10 Years of
Evolution
Annual
Report
2021
10 years of Evolution
Mungari – Cornerstone asset
Kundana Assets Acquisition elevates Mungari to a
cornerstone asset
Acquisition of Kundana Operations, EKJV (51%), Carbine
Project and WKJV (75%)
2021
Crush Creek Acquisition:
Unlocking value and extending mine
life through earn-in agreements.
Cracow Divestment:
Lowering Group AISC1,2 by A$20/oz
2020
Battle North Acquisition proximal to Red Lake:
Unlocking value and extending mine life through
acquiring proximal deposits
Red Lake – Cornerstone asset
Red Lake Acquisition
Unlocking value in an under-capitalised asset
with significant mine life
2019
Evolution’s inaugural entry in the Dow
Jones Sustainability Index – Australia,
one of only two gold companies
Edna May Divestment:
Divested due to low margins3 (18%)
compared to the rest of the Group
(49%), reducing Group AISC by A$50/oz
2017
Evolution enters ASX 100
Ernest Henry – Cornerstone asset
Ernest Henry Economic Interest
Reducing Group AISC by A$100/oz
2016
Marsden Acquisition:
Strategic acquisition of the nearest known
sizeable copper-gold deposit to Cowal
Pajingo Divestment:
Divested due to lack of strategic fit in the
portfolio, reducing Group AISC costs by A$15/oz
Cowal – Cornerstone asset
Cowal Acquisition
Reducing Group AISC by A$100/oz and
extending portfolio mine life
2015
Mungari Acquisition:
Reducing Group AISC by A$30/oz
and extending portfolio mine life
2013
Mt Carlton produces first concentrate,
reducing Group AISC by A$25/oz
2012
Evolution enters ASX 200
Evolution Formed
Conquest Mining and Catalpa Resources merge
to form Evolution Mining November 2011
2011
AISC for a given financial year
2. Based on FY20 performance
3. Based on EBITDA margin
1. Cost reductions refer to contribution to Group
We have come
a long way!
Execution of our growth strategy has delivered four cornerstone assets
Cowal Expansion to 350kozpa in
FY24 – 17+ year mine life
Investment in the development of the Cowal Underground
project and longer-term development of satellite open pits
is expected to increase the operation’s annual production
to over 350koz and extend mine life to 17+ years
Ernest Henry Extension – Mine life
extension below 1,200mRL
Current drill program testing extension of the ore body below the
current reserves at 1,200mRL is expected to deliver 3 – 5 year
mine life extension and will provide increased copper exposure
Red Lake Transformation to 350kozpa in
FY26 – 15+ year mine life
Investing in mine development and exploration milling
expansions to restore Red Lake to a premier Canadian gold mine
targeting 350kozpa in FY26 and to extend mine life 15+ years
Mungari Plant Expansion, 200kozpa
objective – 13+ year mine life
Kundana Assets to provide a high-grade ore source and support
a potential mill expansion to 4.2Mtpa at Mungari with the
objective of achieving an increase in production to 200kozpa and
extend mine life to 13+ years – mill expansion studies in progress
Evolution Mining Limited // Annual Report 2021 1
Our vision
Inspired people creating a premier,
global, gold company
Our strategy
ß Prioritise margin over ounces approach, maintaining a
portfolio of 6 to 8 assets generating superior returns with an
average mine life of at least 10 years
ß Build a reputation for sustainability, reliability and
transparency
ß Embed financial discipline across the business
ß Maintain an active pipeline of quality exploration and
development projects
ß Open to all quality gold, silver and copper-gold
value accretive investments
Our values
Safety
Think before we act,
every job, every day
Excellence
We take pride in our work, deliver our
best and always strive to improve
Accountability
If it is my responsibility,
I own it – good or bad
Respect
We trust each other, act honestly
and consider each other’s opinion
2 Evolution Mining Limited // Annual Report 2021
10 years of sharing the
benefits of mining
~A$10.6B
Economic contributions since inception
– helping to build vital infrastructure
and fund essential community services
in Australia and Canada
~A$600M
In combined regional and direct spend
since inception
A$17M
Community Investment including sponsorships,
donations and Shared Value projects
67%
Local employment
Provision of career opportunities through
workplace programs
69 graduate roles
41 apprenticeships
64 vacation roles
Diversity and
Inclusion focus
to provide equal employment opportunities in
mining for everyone
Emergency Response
Teams on call
to assist with emergency incidents within our
local communities including in drought, fire
and flood events
Collaboration
with industry
on mining innovations such as the
Electric Mine Consortium to accelerate
progress towards the industry goal of
fully electrified zero carbon dioxide and
zero particulate mines
Evolution Mining Limited // Annual Report 2021 3
Our performance
Gold production (koz)
Reserve life (years)*
4
4
8
3
0
8
1
0
8
3
5
7
9
1
7
1
8
6
,
0
1
0
1
-
0
4
9
5
7
8
-
5
1
8
0
6
7
-
0
0
7
3
9
3
8
2
4
8
3
4
0
8
2
.
5
4
1
0
9
.
3
8
.
3
7
.
.
0
0
1
2
9
.
1
6
.
1
6
.
6
5
.
1
5
.
2
1
Y
F
3
1
Y
F
4
1
Y
F
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
*
2
2
Y
F
*
3
2
Y
F
*
4
2
Y
F
2
1
Y
F
3
1
Y
F
4
1
Y
F
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
* Denotes three-year production outlook published 22 July 2021
Reserve growth since inception (Moz)
9
9
.
2
7
.
5
7
.
7
6
6
.
8
5
.
2
5
.
3
3
.
6
3
.
6
2
.
2
1
Y
F
3
1
Y
F
4
1
Y
F
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
Cumulative dividends
declared (A$M)
3
4
9
2
3
7
9
5
4
8
9
2
1
7
1
7
8
3
4
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
7
3
1
Y
F
1
2
4
1
Y
F
* Total Group gold reserves (excluding Kundana Assets and McFinley) divided by Group production. FY12 production adjusted to include
non-attributable production prior to 2 Nov 2011 formation of Evolution. FY12 and FY13 excludes reserves and production for Mt Carlton
which was not a producing asset until late FY13
We Say, We Do, We Deliver
4 Evolution Mining Limited // Annual Report 2021
30 Shared Value
Projects delivered
Partnering with our communities to
deliver long-term benefits including
local economic development,
environmental stewardship,
infrastructure capability, sport, health
and education including:
ß Partnering with the University of Queensland Research
on breakthrough research in early cancer detection using
gold, extending to long haul COVID-19
ß Rural Aid partnership to make a larger impact across our
regions such as:
ß Buy a Bale NSW for struggling farmers – 2,736 bales
delivered to over 200 farmers
ß Financial assistance to farmers to pay bills and spend in
their local communities
ß Somewhere Down the Lachlan – sculpture trail in
regional NSW to encourage tourism and promote the
Wiradjuri culture
ß
Improving Indigenous outcomes:
ß Partnering with the Wiradjuri Condobolin Corporation
to form the Galari Agricultural Company to enhance the
employability and skill development of Indigenous youth
ß Partnering with our First Nation Partners at Red Lake on
a collaborative business entity named ‘Shared Spirits’
ß Environmental enhancement Partnering with James Cook
University and the Great Barrier Reef Marine Park Authority
on the Great Barrier Reef beach scrub protection and
Yellow Zone research project
ß Partnering with the University of Queensland on a
sustainable transformational reuse and economic
alternatives for Mine Waste Study
Evolution volunteers
assisting with sandbagging
during the 2017 NSW floods
Support for Rural Aid - Buy
a Bale hay drop to support
farmers during the NSW drought
Somewhere Down the Lachlan
sculpture trail - to encourage tourism
and promote the Wiradjuri culture
Partnering to protect
and enhance the
Great Barrier Reef
Evolution Mining Limited // Annual Report 2021 5
Building a reputation for
quality and transparency
in Sustainability Reporting
ß
Inaugural annual Sustainability Report published in 2018
ß Reporting aligned with the principles of the Global Reporting Initiative (GRI), Taskforce on Climate Related Disclosures (TCFD),
the United Nations Global Compact (UNGC), and the United Nations Sustainable Development Goals (SDGs)
ß Evolution included in 2020 Dow Jones Sustainability Index Australia – one of only two gold companies
ß Morgan Stanley Capital International (MSCI) rating of ‘AA’ (on a scale of AAA-CCC) – 29.5% above the industry average
Copyright ©2021 Sustainalytics. All rights reserved. This section contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary
of Sustainalytics and/or its third-party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project,
nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at
https://www.sustainalytics.com/legal-disclaimers
The use by Evolution Mining of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not
constitute a sponsorship, endorsement, recommendation, or promotion of Evolution Mining by MSCI. MSCI services and data are the property of MSCI or its information providers and
are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI
6 Evolution Mining Limited // Annual Report 2021
FY21 Achievements
FY21 Achievements
Operational and
Financial Performance
Mineral Resources
and Ore Reserves
680,788oz
Gold production
AISC A$1,215/oz1
(US$907/oz)2 - among the lowest
cost gold producers in the world
A$345.3M
Record statutory net profit after
tax– 14% increase year-on year (YOY)
A$354.3M
Underlying net profit after tax
A$914.2M
EBITDA
Record payout of
A$273.4M
in fully franked dividends –
23.5% increase YOY
1 2 3 4
1
2
3
4
All-in Sustaining Cost includes C1 cash cost, plus royalties,
sustaining capital, general corporate and administration
expenses on a per ounce sold basis
Calculated using an average AUD:USD exchange rate of
0.7466 for FY21
TRIF: Total recordable injury frequency. The frequency of
total recordable injuries per million hours worked. Results
above are based on a 12-month moving average
Local and regional organisations are defined by postcode in
relation to geographical proximity to Evolution mine sites
74% increase
in Mineral Resources to 26.4Moz YOY
49% increase
in Ore Reserves to 9.9Moz YOY
Sustainability
COVID-19 – no material impact
on operations
TRIF3 9.6 – heavy focus on
increased field leadership and
high-quality safety interactions
Commitment to Net Zero
greenhouse gas emissions by
2050 and 30% reduction by 2030
(Scope 1 and 2)
25% increase
in water reuse - improved water security
‘AA’ MSCI ESG rating’
the highest rating among
global gold mining peers
A$129.8M
contribution to local and regional
businesses and organisations4
including A$100.4M in direct
spend with local organisations
Evolution Mining Limited // Annual Report 2021 7
FY21 Annual Report Contents
Together, we can become the
best gold company in the world
Contents
Executive Chairman’s Report
Operations
Discovery
Sustainability Report
Chief Financial Officer's Review
Annual Financial Report
Shareholder Information
Corporate Information
9
11
21
36
124
129
223
225
This report has been authorised for release by the Evolution Board of Directors
Forward looking statements
This report prepared by Evolution Mining Limited (or “the Company”) includes 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.
8 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Executive Chairman’s Report
Executive Chairman’s Report
and extending mine life at these high margin assets.
Importantly, we have always prudently managed our
balance sheet to ensure we are well capitalised to fund our
growth ambitions and deliver returns to our shareholders.
While our past achievements give us much to celebrate,
we look to the future more excited than ever about our
ability to capitalise on the opportunities in front of us to
continue to deliver long term stakeholder value through
safe, low-cost gold production in an environmentally and
socially responsible manner. In July 2021 we announced
our commitment to reducing greenhouse gas emissions
in alignment with the climate change goals of the Paris
Agreement. Evolution is committed to reducing our
greenhouse gas emissions (Scope 1 and 2) by 30% by
2030; and achieving net zero greenhouse gas emissions
by 2050.
Evolution continues to be recognised for its Sustainability
performance, including receiving a sector leading ‘AA’
rating in the annual MSCI ESG Ratings assessment. The
COVID-19 pandemic has not had a material impact on our
operations with protocols developed to minimise risks
to our people and communities and to ensure we can
continue to safely produce gold during this challenging
period that we continue to navigate through.
At Evolution we are committed to providing a workplace
where our people are safe and healthy which relies on
the commitment, leadership, teamwork, engagement and
involvement of our entire workforce. This year we had a
strong focus on improving leading safety metrics including
proactive reporting, training, field interactions and action
close outs. In FY21 our Total Recordable Injury Frequency
(TRIF) rose to 9.6 (30 June 2020: 6.8). We remain fully
committed to improving our safety performance.
In FY21, Evolution produced 680,788 ounces of gold at
an All-in Sustaining Cost (AISC) of A$1,215 per ounce
(US$907/oz). This translated into a record statutory net
profit after tax of A$345.3 million, a 14.5% increase on
the prior year. Operating mine cash flow totalled A$937.3
million prior to total capital investment of A$379.8 million.
A record A$273.4 million in fully franked dividends was
paid during the year, a 23.5% increase on FY20.
During the year a maiden Mineral Resource estimate of
11.0 million ounces of gold and Ore Reserves of 2.9 million
ounces of gold, in accordance with the JORC Code, were
declared at Red Lake – a significant uplift from when
we announced the acquisition in November 2019. This
contribution from Red Lake and continued growth at
Cowal resulted in Evolution’s Group Mineral Resources
increasing by 74% year-on-year to 26.4 million ounces and
Group Reserves increasing by 49% to 9.9 million ounces.
Celebrating 10 years of inspired people
creating a premier global gold company
On behalf of the Board of Directors of Evolution Mining
Limited, I am proud to present you with the Company’s
2021 Annual Report. This incorporates our 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.
As we celebrate 10 years since formation, we look back on
what we have achieved over the last decade with great
pride. To quote from my address to the inaugural Annual
General Meeting on 29 November 2011: “Evolution was
formed to create a vibrant, growth orientated, creative
gold company that will attract and retain the best people
to deliver on a growing portfolio of assets and attract
the attention of major investors in the gold industry.”
Our mantra from day one has been “We say, We do, We
deliver” and I can confidently say that we have delivered
far in excess of what we set out to do 10 years ago.
From the very beginning we developed a clear and
consistent strategy to capitalise on what we felt would be
a transformational period in the Australian gold industry.
We set out to build and upgrade the quality of our asset
portfolio and become a globally relevant gold company
that prospers through the cycle.
In the years that followed we have had the courage to
act countercyclically to acquire great assets at attractive
valuations from motivated sellers who were divesting mines
in Australia and Canada. Through focus and commitment,
we have added significant value to these operations which
now cornerstone our portfolio.
Today we are a very different company, but our vision
and strategy has not changed. Our relentless focus on
quality over quantity has resulted in Evolution generating
sector leading returns and rewarding our shareholders
by paying 17 consecutive dividends. With four long life
cornerstone assets we are investing in growing production
In May 2021 Evolution completed the acquisition of Battle
North whose key asset was the Bateman operation located
10 kilometres from Evolution’s Red Lake operations in
Ontario, Canada. The additional processing capacity from
Bateman mill will accelerate the ability to achieve in excess
of 350,000 ounces of gold per annum from Red Lake.
Evolution Mining Limited // Annual Report 2021 9
FY21 Annual Report COVID-19 has created should not be underestimated but
together we have overcome these obstacles to continue
to deliver on our strategy. I want to sincerely thank each
one of our employees and contractors for their ongoing
contribution. I would also like to thank the Board of
Directors for the ongoing support they have given to the
Leadership Team this year.
Looking ahead to the 2022 financial year, our production
guidance increases to 700,000 – 760,000 ounces which
is driven by growing production at Cowal and Red Lake.
Group AISC is expected to be in the range of A$1,220 –
A$1,280 per ounce.
Over the last 10 years Evolution has built a sustainable
portfolio of long-life, low-cost, high-margin assets in the
safe jurisdictions of Australia and Canada. Our balance
sheet is strong, our assets are generating strong cash flow
and our people are inspired to continue to deliver value
for all our stakeholders while staying true to our values of
Safety, Excellence, Accountability and Respect.
Yours faithfully
JAKE KLEIN
EXECUTIVE CHAIRMAN
Executive Chairman’s Report
The Cowal Underground Project Feasibility Study
was completed during FY21 and has received Board
and regulatory approval for development. The Cowal
underground will provide a higher-grade ore source
which will be blended with E42 open pit ore to drive the
operation’s production profile to 350,000 ounces per
annum. Cowal now has a mine life of at least 17 years
in which it will continue to deliver significant economic
benefit for all stakeholders.
Evolution’s interest in Ernest Henry continues to deliver
exceptional cash flows with record net mine cash flow of
A$309.0 million generated in FY21. The drilling program
and Concept Study for mine life extensions below the
1,200mRL was successfully completed during the year
with encouraging results. Approval to advance to a Pre-
Feasibility Study is expected during the December 2021
half-year.
Subsequent to the end of the 2021 financial year,
we announced that Evolution had entered into an
agreement with Northern Star Resources Limited to
acquire a 100% interest in the Kundana Operations; a
51% interest in the East Kundana Joint Venture; a 100%
interest in certain tenements comprising the Carbine
Project; and a 75% interest in the West Kundana Joint
Venture. The transaction, which completed on 18 August
2021, represents an important strategic opportunity to
consolidate the Mungari region, optimise the value of
existing infrastructure at the Mungari Operation and
capture significant operational synergies.
With four long-life, high-margin cornerstone assets, and a
robust Balance Sheet, Evolution is well placed to deliver on
the organic growth opportunities within the portfolio over
the coming years.
Evolution relies on the relationships we have built with our
stakeholders to ensure that the opportunities created by
our operations produce socially inclusive and sustainable
development for the communities in which we live and
work. The communities near our sites experience the most
direct social, environmental and economic impacts of our
business. By providing competitive wages and benefits,
prioritising local procurement, contributing our fair
share of taxes and royalties, and investing in community
programs and infrastructure, we work hard to support
the development goals of our host communities and
governments. We are also committed to respecting and
enhancing the rights, interests, and cultural activities of our
First Nation Partners and Indigenous Peoples within the
communities in which we operate.
As I stated 10 years ago, we have always endeavoured
to attract and retain the best people in the industry. Our
people have always been our most important asset and we
want every person’s time at Evolution to be the highlight
of their career. Time and again this year we have been
challenged to go above and beyond and each time our
employees and contractors have stood tall, accepted the
challenge and delivered. The anxiety and disruption that
10 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Operations
Chief Operating Officer’s Review
Chief Operating Officer’s Review
recently announced our commitment to a net zero future
by reducing greenhouse gas emissions by 30% by 2030,
and net zero emissions by 2050 in alignment with the
climate change goals of the Paris Agreement. We will
focus on reducing emissions across our operations, as well
as partnering with others to develop new technological
solutions.
Sustainability also means partnering with our stakeholders
to deliver long-term benefits to the communities in
which we operate. Our partnerships resulted in the
commencement of seven new Shared Value projects in
FY21 including breakthrough cancer research with the
University of Queensland. I am pleased to say that our
sustainability performance has been recognised by key
ratings agencies including the Dow Jones Sustainability
Index Australia and has resulted in an upgrade to an
‘AA’ rating from MSCI. This is a testament to the work
being done to differentiate ourselves as a business in the
Sustainability space. Details of our sustainability efforts are
provided in the Sustainability section of this 2021 Annual
Report.
On the production front, we finished the 2021 Financial
Year with 680,788 ounces produced at an All-in Sustaining
Cost of A$1,215 per ounce – both metrics were within or
better than original guidance (production 2% below revised
guidance in April 2021). This delivery reflects not only the
improved planning systems we have been implementing
but also the tenaciousness of our teams to overcome
operational challenges to deliver on our commitments. In
FY22, we plan to keep the momentum focusing on short
interval control and better links between strategic and
tactical planning.
Our internal continuous improvement program ‘Act Like
an Owner’ has also seen a significant increase in rewards
distributed, highlighting the positive culture our people
continually demonstrate through value-adding efforts. In
FY21, we reached a record of 225 approved submissions,
representing a 20% increase on FY20.
For the third consecutive year, we delivered significant
value through our Data Enabled Business Improvement
(DEBI) innovation program. A$41.5 million in benefits were
realised in FY21 against a target of A$30.0 million. The
program comprised over a hundred initiatives across the
Group, with our best success coming from processing
initiatives such as the Oxide Elimination Campaign at
Cowal and throughput and recovery improvements at Red
Lake and Mt Rawdon. Our use of data and analytics to
drive business improvement continues to mature and will
continue to pay dividends as we embed it as part of how
we operate.
Innovation and technology remain front of mind in our
FY22 business plan, with a broad range of opportunities
being pursued across the business. Examples include use
of electric powered underground fleet at Red Lake, in situ
leaching research options for Marsden and crowd-sourced
problem solving for Discovery and operational challenges.
FY21 was the catalyst for Evolution’s
growth to a premier global gold mining
company with significant projects
brought to fruition at three of our
assets, underpinned by the dedication,
hard work and values-driven actions of
our people.
Our Total Recordable Injury Frequency (TRIF) on 30 June
2021 was 9.6 (30 June 2020 was 6.8). Performance varied
across the portfolio and although we did not achieve our
TRIF target, each of our operations were actively involved
in implementing sound, robust initiatives to help reduce the
risk of incidents, injuries, and illnesses. We also saw pockets
of excellence, with Mt Rawdon and Mt Carlton achieving
respectively 3- and 6-months recordable injury free as of
early August 2021. All operations have developed detailed
safety improvement plans for FY22 to drive increased
attention and improvement in safety, with a target TRIF
reduction of 12.5% over the financial year.
COVID-19 continues to be a significant focus for the
business and the formal crisis management response
protocols remain activated. We have worked closely with
regulators, community, and industry groups to comply,
as a minimum, with agreed protocols and requirements.
All management decisions are underpinned by our values
of keeping our people healthy and safe. There has been
no material impact on operations to date, which would
not have been possible without early proactive hard
work and diligence from our site and group teams in the
development of clear operating protocols and trigger
action response plans.
Sustainability performance remains a prerequisite to
our success as a business, and year by year becomes an
increasingly important element of our social licence. At
Evolution, we are committed to doing our part. We have
12 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Chief Operating Officer’s Review
In FY21 Evolution continued to improve the quality of its portfolio with the acquisition of Battle North Gold to accelerate
the transformation of Red Lake, and Crush Creek to provide a new ore source at Mt Carlton. The Cowal Underground
development which will provide a higher-grade ore source at Cowal has received Board and regulatory approval. We also
completed the acquisition of the Kundana mine and East Kundana Joint Venture assets from Northern Star Resources to
elevate Mungari to the fourth cornerstone asset in the Evolution portfolio. It is an exciting time to be a part of the business,
with immense opportunity ahead of us. The FY22 business plan vital few goals of Keeping our People Safe, Living our Values
Driven Culture and Reliably Delivering the Budget will be paramount in securing our current and future success.
Yours faithfully
BOB FULKER
CHIEF OPERATING OFFICER
Rokion R100 battery electrical vehicle (BEV) for
underground at Red Lake
Hololens (Augmented Reality) technology at Cowal -
enables maintenance teams on the surface and/or at the
Original Equipment Manufacturer or Dealership to view
what the maintainer is seeing in real-time to expedite
troubleshooting eg working on an excavator in the open pit
Evolution Mining Limited // Annual Report 2021 13
FY21 Annual Report Operational Performance
Operational Performance
Cowal
The Cowal operation is a world-class open pit gold
operation located 350km west of Sydney and operated
by Evolution since July 2015. It is situated within the Bland
Shire on the traditional lands of the Wiradjuri People.
The operation also works closely with the Lachlan and
Forbes Shires.
Cowal was the highest gold producer in the Group,
achieving 210,847 ounces of gold produced at an AISC
of A$1,042 per ounce. Cowal mined to plan resulting in
meeting its planned gold production. The decrease in
production when compared to the prior year was mainly
due to the planned transition from Stage G ore to Stage H
ore in the E42 open pit, and some lower grade stockpiled
material being processed while this transition occurred.
In FY22 Stage H ore becomes the predominate ore feed
leading to a planned increase in production.
A major milestone was achieved at Cowal with Board and
regulatory approvals received for the development of
the Cowal Underground Mine, which provides a higher-
grade ore source that will be blended with the current
E42 open pit and stockpile ore. The development of the
Cowal Underground Mine is part of the Group’s goal of
Cowal producing 350,000 ounces of low-cost gold a year
and extend its mine life out beyond 17 years, while at the
same time injecting significant economic benefit for all
stakeholders. The planned capital investment is
A$380 million.
Capital investment in FY21 consisted of investment in major
projects including the continuation of Stage H stripping,
construction of the Integrated Waste Landform (IWL)
tailings facility and the Underground Feasibility Study.
The development of the Galway decline commenced
in late February 2021 and is targeted to complete in
December 2021 quarter. This decline will establish the next
stage of diamond drilling platforms to convert additional
resources to reserves and to provide valuable grade control
information for future mining.
The Underground Ore Reserve increased approximately
30% above the maiden estimate of 804,000 ounces to
more than 1 million ounces.
14 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Operational Performance
Red Lake
The Red Lake operation is an underground gold mine in
north western Ontario and is situated in one of the highest-
grade Archean gold camps in Canada. Acquired in April
2020, an operational transformation plan is underway to
restore Red Lake to a premier Canadian gold mine.
In our first year of ownership, Red Lake produced 126,339
ounces of gold at an AISC of A$2,044 per ounce which
was within both production and cost guidance. The three-
year transformation program at Red Lake is well underway
to restore the operation’s production to above 200,000
ounces per annum at an AISC of less than US$1,000 per
ounce.
Construction of the Campbell Young Dickinson (CYD)
Decline box cut is progressing well with first development
to commence in the September 2021 quarter. This decline
will provide independent access to the Upper Campbell
and HG Young ore bodies where 4.8 million ounces of
Red Lake’s 11 million ounce Mineral Resource estimate
is situated.
On 20 May 2021 Evolution announced the completion of
the Battle North Gold acquisition which will enable growth
plans to be accelerated at Red Lake. With the acquisition
of Battle North Gold the Board has also approved an
accelerated plan to deliver in excess of 350,000 low-
cost ounces per annum at Red Lake within five years.
The acquisition also provides the opportunity to build on
our track record as a safe and sustainable operator for
the long-term benefit of a broad range of stakeholders
including the local workforce, regional communities and
our Wabauskang and Lac Seul First Nation Partners.
The consolidated operation will consist of the Lower Red
Lake, Upper Campbell, Cochenour and McFinley mining
areas that will provide ore to the Campbell, Red Lake and
Bateman mills with a total processing capacity target of 2
million tonnes by FY26.
Evolution Mining Limited // Annual Report 2021 15
FY21 Annual Report Operational Performance
Ernest Henry
Mungari
The Ernest Henry copper-gold operation is a large-scale,
long-life asset operated by Glencore. The operation
employs sub-level caving or extraction method. It is
located 38km north-east of Cloncurry, Queensland on the
traditional lands of the Mitakoodi people.
Evolution 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.
Ernest Henry had an outstanding year with records being
delivered on multiple fronts. Gold production was 92,397
ounces at an AISC of negative A$(876) per ounce. The
record AISC result for Ernest Henry was primarily driven
by gold production being delivered to plan combined with
record high achieved copper price of A$11,198 per tonne for
19,196 tonnes of copper sold. Full year net mine cash flow
was A$309.0 million.
The drilling program for extensions below the 1,200mRL
and the Concept Study were successfully completed with
plans to seek approval for a Pre-Feasibility Study (PFS) in
the December 2021 half-year.
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
Coolgardie and Kalgoorlie.
Mungari produced another solid contribution to the
Group’s overall gold production result with gold production
of 115,829 ounces at an average AISC of A$1,453 per ounce.
Mungari’s production was lower than the prior period as
more material was processed from the lower grade open
pits than from the higher grade underground mine in line
with the mining sequence. Full year net mine cash flow was
A$73.2 million.
A key highlight at Mungari has been the performance of
the processing plant, which continued to perform strongly,
capitalising on improved operational and maintenance
initiatives. During the year Mungari achieved throughput of
over 2.0 million tonnes at an average grade of 1.97g/t with
gold recoveries of 91.3%. The plant throughput achieved
its FY21 target and was significantly above the plant’s
nameplate capacity of 1.6 million tonnes per year.
The acquisition of a portfolio of high-grade underground
mines within 8km of Mungari’s mill from Northern Star
Resources Limited announced on 22 July 2021 will escalate
Mungari to Evolution’s fourth cornerstone asset. The
transaction provides a pathway to annual production
objective of 200,000 ounces at Mungari, more than
doubles the Mungari Mineral Resources and Ore Reserves
and consolidates a 1,027km2 land package.
16 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Operational Performance
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.
Mt Rawdon produced 77,005 ounces of gold at an AISC of A$1,513 per ounce for FY21. The production result was in line with
expectations and the prior period due to stable delivery of ore to the processing plant. Net mine cash flow was
A$58.4 million. The team celebrated 20 years of continuous operations on 16 February 2021. A significant milestone of 365 days
without a recordable injury was achieved on 25 February 2021 and the operation had been injury free for over 15 months until
May 2021.
A focus on improving the reliability of the mill resulted in total throughput of 3.4 million tonnes in FY21 which was an
improvement on the 3.3 million tonnes processed in FY20 and was the highest throughput achieved since FY16.
Evolution Mining Limited // Annual Report 2021 17
FY21 Annual Report Operational Performance
Mt Carlton
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.
Mt Carlton produced a total of 58,371 ounces at an AISC of A$1,937 per ounce. The result was ahead of plan. Mine operating
cash flow was A$25.7 million and net mine cash flow was A$19.6 million which was a strong turnaround from the prior period
due to improved operational performance.
Underground mining during the year was concentrated on gaining access to ore in the Western Feeder Zone while V2 open
pit ore was extracted from the Stage 4C following the work in the prior period on the Stage 4C cutback. Adjacent to the V2
open pit, underground development of the decline into the high-grade silver A39 deposit continued during the year with
production from A39 schedule to commence in the December 2021 quarter.
.
18 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Outlook
Outlook
Guidance for FY22
Evolution is guiding FY22 Group gold production of 700,000 – 760,000 ounces at an AISC guidance is A$1,220 – A$1,280
per ounce. Assuming an AUD:USD exchange rate of 0.73, Evolution’s forecast FY22 AISC equates to approximately US$890
– US$935 per ounce.
Investment in sustaining capital in FY22 is guided to be between A$125.0 – A$155.0 million. The majority of the sustaining
capital is directed to Cowal and Red Lake to invest in equipment and infrastructure required due to their longer life of
mine plans.
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 FY22 is guided to be in the range of A$440.0 – A$510.0 million with more than half of the major
capital associated with expansion projects at Cowal to develop the Underground (A$145.0 – A$160.0 million), continue
the construction of the Integrated Waste Landform (A$75 – A$80 million) and undertake feasibility studies on Open Pit
expansion opportunities (A$15.0 – A$20.0 million).
Major capital investments at Red Lake covers the mine development to recapitalise the existing mining areas of Lower
Red Lake and Cochenour (A$50.0 – A$55.0 million), and to commence development of two new mining areas in Upper
Campbell (A$35.0 – A$40.0 million) and McFinley (A$25.0 – A$30.0 million). Major capital for the Campbell mill (A$10.0 –
A$15.0 million) and Bateman mill (A$10.0 – A$15.0 million) will increase processing capacity in excess of 2 million tonnes per
annum and set the operation on the path to in excess of 350,000 ounces production in FY26. The major capital at the other
operations is predominantly mine development expenditure.
The table below provides details of our FY22 Guidance as released on 18 August 2021.
FY22 Guidance
Gold production (oz)
AISC
(A$/oz) *
Sustaining Capital
(A$M) **
Cowal
Red Lake
Mungari
Mt Rawdon
Mt Carlton
230,000 – 250,000
1,180 – 1,220
155,000 – 165,000
1,600 – 1,660
115,000 – 125,000
1,750 – 1,800
75,000 – 80,000
1,470 – 1,520
45,000 – 50,000
1,650 – 1,700
Ernest Henry
80,000 – 90,000
(780) – (720)
35.0 – 40.0
55.0 – 60.0
15.0 – 22.5
5.0 – 10.0
5.0 – 10.0
10.0 – 12.5
Major Capital
(A$M) **
260.0 – 280.0
130.0 – 155.0
25.0 – 40.0
12.5 – 17.5
12.5 – 17.5
0
Corporate
Group
700,000 – 760,000
1,220 – 1,280
125.0 – 155.0
440.0 – 510.0
70 –75
* AISC assumes A$2,200/oz Au and A$11,000/t Cu for royalties and by-products
** Corporate capital of A$3M (Sustaining) and A$2M (Major) not included above
Three-year Outlook
Production is planned to increase by at least 30% to around 1 million ounces during the three-year period to FY24. Growth
will be largely driven by the ramp up of the Cowal underground mine, an increasing production profile at Red Lake and
increased production at Mungari following the acquisition of the Kundana Assets. Costs are expected to remain relatively
stable over the three-year period as the growth strategy continues to focus on producing high margin ounces.
Investment in sustaining capital is forecast to be between A$125 – A$155 million in FY22; A$120 – A$160 million in FY23;
and A$125 – A$165 in FY24. Replacement of equipment and infrastructure at Cowal (A$35 – A$45M per year) and Red Lake
(A$40 – A$45M in FY22; A$45 – A$55M in FY23 and FY24) due to extended life of mine plans account for the majority of
sustaining capital. Investment in growth projects at Cowal and Red Lake will materially increase production and transform
the quality of Evolution’s asset portfolio.
Group Three-Year Outlook
FY22
FY23
FY24
Production (oz)
AISC (A$/oz)1
Sustaining Capex (A$/M)
Major Capital (A$M)
700,000 – 760,000
815,000 – 875,000
940,000 – 1,010,000
1,220 – 1,280
125 – 155
440 – 510
1,125 – 1,185
120 – 160
490 – 560
1,170 – 1,230
125 – 165
290 – 360
1
AISC is based on Gold price of A$2,200/oz (royalties) and Copper price of A$11,000/t (By-product credits)
Evolution Mining Limited // Annual Report 2021 19
FY21 Annual Report Outlook
Cautionary statement concerning the proportion of Exploration
Targets
Of Evolution’s Group Production Outlook, 3% is comprised of Exploration Targets. 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.
For information on Production Targets and Forecast Financials, refer to the ASX release entitled “Acquisition to elevate
Mungari to a cornerstone asset and A$400 million equity raising” released to the ASX on 22 July 2021 and available to view
at www.evolutionmining.com.au. The Company confirms that all material assumptions underpinning the Production Target
and Forecast Financial information derived from the Production Target in the 22 July 2021 release continue to apply and have
not materially changed.
Assets located solely in
Tier 1 jurisdictions
Red Lake
Legend
Operating assets
Low Jurisdictional Risk
20 Evolution Mining Limited // Annual Report 2021
Ernest Henry
Mt Carlton
Mt Rawdon
Mungari
Cowal
FY21 Annual Report Discovery
Red Lake
Legend
Operating assets
Low Jurisdictional Risk
Ernest Henry
Mt Carlton
Mt Rawdon
Mungari
Cowal
"Discovery is seeing
what everyone else
has seen but thinking
what no one else has
thought."
Albert Szent-Gyorgoi,
Nobel Prize winner
Discovery
Discovery
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.
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 are
building a world class exploration team and acquiring assets in highly endowed
gold districts.
Our Discovery group had another outstanding 12 months
in the 2021 Financial Year. This year we continued
embedding and strengthening our early-stage exploration
team responsible for managing our greenfield exploration
projects in Western Australia and Queensland. 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.
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 focus exploration 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. Our area selection and project
evaluation methodologies consider the following technical
characteristics to help rank and prioritise where we are
willing to go:
ß Key mineral systems elements such as geologic
architecture, fluid and metal sources, and the drivers and
traps capable of producing world-class gold deposits
ß 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
ß 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 and 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 FY21, our Discovery team was exploring
approximately 9,800km2 of granted tenements and
mining leases with applications for 76km2 pending. These
tenements are either 100% owned by Evolution or subject
to earn-in or joint venture agreements.
Total expenditure for the year ended 30 June 2021 was
A$52 million. A total of 172km of drilling was completed
across the Group. Drilling expenditure in FY22 is guided to
be A$35.0 – A$60 million.
In FY22, approximately 80% of our discovery investment
will be directed to resource growth and to deliver new
discoveries near our operating mines.
22 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Discovery
Evolution Mining Limited // Annual Report 2021 23
FY21 Annual Report Discovery
Cowal
The Cowal orebody is a world class deposit ranking in the
top 10 Australian gold mines. Evolution has grown the
Mineral Resources and Ore Reserves since acquisition in
2015 from 3.4 million to 9.7 million ounces and from
1.6 million to 4.6 million ounces respectively5.
FY21 drilling resulted in further growth from the high-grade
underground orebody. Drilling programs at GRE46 and
Dalwhinnie resulted in an upgrade of Mineral Resources
from Inferred to Indicated category and extended
mineralisation beyond the existing Underground resource
outlines. Underground Ore Reserves increased to more
than 1.0 million ounces and results were analysed as part of
the Underground Feasibility Study. Mineralisation remains
open down plunge and along strike.
Development of the Galway decline commenced in April
2021 and drilling positions were established in June 2021.
This second decline establishes the next stage of diamond
drilling platforms to extend resources across the gap
between Dalwhinnie and Regal along with upgrading
Mineral Resource classification that will convert additional
Mineral Resources to Ore Reserves and to provide
confirmation of grade control parameters.
Early stage exploration continued at several prospects
including at E40, Nikka and the E39 copper porphyry
exploration target. Nikka is the continuation of the E42
mineralisation around the central fault beneath the pit.
5
Information on Mineral Resources and Ore Reserves is provided on pages 33 to 35 of this Annual Report
Location map of Cowal resource definition and regional projects in FY21
24 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report
Discovery
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.
Evolution’s land position at Red Lake almost doubled to
736km2 with the addition of the Bateman properties to the
portfolio following completion of the Battle North Gold
Corporation acquisition in May 2021. The resources and
reserves acquired in the transaction will be re-estimated
in accordance with the JORC Code and reported in
Evolution’s annual Mineral Resources and Ore Reserves
statement in February 2022.
The Mineral Resource at 31 December 2020 is estimated
at 47.8 million tonnes grading 7.2 grams per tonne for 11.0
million ounces. The Ore Reserve was materially increased
to 13.2 million tonnes grading 6.9 grams per tonne for
2.93 million ounces gold following maiden estimates in
accordance with the JORC Code.
Red Lake represents some of the greatest resource and
exploration upside in the Evolution portfolio. In FY21,
we appropriately committed to spend US$50 million on
exploration over a three-year period with a planned drill
program of over 100,000m per annum to test high quality
targets, deliver new discoveries and to extend resources.
FY21 resource definition drilling focused on reserve
conversion priorities anticipated to come into the
production schedule over the next 12 to 24 months.
Results from this drilling supported resource classification
upgrades at Cochenour, Deep Sulphides, Lower Campbell
and the Twin Otter Zone.
At Lower Red Lake, several impressive widths and grades
were intersected in a small lens approximately 100m in the
footwall of the Deep Sulphide ore body (Red Lake) which
is a new zone with no history of previous mining.
Discovery surface diamond drilling to test drill targets
along the East Bay Trend, in the Western Stratigraphy
and at the SR Zone was undertaken. These areas were
prioritised geologically for their potential to host new zones
of high-grade mineralisation. A high-grade intersection at
the SR prospect close to planned development of the CYD
Decline was returned. Follow-up drilling is planned during
H1FY22 to test the potential of new mineralised zones that
can be accessed from the CYD Decline as it advances to
future production areas at Upper Campbell.
Positive results were returned from underground drilling
testing prospective stratigraphy and structures in the
Hangingwall Corridor outboard of the Kovala fault which
is an important structure in the geological architecture
influencing the geometry of the historically mined High
Grade Zone. Follow-up drilling is ongoing to test the extent
and continuity of this zone.
Encouraging results at new Discovery targets (Thor/Thrust
and Voss/Sidequest) along strike of Cochenour justified
further drilling programs.
Evolution Mining Limited // Annual Report 2021 25
FY21 Annual Report Discovery
Mungari
Resource definition drilling was conducted at Frog’s Leg below the Rocket ore body. The purpose of the drilling was to close
out the gap between deepest development in the mine and a deep drill hole which indicated the mineralisation remains open
along the dip plane of the ore body. Drilling intercepted mineralised vein structure characteristic of the Rocket ore body
although, mineralised true widths reflect the ore body is narrowing at depth. Modelling will progress with a potential small
addition to the resource.
Extensions along strike of the Boomer structure at Frog’s Leg have been drilled north and south of the main Boomer
resource. Results diminished the opportunity for new mineralisation along strike.
Resource definition drilling was conducted at Castle Hill to increase the confidence in the Mineral Resource. Infill results
confirmed grade and thickness continuity of mineralised zones predicted in the geological models.
The acquisition of the Kundana Operations (100%), East Kundana Joint Venture (51%), certain tenements comprising the
Carbine Project (100%) and 75% interest in the West Kundana Joint Venture consolidates a 1,027km2 land package at
Mungari. Drilling will focus on targets with the best grade potential that have the biggest impact on bringing forward future
high-grade production.
Location map of Mungari
26 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Discovery
Crush Creek (100%)
Evolution entered into an earn-in agreement with private
entity Basin Gold Pty Ltd over the Crush Creek project
in September in 2019 and exercised an option to acquire
100% of the project on 10 December 2020.
The Crush Creek project is located 10km northwest
of Collinsville, Queensland, and approximately 30km
southeast of the Mt Carlton Operation. It hosts low
sulphidation epithermal gold mineralisation.
Successful drilling programs at the BV7 and Delta areas
have resulted in the release of a maiden Mineral Resource
of 1.13 million tonnes grading 3.48 grams per tonne gold
for 126,000 ounces gold, reinforcing our belief that
mineralisation we are delineating has the potential to
extend mine life at Mt Carlton.
Drilling is continuing at Crush Creek with a focus on
growing the in-situ mineral resources at the BV7 and Delta
areas as well as testing the nearby Gamma and Delta South
prospects where positive results have been returned. New
targets have recently been developed based on results
received from soil geochemical sampling and mapping.
Murchison Project, WA
(earning 80%)
Evolution entered into an agreement with Enterprise Metals
Limited over the Murchison Project in April 2019.
The Murchison Project is a large, early-stage gold
exploration project covering ~835km2 in the Murchison
region of central Western Australia. The project area is
prospective for Archaean greenstone hosted gold deposits
and encompasses poorly tested continuations of the Big
Bell and Cuddingwarra Shear Zones which host multi-
million-ounce gold deposits at Big Bell, Cuddingwarra
and Mount Magnet. In addition, historic exploration has
indicated prospectivity for volcaniclastic copper/zinc
deposits. The Murchison project is located 30km northwest
of Cue, Western Australia.
Work undertaken in FY21 included a first phase aircore
drilling program (140 holes for 12,082m) to evaluate
extensions of the Big Bell and Cuddingwarra Shear Zones.
Anomalies identified on the Big Bell Shear Zone and a
structural target at the Behring Prospect will be tested by
a 3,200m reverse circulation and diamond core (RC/DC)
drill program.
Plan of the Crush Creek area showing drill hole traces at
the regional targets
Map showing the location and geology of the Cue and
Murchison JV tenements
Evolution Mining Limited // Annual Report 2021 27
FY21 Annual Report Discovery
Cue project, WA (earning 75%)
In September 2019 Evolution entered into an earn-in joint
venture agreement with Musgrave Minerals Limited 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 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.
In FY21, four diamond holes for over 1,500m of diamond
drilling were completed. Drilling targeted bedrock origins of
mineralisation beneath a 7km long gold in aircore anomaly
delineated in previously reported results from Lake Austin.
The drilling has identified a new high-grade gold zone
at West Island hosted in a differentiated dolerite sill over
a strike length of 400m. Encouragingly, mineralisation
remains open in all directions. Follow-up drilling, which
commenced early July, is designed to delineate the
potential scale of mineralisation at West Island.
Evolution has committed A$5 million to fund further drilling
at Cue in FY22. Diamond drilling will focus on delineating
the system’s scale at West Island as well as testing
additional gold-in-regolith aircore anomalies and defining
new diamond drilling targets through aircore drilling.
Location plan of the Cue JV project showing Evolution
drill holes drilled in FY21 and historical drilling
28 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Discovery
Evolution Mining Limited // Annual Report 2021 29
FY21 Annual Report Mineral Resources and Ore Reserves
Mineral Resources and Ore Reserves
Group Mineral Resources as at 31 December 2020 are estimated at 26.4 million ounces of gold and 904,000 tonnes of
copper compared with the estimate at 31 December 2019 of 15.2 million ounces of gold and 934,000 tonnes of copper. The
updated estimate accounts for mining depletion in FY20 of 929,000 ounces of gold. All Mineral Resources are constrained at
an A$2,000 per ounce economic threshold at Evolution’s 100% owned assets.
Group Ore Reserves as at 31 December 2020 are estimated at 9.9 million ounces of gold and 505,000 tonnes of copper
compared with the 31 December 2019 estimate of 6.6 million ounces of gold and 532,000 tonnes of copper after accounting
for mining depletion of 920,000 ounces of gold.
30 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Mineral Resources and Ore Reserves
Commodity Price Assumptions
At Evolution assets, commodity price assumptions used to
estimate the December 2020 Mineral Resources and Ore
Reserves cut-off grades are unchanged and are provided
below. An AUD:CAD exchange rate assumption of 0.9 has
been used for Red Lake.
ß Gold: A$1,450 per ounce for Ore Reserves,
A$2,000 per ounce for Mineral Resources
ß Silver: A$20.00 per ounce for Ore Reserves,
A$26.00 per ounce for Mineral Resources
ß Copper: A$6,000 per ounce for Ore Reserves,
A$9,000 per ounce for Mineral Resources
Ore Reserves are subject to an economic test to verify
extraction is justified. The economic test includes all
capital, operating and sustaining costs and is performed
via a sensitivity analysis using a range of assumed gold
prices from A$1,450 to A$2,200 per ounce and considers
a range of financial metrics including AISC, NPV and FCF.
Sites may have different revenue assumptions in their
final Ore Reserves financial model as detailed in previous
statements.
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) and the ASX Listing
Rules for all Evolution assets.
Changes since 31 December
2020 Mineral Resources and
Ore Reserves Statement
Evolution’s Mineral Resources and Ore Reserves as
at 31 December 2020 were released to the ASX on
17 February 2021 in the report entitled “Annual Mineral
Resources and Ore Reserves Statement.”
The Battle North acquisition announced by Evolution on
15 March 2021 was successfully completed on
19 May 2021 as advised in ASX release on 20 May 2021
and entitled “Completion of Battle North Acquisition.”
Mineral Resources and Ore Reserves associated with this
transaction (Bateman Gold Project) are currently excluded
from Red Lake Mineral Resources and Ore Reserves as they
are reported under the Canadian National Instrument
43-101 Standards (see the Technical Report dated
January 27, 2021 available under Battle North’s profile at
www.sedar.com) and are subject to change when reported
in accordance with the JORC Code 2012 and the ASX
Listing Rules. Revised estimates will be reported in
Evolution’s Annual Mineral Resources and Ore Reserves
Statement in February 2022.
The acquisition of the following assets from Northern
Star Resources Limited was completed as advised in ASX
release on 18 August 2021 and entitled “Kundana Assets
Sale Completes.“ Northern Star’s Mineral Resources and
Ore Reserves will be re-estimated according to Evolution’s
estimation methodologies and reported in Evolution’s
Annual Mineral Resources and Ore Reserves Statement in
February 2022.
ß
100% interest in the Kundana Operations
ß 51% interest in the East Kundana Joint Venture (EKJV)
ß
100% interest in the certain tenements comprising the
Carbine Project
ß 75% interest in the West Kundana Joint Venture (WKJV)
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 2020 other than changes due
to normal mining depletion during the six months ended
30 June 2021.
Governance and Internal
Controls
Evolution reports its Mineral Resources and Ore Reserves
on an annual basis, with Mineral Resources 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 per minimum acceptable requirements
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.
Evolution Mining Limited // Annual Report 2021 31
FY21 Annual Report Mineral Resources and Ore Reserves
Competent Persons Statement
The information in this statement that relates to the Mineral Resources and Ore Reserves listed in the table below is based
on, and fairly represents, information and supporting documentation prepared by the Competent Person whose name
appears in the same row, who is employed on a full-time basis by Evolution (except for Mark Boon who is a full-time
contractor), and is a Member or Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM), Australian Institute
of Geoscientists (AIG) or Recognised Professional Organisation (RPO) and consents to the inclusion in this report of the
matters based on their information in the form and context in which it appears. Each person named in the table below 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.
Evolution employees acting as a Competent Person may hold equity in Evolution 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.
Activity
Competent Person
Membership
Cowal Mineral Resource
Cowal Open Pit Ore Reserve
Cowal Underground Ore Reserve
Red Lake Mineral Resource
Red Lake Ore Reserve
Mungari Mineral Resource
Mungari Open Pit Ore Reserve
Mungari Underground Ore Reserve
Mt Carlton Mineral Resource
Mt Carlton Open Pit Ore Reserve
Mt Carlton Underground Ore Reserve
Mt Rawdon Mineral Resource
Mt Rawdon Ore Reserve
Marsden Mineral Resources
Marsden Ore Reserve
James Biggam
Ryan Kare
Joshua Northfield
Dean Fredericksen
Brad Armstrong
Brad Daddow
Chris Honey
Mark Boon
Ben Coutts
Anton Kruger
Anton Kruger
Justin Watson
Thomas Lethbridge
James Biggam
Anton Kruger
AusIMM
AusIMM
AusIMM
AusIMM
RPO
AIG
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
Status
Member
Member
Member
Member
Member
Member
Member
Member
Member
Fellow
Fellow
Fellow
Member
Member
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 2020” released 3 February 2021 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 Michael Corbett respectively. Jessica
and Michael 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 and Michael consent to the inclusion in this report of the
matters based on their information in the form and context in which it appears.
32 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report
Mineral Resources and Ore Reserves
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Evolution Mining Limited // Annual Report 2021 35
FY21 Annual Report
FY21
Sustainability
Report
Sustainability Snapshot
Executive Chairman on
Sustainability at Evolution
Our Approach to Sustainability
Governance
Environment
Health, Safety and Wellbeing
People and Culture
Community
Glossary
38
44
46
47
65
89
97
105
121
Evolution acknowledges our First Nation Partners and
Indigenous Peoples throughout Australia and Canada and
recognises their continuing connection to land, waters
and community. We pay our respects to them and their
cultures; and to Elders past, present and emerging.
"Sustainability has long been at
the core of Evolution’s culture.
We remain committed to driving
programs that help address
broader societal and environmental
issues, such as climate change,
and transparently disclosing
our progress toward our key
sustainability goals."
James Askew,
Board Risk and
Sustainability Committee Chair
FY21 Sustainability Snapshot
FY21 Sustainability Snapshot
Safety, Wellbeing and Risk
Active reporting, learning and
sharing culture supported by
weekly storytelling sessions
Implemented and monitored
controls to keep our people
safe during COVID-19 and no
interruption to operations
of material and critical actions closed
100%
85%
Training compliance goal of
achieved (22% improvement in
FY21 compared to FY20)
100%
of significant incidents reviewed with
senior management and front-line leaders
to promote learning across the business
Strong hazard
reporting
culture
Increased
services to meet
demand for
mental health and
wellbeing support
during COVID-19
Zero fatalities and prevention through safety in design principles
Governance
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
Published 2020 Modern
Slavery Statement, Supplier
Code of Conduct and
Procurement Statement
38 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report FY21 Sustainability Snapshot
People
231
increase in female workforce
participation compared to FY20
21%
7%
87% 42%
‘Act Like an Owner’
nominations
(17% increase
compared to FY20)
7% Indigenous workforce
(consistent with FY20)
‘Choose to Stay’ (employee retention rate)
against a target of 87%
of jobs filled internally
(2% increase compared to FY20)
Aligned reporting with four key
Environmental, Social and Governance
(ESG) reporting frameworks reporting
including Global Reporting Initiative
(GRI) and Task Force on Climate-Related
Financial Disclosures (TCFD)
Independent sustainability materiality
assessment completed
Transparency with ESG
reporting agencies
Became signatory to the
United Nations Global
Compact
Evolution Mining Limited // Annual Report 2021 39
FY21 Sustainability Report FY21 Sustainability Snapshot
Environment
Commitment to Net Zero
greenhouse gas emissions
by 2050 and 30% reduction
by 2030 – aligned with the
Paris Agreement (FY20
baseline for Scope 1 and 2)
Improved water security with
increase in water reuse25%
No material
environmental incidents
40 Evolution Mining Limited // Annual Report 2021
Over
70%
renewable energy at Red Lake operations
323
hectares of land
rehabilitated on mine sites
100%
of sites covered under biodiversity plans
FY21 Sustainability Report FY21 Sustainability Snapshot
Community
Strong partnerships
through locally relevant
projects and engagement
67%
local employment across our operations
A$3.30M
in direct community
investment
A$1.80B
contribution to
the Australian and
Canadian economies2
Committed
A$1.79M
to 7 Shared Value Projects1
A$129.8M contribution to
local and regional businesses3
and organisations including
A$100.4M in direct spend
with local organisations
(27% increase in local spend
compared to FY20)
Contributed over A$2.5M (since the
pandemic began) to provide direct and
indirect support to our local communities
impacted by the pandemic
1 2 3
1
2
Shared Value Project spend was A$912K in FY21
Economic contributions include supplier payments, wages, dividend payments, interest, taxes, royalties, community investment,
payments to providers of capital and payments to financial institutions (interest)
3
Local and regional organisations are defined by postcode in relation to geographical proximity to Evolution mine sites
Evolution Mining Limited // Annual Report 2021 41
FY21 Sustainability Report Environmental, Social and Governance (ESG) Ratings Performance
Environmental, Social and Governance
(ESG) Ratings Performance
S&P Global Corporate Sustainability Assessment
Morgan Stanley Capital International (MSCI)
CSA SAM Corporate Sustainability Assessment S&P Global:
Inclusion in 2020 Dow Jones Sustainability Index Australia
and 19% improvement in year-on-year score
MSCI rating score of ‘AA’ for the Company’s resilience to
long-term ESG risks4
Shared Value Projects
The following Shared Value Projects (SVP) were supported in FY21:
New
Ongoing
ß Red Lake Fire Recovery Support – Emergency Service
ß University of Queensland’s Research for Early Cancer
capability uplift
Diagnosis Using Gold (extending to long haul COVID-19)
ß Mt Rawdon: Mt Perry Summit Walk Trail Upgrade
ß Great Barrier Reef Beach Scrub Protection
ß West Wyalong Community Theatre
ß Johnathan Thurston JT Academy
ß
1770 Cultural Immersion Festival
ß Galari Agricultural Company5
ß West Wyalong Advocate Newspaper
ß University of Queensland Sustainable Transformational
Reuse and Economic Alternatives for Mine Waste Study
ß Great Barrier Reef Yellow Zone Research Project
4
The use by Evolution Mining of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service
marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Evolution Mining by MSCI.
MSCI services and data are the property of MSCI or its information providers and are provided ‘as-is’ and without warranty. MSCI names
and logos are trademarks or service marks of MSCI
5
Partnered with Wiradjuri Condobolin Corporation to undertake a study on the feasibility of the Galari Project
Our sustainability vision is to
deliver long-term stakeholder
value through safe, low cost gold
production in an environmentally
and socially responsible way.
42 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Our values
Our values
Our values guide behaviours and decisions in the workplaces every day:
Safety
Accountability
Think before we act, every job, every day
If it is my responsibility, I own it – good or bad
Excellence
We take pride in our work, deliver our
best and always strive to improve
Respect
We trust each other, act honestly
and consider each other’s opinion
"Evolution’s commitment to
sustainability is core to our
business and drives our thinking
about who we are and how we will
be relevant in decades to come."
Fiona Murfitt,
VP Sustainability
Evolution Mining Limited // Annual Report 2021 43
FY21 Sustainability Report The Executive Chairman on Sustainability at Evolution
The Executive Chairman on
Sustainability at Evolution
On behalf of the Evolution team, I am pleased to present our FY21 Sustainability
Report which describes the progress we are making on delivering long-term
stakeholder value through safe, low-cost gold production in an environmentally
and socially responsible way.
The COVID-19 pandemic has had a profound impact
around the globe. Through strong collective leadership and
management, Evolution has continued to operate safely
through COVID-19 with no material impact on operations.
Since the pandemic began, we have contributed over
A$2.5 million to provide direct and indirect support to our
local communities impacted by the pandemic.
Respect is one of our values at Evolution. Building an
increasingly inclusive culture where everyone can bring
their true self to work has been enhanced by a dedicated
Inclusion and Diversity measure and target in FY22. This
has been developed to support positive inclusion outcomes
to help deliver the long-term goal of making people’s time
at Evolution a highlight of their career.
During the year, we focussed on building a learning
culture so that our people have greater understanding of
the controls in place to keep them safe and healthy. We
remain committed to continuing efforts to improve health
and safety performance with a heavy focus on robust
controls, increased field leadership and high-quality safety
interactions. The focus on understanding and supporting
holistic wellbeing was also accelerated due to the changing
demands of the pandemic.
We strengthened our evaluation and disclosure of climate
change risks and opportunities for our business with
increased alignment with the Task Force on Climate-
Related Financial Disclosures (TCFD) and a commitment
to a Net Zero future by reducing greenhouse gas emissions
by 30% by 2030, and Net Zero emissions by 2050, aligned
with the climate change goals of the Paris Agreement. We
will focus on reducing emissions across our operations,
as we partner with others to use renewable energy and
develop new technology solutions. Detailed planning
of emission reductions pathways, actions and project
assessment modelling is underway to address climate risks
in the medium and long term.
The ongoing management of Tailings Storage Facilities
(TSFs) is also material. In FY21, the management,
governance and assurance practices for TSFs were
strengthened. Sustainability has been fully integrated into
life-of-mine planning as demonstrated by the improved
planning, training and review processes, supported by the
rigour of the TSF Committee.
The recent destruction of culturally sensitive land in
Australia challenged the industry to review protocols,
standards, and processes. In FY21, Cultural Heritage risks
associated with our current and future activities were
re-assessed to ensure that our management is thorough
and transparent. This management continues to be
underpinned by close engagement with our First Nation
Partners and Indigenous Peoples.
Significant social contributions through our activities
included a A$1.80 billion contribution to the Australian and
Canadian economies, with a A$129.8 million contribution
to the local and regional businesses and organisations
in which we operate. Examples of Shared Value Projects
and partnerships are highlighted in this report and include
breakthrough cancer and COVID-19 research with the
University of Queensland, Red Lake fire recovery support,
the revival of the West Wyalong Advocate newspaper and
partnership with Rural Aid that facilitated the installation
of SOURCE hydro panel arrays at two schools in the
Whitsunday region in North Queensland.
At Evolution, we want our team members to ‘Act Like
an Owner’ (ALO) by treating our business as their own.
In FY21, the ALO program continued to grow and drive
continuous improvements to deliver significant value
through innovation across sustainability and other
business-critical areas. 231 ALO initiatives across the
business were implemented.
44 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report The Executive Chairman on Sustainability at Evolution
An increased level of transparency, due diligence and
reporting has continued as evidenced via our Modern
Slavery Statement and Supplier Code of Conduct being
published. In this area in FY22 we intend to focus on
improving the breadth and depth of our human rights risk
assessments. 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 ‘AA’ rating from MSCI. We also became a
signatory to the United Nations Global Compact in FY21
and are pleased to include our first “Communication on
Progress’ within this report.
Sustainability is at the heart of our purpose and we are
committed to continually improving our sustainability
performance in FY22. I would like to acknowledge and
thank all our staff, contractors, partners and our local
communities in which we operate, for their dedication and
ongoing contribution to our sustainability efforts which are
making a measurable impact.
Yours faithfully
JAKE KLEIN
EXECUTIVE CHAIRMAN
Evolution Mining Limited // Annual Report 2021 45
FY21 Sustainability Report Our Approach to Sustainability
Our Approach to Sustainability
Boundary and Scope
Evolution’s FY21 Sustainability Report marks the fourth
year of annual reporting on the sustainability topics that
are most material to our business and stakeholders. This
Report is for the period from 1 July 2020 to 30 June 2021
and is approved for release by our Board of Directors.
The Sustainability Report covers operations at our
100%-owned gold mines in Australia and Canada: Cowal
in New South Wales, Mt Carlton and Mt Rawdon in
Queensland, Mungari in Western Australia, Red Lake
in Ontario and our exploration activities in Australia
and Canada. In addition to these assets, we hold an
economic 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 Glencore website.
This Report is aligned with the principles of GRI, TCFD,
the United Nations Global Compact (UNGC) and the
United Nations Sustainable Development Goals (SDGs).
To aid the cross-referencing of this Report’s information
on Evolution’s material aspects to elements of the GRI
Sustainability Reporting Standards and other ESG
frameworks, a separate ESG Performance Data document
has been prepared and links with this report. It is available
online at https://evolutionmining.com.au/sustainability/
Management Approach
Information
Management approach information related to each material
topic is available in this Report and on the Evolution Mining
website at https://evolutionmining.com.au/sustainability/
Information Integrity and
Report Audit
In the preparation of Evolution’s Sustainability Report,
quality and relevant information is gathered, recorded,
analysed and disclosed to prepare the Report in a way that
is readily available for examination. Assurance reporting
is undertaken on National Pollutant Inventory (NPI) and
greenhouse gas (GHG) emissions as part of the submission
to National Greenhouse and Energy Reporting Act 2007
(NGER Act). Technical experts have also been engaged to
complete a range of internal audit processes.
Contact
We welcome feedback and invite readers to send
any comments or enquiries about this report to us at
esgreporting@evolutionmining.com
46 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Governance
Governance
Governance
FY21 Highlights
Alignment of disclosures
with GRI, TCFD and ASX
Corporate Governance
Recommendation 7.46
Strong collective leadership to
navigate COVID-19 safely with no
material impact
No material environmental
non-conformances
Representation with
Industry Working Groups
in all jurisdictions
addressing transition risk
to a lower carbon economy
Strategic uplift in the integration of
Sustainability Principles, Policies
and Standards
of all assets internally and
externally audited and verified with
oversight from the Board Risk and
Sustainability Committee
6
6
ASX Corporate Governance Principles and Recommendations
48 Evolution Mining Limited // Annual Report 2021
Tailings Storage Facility (TSF)
Governance Committee providing
effective oversight of TSF
management
Published
2020
Modern Slavery Statement,
Supplier Code of Conduct
and Procurement
Statement
98%
compliance on Cyber
Awareness Training
FY21 Sustainability Report Governance
Our Sustainability Principles
Sustainability is integrated into every aspect 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. Our approach is guided by nine
Sustainability Principles which align with the UNSDGs.
1
Be an employer of choice
attracting the most
talented people and foster
a safe, diverse and
inclusive workplace
3
Contribute positively
to local, regional and
national sustainability
efforts by achieving
an outstanding level
of environmental
stewardship
5
Protect and enhance our
reputation as a trusted
partner and provide
community benefits that
endure beyond the life
of our mines
Demonstrate
robust risk
management and
safety leadership
2
6
Advance the outcomes
for indigenous peoples
and protect their
Cultural Heritage
Actively manage
climate related risks
and opportunities
including improving
energy efficiency
and the responsible
management of water
4
8
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
Respect the human
rights of all our
stakeholders
7
Relentlessly drive for
operational
excellence through
an innovative culture
and inspired people
delivering to plan
9
Evolution Mining Limited // Annual Report 2021 49
FY21 Sustainability Report
Governance
Sustainability: Integrated Into Everything We Do
Unlock potential through
leadership to develop
protective behaviours
Assurance to
promote ongoing
improvement
Disciplined, consistent and
reliable management – the
right way every time
Health, Safety
and Wellbeing
Governance and
Assurance
Risk Management
including
Climate-related risk
Shared stories
strengthen
reputation.
Resilient to change
with improved
disclosure
Storytelling and
ESG Reporting
Collective
Leadership
Environment
Commitment to
reduction in
environmental
footprint
Cultural Heritage
and Indigenous
Engagement
Water and
Emissions
Community
Management
Our 'Net Zero'
future
Protect Cultural
Heritage and First
Nation Partner
relationships
Social licence to operate through
targeted community plans
Our sustainability strategy focuses on value creation to advance our sustainability performance through:
ß Unlocking potential through leadership to develop proactive behaviours
ß Disciplined, consistent and reliable risk management – the right way every time
ß A commitment to reduction in environmental footprint
ß Our Net Zero future
ß Further enhancing our social licence to operate through targeted community plans
ß Protecting Cultural Heritage and First Nation Partner relationships
ß Strengthening reputation through shared stories supported by a strong reporting culture. Resilient to change improved
disclosures
ß Assurance to promote ongoing improvement
50 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Governance
Sustainability Policy and Strategic Planning Policy
The Sustainability Policy7 and Strategic Planning Policy8 outline how sustainability is integrated into the business and are
designed to be read together. These policies focus on the holistic management of risks in:
ß Health and safety
ß Environment
ß Cultural Heritage
ß Human Rights
ß Risk-based decision making
ß Reporting, learning excellence, innovation, and continuous improvement
ß Crisis and emergency management and corporate governance
ß Accountabilities for Risk, Sustainability and Strategic Planning
Sustainability Performance Standards and Strategic Planning
Standards
The Sustainability Performance Standards9 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 FY21 an internal audit of each asset for compliance was completed against these standards. While we identified
areas for improvement, we did not identify any material risks or issues. These findings were independently verified by
third-party auditors.
Sustainability Principles
Sustainability
Policy
Strategic
Planning Policy
Integrated risk
management
framework
Sustainability
Performance Standards
Strategic Planning
Standards
Assurance
programme
Management System, Operating
Processes and Procedures
Sustainability Materiality Assessment
An independent materiality assessment was conducted in FY21 to identify the most important environmental, social and
governance issues for key external and internal stakeholders. We use this input to help prioritise sustainability actions, inform
our sustainability strategy and ensure we report on the issues that are most important to our stakeholders.
7
8
9
Sustainability Policy
Strategic Planning Policy
Sustainability Performance Standards
Evolution Mining Limited // Annual Report 2021 51
FY21 Sustainability Report
Governance
Four step process for Materiality
1
Identify
Material sustainability issues are identified by considering both internal and
external factors, including a review of current and emerging sustainability
topics in the media impacting the industry, risk assessments, internal policy,
peer benchmarking and regular internal and external stakeholder engagement
2
3
4
Prioritise
Topics are ranked based on their importance to the business and external
stakeholders using a range of inputs, before being classified as high,
medium or low
Validate
The classification of topics is validated by our Leadership Team and the
Board’s Risk & Sustainability Committee
Report
and Review
Additional sustainability topics have also been included in this Report to
meet expectations of stakeholders and other reporting requirements.
Material topics will be reviewed internally on an annual basis and
continue the full external refresh cycle every three years
A broad range of sustainability issues were considered that are common to both local and global mining operations using
peer and industry benchmarking of topics. These were analysed against international standards and guidelines, such as the
GRI topic-specific disclosures and the SDGs. Results from ESG Surveys (i.e. CSA SAM, MSCI) were considered to incorporate
investor input into the assessment.
The materiality matrix identifying our material issues, and their alignment with our Sustainability Principles and relevant SDGs
are described below.
Evolution’s FY21 Sustainability Materiality Matrix
All topics in the matrix have been identified as important to Evolution and its stakeholders Issues are listed in alphabetical
order
l
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ß Cultural Heritage
ß Stakeholder Engagement
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ß Work Health, Safety and Wellbeing
ß Climate Risk
ß Diversity and Inclusion
ß Tailings Management
ß Effluents and Waste
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ß Environmental Compliance
ß
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ß Local Employment
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ß Water Management
ß Anti-Bribery and Corruption
ß Modern Slavery and
Human Rights
ß Sustainable Procurement
Importance to and Impact on External Stakeholders
Priority 1
Priority 2
Priority 3
Priority 4
52 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report
Governance
Material Topics mapped against the SDGs and Evolution Sustainability Principles
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Environmental
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Social
Evolution Mining Limited // Annual Report 2021 53
FY21 Sustainability Report
Governance
Performance (Progress against key targets)
In FY21, a number of measures and targets were used to quantify Evolution’s progress toward key strategic and sustainability
objectives set for FY21. Our performance against these measures and targets are aligned with our sustainability principles
and FY21 Balanced Business Plan (BBP). The BBP is designed to be a balanced scorecard which has five key business pillars:
Zero Harm and Sustainability, People, Operations, Growth and Financial Outcomes.
We are pleased to report that by the end of FY21, nearly all of our targets and measures were met or exceeded against these
relevant business pillars and all supporting projects objectives. Notably, the environmental target of reduction in fresh water
used by operations was significantly improved in addition to delivering agreed actions against our community (including
First Nation Partners) plans, and our ‘Choose to Stay’ (employee retention) rate. The target of energy and emissions per
tonne mined was also within range. This is discussed in more detail in the 'Environment' section.
The factors that contributed to significant reduction in fresh water use included record return volumes for the Tailings
Integrated Waste Landform (IWL) Cell at Cowal and successful reuse and harvesting strategies across all sites. The reduction
in the baseline was approximately a 26% improvement in FY21.
While we did not achieve the Total Recordable Injury Frequency (TRIF) target, each of our operations was actively involved
in implementing robust initiatives to help reduce the risk of incidents and to minimise the risk of injuries and illnesses.
Improvements were seen in leading safety metric improvements such as increased proactive reporting, training compliance,
field interactions, action close out and participation in weekly learning calls.
There was variable performance across the sites from world class, to needing improvement. Mt Rawdon set an Evolution
record of 463 days without a recordable injury and Mt Carlton exceeded 100 days since their last recordable injury as at 30
June 2021.
There was a reduction in the severity of injuries and in those incidents that could have been significantly higher potential
injuries. There has been ongoing commitment to the review of material actions to ensure these are addressed and closed out
on time (100% for FY21). These actions are reviewed on a weekly basis and reported on monthly, demonstrating a high level
of confidence in reporting.
The table below provides a snapshot of Evolution’s sustainability performance against key FY21 targets, mapped against
select material topics.
Material Topic
FY21 Target
Water Management
0.54KL raw water drawn per dry tonne milled
FY21 Performance
0.40KL raw water drawn
per dry tonne milled
Energy and Emissions
0.012t CO2-e/t material mined (Scope 1 and 2)
0.0129
Environmental Compliance
Zero material environmental incidents
Zero material
environmental incidents
Work Health, Safety and
Wellbeing
Total recordable injury frequency rate (TRIF) - per million
work hours at or below 5.25
9.62
Cultural Heritage
0 Material Cultural Heritage Incidents.
Community Engagement
Complete 100% of actions in Community Relations Plans.
0 Material Community Impact Incidents
0 Material Cultural
Heritage Incidents
100% of Actions in
Community Relations
Plans have been
completed
0 Material Community
Impact Incidents
Talent Attraction and Retention
87% Choose to Stay (employee retention rate)
87%
54 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Governance
Stakeholder Engagement (material topic)
Definition: Reporting and engagement with investors, customers, Traditional Owners, regulators, local authorities etc.
Our Approach
A stakeholder engagement approach based on clear communication, transparency and trust, helps us to understand the
interests and concerns of our stakeholders and emerging issues and risks to our operations.
The Stakeholder Engagement Performance Standard ensures a consistent approach to engaging with communities,
employees and other stakeholders. Each of our sites use a systematic and recurring stakeholder mapping process (eg social
impact assessment) to identify and prioritise stakeholders from direct and indirect influence areas, and those interested in, or
potentially affected by site activities.
As site or social activities change (eg mine expansion projects, post-mine land use reviews, Black Lives Matter movement
and Juukan Gorge), the level of interest of different stakeholder groups and the nature of their interests and concerns can
also change. Special consideration is also given to identifying potentially vulnerable groups (either within the socio-economic
or the political context) whose voices and perspectives may not otherwise be heard.
The table below provides an overview of stakeholder groups engaged in FY21, key interests and concerns, and how
we generally respond to them. Updates on stakeholder engagement are provided to the Board Risk and Sustainability
Committee on a quarterly basis.
Stakeholder
type
Employees and
Contractors
How we listen
What matters
How we respond
ß Regular feedback sessions,
performance reviews and
personal development plans
of belonging, and being
enabled to do their job
ß Feeling engaged and a sense
ß Communication
ß Regular Employee surveys
ß Regular performance feedback
(Teamgage)
ß Career and development
ß Group and site townhalls and
opportunities
team meetings
ß Communities of practice
ß Fostering a values-led
organisational culture that
optimises performance
ß Health and safety including
mental health and wellbeing
ß Mine life
ß Promote our values
ß Ongoing safety, health and
wellbeing initiatives
ß Weekly staff meeting with
the Executive Chairman and
Leadership Team
ß Site prestart meetings
ß Site Townhalls and updates
ß GM updates
ß Weekly business updates
from the Executive Chairman
Investors and
Analysts
ß Regular meetings with investor
representatives and financiers
ß Consistent financial returns
ß
Investor briefings
ß Management of financial and
ß Full-year and half-year
non-financial risks
results briefings
ß High-quality corporate
ß Annual General Meeting
governance
ß Sustainability and Climate
change risk management
ß Health and safety performance
ß ASX announcements
ß Commitment to global
best-practice ESG reporting
frameworks
ß Cultural Heritage management
ß Targeted specific meetings
First Nation
Partners and
Indigenous
Peoples
ß Regular community and
ß Local employment and
Cultural Heritage meetings
contracting opportunities
ß Stakeholder perception surveys
ß Economic benefits
ß Community grievance
ß Cultural Heritage management
mechanism
ß Community events and
information sessions
ß Local social media channels
ß Cost of living and potential
impacts on local services
ß Cultural safety
ß Mine life
ß Regular community
consultations and
communication
ß Targeted community
investment programs,
Shared Value Projects etc.
ß Deliver on Cultural heritage
and Native Title agreements
ß Regular participation at
cultural events
Evolution Mining Limited // Annual Report 2021 55
FY21 Sustainability Report Governance
Stakeholder
type
Government
and Regulators
How we listen
What matters
How we respond
ß Ongoing dialogue with
regulators, government
agencies and broad range of
political stakeholders
ß Economic benefits
ß Regular engagement with all
ß Environmental, Cultural
Heritage, social and financial
performance
ß Climate change and
levels of government
ß Direct submissions to state
and federal governments’
consultation processes
greenhouse gas emissions
ß Contribute to industry and
ß Regulatory compliance
business associations
ß Transparency
ß Cultural Heritage
Non-
Government
Organisations
ß
Input into social and
environmental impact
assessments
ß Climate change and
ß Engagement on Shared
greenhouse gas emissions
Value Projects
ß Cultural Heritage
ß Commitment to
ß Regular participation
in industry forums and
associations
ß Environmental impacts
ß Transparency
ß Human rights
international climate
initiatives and reporting
frameworks
ß Partnerships for
environmental research
ß Engaged in the United
Nations Global Compact
Suppliers and
Contractors
ß Supplier networking events
ß Supply opportunities for
ß Collaborate to deliver
ß Workshops with local business
projects
networks
ß Health and safety
ß Regular reciprocal supplier
ß Supporting Indigenous and
performance reviews
local contractors
ß Embedded supplier
ß Technology and innovation
relationship management with
our Tier 1 suppliers
ß Capable and effective
employees
ß Supplier feedback survey
tangible safety
improvements
ß Collaborate to improve
Indigenous engagement
outcomes
ß Support programs to
develop local business
capacity and capability
56 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Governance
Case study: Rural Aid collaborations at Mt Rawdon
and Mt Carlton
Rural Aid provides critical support to drought-affected
rural towns and farmers, strives to build stronger futures,
and enhances economic sustainability and wellbeing in
regional areas. In line with our vision and values, Evolution
strengthened its ongoing partnership with Rural Aid to
create more sustainable and resilient rural communities
where we operate. Over the past year, Evolution and Rural
Aid have partnered in the following initiatives:
Monto Our Towns renewal project
The Rural Aid Our Towns initiative provides rural or regional
towns with volunteer and financial support to undertake
projects that rejuvenate and revive parts of their town,
focusing on renewal projects for the long-term future and
sustainability. Evolution contributed both financial and
volunteer support to the Rural Aid Our Towns makeover
project in Monto. The town, situated near our Mt Rawdon
mine, involved more than 50 volunteers that upgraded local
amenities and public spaces. The project was recognised
through the North Burnett Regional Council Australia Day
awards and named the Monto Community Event of the Year.
Hydro Panels
Mt Carlton and Rural Aid leveraged their existing
partnership to facilitate the installation of 30 SOURCE
Hydro Panels across Collinsville State High School and
Merinda State School. This relatively new technology
provides an opportunity to strengthen their water security,
access, and reliability. The panels act as renewable drinking
water systems for the approximately 150 students and
teachers as they use sunlight and air to make, store and
dispense clean, mineralised drinking water and utilise
cloud technology to enable effective monitoring and
optimisation for every climate. Over a 15-year lifespan, just
one Hydro Panel can eliminate the need for up to 54,750
single-use plastic water bottles and avoids the extraction of
groundwater. It provides a unique, one-of-a-kind renewable
water technology for our communities that enables clean,
safe, off-grid potable drinking water, reduced bottle waste,
and opportunities for STEM education.
Evolution Mining Limited // Annual Report 2021 57
FY21 Sustainability Report Governance
Industry Associations
Involvement with memberships and industry associations enables us to keep current regarding matters of public policy,
emerging sector and sustainability trends, regulatory updates, stakeholder interests and the sharing of industry best
practices. We may not align with every element of an association’s public position, but where we believe there is a benefit in
constructive dialogue or advocacy, we will maintain our membership.
In FY21, Evolution was a member of, or participant in, associations listed below:
Organisation
Board Representation
Health, Environment and
Community Representation
New South Wales Minerals Council
Queensland Resources Council
Chamber of Minerals and Energy of Western Australia
Gold Industry Group (Australia)
Lake Cowal Foundation (Australia)
Ontario Mining Association (Canada)
West Wyalong Advocate
NSW Government Sustainability Advantage
United Nations Global Compact
Yes
Yes
No
Yes
Yes
No
Yes
N/A
No
Commitments and Recognition
Yes
Yes
Yes
Yes
Yes
Yes
N/A
Yes
Yes
We participate in external third-party performance benchmarking initiatives and sustainability related assessments, including
environment, social and governance (ESG) ratings agencies, proxy advisor questionnaires and data collection tools. Results
of these assessments inform our planning for continuous improvement.
During FY21, we continued to respond to individual requests for information on our sustainability approach and performance
from investors and other stakeholders and responded to, or participated in:
ß
ISS Governance, Environmental and Social Disclosure Quality Score
ß MSCI
ß S&P Global
ß Sustainalytics
Recognition
United Nations Global Compact
Evolution was proud to become a signatory of the UNGC in FY21, joining the global business community in a commitment
to sustainable business practices, aligning our strategies with the UNGC’s Ten Principles on human rights, labour, the
environment and anti-corruption, the United Nations SDGs and related 2030 SDG targets. Our Sustainability Principles all
align with the UNGC Principles and SDGs.
Australian Council of Superannuation Investors
In FY21 the Australian Council of Superannuation Investors assessed Evolution’s level of sustainability disclosure as being at
a ‘Detailed’ level within the mining sector. We are pleased with this rating and aim to improve from a ‘Detailed’ to a ‘Leading’
rating in the near future.
58 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report MSCI
A high rating of AA (on a scale of AAA-CCC) was
achieved in FY21 in the MSCI Ratings assessment, scoring
5.7 compared to the industry average of 4.4, an 18%
improvement compared to 2020. We were placed among
the top five industry leaders for Health and Safety, Labor
Management and Corruption and Instability.
S&P Global CSA SAM
In August 2021, a score of 51 was achieved, a 19% increase
from 2020 (industry average of 39). Evolution is one of
only two gold companies on the Dow Jones Sustainability
Index - Australia.
ISS
A significant improvement in our ISS score in the ‘Social’
category from ‘8’ to ‘4’ was achieved (scale from 10-1 with
“1” being the highest possible rating). This was supported
by the publication of our Modern Slavery Statement and
Supplier Code of Conduct. 10 11
10
11
1.
Governance
Governance and Compliance
(material topic)
Definition: Ethical business conduct, robust policy,
transparent reporting.
Our Approach
Evolution is committed to maintaining high standards of
ethics, corporate governance, honesty and accountability.
These are aligned with our values, in all aspects of our
business by enacting robust corporate governance
processes and ensuring our employees understand,
and consistently meet, the standards formalised in our
Corporate Governance Statement12.
As per Recommendation 7.4, the Sustainability Report
provides detailed information on the management of our
material environmental and social risks, with a specific
focus on climate risks, in alignment with the TCFD.
Board of Directors
The Board is the governing body of Evolution and its role
is to represent and serve the interests of shareholders by
overseeing and appraising Evolution’s values, strategies,
policies and performance. The Board operates a Risk and
Sustainability Committee13 as a Sub Committee of the
Board. The role of the Risk and Sustainability Committee is
to advise and support the Board of Directors on all matters
pertaining to the Risk and Sustainability of the Company
including the appropriate management of risk arising from
the Company’s activities.
As of 30 June 2021, the Evolution Board has eight
members (75% male and 25% female), with six Independent
and two Executive Directors. The Board is supported by
the following committees:
ß Audit Committee
ß Risk and Sustainability Committee
ß Nomination and Remuneration Committee
10 Copyright ©2021 Sustainalytics. All rights reserved. This section contains information developed by Sustainalytics
(www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data)
and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment
advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions
available at https://www.sustainalytics.com/legal-disclaimers.
11
The use by Evolution Mining of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service
marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Evolution Mining by MSCI.
MSCI services and data are the property of MSCI or its information providers and are provided ‘as-is’ and without warranty. MSCI names
and logos are trademarks or service marks of MSCI.
12
2021 Governance Statement
13 Risk and Sustainability Committee Charter
Evolution Mining Limited // Annual Report 2021 59
FY21 Annual Report Governance
The Board is structured to ensure that the Directors’ skills and experience align with the Company’s goals and strategic
direction. The functions and responsibilities for the Board and each Committee is set out in the respective Charters.
Information on Board members and Charters are available on our website. 14
Board of
Directors
Board
Sub Committees
Executive
Chairman
Nomination and
Remuneration
Audit
Risk and
Sustainability
Leadership Team
TSF Committee14
Senior Management
Investment Management
Committee
14 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
Committee for ratification. Outcomes of the FY21
assurance plan was audited by a third party. Areas for
improvement included health and safety, environment,
social responsibility and Cultural Heritage. No material
findings were identified. A leading indicator on ensuring
all material and critical actions has been integrated into
the Company scorecard and is linked to the remuneration
strategy. This reinforces the importance of tracking and
reporting and closure of findings that may arise from audit,
incident review or internal/external incidents. In FY21 there
were no overdue critical or material actions.
Risk Mitigation and
Management
Risk management is fundamental to maximising the value
of our business and informing its strategic direction.
Effective risk management enables us to make informed
decisions aligned to legislative obligations’ and within
the various regulatory frameworks we operate and in line
with social expectations. Informed and intelligent decision
making will ensure Evolution is able to identify priorities,
allocate resources, create advantage or value, demonstrate
due diligence in discharging legal and regulatory
obligations and meet the standards and expectations of
our stakeholders.
Policies
The material changes to policies in FY21 were the
introduction of the Modern Slavery Statement15,
Procurement Statement16 and Supplier Code of Conduct17.
Policies are available to view in the Corporate Governance
section of our website. The following policies were
reviewed:
ß Anti-Bribery and Corruption Policy
ß Continuous Disclosure Policy
ß Diversity and Inclusion Policy
ß External Communications Policy
ß Shareholder Communication Policy
ß Sustainability Policy (Safety, Health and Wellbeing,
Environment, Tailings Storage Facility (TSF), Social
Responsibility and Cultural Heritage)
ß Strategic Planning Policy
ß Climate Risk Position Statement
ß Code of Conduct
ß Climate Risk Position Statement
Assurance and Audit
An assurance plan is endorsed annually by the Leadership
Team and is submitted to the Risk and Sustainability
15 Modern Slavery Statement
16 Procurement Statement
17
Supplier Code of Conduct
60 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Governance
Our risk-based decision approach is underpinned by the
Sustainability and Strategic Planning Policies, Standards,
Integrated Risk Management Framework, supported
by site processes and procedures that also align 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 Committee throughout the year,
supported by regular reviews by the Leadership Team, site
leadership teams and subject matter experts such as the
TSF Governance Committee. Further, an integrated three
level Line of Defence (LOD) assurance program has been
implemented, supported by subject matter experts and
internal and external audit.
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’s General
Manager to the Chief Operating Officer with confirmation
to 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.
With the impact of COVID-19, our current risk management
focus is on keeping our people safe and well, maintaining
safe and reliable operations and supporting our
communities, all of which are critical to protecting the
future of our business.
The precautionary principle is integrated into our risk
management process whereby, to protect the environment,
lack of full scientific certainty shall not be used as a
reason for postponing cost-effective measures to prevent
environmental degradation.
Regulatory Compliance
We are committed to complying with the laws, regulations
and authorisations that apply to the many facets of our
business. We acknowledge the importance of meeting
compliance obligations to maintaining our social licence
to operate. We routinely conduct targeted audits of
compliance against applicable regulatory standards
and report the outcomes to our Audit and Risk and
Sustainability Committees.
Crisis Response (including
Pandemic) (material topic)
Definition: Business resilience to COVID-19, bushfire, and
other health and environmental emergencies. Business
preparedness and continuity.
Each operation is geographically unique and regionally
located adjacent to landholders and small communities.
In a crisis, Evolution people are often first responders
and available to assist neighbours, community and
neighbouring mines. Through a TCFD alignment review
conducted in 2019, extreme weather was identified as one
of three material climate-related risks. Short, medium and
long-term risks were then identified including cyclones,
flood, long-term drought, bush and forest fires, late snow
cover, food and water borne illness.
Operations prepare thorough mitigation strategies
including: cyclone, rain and wind proof infrastructure and
shelter; certified water storage and drainage networks;
secured buildings and infrastructure; telemetry weather
including lightning detection systems; and emergency
response equipment including the provision of fire trucks,
ambulances, and personnel who are trained in emergency
response including scenario exercises and industry
emergency response competitions.
Operations response plans are recorded in Trigger Action
Response Plans (TARPS), Emergency Response Plans and
Business Continuity Plans. Robust and proactive strategic
planning remain integral to ensuring business continuity
and the health and safety of our communities.
Many communities were affected by the drought, bushfires
and flooding experienced in Australia and Canada in FY21.
Evolution contributed over A$600,000 in donations to
bushfire and drought relief and offered in-kind flood relief
through our Community Investment program.
Our Cowal Operation responded to a call for help from
local shires due to flash flooding which threatened the
homes and safety of West Wyalong and Ungarie residents.
Our people worked tirelessly with local councils and
emergency services to coordinate the community during
the flooding and provide aid in sand-bagging efforts.
In response to the Perth Hills bushfires, the Chamber of
Minerals and Energy coordinated a Bushfire Community
Support Initiative and invited all member companies
to contribute. Evolution contributed A$50,000 to this
initiative recognising that a broader industry response
would have a more direct impact where it was needed
most and directly supported response, relief and recovery
efforts for those impacted by the Perth Hills fire.
Evolution Mining Limited // Annual Report 2021 61
FY21 Sustainability Report We work closely with our communities and with regulators
and industry groups to ensure all our operations are
complying with agreed protocols and remain responsive to
changing needs.
Vaccinations are encouraged to reduce COVID-19 risks.
Employees may attend vaccination appointments during
work hours (as appropriate) and additional leave in the
event of any side effects following vaccination is provided.
Externally facilitated medical information and awareness
sessions are held to provide appropriately qualified
information to our teams on the risks and benefits of
vaccination.
Case study: COVID-19
Response focused on
generating wellbeing and
financial boosts where we
operate
Our focus on protecting the safety and wellbeing of our
people during COVID-19 extends to the towns and regions
our people call home.
Since the pandemic began, Evolution has contributed
over A$2.5 million in direct and indirect support to our
communities. Support includes the donation of masks
to struggling health care clinics in the Cowal region. Our
Mungari operation provided finances to the local Women’s
Shelter to provide refuge to women and children at risk of
domestic violence.
To help mitigate the mental and physical health impacts
that lockdowns and periods of isolation may cause,
communication lines have been strengthened across the
business and the use of our Employee Assistance Program
(EAP) has been encouraged. Our sites have deployed
technologies such as contact tracing cards at Cowal, QR
codes in the Sydney Office and site access protocols have
been strengthened at each site.
Governance
Case study: Boost to
emergency services at
Red Lake
Forest fires occur seasonally within the Red Lake region.
To support the Balmertown Fire Department, Evolution
provided a capability uplift to local emergency services
which included the delivery of a modern, fit-for-purpose
fire truck with increased capacity for critical firefighting
equipment, personnel, and water. More than A$525,000
was also donated to support local businesses and the
Municipality of Red Lake for community recovery and
resilience management. Evolution employees provided
further assistance to the community through participation
in the volunteer fire services which responded to the FY21
fires in the region.
By enhancing the local community’s ability to act as the
first responder to local fires, our communities and our
production are safeguarded.
COVID-19 Management
Through strong collective leadership Evolution continues
to navigate the ongoing COVID-19 pandemic safely with no
material impact to operations. There was one positive case
of COVID-19 (at Red Lake) that was managed carefully with
the site, community and local health department.
We operate under protocols developed to minimise risks
to our people and the communities where we operate to
support safe production during this challenging period.
These plans include activation of our crisis management
protocols, restricting international and domestic travel,
detailed risk assessments across all operations including
our Greenfield exploration projects, enacting strict social
distancing protocols including reducing face-to-face
interactions, increasing flexible working arrangements,
ensuring best practice health management maintenance
and regular COVID-19 communication with the entire
workforce. Specialist medical experts were also engaged to
deliver up to date specialist advice given the complexity of
the pandemic.
62 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Governance
work on behalf of, or for Evolution and its subsidiaries.
Anti-bribery and corruption training is provided to all
employees. All reported incidents of non-compliance or
potential non-compliance are taken seriously, reviewed, and
investigated. In FY21, there were no reported incidents of
corruption.
Whistleblower Policy
A framework has been established for individuals to raise
concerns that relate to unacceptable conduct. Details
of this framework including the defined elements of
independent reporting and investigation procedures,
disclosure protection and the role of the Whistleblower
Protection Officer, along with the associated corporate
governance, are included in the Whistleblower Policy21
and Standard22. The process is managed by an external
third party in conjunction with our People and Culture
department. Whistleblowing events and any actions
are reported to the Audit Committee and the Risk and
Sustainability Committee.
There were zero whistle blower cases reported via our
FairCall (KPMG) service in Australia for our currently
owned assets, or via People and Culture Management for
our Red Lake operations during the reporting period. One
claim in relation to Cracow, a divested asset and outside
of the scope of this report, was investigated and closed in
September 2020.
Political Parties and Public Organisations
Evolution does not undertake any political activity or
sponsor any political parties, movements or public
non-governmental organisations, nor does it make any
contributions to support any such parties, movements or
organisations. In FY21, no donations or payments were
made to political organisations.
Transparency and Disclosure
We are committed to open and transparent dealings
with all our stakeholders. Information is published on our
operational, financial and sustainability performance in a
timely manner through several communication channels,
including media releases, stock exchange announcements,
social media, newsletters and community and investor
meetings. We respond to stakeholder enquiries and
requests for information as required.
Evolution Mining Limited // Annual Report 2021 63
Business Ethics
Our Code of Conduct18 sets the standard for our people
to act ethically, responsibly and lawfully. It applies to
Directors, employees, contractors and consultants
employed to undertake work on behalf of, or for Evolution
and its subsidiaries. It guides us in meeting our ethical
standards and legal requirements, and all Evolution
employees complete a training program to understand its
requirements. We encourage employees to report known
or suspected breaches of the Code and any other policies
and directives, and to raise any other serious concerns they
may have. Any such report is responded to immediately
and investigated accordingly.
100% of our employees completed Code of Conduct
Training.
Economic Performance
At Evolution, we continuously monitor our performance
and objectives, conduct opportunity and risk assessments
and integrate these findings into our economic strategy.19
Anti-Bribery and Corruption
(material topic)
Definition: Commitment to integrity.
Evolution views any bribery or corruption behaviour
as unacceptable. Evolution has an Anti-Bribery and
Corruption Policy20 which extends across all our businesses
and activities, and applies to Directors, employees,
contractors and consultants employed to undertake
18 Employee Code of Conduct
19
Information on Evolution's FY21 economic performance is provided
in the Annual Financial Report section of this Annual Report
20 Anti-Bribery and Corruption Policy
21 Whistleblower Policy
22 Whistleblower Standards
FY21 Sustainability Report Governance
Tax Transparency Code
Evolution supports transparency in our payments to
governments and takes into consideration relevant
transparency standards in ensuring relevant information is
provided to our stakeholders.
At a minimum, Evolution complies with the Australian
Government’s Voluntary Tax Transparency Code. Payments
to government, including taxes and royalties, is provided
separately in our 2020 Tax Governance Statement available
at our website23.
Cyber Security (material topic)
Definition: Equipment failure, Equipment misuse,
Fraudulent Transaction / Impersonation.
Like many businesses and organisations, Evolution faces
constant and evolving cyber threats. The operating and
control systems at our mines increasingly use digital
platforms and high-tech solutions. As such, the security
of these systems is crucial for operating our mines safely
and efficiently, making cyber security one of our material
business risks.
A risk-based approach is applied to manage cyber-related
security risks applying good practice across standard
processes. Evolution leverages leading frameworks such
as National Institute of Standards and Technology (NIST)
and guidance from Australian Government’s Cyber Security
Centre. There are a range of measures implemented to
manage cyber risk including:
ß A cybersecurity policy applicable to all employees
ß A cybersecurity strategy program as part of Evolution’s
overall IT strategy
ß Clear responsibilities with a centralised IT function and
dedicated capability
ß Cyber awareness training (98% compliance) supported by
ongoing awareness alerts and education
ß Defined Disaster Recovery scenarios with Disaster
Recovery testing on six-monthly cycles
ß Governance reporting and regular assurance including
external audits, Incident Response exercises, penetration
testing, and assessment against standards and leading
guidance
Cybersecurity is a standing item on the Risk and
Sustainability Board Sub Committee agenda.
23 Tax Governance Statement
64 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Environment
"We have always put environmental
and social concerns at the forefront
of our operations. Now we’re publicly
committing to bolder, more tangible
action as we align our business with
the transition to Net Zero".
Jake Klein,
Executive Chairman
Environment
Environment
FY21 Highlights
Commitment to Net Zero
greenhouse gas emissions
by 2050* and 30% reduction
by 2030* – aligned with
the Paris Agreement (FY20
baseline for Scope 1 and 2)
* FY20 baseline for Scope 1 and 2 emissions only
Aligned our climate strategy
and related disclosures with the
recommendations of the TCFD
No catastrophic or major
(material) environmental
incidents (including tailings)
Over
70%
of energy at Red Lake coming
from renewable sources24
Improved water security with 25%
increase in water reuse compared to FY20
323 hectares of land was
rehabilitated
24
24 Renewable electricity purchased from grid
66 Evolution Mining Limited // Annual Report 2021
Over
A$200,000
contributed to improve or
enhance environmental
outcomes
Enhanced environmental
stewardship through
governance and assurance
practices including tailings
4,460
hectares of land within the
current mining footprint
all with biodiversity
management plans
FY21 Sustainability Report Environment
Our Approach
Our approach to environmental stewardship is based on understanding and managing the potential risks and impacts of our
operations on the environment. We focus on extracting resources sustainably and achieving positive post-mining outcomes.
In accordance with our Sustainability and Strategic Planning policies and standards, 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 through application of the precautionary principle to deliver against our social licence
obligations and strive for leading practice to meet community expectations.
During FY21, we continued to:
ß Embed the Evolution Sustainability Performance Standards and Strategic Planning Standards
ß Address water security risk to reduce raw water demand and increase water reuse
ß Plan for and manage extreme weather events such as flooding and cyclones in alignment with our strategic planning and
TARPS
ß Drive resource efficiency and carbon reduction initiatives
ß Enhance monitoring though increased telemetry monitoring of weather, surface and groundwater, vibration and air
emissions
ß Consult with stakeholders on mine planning and expansion and post mine land use
In FY21, we enhanced our alignment with the recommendations of the Financial Stability Board’s (FSB) TCFD. Our work
in this space is maturing, and we look forward to continually improving by strengthening our disclosures in FY22 by stress
testing our scenarios to identify climate-related financial risks and opportunities. Further quantifying these risks will inform
our business planning and decision making to ensure our business is resilient to changes in climate.
Throughout FY22 we also plan to refresh site-specific emissions reduction plans to guide our emissions reduction activities
and build off the work undertaken in FY21 that helped shape the Net Zero strategy.
Climate Risk (material topic)
Definition: Ability of the organisation to adapt and respond to the impacts of climate change. Includes physical risks
such as extreme weather events and transitionary risks.
Our Approach
Evolution recognises climate change as a strategic risk with potential financial implications for our business, our supply chain,
our people and communities and our investors. It is one of the most pressing global issues facing our society and is a priority
issue for our stakeholders. Our goal is to consider climate-related risks and opportunities and their short- and long-term
implications in the evaluation of all parts of our operations.
Milestone commitments in addressing global issue of climate change for Evolution include:
Pre-FY19
recognition of extreme
weather, water security and
well-being in the risk register
FY20
release of Climate Risk
Position Statement
FY22
focused commitment through
emission reduction planning, strategic
group approach to renewable energy
sources, financial modelling for
Emissions reduction fund potential
FY20
conceptual adoption of the TCFD
framework including extreme weather,
water security and energy and emission
as physical risks and acknowledgment
of transition risk and pandemic
FY21
release of Net Zero Commitment; joining UN
Global Compact, reissue of climate risk position
statement, alignment with ESG reporting
frameworks, independent materiality assessment
Evolution Mining Limited // Annual Report 2021 67
FY21 Sustainability Report Environment
Task Force on Climate-Related
Financial Disclosures
Evolution recognises the recommendations of the TCFD,
and importantly that our investments may be susceptible
to future changes in climate. In FY21, we have aligned
with the TCFD and our disclosures are presented with
consideration to the interests of our stakeholders.
In FY22, we plan to fully align our approach with the
recommendations of the TCFD framework including stress
testing climate scenarios for our business and advance
understanding and disclosures of climate-related financial
impacts to the business. Clarifying the impact of climate-
related issues on our operations and taking measures
against it will help make our business more sustainable
and, through dialogues with investors, enhance our
corporate value.
Refer to our ESG Performance Summary Data document
for our TCFD index and detailed disclosures.
Governance
We integrate climate change considerations into our
business strategy through strong governance and risk
management that is supported by our Climate Risk Position
Statement25. We support the framework established
by the Paris Agreement to avoid climate change and
recognise our activities either directly or indirectly generate
greenhouse gas (GHG) emissions.
Climate-related risks are actively reported, supported by
FY21 targets established to reduce emissions and improve
water security, prepare for extreme weather and health
events (including pandemic, smoke impacts from fires
and COVID-19 implications) and adopt responsible water
management practices. Our Board is informed, via the
Risk and Sustainability Committee, on progress against
our climate risk targets on a quarterly basis. The Board
approved our approach towards a Net Zero future.
Strengthening the link between Executive
Remuneration and our Climate Targets
The Balanced Business Plan (BBP) is updated annually
to define key goals, measures and targets for the year
to deliver against agreed strategic objectives. The
remuneration strategy for our short-term incentive
payments (STIP) link to ESG elements that include safety,
sustainability, risk and people. Performance against our Net
Zero future approach has been included in the FY22 STIP
program, linked with the new 2030 and 2050 targets. The
inclusion of ESG factors within the remuneration strategy
reinforces the importance and focus on delivery against
ESG by Evolution.
Strategy and Risk Management
In alignment with the TCFD framework Strategy and Risk
Management pillars, Evolution considers short, medium,
and long-term risks as noted below26:
ß Short-term: risks which may materialise in the current
annual reporting period
ß Medium-term: risks that may materialise over a 2-5-year
timeframe
ß Long-term: risks which may fundamentally impact the
viability of our long-term business strategy and our
legacy extending 5-10-20 years
To deliver long term value to stakeholders, climate-
related risk resilience has been built into our operational
environment and communities through sound risk
management practices across all areas in our business.
25 Climate Risk Position Statement
26 All time horizons (ie short, medium and long term) were considered for each risk eg for extreme weather events, we looked at cyclone
(short term), droughts (medium term) and climate change (long term).
68 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Environment
Strategy
The climate-related physical risks and mitigation identified as applicable to our business are presented in the following table.
Climate-related risk
Risk
Mitigation
Water security
Reduced water availability
with the potential for water
security implications to the
business plan.
ß Reduce raw water demand and competition for fresh water
to support communities and agriculture
ß
Increase reuse of mine affected water through design,
construction and operation of IWL
Extreme weather
events
Material damage to the
receiving environment,
assets and infrastructure;
disruptions to operations and
supply chains.
ß Reduce total water demand
ß
ß
Investigate water saving technologies such as dry stacking of
tailings and reduced residence time in processing
Increase use of hypersaline and low-quality water not
suitable for other industries and communities
ß Real time dust, weather and stability monitoring including pit
and tailings and nearby sensitive receptors/neighbours
ß
Innovative dust suppression e.g. engineered tailings cover
pre-snow fall at Red Lake
ß Engineered design, construction and operation of all
significant infrastructure including
ß Trigger Action Response Plans for incoming threat of
cyclone/fire/flood/dust/storm etc
Energy and emissions
Footprint/demand creep
ß Measures, targets – quantify scope 1, 2, 3 carbon emissions
Developing energy regulation,
market demand for sustainably
produced commodities and
supplier surety.
ß Energy audits
ß Emission reduction planning
ß Partnering with industry for accelerated energy efficiency
ß
Internal carbon pricing modelling
ß Technology and innovation pathways
Extreme health events Food, water and viral
ß Health and wellbeing programs and practice
borne illness which could
be confined to site, the
community or global.
ß Fatigue management and onsite medical care
ß Food and water standards and process
ß Pandemic response plans including protection of
communities and First Nation Partners
ß Personal proximity devices for close contact tracing
ß Specialist support and advice
The above mentioned risks and uncertainties outlined reflect risks that could materially affect our performance, future
prospects or reputation. Where risks are material to the Group, they are escalated to the Board Risk and Sustainability
Committee and, as appropriate, to the Board.
Climate-related opportunities to support local communities have also been identified. We have historically assisted
neighbours, local government, emergency services and communities during flood, drought and wildfire events.
Climate-related risks and opportunities have been included in our strategic planning integrated across our business. The
potential likelihood, severity, and materiality of these risks and opportunities to our operations and communities have been
proactively assessed and forecasted. They have informed the reporting requirements and targets outlined in:
ß Site water and emergency management plans
ß
Inclement Weather and Cyclone Management Plan at Mt Carlton
ß Severe Weather Management Plan at Mt Rawdon
ß Detailed design of the Integrated Waste Landform at Cowal
Evolution Mining Limited // Annual Report 2021 69
FY21 Sustainability Report Environment
Regular monitoring of water level depths during extreme weather conditions and the dissemination of cyclone awareness
training at Mt Carlton are examples of Evolution’s resilience methods to managing extreme weather events (or extreme
climate-related natural hazards).
Risk Management
Climate-related risks and opportunities have been included in our strategic planning integrated across our business. We
manage our physical climate risks through the Evolution risk management framework and in alignment with our Strategic
Planning Policy27 and TCFD. The potential likelihood, severity, and materiality of these risks and opportunities to our
operations and communities have been proactively assessed and forecasted.
All material risks and actions, including those related to climate change, are documented and kept current for managing
and reporting purposes. Our risk assessment process is firmly founded in site-specific exposures, including those related to
climate change such as wildfires, cyclones, floods, and landslides at a more regional level.
With respect to physical risks, our operations are located in very different climate regions. Evolution is actively managing
these risks and opportunities, improving energy efficiency, responsibly managing water use and preparing and managing for
extreme weather and health events.
Climate Risk Management Process
Risk management
framework
Risk analysis and
management
Reporting oversight
Risk audit
Consideration of
climate-related
risks are assessed
using the same
approach as
all other risks
assessed by the
business
Management’s
oversight of
climate risk is
supported by
proactive reporting
and effective
escalation
(eg: quarterly to
Board Risk and
Sustainability
Committee)
Decision-making
is supported by
connected and
insightful climate
risk analysis
Audit (internal
and external) for
Board to provide
confidence around
management of
climate (both
physical and
transition) risks
Critical controls
for climate risk are
being managed
effectively
Learning and
continuous
improvement
Clear roles,
responsibilities and
accountabilities
Sustainability
Policy and
Performance
Standards
Strategic
Planning Policy
Climate Risk
Position Statement
Risk Management
Guidelines (ISO
31000) for
effective and
integrated risk
management
27 Strategic Planning Policy
70 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Environment
Carbon Price
Whilst Evolution operations are currently not subject to mandatory carbon pricing for Scope 1 emissions, we acknowledge
global and national carbon price trends. Our operations are also subject to an environmental levy payment for Scope 2
emissions.
To understand the potential financial risks, a robust direct (Scope 1) and indirect (Scope 2) accounting program has been
developed, including setting an emissions baseline. Using the baseline, we have conducted a CO2 abatement cost review
focussing on marginal abatement cost curves (MACC). Although our exposure to carbon price is lower than others in the
industry due to our lower emissions intensity, we are working on short and long-term plans to decarbonise our operations
by 2050. These includes plans to migrate to renewable energy sources and the consideration of renewable fuel, electric fleet
and hydrogen fuel adoption.
One of the ways we respond to transition risk such as the potential impact of climate change policies on our business is by
considering an internal price on carbon and the impacts of climate risk are evaluated as part of life of mine planning. In FY21,
we tested distinct price forecasts for Australia and Canada as part of our decarbonisation modelling.
Metrics and Targets
Specific targets have been captured in our annual Balanced Business Scorecard, including:
ß 30% reduction in CO2-e by 2030 and Net Zero by 2050
ß Year-on-year reduction in CO2-e per tonne material mined (FY20 as a baseline)
ß Year-on-year reduction in freshwater demand (FY20 as a baseline)
ß All operations complete 100% actions in emission reduction plans
Evolution Mining Limited // Annual Report 2021 71
FY21 Sustainability Report Environment
Net Zero Commitment
For our planet and our future there is growing commitment
amongst world nations and businesses towards a Net
Zero future. There is also an increasing expectation from
all stakeholders, that action with a positive impact on
achieving a Net Zero future, is implemented. This is a
future state where there “is no incremental addition of
greenhouse gases into the atmosphere” (Net Zero definition
- Intergovernmental Panel on Climate Change, IPCC).
Evolution supports the Paris Agreement and in FY21
announced a commitment to be Net Zero by 2050 (Scope 1
and 2 emissions only) and an interim target of reducing our
emissions by 30% by 2030 (against a FY20 baseline). In the
development of Net Zero targets, it is recognised that the
current asset portfolio may change over time. However, our
commitment to sustainability will continue throughout the
Our Targets
life of the Company, making Net Zero relevant, including for
the communities in which we operate.
Evolution’s mid to long-term carbon reduction pathways
will include:
ß Migration to renewable energy sources
ß Partnerships with industry, government and supply
chains to maximise use of low-emission solutions
ß Technology roadmaps to support process and efficiency
improvements
ß
ß
Integration of carbon reduction plans within our business
planning framework
Improved transparency in reporting progress and
performance
30%
reduction by
2030
Net Zero
emissions by
2050
for Scope 1 and 2
Why Net Zero?
Context
To ensure long term stakeholder value is delivered,
Evolution is building climate related risk resilience in our
operations and our communities.
The current asset portfolio at Evolution may change over
time. However, Evolution’s commitment to sustainability will
continue throughout the life of the company, making “Net
Zero” relevant.
Scope 2 emissions was the most significant portion of
Evolution’s emissions. Therefore, focusing on renewable
energy sources will deliver the greatest impact on
emissions reduction over the short to mid-term.
72 Evolution Mining Limited // Annual Report 2021
Technology transition and mobile fleet replacement pose
key barriers to more significant reductions in Scope 1
and planning for the long-term transitional change has
commenced.
Methodology
Paris-aligned; GHG Protocol’s location-based or market-
based emission factors should be used to measure annual
energy use.
Note: In specific circumstances we may apply appropriate
adjustments to the FY20 baseline data. This includes
acquisitions and divestments. Specific reporting guidelines
will apply aligned with recognised protocols.
FY21 Sustainability Report Environment
Net Zero Decarbonisation Approach by 2050
2020
Energy
Efficiency
Process
Improvement
Gas
Diesel
Grid
Hydro*
2021-2030
30%
reduction
target
Energy Efficiency
Process Improvement
Renewable Energy
Electrified Fleet / Battery*
Grid Greening
2030-2050
H2
Net
Zero
* Red Lake
Reforestation / Biodiversity
Battery / Electric / Hydrogen Fleet
Carbon offsets
Baseline Year
Accelerating existing technologies
2030
Investing in new technologies
2050
Delivering
our commitment
Key Net
Zero levers
Scope 1 and 2:
~50%
Renewables
~20%
Process improvement,
energy efficiency, technology
~20%
Fleet replacement, future fuels
~10%
carbon offsets,
reforestation/biodiversity
Evolution Mining Limited // Annual Report 2021 73
FY21 Sustainability Report Environment
Our Actions
1. Footprint - Understanding, managing
and reducing emissions (Scope 1 and 2)
Specific opportunities include:
ß Planning process – integrating emissions reduction
opportunities and projects into Provincial Plan, Life of
Mine Plan (LOM)
ß Climate scenarios – stress testing climate scenarios
through workshops with external consultant
ß LOM forecasting – developing credible estimates of
Scope 1 and Scope 2 GHG emissions
ß Projected emissions intensity built into planning (per
unit of production) (transition risk)
ß Planning for long-term transition risk – Continue
membership and climate policy advocacy with Ontario
Mining Association, New South Wales Minerals Council,
The Chamber of Minerals and Energy of Western
Australia, Queensland Resources Council, and Minerals
Council of Australia for an orderly transition to a low
emission economy
ß Northern Industrial Electricity Rate Program (NIER)
(Canada)
3. Technology Pathways - Utilising
technology to improve resource use
efficiency
ß Energy efficiency – conduct energy audits to identify
Specific opportunities include:
process improvement opportunities
ß Sustainable procurement strategy – development of a
strategy that includes emissions reduction opportunities
including renewable energy
Note: Inclusion of understanding and managing Scope 3 is
acknowledged.
2. Partnerships - Industry, government and
supply chain collaboration for higher
use of low-emissions solutions i.e.
Sustainability Advantage, Electric Mine
Consortium
Specific opportunities include:
ß Renewable energy – active management with energy
suppliers to deliver renewable energy sources for grid
connected operations
ß Sustainability Advantage – participating in the Net Zero
Emissions Leadership Accelerator Pilot
ß Electric Mine Consortium – Battery Electric Vehicles,
Energy Storage and Electrical infrastructure,
Underground and Open Cut efficiency
ß Funding and grants – partner with industry peers and
representatives to secure grant funding for emissions
reduction opportunities
ß Mine Expansion, independent peer review – refine RA
process for energy efficiency
ß Technology Roadmap – develop business-wide roadmap
focusing on innovation, adaptation, technology
ß Multiple projects already in the pipeline – automation,
tailings efficiency, renewable energy, future fuels etc
ß Pumped Hydrogen Project – Mt Rawdon (Shared Value
Project)
ß Emission reduction plans at each operation and Group
ß Sustainable Procurement Strategy – Internal Carbon
pricing
ß Red Lake Battery Storage Project
ß Battery Electric Vehicles
4. Capital - Allocating capital to prioritise
and support deployment of seed funding
to trial reduced emissions solutions
Specific opportunities include:
ß Review of how technology and R&D can be funded,
including offset mechanisms
5. Transparency - Transparent reporting
on our progress and performance i.e.
NGERs and TCFD
Specific opportunities include:
ß Full alignment with TCFD reporting
ß Potential external assurance on TCFD disclosures in the
near future
ß NGERs compliance
74 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Case study: Net Zero
Emissions Leadership
Accelerator Pilot
Since 2020, Evolution has been a member of Sustainability
Advantage (SA), part of the Department of Planning,
Industry and Environment (DPIE). SA works with medium
and large organisations to accelerate the adoption of
sustainable practices and nurturing leaders committed to
securing a sustainable NSW.
SA recently launched a new initiative, Net Zero
Emissions Leadership Accelerator Pilot, aimed at helping
organisations build technical and leadership knowledge
and capabilities to implement Net Zero emission strategies,
build business resilience and accelerate Net Zero success.
The Pilot has taken a select cohort of Sustainability
Advantage’s influential members through a six-month
program that will accelerate the shift to Net Zero emissions.
Evolution is one of approximately 20 organisations selected
to participate in the Pilot. Our participation will further
assist us in our Net Zero strategy and emissions reduction
pathways work.
Case study: Electric
Mine Consortium
Evolution has partnered with 14 other companies in the
mining industry to form the Electric Mine Consortium with
the ambition of accelerating progress towards the fully
electrified zero CO2 and zero particulates mine.
Electrification of mine sites, powered by clean energy,
offers our industry the option to operate mines in line
with our commitments to decarbonise. It also reduces
occupational health exposures for our employees by
significantly reducing emissions in our underground
mines. Our shareholders will benefit from the potential for
significantly improved economics on offer from simplified,
interoperable, electric-drive equipment with lower mining
and energy costs.
Working groups addressing:
ß Surface and long haulage
ß Underground Haulage, Light and Utility BEV and
Electrical Infrastructure
ß Electrification value model
Environment
Case study: Battery Electric
Vehicles at Red Lake
Our Red Lake Operation audited their mobile fleet
and replaced multiple pieces of equipment with newer
and cleaner technology. The site has commenced the
purchasing program and have committed to purchasing
up to eight battery electrical vehicles (BEVs) and has
allocated over A$13 million worth of capital to trialling and
utilising the equipment in the coming years. These BEVs
mitigate risks associated with diesel equipment like
ventilation restrictions and noise emissions and will reduce
diesel emissions underground and improve employee
health and wellbeing. We are excited to assess their
benefits and apply BEVs at our other operations based on
learning. These efforts contribute to our efforts to manage
climate risk and reveal opportunities for new partnerships
and exploration of innovative markets.
Evolution Mining Limited // Annual Report 2021 75
FY21 Sustainability Report Environment
Energy and Emissions (material topic)
Definition: Monitoring, management and reduction of carbon emissions including aspects such as fuel types, energy
efficiency, renewable technologies.
Our Approach
Managing energy consumption and greenhouse gas (GHG) emissions is a high priority for Evolution as we continue to focus
on our climate-related risks and opportunities. We monitor transition risk in relation to energy and emissions regulations
through climate policy advocacy with a proactive approach to resource efficiency and energy planning.
When measuring our emissions performance Evolution applies a location-based method28, which reflects the average
emissions intensity of grids on which energy consumption occurs. Detailed monthly capture and analysis of our energy and
emissions performance is conducted in alignment with the Evolution Sustainability Performance Standards29.
Our Net Zero commitment was based on the baseline data derived from an aggregate of all Evolution assets’ emissions
profile in FY20. The baseline has since been recalculated due to the divestment of Cracow and acquisition of Red Lake. This
adjustment is reflected below in our emissions performance.
Operations are proactively engaged in achieving our medium term and long-term emissions targets through understanding
their carbon footprint, developing industry partnerships and investigating technology pathways as outlined in the ‘Climate
Risk’ section.
We take a long-term view of emissions reduction with the first milestone commitment of 30% reduction in CO2-e by 2030
(FY20 baseline). With this understanding Evolution acknowledges that our journey will require sustainable operations
focussing on periods of development and construction paired with wholesale change in the process introduced though the
technology pathway program.
Our Performance
Our FY21 emissions performance compared to FY20 is as per below:
GHG Emissions
FY21
FY20
(actual baseline)
% change
FY20
(adjusted baseline)*
% change
Greenhouse gas emissions
Scope 1 (t CO2-e)
Greenhouse gas emissions
Scope 2 (t CO2-e)
Total of Scope 1 and
Scope 2 (t CO2-e)
178,395
157,857
371,089
398,187
549,484
556,044
13%
-7%
-1%
173,898
371,089
536,827
3%
2%
2%
* Adjusted FY20 emissions baseline to include current assets and exclude divested asset (Cracow).
In FY21, Evolution’s direct emissions (Scope 1) and indirect emissions (Scope 2) were 549,484 tonnes of CO2-e with Scope 2
emissions accounting for 68% of the total emissions during the year.
Compared to FY20, Scope 2 emissions reduced by 7% as total renewable energy purchased increased by 148 million kWh
compared to the previous year. This is attributed to Red Lake where over 70% of their energy comes from renewable sources.
28
Greenhouse Gas Protocol
29
Sustainability Performance Standards
76 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Environment
As part of our Net Zero commitment to utilising clean energy sources, we plan to investigate the potential to introduce
renewable energy sources including solar and hydrogen fuel cell at our operations in the future.
Renewable vs Non Renewable
Energy FY16-FY21
Renewable Energy Consumption
800,000,000
600,000,000
400,000,000
200,000,000
0
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
Renewable Electricity
Non - Renewable Electricity
Renewable (GJ) 35%
Non - Renewable (GJ) 65%
Scope 2 emissions reflect two thirds of emissions, with our Cowal operations in NSW contributing almost half of all
emissions. There will be an increased focus in FY22 on efficiencies improvement plans, looking to integrate solutions where
they will have the most impact.
Whilst there has been an increase in Scope 1 emissions of 21% due to increased trucking, haulage and diesel consumption,
efficiencies were delivered with a decrease in Scope 2 emissions (electricity) of 4%.
There was a 10% increase in utilisation of truck fleet between FY20 and FY21, in addition to four additional haul trucks (new
hires) added to the fleet in January / February 2021. The number of truck cycles increased 31%, with average haul distance
increasing from 9.7km to 12.1km with Stage 2 IWL works. This contributed to an increase in ore and waste mined (29% and
5% respectively). This equated to a 65% increase in haulage distance for the truck fleet between FY20 and FY21 due to the
development of the underground decline.
Scope 1 and Scope 2 GHG Emissions,
by Operation FY21
Total Energy Consumption
by Site (GJ)
600,000
400,000
200,000
0
l
a
w
o
C
e
k
a
L
d
e
R
i
r
a
g
n
u
M
l
a
t
o
T
n
o
d
w
a
R
t
M
n
o
t
l
r
a
C
t
M
Greenhouse gas emission Scope 2 (t CO2-e) (2)
Greenhouse gas emission Scope 1 (t CO2-e) (1)
Mt Carlton 7%
Cowal 43%
Red Lake 22%
Mungari 14%
Mt Rawdon 14%
Evolution Mining Limited // Annual Report 2021 77
FY21 Sustainability Report
Environment
Scope 1 and 2 emissions FY19-FY21
by Operation (t CO2-e)
Scope 1 and 2 emissions breakdown by
Operation (t CO2-e)
400,000
300,000
200,000
100,000
0
l
a
w
o
C
e
k
a
L
d
e
R
i
r
a
g
n
u
M
l
a
t
o
T
n
o
d
w
a
R
t
M
n
o
t
l
r
a
C
t
M
l
a
w
o
C
e
k
a
L
d
e
R
i
r
a
g
n
u
M
n
o
d
w
a
R
t
M
n
o
t
l
r
a
C
t
M
Greenhouse gas emission Scope 1 (t CO2-e) (1)
Greenhouse gas emission Scope 2 (t CO2-e) (2)
Total Scope 1 and 2 (t CO2-e)
600,000
400,000
200,000
0
FY19
FY20
FY21
Emissions Intensity
Our FY21 emissions intensity performance compared to FY20 is presented below.
Emissions Intensity (CO2-e)
FY21
% change
FY20
(actual
baseline)
Emissions intensity per tonne material mined
(t Scope 1 and Scope 2 CO2-e/tonne)
0.0129
0.0132
Emissions intensity per tonne ore processed (t
Scope 1 and Scope 2 CO2-e/tonne)
0.0353
0.0369
Emissions intensity by gold produced (t
Scope 1 and Scope 2 CO2-e/ounce)
0.9339
0.8909
-2%
-4%
5%
FY20 –
(adjusted
baseline)*
0.0126
0.0355
0.7954
% change
2%
-1%
17%
* Adjusted FY20 emissions baseline to include current assets and exclude divested asset (Cracow).
A FY21 target was to establish a stronger baseline target for an emission intensity per tonne of material mined. The target of
0.012t CO2-e was established. The performance of 0.0129 CO2-e was within the target range.
78 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report
Environment
GHG Emissions Intensity FY19-FY21
d
e
n
M
i
l
a
i
r
e
t
a
m
e
n
n
o
T
/
e
-
2
O
C
e
n
n
o
T
0.0800
0.0700
0.0600
0.0500
0.0400
0.0300
0.0200
0.0100
0.0000
FY19
FY20
FY21
Mungari
Mt
Rawdon
Mt
Carlton
Cowal
Cracow
Red Lake
0.0101
0.0098
0.0068
0.0105
0.0639
0.0112
0.0094
0.0078
0.0157
0.0708
Total
Average
0.0107
0.0132
0.0096
0.0120
0.0098
0.0148
0.0253
0.0129
GHG Emissions intensity: Scope 1 + Scope 2 (location based) GHG emissions per tonne material mined.
Cracow Operations: FY19-FY20 Red Lake Operations: FY21
Emissions intensity of 5% increase per gold produced was due to the processing of lower grade ore. Evolution processed 1%
more tonnes in FY21 to produce 14% fewer ounces. This was predominantly due to the processing of low-grade stockpiles
whilst mine development continued ensuring the sustainability of all operations.
Effluents and Waste (material topic)
Definition: Waste rock, industrial waste, organic and inorganic waste.
Our Approach
We ensure that our waste and product materials generated from mining and processing are handled, stored and disposed of
appropriately. The most substantial waste stream is mineral waste.
Mineral waste is defined as excess material removed from the mine void in order to reach the ore body and remaining
materials after the extraction of mineral from ore during processing. All mineral wastes are handled in accordance with the
Evolution Sustainability Performance Standards and licence conditions.
Operations manage waste in accordance with a site-specific Waste Management Plan. Non-hazardous waste streams such as
cardboard, glass and plastic are recycled, and general household waste is diverted to landfill.
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.
Our Performance
In FY21, the operations produced 32.69 million tonnes of waste rock to extract 9.9 million tonnes of ore. This represented a
3.3 ratio of waste to ore and an increase from the 2.9 FY20 ratio30. Stripping ratio increased due to ‘first cut’ development
activities at:
Mungari – Cutters Ridge open pit development
Mt Rawdon - Mine development
30 Adjusted FY20 figure to include current assets and exclude divested asset (Cracow).
Evolution Mining Limited // Annual Report 2021 79
FY21 Sustainability Report
Environment
Future Focus
Evolution have partnered with external organisations to
address:
ß Non-road diesel emissions
ß Energy
ß Water security – reuse of water
ß Tyre recycling
ß Unlocking the value of waste rock and tailings
Non-Mineral Waste
Responsible management of non-mineral waste at our
operations is formalised through the implementation of
comprehensive waste management plans. These plans
specify how the different types of waste produced by our
activities are to be managed, including identification of
opportunities for waste minimisation, recycling and reuse.
During FY21, approximately 24,900 tonnes of non-mineral
waste was generated, of which 63% was classified as
non-hazardous waste. All waste generated was stored
and recycled or disposed of following applicable waste
regulations and the site waste management plans.
Case study: University of
Queensland Sustainable
Transformational Reuse and
Economic Alternatives for
Mine Waste Project (STREAM)
at Cowal
There is a growing need within the mining industry for
more integrated holistic approaches to managing mine
waste and reduce related environmental footprints. To
address this challenge, Evolution has entered into a three-
year partnership with the University of Queensland through
the Sustainable Transformational Reuse and Economic
Alternatives for Mine Waste Project (UQ STREAM).
National and international partnerships, and bespoke PhDs,
will be provided at our Cowal Operation to identify reuse
options for tailings and waste rock in a circular economy
model, and unlock value streams within their mine waste.
31
Church of England Tailing Disclosure
32
Global Industry on Tailings Management Standard
80 Evolution Mining Limited // Annual Report 2021
The partnership will help to challenge the perception
of mine waste being a zero-value product and enable
increased efficiency, innovation, research, and knowledge
sharing. It will equip the next generation of leaders and
researchers with new skills, expertise, technologies, and
techniques to demonstrate best practice Environmental
Management Systems for waste management. Overall,
UQ STREAM can prove that innovative problem-solving
is business as usual at Evolution, positioning us at the
forefront of sustainability research in the mining industry.
Tailings Management
(material topic)
Definition: Most significant mining waste stream.
Our Approach
Evolution’s tailings management approach is open and
transparent with detailed information, including a full list
of our tailings facilities (provided in our Church of England
Tailing Disclosure31).
The tailings facilities are planned, designed, constructed
and operated in accordance with leading industry practices
and guidelines. In alignment with the Global Industry on
Tailings Management Standard32, tailings management
further integrates climate scenario considerations,
stakeholder engagement, our communities, water security,
the safety of the facility and closure/reclamation.
Tailings risk assurance is achieved through routine
inspections and monitoring and independent audit process.
Risk reduction is our highest priority and we are working
toward this through increased repurpose of tailings in
FY21 compared to FY20, improving our water security
through innovative controlled seepage systems in new TSF
construction at Cowal (Integrated Waste Landform) and
Mungari.
FY21 Sustainability Report Environment
Nine tailings facilities globally
ore mined from open pit
8.5Mt
25% 42%
tailings reuse at Red Lake
for paste fill – 134kt
tailings reuse at Mungari
for paste fill – 845kt
15.6Mt
ore processed
1.4Mt
ore mined from
underground
Evolution Mining Limited // Annual Report 2021 81
FY21 Sustainability Report Environment
Tailings risk was controlled and further reduced in FY21 by:
Our Performance
ß
ß
ß
ß
Introduction of real time monitoring and alert system
(K2Fly)
Introduction of an improvement orientated Tailings
Working Group
Improved seepage recovery systems in new
construction at Cowal and Mungari
Internal and external training from Operator to Board
level
ß Continuation of quarterly Tailings Governance meetings
at site and Group and oversight by the Risk and
Sustainability Committee
ß Biennial governance audit for all operations and
Independent Tailings Review Board for Red Lake
ß Recertification for Cowal and Red Lake to the
International Cyanide Management Code
ß Tailings capping trials planning at Cowal and Mt Rawdon
ß Studies – dry stacking, enhanced thickening,
reprocessing of tailings, in-pit deposition
ß Board and leadership TSF specific training
ß
Increased rigour at the TSF Committee
Environmental Compliance
(material topic)
Definition: Regulated incidents and impacts including:
ie Noise, environmental discharges, air emissions and
cyanide.
Our Approach
Our social licence to operate is supported through permit
and licence approval and provides minimum requirements
to ensure the health and safety of our communities and the
protection of our environment. Operating under relevant
licence conditions, all operations are required to provide
annual compliance reports to demonstrate conformity with
current legal and other obligations supported by assurance
activity.
The environmental laws and regulations that cover each
site, 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).
82 Evolution Mining Limited // Annual Report 2021
In FY21, there were no significant fines paid (> US$10,000)
related to environmental impacts. There were no material
environmental incidents in FY21 (major or catastrophic)
and four reportable events (classified at a moderate level)
were notified to the relevant government authority and the
relevant agreed action was taken.
We adopt cyanide destruction systems to reduce the
concentration of cyanide discharged to our facilities and
Cowal and Red Lake have been recertified against the
International Cyanide Management Code.
Air Quality
Our Approach
The management and minimisation of air emissions by
mining operations is required to protect sensitive receptors
in the vicinity of our operations. Air quality is managed
according to the Sustainability Performance Standards.
Dust generated by mining activity is controlled through
mine design, haulage planning, and dust suppression to
ensure emissions are within compliance limits. Additional
controls are in place to manage and mitigate emission
of particulates (GHG and dust) within and beyond our
operation boundaries. This includes associated monitoring
to allow the effectiveness of controls to be routinely
assessed, validated and adjusted if required.
Our Performance
In FY21, all operations were in full compliance with
regulated limits for particulate emissions. Monitoring of
depositional dust at our operations met licence conditions.
Refer to our ESG Performance Summary Data document
for our performance around our air emissions related to
GHG emissions.
Water Management
(material topic)
Definition: Security of supply, quality, efficiency of
water use, reuse and recycling opportunities. Potential
impacts on community and environment.
Our Approach
Water is integral to our operations, and water stewardship
is a key part of our ongoing social licence to operate. We
recognise the need to manage our water requirements with
the shared needs and demands of the environment, local
communities and other stakeholders in water catchments.
Consideration of the impact that climate change may have
on water availability and quality is integral to effective
management.
FY21 Sustainability Report Each operation maintains water management plans and
site-wide water balances to guide responsible water use
throughout the mine lifecycle and in the context of the
local catchment. Water-related activities are regulated by
relevant legislation in each jurisdiction and are subject to
set quality and quantity thresholds.
Our Performance
Total water withdrawn increased in FY21. The increase
in water withdrawn was due to the inclusion of Red Lake
and an increase in water withdrawn at the Mt Rawdon
and Mt Carlton operations. Mt Rawdon experienced an
unseasonably dry FY21 and had to supplement with raw
water.
Our aim is to maximise the reuse of mine affected water
(MAW) to reduce the demand for external raw water supply
which reduces competition for agricultural and other
industries and communities. No Evolution operations are in
high to extremely high baseline water stress areas according
to definitions set in the WBC SD Global Water Tool, WRI
Aqueduct Global Water Tool or Water Footprint Network.
Total water reuse increased by 25% between FY20 and
FY21. Notable increases in water reuse were recorded at
Cowal (30%) and Mt Carlton (>200%), demonstrating the
increased focus and planning associated with water reuse
at our operations. With the commissioning of the IWL
during FY21, descaling of pipework and upgrade of pumps,
Cowal was able to increase daily return of water from the
IWL from a previous average of 8-12ML to >17ML to meet
the daily demand of ~24ML.
Case study: Integrated Waste
Landform at Cowal
In 2019 the Cowal operation was in a drought declared
area. The site was, however, well advanced on a multi
solution response to ensure external users such as
agriculture and communities had adequate water supply.
Construction of the IWL Stage 1 was in progress which
included controlled seepage recovery design and surface
decant water return planning to optimise return of water
from the tailings storage facility. This would lead to
significant reduction in fresh water required from external
sources due to the increase in availability of harvested
rainwater on site and increased availability of water from
the IWL.
During FY21, for a period of four months, no water was
drawn from the Wyangala dam source (Wyangala Dam
is Cowal’s fresh surface water source). Water was still
withdrawn from fresh bores close to the mining lease,
however, this demand was reduced by 65% (4.6M kL in
FY20 to 1.3M kL in FY21).
Environment
Water reuse increased from 4M kL in FY20 to 5M kL in
FY21 attributed to the improved efficiency of mine affected
water return from the IWL.
Water Reuse FY18-FY21
FY18
FY19
FY20
FY21
0
5,000
10,000
15,000
20,000
25,000
Total Water Used (ML)
Water Recycled/Reused (ML)
Evolution Mining Limited // Annual Report 2021 83
FY21 Sustainability Report Environment
In FY21, the water withdrawn intensity per tonne of ore
processed increased by 11% which is attributed to the
inclusion of Red Lake in the water intensity measure
(excluding Red Lake, the intensity figure would have
decreased by 20%). This is a whole of site water demand
measured as per dry tonne milled. Red Lake has a
relatively high-water intensity of 5.15 kL/tonne, noting
that this is the only Evolution site to operate an Autoclave
and be undertaking extensive reclamation activities in
the treatment of legacy Arsenic Trioxide materials from
underground workings.
Our future efforts in water management will include
continued focus on water security – mitigation of the
effects of extreme weather events (drought and flood)
through a reduction of total water demand, increase in
water reuse, water storage and stormwater, sediment and
erosion control best practice.
Case study: Catchment if You
Can Challenge at Mt Carlton
Mt Carlton initiated an innovative crowdsourcing event
called “Catchment if You Can Challenge.” The objective
was to find solutions to deliver water reduction and
reuse goals. The operation set themselves a challenge to
significantly reduce the volume of water already on site
and to determine the appropriate way to treat and recycle
large values of low pH water to be used in and around
their operation. The challenge attracted submissions
from over 130 participants from 26 countries. Following
proposal reviews and investigations, two companies
have progressed to the design and costing phase with
solutions that include the use of an enhanced evaporation
towers utilising recycled HDPE to tackle water inventory
issues, and electrodialysis to treat acid mine drainage. The
innovation demonstrated that Mt Carlton can safeguard
the water essential for the work, health, and wellbeing of
our employees and communities, and address emerging
climate risks of water insecurity.
84 Evolution Mining Limited // Annual Report 2021
Hazardous Chemicals
Management (material topic)
Definition: Use, storage, handling, transport and disposal
of hazardous chemicals including explosives and other
dangerous goods.
Our Approach
Hazardous chemicals including the use of explosives,
cyanide and other dangerous goods are essential to our
mining and processing activities. We recognise the need
to ensure hazardous chemicals are managed through their
lifecycle in accordance with risk management principles to
avoid risk to human health and our ecosystems.
Each operation manages the hazardous chemicals lifecycle
in accordance with the minimum standards outlined in our
Sustainability Policy and Standards. The use of hazardous
chemicals is regulated by relevant legislation in each
jurisdiction and is subject to specific licenses, approvals
and is inspected routinely by the regulator.
The sustainability assurance program also completes audits
at each site to ensure minimum standards are being met
and to identify best practice learnings are shared across
the business.
Our Performance
ß Cyanide Code compliance at Red Lake and Cowal
ß Permit and or licence compliance for all explosives,
dangerous goods, poisons and radiation devices
ß Use of Chemalert for management of all chemicals
ß Chemical approval required prior to entering operations
including risk assessment
ß Emergency response spill scenario training at all
operations
ß
Internal Audit and review validated by external auditors
Land Use and Biodiversity
(material topic)
Definition: Biodiversity and ecosystems protection and
restoration. Audited, mapped and management plans in
place. Fire, pest and weed strategies.
Our Approach
Biodiversity may be affected by the impacts of mining
activities on water, land and ecosystems. Our local
stakeholders are valuable sources of knowledge
concerning biodiversity, and we work closely with our local
communities to identify sensitive areas and monitor any
potential impacts. We incorporate all stakeholder concerns
into our environmental stewardship approach.
FY21 Sustainability Report Our biodiversity strategy is linked to the stage of
development of our projects. As an example, at all
operations including exploration biodiversity risks are
actively mitigated through ongoing field mapping of fauna
and flora, as well as land disturbance permit process at all
operations. Sensitive flora and fauna are only impacted
where the internal and external permitting process have
been met and no other alternative is available.
Biodiversity Management Plans which meet the
requirements of the Sustainability Performance Standard
are in place at all sites and are regularly reviewed. All
activities are monitored in accordance with obligations.
Our Performance
ß Disturbance permitting process embedded at all mine
and exploration projects
ß Annual review of biodiversity management plans
ß At the beginning of FY21 Evolution was managing
90,222 hectares of land (owned, leased or occupied)
ß At the close of FY21, Evolution was managing 130,505
hectares
ß 4,460 hectares of land are currently managed under
biodiversity management plans related directly to
mining
ß Receiving environment protection through sediment
and erosion control including the Cowal Lake Protection
Bund
Refer to ESG Performance Data document for more
information.
Case study: Northern
Queensland Dry Tropics Beach
Scrub Rehabilitation Project at
Mt Carlton
There is an invasive weeds biodiversity challenge in
the region of where Mt Carlton is located. Mt Carlton
has partnered with the Gudjuda Reference Group and
collaborated with NQ Dry Tropics and the Bindal Traditional
Owners to clear a six-hectare patch of beach scrub, located
on traditional Bindal land, by removing lantana and other
threatening weeds.
As a project sponsor, Mt Carlton provided A$200,000
to support the training of bushrangers in safe chemical
handling, mapping and assessing the health and condition
of beach scrub vegetation using the Biological Condition
Assessment Tool (BioCAT). Four young Gudjuda trainees
have been provided extensive training, received project-
relevant skill certifications and made significant inroads on
the lantana threatening to overwhelm healthy beach scrub
biodiversity.
Environment
Case study: Great Barrier Reef
Yellow Zone Project
The Great Barrier Reef is a vast and vital ecosystem
supporting much of Australia’s rich marine biodiversity and
is upheld in importance with the United Nation’s 2021-2030
International Decade of Ocean Science for Sustainable
Development. Since 2020, in partnership with James Cook
University (JCU) and the Great Barrier Reef Marine Park
Authority (GBRMPA), Evolution has contributed A$218,000
of funding and intellectual collaboration towards the Great
Barrier Reef Yellow Zone Project. This research project
delves into partially protected marine areas (yellow zones)
with regards to questions of marine life, reef habitat health,
and cyclone and bleaching impacts on reefs. These areas
have rarely been the focus of research, but 2021 studies
related to this project have affirmed yellow zones, in
combination with no-take green zones, as effective marine
biodiversity management tools. Evolution’s funding has
enabled the research area to be expanded. The partnership
conserves the reef and supports local fishing communities
through increased awareness of the conservation benefits
of yellow zones.
Evolution Mining Limited // Annual Report 2021 85
FY21 Sustainability Report Environment
Case study: Lake Cowal Foundation
Evolution has a strong, long-standing partnership with the Lake Cowal Foundation (LCF) and Lake Cowal Conservation
Centre (LCCC) which aim to educate the community in natural resource management issues and encourage the adoption
of sustainable land, water and biodiversity management practices. LCF has initiated and implemented a range of projects in
collaboration with individual landholders, local community groups including Landcare, local First Nation Partners, local and
State government organisations. Evolution has also contributed to these diverse projects, seeing increases in biodiversity
evidenced by significant concentration of waterbirds at the ephemeral inland wetland system due to increased rainfall and
ongoing environmental management of Lake Cowal.
Mine Closure: Rehabilitation (material topic)
Definition: Restoring land to natural state or suitable for future uses such as conservation, agriculture, clean energy
industry.
Our Approach
How we rehabilitate and transition mines to a post mine land use is wholly integrated to our life of mine planning process.
Land management and rehabilitation efforts are aligned with leading practice and are undertaken in a socially and
environmentally responsible manner, with an integrated approach to planning the rehabilitation and closure of our mines that
commences at the feasibility phase and continues throughout the life of the asset. Physical and transition risks are mitigated
through internal and external networking, working groups and assurance activities undertaken at the LOD1, 2 and 3 levels.
Our Mine Closure and Rehabilitation Standard33 guides our approach to ensure consistency across the business. This requires
every site to have a set of land outcome documents including a plan for closure, mapped disturbance and a rehabilitation
cost model with an annual budget for progressive mine rehabilitation.
Progressive rehabilitation is a focus during the operations phase of the mine lifecycle to minimise the mining footprint, assist
with understanding and evaluating closure risks, identify knowledge gaps and inform research and development programs,
and refine closure provision estimates.
Our Performance
ß Enhanced stakeholder engagement in the planning phase considered business as usual
ß 4,460 hectares of land disturbed by mining activity
ß 323 hectares of land rehabilitated
ß Site Closure Plans – 100% of all operational sites
ß 2 Line of Defence 3 audits complete in FY21 to validate closure cost models, plans and disturbance
ß Ongoing Wetlands trial at Mt Rawdon
ß Planning for Tailings cover trials at Mt Rawdon and Cowal
ß A$268.4 million rehabilitation liability (refer to table below)
Operation
Cowal
Mt Carlton
Mungari
Mt Rawdon
Red Lake
Type
Financial
Assurance
Surety bond
Levy System
Levy System
Surety bond
Surety bond
A$64,902,072
A$31,877,954
A$20,900,994
A$49,952,091
CA$63,386,000
33 Sustainability Performance Standards
86 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Case study: Pumped Hydro
Project at Mt Rawdon
The Mt Rawdon operation is currently planned to close
in 2028. Evolution is pursuing construction of a leading-
edge low-cost, renewable energy storage managed in
partnership with Infrastructure Capital Australia Partners
(ICA Partners), known as the Pumped Hydro Project.
Preliminary feasibility studies support the project’s
potential to deliver a cost-efficient renewable energy
power source in Queensland that would contribute to the
state-wide target of 50% renewables by 2030. It would also
generate significant economic and social benefits to the
local community and National Electricity Market (NEM).
Planning with decision-makers and experienced partners
is ongoing. The initiative showcases Evolution’s capability
to lead sustainable solutions in line with our values and
support our local communities beyond the life of mine, with
planned positive legacy solutions.
Environment
Case study: Opening of
Ben Prior Park
In the Goldfields region of Western Australia, as with all
of the communities where we operate, local economic
development and community resilience rely on partnerships
between industry, community groups, and local decision-
makers. To enhance the liveability of Coolgardie, Evolution,
along with the Shire of Coolgardie, Kambalda Men’s Shed,
Coolgardie Men’s Shed, and others collaborated to restore
and refurbish Coolgardie’s Ben Prior Park. Evolution donated
approximately A$177,000 to the restoration. Upgrading
Coolgardie’s community assets and aesthetics with the
open-air mining museum promotes local tourism and
economic stimulus, retains community support, attracts
employees, and promotes and educates on mining’s rich
history in the Goldfields. The facilities refurbished at Ben
Prior Park enable a deeper understanding of the role of
mining in the region and provides educational and sensory
tools for school group visits.
Evolution Mining Limited // Annual Report 2021 87
FY21 Sustainability Report Health, Safety
and Wellbeing
"Imagine if we could create an
environment where we went home
even better than when we arrived.
That is our aspiration in keeping
people healthy and safe".
Fiona Murfitt,
VP Sustainability
Health, Safety and Wellbeing
Health, Safety and Wellbeing
FY21 Highlights
Leading safety metric
improvements – proactive
reporting, training
compliance, field
interactions, action close out
Active learning and sharing culture
supported by weekly storytelling sessions
100%
of material and critical actions closed
Training compliance goal of
85%
achieved (22% improvement in
FY21 compared to FY20)
Implemented and monitored
controls to keep our people
safe during COVID-19 and no
interruption to operations
Strong hazard reporting culture
90 Evolution Mining Limited // Annual Report 2021
Increased services to meet
demand for mental health
and wellbeing support during
COVID-19
100%
of significant incidents reviewed with
senior management and front-line leaders
to promote learning across the business
All Performance Standards
audited at assets with no
material findings identified
Zero
fatalities
prevention through
safety in design
principles
FY21 Sustainability Report Health, Safety and Wellbeing
Work Health, Safety and Wellbeing
(material topic)
Definition: Physical and mental health. Employee and
contractor safety, occupational hygiene.
Our Approach
Evolution is committed to providing workplaces where
our people including contractors and business partners
are physically and psychologically safe, healthy, and well.
We apply risk management principles with a focus on
eliminating hazards, and where that is not possible, ensuring
that risk is managed within agreed tolerability levels. This
is achieved through the ongoing review and improvement
of risk including bowtie risk assessments for material
and critical safety risks and the identification and active
management of critical controls associated with these.
Our workforce is expected to comply with health and
safety requirements that are supported by our systems
and processes, including our Sustainability Policy, and
Sustainability Performance and Strategic Performance
Standards. We measure our health and safety performance
using a combination of leading indicators, lagging
indicators and performance targets established during the
annual business planning process. Our primary lagging
indicator for measuring health and safety performance, and
for benchmarking against peers, is the Total Recordable
Injury Frequency (TRIF). Other lagging indicators are Lost
Time Injury Frequency (LTIF). All frequencies are calculated
based on a 1,000,000 work-hours formula using OSHA
principles. Leading indicators are also measured and
reported on a monthly basis including proactive reporting
ratios, training compliance rates, field interactions,
investigations closed on time and an action close out on
time calculation.
Success Through Collaboration
To achieve our objectives, we depend on the commitment,
leadership, teamwork, engagement, and involvement of
everyone in our workforce – employees and contractors
alike. Our workforce is actively involved in health and safety
through participation in working groups, project teams,
business improvement initiatives and health and safety
committees, or by way of designated health and safety
representatives.
All significant incident investigations are presented to the
COO, Vice President Sustainability and site representatives
in weekly report, review and share meetings and other
more detailed reviews as required. Findings and key
learnings are discussed and then shared across the
business with the aim of preventing a recurrence.
Health, Safety and Wellbeing
Consolidated health and safety performance data is
frequently evaluated to identify trends and develop
focused incident and injury prevention strategies. Statistics,
incident details and summary investigation findings are
readily available and accessible to employees, contractors
and visitors and a monthly report is published across the
business. This is available on the Intranet for access by
all. Health and safety performance results are reported to
the Leadership Team and shared across our operations
monthly, then reviewed quarterly with the Board Risk and
Sustainability Committee.
Our Performance
In FY21 we focussed on building a learning and proactive
culture so that people fully understand the controls in place
relating to our material and critical risks that keep them
safe in the workplace.
Each operation implemented sound initiatives to help
reduce the risk of incidents and to minimise the risk
of injuries and illnesses. Performance was variable
across the sites ranging from "excellence" to "requiring
improvement" (at two operations where the majority of
injuries occurred). Tailored programs and plans have been
designed to address the specific needs of each site and are
being measured and tracked which focus on leadership,
courageous conversations, behaviours and “seeing”
hazards. There has been ongoing commitment to the
review of material actions to ensure these are addressed
and 100% closed out. This is reviewed on a weekly basis,
reported on monthly and independently verified.
There were 54 recordable injuries during FY21, with
14 being lost-time injuries, resulting in a TRIF of 9.62.
The TRIF did not meet the 5.25 target. Whilst this was
disappointing, the types of recordable injuries experienced
shifted to injuries of a lower order, demonstrating a
reduction in higher order or those where a more severe
injury could have occurred. This was further supported
with improvement in leading indicators such as reporting
and communication of serious incidents and their casual
factors, proactive significant incident reporting, training
compliance rates, field interactions and closure of
investigations and actions on time. This trend supports an
improved culture of reporting and is evidence that controls
are operating to prevent the most serious consequence.
The focus on risk management was also supported by
audits at all sites, with no significant findings identified.
These findings were also verified through external review
and audit. We are continually learning, improving and
sharing how we create safe and healthy workplaces with
an emphasis on preventing serious outcomes, with an
increased use of technology and data driven insights to
reduce risk.
Evolution Mining Limited // Annual Report 2021 91
FY21 Sustainability Report Health, Safety and Wellbeing
Safety Performance Comparison1
Number of safety interactions
Number of hazards reported
FY21
49,107
13,337
Significant Incidents reviewed with senior management (%)
100%
Proactive Significant incidents
TRIF2
TRIF Target
LTIF3
Fatalities
38
9.62
5.25
2.49
0
FY20
54,287
13,415
100%
34
6.76
5.50
2.07
0
FY19
32,588
13,040
100%
n/a
8.31
4.95
1.75
0
Total Hours Worked
5,612,323
5,323,912
4,570,433
1 Our safety performance includes both employees and contractors.
2
Total Recordable Injury Frequency (TRIF) is calculated as (total number of recordable injuries [including fatalities, lost time injuries,
restricted work and medical treatment injuries] x 1,000,000) / total hours worked.
3
Lost Time Injury Frequency (LTIF) is calculated as (total lost time injuries x 1,000,000) / total hours worked.
Note: the safety interactions and hazards information for FY21 (excludes data from Cracow (divested late FY20) and
interactions from the Red Lake operations. The intervention programme for Red Lake has commenced and is focused on
leadership, courageous conversations, behaviours and “seeing” hazards. This data commenced in late Q3 FY21 and will be
reflected in FY22 data.
Wellbeing
Workplaces that promote mental and physical health and psychological safety are vital to building trust and respect. By
investing in mental health and wellbeing programs, we aim to improve health, safety, and business outcomes. Our FY21
plan to enhance awareness, understanding and support for holistic wellbeing was accelerated by the COVID-19 pandemic,
and we continue to adjust our protocols and measures put in place on the advice from the relevant government and health
specialists, particularly to ensure the safety and wellbeing of our people.
We engaged and supported our people using onsite health practitioners. This was complemented by a wellbeing framework,
a mental health support framework and mental health first aid training across operations, which equips people and their
families with knowledge to proactively manage their own wellbeing and provides access to tools and support for early
intervention and recovery.
Other initiatives at our operations to support a mentally healthy workplace included R U OK Day initiatives, mental health
first aid training and fatigue management training for employees and supervisors, and the Blue Tree Project. There were 296
people who had proactive treatment for pre-existing conditions.
In FY22 the wellbeing framework is being enhanced to develop an organisation-wide focus on psychological safety
supported by the development of leading indicators to monitor and track wellbeing across the workforce.
Case study: Blue Tree Project and Wellbeing Initiative at Cowal
and Mungari
The nationwide movement of the Blue Tree Project has left its mark at the Cowal and Mungari Operations. At each operation,
a tree has been painted blue with support from local stakeholders to support the project raising awareness around mental
health and sparking difficult conversations. Increasing visibility that “It’s OK to have a blue day” encourages our people to
reflect on the wellbeing and health of themselves and others, break down stigmas surrounding mental health, and foster
community connections and engagement. These blue trees serve as a reminder that our people and their health are our
most important assets and align with our sustainability approach of creating planned positive legacies. Already more than
600 trees have been painted and registered across Australia to help raise awareness of mental health and suicide prevention.
92 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Occupational Hygiene
All sites have risk-based Health and Hygiene Management
Plans that includes identification and quantification
of risk from actual and potential exposure to airborne
contaminants, hazardous atmospheres, flammable
substances, noise, hazardous manual tasks and
environments where personnel are exposed to hazardous
materials. Health risk assessments are conducted, and
monitoring programs are implemented for similar exposure
groups (SEGs). The monitoring programs are reviewed
on a regular basis. Corrective and remedial actions are
implemented where the results of monitoring have
identified an increased threat to workers’ health.
Contractor Health and Safety
We communicate our minimum expectations regarding
contractor health and safety requirements as a component
of the procurement process for our sites and projects.
These expectations form an integral part of the signed
agreements with each contractor or business partner.
Communication is critical and includes the provision of
information on site specific risks and we collaboratively
review the way tasks are designed and undertaken. We
ensure we are clear in communicating the requirements
and accountability for supervision to ensure work is being
carried out safely and in line with Evolution’s standards.
Evolution operates a ‘one team’ approach and reports
and reviews all incidents including near misses from all
contractors. Like all employees, contractors are required
Health, Safety and Wellbeing
to follow safe work practices, report all incidents and to
stop work if they are unable to control the hazards of the
task or implement robust controls to safely perform the
task. Where a contractor does not follow safe practices,
we require them to cease work until remedial actions
have been taken. This may include implementing written
procedures for high-risk tasks within the contractor’s
scope; documenting training for all personnel; conducting
fit-for-purpose audits of machinery, materials, PPE and
emergency equipment used by the contractor; and
re-inducting their employees to Evolution’s site-safety
requirements.
Emergency Preparedness
Emergency response programs are in place at all our
operations and are rigorously reviewed and assessed to
ensure the business is well prepared to respond to an
incident and/or an emergency. Our emergency response
teams comprise of employees with additional training
in emergency protocols, procedures and equipment.
The emergency response programs include extensive
emergency drills and training, such as mine rescue
scenarios / training, fire drills, CPR first-aid training, and
training in the use of hazardous materials suits and other
safety equipment.
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 how 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.
Evolution Mining Limited // Annual Report 2021 93
FY21 Sustainability Report Health, Safety and Wellbeing
FY21 has been a year where there has been an ongoing and active CMT and IMTs established for COVID-19. These teams
continue to meet on a regular basis to address the ongoing COVID-19 issue. Additional examples where IMTs have been
established with support from a CMT include cyclones at Mt Carlton, floods at Cowal and forest fires at Red Lake.
We continue to build the capability of 173 members in our Emergency Response Team (ERT) to support our operations and
to assist our communities through significant incidents or threatening situations. Our emergency response teams maintain
close working relationships with community-based emergency responders and provide additional support and resources to
local responders in the event of a serious off-site incident. In cases of disaster and irregular weather events such as floods
and forest fires, our emergency responders are ready and prepared to assist community-based response teams to protect
our workers, assets and neighbours.
Red Lake ice rescue simulation
Cowal road crash rescue
Mouna Momo stabilises her patient at the
multi-casualty First Aid event,
Mungari emergency response competition
Chris McIntosh (EVN
Mungari Captain) directing
team during fire event
94 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Health, Safety and Wellbeing
Case study: Kalgoorlie
Surface Mine Emergency
Response Competition 2021
at Mungari
Case study: TRIF Safety
Record – Leaders in the
Community and at Work at
Mt Rawdon
In April and May 2021, our Mungari Operation hosted the
Kalgoorlie Surface Mine Emergency Response Competition
which was run by the Chamber of Minerals and Energy
Western Australia. The multiday event provided scenario-
based training for nine teams, comprising approximately
200 people across the mining industry, on mine safety
and enhancing education in industry-leading emergency
approaches. Skills were tested across scenarios in
firefighting, hazardous chemicals, first aid, team skills,
vehicle extrication, rope rescue, incident management,
confined space rescue, and theory exams. Evolution
claimed second place in Rope Rescue and several third
places including Individual Theory and Best Captain.
In January 2021, the Mt Rawdon Operation achieved 365
days without a recordable injury, enabling the lowest
TRIF ever at Evolution of 0.00 and efficient production.
The incredible milestone was attributed to mature risk
management procedures, leadership, and peer on peer
interactions at the operation and across Group. For
example, the site committed to ongoing visible leadership
through an interactions program, held safety toolbox
sessions on resetting risk and controls examinations and
rolled out a 5S Lean manufacturing standard (Sort, Set in
Order, Shine, Standardise and Sustain) and shared learning
broadly across the site and at other operations. In addition,
the Site Leadership Team continue to raise standards in
reporting and incident investigations. This commitment to
safety has encompassed not only the workforce but also in
the communities through a Community First Aid Training
Day held for 20 local residents.
Evolution Mining Limited // Annual Report 2021 95
FY21 Sustainability Report Health, Safety and Wellbeing
Transport Safety
(material topic)
Definition: Road and aviation accidents. Road dust from
transportation to and within the mining sites.
Our Approach
Evolution is committed to ensuring the safety of our
employees, contractors, and our communities as we
undertake crucial road and aviation activities on our sites
and within the areas in which we operate. These activities
include the movement of people, delivery of products or
transporting goods and equipment.
The risk related to transport safety varies based on the
activities of our operations, the location of our assets and
the local environments in which we operate.
Minimum standards have been developed to define key
requirements related to transport safety outlined within the
Sustainability Performance Standards including; Aviation
and Travel and Fixed and Mobile Equipment standards.
Vehicle Interaction and Aviation have been identified as
Material risks at a Group level which requires bowtie risk
assessments and critical control plans to be in place with
verification activities undertaken to verify controls are
effective and functioning as designed in controlling the risk.
The sustainability assurance program incorporates
verification against the two Standards and the material risk
program across all operations and the wider business. If
any deviation is identified, an action plan is developed and
the nonconformance is escalated to the Leadership Team.
Aviation Safety
The Evolution Group Sustainability Team takes a lead role
in managing the risks and ensuring effective control of
risks associated with the Aviation and Travel Standard
providing travel related security, emergency recovery and
management across the business. Aviation services are
reviewed and approved by Group in consultation with key
industry and regulatory bodies.
International SOS have been engaged to support the
safety of our people as they travel internationally and
domestically. Travel is registered, people are briefed prior
to departing on any medium to high risk travel and support
is also provided in ensuring the safety of our people during
the COVID-19 global pandemic.
Vehicle Safety
Our road safety approach focuses on vehicle design
and condition, road design and maintenance, traffic
management rules as well as driver skills and behaviour.
We recently formed an Evolution Community of Practice
to champion a program of activities aimed at reducing
vehicle incident and near misses across the business. We
are focused on reducing risk through both driver behaviour
and targeting technological solutions to improve the safety
outcomes of vehicle operations.
Our Performance
100% of charter airlines in use through FY21 have
undergone the required third-party audit, confirming
compliance to regulatory and Evolution minimum
standards. There were no aviation related events in FY21.
Vehicle safety was a key element of the FY21 assurance
audits with all sites meeting the minimum requirement
of the standard. Whilst there were some improvements
required these have been assigned actions and will be
tracked through to close out. A vehicle safety community
of practice has been established to drive ongoing focus
and improvement in vehicle safety across the business.
96 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report People and
Culture
"Our ability to maximise the value of
our portfolio is underpinned by an
engaged and enabled workforce.
An inclusive culture that leverages
diversity and values employee
wellbeing is key to our success."
Paul Eagle,
VP People and Culture
People and Culture
People and Culture
FY21 Highlights
21% 42%
increase in female workforce
participation compared to FY20
of jobs filled internally
(2% increase compared to FY20)
Employees choosing to stay at
87%, against a target of 87%
231
‘Act Like an Owner’
recognition program
nominations (17% increase
compared to FY20)
Improved our approach to
performance management,
with an increased focus on
regular feedback, coaching,
and development supported
by a simplified People and
Culture system
Built cultural awareness through
training and collaboration with our
local Indigenous communities
98 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report People and Culture
Our Approach
Evolution has a values-based culture with clear
expectations around behaviours, that aims to create an
environment where our people are informed, engaged and
have strong working relationships with their Leaders and
work colleagues.
Aligned to this, we believe that developing our people
is vital to our success as a business and to ensuring our
people’s time at Evolution is a highlight of their career.
As part of our people strategy we focus on growing
outstanding leaders, building capability across the business
and driving an inclusive culture that leverages our diversity
and optimises workforce performance. We aim to create
safe work environments that promote dignity, respect and
wellbeing, in which the contributions of all employees are
recognised and valued.
We ensure our approach to remuneration is competitive
and supportive of delivering quality outcomes, whilst
recognising the significant efforts of our people.
Our Performance
As of 30 June 2021, Evolution employed 1,977 Permanent,
Fixed Term and Casual employees, compared to 1,448 in
FY20. The acquisition of the Red Lake operation and Battle
North Gold added 753 employees to our workforce. 87%
of our employees chose to stay with Evolution which is a
strong result given a competitive market.
Gender Mix Participation
Female representation in the workforce increased from
16.5% in FY20 to 20% in FY21. In addition, 44% of the
Graduate Development Program hires in FY21 were
females.
Indigenous Participation
The focus remains on growing a pipeline of Indigenous
candidates, and proactively identifying experienced
external talent with the skillsets needed by the
organisation. Our directly employed Indigenous workforce
increased from 127 to 139 people, representing 7% of our
workforce.
Inclusion and Diversity
(material topic)
Definition: All forms of diversity and inclusive design of
workplaces. Gender strategy aligned with WGEA: ‘female
participation in mining’. Cultural awareness training.
Evolution is passionate about creating a workplace that’s
inclusive and supportive; a place where everyone can
truly be themselves. A diverse and inclusive company
is a stronger, more successful company. Improved
diversity yields many benefits, including positive impacts
on organisational culture and reputation, employee
attraction and retention, as well as enhanced stakeholder
relationships and business outcomes.
We continue to support a flexible and inclusive working
environment that assists employees to balance their
responsibilities between work and home. In FY21, we
formed an Inclusion Awareness Project which will focus
on delivering Inclusion Awareness education, supporting
leaders to have meaningful conversations with their
teams, as well as identifying and acting on improvement
opportunities throughout FY22.
We report annually on the gender mix within our workforce
via our Workplace Gender Equality Public Report.34
Case study: Cultural
Awareness Training at
Connor’s Arc
Eight members of the Evolution Connor’s Arc Greenfields
exploration team met with the Barada Barna peoples in
Moranbah, in April, to participate in a cultural awareness
training session. The training covered the history of the
Barada Barna people and their journey to Native Title
Determination, the difference between a Welcome to
Country and Acknowledgement of Country, their language,
and artefacts. The session also covered how the Barada
Barna Aboriginal Corporation are working towards a
sustainable future for their people and their countrymen
by expanding their business and sharing their business
acumen with other traditional owner groups to help them
succeed.
34 Workplace Gender Equality Public Report
Evolution Mining Limited // Annual Report 2021 99
FY21 Sustainability Report People and Culture
Case study: Rainbow
Crosswalk Sign of acceptance
for LGBTQ2S+ community at
Red Lake
Case study: Sponsoring the
1770 Cultural Connections
Immersion Festival at
Mt Rawdon
Respect is a key value at Evolution. The Red Lake
Operation demonstrated this value by showing support
and celebrating their diverse and inclusive LGBTQ2S+
community during Pride Month in June. Red Lake
employees painted a rainbow crosswalk with permission
of the Municipality of Red Lake, adding not just a pop of
colour, but also a dash of hope and acceptance into the
community. This community encompasses straight and
cisgender allies supporting and advocating for LGBTQ2S+
community members, as well as those within the
LGBTQ2S+ community who support each other.
Mayor Fred Mota commends Evolution: “We are very
pleased to have this opportunity to partner with Evolution
on this project. Red Lake is a community that is supportive
of inclusion and diversity. This rainbow crosswalk will serve
as a visual reminder of this sentiment for years to come.”
The 1770 Cultural Connections Immersion Festival is a
cultural event in the Burnett region driving reconciliation
through cultural education and engagement. ‘Reconciliation
through Celebration’ is the key objective of the festival
which features food, cultural performances, guest speakers,
lessons in biodiversity, and storytelling around the cultural
values and history of First Nation Partners and Indigenous
Peoples. Despite COVID-19, the inaugural festival in 2020
attracted over 1,600 people. Evolution is proud to offer its
ongoing support as the festival’s major sponsor for the next
three years, along with the Burnett Mary Regional Group
and event organisers, the Gidarjil Development Corporation.
Formalising this joint partnership with these regional
change-makers enables effective forward planning, increases
the national profile of the event, fosters the progression
of Mt Rawdon’s related biodiversity regeneration projects,
and aligns with our sustainability commitments to
enhance cultural and environmental outcomes in our local
communities. Through this collaboration, our partners
envisage the 1770 Cultural Connections Immersion Festival
will become one of the most significant festivals for First
Nation Partners and Indigenous Peoples in Australia.
Employee Engagement
(material topic)
Monthly voluntary employee engagement surveys are
conducted, providing people with an opportunity to let
their leaders and team members know what is important
to them.
During FY21, an average of 54% of our team members
responded to the survey (compared to 53% in FY20). The
results demonstrated that we successfully sustained or
improved over the period against our key culture measures,
which are aligned to our values.
We received a combined staff engagement score of 78,
which is a strong result, consistent with FY20. In FY21
questions were added on wellbeing (physical, social and
psychological), culture (supportive workplace culture) and
belonging (sense of belonging as part of their workplace).
These questions scored consistently in the 73 - 79 range.
We were pleased that engagement was consistently high
despite the COVID-19 crisis.
100 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report People and Culture
Response Rate
Excellence
Accountability
Honest Conversations
Safety
54%
80%
77%
77%
84%
Collaboration
Respect
Wellbeing
Culture
Belonging
75%
78%
79%
73%
75%
Combined Score Average: 78
Talent Attraction and Retention
(material topic)
Definition: Appealing to new and experienced talent,
targeted training, career growth and development.
Talented people are core to our business, and we are
always keen to identify, attract and retain people who are
highly skilled, with strong alignment to our values. In FY21,
some enhancements included: streamlining the recruitment
process; implementing new sourcing and selection tools;
and consolidating the reporting of recruitment statistics
through enhanced recruitment dashboards. Social media
channels, eg LinkedIn and Facebook, are used to showcase
diversity through employee story sharing, community
initiatives and local activities. Our partnerships with
Work180, JT Academy, Gold Industry Group and other local
and community associations help us deliver targeted talent
attraction messaging to our candidate market.
As highlighted above, strong levels of retention have been
maintained across our workforce. This is a reflection of the
targeted work undertaken to attract quality people to the
business and the provision of an environment where they
want to stay, thrive and do their best work.
As part of our commitment to a diverse workforce,
we increased our engagement with, and employment
pathways for, Indigenous People across Australia and
Canada.
Evolution strives to continue to develop and grow our
employees by engaging and investing in their futures
through a variety of internal and external offerings.
We encourage our people to take up opportunities for
development that complement their individual needs, short
and long-term career goals and business requirements.
We focus on developing people both personally and
professionally, which enables the Company to build
organisational capability and capacity.
Recognising and Rewarding our People
We have built a culture where our team members ‘Act
Like an Owner’ (ALO) by treating Evolution as if it is their
own business. In FY21, 231 ALO initiatives were generated
that delivered significant value for our business through
change, improved safety, innovation, cost reductions and
efficiency gains.
In addition to this, Evolution is in its seventh year of
offering all eligible Australian based employees A$1,000
worth of Evolution shares, through the employee share
offering program. Therefore, they can truly be owners of
our business.
Evolution undertakes an annual pay review and bonus
process, aimed at recognising and rewarding employee
outcomes aligned to organisational goals as well as the
efforts of our people throughout the year.
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 health
and safety, people, environment, climate risks (water and
emissions), social responsibility and innovation, as well as
ALO contributions.
Evolution Mining Limited // Annual Report 2021 101
FY21 Sustainability Report People and Culture
Case study: Mill Feed
at Cowal
The processing team on site identified that the mobile
crushers could crush ore to an appropriate size to feed
via the soft oxide bin to compensate for the Coarse Ore
Stockpile (COS) feeders being out of action. Luke White
was instrumental in this process, promptly leading the team
to minimise disruption to the mill feed. He coordinated
the safe removal of the contaminated material in the COS,
allowing for a cost saving of A$640,000.
Case study: Act Like an
Owner – Crusher Jaw Liner
at Mt Carlton
Mt Carlton ore is extremely abrasive and may be very
hard. This causes rapid rates of wear for ground engaging
tools, in this case, the crusher jaw liners. Rapid wear rates
require high frequency of maintenance work to change
out, with resultant risk exposure. Glenn Jarvis provided
ore specifications to a new supplier (Brisbane based
manufacturer) who designed and supplied jaw liners (24%
manganese) specifically for Mt Carlton ore characteristics.
This resulted in a ~30% decrease in the required frequency
of maintenance work to change out worn liners, with
resultant decrease in risk exposure and increase in effective
run time. Consumable costs decreased by 30% as a result
of the longer utilisation time (A$106,000), supply lead
times and supply risk with previous supplier in China also
decreased.
Training and Education
Extensive training is provided to increase or improve
skills that mitigate the risk of health and safety incidents,
meet compliance requirements, and increase employees’
understanding of their responsibilities towards the
environment. All staff participate in annual performance
and career development reviews covering their on-the-job
performance, our values and training and development
goals.
In FY21 our continued focus on development, leadership
and retention was measured through:
ß 82% of people fulfilling their stated development goals
ß
Improved continuity in our leadership pipeline
effectively retaining and attracting top talent in our
management group
ß Enrolment and participation of 283 of our leaders in
development programs despite COVID-19
ß 42% of our vacant roles appointed through succession
and internal candidates
ß Growth in our pool of employees identified as “ready
now succession” to 31% against a target of 20%
ß Delivery of a total of 116,092 training hours in FY21: an
average of 59 hours per employee
The rollout of our refreshed Leadership Development suite
of programs underpinned by our Leadership Behaviours
commenced in FY21. The leadership suite includes
Leadership Essentials; practical bite-sized learning for all
leaders, delivered on site; and Introduction to Leadership,
which is aimed at supporting new and emerging leaders
around the fundamentals of being an effective leader.
The GOLD mid-senior development program was also
refreshed, focusing on building leaders who are values
driven, resilient and agile, commercially minded, inclusive
and delivery focused.
Graduate Program
Evolution’s Graduate Program has been running since 2013.
We are delivering diversity and equality in our graduate
talent pipeline supported by a robust and engaging
recruitment and selection process. A sixth cohort of new
graduates were welcomed to the business in January 2021.
Across their two-year journey, the graduates are supported
and encouraged to flourish in both their personal and
professional development through formal workshops
and webinars, customised development assessments and
learning, mentoring, exposure to the Senior Leadership
Team, and a dedicated development guide.
102 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report People and Culture
Case study: Meet Gizella
Szekely, one of our Graduates
Gizella knew she wanted to be a part of Evolution from
a young age and began her time with the business as a
vacation student. She was successful as an applicant in
Evolution’s Graduate Program as a geologist in 2021, a role
that incorporates what she is passionate about: exploring
the great outdoors and mineralogy. What stood out to
Gizella about Evolution is the clear focus on people and
experiencing that no matter what role people are in, the
business will always support them.
In her time with Evolution, Gizella has been provided with
several learning opportunities and the opportunity to
immerse herself within different departments, allowing
her to experience many aspects of the geology function.
Her career highlight so far has been working on the Cowal
Underground Feasibility Study which involved logging core
to understand the GRE46 deposit.
Case study:
JT Academy
The JT Academy has been a valuable partner in addressing
talent attraction and retention challenges in the mining
industry. Since 2019, Evolution’s operations have actively
engaged in the academy’s various programs, such as JT
Community, JT Youth, JT Leadership, and Lead Like a
Girl. These programs have supported the attraction and
retention of local, indigenous, and female candidates into
the mining industry, and have enhanced Evolution’s talent
attraction, brand promotion, and community education
programs. They have also led to the delivery of thousands
of educational workbooks across our local communities,
workshops on self-confidence, JT Leadership sessions,
as well as school and site visits by Johnathan Thurston
(NRL football legend) which have generated cultures of
positivity, self-belief, and cohesion in our communities.
So far, by leveraging the Academy's resources, Evolution
has increased the number of job applicants identified as
Aboriginal and/or Torres Strait Islander to 12% in FY21. This
partnership is part of enabling sustainable positive legacies
in our communities, particularly with equal access to
employment, training, and capacity building.
Evolution Mining Limited // Annual Report 2021 103
FY21 Sustainability Report People and Culture
104 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Community
"We are deeply connected to the local
communities where we operate. Partnering
with our First Nation Partners and Indigenous
Peoples, neighbours, local and regional
governments and suppliers allows us to
improve outcomes in health, community
infrastructure and services and education,
including providing traineeships and creating
pathways for employment. By working together,
we can create long-lasting, inclusive and
sustainable value beyond the life of our mines."
Bob Fulker,
Chief Operating Officer
Community
Community
FY21 Highlights
Active engagement with First
Nation Partners and Local
Communities
0 Material Cultural Heritage Incidents
0 Material Community Impact Incidents
100%
of Actions in Community
Relations Plans completed
106 Evolution Mining Limited // Annual Report 2021
A$3.30
million
in direct community
investment in FY21
7 new Shared Value
Projects in FY21
A$100
million
local spend (27% increase
compared to FY20)
FY21 Sustainability Report Community
Our Approach
Evolution relies on the relationships we have with our
stakeholders to ensure that the opportunities created by
our operations produce socially inclusive and sustainable
development for the communities in which we work.
The communities near our sites experience the most direct
social, environmental and economic impacts of our business.
By providing competitive wages and benefits, prioritising
local procurement, contributing our fair share of taxes
and royalties, and investing in community programs and
infrastructure, we work hard to support the development
goals of our host communities and governments.
Providing clear and transparent benefits to local
communities is an integral part of our strategy for gaining
support. Our approach is to:
ß Build engaged and lasting relationships with the
communities in which we operate
ß Uphold fundamental human rights
Indigenous Peoples, including First Nation Partners in
Canada, are often highly impacted by mining. In Canada,
the mining industry is the single largest employer of
First Nation peoples and contributes to the sustainable
development of Indigenous communities across the
country. As identified by the Truth and Reconciliation
Commission of Canada, Canada’s private sector has an
important role to play in helping to reconcile historical
injustices faced by Indigenous Peoples. As a mining
company with a Canadian asset in operation, Evolution
has a responsibility to meaningfully consult First Nation
communities and provide equitable access to employment,
training and educational opportunities.
Our Community Relations teams at all sites works with our
First Nation Partners and Indigenous Peoples, contractors
and educational institutions to provide training and
employment opportunities to Indigenous peoples. The
General Manager at each site is responsible for First Nation
engagement at a local level.
ß Protect cultural heritage and First Nation partnerships
Our Performance
ß
Invest in meaningful community projects and
sustainable development
ß Respect cultures, customs and values while engaging in
open and inclusive dialogue
In FY21, there were no disputes relating to land use,
customary rights of local communities and Indigenous
Peoples, or incidents of violations involving rights of
Indigenous Peoples.
Indigenous Stakeholder
Outcomes (material topic)
Definition: Economic and education opportunities,
community and health outcomes for Indigenous
stakeholders.
Our Approach
Evolution is committed to respecting and enhancing the
rights, interests, concerns, traditional land uses and cultural
activities of our First Nation Partners and Indigenous
Peoples within the communities in which we operate. For
operations whose activities can directly or indirectly affect
Indigenous Peoples, our Social Responsibility Performance
Standards require the establishment of formal procedures
and processes related to Indigenous Community
engagement, economic inclusion and Cultural Heritage
conservation, while ensuring we meet applicable legislative
requirements.
Our Stakeholder Engagement Standard and Guidance
guide our relationships with Indigenous Communities
by outlining specific requirements around engagement,
communication, integration of community input,
monitoring and review.
Refer to the ESG Performance Data document for activities
that take place in or near areas where Indigenous Peoples
are located.
Case study: Yalga-binbi
Training Centre at Mt Rawdon
The Yalga-binbi Institute for Community Development
(YBI) now comprises a new and improved Environmental
Marine Training Centre with an Alternative School for
the delivery of high-quality training and community
development opportunities for at-risk youth in a secure,
self-contained environment. YBI has been working within
the community for over 20 years to develop programs
and training opportunities that promote positive social
transformation and help empower the Indigenous
community to build better, healthier, and stronger
communities. Since 2018 an estimated 400 people have
enrolled in their courses covering Conservation and Land
Management, Marine Compliance, Construction, Hospitality,
Retail, and Office Administration on site, and an outreach
training program is being run for local prison inmates to
retrain ahead of release. We are honoured to have built
upon our partnership with YBI to fund these developments
and are eager to support the outcomes for youth to learn
and prosper in the long-term.
Evolution Mining Limited // Annual Report 2021 107
FY21 Sustainability Report Community
honour and a responsibility. We value the partnerships
we have built and are committed to working together to
protect their Cultural Heritage and advance outcomes
for First Nation Partners and Indigenous Peoples. Our
relationships are integrated into our values driven
approach, reflected in our Sustainability Principles and
supported by our Sustainability Performance Standards
and ongoing practical implementation of these standards.
We believe that Cultural Heritage management should
be based in agreement making and collaboration, with
Traditional Owners and Custodians given a central role and
voice. With input from Traditional Owners and Custodians,
we have developed and implemented comprehensive
Cultural Heritage management plans to monitor and
manage our environmental impacts on Cultural Heritage.
This is especially important when our projects are
located on land traditionally owned, adjacent to, or under
customary use by Indigenous peoples. In these instances,
specific engagement is undertaken.
In 2021, to further support this commitment, management
created a new Group role to drive the development and
implementation of a comprehensive cultural heritage,
community and Indigenous relations strategy, framework
and risk management.
Cultural Heritage Management Review
The 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.
In response to the incident resulting in the destruction
of the culturally significant heritage site, Juukan Gorge,
Evolution took the following steps:
ß Each of our assets reached out to our Traditional
Custodians to reaffirm our commitment to protecting
Cultural Heritage and also checked if there were any
concerns
ß Renewed focus on education across the business,
including progressing the planning of Cultural
Competency sessions for leadership teams in the first
instance
ß Reviewed our existing Cultural Heritage standards
and related audit findings to evaluate if we had the
correct processes and systems to support our ongoing
commitment to the protection of Cultural Heritage and
as trusted partners
ß Reaffirmed our commitment through increased
communications at all locations
ß Delivered a brief outlining the impact of the destruction
of Juukan Gorge and key findings from the ‘Juukan
Gorge Interim Report’35 to Evolution’s Board,
Management and site management; the brief included
Case study: Wiradjuri
Condobolin Corporation Galari
Agricultural Company
Business at Cowal
Evolution and the Wiradjuri Condobolin Corporation
have come together to form the Galari Agricultural
Company (GAC) which has a meaning of connections
to the Lachlan River. The employment and training
initiative and horticultural and livestock enterprise will
focus on the production of beef cattle, lamb, and wool
on 1,600 acres of Evolution land. The project will start
with training in shearing and animal husbandry for eight
trainees. Longer-term goals are to establish GAC as a
Registered Training Organisation to support 80 youths
annually to build careers in agriculture, livestock, mining,
commercial cleaning, catering, and land management.
This collaboration will enhance the employability and
skill development of Indigenous youth in the region and
establish an ongoing work readiness pathway program.
Cultural Heritage
(material topic)
Definition: Working with Indigenous communities
to protect places and items of cultural significance.
Indigenous engagement.
Our Approach
Evolution acknowledges the special connection to country
that Indigenous people have, and we work together to
build constructive and respectful relationships.
As the short-term custodians of the land in which we
operate, we respect the role of our First Nation Partners,
Traditional Owners and Custodians of the land and
consider environmental and Cultural Heritage as both an
35 Juukan Gorge - Interim Report – Parliament of Australia (aph.gov.au)
108 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report an overview of the next steps to ensure learnings from
this interim report are integrated into planning and
management
ß Conducted specific discussions with the Site General
Managers and teams to reinforce our values and
expectations
ß Developed specific First Nation Engagement Plans that
considered Cultural Awareness across the business
ß Added Cultural Heritage to our Quarterly Environmental
Assurance audits as an added layer of governance
Evolution’s nine Sustainability Principles are closely
aligned with the UN Sustainable Development Goals with
one Principle focusing on ‘Advancing the outcomes for
Indigenous Peoples and protect their Cultural Heritage’.
We have developed a set of Social Responsibility
Performance Standards that sit within the Sustainability
Performance Standards. Sections 5.1 and 5.2 of the Social
Responsibility Performance Standards outline performance
requirements related to planning, performance and
review of Cultural Heritage management and Traditional
Custodians and First Nation engagement. Each of our
projects and assets undergo regular sustainability audit and
assurance programs that assess performance against these
standards and identify opportunities for improvement.
Sustainability audits conducted in FY21, highlighted good
alignment across all our assets in understanding and
implementation of the Social Responsibility Performance
Standards. The results of our audits for all operations
provide Evolution with greater assurance that current
governance practices are adequate to ensure the
protection of Cultural Heritage, relationships and values.
Our Performance
As outlined in the Social Responsibility Performance
Standards, each of our operations has a dedicated
Community Relations team that liaises with our Traditional
Custodians and First Nation Partners and oversee
the relationship agreements in place. Our Australian
and Canadian operations and exploration projects
operate under Collaboration Agreements, Native Title
Agreements, Cultural Heritage Agreements and/or
Exploration Agreements with our First Nation Partners.
These agreements are negotiated in good faith, fairly
and equitably and ensure we work in partnership with
Traditional Custodians and First Nation Partners to support
opportunities that promote and support self-determination
including:
ß Enabling them to maintain, control, protect and develop
their Cultural Heritage, traditional knowledge and
cultural expressions. These can include Cultural Heritage
Management Plans which prescribes steps to be taken
when undertaking operational or exploration activity
that has the potential to uncover or disturb Cultural
Heritage. Heritage Agreements may also have provisions
to promote Cultural Awareness Training across sites
Community
ß Supporting the improvement and sustainability of their
social and economic conditions including negotiated
royalties or consideration to employment and training
opportunities and awareness of business opportunities
that may arise within the operational footprint
Each asset is required to maintain documentary evidence
of the status of actions, implementation and achievement
against an agreed commitment. Any Cultural Heritage
near misses or incidents must be immediately reported to
enable a review of any incident or near miss to ensure we
understand, learn and widely communicate findings from
the frontline, with our stakeholders and to the Board.
The Board Risk and Sustainability Committee meet and
review our Environment, Social and Safety performance
on a quarterly basis. Cultural Heritage impact or material
changes are included in the Board update and open for
discussion and review.
During FY21, there were no material Cultural Heritage
Incidents.
Case study: Identification of
Stone Artefacts at Drummond
Our Cultural Heritage obligations include reporting all
artefacts or sites of potential cultural significance identified
during the course of our exploration field work. Whilst
geological mapping on Birriah country at the Drummond
Greenfields Project, two Evolution employees identified
several stone artefacts and after further detailed work
located a possible knapping (“factory”) site.
These locations were photographed and a report was
forwarded to the Birriah Cultural Heritage Officer, who
subsequently inspected the sites that we had identified.
The Officer confirmed the sites were of importance and
acknowledged our efforts for noting the site and bringing it
to their attention so that it can be adequately studied and
recorded for posterity.
Our Social Licence depends on the strength of our
relationships with the communities within which we
operate and the Native Title groups with whom we work.
Our people’s observations and follow-through have
demonstrated our values and commitments to Cultural
Heritage obligations.
Evolution Mining Limited // Annual Report 2021 109
FY21 Sustainability Report Community
Case study: Integrated
Cultural Heritage
Management at Mungari
Following the destruction of culturally significant land in
Australia, Cultural Heritage management and protection
have been reaffirmed as key enablers for the operation and
future of the mining industry. Evolution is committed to
strengthening our existing relationships with our Traditional
Custodian and First Nation Partners and engaging in
thorough due diligence. The Mungari Operation are
leading Evolution’s integrated approach to Cultural
Heritage management through their enhanced monitoring
and regional geographical mapping of registered sites,
engagement in NAIDOC and Reconciliation Week, ongoing
open and honest landowner negotiations, and improved
cultural competencies.
The enhanced monitoring and mapping, particularly
through new technologies such as tablets to access the
QField application, enables greater efficiencies, allows us to
assess the implications for future landowner negotiations
and tenements, and boosts accuracy and visibility over
tenements, disturbances, boundaries, pastoral reserves, and
Cultural Heritage sites in the field.
110 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Community
Community Engagement (material topic)
Definition: Indigenous and non-Indigenous community engagement. Managing community expectations and grievances.
Delivering on mutually beneficial agreements and investing in developing our local communities.
Our Approach
We understand the responsibility of being a major community employer and partner. Across Australia and Canada, we
employ local people, use a mix of national and local suppliers, and support economies more broadly through taxes and other
government payments. We aim to create sustainable partnerships and opportunities for our people to be involved in their
community.
It is important that we are an integral part of our local communities and work to understand expectations, share information
and resolve issues as they arise. We work to make a positive contribution to our communities, with management plans in
place to ensure responsible operations, and we work collaboratively on issues and opportunities. Many of our major sites
have established community consultation committees, providing a regular forum for open discussion between Evolution,
community representatives and other stakeholders about the environmental management and performance of our
operations.
Community Investment
Our Approach
Engaging with local stakeholders to understand our impacts as well as their goals for the sustainable development of their
communities is essential to how we identify and implement community investment programs, including our Shared Value
Projects and sponsorships and donations.
Our approach to community investment is site-specific, while maintaining the core guiding principles presented below.
Each site is responsible for its own community investment initiatives. Community investment projects are first assessed and
then implemented by our Community Relations teams at each of our sites. The site General Managers are responsible for
overseeing community investment projects and their contributions to sustainable development.
Evolution's Community Investment program is underpinned by four guiding principles:
Attraction and
Retention
ß Raise awareness
and strengthen
reputation of
Evolution / mining
sector in broader
community
ß Attract younger
generation to
careers with
Evolution / the
mining sector
ß Grow Evolution’s
brand as employer
of choice
Build Community
Advocacy
ß Demonstrate
industry relevance
(now and future)
ß Foster trust in
mining/ gold sector
ß Touch the hearts of
our local, regional
and national
communities
ß Grow understanding
of modern mining
practices
* Aboriginal or Torres Strait Islander
Enhance
Outcomes for
First Nation
Groups and
ATSI* people
ß Demonstrate
our respect and
accountability for
any disturbance
ß Partnerships that
build capacity for
the future
ß Develop/support
actions to help close
the gap:
ß Health
ß Education
ß Employment
Innovation
and Industry
Relevance
ß Unlock value for
Evolution / mining
sector
ß Support leading
practice and new
approaches in:
ß Environment
ß Safety
ß Discovery
ß Operations
ß Technology
ß Community
outcomes
Evolution Mining Limited // Annual Report 2021 111
FY21 Sustainability Report Community
Our Performance
Direct Community Investment
Total direct community investment expenditures across our operations and Group office in FY21 were approximately A$3.30
million, and supported the following impact areas:
Community Investment Breakdown FY21 (%)
22%
9%
7%
17%
17%
4%
12%
12%
Arts, Culture and Sport 9%
Environmental Stewardship 7%
Skills, Education and Training 17%
Community Resilience 12%
Health and Wellbeing 12%
Local Economic Development 4%
Infrastructure Capability 17%
Other* 22%
*'Other' refers to impacts external of the provided impact areas.
The following table highlights key Shared Value Projects at each of our sites:
Site
Purpose
Impact Area
Outcomes
Group
Shared Value
Project
University of
Queensland’s
Research for
Early Cancer
Diagnosis Using
Gold
NQ Dry Tropics
Beach Scrub
Protection
Mt Carlton
Partnership with UQ
to support research
into using gold
nanoparticles to test for
cancer, enabling early
diagnosis of all cancer
types
To improve the
condition and extent of
threatened beach scrub
ecological communities
in the dry tropics
in partnership with
Traditional Custodians
and NQ Dry Tropics
Health and
Wellbeing
ß Novel technology enabling early cancer
diagnosis and survival rates up to 98%
Environmental
Stewardship
and Skills,
Education and
Training
ß Several research papers published in
renowned medical journals –advocating
for the value of gold in biomedical
technologies – with positive receptions
ß Extension of partnership into researching
long haul COVID-19 impacts
ß
Invasive lantana removed from beach scrub
ecological communities near The Pocket
outside of Ayr
ß Four Gudjuda trainees trained and certified
as bushrangers to undertake mapping,
vegetation assessments, and to look after
Country
ß Enhanced skill transferability and
employability of the local community
112 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Community
Site
Purpose
Impact Area
Outcomes
Cowal
Partnership with
Forbes Arts Society to
significantly enhance
tourism in the region
by installing a sculpture
trail between shires
Arts, Culture
and Sport,
Community
Resilience and
Local Economic
Development
ß
Installation of three Evolution-sponsored
sculptures: a 22m long galvanised steel
Goanna named ‘Varganus’, the thought-
provoking ‘Road Kill’, and a 6m tall
Indigenous warrior named ‘Heart of
Country’
Shared Value
Project
Somewhere
Down the
Lachlan
Great Barrier
Reef Yellow
Zone Research
Project
Red Lake Fire
Recovery
Support
Red Lake
Mt Perry
Summit Walk
Mt
Rawdon
Ben Prior Park
Mungari
Mt Carlton Partnership with James
Cook University and
Great Barrier Reef
Marine Park Authority
to research protected
marine areas with aims
of reef conservation
and community support
To enhance emergency
capabilities within
the Red Lake region,
namely with a new and
higher capacity fire
truck, following the
bushfire disasters of
August 2020
A funding collaboration
to provide visitors
with a reason to stop
and stay in Mt Perry
and develop tourism
and community
infrastructure
capabilities
Partnership with the
Shire of Coolgardie,
Kambalda and
Coolgardie Men’s Sheds
to restore Coolgardie’s
Ben Prior Park into a
functional open-air
mining museum and
tourism rest spot
ß Linked the local shires together,
encouraged tourism, and fostered the
local economy with the associated Grazing
Down the Lachlan
ß Educational opportunities respecting and
incorporating the traditional culture of
Indigenous people
ß Transition to independent management by
the Forbes Art Society and community
Environmental
Stewardship
ß Research and data generated on yellow
zone areas which are often overlooked in
favour of no-take fishing areas
ß Expansion of the spatial research area,
enabling greater access and scope of local
fishing communities
Community
Resilience
ß Provision of a modern fit-for-purpose fire
truck
ß Financial support to enable regional
economic recovery following bushfire and
evacuation costs
ß Long-term community resilience to fire
emergencies, safeguarding community
safety and wellbeing
ß Strengthened existing partnerships with
the Balmertown Fire Department
ß Track upgraded to a Class 3 Standard
hiking trail, including improved signage and
amenities
ß Several Gidarjil Trainees trained in mapping
and land management to revitalise the
track
ß
Increased patronage and tourism
Community
Resilience and
Local Economic
Development
Community
Resilience and
Skills, Education
and Training
ß Since March 2021, Coolgardie’s community
assets and the region’s rich mining history
enhanced and showcased in a revitalised
open-air mining museum
ß Mining and farming equipment, such as
shaft winder wheels, provided from the
collection of late local resident Ben Prior
ß
Increased tourism and economic stimulus,
and sensory tools to educate the
community
ß Recognition from Gold Industry Group
Evolution Mining Limited // Annual Report 2021 113
FY21 Sustainability Report Community
Grievances
Our Approach
We believe that conducting business honestly and
respectfully requires open communication between our
sites and stakeholders. This is essential when managing
disputes regarding our activities and relationships. When
grievances are raised, we act and respond with due
diligence, and effective grievance mechanisms play an
important role in governing and remediating any impacts.
Our Performance
All operations have a grievance mechanism in place
to ensure that stakeholders can voice concerns about
Evolution activities and impacts and that these concerns
are documented in a transparent, accountable manner and
addressed in a timely fashion.
Refer to the ESG Performance Data document for the total
number of grievances filed through grievance mechanisms
at each of our operations in FY21.
Case study: Mt Perry Summit
Walk at Mt Rawdon
The Mt Perry Community Development Board (MPCDB)
works to support the Mt Perry community and give the
region an identity and prosperous future beyond the life of
mining. An element of this strategy is the promotion and
delivery of the Mt Perry Summit Nature Walk. Evolution
has partnered with the MPCDB, Gidarjil Development
Corporation, North Burnett Regional Council, and QPWS,
to improve the existing Mt Perry Summit Nature Walk
and upgrade it to a safe and marketable Class 3 Standard
hiking trail. The unmarked bush trail initially lacked signage
and any local promotion. The upgrades have the potential
to showcase Mt Perry’s local ecosystems, foster local
economic development through increased visitors and
longer stays in town, and support the health and wellbeing
of both visitors and employees. The project also enables
collaboration with our Traditional Custodians, Gidarjil,
and the Queensland State Government in providing
employment and training opportunities to 15 local
applicants while building the walking track. Even prior
to the official opening on 6 August, the trail experienced
increased patronage and usage.
114 Evolution Mining Limited // Annual Report 2021
Case study: West Wyalong
Advocate Revival at Cowal
Regional Australian newspapers are recognised as a key
communication source for small communities, yet they
have experienced recent widespread closures. In early
2021, the closure of the 126-year-old West Wyalong
Advocate was announced to the disappointment of the
communities surrounding our Cowal Operation. The team
at Cowal saw the loss of the region’s most trusted and vital
resource as an opportunity to work closely with community
representatives and the Bland Shire to revive the paper
under the management of an external, independent body.
This revival aimed to strengthen and sustain long-term
community, employment, and business connections across
the region beyond the life of mine in line with Cowal’s
community relations priorities. After a four-month hiatus,
the Advocate successfully recommenced publication in
May 2021 underpinned by strong long-term foundations
of economic support from Evolution and an independent
management committee. This success story featured as
an entry in the 2021 NSW Mining HSEC Awards and was
recognised for its positive community impact.
FY21 Sustainability Report Community
Case study: UQ research into
DNA Nanostructures and
COVID-19 immune responses
using Gold
To aid in the research and development of rapid cancer
tests, Evolution committed A$300,000 over a three-year
partnership with the University of Queensland (UQ) in 2019.
Researchers from UQ developed a breakthrough novel
Immuno-Storm chip technology, using gold nanoparticles
that can rapidly detect cancer cells in the human body
with the potential to enable early diagnosis for all cancer
types and improve survival rates up to 98%. It is considered
a disruptive technology, and Evolution’s support assists in
commercialising it, generating intellectual property, and
contributing to the growth of our Biotechnology industry.
We are exploring opportunities to continue our support,
with research expanded to include long-term COVID-19
immune response. Following the successful initial clinical
demonstration and advancement of the technology
and research, Professor Trau, Director of the Centre for
Personalised Medicine at UQ’s Australian Institute for
Bioengineering and Nanotechnology, and the UQ scientists
who pioneered the technology, are focused on critical
research in the application of the Immuno-Storm chip
technology to long-term COVID-19 immune response. This
innovative research offers an opportunity for Evolution
to improve the health of people in our communities and
globally, save lives, build the diversity of new gold-based
products in medical diagnostics, and demonstrate the
relevance of gold.
Local Employment
(material topic)
Definition: Commitment to employ locals where possible,
followed by a preference for relocation over FIFO.
Our Approach
Drawing our workforce from local communities where
possible is a priority to ensure that the economic benefit
of employment remains in our local communities. Benefits
of local employment include skills development, increased
income levels and economic diversification.
This strategy helps build strong working relationships with
local communities. Hiring and training local employees
may also result in operating efficiencies and lower long-
term costs by having an educated and experienced
workforce near our sites. This practice positively impacts
local and national economies by providing well-paying
jobs and generating government revenues that can be
directed towards health care, education and infrastructure.
Conversely, negative impacts can include inflated local
prices for goods and services as well as income disparity
between the mining and non-mining workforce.
Our Performance
67%
local employment
across our operations
Evolution Mining Limited // Annual Report 2021 115
FY21 Sustainability Report Community
Case study: The Karlkurla
Park Shed: Enhancing training
and employment prospects
for Goldfields prisoners at
Mungari
In partnership with the Kalgoorlie-Boulder Urban Landcare
Group, Evolution has supported a program to enhance
skill development and training opportunities for local
Goldfields prisoners. Through this program, 16 members of
the correctional community constructed a storage shed as
part of wider infrastructure upgrades to the local nursery.
It has contributed to the members’ rehabilitation into the
community by boosting their employment opportunities
and established a foundation for upgrades to the nursery
which will provide a community space for recreation,
connection, health, and wellbeing.
116 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report "Evolution continues to work in
partnership with our supply chain to
continuously improve our approach,
develop sustainable practices and
deliver value to our business and
communities. We strive to work with
suppliers and contractors who share
our values and are driven to improve
our supply chain’s social and ethical
footprint."
Gary Ward,
Group Manager Supply
Sustainable Procurement
Sustainable Procurement
FY21 Highlights:
A$100
million
local spend (27% increase
compared to FY20)
54%*
of medium and high-risk suppliers
assessed for modern slavery and
human rights risks in FY21
* 54% of questionnaires issued were returned in FY21
Modern Slavery
Statement released
Supplier Code of
Conduct released
Standard contract terms
updated to consider modern
slavery risks and expectations
118 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Sustainable Procurement
(material topic)
Definition: Purchase goods and services responsibly:
human rights, environmental issues, Indigenous
corporations, security, and supplier conduct.
Supply chains represent the people who do the work to
supply the goods and services that we need to operate,
the local communities whose needs and expectations
must be understood and respected, and the environment
that sustains our communities and provides the natural
resources we need for our products. We choose to partner
with suppliers who share our core values.
A Procurement Statement provides the framework
under which Evolution procures goods and services and
is aimed at ensuring the Company applies its adopted
values (Safety, Excellence, Accountability and Respect)
to procurement activities and that the outcomes reflect
maximising value for the Company and our relationships
with our suppliers.
Suppliers play a key role in helping to deliver on our
corporate strategy. Our Supplier Code of Conduct outlines
the expectations we have of our suppliers. Suppliers are
required to be accountable for their actions and commit
to ensuring they conduct their business in alignment with
Evolution’s values and behaviours.
A Sustainable Procurement Framework is being developed
which aims to ensure that sustainable procurement
practices are embedded in our business, ensuring ESG
standards are maintained and continuously improved
throughout the procurement lifecycle.
Local and Regional
Procurement
Our Approach
Procuring goods and services from local and regional
suppliers helps share the economic value in the
communities in which we operate. Progress is monitored
by tracking direct procurement spend (paid by Evolution)
and indirect spend (paid by subcontractors to Evolution).
Our approach is based on local economic procurement
decisions and processes that have significant and positive
impacts on local economies, with associated benefits to
businesses and communities in the regions of our sites.
Our local and regional procurement practices focus on:
ß Promoting an open and shared culture across all our
workplaces
ß Providing ongoing training and education
ß Upholding equal opportunities, diversity and anti-
discriminatory practices
Sustainable Procurement
ß Hiring employees, contractors and suppliers from the
local community
We engage with our local communities. This includes
hosting information evenings with our key contractors and
their communities to discuss subcontracting, supply and
employment opportunities on various projects.
Our Performance
In FY21, we spent A$129 million directly with local and
regional suppliers, including A$100 million with local
suppliers, a 27% increase compared to FY20. Our increase
in this spend is due to our efforts to more actively identify
opportunities to include local, regional and Indigenous
suppliers.
Case study: Tucker Dust and
Diesel Partnership at Mungari
Mungari celebrated a local and Indigenous procurement
partnership with Tucker Dust and Diesel, a 100%
Aboriginal-owned company that takes pride in its local
heritage and community, specialising in mobile plant and
vehicle maintenance and mining support equipment.
The Managing Director of Tucker Dust and Diesel is a
strong believer in helping the local community and its
people and has a long-term vision of creating professional
employment opportunities for the next generation
through apprenticeships and traineeships. Instilling quality
workmanship into training regimes and providing quality
service to clients is core to the Tucker Dust and Diesel
working ethos. Our partnership aligns with our aspirations
to enhance our sustainable procurement, provide for
Indigenous stakeholder outcomes, and remove any
potential barriers to doing so.
Evolution Mining Limited // Annual Report 2021 119
FY21 Sustainability Report Sustainable Procurement
Modern Slavery and Human
Rights (material topic)
Definition: Australian modern slavery legislation. Work
hours, fair pay, supply chain transparency.
As a signatory to the UNGC, Evolution has committed
to advancing all Ten Principles of the UNGC, including
Principles One and Two: Human rights and respect for
human rights, as outlined in the United Nations Universal
Declaration of Human Rights.
One of Evolution’s nine sustainability principles, Human
Rights, underpins the Human Rights Performance
Standard, as part of our Sustainability Performance
Standards.
In FY21, our assets were internally audited and verified,
including human rights risks, against our Human Rights
Performance Standard. No violations of human rights,
including the rights of Indigenous peoples, were recorded
during the reporting period.
Our Modern Slavery Statement was approved in FY21,
and a commitment within our statement is to undertake
further questioning, review and assessment of suppliers
considered to be at higher risk of modern slavery in their
supply chains. We have collaborated with each of our sites
to determine our medium to high risk suppliers and have
issued 76 questionnaires on human rights and modern
slavery risks to those identified suppliers. Our assessments
to date have not identified any modern slavery practices in
our operations or supply chain, however we recognise this
is an ongoing process and we remain vigilant.
A Modern Slavery Business Guide has been developed
which sets out our approach in our business activities to
manage the potential risk of modern slavery occurring in
vendor supply chains.
120 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Glossary
Glossary
Glossary
“AA” rating
Rating credibility used in the MSCI review. The lowest rating of “CCC” to the highest rating of “AAA”
A$
ALO
AMD
B
BBP
BEV
CMT
CN
CO2-e
COVID-19
CSA
CSIRO
Australian dollars
Act Like an Owner. An internal ongoing recognition program that rewards our employees for their
supportive behaviour and good ideas
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
Balanced Business Plan
Battery electrical vehicles. Fully-electric, meaning they are solely powered by electricity and do not
have a petrol, diesel or LPG engine, fuel tank or exhaust pipe.
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
Carbon dioxide equivalent. A standard unit for measuring carbon footprints
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
FSB
FNP
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
Financial Stability Board. An international body that monitors and makes recommendations about
the global financial system
First Nation Partners
FY20 / FY21
FY meaning financial year. FY21 would then be the period from July 2020 to end of June 2021
GHG
GRI
ICMM
ISS ESG
IWL
JT
kL
Greenhouse Gas. Compound gases that trap heat or longwave radiation in the atmosphere
Global Reporting Initiative. Independent, international organisation that provides the world’s most
widely used standards for sustainability reporting
International Council on Mining and Metals. An international organisation whose purpose bringing
together a safe, fair and sustainable mining and metals industry
Institutional Shareholder Services (ISS). ISS ESG is a business that provides corporate and
company ESG research and ratings
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
Evolution Mining Limited // Annual Report 2021 121
FY21 Sustainability Report Glossary
Glossary
LCF
LCCC
Lake Cowal Foundation. A not-for-profit Environmental Trust established in June 2000 to protect
and enhance Lake Cowal, a nationally significant wetland located 45 km north of West Wyalong
New South Wales
Lake Cowal Conservation Centre. A community educational facility where school students, land
managers and community members can learn about and experience a variety of issues associated
with natural resource management
LGBTQ2S+
community
Loosely defined grouping of people who Lesbian, Gay, Bisexual, Transgender, Queer or
Questioning, Two-Spirit and other minorities
LOD
LOM
LoKal
M
MillROC
ML
MSA
Line of Defence
Life of Mine
Name given to a local community initiative in Kalgoorlie
Million. Number equivalent to the product of a thousand and a thousand
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
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
MPCDB
Mt Perry Community Development Board. exists to promote and support all forms of community
and economic development within the town of Mt Perry and the surrounding areas
MSCI
NGER
NIST
NIER
NGOs
NMD
NPI
PAF
PPE
S&P Global
SAM
Scope 1
Scope 2
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
National Institute of Standards and Technology. Founded in 1901, NIST is one of United States’
oldest physical science laboratories; they released a cybersecurity framework that integrates
industry standards and best practices to help organizations manage their cybersecurity risks
Northern Industrial Electricity Rate Program. Assists Northern Ontario’s largest industrial electricity
consumers to reduce energy costs, sustain jobs and maintain global competitiveness
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
Company that provides data, research, news and analytics to customers including institutional
investors and corporations
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
122 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Glossary
Glossary
SD
STIP
t
SA
TARP
TCFD
TRIF
TSF
UN SDGs
WORK 180
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
Short term incentive plan
tonnes
Sustainability Advantage. NSW Government program encouraging and accelerating the
sustainability of medium to large businesses
Trigger Action Response Plan. Consists of a set of documented and known work place hazards
that need to be continuously checked for
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
Tailings storage facility. A facility designed to safely store left over mined minerals
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
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 2021 123
FY21 Sustainability Report Chief Financial Officer’s Review
Chief Financial Officer’s Review
totalled 200,000 ounces at a price of A$1,892 per ounce
for the Australian operations and 80,000 ounces at
C$2,272 per ounce for Red Lake with quarterly deliveries
through to June 2023.
Copper revenue was a record with a 26% increase from the
prior year to A$236.9 million (FY20: A$187.9 million), driven
by a 33% increase in the copper price to A$11,172 per tonne
which was partially offset by a 5% decrease in production
to 21,361 tonnes.
Mine operating costs, excluding Red Lake (first full year
of ownership) and Cracow (divested 1 July 2020), showed
good cost control in the year with increases in costs
largely driven by increased activity across the sites. Price
increases over the year were only approximately 1% of
the total operating cost or A$5.8 million. The increase
was mainly due to a 3.5% rise in labour and contractor
rates combined with increased maintenance consumables
costs and water unit rates. Pleasingly, these cost increases
were mostly offset by lower power costs linked to new
contract rates, lower diesel costs due to lower oil prices
and lower grinding media costs due to the benefits of
new contract rates. Higher activities across the operations
impacted operating costs by 3.5% or A$26.6 million driven
by the full year of underground operations at Mt Carlton,
additional headcount at Cowal and Mungari, and increased
maintenance activities.
Red Lake operating costs were A$197.2 million for the first
full-year in comparison to A$48.3 million incurred for the
part-year of ownership in FY20. On a pro-rata basis costs
at Red Lake in FY21 remained in line with FY20.
Inventory costs expensed were A$44.9 million lower driven
by increased value of stockpile inventories predominantly
at Cowal, partially offset by planned drawdown of
stockpiles until access to Stage H ore is obtained in FY22.
Royalties were in line with FY20 driven by higher achieved
metal prices offset by lower metal quantities sold. By-
product revenue was up 28% due to higher metal prices,
particularly copper.
Tax expense for FY21 of A$150.9 million is A$43.9 million
higher than FY20 reflecting the higher profit achieved in
the year.
Operating mine cash flow decreased by 16% to A$937.3
million (FY20: A$1,121.4 million). Total capital investment
was A$379.8 million (FY20: A$371.0 million) which included
A$105.7 million (FY20: A$83.4 million) of sustaining capital
investment and A$274.1 million (FY20: A$287.6 million) of
major capital investment.
On 20 May 2021 Evolution completed the acquisition of all
the outstanding shares of Battle North Gold at a price of
C$2.65 per common share in cash for a total consideration
of approximately C$343.0 million. Battle North Gold’s
key asset was the Bateman mill which is located 10km
from Evolution’s existing Red Lake operations in Ontario,
Canada. The additional processing capacity from the new
Bateman mill will accelerate the ability to achieve in excess
of 350,000 ounces of gold per annum from Red Lake.
In the 2021 financial year Evolution’s
quality asset portfolio delivered
a record statutory net profit with
shareholders continuing to be
rewarded through our consistent
dividend policy.
Evolution achieved a record statutory net profit after tax of
A$345.3 million for FY21, a 14.5% increase on the prior year
(30 June 2020: A$301.6 million). Underlying profit after tax
was A$354.3 million (FY20: A$405.4 million).
Group gold production was 680,788 ounces at an AISC of
A$1,215 per ounce (US$907/oz) which continues to place
Evolution among the lowest cost producers in the world.
In FY22, Evolution has guided production of 700,000
– 760,000 ounces at an AISC in the range of A$1,220 –
A$1,280 per ounce.
Revenue for FY21 decreased by 4% to A$1,864.1 million
(FY20: A$1,941.9 million). The higher achieved gold price
of A$2,369 per ounce was partially offset by a decrease
in production for the year to 680,788 ounces (FY20:
746,463oz). Revenue comprised of A$1,605.0 million of
gold, A$236.9 million of copper and A$22.1 million of silver
(FY20: A$1,738.1 million of gold, A$187.9 million of copper
and A$15.8 million of silver revenue).
Total gold sold equalled 677,150 ounces which included
deliveries into the Australian gold hedge book of 100,000
ounces at an average price of A$1,829 per ounce (FY20:
100,000 ounces, A$1,734/oz) and Canadian hedge book of
40,000 ounces at an average price of C$2,272 per ounce.
The remaining 537,150 ounces were sold in the spot market
comprising 456,001 ounces delivered at an average price
of A$2,474 per ounce and 81,169 ounces delivered at an
average price of C$2,361 per ounce (FY20: 664,655oz,
A$2,320/oz). At 30 June 2021 gold delivery commitments
124 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Chief Financial Officer’s Review
On 22 July 2021, Evolution announced that it had entered
into an agreement with Northern Star Resources Limited to
acquire:
cross currency swaps to hedge the US dollar exposure. The
completion of the placement is subject to standard closing
conditions and is expected to be drawn in November 2021.
ß
100% interest in the Kundana Operations
ß 51% interest in the East Kundana Joint Venture (EKJV)
ß
100% interest in certain tenements comprising the
Carbine Project
ß 75% interest in the West Kundana Joint Venture (WKJV)
The transaction completed on 18 August 2021 with
the acquired operating assets all situated within eight
kilometres of Evolution’s Mungari Operations, which
represents an important strategic opportunity to
consolidate the region, optimise the value of its existing
Mungari infrastructure and capture significant operational
synergies. Evolution has paid Northern Star A$400.0
million in cash to acquire the assets, which was funded by a
A$400.0 million fully underwritten institutional placement
and was accompanied by a non-underwritten share
purchase plan which raised an additional A$68.0 million.
On 13 August 2021 Evolution announced that it had
successfully priced a US$550 million placement in the
United States private placement market. This was following
receipt of an investment grade private credit rating from a
major reputable rating agency. Funds from the placement
will enable repayment of the existing term loan facility
that funded the Red Lake acquisition (A$450 million) and
extend the debt maturity profile from an average of 2.7
years to 7.1 years. The placement consisted of US$200
million maturing November 2028 with a fixed rate coupon
of 2.83% and US$350 million maturing November 2031 with
a fixed rate coupon of 3.17%. Evolution has entered into
A record A$273.4 million (FY20: A$221.4 million) in fully
franked dividends was paid during the year, a 23.5%
increase on the prior year.
The Board declared a final FY21 fully franked dividend of
5 cents per share, totalling A$91.3 million. This results in an
FY21 full year dividend of 12 cents per share fully franked.
This dividend is based on the policy of whenever possible
paying a dividend based on free cash flow generated
during a year. The policy targets a payout ratio of 50% of
cash flow. Free cash flow is defined as cash flow before
debt and any acquisitions or divestments. The full year
dividend equates to a payout rate of 64% of FY21 group
cash flow.
In summary, the 2021 financial year was another great year
for Evolution. As we look forward to 2022 and beyond, our
strong cash position and robust balance sheet will allow
us to invest in attractive organic growth opportunities to
increase the production profiles at our high quality, long
life cornerstone assets which is expected to continue to
generate superior returns for our investors.
Yours faithfully
LAWRIE CONWAY
FINANCE DIRECTOR AND CHIEF FINANCIAL OFFICER
Financial
Statutory Profit before tax
Underlying Profit after tax1
Underlying Profit after tax1
EBITDA
EBITDA Margin
AIC Margin
Earnings Per Share
Mine Cash flow
Group cash flow2
Final Dividend (fully ranked)
Units
A$M
A$M
A$M
A$M
%
A$/oz
cps
A$M
A$M
cps
FY21
496.2
345.3
354.3
914.2
49%
673
20.2
554.9
327.3
5.0
FY20
408.6
301.6
405.4
1,029.4
53%
764
17.7
736.0
541.8
9.0
Change
21%
14%
(13%)
(11%)
(8%)
(12%)
(14%)
(25%)
(40%)
(4.0)
1. Main differences between Statutory and Underlying Profit after tax are A$11M in M&A costs (FY21) and A$101M for Mt Carlton impairment
(FY20)
2. Cash flow before dividends, debt repayments and M&A costs
Evolution Mining Limited // Annual Report 2021 125
FY21 Annual Report Board of Directors
Board of Directors
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
$100 million and was purchased by
Eldorado Gold Corporation in late
2009 for over $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.
Lawrence (Lawrie) Conway
B Bus, CPA, GAICD
Finance Director and Chief
Financial Officer
Mr Conway was appointed Finance
Director and Chief Financial Officer
of the Group 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, MSME (AIME)
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, Senegal and Burkina Faso
(Non-Executive Director since
July 2017).
Within the last 3 years Mr Askew has
been a Non-Executive Director of
Oceana Gold.
Mr Askew is Chair of the Risk and
Sustainability Committee and
Member of the Nomination and
Remuneration Committee.
126 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Board of Directors
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
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
Jason Attew
BSc, MBA
Non-Executive Director
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 and Chair of the Audit
and Risk Committee. Further, she is a
Non-Executive Director of Insurance
Commission of Western Australia and
the AFL Fremantle Football Club.
Ms Hall is the Chair of the Audit
Committee and Member of the Risk
and Sustainability Committee.
Mr Attew is a mining industry veteran
who has dedicated 25 years to the
mining sector and is currently the
President and CEO of Gold Standard
Ventures Corporation. Previously
he 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.
Mr Attew 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 and is also on the board
of The Food Stash Foundation, a
Vancouver-based non-profit whose
mission is to create food & nutritional
security for local residents.
Mr Attew is a Member of both the
Audit Committee and the Nomination
and Remuneration Committee.
Evolution Mining Limited // Annual Report 2021 127
FY21 Annual Report Board of Directors
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
BEng (Mining - Hons 1), FAusIMM,
GAICD, Grad Dip SIA
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. She was also co-Founder
and Chair of Women in Mining and
Resources Sg (WIMAR Sg).
Prior to joining BHP, Ms Binns held
Board and senior management roles
at Merrill Lynch Australia including
Managing Director and Head of
Australian Research, Head of Global
Mining, Metals and Steel Research, and
Head of Australian Mining Research.
Ms Binns is currently a Non-Executive
Director of ASX-listed companies
Sims Limited and Cooper Energy,
as well as the Not For Profit Carbon
Market Institute, which assists
industry in the transition to net zero
emissions. Ms Binns is also a Member
of the Advisory Council for JP Morgan
in Australia and NZ.
Ms Binns is a Member of the Audit
Committee.
128 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Annual
Financial
Report
Contents
Contents
Directors’ Report
Auditor’s Independence Declaration
Notes to the Consolidated Financial Statements
131
171
172
Consolidated Statement of Profit or Loss and Other Comprehensive Income
172
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Information
173
174
175
216
217
223
226
130 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report
Directors' Report
Directors' Report
APPENDIX 4E
EVOLUTION MINING LIMITED ACN 084 669 036 AND
CONTROLLED ENTITIES ANNUAL FINANCIAL
REPORT
For the year ended 30 June 2021
Results for Announcement to the Market
Key Information
30 June 2021
30 June 2020
Up / (down)
% Increase/
$'000
$'000
$'000
(decrease)
Revenues from contracts with customers
1,864,058
1,941,863
(77,805)
Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA)
914,235
1,029,432
(115,197)
Statutory profit before income tax
496,172
408,590
87,582
Profit from ordinary activities after income tax attributable to the
members
345,262
301,552
43,710
(4) %
(11) %
21 %
14 %
Dividend Information
Final dividend for the year ended 30 June 2021
Dividend to be paid on 28 September 2021
Interim dividend for the year ended 30 June 2021
Dividend fully paid on 26 March 2021
Final dividend for the year ended 30 June 2020
Dividend fully paid on 22 September 2020
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
5.0
5.0
7.0
7.0
9.0
9.0
30 June 2021
$
30 June 2020
$
1.51
1.47
30 June 2021
Cents
20.21
20.14
30 June 2020
Cents
17.71
17.62
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 2021 131
FY21 Annual Report
Directors' Report (continued)
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
Directors' Report
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 2021.
Directors
The Directors of the Group during the year ended 30 June 2021 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.
Executive Chairman
Jacob (Jake) Klein
Lawrence (Lawrie) Conway Finance Director and Chief Financial Officer
Thomas (Tommy) McKeith
James (Jim) Askew
Jason Attew
Andrea Hall
Victoria (Vicky) Binns
Peter Smith
Lead Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
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 2021 include:
Sustainability
•
•
•
•
The Group has always put environmental and social concerns at the forefront of our operations. We have now publicly committed to
bolder, more tangible action as we align our business with the commitment to transition to “Net Zero” greenhouse gas emissions by 2050
(scope 1 and 2) and a 30% reduction in greenhouse gas emissions by 2030.
The Group continues to be recognised for its Sustainability performance, receiving a sector leading rating of ‘AA’ in the MSCI ESG Ratings
assessment.
The COVID-19 pandemic has not had a material impact to operations with the Group 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, temporarily suspending activities across
most of the Group’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's total recordable injury frequency (TRIF) was 9.6 as at 30 June 2021 (30 June 2020: 6.8). Despite the increase in TRIF, the
Group remains committed to continuing efforts to improve safety performance with a heavy focus on increased field leadership and high-
quality safety interactions.
Financials
•
•
•
•
The Group achieved a record statutory net profit after tax of $345.3 million for the year, a 14.5% increase on the prior year (30 June 2020:
$301.6 million).
Basic earnings per share was also a record, which increased by 14.1% to 20.21 cents per share (30 June 2020: 17.71 cents)
A record $273.4 million (30 June 2020: $221.4 million) in fully franked dividends was paid during the year, a 23.5% increase on the prior
year.
The Directors declared a final fully franked dividend of 5.0 cents per share, which is the 17th consecutive dividend (30 June 2020: 9.0
cents). The aggregate amount of the final dividend to be paid on 28 September 2021 is estimated at $91.3 million following the completion
of the Share Purchase Plan (SPP).
1
132 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Key highlights for the year (continued)
•
The Group's key results are as follows:
◦
◦
Total gold production of 680,788oz at an AISC of $1,215/oz.
Operating mine and net mine cash flow of $937.3 million and $554.9 million respectively.
•
•
•
•
On 15 March 2021, the Group announced an agreement to acquire all of the outstanding shares of Battle North Gold at a price of C$2.65
per common share in cash for a total consideration of approximately C$343.0 million. Battle North Gold's key asset is the Bateman mill
which is located 10km from the Groups existing Red Lake operations in Ontario, Canada. The additional processing capacity from the new
Bateman mill will accelerate the Groups ability to achieve in excess of 350,000 ounces of gold per annum from Red Lake. In addition the
expansion of the Group's footprint in Ontario, Canada, will provide the Group with an opportunity to build on its track record as a safe and
sustainable operator for the long term benefit of a broad range of stakeholders including the local workforce, regional communities and the
Groups Wabauskang and Lac Seul First Nation Partners.
The full Australian dollar currency exposure of the C$343.0 million purchase price for Battle North Gold, was hedged shortly after entering
into the transaction resulting in a saving of $9.7 million versus the spot exchange rate at closing.
Subsequent to the end of the period on 22 July 2021, The Group announced that it has entered into an agreement with Northern Star
Resources Limited to acquire:
◦
◦
◦
◦
100% interest in the Kundana Operations
51% interest in the East Kundana Joint Venture (EKJV)
100% interest in the certain tenements comprising the Carbine Project
75% interest in the West Kundana Joint Venture (WKJV)
The transaction completed on 18 August 2021 with the acquired operating assets all situated within 8km of the Group's Mungari
Operations, which represent an important strategic opportunity for the Group to consolidate the region, optimise the value of its existing
infrastructure and capture significant operational synergies. The Group has paid Northern Star $400.0 million in cash to acquire the assets,
which was funded by a $400.0 million fully underwritten institutional placement and is accompanied by a non-underwritten share purchase
plan.
On 13 August 2021, the Group announced that it has successfully priced a maiden debt private placement in the United States on 12
August 2021 totalling US$550 million. The Transaction is subject to standard closing conditions with proceeds expected to be drawn in
November 2021.
Operations
▪
▪
▪
▪
On 13 August 2020, the Group announced its first Mineral Resource estimate in accordance with the JORC Code for Red Lake of 48.1Mt
grading 7.1g/t for 11.0 million ounces. This included 4.3 million ounces at an average grade of 10.5g/t gold in the Upper Campbell area.
The Group acquired a 100% interest in the Crush Creek project located 30km south east of Mt Carlton. An initial ownership of 70% was
achieved following sole funding $7.0 million of exploration expenditure and acquired the remaining 30% of the project for $4.5 million.
Successful drilling programs at the BV7 and Delta areas have resulted in a maiden Mineral Resource estimate of 1.1 million tonnes
grading 3.48 grams per tonne gold for 126,000 ounces, reinforcing our belief that mineralisation being delineated has the potential to
extend mine life at Mt Carlton.
A major milestone was achieved at Cowal with the Board's approval of the development of the Cowal Underground Mine, which provides a
higher-grade ore source that will be blended with the current E42 open pit and stockpile ore. The development of the Cowal Underground
Mine is part of the Group's goal of Cowal producing 350,000 ounces of low-cost gold a year and extend its mine life out beyond 17 years,
while at the same time injecting significant economic benefit for all stakeholders. The planned capital investment is $380.0 million. The
project is pending regulatory approval which is expected to be received in the September 2021 quarter.
At Red Lake, the Board approved a clear and defined program that accelerates the restoration of Red Lake to a premier Canadian gold
mine with the goal of producing 350,000 ounces of low-cost gold per year by FY26. This will also deliver significant benefit for all
stakeholders of the Red Lake asset.
2
Evolution Mining Limited // Annual Report 2021 133
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Operating and Financial Review
Evolution is a leading, low-cost Australian gold mining company. As at 30 June 2021, 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.
The Group completed the acquisition of Battle North Gold on 19 May 2021 which will enable growth plans to be accelerated at the Red Lake operations.
Evolution’s vision is for inspired people to create a premier global gold company which will generate sustainable returns for our shareholders and deliver
benefits to all of our stakeholders. As a business, the Group is focused on prospering through the metal price cycle. Evolution believes that this can be
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, the Group require an active pipeline of quality exploration and development projects. The Group strives to build a reputation of
sustainability, reliability and transparency. Financial discipline must be core and embedded across the entire business. The Group remains open to all
quality gold, silver and copper-gold value accretive investments and recognise that divesting assets is an important component of our strategy. The
operating achievements during the past twelve months clearly reflect our discipline to staying true to our strategy.
Profit Overview
The Group achieved a record statutory net profit after tax of $345.3 million for the year ended 30 June 2021 (30 June 2020: $301.6 million). The
underlying net profit after tax was $354.3 million for the year (30 June 2020: $405.4 million). The following graph reflects the movements in the Group's
profit after tax for the year ended 30 June 2021 from the year ended 30 June 2020.
Mine operating costs, excluding Red Lake (first full year of ownership) and Cracow (divested 1 July 2020), showed good cost control in the year with
increases in costs largely driven by increased activity across the sites. Price increases over the year were only approximately 1% the total operating cost
or $5.8 million. The price increases were mainly due to a 3.5% increase in labour and contractor rates combined with increased maintenance
consumables costs and water unit rates. Pleasingly, these costs increases were mostly offset by lower power costs linked to new contract rates, lower
diesel costs due to lower oil prices and lower grinding media costs due to the benefits of new contract rates. Higher activities across the operations
impacted operating costs by 3.5% or $26.6 million driven by the full year of underground operations at Mt Carlton, additional headcount at Cowal and
Mungari; and increased maintenance activities.
Red Lake operating costs were $197.2 million for the first full-year in comparison to $48.3 million incurred for the part-year of ownership in the year
ended 30 June 2020. On a pro-rata basis costs at Red Lake in the year ended 30 June 2021 remained in line with the prior year.
Inventory costs expensed were $44.9 million lower driven by increased value of stockpile inventories predominantly at Cowal. This was partially offset by
planned drawdown of stockpiles until access to Stage H ore is obtained in the first part of FY22.
Royalties were in line with prior year driven by higher achieved metal prices offset by lower metal quantities sold. By-product revenue was up 28% due to
higher metal prices.
The impairment in the year ended 30 June 2020 relates to the Mt Carlton asset impairment on a post-tax basis of $101.0 million ($144.3 million pre-tax)
due to the downgrade in the resource and reserve base.
Tax expense for the year ended 30 June 2021 is $43.9 million higher reflecting the higher profit achieved in the year.
3
134 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Profit Overview (continued)
The table below shows the reconciliation between the Statutory and Underlying profit.
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
Directors' Report (continued)
30 June 2021
$000
496,172
—
15,058
—
511,230
(150,910)
—
(4,517)
—
(1,461)
354,341
30 June 2020
$000
408,590
(11,517)
35,052
144,346
576,471
(107,038)
(3,475)
(10,515)
(43,304)
(6,769)
405,370
Operating mine cash flow decreased by 16% totalling $937.3 million (30 June 2020: $1,121.4 million). Total capital investment was $379.8 million (30
June 2020: $371.0 million) which included $105.7 million (30 June 2020: $83.4 million) of sustaining capital investment and $274.1 million (30 June
2020: $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
($'000) unless otherwise stated.
Key Business Metrics
Total underground lateral development (m)
Total underground ore mined (kt)
Total open pit ore mined (kt)
Total open pit waste mined (kt)
Processed tonnes (kt)
Gold grade processed (g/t)
Gold production (oz)
Silver production (oz)
Copper production (t)
Unit cash operating cost ($/oz) (i)
All in sustaining cost ($/oz) (i)
All in cost ($/oz) (i)
Gold price achieved ($/oz)
Silver price achieved ($/oz)
Copper price achieved ($/t)
Total Revenue
Cost of sales (excluding D&A and fair value adjustments)
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
30 June 2021
30 June 2020
% Change (ii)
25,254
7,874
8,815
31,235
22,116
1.13
680,788
650,268
21,361
879
1,215
1,696
2,369
34
11,172
1,864,058
(904,728)
(33,797)
546,431
914,235
49%
345,262
354,341
937,298
(379,826)
554,855
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
21 %
(4) %
(9) %
2 %
(1) %
(11) %
(9) %
(3) %
(5) %
(16) %
(16) %
(12) %
4 %
36 %
33 %
(4) %
(6) %
43 %
(11) %
(11) %
(8) %
14 %
(13) %
(16) %
(2) %
(25) %
(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 the Group's cost and not solely the cost of Ernest
Henry's operation.
4
Evolution Mining Limited // Annual Report 2021 135
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Mining Operations
Cowal
Cowal was the highest gold producer in the Group, achieving 210,847oz of gold at an AISC of $1,042/oz. Mining was completed to plan during the year
resulting in Cowal meeting its planned reduced gold production target. The decrease was mainly due to the planned transition from Stage G ore to Stage
H ore and some lower grade stockpiled material being processed while this transition occurred. In FY22 Stage H ore becomes the predominate ore feed
leading to a planned increase in production.
Mine operating cash flow for the year was $270.7 million. Net mine cash flow was $100.3 million post sustaining capital of $12.9 million and major capital
of $157.5 million.
As part of Cowal's plan to achieve a sustainable 350,000 ounce production profile from FY23, it is investing heavily now in order to reach this goal.
Capital investment during the year consisted of major project capital, which included the continuation of Stage H stripping, construction of the Integrated
Waste Landform (IWL) tailings facility and the Underground Feasibility Study.
The Board approved the accelerated development of the Galway decline in November 2020 and development of the decline commenced in late February
2021 and advanced 1,129 metres during the year. It is targeted to be completed in the December 2021 quarter.
A major milestone was achieved at Cowal with the Board's approval of the development of the Cowal Underground Mine, which provides a higher-grade
ore source that will be blended with the current E42 open pit and stockpile ore. The development of the Cowal Underground Mine is part of the Group's
goal of Cowal producing 350,000 ounces of low-cost gold a year and extend its mine life out beyond 17 years, while at the same time injecting significant
economic benefit for all stakeholders. The planned capital investment is $380.0 million. The project is pending regulatory approval which is expected to
be received in the September 2021 quarter.
995
993
1,042
251
FY19
262
FY20
211
FY21
Gold Production ('000 oz)
AISC (A$/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)
30 June 2021
30 June 2020
Change
270,689
(12,876)
(157,546)
(170,422)
100,267
210,847
1,042
1,855
416,828
(11,919)
(169,313)
(181,232)
235,596
262,035
933
1,715
(146,139)
(957)
11,767
10,810
(135,329)
(51,188)
(109)
(140)
5
136 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Mining Operations (continued)
Ernest Henry
Ernest Henry had an outstanding year with records being delivered on multiple fronts. Gold production was 92,397oz at a record low AISC of negative
$(876)/oz after taking into account copper and silver by-product credits which also hit a record of $(2,866)/oz. The record AISC result for Ernest Henry
was primarily driven by gold production being delivered to plan combined with record high achieved copper price of $11,198/t for 19,196 tonnes of
copper sold.
Operating mine cash flow for the year was also a record at $323.2 million as was the net mine cash flow of $309.0 million, post sustaining capital of
$14.2 million.
Ore mined was 6.5 million tonnes at an average grade of 0.58g/t gold and 1.07% copper. Underground development was 8,612m. Ore processed was
6.5 million tonnes at an average grade of 0.47g/t gold and 1.07% copper. Gold recovery and copper recovery of 79.8% and 95.0% respectively were
achieved for the year.
The drilling program for extensions below the 1200RL and the Concept Study were successfully completed with plans to seek approval to a Pre-
Feasibility Study (PFS) in the December 2021 half-year.
99
FY19
(539)
95
FY20
(432)
92
FY21
(876)
Gold Production ('000 oz)
AISC (A$/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)
30 June 2021
30 June 2020
Change
323,203
(14,221)
—
(14,221)
308,982
92,397
17,592
(876)
(876)
267,817
(11,198)
—
(11,198)
256,619
94,902
20,688
(432)
(432)
55,386
(3,023)
—
(3,023)
52,363
(2,505)
(3,096)
(444)
(444)
(i)
Ernest Henry mining and processing statistics are in 100% terms while costs represent the Group's cost and not solely the cost of Ernest
Henry's operation.
6
Evolution Mining Limited // Annual Report 2021 137
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Mining Operations (continued)
Red Lake
In Red Lake's first full year under the Group's ownership it produced 126,339oz of gold at an AISC of $2,044/oz. The initial three-year transformation
program at Red Lake announced at acquisition is well underway to restore the operation’s production to above 200,000 ounces per annum at an AISC of
less than US$1,000 per ounce.
Further to this, on 20 May 2021 the Group announced the completion of the Battle North Gold acquisition which will enable growth plans to be
accelerated at the Red Lake Operation in Canada by providing further milling capacity. The acquisition supports the Board approved program that
accelerates the restoration of Red Lake to a premier Canadian gold mine with the goal of producing 350,000 ounces of low-cost gold per year by FY26.
This will also deliver significant benefit for all stakeholders of the Red Lake asset.
Mine operating cash flow for the full-year was $90.3 million while net mine cash flow was negative $(5.6) million in line with supporting the sites growth
plans and investment in new gear and equipment, sustaining capital was $46.8 million and major capital was $46.3 million.
Ore mined was 0.7 million tonnes at an average grade of 6.22g/t gold for the year. Ore processed was 678 thousand tonnes at 6.10g/t gold with the
Campbell mill achieving recoveries of 92.2% for the year.
Construction of the CYD (Campbell Young Dickinson) Decline box cut is progressing well with first development to commence in the September 2021
quarter. This decline will provide independent access to the Upper Campbell and HG Young ore bodies where 4.8 million ounces of Red Lake’s 11 million
ounce Mineral Resource estimate is situated.
1,943
2,044
FY19
27
FY20
126
FY21
Gold Production ('000 oz)
AISC (A$/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)
30 June 2021
30 June 2020
Change
90,256
(46,773)
(46,265)
(93,037)
(5,628)
126,339
2,044
2,517
30,782
(6,598)
(14,274)
(20,873)
(2,920)
27,428
1,943
2,378
59,474
(40,175)
(31,991)
(72,164)
(2,708)
98,911
(101)
(139)
7
138 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Mining Operations (continued)
Mungari
Mungari produced another solid contribution to the Group's gold production result, with production of 115,829oz of gold at an average AISC of $1,453/oz.
Mungari's production was lower than the prior year as more material was processed from the lower grade open pits than from the higher grade
underground mine in line with the mining sequence.
Mine operating cash flow was a strong result at $146.2 million and net mine cash flow was $73.2 million for the full year.
Capital investment in the year was $73.0 million consisting mainly of underground development drilling, the Tailings Storage Facility expansion and
Cutters Ridge mine development.
A key highlight at Mungari has been the performance of the processing plant, which continued to perform strongly, capitalising on improved operational
and maintenance initiatives. During the year, Mungari achieved throughput of over 2.0 million tonnes of ore at an average grade of 1.97g/t gold with gold
recoveries of 91.3%. The plant throughput achieved the year ended 30 June 2021 target and was significantly above the plant's nameplate capacity of
1.6 million tonnes per year.
Underground ore mined was 0.5 million tonnes at 3.14g/t gold. Total underground development was 2,726m. Open pit total material mined was 7,891
thousand tonnes. Open pit ore mined was 1.3 million tonnes at a grade of 1.24g/t gold. Total material movement continues to increase as productivity
rates improve.
1,320
1,215
121
FY19
133
FY20
1,453
116
FY21
Gold Production ('000 oz)
AISC (A$/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)
30 June 2021
30 June 2020
Change
146,197
(20,526)
(52,481)
(73,007)
73,191
115,829
1,453
1,988
139,363
(12,478)
(14,189)
(26,667)
112,696
133,388
1,215
1,447
6,834
(8,048)
(38,292)
(46,340)
(39,505)
(17,559)
(238)
(541)
8
Evolution Mining Limited // Annual Report 2021 139
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Mining Operations (continued)
Mt Rawdon
Mt Rawdon celebrated 20 years of continuous operations on 16 February 2021. A significant milestone of 365 days without a recordable injury was also
achieved on 25 February 2021 and the operation achieved over 15 months without a recordable injury until May 2021.
Mt Rawdon produced 77,005oz of gold at an AISC of $1,513/oz for the full year. The production result was in line with expectations and the prior year
due to stable delivery of ore to the processing plant.
Mine operating cash flow was $81.3 million and net mine cash flow of $58.4 million was achieved for the year post sustaining capital of $9.3 million,
major capital of $12.7 million and restructuring costs of $0.8 million. Capital investment for the year focused on the construction of the Tailings Storage
Facility buttress, tailings storage facility lift and north wall meshing in order to support the ongoing mining operations.
A focus on improving the reliability of the mill resulted in total throughput of 3.4 million tonnes for the full year which was a significant improvement on the
3.3 million tonnes processed in the prior year and was the highest throughput achieved since FY16.
1,233
95
FY19
1,546
1,513
82
FY20
77
FY21
Gold Production ('000 oz)
AISC (A$/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)
30 June 2021
30 June 2020
Change
81,253
(9,307)
(12,713)
(22,021)
58,446
77,005
1,513
1,679
81,034
(9,963)
(12,086)
(22,049)
58,985
82,004
1,546
1,694
219
656
(627)
28
(539)
(4,999)
33
15
9
140 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Mining Operations (continued)
Mt Carlton
Mt Carlton produced a total of 58,371oz at an AISC of $1,937/oz. The result was ahead of plan for Mt Carlton, with the reliable performance a result of
consistent feed grade to the mill.
Mine operating cash flow was $25.7 million and net mine cash flow was $19.6 million, which was a strong turnaround from the prior year due to improved
operational performance.
Underground mining during the year was concentrated on gaining access to ore in the Western Feeder Zone while V2 open pit ore was extracted from
Stage 4C following the work in the prior period on the Stage 4C cutback. Adjacent to the V2 open pit, underground development of the decline into the
high grade silver A39 deposit continued during the year, with production from A39 scheduled to commence in the December 2021 quarter.
At Crush Creek, successful drilling programs at the BV7 and Delta areas have resulted in a maiden Mineral Resource estimate of 1.1 million tonnes
grading 3.48 grams per tonne gold for 126,000 ounces, reinforcing our belief that mineralisation being delineated has the potential to extend mine life at
Mt Carlton.
1,453
59
FY20
738
107
FY19
1,937
58
FY21
Gold Production ('000 oz)
AISC (A$/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)
30 June 2021
30 June 2020
25,698
(965)
(5,136)
(6,102)
19,597
58,371
1,937
2,105
71,223
(16,103)
(65,380)
(81,483)
(10,260)
58,962
1,453
2,519
Change
(45,525)
15,138
60,244
75,381
29,857
(591)
(484)
414
10
Evolution Mining Limited // Annual Report 2021 141
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Financial Performance
Profit or Loss
Revenue for the year ended 30 June 2021 decreased by 4% to $1,864.1 million (30 June 2020: $1,941.9 million). The higher achieved gold price of
$2,369/oz was partially offset by a decrease in produced ounces for the year to 680,788 oz (30 June 2020: 746,463oz). Revenue comprised of $1,605.0
million of gold, $236.9 million of copper and $22.1 million of silver revenue (30 June 2020: $1,738.1 million of gold, $187.9 million of copper and $15.8
million of silver revenue).
Total gold sold equalled 677,150oz which included deliveries into the Australian gold delivery commitments of 100,000oz at an average price of $1,829/
oz (30 June 2020: 100,000 oz, $1,734/oz) and Canadian hedge book of 40,000oz at an average price of C$2,272/oz. The remaining 537,150oz were
sold in the spot market comprising 456,001oz delivered at an average price of $2,474/oz and 81,169oz delivered at an average price of C$2,361/oz
(30 June 2020: 664,655 oz, $2,320/oz). At 30 June 2021 the Group's gold delivery commitments totalled 200,000 ounces at a price of $1,892/oz for the
Australian operations and 80,000 ounces at C$2,272/oz for Red Lake with quarterly deliveries through to June 2023.
Copper revenue achieved a 26.1% increase from the prior year to $236.9 million (30 June 2020: $187.9 million), driven by a 32.9% increase in copper
price of $11,172/t partially offset by a 4.9% decrease in production to 21,361 tonnes.
The Group achieved a record statutory net profit after tax of $345.3 million for the year ended 30 June 2021 (30 June 2020: $301.6 million). The Group
also achieved an underlying net profit after tax of $354.3 million for the year (30 June 2020: $405.4million).
Balance Sheet
Total assets increased 4.7% during the year to $3,957.0 million (30 June 2020: $3,778.0 million restated). Cash and cash equivalents decreased by
$212.5 million driven by a number of factors which include 87.5koz lower ounces sold, higher dividends paid $273.4m (30 June 2020 $221.4m), and
funding for the Battle North Gold acquisition.
The net carrying amount of property, plant and equipment increased by $306.9 million primarily driven by the initial recognition in the accounts of the
Battle North Gold acquisition. Mine development and exploration increased by $86.1 million which was due to additions at Cowal and Red Lake offset by
depreciation. The increase of $80.8 million in deferred tax assets was primarily a result of the initial recognition of Battle North Gold tax losses acquired
as part of the acquisition which are expected to be available for utilisation in the future at Red Lake.
Total liabilities for the Group increased to $1,422.1 million at 30 June 2021, an increase of $107.5 million, or 8.2% on the prior period. The key drivers
consist of $63.2 million increase in rehabilitation provision from Ernest Henry and Battle North Gold initial recognition, and $39.8 million increase in
interest bearing liabilities net of capitalised borrowing costs.
Cash Flow
Total cash outflows for the year amounted to $211.9 million outflow (30 June 2020: $37.3 million inflow).
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
30 June 2021
30 June 2020
$'000
$'000
757,008
(724,115)
(244,787)
(211,894)
372,592
(636)
1,005,324
(1,003,977)
35,906
37,253
335,164
175
Change
$'000
(248,316)
279,862
(280,693)
(249,147)
37,428
(811)
Cash at the end of the year
160,062
372,592
(212,530)
11
142 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Financial Performance (continued)
Cash Flow (continued)
Net cash outflows from investment activities were $724.1 million, a decrease of $279.9 million from the prior period (30 June 2020: $1,004.0 million
outflow). Major items contributing to the change in outflow was the acquisition of Battle North Gold for for $355.8 million while in the prior year Red Lake
was acquired for $583.6 million. The current year outflows was partially offset by the cash received from the disposal of Cracow for $57.0 million.
Net cash outflows from financing activities were $244.8 million, an increase of $280.7 million (30 June 2020: $35.9 million inflow). Financing cash flows
for the year included the drawdown of $145.0 million from Revolver Facility (“Facility A”) and repayment of $95.0 million on the Term Loan Facility
(”Facility B”). Dividends paid during the year totalled $273.4 million which was 23.5% higher than prior year (30 June 2021: $221.4 million).
Taxation
During the year, the Group made income tax payments of $96.7 million and recognised an income tax expense of $150.9 million (30 June 2020: $107.0
million).
The tax payments made in respect of the 30 June 2020 financial year combined with tax instalments paid over the course of the 30 June 2021 financial
year have enabled the declaration of fully franked interim and final dividends.
Capital Investment
Capital investment for the year totalled $379.8 million (30 June 2020: $371.0 million). This consisted of sustaining capital, including near mine exploration
and resource definition of $105.7 million (30 June 2020: $83.4 million) and mine development of $274.1 million (30 June 2020: $287.6 million). The main
capital projects included the Cowal Stage H development, Integrated Waste Landform (IWL) tailings facility and Underground Feasibility Study and
drilling, underground mine development and discovery drilling at Red Lake, Cutters Ridge mine development and underground development drilling at
Mungari, Open pit mine development, tails storage buttressing project and fixed plant maintenance at Mt Rawdon.
Financing
Total finance costs for the year were $21.1 million (30 June 2020: $21.3 million). Included in total finance costs are interest expenses of $17.4 million
(30 June 2020: $11.6 million), amortisation of debt establishment costs of $2.2 million (30 June 2020: $6.7 million), discount unwinding on mine
rehabilitation liabilities of $0.4 million (30 June 2020: $1.8 million) and interest expense on lease liability unwinding of $1.2 million (30 June 2020: $1.1
million).
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 2021 on each facility are set out below:
Facility Name
Revolving Credit Facility – Facility A - $m
Term Loan – Facility B - $m
Term Loan – Facility E - $m
Performance Bond – Facility C $m
Performance Bond – Facility D C$m
Guarantee Facility - $m
Material business risks
Term Date
31 Mar 2023
15 Jan 2025
15 Apr 2026
31 Mar 2023
31 Mar 2023
30 Oct 2021
Facility Size
$m
$360.0
$570.0
$440.0
$175.0
$125.0
$55.0
Amount Drawn
Available Amount
$m
$145.0
$570.0
$0.0
$151.8
$66.2
$55.0
$m
$215.0
$0.0
$440.0
$23.2
$58.8
$0.0
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 2021 are:
12
Evolution Mining Limited // Annual Report 2021 143
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Material business risks (continued)
COVID-19
The Group 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.
A Group Recovery Plan along with documented site and Group risk assessments are in place and endorsed by the Crisis Management Team, with
authority from the Leadership Team. These plans and assessments remain dynamic and are reviewed and updated frequently based on government
data and as local situations change. We continue to monitor, assess, and respond to these ongoing changes to risk. To date there has been no material
impact on Evolution’s operations from the COVID-19 virus.
In addition, the Group has taken a position to strongly support and encourage all staff to be vaccinated to reduce the risk factors with COVID-19. This
has been formalised in a guideline which outlines provisions to enable staff to attend vaccination appointments during work hours as well as to support
those who may encounter side effects following vaccination. Externally facilitated information and awareness sessions have been held and continue to
be offered to provide appropriate qualified information to our teams on the risks and benefits of vaccination.
The Group 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.
To mitigate the mental and physical health impacts that lockdowns and periods of isolation may cause, communication lines have been emphasised
across the business as well as the Employee Assistance Program. Our sites have also deployed technologies to enable risk mitigation and tracing, such
as contact tracing cards at Cowal, QR codes in the Sydney Office, and strengthened site access protocols at each site.
Additional site-specific health and safety initiatives which has been utilised at various stages during the pandemic 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.
Support for Community groups and employees remains ongoing. Evolution has additionally provided donations to our local communities impacted by the
pandemic – since the start of the pandemic, over $2.5 million has been donated to provide direct and indirect support to our communities.
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
144 Evolution Mining Limited // Annual Report 2021
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Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Material business risks (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 Ore Reserves
The Group must continually replace Ore Reserves depleted by production to maintain production levels over the long term. Ore 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 Ore Reserves will not be
offset by discoveries or acquisitions or that divestitures of assets will lead to a lower Ore Reserve base. The Mineral Resource base of the Group may
decline if Ore 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 and
management of the environment, water management, waste disposal, worker health and safety, mine development and rehabilitation and the 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 of 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.
The Group has implemented extensive health, safety and community initiatives at its sites to manage the health and safety of its employees, contractors
and members of the community. While these control measures are in place there is no guarantee that these will eliminate the occurrence of incidents
which may result in personal injury or damage to property. In certain instances such occurrences could give rise to regulatory fines and/or civil liability.
14
Evolution Mining Limited // Annual Report 2021 145
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Material business risks (continued)
Climate Change
The Group acknowledges that climate change is occurring, and its effects have the potential to impact our business and communities. The most
significant climate related risks include the following: reduced water availability; extreme weather or health events; emissions and waste, 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. Each year, annual reports are externally audited and submitted to
the 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. We also run the equivalent reporting (National Pollutant Release Inventory) for our
Canadian Operations.
The Group publishes an annual Sustainability Report in accordance with the Global Reporting Initiative and the recommendations of the Taskforce on
Climate-related Financial Disclosures (TCFD) that details activities in relation to the management of key risks including environmental and climate risks.
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. Maintaining trusted relationships with our local community stakeholders throughout the
entire mining cycles is an essential part of securing and maintain our social licence to operate, including with our First Nation People’s communities. The
Group recognises that a failure to appropriately manage local community stakeholder expectations may lead to dissatisfaction which has 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 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 Board Sustainability and Risk Committee,
supported by Management review 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, Safety, Environment, Cultural Heritage and Equal Employment Opportunity.
The site Leadership Teams, the Executive 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
The Company's dividend policy is, whenever possible, to pay a dividend based on group cash flow generated during a year. The Group's free cash flow
is defined as cash flow before debt and dividends and mergers and acquisitions.The Directors 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 group cash flow.
The Board has confirmed that the Group 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 5.0 cents per share. The aggregate amount of the final dividend to be paid on 28 September 2021 is estimated at $91.3 million following
the completion of the Share Purchase Plan (SPP). Evolution Mining Limited shares will trade excluding entitlement to the dividend on 30 August 2021,
with the record date being 31 August 2021 and payment date of 28 September 2021.
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.
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.
15
146 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Events occurring after the reporting period
Refer to Note 24 of the Consolidated Financial Statements for details of events occurring after the reporting period.
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 three times per year. The Directors are not aware of
any environmental incidents occurring during the year ended 30 June 2021 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 Group's five 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 five years have been:
Number of Level III incidents
FY21
4
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 four events reported to the regulatory authorities in the current year none 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.
16
Evolution Mining Limited // Annual Report 2021 147
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Information on Directors
The following information is current as at the date of this report. Please refer to the Remuneration Report section (g) 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 $100 million and was
purchased by Eldorado Gold Corporation in late 2009 for over $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.
Lawrence (Lawrie) Conway B Bus, CPA, GAICD, Finance Director and Chief Financial Officer
Mr Conway was appointed Finance Director and Chief Financial Officer of the Group 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, MSME (AIME), 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, Senegal and Burkina Faso (Non-Executive Director since July 2017).
Within the last 3 years Mr Askew has been a Non-Executive Director of Oceana Gold.
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
148 Evolution Mining Limited // Annual Report 2021
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Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(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 and Chair of the Audit and Risk Committee. Further, she is a Non-Executive Director of
Insurance Commission of Western Australia and the AFL 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 and is currently the President and CEO of Gold Standard
Ventures Corporation. Previously he 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.
Mr Attew 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 and is also on the board of The Food Stash
Foundation, a Vancouver-based non-profit whose mission is to create food & nutritional security for local residents.
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, BEng (Mining - Hons 1), FAusIMM, GAICD, Grad Dip SIA, 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. She was also co-Founder and Chair of
Women in Mining and Resources Sg (WIMAR Sg).
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 and the Carbon Market Institute, Australia’s leading
independent industry association for business leading the transition to net zero emissions. Ms Binns is also a Member of the Advisory Council for
JP Morgan in Australia & NZ.
Ms Binns is a Member of the Audit Committee.
18
Evolution Mining Limited // Annual Report 2021 149
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Company Secretary
Evan Elstein, BCom GDA, ACA, FGIA, FCIS
Mr Elstein was appointed as the Group 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.
Mr Elstein has more than 25 years' executive management and corporate governance experience, spanning the mining, technology and
manufacturing sectors. Prior to joining the mining industry, he held senior positions with IT consulting companies and served as the Chief
Financial Officer and Company Secretary of Hartec Limited. Before emigrating to Australia, Mr Elstein held a number of management positions
at Dimension Data in South Africa.
Mr. Elstein 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.
Meetings of directors
The numbers of meetings of the Group's Board of Directors and of each Board Committee held during the year ended 30 June 2021, 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
Board
Audit
Risk Management Nomination and
Remuneration
Meetings of committees
A
11
11
11
11
11
11
11
11
B
11
11
11
11
11
11
11
11
A
-
-
-
-
4
4
4
-
B
-
-
-
-
4
4
4
-
A
-
-
3
-
3
-
-
3
B
-
-
3
-
3
-
-
3
A
-
-
3
3
-
3
-
-
B
-
-
3
3
-
3
-
-
A
B
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.
19
150 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Letter)
Dear Fellow Shareholder,
On behalf of the Evolution Board, I am pleased to provide the Remuneration Report for the year ending 30 June 2021.
At Evolution, the Board, the Leadership Team and every employee strives to act like owners each and every day and live by the Evolution values of
Safety, Excellence, Accountability and Respect.
We are all living in turbulent, uncertain and constantly changing times. One thing that is not changing is Evolution’s commitment to executing a growth
strategy focused on sustainable high margin ounces. This, in our view, is the pathway to building a unique gold business that will prosper through the
gold cycle, and is 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.
FY21 Performance
Evolution has had another strong year of performance during a time where the COVID-19 pandemic continues to be a challenge globally. Throughout
FY21 we have faced and managed several tough weather events, including an extreme wind event at Cowal and bushfires at Mt Rawdon and forest fires
at Red Lake. 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.
Evolution has continued to advance the overall business strategy, including with the work undertaken in relation to the Cowal Underground, the Red
Lake transformation, the accretive acquisition of the Battle North Gold Corporation and the acquisition of Northern Star Limited’s Kundana operations
announced after year-end. Evolution now has four cornerstone assets, two with a mine life of greater than 15 years. In addition to this, Evolution has
elevated its approach to ESG reflected in the upgraded MSCI ESG rating of AAA, the highest rating among global gold mining peers, committed to net
zero greenhouse gas emissions by 2050 or earlier and a 30% reduction by 2030 (Scope 1 and 2 from a FY20 baseline), continued to work closely with
all stakeholder groups, be that communities within which we operate, contractors, suppliers, partners and our shareholders, while continuing to pay
strong dividends to our shareholders.
Our strategy at Evolution has been clear and consistent, generating sector leading cash flow in FY21 of $481 per ounce. Over the last six years the
Company has acquired Mungari, Cowal, an economic interest in Ernest Henry, Red Lake Operations, Battle North Gold 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 13 years
while maintaining a low All-in Sustaining Cost (AISC) of around $1,215 per ounce. Our strategy, which focuses on sustainable margin over production,
has generated strong total shareholder returns (TSR) in excess of 16.4% compound growth over the past three-year period.
For FY21, Evolution delivered strong financial results including $1,864.1 million in revenue generating $327.3 million of free cash flow allowing us to
return $273.4 million in dividends to shareholders and repay $95.0 million in debt over the year.
STI Outcomes
For FY21, 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.
Evolution was disappointed with its overall safety performance for FY21, however it is clear on where the key issues are and we have associated plans
in place to improve in this area. In terms of risk, an independent audit demonstrated our excellent progress with our critical controls, including bow tie
analysis, and agreed actions being closed out on time. Our business development activity, which for FY21 included the acquisition of Battle North Gold in
Canada and good progress at the company’s early stage projects with strong drill results at the Cue project and transitioning Crush Creek to a PFS
following delivery of a maiden mineral resource (126koz).
The Company delivered strongly against its Balanced Business Plan (BBP) objectives for the year. In discovery, we added a new greenfields project and
rotated out of two others. Pleasingly we were able to materially increase our mineral resource and ore reserves year on year by 11.2 million and 3.2
million ounces respectively (inclusive of depletion and divestments). Our focus on data enabled business improvement initiatives delivered $41.5 million
in value to the business.
The strategic imperatives element of the STI has a weighting of 30%. For FY21, the Board evaluated progress against the FY21 BBP, delivery against
key projects at Cowal, Red Lake and Mungari and improving the overall business aligned to the strategy, via business development and operational
effectiveness. Balancing all factors, the Board awarded a score of 120% being between target and stretch for the strategic imperatives measure,
resulting in an overall STI outcome of 117%, which the Board believes is an appropriate reflection of the overall performance for FY21. A full breakdown
is provided in the report.
20
Evolution Mining Limited // Annual Report 2021 151
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Letter continued)
LTI Outcomes
Our LTI performance measures directly link to shareholder expectations and reinforce our focus on delivering sustainable superior shareholder returns.
For the FY19 LTIPs, tested and vesting as at 30 June 2021, the measures focused on Absolute Shareholder Return, Relative Shareholder Return,
Earnings per share 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 77.0%. A full breakdown is provided in the report.
Signed:
Tommy McKeith
Chair of the Nomination and Remuneration Committee
21
152 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited)
This Remuneration Report forms part of the Directors' Report for the year ended 30 June 2021. This report contains details of the remuneration paid to
the Directors and Key Management Personnel ("KMP") and is aligned to the Group's overall remuneration strategy and framework. The Group'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 high quality and appropriately experienced Directors, KMP and employees.
This remuneration report is presented under the following sections:
Remuneration Strategy, Framework and Philosophy
a. Remuneration Overview
b. Remuneration Governance
c.
d. Changes in relation to Remuneration in FY21
e.
f.
g. Other Remuneration Information
h.
i.
j.
Transactions with KMP
Changes planned for remuneration in FY22
Summary of Key Terms
Executive Remuneration Performance Measures and Outcomes – STIs and LTIs
Non-Executive Director Remuneration Outcomes
(a) Remuneration Overview
(i)
Response to COVID-19
In response to the COVID-19 pandemic, the Group developed an approach based on the following principles:
Elements
People
Process
Structure
Principles
Driven by our values of Safety, Excellence, Accountability and Respect
Continued discipline with health and safety practices
Sound review, reporting and learning culture
Strong communication to ensure all employees had clarity on the expectations and approach to effectively managing
through the pandemic
Engaged workforce in touch with indigenous and community groups to provide support on local issues
Risk assessments and Triggered Action Response Plans (TARPs) with ongoing review;
Medical experts engaged for ongoing advice, support and review;
Supply Chain regularly reviewed;
Scenario’s modelled through the cycle
–
–
–
People and site response
Commercial and financial considerations
Community impacts and plans
Roles and responsibilities defined and appointed;
Company Crisis Management and Site Incident Management Teams activated and mobilised;
Document controlled data and information.
Communication
Internal – our people and contractors
External – Communities, Government and Industry
The Group 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 Group 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, restricting international and domestic travel, detailed risk assessments across all operations including 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 maintenance and regular COVID-19 communication with the entire workforce.
Whilst the Group has had very limited exposure with one positive case of COVID-19 (at the Red Lake operations), each site and associated community
has been impacted in different ways. The Group continues to work closely within the communities where we operate and with regulators and industry
groups to ensure all our operations are complying with agreed protocols and remain responsive to changing needs.
The Group has also strongly encouraged and supported all staff to be vaccinated to reduce COVID-19 risks. These have been formalised in a guideline
which outlines provisions that enable staff to attend vaccination appointments during work hours (as appropriate) in addition to providing additional leave
in the event of any side effects following vaccination. Externally facilitated medical information and awareness sessions have also been held and will
continue to be offered to provide appropriate qualified information to our teams on the risks and benefits of vaccination.
To mitigate the mental and physical health impacts that lockdowns and periods of isolation may cause, communication lines have been strengthened
across the business as well as with the Employee Assistance Program (EAP). Our sites have also deployed technologies to enable risk mitigation and
tracing, such as contact tracing cards at Cowal, QR codes in the Sydney Office and site access protocols have been strengthened at each site.
Support for Community groups and employees remains ongoing. The Group has additionally provided donations to our local communities impacted by
the pandemic – since the start of the pandemic, over $2.5 million has been donated to provide direct and indirect support to our communities.
22
Evolution Mining Limited // Annual Report 2021 153
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited)
(a) Remuneration Overview (continued)
The Nomination and Remuneration Committee (Committee), along with Risk and Sustainability Committee and the Board have regularly reviewed and
considered the impacts of COVID-19 on the performance of the business. Specific to COVID-19, no adjustment has been made to the FY21
remuneration outcomes.
(ii) Executive Directors, Non-Executive Directors and Key Management Personnel
The executive remuneration framework covered in this report includes the Executive Directors (Executive Chairman and Chief Financial Officer), Non-
Executive Directors and those executives considered to be Key Management Personnel (“KMP”) named below:
Name
Jacob (Jake) Klein
Lawrence (Lawrie) Conway
James Askew
Andrea Hall
Thomas McKeith
Jason Attew
Vicky Binns
Peter Smith
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt*
Position
Executive Chairman
Finance Director and Chief Financial Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Vice President People & Culture
Company Secretary & Vice President Information Technology
Chief Operating Officer
Vice President Discovery & Business Development
Vice President Sustainability
* Fiona Murfitt joined the Group in January 2020 as the General Manager Sustainability and was promoted to the KMP as VP - Sustainability effective 1
July 2020.
** For NEDs Remuneration information refer to page 33.
page 164
(iii) Executive service agreements - all agreements are ongoing agreements
Name
Position Title
Total Fixed
Remuneration
Notice Period by
Executive
Notice Period by
Evolution
Termination payments *
Existing Executive Directors and Key Management Personnel
Jacob Klein
Executive Chairman
Lawrie Conway
Finance Director and Chief
Financial Officer
Paul Eagle
Evan Elstein
Vice President People and
Culture
Company Secretary and Vice
President Information
Technology
805,674
300,000 fixed
Director's Fees
626,874
135,000 fixed
Director's Fees
6 months
6 months
3 months
6 months
421,874
3 months
6 months
421,874
3 months
6 months
Bob Fulker
Chief Operating Officer
541,874
3 months
6 months
Glen Masterman
Vice President Discovery and
Business Development
451,874
3 months
6 months
Fiona Murfitt**
Vice President Sustainability
405,000
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
*For a change of control event, the termination payment is 12 months TFR for Executive Directors and KMP.
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.
**Fiona Murfitt joined the Group in January 2020 as the General Manager Sustainability and was promoted to the KMP as VP - Sustainability effective 1
July 2020.
23
154 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited)
(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 strategy, philosophy, policies and supporting systems, having regard to whether they are:
◦
◦
◦
Relevant to the Group’s wider objectives and strategies;
Legal and defensible; and
In accordance with the people and culture objectives of the Group
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 KMP, in accordance with approved Board policies and processes.
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 Aon Remuneration report in Australia (an industry recognised gold and general mining remuneration benchmarking
survey covering 126 organisations within the industry) and a combination of the Mercer and Korn Ferry Remuneration reports for the Canadian
market.
Total Annual Remuneration - TAR (TFR plus STI) 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 level for critical roles and
exceptional individual performance.
24
Evolution Mining Limited // Annual Report 2021 155
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(b) Remuneration Governance (continued)
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 Group long-term incentives are focused on delivering shareholder value; and
The principles and integrity of the remuneration review process deliver fair and equitable outcomes
(c)
Remuneration Strategy and Framework
The following table outlines the remuneration components for all KMP for the 2021 financial year:
25
156 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Strategic objective
Remuneration is designed to attract, motivate and retain high
performing individuals.
Considerations include:
•
•
•
•
•
•
Overall Company strategy and annual 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.
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
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)
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 FY21, 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, improving operational effectiveness via the
delivery of priority capital projects and progress in the company's
sustainability targets.
Long Term
Incentive (LTI)
Performance measures agreed with the Board have a 3 year time
horizon and are focused on enhancing shareholder value.
The primary objective to deliver industry leading shareholder
returns.
The target achievement remuneration ratio mix for Executive Directors and KMP has not changed from prior financial year. The 2021 financial year and
prior financial year is as follows:
CEO/Executive Chairman (FY21
& FY20)
Other KMP (FY21 & FY20)
59%
15%
26%
65%
17%
18%
51%
18%
31%
57%
20%
23%
Target
Stretch
Target
Stretch
TFR
STI
LTI
TFR
STI
LTI
(d) Changes in relation to remuneration in FY21.
No changes were made in relation to remuneration in FY21.
26
Evolution Mining Limited // Annual Report 2021 157
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs
(i) Financial Performance
The Group has demonstrated strong financial performance over the past five years as shown in the following charts:
Statutory Profit/(loss) ($m)
Underlying Profit After Tax
($m)
EBITDA ($m)
217.6
263.4
218.2
301.6
345.3
206.6
250.8
218.2
405.4
354.3
713.9
795.1
730.3
1,029.4
914.2
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
Annual Results
Cumulative Average
Annual Results
Cumulative Average
Annual Results
Cumulative Average
Basic EPS (cents)
Dividends declared(cents per
share)
Share price ($) at 30 June
13.28
15.57
12.86
17.71
20.21
7.5
9.5
5.0
16.0
12.0
4.36
3.51
2.41
5.67
4.5
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
Annual Results
Cumulative Average
Annual Results
Cumulative Average
Annual Results
Cumulative Average
27
158 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
(ii) STIP
STIP Overview
Component
Participation
Composition
Performance
conditions
FY21 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
2021 financial year, the Group objectives were focused on the areas of safety, risk, group cash contribution, all in sustaining
costs and strategic imperatives, designed to improve the overall business aligned to the long term business strategy.
At the time of setting the FY21 STIP measures, the Board determined it would consider the following factors when awarding
the score for the strategic imperatives measure:
1.
2.
3.
Progress relative to the FY21 Balanced Business Plan (BBP);
Delivery on key projects - including the Red Lake turnaround, (against identified FY21 improvements);
Cowal (key projects on track, including the Underground project); Mungari (Satellite pits on track and
studies completed for regional resources, including the heap leach study);
Progress on Sustainability targets (scope 1 and 2 emissions, water security targets and community
plans).
STIP Performance Measures and Outcomes
Measure
TRI Frequency (TRIF) (12mma)
Weighting
Performance
Outcome
Risk - Critical and Material Risk Actions
Group Cash Contribution ($ million)
Group All in Sustaining Cost ($/oz sold)
15%
9.6
15%
150%
20%
$327.3m
20%
1,215
Award
0.0 %
The overall outcome was disappointing and remains an area of focus for
the business. The Board notes that there were some pockets of
excellence with Mt Rawdon setting an Evolution record of 463 days
without a recordable injury, Mt Carlton going over 100 days since their
last recordable injury as at 30 June 2021.
22.5 %
All bow tie analysis and extreme risks controls were implemented and
validated in line with the minimum standards. All actions were reviewed
and reported weekly. There were no overdue actions. Independent
audits where completed for all sites and all sites achieved a satisfactory
rating or better.
30.0 %
Against a target of $210.0 million, the performance of $327.3 million
achieved a stretch outcome. The result for the year was predominantly
driven by a strong focus on cost management, both operating and
capital, and higher gold prices offset by lower than planned production,
and higher tax payments due to higher profits.
28.5 %
The continued focus on cost control resulted in a better than budget
performance which delivered an outcome between target and stretch.
This is a pleasing improvement considering the outcome for FY20 was
below threshold.
28
Evolution Mining Limited // Annual Report 2021 159
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
STIP Performance Measures and Outcomes (continued)
Measure
Strategic Imperatives
Weighting
Performance
Outcome
Award
36.0 %
1. Progress relative to the FY21 Balanced Business Plan (BBP)
The BBP is designed to be a balanced scorecard which has 5 key
business pillars: Zero Harm and Sustainability, People, Operations,
Growth and Financial Outcomes. Against these business pillars most of
the measures were achieved and all supporting projects achieved the
desired outcomes.
2. Delivery on key projects - including the Red Lake turnaround, (as part of
the 3 year transformation program); Cowal (key projects such as the
Cowal Underground;Integrated Waste Landform (IWL); and Open Pit
extension studies on track); Mungari (Satellite pits on track and studies
completed for regional resources and province optimisation)
At Red Lake, the integration and start of turning Red Lake into a
cornerstone asset for Evolution has gone very well despite an inability for
management to visit the site since March 2020. Key improvements
included the significant upgrade in resources (to 11moz) and reserves
(3moz), the restructure to align the workforce with the production profile
and a number of transformation projects including decommissioning the
Campbell shaft, replacement of mining equipment to drive greater
efficiencies, establishment of additional mining fronts and increasing
development metres.
At Cowal, Stage H is nearing completion with access to ore planned in first
half of FY22; the IWL successfully deposited material in stage 1 early with
additional savings on the existing tails management facility achieved;
Satellite open pit studies continued on plan and the Underground FS was
completed on time and approved by the Board.
For Mungari, the future growth project progressed to plan.
3. Progress on Sustainability targets (scope 1 and 2 emissions, water
security targets and community plans).
Community plans including first nation people's plans have been delivered.
The independent materiality assessment also supported strong community
sentiment.
There were no material environmental incidents in FY21.
In terms of scope 1 and 2 emissions, the FY21 target was to track and
drive a reduction in CO2-e emissions per tonnes of material mined (ore
and waste). This was assessed against the baseline of FY20 @ 0.012t
CO2-e/t material mined. The performance over the year was varied with
the first half of the year better than the latter half, both tracking around the
baseline.
30%
120%
Evolution is in a very strong position for water security as a result of
increased planning and execution of the water strategy. The target was to
track and reduce raw water drawn per dry tonne milled (DTM) off a
baseline 0.54kL raw water drawn per DTM (12mma). The reduction in raw
water has been significant due to factors such record return volumes for
the Tailings IWL Cell at CGO and successful reuse and harvesting
strategies across all sites. The
the baseline was
approximately a 35% improvement with an average - over the 12 months
being around 0.35kL/DTM.
reduction
in
Overall Outcome
100%
116.96 %
29
160 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
The outcomes for the KMP are set out in the table below. They also reflect the strong performance of individual KMP members against their KPIs agreed
with the Executive Chairman.
Component
Performance measure
Total STIP Granted
($)
% of Maximum
Entitlement Granted
% of Maximum
Entitlement Forfeited
2021
Directors
Jacob Klein
Lawrie Conway
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt*
583,000
460,000
300,000
300,000
385,000
340,000
300,000
80.6 %
81.7 %
79.3 %
79.3 %
79.2 %
83.9 %
85.5 %
19.4 %
18.3 %
20.7 %
20.7 %
20.8 %
16.1 %
14.5 %
*Fiona Murfitt joined the Group in January 2020 as the General Manager Sustainability and was promoted to the KMP as VP - Sustainability effective 1
July 2020.
(iii) LTIP
LTIP Overview
Component
Participation
Performance
period
Composition
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 Group 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
Performance
conditions
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
Board discretion. Performance Rights do not vest until a specified period after granting and their vesting 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 are allocated to the participating employee. Unvested Performance Rights cannot be transferred and
will not be quoted on the ASX.
30
Evolution Mining Limited // Annual Report 2021 161
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
LTIP Performance Measures
The following table outlines the performance measures for the LTIPs issued in FY21 and to be issued in FY22.
KPI's
Weighting
Relative TSR
Performance
25%
Absolute TSR
Performance
25%
Relative AISC
25%
Increase in ore
reserves per
share
25%
Measure
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
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 each
year, measured as the cumulative
annual TSR over the three year
performance period.
Performance Rights will be tested
against Evolution's relative ranking
of its AISC performance for the 12
month period compared to the
AISC performance ranking of the
Peer Group Companies for the
same period.
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 each
year.
Criteria
Threshold
8th ranking = 33% (Below 8th = 0%)
Target
7th ranking = 50%
Above 4th ranking and below 7th
ranking = Straight line pro-rata
between 50% and 100%
Exceptional
Top 3 ranking = 100%
Threshold
10% return per annum = 33%
>10% to <15% = pro-rata between
33% and 66%
Target
15% return per annum= 66%
>15% to <20% = pro-rata between
66% and 100%
Exceptional
>20% return per annum = 100%
Threshold
8th ranking = 33% (Below 8th = 0%)
Target
7th ranking = 50%
Above 4th ranking and below 7th
ranking = pro-rata between 50% and
100%
Exceptional
Top 3 ranking = 100%
Threshold
90% of Baseline Ore Reserves =
33%
>90% but below 100% of Baseline
Ore Reserves = pro-rata between
33% and 66%
Target
100% of Baseline Ore Reserves =
66%
>100% of Baseline Ore Reserves
and below 120% of Baseline Ore
Reserves =
pro-rata between 66% and 100%
Exceptional
>120% and above of Baseline Ore
Reserves = 100%
Total LTI
100%
31
162 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
LTIP Outcomes
Component
Award outcome for the year -
ESOP Performance Rights
Performance measure
Outcomes for the FY18 award which were approved by the Board and vested in August 2020 are set out as
follows:
Performance Target
Measure
Weighting
FY18
Outcome
% of Maximum
Vested
% Vested
(i)
(ii)
(iii)
(iv)
Relative TSR Performance
Percentile
Absolute TSR performance
Compound annual return
Growth in Earnings per share
Compound annual return
Increase in ore reserves per share
Percentage increase
Total
25 %
25 %
25 %
25 %
100.0 %
20th
38.3 %
18.1 %
118.6 %
77.3 %
100.0 %
100.0 %
97.6 %
19.3 %
25.0 %
25.0 %
24.4 %
93.7 %
Outcomes for the FY19 award approved by the Board for vesting in August 2021 are set out as follows:
Performance Target
Measure
Weighting
FY19
Outcome
% of Maximum
Vested
% Vested
(i)
(ii)
(iii)
(iv)
Relative TSR Performance
Percentile
Absolute TSR performance
Compound annual return
Growth in Earnings per share
Compound annual return
25 %
25 %
25 %
30th
16.4 %
11.8 %
59.4 %
75.6 %
72.8 %
Increase in ore reserves per share
Percentage increase
25 %
125.1 %
100.0 %
Total
100.0 %
14.9 %
18.9 %
18.2 %
25.0 %
77.0 %
(f) 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 2021, 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 2022, the Equity Amount will be $65,000 for each NED, and $80,000 for the LID.
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 2021, the 10 trading day period to calculate the
VWAP used to determine the number of share rights granted to each NED commences on 19 August 2021.
Providing the NED remains a director of the Group, 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 any other 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 the Group's 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 the Group; or
three 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 Group.
32
Evolution Mining Limited // Annual Report 2021 163
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(f) Non-Executive Director Remuneration Outcomes (continued)
Outlined in the table below is a summary of the fee structure by individual as at 30 June 2021. For remuneration outcomes please refer to table in
section d (iv).
Directors
James Askew
Andrea Hall
Thomas McKeith
Peter Smith
Vicky Binns
Jason Attew
Cash Component ($)
Equity ($)
Base Fees
Lead
Independent
Sub-Commitee
Chairman
Sub-Commitee
Member
Total Cash Fees
NED Equity
Plan Shares
Total per annum
($)
120,000
120,000
120,000
120,000
120,000
120,000
720,000
—
—
15,000
—
—
—
35,000
40,000
35,000
—
—
—
20,000
20,000
—
20,000
20,000
40,000
15,000
110,000
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
240,000
245,000
250,000
205,000
205,000
225,000
405,000
1,370,000
(g) Other remuneration information
(i) Remuneration Summary Table
Fixed
Remuneration
Leave**
Post-
Employment
Benefits
STI
LTI
Base Salary and
Fees
Movement
Superannuation
Bonus
Amortised Value *
Total
Total
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Directors
Jacob Klein
Lawrie Conway
James Askew
Andrea Hall
Thomas McKeith
Jason Attew
Vicky Binns
Peter Smith
Graham Freestone****
Colin Johnstone*****
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt***
—
1,083,980 1,082,797 30,574 19,546 21,694 21,003 583,000 510,000 1,177,278 2,109,599 2,896,526 3,742,945
21,694 21,003 460,000 412,000 646,785 727,543 1,920,303 1,916,068
740,179 738,997 51,645 16,525
206,113
—
175,000 163,750
214,029
—
164,384 156,773
227,240
—
155,251 162,862
121,685
—
93,333
160,000
35,000
—
31,963
127,854
—
31,963
35,000
127,854
— 100,883
—
— 60,883
137,878
—
— 87,500
—
15,616 14,893
14,749 15,472
—
3,037
3,037
— 5,784
—
—
52,638
—
52,638
—
64,786
—
—
52,638
— 32,501
— 32,501
—
—
227,638
232,638
234,786
212,638
— 172,501
— 172,501
42,363
42,363
48,906
28,352
— 34,216
— 50,378
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,146
12,146
21,694 21,003 300,000 271,000 474,594 464,035 1,208,615 1,168,309
400,179 398,997 12,148 13,274
21,694 21,003 300,000 277,000 482,847 486,283 1,213,143 1,194,346
400,179 398,997
8,423 11,063
21,694 21,003 385,000 343,000 618,275 656,990 1,570,599 1,553,502
520,180 518,997 25,450 13,512
21,694 21,003 340,000 302,000 516,408 513,936 1,313,627 1,277,273
5,345 11,337
430,180 428,997
383,306
—
— 177,230
4,868,526 4,356,809 154,425 85,257 206,515 168,241 2,668,000 2,115,000 4,381,119 5,204,964 12,278,585 11,930,271
— 903,070
— 300,000
— 21,694
— 20,840
*Amortised value of share based rights comprises the fair value of options and performance rights expensed during the year for KMP, and
retention rights for NEDs.
**Leave comprises of annual and long service leave movement for a financial year.
***Fiona Murfitt joined the Group in January 2020 as the General Manager Sustainability and was promoted to the KMP as VP - Sustainability effective 1
July 2020.
****Graham Freestone retired as Non-Executive Director effective 28 November 2019.
*****Colin Johnstone retired as Non-Executive Director effective 11 March 2020.
33
164 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(g) Other remuneration information (continued)
(ii) Performance Rights granted, vested or lapsed in each financial year:
Granted
Granted - TIP
Vested
Vested - TIP
Forfeited
Subject to vesting
Testing date
Testing date - TIP**
Vesting (%) -
excluding TIP
FY17
6,797,540
FY18
6,586,571
FY19
FY20
5,699,933 6,038,033
FY21 Running Balance
38,430,338
5,166,893
3,375,000
—
(4,051,551)
(4,019,532)
(2,892,476)
—
—
—
—
—
—
—
—
—
3,375,000
(12,094,027)
(2,892,476)
(3,228,513)
(2,567,039)
(2,035,401)
(1,562,211)
(536,774)
(14,548,260)
—
—
3,664,532
4,475,822
4,630,119
12,770,473
30/6/2019
30/6/2020
30/6/2021
30/6/2022
30/6/2023
16/12/2019
—
—
88.2 %
93.7 %
77.0%*
—
— %
—
— %
—
—
— %
*The FY19 Tranche 1 performance rights are re-tested as at 30 June 2021 and adjusted to reflect the outcome for the full three year
performance period.
** The Transition Incentive Plan (TIP) was entered into by Evolution with the Executive Chairman Mr. Jake Klein.
(iii) Movement in Performance Rights in FY20 and FY21:
Outstanding balance at the beginning of the year
Performance rights granted during the period
Vested during the period
Forfeited during the period
Outstanding balance at the end of the year
2021 Number
13,776,882
5,166,893
(4,019,532)
2020 Number
18,643,061
6,038,033
(7,025,612)
(2,153,770)
(3,878,600)
12,770,473
13,776,882
(iv) Performance Rights and Shares
Directors
Jacob Klein
Lawrie Conway
James Askew (i)
Andrea Hall (i)
Thomas McKeith (i)
Jason Attew***
Vicky Binns**** (i)
Peter Smith**** (i)
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt**
Balance at the
start of the
year*
Granted as
compensation
Vested
Forfeited
Balance at
the end of
the year
Vested and
exercisable
To be
Forfeited
Unvested
At end of the year
1,738,939
475,404
(648,904)
(43,261)
1,522,178
381,621
114,314 1,026,243
943,815
264,038
(345,985)
(23,065)
838,803
206,865
61,966
569,972
12,727
12,727
15,664
12,727
—
—
10,984
10,984
(12,727)
(12,727)
13,519
(15,664)
10,984
10,984
10,984
(12,727)
—
—
—
—
—
—
—
—
10,984
10,984
13,519
10,984
10,984
10,984
—
—
—
—
—
—
—
—
—
—
—
—
10,984
10,984
13,519
10,984
10,984
10,984
613,399
636,487
818,618
675,594
91,628
5,572,325
177,434
177,434
228,129
190,108
164,760
(219,124)
(233,540)
(302,737)
(245,072)
—
1,745,746 (2,049,207)
(14,608)
(15,569)
(20,183)
(16,338)
—
(133,024)
557,101
564,812
723,827
604,292
256,388
133,954
139,888
178,040
149,214
—
5,135,840 1,189,582
40,125
41,903
53,331
44,697
—
383,022
383,021
492,456
410,381
256,388
356,336 3,589,922
*Opening balance does not match the performance period ended 30 June 2020 as the performance plan was not tested until August 2020 so the
forfeitures were included in closing balance.
**Fiona Murfitt joined the Group in January 2020 as the General Manager Sustainability and was promoted to the VP - Sustainability effective 1 July
2020.
34
Evolution Mining Limited // Annual Report 2021 165
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(g) Other remuneration information (continued)
**The performance rights issued have a zero exercise price. The performance rights may be exercised on or after the vesting date. Once vested the
performance rights have 15 years until expiry.
*** Grant date for Key Management Personnel performance rights was 17 September 2020. Jake Klein and Lawrie Conway's performance rights was
granted on 26 November 2020 following shareholder approval at the Annual General meeting. Non-Executive Directors had share rights granted on 26
November 2020.
(i) Non-Executive Director Share Rights granted under the NED Equity Plan are not subject to performance conditions or any other service requirements
which could result in potential forfeiture.
The fair value at grant date for the Key Management Personnel FY21 performance rights are stated below:
September 2020 Performance Rights issue
Fair value at grant date ($)
Relative TSR
Absolute TSR
Relative AISC Growth in Ore
Reserves
2.99
2.42
5.52
5.52
The fair value at grant date for the Non-Executive Directors FY21 share rights were $5.0 and are based on one year service condition.
The fair value at grant date for the Jake Klein and Lawrie Conway's FY21 performance rights are stated below:
November 2020 Performance Rights issue
Fair value at grant date ($)
(v) Directors and key management personnel equity holdings
Relative TSR
Absolute TSR
Relative AISC Growth in Ore
Reserves
2.09
1.52
4.62
4.62
Directors
Jacob Klein
Lawrie Conway
James Askew
Andrea Hall
Thomas McKeith
Jason Attew
Vicky Binns
Peter Smith
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt*
Balance at the start
of the year
Received during
the year on
conversion of
performance
rights
Other changes
Balance at the end
of the year
14,745,960
955,612
801,731
28,144
201,364
—
—
—
167,000
555,251
—
—
—
648,904
345,985
12,727
12,727
15,664
12,727
—
—
803,355
233,540
302,737
245,072
—
17,455,062
2,633,438
—
(185,000)
—
—
—
14,000
—
26,126
(182,326)
(103,540)
(282,737)
(240,000)
—
(953,477)
15,394,864
1,116,597
814,458
40,871
217,028
26,727
—
26,126
788,029
685,251
20,000
5,072
—
19,135,023
*Fiona Murfitt joined the Group in January 2020 as the General Manager Sustainability and was promoted to the VP - Sustainability effective 1 July 2020.
35
166 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(h) Transactions with KMP
(a) Loans:
There are no loans provided to Key Management Personnel as at 30 June 2021.
(b) Related Party Transactions:
Directors fees in the amount of $175,000 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 2020: $163,750).
(i) Changes are planned for remuneration in FY22
The planned change for the FY22 KPIs is:
Element
Changes for FY22
Reason for Change
Change in the comparator group.
To maintain a good balance of similar sized companies by market capitalization and
representation across the Australian and Canadian markets and to reflect changes
where companies have merged or been acquired.
36
Evolution Mining Limited // Annual Report 2021 167
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Remuneration Report (Audited) (continued)
(j) Summary of Key Terms
Below is a list of key terms with definitions used within the Director’s Report:
Key Term
The Board of Directors
(“the Board” or “the
Directors”)
Key Management
Personnel ("KMP")
Total Fixed
Remuneration ("TFR")
Short Term Incentive
("STI") and Short Term
Incentive Plan (“STIP”)
Long Term Incentive
("LTI") and Long term
Incentive Plan (“LTIP”)
Total Annual
Remuneration
Total Remuneration
Superannuation
Guarantee Charge
("SGC")
Definition
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 Group and
are members of the senior leadership team. KMP for the financial year ended 30 June 2018 are listed above.
Total Fixed Remuneration comprises a base salary plus superannuation. This is currently positioned at the median (50th
percentile) of the industry benchmarking report.
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.
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 Fixed Remuneration plus STI.
Total Fixed Remuneration plus STI and LTI.
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 Group, at the discretion of the Directors, to grant Options over unissued ordinary shares of the Group
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")
NED Equity Plan
Total Shareholder
Return ("TSR")
Key Performance
Indicators ("KPIs")
Volume Weighted
Average Share Price
(“VWAP”)
Fees
Forfeiture
The plan permits the Group, at the discretion of the Directors, to grant both Options and Performance Rights over unissued
ordinary shares of the Group to eligible Directors and members of staff as specified in the plan rules.
The plan permits the Group, at the discretion of the Board and Remuneration. Committee to issue remuneration to Non-
Executive Directors through Share Rights.
TSR is the total return on an ordinary share to an investor arising from growth in the share price plus any dividends
received.
A form of performance measurement for individual performance against a pre-defined set of goals.
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 paid to Executive and Non-Executive Directors for services as a Director, including sub-committee fees as applicable.
Performance rights forfeited upon cessation of employment or vesting conditions not met.
37
168 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Indemnification of officers and auditors
During the financial year the Group paid a premium in respect of a contract insuring the Directors of the Group, the Group secretaries and all executive
officers of the Group 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 Group 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 Group;
The provision of Directors and Officers Liability Insurance; and
Indemnity for legal costs incurred by Directors in carrying out the business affairs of the Group.
Except for the above the Group 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 Group or of any related body corporate against a liability incurred as such an officer or auditor.
Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group, or to intervene
in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the
Corporations Act 2001.
Non-audit services
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with
the Group 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 29(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.
38
Evolution Mining Limited // Annual Report 2021 169
Directors' Report (continued)FY21 Annual Report
Directors' Report (continued)
Evolution Mining Limited
Directors' Report
30 June 2021
(continued)
Non-audit services (continued)
Other assurance services
PricewaterhouseCoopers firm:
Due diligence 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
Total remuneration paid to PricewaterhouseCoopers
Total remuneration paid to Non PricewaterhouseCoopers
Auditor's independence declaration
2021
$
2020
$
—
6,560
217,541
41,348
265,449
—
6,891
149,651
—
156,542
77,380
103,060
67,557
555,348
700,285
83,940
881,794
965,734
44,183
393,762
541,005
109,951
587,596
697,547
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 40.
page 171
Rounding of amounts
The Group 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 off' of amounts in the Directors' off Report have been rounded in accordance with that
ASIC Corporations Instrument 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
39
170 Evolution Mining Limited // Annual Report 2021
Directors' Report (continued)FY21 Annual Report
Auditor’s Independence Declaration
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Evolution Mining Limited for the year ended 30 June 2021, 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
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Evolution Mining Limited and the entities it controlled during the
period.
Marc Upcroft
Partner
PricewaterhouseCoopers
Sydney
19 August 2021
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.
40
Evolution Mining Limited // Annual Report 2021 171
FY21 Annual Report Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Notes
30 June 2021
30 June 2020
$'000
$'000
Sales revenue
Cost of sales
Gross Profit
Interest income
Other income
Share based payments expense
Corporate and other administration costs
Transaction and integration costs
Gain on sale of subsidiary
Exploration and evaluation costs expensed
Impairment loss on assets - Mt Carlton
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense attributable to Owners of Evolution Mining Limited
2
2
2
28
2
2
9
2
3
Other comprehensive income
Changes in the fair value of equity investments at fair value through other comprehensive
income (FVOCI) net of tax (will not be reclassified to profit or loss)
Exchange differences on translation of foreign operations (may be reclassified to profit or
loss)
12(b)
12(b)
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
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
4
4
1,864,058
(1,285,131)
578,927
1,941,863
(1,285,350)
656,513
1,847
12,950
(11,371)
(37,107)
(15,058)
—
(12,877)
—
(21,140)
496,172
3,540
4,949
(10,691)
(32,859)
(35,053)
11,517
(23,719)
(144,346)
(21,261)
408,590
(150,910)
345,262
(107,038)
301,552
(25,861)
19,958
17,713
(8,148)
337,114
(47,261)
(27,303)
274,249
337,114
337,114
274,249
274,249
Cents
20.21
20.14
Cents
17.71
17.62
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
41
172 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report
Notes to the Consolidated Financial Statements (continued)
Notes to the Consolidated Financial
Evolution Mining Limited
Statements (continued)
Consolidated Balance Sheet
As at 30 June 2021
Consolidated Balance Sheet
Notes
30 June 2021
Restated1
30 June 2020
$'000
$'000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
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
Other Current 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
Capital and reserves attributable to owners of Evolution Mining Limited
Total equity
10
13
15
15
16(a)
7
9
8
20
17
14
11
19
8
11
19
20
8
18
12(a)
12(b)
12(c)
160,062
115,742
188,558
464,362
372,592
149,040
202,157
723,789
113,634
62,904
989,894
2,159,989
22,886
94,917
48,449
3,492,673
86,517
96,195
683,010
2,073,848
34,364
14,114
66,113
3,054,161
3,957,035
3,777,950
190,977
102,843
2,712
38,448
14,418
—
349,398
508,389
319,396
166,004
10,684
68,274
1,072,747
1,422,145
2,534,890
2,183,727
49,406
301,757
2,534,890
2,534,890
190,810
93,453
8,881
41,947
22,000
6,392
363,482
468,609
263,998
124,702
21,132
72,717
951,158
1,314,640
2,463,310
2,183,727
49,723
229,860
2,463,310
2,463,310
1. Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
42
Evolution Mining Limited // Annual Report 2021 173
FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Consolidated Statement of Changes in Equity
Balance at 1 July 2019
Adjustment on adoption of AASB 16 (net of tax)
Restated total equity at the beginning of the
financial year
Profit after income tax expense
Changes in fair value of Equity investments at
FVOCI net of tax
Exchange differences on translation of foreign
operations
Total comprehensive income
Transactions with owners in their capacity as
Dividends provided for or paid
Recognition of share-based payments
5
28
Notes
Issued
capital
$'000
Share-based
payments
$'000
Fair value
revaluation
reserve
$'000
1Foreign
currency
translation
$'000
Retained
earnings
$'000
Total equity
$'000
2,183,727
—
2,183,727
53,870
—
53,870
18,509
—
18,509
—
—
—
150,372
(688)
2,406,478
(688)
149,684
2,405,790
—
—
—
—
—
—
—
—
—
—
301,552
301,552
—
19,958
—
—
19,958
—
—
—
19,958
(47,746)
(47,746)
—
301,552
(47,746)
273,764
—
5,132
5,132
—
—
—
—
—
—
(221,376)
(221,376)
5,132
(221,376)
(216,244)
Balance at 30 June 2020
2,183,727
59,002
38,467
(47,746)
229,860
2,463,310
Balance at 1 July 2020
Profit after income tax expense
Changes in fair value of Equity investments at
FVOCI net of tax
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
28
2,183,727
59,002
—
38,467
—
(47,746)
—
229,860
345,262
2,463,310
345,262
—
—
—
—
—
—
—
(25,861)
—
—
17,713
—
—
(25,861)
17,713
—
(25,861)
17,713
345,262
337,114
—
7,831
7,831
—
—
—
—
—
—
(273,365)
(273,365)
—
7,831
(273,365)
(265,534)
Balance at 30 June 2021
2,183,727
66,833
12,606
(30,033)
301,757
2,534,890
1. Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
43
174 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Consolidated Statement of Cash Flows
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 contingent consideration
Proceeds from sale of subsidiary
Payments for equity investments
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 and Revolving Credit Facility
Repayment of interest bearing liabilities
Lease liability principal payments
Dividends paid
Net cash (outflow)/inflow from financing activities
Net (decrease)/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 increase at end of year
Notes
30 June 2021
$'000
1,870,293
(988,237)
(15,058)
3,427
1,847
(18,524)
(96,740)
757,008
(160,260)
(272,561)
—
6,976
57,022
(1,123)
(4,500)
(349,669)
(724,115)
145,000
(95,000)
(21,422)
(273,365)
(244,787)
(211,894)
372,592
(636)
160,062
6(a)
25
11
11
8
5
10
10
30 June 2020
$'000
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
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
44
Evolution Mining Limited // Annual Report 2021 175
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Business Performance
Performance by Mine
Revenue and Expenses
Income tax expense
Earnings per share
Dividends
Other cash flow information
Resource Assets and Liabilities
Property, plant and equipment
Leases
Mine development and exploration
1
2
3
4
5
6
7
8
9
Capital Structure, Financing and Working Capital
10
Cash and cash equivalents
11
12
13
14
15
16
17
18
19
Interest bearing liabilities
Equity and reserves
Trade and other receivables
Trade and other payables
Inventories
Financial assets and financial liabilities
Other non-current assets
Other non-current liabilities
Provisions
20
Deferred tax balances
Risk and unrecognised items
Financial risk management
Contingent liabilities and contingent assets
Commitments
Events occurring after the reporting period
Other Disclosures
Business Combinations
Ernest Henry Operation
Related party transactions
Share-based payments
Remuneration of auditors
21
22
23
24
25
26
27
28
29
30
Deed of cross guarantee
31
32
33
34
Interests in other entities
Parent entity financial information
Summary of significant accounting policies
New accounting standards
176 Evolution Mining Limited // Annual Report 2021
177
177
178
181
181
182
182
184
184
186
187
191
191
191
192
193
194
195
195
196
196
197
199
201
201
204
204
205
206
206
208
209
209
212
212
213
214
215
215
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(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 and exploration 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 excludes financial
items not considered to be contributing to underlying profit such as fair value amortisation expenses and transaction and integration costs.
The Group’s operations are conducted in the mining industry in Australia and Canada. Red Lake and Battle North Gold are in Canada, and the
revenue generated by Red Lake is outside of Australia.
(b) Segment information
The segment information for the reportable segments for the year ended 30 June 2021 is as follows:
Cowal
Mungari Mt Carlton
Mt
Rawdon
Ernest
Henry Red Lake
Cracow Exploration Corporate
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Revenue
EBITDA
495,792 278,162 168,597 187,717 439,513 294,277
97,079
288,173 138,602
83,250 318,606
33,620
Sustaining Capital
12,876
20,526
965
9,307
14,221
46,773
Major Capital
Total Capital
157,546
170,422
52,481
73,007
5,136
6,102
12,713
22,021
—
14,221
46,265
93,037
The segment information for the reportable segments for the year ended 30 June 2020 is as follows:
—
—
—
—
—
$'000
—
$'000
$'000
1,864,058
(12,877)
(32,218)
914,235
—
—
—
1,016
105,684
—
1,016
274,141
379,826
Cowal Mungari Mt Carlton
Mt
Rawdon
Ernest
Henry Red Lake
Cracow
Explorati
on
Corporate
Total
Revenue
EBITDA
$'000
$'000
618,630 297,401
$'000
$'000
167,383 195,156 391,017
$'000
$'000
76,389
$'000
195,887
$'000
—
$'000
$'000
— 1,941,863
369,637 154,092
75,584
79,210 270,999
28,004
111,398
(23,719)
(35,773) 1,029,432
Sustaining Capital
11,920 12,480
Major Capital
Total Capital
169,310 14,190
181,230 26,670
16,100
65,380
81,480
9,960
11,200
6,600
13,310
12,090
22,050
—
11,200
14,270
20,870
12,350
25,660
—
—
—
1,810
—
1,810
83,380
287,590
370,970
46
Evolution Mining Limited // Annual Report 2021 177
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(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
Interest income
Transaction and integration costs
Finance costs
Gain on sale of subsidiary
Profit before income tax expense
Recognition and measurement
30 June 2021
$'000
30 June 2020
$'000
914,235
(383,712)
—
1,847
(15,058)
(21,140)
—
496,172
1,029,432
(435,239)
(144,346)
3,540
(35,053)
(21,261)
11,517
408,590
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).
(d) Segment non-current assets
Segment non-current assets disclosed below are amounts expected to be recovered more than 12 months after the reporting period, excluding
financial instruments, deferred tax assets and post-employment benefit assets. Segment non-current assets are aggregated on a geographical basis.
As at 30 June 2021
Inventory
Property, Plant & Equipment
Mine Development & Properties
Right of use asset
Other
Total segment non-current assets
2 Revenue and Expenses
Revenue from contracts with customers
Gold sales
Silver sales
Copper sales
Total Revenue from contracts with customers
Australia
$'000
113,634
574,135
1,582,712
17,280
47,995
2,335,756
Canada
$'000
—
415,759
577,277
5,606
454
999,096
Total
$'000
113,634
989,894
2,159,989
22,886
48,449
3,334,852
30 June 2021
30 June 2020
$'000
$'000
1,604,997
22,127
236,934
1,864,058
1,738,131
15,833
187,899
1,941,863
47
178 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
2 Revenue and Expenses (continued)
Disaggregation of revenue from contracts with customers
Cowal
$'000
Mungari Mt Carlton Mt Rawdon
$'000
$'000
$'000
Ernest
Henry
$'000
Red Lake
$'000
Cracow
$'000
Total
$'000
30 June 2021
Gold sales
Silver sales
Copper sales
490,993
4,800
—
277,791
371
—
135,470
10,575
22,553
184,477
3,239
—
222,400
2,731
214,382
293,865
413
—
— 1,604,997
22,127
—
236,934
—
Total Revenue from contracts with
customers
495,792
278,162
168,597
187,717
439,513
294,277
— 1,864,058
30 June 2020
Gold sales
Silver sales
Copper sales
Total Revenue from contracts
with customers
Cowal
$'000
Mungari Mt Carlton Mt Rawdon
$'000
$'000
$'000
Ernest
Henry
$'000
Red Lake
Cracow
$'000
$'000
Total
$'000
614,199
297,091
146,657
192,865
215,998
76,333
194,988 1,738,131
4,431
—
310
—
6,592
14,134
2,291
1,254
56
899
15,833
—
173,765
—
187,899
618,630
297,401
167,383
195,156
391,017
76,389
195,887 1,941,863
Revenues of $217.1 million (30 June 2020: $175.0 million) which relate to copper and silver sales are derived from a single external customer. The other
major customers include refineries and financial institutions.
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 26) gold sales are
recognised when the metal is received from Glencore and sold by the Group.
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 26) 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 market 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 the Group’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.
48
Evolution Mining Limited // Annual Report 2021 179
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
2 Revenue and Expenses (continued)
Other Income
Net foreign exchange gain
Other
Total Other Income
Cost of sales
Mine operating costs
Royalty and other selling costs
Depreciation and amortisation expense (i)
Corporate and other administration costs
Corporate overheads
Depreciation and amortisation expense (i)
Transaction and integration costs
Contractor, consultants and advisory expense
Corporate and administration expense
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) (i)
Cost of sales (Ernest Henry)
Corporate and other administration costs (i)
30 June 2021
30 June 2020
$'000
11,031
1,919
12,950
$'000
2,631
2,318
4,949
30 June 2021
$'000
30 June 2020
$'000
841,170
63,558
380,403
1,285,131
777,584
75,353
432,413
1,285,350
33,798
3,309
37,107
9,736
5,322
15,058
2,204
413
1,150
17,374
21,140
30,033
2,826
32,859
15,161
19,892
35,053
6,734
1,812
1,147
11,568
21,261
250,554
129,849
3,309
383,712
306,357
126,056
2,826
435,239
(i) The fair value amortisation or unwind associated with the Cowal and Mungari non-current assets on historical acquisition is now reported under
depreciation and amortisation. This has also been reflected in the comparative figures. The Group similarly uses the units of production basis when
amortising these assets. Depreciation arising from Right-of-use assets (AASB 16) has also been classified here.
49
180 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(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
Total
(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
Adjustment for difference between Australian and overseas tax rates
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
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
(c) Weighted average number of shares used as the denominator
30 June 2021
30 June 2020
$'000
94,003
57,315
(408)
150,910
$'000
89,548
18,358
(868)
107,038
30 June 2021
30 June 2020
$'000
496,172
148,852
$'000
408,590
122,577
—
(408)
3,411
—
(1,461)
(1,039)
1,555
150,910
(5,347)
(868)
3,207
(3,455)
(6,769)
(2,307)
—
107,038
30 June 2021
30 June 2020
Cents
20.21
20.14
Cents
17.71
17.62
30 June 2021
30 June 2020
$'000
$'000
345,262
301,552
2021 Number
2020 Number
Weighted average number of ordinary shares used in calculating the basic earnings per share
Effect of dilutive securities (i)
Adjusted weighted average number of ordinary shares used in calculating the diluted earnings per share
1,708,094,924
6,248,654
1,714,343,578
1,702,328,240
8,718,718
1,711,046,958
(i)
Performance rights and share rights have been included in the determination of diluted earnings per share.
50
Evolution Mining Limited // Annual Report 2021 181
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
5 Dividends
(a)
Ordinary shares
Interim dividend - 2021 Interim dividend for the year ended 30 June 2021 of 7.0 cents per share fully franked
(30 June 2020: 7.0 cents per share fully franked) per fully paid share paid on 26 March 2021
Final dividend - 2020
Final dividend for the year ended 30 June 2020 of 9.0 cents per share fully franked (30 June 2019: 6.0 cents
per share fully franked) paid on 22 September 2020
Total dividend paid
(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 5.0 cents per fully paid ordinary share (30 June 2020: 9.0 cents fully franked). The
aggregate amount of the proposed dividend expected to be paid on 28 September 2021 out of retained
earnings at 30 June 2021, but not recognised as a liability at period end, is
(c)
Franked dividends
30 June 2021
$'000
30 June 2020
$'000
119,606
119,552
153,759
273,365
101,824
221,376
30 June 2021
$'000
30 June 2020
$'000
91,300
153,404
The final dividend recommended after 30 June 2021 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 2022. The franking account balance at the end of the
financial year is $1.3 million (30 June 2020: $20.7 million).
6 Other cash flow information
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
30 June 2021
30 June 2020
$'000
$'000
345,262
383,712
1,508
—
—
10,085
—
12,877
—
—
150,910
(96,740)
(8,112)
(12,044)
(29,393)
(829)
(226)
757,008
301,552
435,239
—
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
Profit after income tax
Depreciation and amortisation
Loss on disposal of assets
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)/Decrease in inventories
(Decrease)/Increase in operating payables
(Decrease) in borrowing costs
(Decrease)/Increase in other provisions
Net cash inflow from operating activities
51
182 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
6 Other cash flow information (continued)
(b) Net (debt)/cash reconciliation
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
Net (debt)/cash at the beginning of the year
Cash (outflow) inflow
Effects of exchange rate changes on cash and cash equivalents
Bank loan drawdown
Bank loan repayment
Net (debt) as at end of the year
30 June 2021
30 June 2020
$'000
$'000
160,062
(620,000)
(459,938)
372,592
(570,000)
(197,408)
30 June 2021
30 June 2020
$'000
(197,408)
(211,894)
(636)
(145,000)
95,000
(459,938)
$'000
35,164
37,253
175
(570,000)
300,000
(197,408)
52
Evolution Mining Limited // Annual Report 2021 183
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
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 2020
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2021
Carrying amount at the beginning of the year (i)
Additions
Amounts acquired in a business combination
Reclassifications
Disposals
Depreciation (ii)
Exchange differences taken to reserve
Carrying amount at the end of the year
At 30 June 2021
Cost
Accumulated depreciation
Net carrying amount
Included in above
Assets in the course of construction
Freehold land
$'000
Plant and
equipment
$'000
Total
$'000
19,220
—
19,220
2,377,804
(1,714,014)
663,790
2,397,024
(1,714,014)
683,010
19,220
—
—
—
—
—
18
19,238
663,790
160,260
235,914
626
(1,508)
(98,632)
10,205
970,656
683,010
160,260
235,914
626
(1,508)
(98,632)
10,223
989,894
19,238
—
19,238
2,319,065
(1,348,409)
970,656
2,338,303
(1,348,409)
989,894
—
202,856
202,856
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
(ii) The fair value amortisation or unwind associated with the Cowal and Mungari non-current assets on historical acquisition is now reported under
depreciation and amortisation. This has also been reflected in the comparative figures. The Group similarly uses the units of production basis when
amortising these assets.
53
184 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
7 Property, plant and equipment (continued)
At 1 July 2019
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2020
Carrying amount at the beginning of the year
Additions
Amounts acquired in a business combination (i)
Disposals
Depreciation
Impairment
Exchange differences taken to reserve
Divestment of Cracow
Carrying amount at the end of the year
At 30 June 2020
Cost
Accumulated depreciation
Net carrying amount
Included in above
Assets in the course of construction
Freehold land
$'000
Plant and
equipment
$'000
Total
$'000
17,529
—
17,529
1,682,343
(1,122,819)
559,524
1,699,872
(1,122,819)
577,053
17,529
—
4,757
(59)
—
—
(314)
(2,693)
19,220
559,524
124,386
151,230
(258)
(87,921)
(40,531)
(9,989)
(32,652)
663,790
577,053
124,386
155,987
(317)
(87,921)
(40,531)
(10,302)
(35,345)
683,010
19,220
—
19,220
2,377,804
(1,714,014)
663,790
2,397,024
(1,714,014)
683,010
—
116,338
116,338
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
Recognition and measurement
Cost
Plant and equipment is carried at cost less accumulated depreciation and impairment. Cost equals the the amount of cash or cash equivalents paid or
the fair value of the other consideration given at acquisition date and includes expenditure that is directly attributable to the acquisition of the items and
an estimate of future restoration costs specific to the asset.. 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 range from 20% to 33% per annum for straight line or on a units of production basis in line with the
economically recoverable reserves of the mine property at which the item is located. 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.
54
Evolution Mining Limited // Annual Report 2021 185
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
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
Plant and Machinery
Property
Office Equipment
Total Right-of-use assets
Lease Liabilities
Current
Non-current
Total Lease Liabilities
30 June 2021
30 June 2020
$'000
$'000
19,202
3,673
11
22,886
29,116
5,223
25
34,364
30 June 2021
$'000
30 June 2020
$'000
14,418
10,684
25,102
22,000
21,132
43,132
The consolidated statement of profit or loss and other comprehensive income shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Plant and Machinery
Property
Office Equipment
Total depreciation charge of right-of-use assets
Other Items
Interest expense
Expense relating to short-term leases
Total Other Items
30 June 2021
30 June 2020
$'000
$'000
14,284
1,353
14
15,651
10,171
1,550
36
11,757
30 June 2021
30 June 2020
$'000
1,150
1,897
3,047
$'000
1,147
4,236
5,383
The total cash outflow in the current year was $24.5 million including interest and short-term lease payments.
The tables below analyse the Group's lease liabilities into relevant maturity groupings based on their contractual maturities.
At 30 June 2021
Lease liabilities
Less than
Between 1
Between 2
1 year
$'000
and 2 years
and 5 years
$'000
$'000
Over 5
years
$'000
Total
contractual
cash flows
$'000
Carrying
amount
$'000
14,973
3,620
3,439
5,460
27,492
25,102
55
186 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
Notes to the Consolidated Financial Statements
9 Mine development and exploration
At 1 July 2020
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2021
Carrying amount at the beginning of the year (i)
Additions
Amounts acquired in a business combination
Transfers to Mine Development and Exploration
Amortisation (ii)
Amortisation recognised in inventory
Reclassifications
Write-off
Exchange differences taken to reserve
Carrying amount at the end of the year
At 30 June 2021
Cost
Accumulated amortisation
Net carrying amount
Producing mines
Exploration and
evaluation
$'000
$'000
Total
$'000
4,518,777
(2,792,055)
1,726,722
1,726,722
259,909
8,266
1,285
(274,619)
4,055
936
—
3,781
347,126
4,865,903
—
(2,792,055)
347,126
2,073,848
347,126
60,732
33,661
(1,285)
—
—
—
(12,874)
2,294
2,073,848
320,641
41,927
—
(274,619)
4,055
936
(12,874)
6,075
1,730,335
429,654
2,159,989
3,870,426
(2,140,091)
1,730,335
429,654
4,300,080
—
(2,140,091)
429,654
2,159,989
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
(ii) The fair value amortisation or unwind associated with the Cowal and Mungari non-current assets on historical acquisition is now reported under
depreciation and amortisation. This has also been reflected in the comparative figures. The Group similarly uses the units of production basis when
amortising these assets.
56
Evolution Mining Limited // Annual Report 2021 187
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
9 Mine development and exploration (continued)
At 1 July 2019
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2020
Carrying amount at the beginning of the year
Additions
Amounts acquired in business combination (i)
Transfers to Mine Development and Exploration
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 depreciation
Net carrying amount
Producing mines Exploration and evaluation
$'000
$'000
Total
$'000
3,253,088
(1,793,430)
1,459,658
1,459,658
262,006
482,176
8,172
—
(985)
(297,724)
(95,500)
(41,596)
(1,150)
(48,335)
1,726,722
4,518,777
(2,792,055)
1,726,722
212,410
—
212,410
3,465,498
(1,793,430)
1,672,068
212,410
1,672,068
82,808
97,200
(8,172)
(2,900)
(23,719)
—
—
(2,618)
—
(7,883)
347,126
344,814
579,376
—
(2,900)
(24,704)
(297,724)
(95,500)
(44,214)
(1,150)
(56,218)
2,073,848
347,126
—
347,126
4,865,903
(2,792,055)
2,073,848
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
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.
57
188 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
9 Mine development and exploration (continued)
Recognition and measurement (continued)
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.
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 regard to both its physical life limitations and to present
assessments of economically recoverable reserves of the mine property at which it is located. The changes in ore reserves and mineral resources
driving the remaining life of mine production are accounted for prospectively when amortising existing mine development assets.
Impairment of non-financial assets
(i)
Testing for impairment
At each reporting date, the Group tests its assets for impairment where there is 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.
58
Evolution Mining Limited // Annual Report 2021 189
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
9 Mine development and exploration (continued)
Accounting estimates and judgements (continued)
Exploration and evaluation (continued)
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.
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 changes 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 Mineral Resources
The Group estimates its Ore Reserves and Mineral Resources annually at 31 December each year and reports in the following February, 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.
59
190 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
Capital Structure and Financing
This section provides information on the Group's capital and financial management activities.
10 Cash and cash equivalents
Current assets
Cash at bank
Total Current assets
Recognition and measurement
30 June 2021
$'000
30 June 2020
$'000
160,062
160,062
372,592
372,592
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.
11 Interest bearing liabilities
Current liabilities
Bank loans
Less: Borrowing costs
Total Current liabilities
Non-current liabilities
Bank loans
Less: Borrowing costs
Total Non-current liabilities
30 June 2021
30 June 2020
$'000
$'000
105,000
(2,157)
102,843
515,000
(6,611)
508,389
95,000
(1,547)
93,453
475,000
(6,391)
468,609
During the year, the Group drew down $145.0 million on the Revolving Facility (“Facility A”) to partly fund the Battle North Gold acquisition. The Group
also entered into a new Guarantee Facility of $50.0 million during the half-year and was increased to $55.0 million at 30 June 2021. A total of $95.0
million was repaid on the Term Loan Facility (”Facility B”) during the year. No changes were made to the existing Performance Bond Facility (“Facility C”)
and Performance Bond Facility (“Facility D”).
The Group also entered into a new Term Loan Facility ("Facility E") of $440.0 million which remains undrawn as at 30 June 2021.
The repayment periods, facility size and amounts drawn at 30 June 2021 on each facility are set out below:
Facility Name
Revolving Credit Facility – Facility A - $m
Term Loan – Facility B - $m
Term Loan – Facility E - $m
Performance Bond – Facility C $m
Performance Bond – Facility D C$m
Guarantee Facility - $m
Term Date
31 Mar 2023
15 Jan 2025
15 Apr 2026
31 Mar 2023
31 Mar 2023
30 Oct 2021
Facility Size
$m
$360.0
$570.0
$440.0
$175.0
$125.0
$55.0
Amount Drawn
Available Amount
$m
$145.0
$570.0
$0.0
$151.8
$66.2
$55.0
$m
$215.0
$0.0
$440.0
$23.2
$58.8
$0.0
(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.
60
Evolution Mining Limited // Annual Report 2021 191
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
11 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. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised.
12 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.
Balance at 1 July 2019
Shares issued on vesting of performance rights
Shares issued under Employee Share Scheme (i)
Shares issued under NED Equity Plan
Balance as at 30 June 2020
Shares issued on vesting of performance rights
Shares issued under Employee Share Scheme (i)
Shares issued under NED Equity Plan
Balance as at 30 June 2021
Number of
shares
1,697,069,720
6,944,027
337,690
62,538
$'000
2,183,727
—
—
—
1,704,413,975
2,183,727
4,019,532
179,733
53,845
—
—
—
1,708,667,085
2,183,727
(i)
Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in note 28.
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
30 June 2021
30 June 2020
Notes
$'000
$'000
16(a)
12,606
66,833
(30,033)
49,406
38,467
(25,861)
12,606
59,002
7,831
66,833
38,467
59,002
(47,261)
50,208
18,509
19,958
38,467
53,870
5,132
59,002
61
192 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
12 Equity and reserves (continued)
(b) Other reserves (continued)
Foreign currency translation
Balance at the beginning of the year (i)
Currency translation differences arising during the year
Balance at the end of the year
Notes
30 June 2021
$'000
Restated1
30 June 2020
$'000
(47,746)
17,713
(30,033)
—
(47,746)
(47,746)
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
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, key management personnel and other Group employees 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
Adjustment on adoption of AASB 16 (net of tax)
Dividends provided for or paid
Net profit for the period
Balance at the end of the year
13 Trade and other receivables
Current assets
Accrued Revenue
Trade receivables
GST refundable
Prepayments
Other receivables
Total Current assets
30 June 2021
30 June 2020
$'000
$'000
229,860
—
(273,365)
345,262
301,757
150,372
(688)
(221,376)
301,552
229,860
30 June 2021
$'000
30 June 2020
$'000
58,088
21,207
6,172
10,752
19,523
115,742
49,478
14,614
12,326
8,510
64,112
149,040
62
Evolution Mining Limited // Annual Report 2021 193
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
13 Trade and other receivables (continued)
Recognition and measurement
Accrued Revenue
Accrued revenue of $58.1 million (30 June 2020: $49.5 million) is measured at fair value through profit or loss, and relates to silver and copper sales
from April to June 2021 production for Ernest Henry. Fair value is determined using observable market data for estimated metal prices (level 2 valuation
methodology). These amounts are to be settled in July to September 2021. Refer to note 2 for further information on the transaction and the financial
results for the year ended 30 June 2021.
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.
A portion of the trade receivable balance relates to concentrate sales at Mt Carlton, which are provisionally priced based on fair value during the
quotation period until the final settlement price is determined. Fair value is determined using observable market data for estimated metal prices (level 2
valuation methodology). Trade receivables post final settlement are carried at final settlement price less provision for impairment.
Other receivables
These amounts are measured at amortised cost and generally arise from transactions outside the usual operating activities of the Group. They do not
contain impaired assets and are not past due.
In FY21, net proceeds of $57.0 million was received from Cracow divestment. $14.2 million deferred consideration receivable was reclassified from other
non-current assets to other receivables as it is due to be received in June 2022.
14 Trade and other payables
Current liabilities
Trade creditors and accruals
Other payables (i)
Total Current liabilities
30 June 2021
30 June 2020
$'000
$'000
142,376
48,601
190,977
151,631
39,179
190,810
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
Recognition and measurement
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 $30.5 million (30 June 2020: $34.6 million) relating to the Group's share of production costs for
April 2021 to June 2021 for Ernest Henry. These amounts are to be settled in July 2021 to September 2021.
63
194 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
15 Inventories
Current
Stores
Ore
Doré and concentrate
Metal in circuit
Metal in transit
Total current inventories
Non-current
Ore
Total non-current inventories
Recognition and measurement
30 June 2021
$'000
30 June 2020
$'000
82,239
33,555
10,211
39,257
23,296
188,558
113,634
113,634
76,098
53,704
12,557
27,426
32,372
202,157
86,517
86,517
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 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 2021 was $3.2 million (30 June 2020: $25.3
million).
16 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
Total Listed securities - Non-current
30 June 2021
$'000
30 June 2020
$'000
51,117
8,031
3,194
550
12
62,904
80,828
8,643
5,160
1,558
6
96,195
(i) On 18 December 2020, the Group acquired 3.1 million shares in Musgrave Minerals Limited (“Musgrave”) for a cash consideration of $1.1 million.
64
Evolution Mining Limited // Annual Report 2021 195
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
16 Financial assets and financial liabilities (continued)
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. Fair
value has been determined based on quoted market prices at balance date (level 1 valuation methodology). 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.
17 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 2021
30 June 2020
$'000
$'000
—
28,629
2,790
16,500
—
530
48,449
1,163
34,441
2,790
16,500
10,628
591
66,113
Contingent consideration amounts classified as a financial asset are remeasured to fair value with changes in fair value recognised in profit or loss. The
fair values for contingent consideration assets are determined using significant unobservable inputs (level 3 valuation methodology) such as expected
future production, revenues and costs of the disposed operations. The expected cash flows are discounted using a risk-adjusted market rate which takes
into account counterparty credit risk. No fair value gains or losses have been recognised in profit or loss during the year.
18 Other non-current liabilities
Non-current liabilities -Other
Contingent consideration liability to Newmont Corporation
Other
Total Non-current liabilities - Other
Recognition and measurement
30 June 2021
30 June 2020
$'000
$'000
52,176
16,098
68,274
56,243
16,474
72,717
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 25) on 1 April 2020 and is now carried at AUD
$52.2 million at 30 June 2021. The movement in the liability from initial recognition is mainly 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. The fair value of the contingent consideration liability is determined using significant unobservable inputs (level 3
valuation methodology), being the estimated discovery of additional gold resources.
65
196 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
19 Provisions
Current
Employee entitlements (i)
Total Current provisions
Non-current
Employee entitlements
Rehabilitation provision (i)
Other long term provision (i)
Total Non-current provisions
Total provisions
(a) Movements in provisions
Movements in each class of provision during the financial year are set out below:
30 June 2021
Carrying amount at the beginning of the year (i)
Charged to profit or loss
provision recognised
Re-measurement of provision
Amounts recognised in business combinations
Exchange differences taken to reserve
Carrying amount at the end of the year
30 June 2020
Carrying amount at the beginning of the year
Charged to profit or loss
unwinding of discount
provision recognised
Re-measurement of provision
Amounts recognised in business combinations (i)
Exchange differences taken to reserve (i)
Divestment of Cracow
Carrying amount at the end of the year
30 June 2021
$'000
30 June 2020
$'000
38,448
38,448
41,947
41,947
6,743
312,230
423
319,396
357,844
3,945
259,630
423
263,998
305,945
Employee
benefits
$'000
Rehabilitation
$'000
Other
$'000
Total
$'000
45,892
259,630
423
305,945
(701)
—
—
—
—
43,580
8,266
754
—
—
—
—
(701)
43,580
8,266
754
45,191
312,230
423
357,844
35,153
147,970
210
183,333
—
7,914
—
4,013
(1,188)
—
45,892
1,673
21,833
105,052
(6,936)
(9,962)
259,630
—
211
2
—
—
—
1,673
30,240
(280)
109,065
(8,124)
(9,962)
423
305,945
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for further
details.
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.
66
Evolution Mining Limited // Annual Report 2021 197
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
19 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 FY21 is largely driven by initial recognition at Ernest Henry and Battle North Gold.
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.
67
198 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
20 Deferred tax balances
(a) Recognised deferred tax balances
Inventories
Equity investments at fair value
Exploration and evaluation expenditure
Property, plant and equipment
Mine development
Employee benefits
Lease liabilities
Provisions
Share issue costs
Other
Deferred tax balances from temporary differences
Tax losses carried forward
Deferred tax (liabilities)/assets
Deferred tax (liabilities)/assets - Australian entities
Deferred tax assets/(liabilities) - Canadian entity
Deferred tax (liabilities)/assets
30 June 2021
$'000
31,983
—
(49,100)
(129,870)
(68,543)
10,189
2,030
75,392
—
3,865
(124,054)
52,967
(71,087)
(111,793)
40,706
(71,087)
1Restated 30
June 2020
$'000
31,836
(8,553)
(87,624)
(124,306)
(45,978)
9,624
3,165
62,031
379
28,754
(130,672)
20,084
(110,588)
(81,705)
(28,883)
(110,588)
1. Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25
for further details.
(b)
Movement in deferred tax balances during the year
1Restated
Balance at 1
July 2020
Recognised in
profit or loss
Recognised in
equity
$'000
31,836
(8,553)
(70,861)
(124,306)
(45,978)
9,624
3,165
62,031
379
20,084
11,991
(110,588)
$'000
147
—
(15,087)
(34,067)
(49,818)
589
(1,153)
13,259
(379)
27,762
1,432
(57,315)
—
—
8,553
—
—
—
—
—
—
—
—
—
8,553
Utilised to
reduce tax
liability
$'000
—
—
—
—
—
—
—
—
—
(2,518)
—
(2,518)
Recognised
on business
combinations FX translation
Balance at 30
June 2021
$'000
—
—
35,713
27,766
28,513
—
—
—
—
6,595
(9,346)
89,241
$'000
—
—
$'000
31,983
—
1,135
(49,100)
737
(129,870)
(1,260)
(68,543)
(24)
18
102
—
1,044
(212)
1,540
10,189
2,030
75,392
—
52,967
3,865
(71,087)
Inventories
Equity investments at fair value
Exploration and evaluation
Property, plant and equipment
Mine development
Employee benefits
Lease liabilities
Provisions
Share issue costs
Tax losses carried forward
Other
Deferred tax assets/ (liabilities)
1. Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25
for further details.
(c) Unrecognised deferred tax assets
The Group has unrecognised available tax losses of $307.5 million as at 30 June 2021 (30 June 2020: $10.3 million). Tax losses and temporary
differences unrecognised from the Battle North Gold acquisition amounted to $260.8 million with $65.2 million as a deferred tax asset. For Red Lake,
$41.3 million are unrecognised temporary differences with $10.3 million as a deferred tax asset. For Australia, $5.4 million tax losses and a deferred tax
asset of $1.6 million have not been recognised.
68
Evolution Mining Limited // Annual Report 2021 199
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
20 Deferred tax balances (continued)
Accounting estimates and judgements
Judgement is required to determine whether deferred tax assets are recognised in the Balance Sheet. Management assesses 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.
Accounting policy
Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences between the tax base of an asset or liability
and its carrying amount in the statement of financial position. The tax base of an asset or liability is the amount attributed to that asset or liability for tax
purposes.
Deferred tax liabilities are recognised for taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences, carry-
forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised.
Deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them:
•
•
Arise from the initial recognition of an asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss.
Are associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred tax assets are reassessed at
each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset
to be recovered.
Deferred tax assets and liabilities are measured based on the expected manner of recovery of the carrying value of an asset or liability. Deferred tax
assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised, or the liability is settled, based on
tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred taxes attributable to amounts recognised directly in equity are also recognised directly in equity.
69
200 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(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.
21 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
Trade and other receivables at amortized cost
Trade and other receivables at FVTPL
Equity investments at FVOCI
Contingent consideration assets
Financial Liabilities
Trade and other payables (i)
Interest bearing liabilities
Contingent consideration liabilities
30 June 2021
30 June 2020
$'000
$'000
160,062
43,411
72,331
62,904
48,449
387,157
190,977
611,232
52,176
854,385
372,592
95,570
53,470
96,195
66,113
683,940
190,810
562,062
56,243
809,115
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
(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 2021 (30 June 2020: 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.
70
Evolution Mining Limited // Annual Report 2021 201
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
21 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)
(i)
Market risk
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. The Group generally does not hedge foreign exchange risks other than those relating to significant
transactions, such as those relating to the 2020 and 2021 acquisitions of Red Lake and Battle North Gold. The Group typically utilises forward exchange
contracts to hedge foreign exchange risks for significant transactions.
As at 30 June 2021, the Group held US$2.5 million (30 June 2020: US$0.7 million) in US dollar currency bank accounts, C$21.8 million in Canadian
dollar currency bank account, outstanding receivables of US$8.3 million (30 June 2020: US$4.9 million) relating to the Mt Carlton operation and US$43.7
million (30 June 2020: US$34.0 million) relating to Ernest Henry.
The Group also recognised a USD denominated contingent consideration liability being US$38.44 million as part of the Red Lake purchase consideration
(note 18). An increase/decrease in AUD:USD foreign exchange rates of 5% will result in $2.6 million impact to net assets and pre-tax profit.
The Group is exposed to translation-related risks arising from the Red Lake and Battle North Gold operations 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 $45.8 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 2021
covering sales of 200,000 oz (30 June 2020: 300,000 oz) of gold at an average forward price of $1,892 per ounce (30 June 2020: $1,871 per ounce) and
80,000 oz of gold at an average forward price of C$2,272 (30 June 2020: C$2,273).
The Group is also exposed to market share price movements on its equity investments at fair value. Refer to note 16 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. The Group has a small but long standing customer base with
an exemplary track record of meeting their contractual obligations. In addition the Group only deals with financial institutions that have investment grade
or higher credit ratings. For these reason at the balance sheet date there were no significant concentrations of credit risk. The total trade and other
receivables outstanding at 30 June 2021 was $115.7 million (30 June 2020: $149.0 million). Cash and cash equivalents at 30 June 2021 were $160.1
million (30 June 2020: $372.6 million).
(d)
Interest rate risk
The Group is exposed to interest rate risk through its long term borrowings comprising $145.0 million on the Revolving Facility (“Facility A”) and $475.0
million on the Term Loan Facility ("Facility B"). As the borrowings are periodically contractually repriced, the Group is exposed to the risk of future
changes in market interest rates.
Holding all other variables constant, the impact on current year post-tax profit of a 0.5 percent increase/decrease in the rate of interest on the long term
borrowings of the Group would be a decrease/increase of $2.0 million.
(e)
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.
71
202 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
21 Financial risk management (continued)
(e)
(i)
Liquidity risk (continued)
Financing arrangements
The Group had access to the following borrowing facilities at the end of the reporting period:
Existing debt facilities - Undrawn
Expiring beyond one year
30 June 2021
30 June 2020
$'000
$'000
655,000
655,000
360,000
360,000
(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
•
cash flows.
net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the
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.
Less than 1 year
Between 1 and 2
years
Between 2and 5
years
Over 5 years
Total contractual
cash flows
Carrying amount
(assets)/
liabilities
$'000
$'000
$'000
$'000
$'000
$'000
At 30 June 2021
Non-derivatives
Trade and other payables
Bank loans
Lease liabilities
At 30 June 2020
Non-derivatives
Trade and other payables (i)
Bank loans
Lease liabilities
190,977
105,000
14,973
310,950
—
265,000
3,620
268,620
—
250,000
3,439
253,439
190,810
95,000
22,000
307,810
—
105,000
11,023
116,023
—
370,000
4,935
374,935
—
—
5,460
5,460
—
—
5,174
5,174
190,977
620,000
27,492
838,469
190,810
570,000
43,132
803,942
190,977
620,000
25,102
836,079
190,810
570,000
43,132
803,942
(i) Upon revising the provisional fair values of Red Lake (acquired 1 April 2020), prior year comparative figures have been restated. Refer to note 25 for
further details.
(f)
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.
72
Evolution Mining Limited // Annual Report 2021 203
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
22 Contingent liabilities and contingent assets
(a) Contingent assets
(i)
The Group recognised contingent consideration assets that arose from the past business divestments. Refer to note 17 for further details.
Contingent consideration receivable
(b) Contingent liabilities
The Group had contingent liabilities at 30 June 2021 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 2021. The total of these guarantees at 30 June 2021 was $278.0 million with various financial institutions (30 June
2020: $198.1 million).
(iii)
Red Lake
The Group recognised a contingent consideration liability on the purchase consideration of Red Lake. Refer to note 18 for further details.
23 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:
Within one year
Later than one year but not later than five years
Later than five years
30 June 2021
30 June 2020
$'000
$'000
13,787
28,173
36,556
78,516
10,881
29,986
33,979
74,846
(ii)
Capital commitments
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 2021
30 June 2020
$'000
124,575
124,575
$'000
24,244
24,244
In relation to the Group's contingent consideration liability with Newmont (note 18), 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 of ownership. As of the 30 June 2021 Evolution has invested
capital of US$88.2 million on existing operations and US$15.8 million on exploration.
73
204 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
23 Commitments (continued)
(b) Gold delivery commitments
At 30 June 2021
Within one year
Later than one year but not greater than five years
At 30 June 2020
Within one year
Later than one year but not greater than five years
At 30 June 2021
Within one year
Later than one year but not greater than five years
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 $/oz
Value of
committed sales
$'000
100,000
100,000
200,000
100,000
200,000
300,000
1,868
1,916
1,892
1,829
1,892
1,871
186,800
191,600
378,400
182,909
378,454
561,363
Gold for
physical delivery
oz
Average
contracted sales
price C$/oz
Value of
committed sales
C$'000
40,000
40,000
80,000
40,000
80,000
120,000
2,272
2,271
2,272
2,272
2,271
2,271
90,880
90,840
181,720
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.
24 Events occurring after the reporting period
Subsequent to the end of the period on 22 July 2021, the Group announced that it has entered into an agreement with Northern Star Resources
Limited to acquire:
•
•
•
•
100% interest in the Kundana Operations
51% interest in the East Kundana Joint Venture (EKJV)
100% interest in the certain tenements comprising the Carbine Project
75% interest in the West Kundana Joint Venture (WKJV)
The transaction completed on 18 August, 2021 with the acquired assets all sitting within 8km of the Group's Mungari Operations, which
represent an important strategic opportunity for the Group to consolidate the region, optimise the value of its existing infrastructure and capture
significant operational synergies. The Group has paid Northern Star $400.0 million in cash to acquire the assets, which was funded by a $400.0
million fully underwritten institutional placement and is accompanied by a non-underwritten share purchase plan.
On 13 August 2021, the Group announced that it has successfully priced a maiden debt private placement in the United States on 12 August 2021
totalling US$550 million. The Transaction is subject to standard closing conditions with proceeds expected to be drawn in November 2021.
The placement consists of US$200 million maturing November 2028 with a fixed rate coupon of 2.83% and US$350 million maturing November 2031
with a fixed rate coupon of 3.17%. The Group has entered into cross currency swaps to hedge the US dollar exposure.
Proceeds will be used to repay the existing Term Loan facility associated with the acquisition of Red Lake and for general corporate purposes. The
placement will extend the Group's debt maturity profile from an average of 2.7 years to 7.1 years. The Group's balance sheet is well positioned to fund
the recently announced pipeline of growth projects and this placement will more closely align debt maturity with the group's average mine life.
74
Evolution Mining Limited // Annual Report 2021 205
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
Other Disclosures
This section covers additional financial information and mandatory disclosures.
25 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
asset or liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss. Acquisition-related costs are expensed
as incurred.
a) Red Lake Acquisition
(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
583,556
62,255
645,811
(a) Cash paid is comprised of US$375.0 million for the initial purchase, US$14.8 million working capital adjustment payment, C$5.3 million interim
operating plan funding and C$1.2 million Ontario Mining Tax payment.
(b) Contingent consideration includes an additional payment up to a maximum of US$100 million payable upon the discovery of new resources outside of
the agreed baseline. 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.
The 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
Other non-current assets
Right-of-use-assets
Deferred tax assets
Trade and other payables
Other current liabilities
Employee entitlements
Lease liabilities
Other non-current provisions
Rehabilitation Provisions
Deferred tax liability
Total
Final Fair
Value
$'000
Preliminary
Fair Value
$'000
47,501
670
47,744
155,987
579,376
587
5,818
15,221
(24,142)
(6,844)
(4,013)
(3,895)
(17,110)
(105,052)
(46,037)
645,811
47,501
671
47,744
207,426
419,333
587
2,765
16,463
(27,077)
—
(1,078)
(3,895)
—
(65,853)
—
644,587
The initial accounting for the acquisition has been revised and finalised for the current period as shown above. These adjustments have determined the
net identifiable assets/(liabilities) as being $1.2 million higher than previously reported. The comparative information shown in the financial statements
has been restated to include the adjusted fair values. There has been no material impact to the comparative profit or loss so as to require restatement.
75
206 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
25 Business Combinations (continued)
(ii)
Outflow of cash to acquire subsidiary
Outflow of cash to acquire subsidiary
Cash paid during year ended 30 June 2020
Cash paid during year ended 30 June 2021
Less: balance acquired
Total outflow of cash - investing activities
(iii)
Acquisition and integration costs
AUD
$'000
582,332
1,223
(47,501)
536,054
Acquisition and integration costs of $5.5 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. A total of $30.1 million was paid for the year ended 30 June 2020.
b) Battle North Gold Acquisition
(i)
Summary of acquisition
On 19 May 2021, the Group completed the acquisition of Battle North Gold Corporation. Battle North Gold's assets include the Bateman Gold Project,
contiguous to Evolution’s Red Lake Operations in Ontario, Canada, and a large gold exploration land package on the Long Canyon gold trend near the
Nevada-Utah border in the United States.
Details of the purchase consideration and the net assets acquired are as follows:
Purchase consideration
Cash paid
The 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
Other non-current assets
Right-of-use-assets
Deferred tax assets
Trade and other payables
Employee entitlements
Lease liabilities
Rehabilitation Provisions
Total
AUD $'000
355,790
355,790
Preliminary Fair
Value
$'000
7,345
3,671
337
235,914
41,927
29
3,352
89,241
(16,471)
(280)
(1,009)
(8,266)
355,790
Please note the initial accounting for the acquisition is determined only on a provisional basis as at 30 June 2021. 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.
76
Evolution Mining Limited // Annual Report 2021 207
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
25 Business Combinations (continued)
(ii) Outflow of cash to acquire subsidiary
Outflow of cash to acquire subsidiary
Cash paid
Less: balance acquired
Total outflow of cash - investing activities
(iii) Acquisition and Integration costs
AUD
$'000
355,790
(7,345)
348,445
Integration costs of $3.9 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 during the year.
26 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 defined life of mine area at the time of the acquisition. 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 the Group. 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.
(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
The carrying amounts of assets and liabilities as at the period end were:
30 June 2021
30 June 2020
$'000
439,513
(120,907)
(129,849)
188,757
$'000
391,017
(120,017)
(126,056)
144,944
77
208 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
26 Ernest Henry Operation (continued)
Financial performance and position (continued)
Assets
Accrued Revenue
Inventories
Mine Development
Total assets
Liabilities
Trade and other payables
Provision
Total liabilities
Net assets
27 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
Long Service Leave
Post-employment benefits
Share-based payments
30 June 2021
30 June 2020
$'000
$'000
58,088
23,296
402,623
484,007
30,485
54,976
85,462
49,478
32,372
458,254
540,104
34,641
—
34,641
398,545
505,463
30 June 2021
30 June 2020
$'000
$'000
7,536,526
154,425
206,515
4,381,119
12,278,585
6,471,811
85,257
168,237
5,204,963
11,930,268
pages 153 to 168
Detailed remuneration disclosures are provided in the remuneration report on pages 22 to 37.
(d)
Transactions with other related parties
Directors fees in the amount of $175,000 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 2020:$163,750).
28 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 Group, at the discretion
of the Directors, to grant both Options and Performance Rights over unissued ordinary shares of the Group to eligible Directors and members of staff as
specified in the plan rules.
78
Evolution Mining Limited // Annual Report 2021 209
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
28 Share-based payments (continued)
(a)
(2)
Types of share based payment plans (continued)
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 Group, at the discretion of the
Directors, to grant NED Share Rights as part of their remuneration.
(b)
Recognised share based payment expenses
30 June 2021
30 June 2020
$'000
$'000
Expense arising from equity settled share based payment transactions recognised in profit and loss
11,371
10,691
Summary and movement of share based payment plans
The following table illustrates the number and movements in, performance rights issued during the year.
Outstanding balance at the beginning of the year
Performance rights granted during the period
Vested during the period
Forfeited during the period
Outstanding balance at the end of the year
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
2021 Number
13,776,882
5,166,893
(4,019,532)
2020 Number
18,643,061
6,038,033
(7,025,612)
(2,153,770)
(3,878,600)
12,770,473
13,776,882
2021 Number
53,845
68,439
(53,845)
—
—
68,439
2020 Number
57,235
71,875
(72,083)
(3,182)
—
53,845
There were 68,439 Share Rights granted during the 2021 financial year. Provided the NEDs remain directors of the Group, Share Rights will vest and
automatically exercise 12 months after the grant date of 23 November 2020 with disposal restrictions attached to these shares.
(c)
Fair value determination
During the year, the Group issued two allotments of performance rights that will vest on 30 June 2023. They have four performance components being a
Total Shareholder Return (“TSR”) condition, an absolute TSR condition, a Relative AISC 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 (market-based condition) will be measured as the cumulative annual TSR over the three year period
ending 30 June 2023.
(iii)
Relative AISC
Relative AISC (non-market-based condition) will be tested against Evolution’s relative ranking of its AISC performance for the 12 month period ending 30
June 2023 (Evolution AISC) compared to the AISC performance ranking of the Peer Group Companies for the same period (Peer Group AISC).
(iv)
Growth in Ore Reserves per Share
The growth in Ore Reserves per share (non-market-based condition) is measured by comparing the Baseline measure of the Ore Reserves as at 31
December 2019, to the Ore Reserves as at 31 December 2022 on a per share basis, with testing to be performed at 30 June 2023.
79
210 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
28 Share-based payments (continued)
(c)
Fair value determination (continued)
The following tables list the inputs to the models used for the Performance Rights granted for the period:
September 2020 Performance Rights issue
Number of rights issued
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
February 2021 Performance Rights issue
Number of rights issued
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
Relative TSR
Absolute TSR
Relative AISC Growth in Ore
Reserves
1,068,550
1,068,550
1,068,550
5.90
0.23%
2.79 years
40%
2.99
5.90
0.23%
2.79 years
40%
2.42
5.90
0.23%
2.79 years
40%
5.52
37,836
4.68
0.10%
37,836
4.68
0.10%
37,836
4.68
0.10%
1,068,550
5.90
0.23%
2.79 years
40%
5.52
37,836
4.68
0.10%
2.37 years
2.37 years
2.37 years
2.37 years
40%
2.58
40%
1.20
40%
4.39
40%
4.39
The volatility above was determined with reference to historical volatility but also incorporates factors that management believes will impact the actual
volatility of the Group’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 Group (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.
80
Evolution Mining Limited // Annual Report 2021 211
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
29 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
Canadian related audit services
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
2021 $
2020 $
640,757
79,830
6,560
727,147
603,473
52,083
6,891
662,447
77,380
77,380
103,060
103,060
804,527
765,507
2021 $
2020 $
217,541
41,348
258,889
67,557
555,348
622,905
149,651
—
149,651
44,183
393,762
437,945
Total remuneration of non-PricewaterhouseCoopers audit firms
881,794
587,596
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.
30 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'.
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 2021 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.
81
212 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Evolution Mining Limited
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
For the year ended 30 June 2021
(continued)
(continued)
31 Interests in other entities
31 Interests in other entities
(a) Significant investments in subsidiaries
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in accordance with the
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in accordance with the
accounting policy described below:
accounting policy described below:
Name of entity
Name of entity
Evolution Mining Management Services Pty Ltd
Evolution Mining Management Services Pty Ltd
Conquest Mining Pty Ltd (i) (ii)
Conquest Mining Pty Ltd (i) (ii)
Mt Rawdon Operations Pty Ltd (i) (ii)
Mt Rawdon Operations Pty Ltd (i) (ii)
Evolution Mining NZ Pty Ltd (ii)
Evolution Mining NZ Pty Ltd (ii)
Evolution Mining (Cowal) Pty Ltd (i) (ii)
Evolution Mining (Cowal) Pty Ltd (i) (ii)
Evolution Mining Mungari Pty Ltd (i) (ii)
Evolution Mining Mungari Pty Ltd (i) (ii)
Toledo Holding (Ausco) Pty Ltd (i)
Toledo Holding (Ausco) Pty Ltd (i)
Evolution Mining (Mungari East) Pty Ltd (i) (ii)
Evolution Mining (Mungari East) Pty Ltd (i) (ii)
Evolution Mining (Mungari) Pty Ltd (i) (ii)
Evolution Mining (Mungari) Pty Ltd (i) (ii)
Evolution Mining (Phoenix) Pty Limited (i) (ii)
Evolution Mining (Phoenix) Pty Limited (i) (ii)
Hayes Mining Pty Ltd (i)
Hayes Mining Pty Ltd (i)
Evolution Mining (Aurum 2) Pty Ltd (i) (ii)
Evolution Mining (Aurum 2) Pty Ltd (i) (ii)
Evolution Mining (Connors Arc) Pty Ltd (i) (ii)
Evolution Mining (Connors Arc) Pty Ltd (i) (ii)
Evolution Mining (Canada Holdings) Ltd (ii)
Evolution Mining (Canada Holdings) Ltd (ii)
Evolution Mining Management Services (Canada) Ltd (ii)
Evolution Mining Management Services (Canada) Ltd (ii)
Evolution Mining Gold Operations Ltd (ii)
Evolution Mining Gold Operations Ltd (ii)
Evolution Red Lake Nominee Ltd (ii)
Evolution Red Lake Nominee Ltd (ii)
Battle North Gold Corporation (ii) (iv)
Battle North Gold Corporation (ii) (iv)
Rubicon Minerals Nevada Inc (iv)
Rubicon Minerals Nevada Inc (iv)
Rubicon Alaska Holdings (Inc) (Ontario) (iv)
Rubicon Alaska Holdings (Inc) (Ontario) (iv)
Country of
Country of
Incorporation
Incorporation
Class of
Class of
shares
shares
Equity holding
Equity holding
2021 %
2021 %
2020 %
2020 %
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
0%
0%
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%
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%
100%
100%
0%
0%
0%
0%
0%
0%
(i)
(i)
the Australian Securities and Investments Commission. For further information refer to note 31.
the Australian Securities and Investments Commission. For further information refer to note 31.
These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order 98/1418 issued by
These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order 98/1418 issued by
(ii)
(ii)
operating gold related projects.
operating gold related projects.
These entities are considered to be the material controlled entities of the Group. Their principal activities are identifying, developing and
These entities are considered to be the material controlled entities of the Group. Their principal activities are identifying, developing and
(iii)
(iii)
These entities were divested during this financial year.
These entities were divested during this financial year.
(iv)
(iv)
These entities have been acquired as part of the Battle North Gold acquisition.
These entities have been acquired as part of the Battle North Gold 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
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.
interests held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
82
82
Evolution Mining Limited // Annual Report 2021 213
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
32 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.
(a) 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
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
(b) Guarantees entered into by the parent entity
The parent entity has provided bank guarantees, as detailed in note 23.
(c) Contingent liabilities of the parent entity
30 June 2021
$'000
30 June 2020
$'000
161,289
2,904,584
3,065,873
399,574
2,515,538
2,915,112
128,728
696,404
825,132
122,452
632,047
754,499
2,240,741
2,160,613
2,183,727
14,094
66,759
(23,839)
2,240,741
2,183,727
39,961
58,928
(122,003)
2,160,613
371,529
—
371,529
272,706
—
272,706
The parent entity did not have any contingent liabilities as at 30 June 2021. For information about guarantees given by the parent entity, please see
above.
83
214 Evolution Mining Limited // Annual Report 2021
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Notes to the Consolidated Financial Statements
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
(continued)
33 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 separately 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)
(i)
Foreign currency translation
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 which are denominated in foreign currencies are re-translated 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.
34 New accounting standards
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2021 reporting periods and have not
been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and
on foreseeable future transactions.
84
Evolution Mining Limited // Annual Report 2021 215
Notes to the Consolidated Financial Statements (continued)FY21 Annual Report
Directors’ Declaration
Directors’ Declaration
Evolution Mining Limited
Evolution Mining Limited
Directors' Declaration 30
Directors' Declaration 30
June 2021
June 2021
In the Directors' opinion:
In the Directors' opinion:
(a)
(a)
(b)
(b)
(c)
(c)
(i)
the financial statements and notes set out on pages 41 to 84 are in accordance with the Corporations Act 2001, including:
the financial statements and notes set out on pages 41 to 84 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 2021 and of its performance for the year ended
on that date, and
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 2021 and of its performance for the year ended
on that date, and
pages 172 to 215
(ii)
(ii)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
there are reasonable grounds to believe that the Group 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 or liabilities to which
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group or liabilities to which
they are, or may become, subject by virtue identified in note 30 will be able to meet any obligations of the deed of cross guarantee described in
they are, or may become, subject by virtue identified in note 30 will be able to meet any obligations of the deed of cross guarantee described in
note 30.
note 30.
Note 33(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
Note 33(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.
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.
This declaration is made in accordance with a resolution of Directors.
Jacob (Jake) Klein
Jacob (Jake) Klein
Executive Chairman
Executive Chairman
Sydney
Sydney
Andrea Hall
Andrea Hall
Chair of the Audit Committee
Chair of the Audit Committee
85
85
216 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report
Independent Auditor’s Report
Independent Auditor’s Report
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 with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated balance sheet as at 30 June 2021
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
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.
86
Evolution Mining Limited // Annual Report 2021 217
FY21 Annual Report
Independent Auditor’s Report
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. 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 taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
● Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
● A Canadian component audit team performed
specified audit procedures over the financial
information of the Red Lake Mine in Canada
under the review and supervision of the
Australian engagement team.
● For the purpose of our audit we used overall
Group materiality of $22.8 million, which
represents approximately 2.5% of the Group’s
earnings before interest, tax, depreciation,
amortisation and impairment expense
(EBITDA).
● We applied this threshold, together with
qualitative considerations, to determine the
scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate
the effect of misstatements on the financial
report as a whole.
● We chose Group EBITDA because, in our view, it
is the benchmark against which the performance
of the Group is most commonly measured.
● We utilised a 2.5% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
Key audit matters
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 financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit Committee.
218 Evolution Mining Limited // Annual Report 2021
87
Independent Auditor’s Report (continued)FY21 Annual Report Independent Auditor’s Report
Key audit matter
How our audit addressed the key audit
matter
Purchase Price Allocation for acquisition of
Red Lake gold mine
(Refer to note 25 (a)) [$645.8 million]
The Group acquired 100% of the Red Lake gold mine
(Red Lake) from Newmont Corporation on 1 April
2020. As a result of the size and complexity of the
transaction, the purchase price accounting allocation
was provisional as at 30 June 2020. The purchase
price allocation was finalised during the year ended
30 June 2021.
As part of the finalised purchase price allocation, the
fair values of the assets and liabilities were
determined using updated valuations of the assets
acquired and liabilities assumed. Fair value was
determined by the Group using various valuation
methods, which were applied according to the assets
and liabilities being measured. The Group was
assisted by an expert in the process to determine the
fair value of the rehabilitation provision at acquisition
date.
The purchase price allocation for the Red Lake
acquisition was a key audit matter given the
judgements and subjectivity required by the Group in
the valuation methodologies and key assumptions.
Our procedures included the following, amongst
others:
●
●
●
●
Evaluated the Group’s accounting by
considering the requirements of Australian
Accounting Standards, key transaction
agreements, our understanding obtained of
the business acquired and its industry and
selected minutes of the board of directors
meetings.
Evaluated the valuation methodologies and
assessed the appropriateness of the valuation
assumptions used by the Group on which the
final fair values of the identifiable assets and
liabilities acquired were based. Evaluated the
completeness and accuracy of the underlying
data supporting the significant judgements
and estimates used by the Group.
Evaluated the objectivity, competence and
capabilities of the management expert
utilised to assist the Group in determining
the fair value of the rehabilitation provision.
We further obtained an understanding of the
work performed by the expert and evaluated
the appropriateness of the conclusions
reached.
Assessed the adequacy of the business
combination disclosures in Note 25 (a) in
light of the requirements of Australian
Accounting Standards.
88
Evolution Mining Limited // Annual Report 2021 219
Independent Auditor’s Report (continued)FY21 Annual Report Independent Auditor’s Report
Key audit matter
How our audit addressed the key audit
matter
Acquisition of Battle North Gold Corporation
(Refer to note 25 (b)) [$355.8 million]
Our procedures included the following, amongst
others:
During the year, the Group acquired 100% of Battle
North Gold (Battle North). The acquisition was
completed on 19 May 2021.
The purchase consideration was $356 million (C$343
million) in cash.
The acquisition of Battle North has been accounted
for as a business combination in accordance with
AASB 3 Business Combinations and involved
consideration as to the acquisition date and the
recognition and measurement of identifiable assets
acquired and liabilities assumed as at that date.
The accounting for the business combination has been
recorded on a provisional basis in the consolidated
financial statements.
The accounting for the acquisition was a key audit
matter because it was a significant transaction for the
year given the financial impact on the Group.
●
●
●
●
Evaluated the Group’s accounting against the
requirements of Australian Accounting
Standards, key transaction agreements, our
understanding obtained of the business
acquired and minutes of the board of
directors’ meetings
Agreed the amount of the purchase
consideration paid to the transaction
agreements and bank statements
Assessed the appropriateness of the
valuation methodologies and key
assumptions used by the Group on which the
provisional fair values of the identifiable
assets and liabilities acquired were based,
and
Assessed the adequacy of the business
combination disclosures in Note 25 (b) in
light of the requirements of Australian
Accounting Standards.
Other information
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 2021, but does not include the
financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other
information we obtained included the Directors' report. We expect the remaining other information to
be made available to us after the date of this auditor's report.
220 Evolution Mining Limited // Annual Report 2021
Independent Auditor’s Report (continued)FY21 Annual Report Independent Auditor’s Report
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on 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 that fact. We have nothing to report in this regard.
When we read the 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
professional judgement to determine the appropriate action to take.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
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, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
90
Evolution Mining Limited // Annual Report 2021 221
Independent Auditor’s Report (continued)FY21 Annual Report Independent Auditor’s Report
Report on the remuneration report
Report on the remuneration report
Our opinion on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 20 to 37 of the directors’ report for the
year ended 30 June 2021.
We have audited the remuneration report included in pages 20 to 37 of the directors’ report for the
year ended 30 June 2021.
pages 151 to 168
In our opinion, the remuneration report of Evolution Mining Limited for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
In our opinion, the remuneration report of Evolution Mining Limited for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
Responsibilities
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 express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
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 express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
PricewaterhouseCoopers
Marc Upcroft
Marc Upcroft
Partner
Partner
Sydney
19 August 2021
Sydney
19 August 2021
222 Evolution Mining Limited // Annual Report 2021
91
91
Independent Auditor’s Report (continued)FY21 Annual Report Shareholder information
Shareholder information
Capital (as at 20 September 2021)
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 29 September 2021)
Distribution of Fully Paid Shares (as at 29 September 2021)
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
Securities
1,642,837,000
115,645,401
33,531,722
35,587,775
5,337,346
1,832,939,244
Unmarketable Parcels
118,103
%
89.63
6.31
1.83
1.94
0.29
100.00
0.01
No. of Holders
270
4,731
4,543
13,553
11,158
34,255
1,712
Substantial Shareholders (as at 20 August 2021)
1,832,939,244
34,255
1,712
A$3.48
%
0.79
13.81
13.26
39.57
32.57
100.00
5.00
Van Eck Global
Australian Super
Total
Fully Paid Ordinary Shares
Number
177,129,071
124,218,972
301,348,043
%
9.66
6.78
16.35
The disclosed number of ordinary shares held by substantial shareholders may not be equal to the actual number of ordinary
shares held as at 21 September 2021 as only movements of at least 1% are required to be notified to the Australian Securities
Exchange.
Evolution Mining Limited // Annual Report 2021 223
FY21 Annual Report Shareholder information
Twenty Largest Shareholders (as at 21 September 2021)
Current
balance
805,545,558
377,275,235
163,266,571
70,385,173
49,788,988
17,544,204
12,852,901
12,829,395
12,180,793
8,800,218
7,767,953
7,224,519
5,432,067
4,507,692
3,999,994
3,024,231
2,447,436
2,259,865
2,209,495
2,045,585
1,571,387,873
1,571,387,873
261,551,371
1,832,939,244
Fully Paid Ordinary Shares
Issued
capital %
43.95
20.58
8.91
3.84
2.72
0.96
0.70
0.70
0.66
0.48
0.42
0.39
0.30
0.25
0.22
0.16
0.13
0.12
0.12
0.11
85.73
85.73
14.27
100.00
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
ROXI PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
SMARTEQUITY EIS PTY LTD
LUJETA PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
NETWEALTH INVESTMENTS LIMITED
AMP LIFE LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED
NETWEALTH INVESTMENTS LIMITED
Total
TOTAL
Balance of Register
Grand TOTAL
1.5 Share Buy-Backs
There is no current on-market buy-back scheme.
2. Other Information
Evolution Mining Limited, incorporated and domiciled in Australia, is a public listed Company limited by Shares.
224 Evolution Mining Limited // Annual Report 2021
FY21 Annual Report Corporate Information
Corporate Information
ABN 74 084 669 036
Board of Directors
Jake Klein
Executive Chairman
Lawrie Conway
Finance Director and CFO
Tommy McKeith
Lead Independent Director
Jim Askew
Jason Attew
Andrea Hall
Vicky Binns
Peter Smith
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Company Secretary
Evan Elstein
Registered and principal office
Level 24, 175 Liverpool Street
Sydney NSW 2000
T: +61 (0)2 9696 2900
F: +61 (0)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
Auditor
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 2021 225
FY21 Annual Report
Corporate Information
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226 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report Corporate Information
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Evolution Mining Limited // Annual Report 2021 227
FY21 Sustainability Report Corporate Information
This page is intentionally left blank.
228 Evolution Mining Limited // Annual Report 2021
FY21 Sustainability Report McFinley operation, Red Lake, Ontario
Level 24, 175 Liverpool Street SYDNEY NSW 2000
+61 2 9696 2900
+61 2 9696 2901
www.evolutionmining.com.au