises the:
consolidated balance sheet asat 30 June 2020
consolidated statement of profit or loss and other comprehensive income for the year thenended
consolidated statement of changes in equity for the year thenended
consolidated statement of cash flows for the year then ended
notes to the consolidated financial statements, whichinclude a summary of significant accounting
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
●
●
●
●
●
●
policies
directors’ declaration.
Basis for opinion
section of our report.
our opinion.
Independence
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
Independent Auditor’s Report
Independent Auditor’s
Report
/
/
I
n
d
e
p
e
n
d
e
n
t
A
u
d
i
t
o
r
’
s
R
e
p
o
r
t
Independent auditor’s report
To the members of Evolution Mining Limited
Independent auditor’s report
To the members of Evolution Mining Limited
Report on the audit of the financial report
Our opinion
In our opinion:
Report on the audit of the financial report
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
Our opinion
In our opinion:
performance for the year thenended
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
What we have audited
The Group financial report comprises the:
performance for the year thenended
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
●
●
●
●
●
●
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
consolidated balance sheet asat 30 June 2020
consolidated statement of profit or loss and other comprehensive income for the year thenended
consolidated statement of changes in equity for the year thenended
What we have audited
consolidated statement of cash flows for the year then ended
The Group financial report comprises the:
notes to the consolidated financial statements, whichinclude a summary of significant accounting
policies
●
directors’ declaration.
●
●
●
●
consolidated balance sheet asat 30 June 2020
consolidated statement of profit or loss and other comprehensive income for the year thenended
consolidated statement of changes in equity for the year thenended
consolidated statement of cash flows for the year then ended
notes to the consolidated financial statements, whichinclude a summary of significant accounting
policies
directors’ declaration.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
section of our report.
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
our opinion.
Basis for opinion
●
Basis for opinion
Independence
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
section of our report.
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
our opinion.
Independence
PricewaterhouseCoopers, ABN 52 780 433 757
We are independent of the Group in accordance withthe auditor independence requirements of the
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
Liability limited by a scheme approved under Professional Standards Legislation.
100
PricewaterhouseCoopers, ABN 52 780 433 757
Evolution Mining Limited // Annual Report 2020 183
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
t
r
o
p
e
R
s
’
r
o
t
i
d
u
A
t
n
e
d
n
e
p
e
d
n
I
/
/
Our audit approach
An auditis designed to provide reasonable assurance about whether the financialreport is free from
materialmisstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users takenon the basis of the financial report.
Independent auditor’s report
To the members of Evolution Mining Limited
We tailored the scope of our auditto ensure thatwe performed enough workto be able to give an opinion
Report on the audit of the financial report
on the financial report as a whole, taking intoaccount the geographic and managementstructure of the
Group, its accounting processes and controls andthe industry in which it operates.
Our opinion
In our opinion:
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
performance for the year thenended
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
Materiality
Audit scope
● For the purpose of our audit we used overall Group
What we have audited
The Group financial report comprises the:
materiality of $25 million, which represents
approximately 2.5% of the Group’s earningsbefore
interest, tax, depreciation, amortisation and
impairment expense (EBITDA).
● Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
●
●
●
●
●
● We applied thisthreshold, together with qualitative
considerations, to determine the scope of our audit
and the nature, timing and extentof our audit
proceduresand to evaluate the effect of
misstatements on the financial report as a whole.
consolidated balance sheet asat 30 June 2020
consolidated statement of profit or loss and other comprehensive income for the year thenended
specified auditprocedures over the financial
consolidated statement of changes in equity for the year thenended
information of the Red Lake Mine in Canada, under
the review and supervision of the Australian
consolidated statement of cash flows for the year then ended
engagement team.
notes to the consolidated financial statements, whichinclude a summary of significant accounting
policies
● We chose EBITDA because, in our view, it is the
benchmark against which the performance of the
directors’ declaration.
Group is most commonly measured.
● A Canadian componentaudit team performed
●
● We utilised a 2.5% threshold based on our
Basis for opinion
professional judgement, noting it is within the range
of commonly acceptable thresholds.
Key audit matters
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
section of our report.
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
our opinion.
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. The key audit matters were addressed in the context of
our audit of the financialreport asa whole, andin forming our opinion thereon, andwe donot provide a
separate opinion on these matters. Further, any commentary on the outcomes of a particular audit
procedure is made in that context.
Independence
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
101
102
184 Evolution Mining Limited // Annual Report 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
Key audit matter
How our audit addressed the key audit matter
Impairment of Mt Carlton mine assets
(Refer to note 10) [$144.3m]
We performed the following procedureson the Group’s
impairment assessment for the Mt Carlton mine assets,
amongst others:
consisted of $715.4m of property, plant and equipment
● developed an understanding of the key controls
At 30 June 2020, the Group’s non-current assets
and $1,939.9m of mine development and exploration
assets.
The Group determined that there was an indicator of
impairment for the Mt Carlton mine assets given that
there was a significant downgrade of reserves and
resources identified during the period following an
extensive grade control infill drilling program. The
Group therefore performed a detailed impairment
assessment for the Mt Carlton mine assetsand
estimated its recoverable amount and compared it to
its carrying value. Thisimpairment assessment
concluded that an impairment charge of $144.3m was
required at year end.
Significant judgements, assumptions and estimates
were used by the group in determining the recoverable
amount of the Mt Carlton mine assets. The recoverable
amount is based on the expected future cash flows
which are inherently uncertain, and are affected by a
number of factors, set out in the life-of-mine plan, such
as:
●
●
●
production estimates
estimates of operating costs
economic factors such as gold price, discount
rate and the foreign currency exchange rate.
We considered the impairment assessment of the Mt
Carlton mine assets to be a key audit matter due to the
following reasons:
●
significant judgment applied by the group in
relation to the significant assumptions used in
determining the recoverable amount
●
the significance of the impairment charge
related to the Mt Carlton CGU.
associated with the identification of impairment
indicators and the preparation of the discounted
cash flow model used to assess the recoverable
amount of the Mt Carlton CGUs (the impairment
model)
●
visited the Mt Carlton site and held a series of
discussions with site management team to obtain
an understanding of the assets, orebody, resource
and future plans which may impact impairment
considerations
●
assessed whether the Mt Carlton CGU included all
assets, liabilities and cash flows directly
attributable to the Mt Carlton CGU and a
reasonable allocation of corporate assets and
overheads
●
considered if the impairmentmodel used to
estimate the recoverable amount of the Mt
Carlton CGU on a ‘fair value lesscost of disposal’
basis was consistent with Australian Accounting
Standards
●
considered if the impairmentmodel appropriately
included the likely transaction costs associated
with selling the CGU
● assessed the reasonablenessof the cash flow
projections included in the life-of-mine model for
the Mt Carlton CGU and challenged the
appropriateness of the key assumptions by
o evaluating the cash flows with reference to our
knowledge of the industry, accuracy of
historical forecastsin respect of production
costs and capital expenditure and evaluating
the potential risk of management bias
o evaluating the reasonableness of the gold price
forecasts used in the impairment model with
reference to external forecasts by comparing
Independent Auditor’s Report (continued)
/
/
I
n
d
e
p
e
n
d
e
n
t
A
u
d
i
t
o
r
’
s
R
e
p
o
r
t
Key audit matter
How our audit addressed the key audit matter
Impairment of Mt Carlton mine assets
(Refer to note 10) [$144.3m]
Independent auditor’s report
To the members of Evolution Mining Limited
We performed the following procedureson the Group’s
impairment assessment for the Mt Carlton mine assets,
amongst others:
At 30 June 2020, the Group’s non-current assets
consisted of $715.4m of property, plant and equipment
and $1,939.9m of mine development and exploration
assets.
Report on the audit of the financial report
● developed an understanding of the key controls
associated with the identification of impairment
indicators and the preparation of the discounted
cash flow model used to assess the recoverable
amount of the Mt Carlton CGUs (the impairment
model)
The Group determined that there was an indicator of
Our opinion
impairment for the Mt Carlton mine assets given that
there was a significant downgrade of reserves and
In our opinion:
resources identified during the period following an
extensive grade control infill drilling program. The
Group therefore performed a detailed impairment
assessment for the Mt Carlton mine assetsand
estimated its recoverable amount and compared it to
its carrying value. Thisimpairment assessment
concluded that an impairment charge of $144.3m was
required at year end.
visited the Mt Carlton site and held a series of
discussions with site management team to obtain
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
an understanding of the assets, orebody, resource
(together the Group) is in accordance withthe Corporations Act 2001, including:
and future plans which may impact impairment
considerations
●
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
performance for the year thenended
●
assessed whether the Mt Carlton CGU included all
assets, liabilities and cash flows directly
attributable to the Mt Carlton CGU and a
reasonable allocation of corporate assets and
overheads
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
Significant judgements, assumptions and estimates
were used by the group in determining the recoverable
amount of the Mt Carlton mine assets. The recoverable
What we have audited
amount is based on the expected future cash flows
which are inherently uncertain, and are affected by a
The Group financial report comprises the:
number of factors, set out in the life-of-mine plan, such
as:
●
●
●
●
●
●
●
●
●
●
production estimates
estimates of operating costs
economic factors such as gold price, discount
rate and the foreign currency exchange rate.
considered if the impairmentmodel used to
estimate the recoverable amount of the Mt
Carlton CGU on a ‘fair value lesscost of disposal’
consolidated balance sheet asat 30 June 2020
basis was consistent with Australian Accounting
Standards
consolidated statement of profit or loss and other comprehensive income for the year thenended
consolidated statement of changes in equity for the year thenended
consolidated statement of cash flows for the year then ended
notes to the consolidated financial statements, whichinclude a summary of significant accounting
policies
directors’ declaration.
significant judgment applied by the group in
relation to the significant assumptions used in
Basis for opinion
determining the recoverable amount
the significance of the impairment charge
related to the Mt Carlton CGU.
knowledge of the industry, accuracy of
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
historical forecastsin respect of production
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
costs and capital expenditure and evaluating
the potential risk of management bias
section of our report.
considered if the impairmentmodel appropriately
included the likely transaction costs associated
with selling the CGU
projections included in the life-of-mine model for
the Mt Carlton CGU and challenged the
appropriateness of the key assumptions by
o evaluating the cash flows with reference to our
● assessed the reasonablenessof the cash flow
We considered the impairment assessment of the Mt
Carlton mine assets to be a key audit matter due to the
following reasons:
●
●
●
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
our opinion.
o evaluating the reasonableness of the gold price
forecasts used in the impairment model with
reference to external forecasts by comparing
Independence
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
102
PricewaterhouseCoopers, ABN 52 780 433 757
Evolution Mining Limited // Annual Report 2020 185
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
Independent Auditor’s Report (continued)
t
r
o
p
e
R
s
’
r
o
t
i
d
u
A
t
n
e
d
n
e
p
e
d
n
I
/
/
Key audit matter
How our audit addressed the key audit matter
Independent auditor’s report
To the members of Evolution Mining Limited
the projected gold price against external
forward prices.
o comparing the discount rate and value per
resource ounce to mark et indicators, together
with our valuation specialists
Report on the audit of the financial report
Our opinion
In our opinion:
●
o tested the mathematical accuracy of the
spreadsheet models used by the group.
considered whether facts and circumstances
existed which indicate the impairmentshould
have been recorded in prior periods.
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
We considered the adequacy of the Group's disclosures
made in Note 10 in respect of the Mt Carlton
impairment assessment, including those disclosures
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
related to significant accounting judgements and
estimates used to determine the recoverable amount in
accordance with the Australian Accounting Standards.
performance for the year thenended
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
Acquisition of Red Lake Gold Mine
(Refer to notes 26, 19) [$644.6m]
What we have audited
The Group financial report comprises the:
●
Our procedures included the following, amongstothers:
●
●
●
●
●
During the year, the Group acquired 100% of the Red
Lake gold mine (Red Lake) from Newmont Corporation
(Newmont). The acquisition completed on 1 April
2020.
evaluating the Group’s accounting against the
requirements of Australian Accounting
consolidated balance sheet asat 30 June 2020
Standards, key transaction agreements, our
understanding of the business acquired and
consolidated statement of profit or loss and other comprehensive income for the year thenended
minutes of the board of directors’ meetings
consolidated statement of changes in equity for the year thenended
The Group has agreed to pay Newmont US$375 million
consolidated statement of cash flows for the year then ended
in cash upon closing of the transaction, and up to an
assessment prepared by the group on which
additional US$100 million payable upon new resource
the provisional fair values of the identifiable
notes to the consolidated financial statements, whichinclude a summary of significant accounting
discovery (Contingent Consideration). The Contingent
assets and liabilities acquired were based ,and
Consideration comprisesof an additional payment of
policies
US$20 million for each additional one million ounces
directors’ declaration.
of new mineral resourcesdiscovered and added to the
Red Lake resource base, up to a maximum of five
million ounces or US$100 million in total, over a 15-
Basis for opinion
year period.
combination disclosures in Note 26 in light of
the requirementsof Australian Accounting
Standards.
● assessed the adequacy of the business
● obtained and inspected the valuation
●
The accounting for the acquisition was a key audit
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
In relation to the valuation of the contingent
matter because it was a significant transaction for the
consideration, our procedures included, amongst
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
year given the financial and operational impacts on the
others:
section of our report.
Group. In addition, the Group made significant and
complex judgements when accounting for the
acquisition, including estimating the purchase
consideration, particularly in respect of contingent
consideration payable.
o assessing if the calculation of the contingent
consideration was in accordance with the
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
contractual arrangements and the
our opinion.
Independence
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
103
186 Evolution Mining Limited // Annual Report 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
Independent Auditor’s Report (continued)
/
/
I
n
d
e
p
e
n
d
e
n
t
A
u
d
i
t
o
r
’
s
R
e
p
o
r
t
Key audit matter
How our audit addressed the key audit matter
The accounting for the acquisitionsis provisional at the
time of authorisation of the financial report.
Independent auditor’s report
requirements of Australian Accounting
Standards
To the members of Evolution Mining Limited
Report on the audit of the financial report
o assessing the Group’s evaluation of whether
the conditions required for the contingent
consideration to be paid were likely to be met
in the future based upon current Group
expectations.
Our opinion
In our opinion:
Other information
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 30 June 2020, butdoes not include the financialreport
and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we
obtained included the Director's report. We expect the remaining other information to be made available
to us after the date of this auditor's report.
performance for the year thenended
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
Our opinion on the financialreport does not cover the other information andwe do notandwillnot
expressan opinion or any form of assurance conclusion thereon.
What we have audited
The Group financial report comprises the:
If, basedon the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report thatfact. We have nothingto report in this regard.
In connection with our audit of the financial report, our responsibility is to readthe other information
and, in doing so, consider whether the other informationis materially inconsistent withthe financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
consolidated balance sheet asat 30 June 2020
consolidated statement of profit or loss and other comprehensive income for the year thenended
consolidated statement of changes in equity for the year thenended
consolidated statement of cash flows for the year then ended
notes to the consolidated financial statements, whichinclude a summary of significant accounting
policies
directors’ declaration.
When we readthe other information not yet received, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and use our professionaljudgement
to determine the appropriate action to take.
●
●
●
●
●
●
Responsibilities of the directors for the financial report
Basis for opinion
The directors of the Company are responsible for the preparation of the financial report that givesa true
and fair viewin accordance with Australian Accounting Standardsand the Corporations Act 2001 andfor
such internal control as the directors determine is necessary to enable the preparationof the financial
report that givesa true andfair view andis free from material misstatement, whether due to fraud or
error.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
section of our report.
In preparing the financial report, the directors are responsible for assessingthe ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to goingconcernandusingthe
going concern basis of accounting unless the directors either intendto liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
our opinion.
Independence
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
104
PricewaterhouseCoopers, ABN 52 780 433 757
Evolution Mining Limited // Annual Report 2020 187
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
Independent Auditor’s Report (continued)
t
r
o
p
e
R
s
’
r
o
t
i
d
u
A
t
n
e
d
n
e
p
e
d
n
I
/
/
Auditor’s responsibilities for the audit of the financial report
Independent auditor’s report
To the members of Evolution Mining Limited
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, andto issue anauditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that anaudit
conducted in accordance withthe Australian Auditing Standards will always detect a material
misstatementwhen it exists. Misstatements canarise from fraud or error and are considered material if,
Report on the audit of the financial report
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users takenon the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
Our opinion
and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This
In our opinion:
description forms part of our auditor's report.
Report on the remuneration report
The accompanying financial report of Evolution Mining Limited (the Company)and its controlled entities
(together the Group) is in accordance withthe Corporations Act 2001, including:
(a) giving a true and fair viewof the Group's financial position asat 30 June 2020 andof its financial
Our opinion on the remuneration report
We have audited the remuneration report included in pages 105 to 133 of the directors’report for the
year ended 30 June 2020.
performance for the year thenended
(b) complying with Australian Accounting Standards andthe Corporations Regulations 2001.
In our opinion, the remuneration report of Evolution Mining Limited for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
What we have audited
The Group financial report comprises the:
Responsibilities
●
●
●
●
●
consolidated balance sheet asat 30 June 2020
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to expressan
consolidated statement of profit or loss and other comprehensive income for the year thenended
opinion on the remuneration report, based on our audit conducted in accordance with Australian
consolidated statement of changes in equity for the year thenended
Auditing Standards.
consolidated statement of cash flows for the year then ended
notes to the consolidated financial statements, whichinclude a summary of significant accounting
policies
directors’ declaration.
PricewaterhouseCoopers
●
Basis for opinion
Marc Upcroft
Partner
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’sresponsibilities for the audit of the financial report
section of our report.
Sydney
13 August 2020
We believe thatthe auditevidence we have obtained is sufficient and appropriate to provide a basisfor
our opinion.
Independence
We are independent of the Group in accordance withthe auditor independence requirements of the
Corporations Act 2001 andthe ethical requirements of the Accounting Professionaland Ethical
Standards Board’s APES 110 Codeof Ethics for Professional Accountants (including Independence
Standards)(the Code)that are relevant to our audit of the financialreport in Australia. We have also
fulfilledour other ethicalresponsibilities in accordance withthe Code.
105
188 Evolution Mining Limited // Annual Report 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
100
Independent Auditor’s Report (continued)
Shareholder information
Capital (as at 23 September 2020)
Share Capital
Ordinary shareholders
Shareholdings with less than a marketable parcel of $500 worth of ordinary shares
Market price (closing price on the Australian Securities Exchange as at 22 September 2020)
Distribution of Fully Paid Shares (as at 23 September 2020)
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
Securities
1,571,853,429
84,050,360
23,680,222
24,990,337
4,038,892
1,708,613,240
16,657
%
No. of Holders
92.00
4.92
1.39
1.46
0.24
100.00
0.00
214
3,265
3,168
9,461
8,461
24,569
852
Substantial Shareholders (as at 23 September 2020)
/
/
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
1,708,613,240
24,569
852
A$5.84
%
0.87
13.29
12.89
38.51
34.44
100.00
3.47
Van Eck Global
Australian Super
Vanguard Group
Total
Fully Paid Ordinary Shares
Number
178,947,886
95,825,162
92,897,030
%
10.47
5.61
5.44
367,670,078
21.52%
The disclosed number of ordinary shares held by substantial shareholders may not be equal to the actual number of ordinary shares held as at 23 September 2020
as only movements of at least 1% are required to be notified to the Australian Securities Exchange.
Twenty Largest Shareholders (as at 23 September 2020)
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
Fully Paid Ordinary Shares
Current
balance
Issued
capital %
840,365,148
394,759,443
129,582,202
56,306,769
49.18
23.10
7.58
3.30
Evolution Mining Limited // Annual Report 2020 189
n
o
i
t
a
m
r
o
f
n
i
l
r
e
d
o
h
e
r
a
h
S
/
/
Shareholder information
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ROXI PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
SMARTEQUITY EIS PTY LTD
LUJETA PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
AMP LIFE LIMITED
MR KEVIN GOORJIAN & MRS JUDITH GOORJIAN
NATIONAL NOMINEES LIMITED
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BNP PARIBAS NOMS(NZ) LTD
Total
TOTAL
Balance of Register
Grand TOTAL
1.5
Share Buy-Backs
There is no current on-market buy-back scheme.
2.
Other Information
21,496,095
20,717,297
9,063,606
7,737,099
7,386,105
5,624,787
5,428,171
4,428,723
4,330,606
2,608,513
2,452,112
1,940,294
1,693,327
1,679,893
1,577,837
1,540,243
1.26
1.21
0.53
0.45
0.43
0.33
0.32
0.26
0.25
0.15
0.14
0.11
0.10
0.10
0.09
0.09
1,520,718,270
89.00
1,520,718,270
187,894,970
89.00
11.00
1,708,613,240
100.00
Evolution Mining Limited, incorporated and domiciled in Australia, is a public listed Company limited by Shares.
190 Evolution Mining Limited // Annual Report 2020
This page has been left blank intentionally
Evolution Mining Limited // Annual Report 2020 191
This page has been left blank intentionally
192 Evolution Mining Limited // Annual Report 2020
Corporate
information
ABN 74 084 669 036
Board of Directors
Jacob (Jake) Klein
Executive Chairman
Lawrence (Lawrie) Conway
Finance Director and Chief Financial Officer
Thomas (Tommy) McKeith
Lead Independent Director
James (Jim) Askew
Non-Executive Director
Andrea Hall
Jason Attew
Peter Smith
Non-Executive Director
Non-Executive Director
Non-Executive Director
Victoria (Vicky) Binns
Non-Executive Director
Company Secretary
Auditor
Evan Elstein
Registered Office
Level 24, 175 Liverpool Street
SYDNEY NSW 2000
Postal Address
Level 24, 175 Liverpool Street
SYDNEY NSW 2000
T: +61 2 9696 2900
F: +61 2 9696 2901
Share Register
Link Market Services
Level 12, 680 George Street
SYDNEY NSW 2000
T: +61 1300 554 474
F: +61 2 9287 0303
PricewaterhouseCoopers
One International Towers Sydney
Watermans Quay
BARANGAROO NSW 2000
T: +61 2 8266 0000
F: +61 2 8266 9999
Website
www.evolutionmining.com.au
Stock Exchange Listing
Evolution Mining Limited (EVN) shares are listed
on the Australian Securities Exchange
Evolution Mining Limited // Annual Report 2020 193
Level 24, 175 Liverpool Street SYDNEY NSW 2000
+61 2 9696 2900
+61 2 9696 2901
ASX: EVN
www.evolutionmining.com.au