Evolution Mining —
a leading, globally relevant
gold miner
Formed in November 2011, Evolution has evolved to
become a leading, globally relevant gold mining company.
We operate five wholly-owned mines in Australia and
Canada and in FY22 produced 640,275 ounces of gold at
a sector leading low All-in Sustaining Cost (AISC) of $1,259
per ounce:
■ Cowal in New South Wales
■ Ernest Henry and Mt Rawdon in Queensland
■ Mungari in Western Australia
■ Red Lake in Ontario, Canada
Our focus on upgrading the quality of our portfolio
towards long-life, low-cost, high-margin assets in the safe
jurisdictions of Australia and Canada has positioned us
well to prosper through all market cycles while generating
superior shareholder returns.
FY23 Group gold production guidance is 720,000 ounces
of gold at an All-in Sustaining Cost of $1,240 per ounce
(+/- 5%) and FY24 Group gold production is forecasted
to increase to 800,000 ounces at an unchanged All-in
Sustaining Cost of $1,240 per ounce (+/- 5%).
11 years of Evolution
Together we can become the best gold company in the world
2022
Ernest Henry – acquisition of full ownership
delivering an immediate and material
increase to cash flow generation and
lowering Group AISC by ~$190/oz in FY23
Maiden debt private placement
totalling US$550M, and investment
grade rating
Mt Carlton Divestment
Non-core asset for total consideration of up
to $90M
Mungari – Cornerstone asset
2021
Battle North Acquisition
Proximal to Red Lake
Unlocking value and extending mine life
through acquiring proximal deposits
Acquisition of Kundana Operations, EKJV
(51%), Carbine Project and WKJV (75%)
elevates Mungari to a cornerstone asset
Cracow Divestment
Lowering Group AISC1,2 by A$20/oz
2020
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
Ernest Henry – Cornerstone asset
Ernest Henry Economic Interest
Reducing Group AISC by A$100/oz
2017
2016
Evolution enters ASX 100
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
2011
Evolution enters ASX 200
1 Cost reductions refer to contribution to
Group AISC for a given financial year
2 Based on FY20 performance
3 Based on EBITDA margin
Conquest Mining and Catalpa Resources merge
to form Evolution Mining November 2011
Evolution Formed
2 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 3
Executive Chair’s report
Executive Chair’s report
We acknowledge that we as a Company, like the rest
of the industry, also have work to do in ensuring the
psychological safety for all of our people. For Evolution,
in essence this means a workplace where people believe
they can speak up and that is inclusive and diverse; where
at a minimum, it is free of any form of bullying, prejudice
or sexual harassment. We are absolutely committed
to this.
Our sustainability performance is outlined in detail in
the Sustainability Report and I would encourage you to
review some of the excellent work we are doing in our
local communities and environments. Evolution’s efforts
and enhanced reporting in this area has been recognised
by key ratings agencies including the Dow Jones
Sustainability Index Australia and maintaining our ‘AA’
rating from MSCI.
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. Our seriousness
about reaching these commitments was emphasised by
a 7% improvement in our carbon emission intensity per
tonne mined in FY22. There is still much more work to do
in this area but this is encouraging early progress on this
important journey.
We are looking at new and innovative ways to reduce our
environmental impact and enhance our sustainability
performance to achieve our net zero commitment. In this
regard, we are fortunate to have identified a truly unique
opportunity at Mt Rawdon to create a multi-generational
infrastructure asset. Our plan, which is advancing rapidly, is
to convert the open pit into a 1-2 gigawatt pumped hydro
battery at the conclusion of mining in the coming years.
Evolution is working on this opportunity with ICA
Partners, which originated the concept some three
years ago and will be co-owners of the project. We have
commenced engagement with potential offtake partners
and have grown increasingly confident of the potential to
demonstrate this as both a model mine closure as well as
creating significant value for Evolution shareholders.
Operationally, in FY22, Evolution produced 640,275
ounces of gold at an All-in Sustaining Cost (AISC) of
A$1,259 per ounce (US$914/oz) which remains in the
lowest quartile. This translated into an EBITDA margin
of 44% and the second highest statutory net profit after
tax in our history of A$323.3 million, a 6.4% decrease on
the record prior year. Operating mine cash flow totalled
A$893.3 million before total capital investment of
A$606.4 million. This enabled us to return $146.6 million
to our shareholders through our 18th and 19th consecutive
dividends at the half-year and full-year financial
results respectively.
During the period we acquired the balance of Ernest
Henry from Glencore which, in time, could become one
of the most important transactions in Evolution’s history.
Ernest Henry is a world-class asset in Australia and one
which we already knew extremely well thanks to our
successful investment in the asset in 2016.
On behalf of the Board of Directors of Evolution Mining
Limited, it is my pleasure to present you with the
Company’s 2022 Annual Report. This incorporates our
Sustainability Report which supports our objective to
deliver long-term stakeholder value through safe, reliable,
low-cost gold production in an environmentally and
socially responsible way.
Since we formed Evolution in 2011 we have had a
consistent strategy built around the pillars of assembling
a great team, focusing exclusively on the Tier One
jurisdictions of Australia and Canada, operating a
concentrated portfolio of high-quality assets in well-
endowed, geologically prospective gold districts and
continually seeking opportunities to improve the quality
of our portfolio.
We continued to stay true to our strategy in FY22 and
completed three transactions which I believe have
delivered a step change to the quality of our asset
portfolio. At the same time, the period was also extremely
challenging and we fell short on the operational delivery
which we pride ourselves on. We have learnt lessons and
made changes within our business to return to our
high standards.
At Evolution we are driven to provide a workplace
where our people are safe and healthy. This relies on the
commitment, leadership, teamwork, engagement and
involvement of our entire workforce. Increased reporting
and field leadership have been a major focus in FY22
which saw overall health and safety improve across the
Group. The total recordable injury frequency (TRIF) was
10.66 (including six months of full ownership of Ernest
Henry) as at 30 June 2022. We will make every effort to
keep improving our safety performance.
The acquisition delivered an immediate and substantial
increase in cash flow generation, lowered our AISC and
has clear growth potential.
Subsequent to the end of the period, in August 2022,
we were very pleased to release an updated Mineral
Resource estimate for Ernest Henry that captured 119 new
drill holes and resulted in a 28% increase in the contained
copper to 1.13 million tonnes and a 24% increase in
contained gold to just over 2 million ounces. The upgrade
will form part of a study into a mine life extension due
for completion in December 2022 and gives us high
confidence in this future of this cornerstone asset.
Our second major acquisition of the period related to
the consolidation of the Mungari district through the
acquisition of Kundana and the East Kundana Joint
Venture interest owned by Northern Star Resources.
This transaction resulted in Evolution becoming one
of the largest tenement holders in the Kalgoorlie
region. The Kundana assets are located close to our
Mungari processing infrastructure which will give us the
opportunity to capture valuable synergies and improve
both operational flexibility and longevity of Mungari.
We also further upgraded the quality of our portfolio
through the sale of Mt Carlton to Navarre Minerals. Total
consideration for the sale is up to $90 million with the
sale closing in December 2021. Mt Carlton was Evolution’s
first development project and we appreciate the
contribution of its employees, contractors, suppliers, the
traditional custodians of the land the Birriah People, and
the local community to its success.
Within our portfolio we have several important growth
projects underway or under consideration. I have already
mentioned the mine life extension study underway at
Ernest Henry and we are also completing a Feasibility
Study into a potential plant expansion at Mungari which
will be considered when cost inflation and labour market
conditions in Western Australia stabilise.
At Red Lake, we continue to make progress with the
transformation underway. Key physical metrics including
production and grade having improved over the year
and are now at the rates required to deliver the site
FY23 production guidance of 160,000 ounces. This is
being achieved through efficiencies on the mining side,
optimisation on the processing side and the huge effort
of our people. We have a clear pathway to achieving the
goal of 300,000 ounces per annum, thus restoring Red
Lake to a premier long-life, low-cost Canadian gold mine.
Yours faithfully
JAKE KLEIN
EXECUTIVE CHAIR
4 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 5
1 Using the average AUD:USD exchange rate of 0.7258 for the 12 months of FY22
Contents
Contents
Contents
FY22 achievements
Operations
Discovery
Mineral Resources and Ore Reserves
FY22 Sustainability Report
Chief Financial Officer’s review
Board of Directors
Annual Financial Report
Shareholder information
Corporate information
8
17
26
36
44
137
139
142
240
242
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.
All amounts are expressed in Australian dollars unless stated otherwise.
6 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 7
FY22 achievements
FY22 achievements
Operational &
financial
Portfolio
transformation
Sustainability
640,275oz
Gold production
AISC
$1,259/oz1
(US$914/oz)2
Among the lowest cost gold
producers in the world
$893M
Operating mine cash flow
$323.3M
Statutory net profit
after tax
44%
Strong EBITDA margin
$146.6M
Payout in fully franked
dividends
2 major growth
projects
in execution, and five further
growth studies underway
US$550M
Maiden debt private
placement and investment
grade rating
Acquisition
of 100% of
Ernest Henry
Cementing Evolution’s
position as one of the
lowest cost gold
producers in the world
Acquisition of
Kundana
assets3
Elevating Mungari
to Evolution’s fourth
cornerstone asset
Mt Carlton
divestment
Non-core asset
34%
Decrease in Injury Severity
year-on-year due to risk
reduction activities
84%
Increase in Hazard reporting
year-on-year
42%
Reduction in freshwater
demand per tonne milled
(compared to FY20
baseline)
7%
Reduction in emissions
intensity per tonne of
material mined compared to
FY20 baseline
30%
Female graduate hires in the
workplace at the
end of FY22
72%
Local employment across
our operations
$2.03B
Contribution to the
Australian and Canadian
economies
$164M
Contribution to local and
regional businesses and
organisations4 including
$133M
Direct spend with local
organisations – a 32%
increase year-on-year
Mineral Resources
and Ore Reserves
12%
Increase in Gold Mineral
Resource year-on-year5
63%
Increase in Copper Mineral
Resource year-on-year5
27%
Increase in Ore Reserve
year-on-year
5%
Increase in Gold Ore
Reserve year-on-year
1 All-in Sustaining Cost includes C1 cash cost, plus royalties, sustaining capital, general corporate and administration expenses on a per ounce sold basis. Excludes Mt
Carlton from 1 October 2021 due to divestment, and includes 100% ownership of Ernest Henry from 1 January 2022
2 Calculated using an average AUD:USD exchange rate of 0.7258 for FY22
3 Kundana Assets represent 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
4 Local and regional organisations are defined by postcode in relation to geographical proximity to Evolution mine sites
5 Excludes the 30 June 2022 Mineral Resource update at Ernest Henry
FY22 achievements
Sustainability
objective
To deliver long-term
stakeholder value through
safe, reliable, low-cost gold
production in an
environmentally
and socially
responsible way
Values
driven
culture
Our values guide our behaviours
and the decisions we make in
the workplace every day
Company
vision
Inspired people
creating a premier
global gold company
Consistent
corporate
strategy
founded on:
ß A business that prospers through the cycle
ß Create sustainable value for stakeholders
in an environmentally and socially
responsible way
ß High performing culture with values and
reputation as non-negotiables
ß Willing to take appropriate geological,
operational and financial risks
ß A portfolio of up to 8 assets in Tier 1
jurisdictions generating superior returns
ß Financial discipline around margin and
appropriate capital returns
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
It is my
responsibility, I own
it – good or bad
Respect
We trust each
other, act honestly
and consider each
other’s opinions
8 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 9
FY22 achievements
FY22 achievements
Progress on the execution of our growth
strategy at our four cornerstone assets
FY22
FY23
OBJECTIVE
Cowal
■ Underground Mine development
■
Integrated Waste Landform
construction
■ Commenced mining ore at Stage H
Ernest Henry
■
Full ownership acquired - exceptional
returns delivered
■ Material increase to Mineral Resource
■ Mine Extension Pre-feasibility Study
progressing
Red Lake
■ Continued mining operational
transformation
■ Resources and Reserves expansion
■ Campbell, Young And Dickenson (CYD)
Decline development
■
Processing optimisation - record throughput
at Campbell and Red Lake plants
Mungari
■ Acquired and integrated Kundana
assets – district consolidation,
resources more than doubled, higher
grade ore
■ Cowal Underground completion FY23
■ Open Pit Continuation Feasibility Study
due FY23
320kozpa low-cost
production outlook in
FY24 and longer term
goal of 350kozpa
■ Updated Ore Reserve
■ Mine Extension Pre-feasibility Study
due FY23
Mine life extension
beyond FY26
■ Continued mining operational
transformation
■
Production from new high-grade
mining front at Upper Campbell
■ Mill Optimisation Study
200koz production outlook in
FY24 and longer term goal of
300kozpa+ low-cost production
■
Plant Expansion Feasibility
Study by December 2022
Opportunity for 200kozpa
production through plant
expansion
10 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 11
FY22 achievements
FY22 achievements
Key performance metrics since inception
Gold production (koz)
Ore Reserve growth since inception (Moz)
4
4
8
3
0
8
1
0
8
3
5
7
0
2
7
0
0
8
9
1
7
1
8
6
0
4
6
3
9
3
8
2
4
8
3
4
0
8
2
9
9
.
.
3
0
1
0
7
.
0
7
.
5
7
.
6
6
.
9
5
.
1
.
3
4
2
.
2
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
2
2
Y
F
1
3
2
Y
F
1
4
2
Y
F
2
1
c
e
D
3
1
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D
4
1
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5
1
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6
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9
1
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e
D
0
2
c
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D
1
2
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e
D
Reserve life2 (years)
Cumulative dividends declared ($M)
(pre-dividend reinvestment plan)
.
5
9
.
3
6
1
.
5
.
7
9
.
2
8
4
8
.
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7
9
0
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9
5
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0
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1
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5
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2
1
7
1
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1
2
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4
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2
1
0
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6
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1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
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
1 Denotes production guidance and outlook published 27 June 2022 (+/-5%)
2 Reserve life is total gold Ore Reserves divided by Group production
(calendar year used for production)
12 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 13
FY22 achievements
FY22 achievements
Progress on our Net Zero strategy
Key FY22 achievements toward our Net Zero commitments of 30% emissions reduction target
by 2030 and Net Zero by 2050 included:
Building a reputation for quality and transparency in
the reporting of our Sustainability performance
■ Emissions baseline and forecast validated
■ Value chain emissions map developed
■ Climate scenario analysis for energy and emissions and water security modelled at Cowal
■ High-level site decarbonisation roadmaps developed
■ Scoping and feasibility studies conducted on electric vehicle use at sites
■
7% reduction in emissions intensity per tonne mined (compared to FY20 baseline)
We proactively participate in a range of Sustainability surveys to help
inform understanding and improve our Sustainability performance.
Our Environmental, Social and Governance rating recognition over
the past 12 months includes:
Phase 1
Phase 2
Phase 3
TRANSITION TO 100% RENEWABLE ENERGY
(~2/3 of current emissions are Scope 2)
Target >30% renewables
Wind, solar energy sources
New storage technologies
Develop value chain
partnerships
Target greater % of
renewables
Green hydrogen
Further develop value chain
partnerships
Leverage disruptive
technologies (not
required to achieve 100%)
Optimise value chain
partnerships
ELECTRIFICATION OF FLEET & EQUIPMENT
(~1/3 of current emissions are Scope 1)
Energy effi ciency initiatives/
low emission technologies
Further leverage disruptive
technology
Electric material movement
(BEV & FCEV)
Green hydrogen
Mine-of-the future design
Electrifi ed underground
operations
BIODIVERSITY INVESTMENT
& MANAGEMENT
Explore/invest off set and
biodiversity management
options
Alignment to Task Force on
Nature-Related Financial
Disclosures
Verifi ed and assured
biodiversity off sets
r
e
v
e
L
n
o
i
t
c
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Inclusion in the 2021 Dow Jones Sustainability Index
Australia (one of only three gold companies) – a score
of 53 was achieved, a 4% increase from FY21 (industry
average of 34)
A high rating of ‘AA’ (on a scale of AAA-CCC) by Morgan
Stanley Capital International (MSCI) – scoring 5.9
compared to the industry average of 4.7. Placed among
the top five industry leaders for Labor Management,
Anticompetitive Practices and Business Ethics & Fraud
Improved ESG Risk Rating from ’40.2’ in FY21 to ’29.2’
in FY22 and ranked 24 out of 123 companies in the
precious metals industry and 19 out of 96 in the gold
subindustry in Sustainalytics’ 2021 ESG ratings
ISS ESG ratings: improved ESG scores including a Level 1
(highest) for Environment and Level 2 for Social
Australasian Reporting Awards: Silver and Bronze for
Evolution’s Annual and Sustainability Reports 2021
Winner of the 2022 NSW Minerals Council Health,
Safety, Environment and Community Excellence Award
Now
2030
2040
30% reduction target
2050
Net Zero target
14 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 15
Chief Operating
Officer’s review
The 12 months of FY22 was one of the busiest and most
exciting periods of Evolution’s history. I’d like to start by
recognising our people, who continue to demonstrate
their tenacity and dedication to our pursuit of being
a premier global gold company. On top of the day to
day running our operations, we also completed three
transformative deals in the period which have enhanced
our portfolio and future growth options. The quantum
of additional work that goes into the pre-transaction
due diligence and post-deal integration is extensive and
without our people, these transactions would not have
been possible.
With the Kundana and Ernest Henry transactions, we now
have five substantial growth projects across our assets
in varying stages of maturity: Red Lake CYD Decline,
Cowal Open Pit Continuation (OPC) Feasibility Study,
Mungari Plant Expansion Feasibility Study, Ernest Henry
Mine Extension Pre-Feasibility Study and the Mt Rawdon
Pumped Hydro. These projects are vital to the future
of our business and require a constant focus to ensure
they are delivering the best outcomes. In November 2021
my team was expanded to include a General Manager –
Projects to provide cover for these important
growth options.
Operations
We are committed to an improved health and safety
performance with a heavy focus on leading indicators,
increased reporting, field leadership, action closure
discipline and high-quality safety interactions. This focus
saw overall improvements in these leading indicators
across the Group, with delivery on or better than target.
The total recordable injury frequency (TRIF) was 10.66
(including six months at Ernest Henry) at 30 June 2022.
Mungari showed significant improvement throughout
the year, reducing their TRIF by 60% from 30 June 2021
through increased leader time in field.
Our people demonstrated resilience and strong
risk management through the COVID-19 pandemic.
Operations were maintained, supported by protocols
developed to minimise risks to our people and
communities that allowed safe production during this
challenging time. Notwithstanding these measures,
regulatory isolation requirements resulted in high levels
of COVID-19 related absenteeism across many of our sites
which adversely impacted performance during the year.
We continued to assist our local communities impacted
by the pandemic by providing direct and indirect support,
contributing over $2.5 million since the pandemic began.
Sustainability performance remains a prerequisite to
our success as a business, and year by year becomes an
increasingly important element of our social licence. In
FY22, we continued to focus on addressing greenhouse
gas emissions by assessing initiatives to improve energy
efficiency and to identify lower-carbon energy sources.
Each operation developed a high-level decarbonisation
roadmap with a near-term focus on renewables, medium-
term focus on investing in low emission technologies
and longer-term focus on biodiversity management. We
also continued to collaborate with industry partners to
develop technological solutions for emissions reductions
through groups such as the Electric Mine Consortium.
On the production front, we finished FY22 with 640,275
ounces produced at an AISC of $1,259 per ounce
(US$914/oz). Production was below guidance, driven
largely by the slower ramp up at Red Lake and weather
and geotechnical challenges at Mt Rawdon. Excluding
these, the other sites delivered to within 5% of their plans
despite impacts from COVID-19, La Nina and inflationary
effects faced during the year. We have learned a lot from
Red Lake’s performance and their FY23 plan has been
geared towards delivery.
We have built and fostered a culture where our people
‘Act Like an Owner’ (ALO) by treating Evolution as if it
is their own business. In FY22, 97 Group ALO initiatives
were approved that delivered significant value for the
business through change, improved safety, innovation,
cost reductions and efficiency gains. On a related
note, our Data Enabled Business Improvement (DEBI)
innovation program also saw huge success in FY22 with
over $32 million in value added to the business versus
a target of $21 million. We have lifted the FY23 target
back up to A$40 million and look forward to seeing what
initiatives Ernest Henry and a consolidated Mungari
will bring.
16 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 17
Operations
Operations
Operations
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 227,105 ounces of gold produced at an AISC of
$1,245 per ounce. Production was within 5% of guidance,
despite significant impacts from COVID-19 and significant
weather events affecting the mining plan.
Operating mine cash flow was $247.4 million, sustaining
capital was $30.9 million and major capital was $229.9
million in line with supporting the operation’s
growth plans.
Capital expenditure in FY22 consisted of investment in
major projects including Underground Mine Development,
construction of the Integrated Waste Landform (IWL)
tailings facility, and Stage H mine development.
Gold production in FY23 is guided to increase to 275,000
ounces at an AISC of $1,250 per ounce (+/- 5%) and
production is forecast to increase to 320,000 ounces in
FY24 as underground production ramps up.
The development of the Cowal Underground Mine with a
planned capital investment of $380 million is progressing
well and is on budget and schedule for critical path
activity, with cost inflation absorbed within the project
contingency. All material contracts have now been
executed. Approximately 6,450 metres of underground
development has been completed to 30 June 2022 and first
production ore is on schedule for the June 2023 quarter.
The development of the Underground Mine will enable
Cowal’s production to grow to a goal of 350,000 ounces
of low-cost gold a year and extend its mine life to
2040, while injecting significant economic benefit for
all stakeholders. The Underground Mine will provide a
higher-grade ore source that will be blended with the
current E42 open pit and stockpile ore.
We are in the early stages of developing a proposed
extension of the current open pit plan, referred to as the
Open Pit Continuation (OPC) Project. The OPC Project
will extend the current approved mining operations by
two years (from 2040 until 2042). Visit our website for
regular updates about the OPC Project, as it progresses
through the environmental impact assessment.
https://evolutionmining.com.au/cowal/
Note: All metal production is reported as payable
In terms of building our team, we are proud that our graduate program received a record of more than 1,200 applications
for 31 positions in Australia and Canada. We were overwhelmed by the exceptional energy, talent and capacity of the
individuals who applied in what is now the eighth year of this important program. We know we are developing the future
leaders of our business and our industry.
Looking ahead, the upgrades made to our portfolio in FY22, together with the growth projects and studies underway,
provide us with a strong outlook. In the next few years, our production is planned to increase by around 25% while
maintaining a very low-cost position. In FY23, production is forecast to increase by 12.5% to around 720,000 ounces and
increase by a further 11% to around 800,000 ounces in FY24. All-in Sustaining Cost (AISC) is expected to be maintained at
around A$1,240 per ounce in FY23 and FY24.
Our focus in FY23 will remain on what matters the most: keeping our people healthy and safe, strengthening our values
driven culture, and reliably delivering to plan. The activity in FY22 has positioned us well with a quality portfolio of low-
cost, long-life assets with immense opportunity for growth. I am excited for what the future brings for Evolution and our
people as we continue to elevate our business in pursuit of our vision and strategy
Yours faithfully
BOB FULKER
CHIEF OPERATING OFFICER
Ernest Henry
Queensland
Mt. Rawdon
Queensland
Mungari
Western Australia
Cowal
New South Wales
Red Lake
Canada
18 Annual Report | www.evolutionmining.com.au
Annual Report | evolutionmining.com 19
Operations
Operations
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, on the
traditional lands of the Wabauskang and Lac Seul First
Nation Peoples. Acquired in April 2020, an operational
transformation plan is underway to restore Red Lake to
a premier Canadian gold mine with a production goal of
greater than 300,000 low-cost ounces per annum.
The Red Lake operation post transformation will consist
of the Red Lake, Campbell, Cochenour and McFinley
mining areas that will provide ore to the Campbell, Red
Lake and Bateman mills. A Mill Optimisation Study is
currently underway to determine the most value-accretive
use of our processing facilities.
In our second year of ownership, Red Lake produced
115,276 ounces of gold at an AISC of $2,519 per ounce.
FY22 performance was below plan largely due to
COVID-19 related absenteeism and procurement delays.
Performance improved progressively throughout the
year with positive quarterly trends on underground
development metres, ore mined, grade, ore haulage
and tonnes processed, and the operation is now
operating at the run rates required for FY23 production
guidance. Operating mine cash flow was $35.2 million,
sustaining capital was $45.8 million and major capital
was $153.4 million in line with supporting the operation’s
transformation and growth plans.
Production is planned to increase by approximately 65%
over next two years with FY23 production to increase
by 35% to approximately 160,000 ounces and FY24
production to increase by a further 25% to approximately
200,000 ounces (+/- 5%). FY23 AISC is guided at $1,880
per ounce (+/- 5%).
Notable milestones achieved in FY22 include:
■ Development metres consistently above the 1,200m per
month target
■ Continued improvements in drill and blast performance
including a significant increase in production drilling
driving increased drill stocks and improved stope
turnover rates
■ First ore mined from the higher grade MMTP and
Aviation zones
■ CYD decline development nearing completion –
provides independent access to the Upper Campbell
and HG Young ore bodies where 16 million tonnes at
9.4g/t gold for 4.8 million ounces of Red Lake’s 53.6
million tonnes at 6.8g/t gold for 11.7 million-ounce
Mineral Resource estimate is situated
■ Record throughput performance at Campbell and Red
Lake process plants in March processing 90,000 tonnes
which is the highest throughput achieved in the history
of the operation. The Campbell mill achieved a record
2,163tpd during the mill expansion trial period1.
■ Commissioned first underground battery electric
loader and the mining control room which will drive
operational efficiency improvements
■ Commissioned new locomotives for the High Speed
Tram which has enabled a significant increase in ore
haulage from Cochenour to Reid shaft
1 Permission granted for the daily throughput restriction of 2,000tpd to be
lifted for a limited trial in the June 2022 half-year to support the Campbell
mill expansion
The Mine Extension Pre-feasibility Study from the 1,125RL
to 775RL is progressing well and due for completion by
December 2022. The study will benefit from the results
of the current surface drilling programs targeting the ore
body at a more optimal angle, and the updated Mineral
Resource estimate at 30 June 2022, which resulted in a
material increase (~24%) in the reported Mineral Resource
to 88.3 million tonnes at 1.28% copper and 0.73g/t gold.
Ernest Henry
The Ernest Henry copper-gold operation is a large-scale,
long-life asset located 38km north-east of Cloncurry,
Queensland on the traditional lands of the Mitakoodi
people. The operation commenced as an open pit mine in
1998 and transitioned to underground mining in 2011. The
operation employs a low-cost and highly efficient sub-
level caving ore extraction method.
On 6 January 2022, we acquired a transformational 100%
ownership of Ernest Henry (economic effective date 1
January 2022) resulting in a material uplift in production
and cash flow from this asset in FY22.
Gold production in FY22 was 84,145 ounces at a record
low AISC of negative $1,680 per ounce driven by the
increased copper production in H2 FY22 following 100%
ownership. Operating mine cash flow was $474.2 million,
sustaining capital was $28.0 million and major projects
capital was $10.8 million.
FY23 production is planned to be approximately 82,000
ounces of gold and 55,000 tonnes of copper at an AISC
of negative $2,600 (+/- 5%).
20 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 21
Operations
Operations
An operational transformation plan
is underway to restore Red Lake to
a premier Canadian gold mine with
a production goal of greater than
300,000 low-cost ounces per annum
Reid and Campbell shafts, Red Lake,
Ontario, Canada. Image capturing the
Northern Lights.
Mungari
The Mungari operation is located 600km east of Perth
and 20km west of Kalgoorlie in Western Australia. There
are currently two registered native title claims over the
majority of the Mungari tenements – the Maduwongga
People and the Marlinyu Ghoorlie People. Our local
communities are Coolgardie and Kalgoorlie.
The acquisition of a portfolio of high-grade underground
mines (Kundana assets) within 8km of Mungari’s plant
elevated Mungari to our fourth cornerstone asset, creating
a pathway to production of 200,000 ounces per annum.
Mungari now consists of three operating underground
mines, an open pit and a 2 million tonne per annum plant.
The integration of the Kundana assets is well underway
to create “One Mungari” with standardised systems and
processes, and the sharing of equipment and workforce
across what were previously three separately run
operations. Cost reductions are continuing through site
synergies and contract consolidations which will continue
through FY23.
Mungari contributed 138,035 ounces to the Group’s
overall gold production, a 19% increase on FY21, at an
average AISC of $1,931 per ounce.
Operating mine cash flow was $84.8 million, sustaining
capital was $30.3 million and major projects capital was
$41.8 million.
Mungari achieved throughput of 1,861,000 tonnes at an
average grade of 2.77g/t gold with gold recoveries of
91.2%. Gold production of approximately 127,500 ounces
(+/- 5%) is planned in FY23 and FY24. FY23 AISC is
guided at $2,040 per ounce (+/- 5%).
The Plant Expansion Feasibility Study currently underway
will provide the option to grow to grow to a 4.2 million
tonne per annum processing capacity and the pathway
to 200,000 ounces per annum, subject to and is due for
completion in December 2022.
Gold bars from Mungari ore being stamped
22 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 23
Operations
Operations
FY23 guidance and
FY24 outlook
Group production for FY23 is guided to increase 12% on FY22 to 720,000 ounces (+/- 5%) and the outlook for FY24 is
expected to increase a further 11% to 800,000 ounces (+/- 5%). This will deliver a total increase of 25% over the two years.
The FY23 AISC guidance and FY24 AISC outlook is expected to be approximately $1,240 per ounce (+/- 5%) (~US$870/oz),
continuing to place Evolution as one of the lowest cost, global gold producers.
Sustaining capital is guided to be approximately $190 – $240 million in FY23 with the same outlook for FY24. Capital in
FY23 includes fleet replacement at Ernest Henry given the confidence of a mine life extension. The main driver to the
change to the FY24 outlook is at Cowal, due to higher underground mine development rates linked to the latest mine plan.
The guidance for FY23 major capital remains unchanged at $530 – $600 million while the outlook for FY24 has been
lowered to $330 – $380 million. The majority of this capital is for development of the Cowal Underground mine; the
transformation of Red Lake; and progressing studies on growth opportunities at Cowal Open Pits, Ernest Henry Extension,
and Plant Expansion at Mungari.
The guidance and outlook for both sustaining and major capital is also being impacted by some investment in FY22 being
deferred or delayed into FY23.
For further information on Production Targets and Forecast Financials, refer to the ASX release titled “Business Update”
dated 27 June 2022 available to view at www.evolutionmining.com.au. The Company confirms that all material assumptions
underpinning the production targets and forecast financial information derived from the production targets in the 27 June
2022 release continue to apply and have not materially changed.
FY23 guidance
Group
Cowal
Ernest Henry
Red Lake
Mungari
Mt Rawdon
Corporate
FY24 outlook
Group
Cowal
Ernest Henry
Red Lake
Mungari
Mt Rawdon
Gold production (oz)
(+/- 5%)
AISC1 ($/oz)
(+/- 5%)
Sustaining capital
($M)
Major capital
($M)
720,000
275,000
82,500
160,000
127,500
75,000
1,240
1,250
(2,600)
1,880
2,040
1,950
190 – 240
40 – 50
65 – 80
50 – 60
30 – 40
5 – 7.5
0 – 2.5
Gold production (oz)
(+/- 5%)
AISC1 ($/oz)
(+/- 5%)
Sustaining capital
($M)
1,240
190 – 240
800,000
320,000
80,000
200,000
125,000
75,000
530 – 600
325 – 360
35 – 45
130 – 150
40 – 45
Major capital
($M)
330 – 380
(1) AISC is based on Gold price of $2,400/oz (royalties) and Copper price of $12,500/t (By-product credits)
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 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 60,004 ounces of gold at an AISC
of $1,782 per ounce in FY22. The production result was
lower than plan with extreme weather events creating
operational challenges due to instability in the North
Wall during the March quarter. Processing throughput
was strong but production was impacted due to
processing of low grade stockpiles whilst the wall issues
were being managed. Access to higher grade ore was
re-established in the June 2022 quarter. Operating mine
cash flow was $39.8 million, sustaining capital was $8.3
million and major projects capital was $22.6 million.
Gold production is planned to be approximately 75,000
ounces (+/- 5%) in FY23 and FY24. FY23 AISC is guided
at $1,950 per ounce (+/- 5%).
Evolution is progressing a Feasibility Study into the
Mt Rawdon Pumped Hydro (MRPH) Project, which is
reviewing the conversion of the existing open pit into
a 1-2GW pumped hydro project post mine life. The
Feasibility Study is being completed with our partner,
Ironstone Capital Australia, and is due for completion in
June 2023. Evolution will retain a 50% share of the MRPH
Project if the project proceeds.
The MRPH Project is currently planned to be
commissioned in 2028 and will support the Queensland
government’s target of achieving 50% renewable energy
by 2030 as well as the Federal government’s 43% 2030
emissions reduction target. The project also delivers
on our social responsibility commitment of leaving a
positive legacy for the communities in which we operate
beyond the life of the mine.
Mt Carlton
Mt Carlton was divested effective from 1 October 2021.
For the three months under the Group’s ownership, Mt
Carlton produced a total of 15,710 ounces at an AISC of
$1,823 per ounce. Mine operating cash flow was $11.8
million. Net mine cash flow was $8.2 million, generated
post sustaining capital of $2.7 million and major capital
of $1.0 million.
24 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 25
Discovery
Discovery
Discovery
Discovery
"We have a world-class
exploration team and have
acquired assets in highly
endowed gold districts"
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 have
a world-class exploration team and have acquired assets in highly
endowed gold districts.
Our Discovery group had another outstanding 12 months
in FY22. This year we brought several projects to decision
points (Connors Arc, Murchison, E39) and took over
direct management of the rapidly progressing Cue Joint
Venture Earn-In. We also staked a large (>750 km2)
new greenfields tenement package in Ontario, Canada
called Lake St. Joseph about 200km east of Red Lake.
We continued to invest significantly in the technical
development of our people and provided opportunities
for them to upskill and gain experience across our
diverse portfolio.
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:
■ Key mineral systems elements such as geologic
architecture, fluid and metal sources, and the drivers and
traps capable of producing world-class gold deposits
■ Footprint scales demonstrating size and grade potential
for an Evolution-scale mining operation. Distribution
patterns of low-level gold, pathfinder elements and
alteration mineral associations that demonstrate evidence
of large hydrothermal systems always rank highly
■ Navigating to gold using the right data layers to
enable determination of where we are in a system and
to vector to gold quickly and effectively. We believe
strongly in integrating geological observations with
project-wide multi-element geochemistry, airborne
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 FY22, our Discovery team was
exploring approximately 6,447km2 of granted tenements
and mining leases with applications for 97km2 pending.
These tenements are either 100% owned by Evolution or
subject to earn-in or joint venture agreements.
Total expenditure for FY22 was $58.8 million. A total of
140km of drilling was completed across the Group. Drilling
expenditure in FY23 is guided to be approximately
$60-$65 million.
In FY23, approximately 72% of our discovery investment
will be directed to resource growth and to deliver new
discoveries near our operating mines.
26 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 27
Analysing RC sample spoils using an ASD
Terraspec Halo mineral analyser
Discovery
Discovery
Mineral Resource growth
since inception (Moz)1
Ore Reserve growth since
inception (Moz)
Cost of adding
Mineral Resources
$35-40/oz
.
2
4
1
.
2
4
1
4
1
.
7
4
1
.
2
5
1
.
8
6
4
5
.
5
.
6
9
4 2
6
2
.
Cost of adding
Ore Reserves
$50-55/oz
0
7
.
9
5
.
1
.
3
4
2
.
2
2
.
5
0 7
7
.
.
.
3
0
1
9
9
.
6
6
.
Cowal
We have grown the Mineral Resources and Ore Reserves of the world class Cowal orebody since acquisition in 2015 by 6.2
million ounces and 3.0 million ounces respectively11. The Cowal Mineral Resource is now estimated at 305.3 million tonnes
at 0.98g/t gold for 9.62 million ounces and the Ore Reserve is estimated at 138 million tonnes at 1.03g/t gold for 4.59
million ounces.
Further growth opportunities include extensions to the Cowal Underground and expansion of the E42 pit and satellite pits.
FY22 drilling resulted in the refinement of the geological interpretation of the Dalwhinnie, Galway and Endeavour zones
within the GRE46 underground orebody. The Cowal Underground Mineral Resource is now estimated at 35.7 million tonnes
at 2.41g/t gold for 2.77 million ounces and Reserves are estimated at 14.4 million tonnes at 2.31g/t gold for
1.07 million ounces.
Underground diamond drilling ahead of pre-production infill drilling was undertaken to build grade-controlled stopes for
early years of the underground production schedule at GRE46. Drilling focused on the Galway and upper
Dalwhinnie zones.
Surface diamond drilling to support geotechnical and metallurgical Ore studies into open pit extensions around the E42
open pit was conducted.
Early-stage exploration continued at E39 located 5km south of E42. The drilling targeted porphyry copper style
mineralisation and returned strongly anomalous copper intervals over variable widths. A last round of drilling is being
planned to test two remaining areas where there is sufficient space to host the scale of intrusive system that would be
required to deliver an economic success albeit at higher grades than have been encountered to date.
2
1
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D
3
1
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D
4
1
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D
5
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e
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6
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7
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8
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9
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3
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4
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e
D
1 The Group Gold Mineral Resources are reported as at 31 December 2021 and therefore exclude an additional 405koz in the interim Ernest Henry Mineral
Resource update which was depleted to 30 June 2022 (reported on 1 August 2022)
Ernest Henry core yard
28 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 29
Location map of Cowal resource definition and regional projects in FY22
11 Information on Mineral Resources and Ore Reserves is proved on pages 36 to 43 of this Annual Report
Discovery
Discovery
Ernest Henry
A material increase to the Mineral Resource was reported
on 1 August 2022. The Mineral Resource is now estimated
at 88.3 million tonnes at 1.28% copper and 0.73g/t gold
for 1.13 million tonnes of copper and 2.07 million ounces
of gold net of mining depletion as of 30 June 2022 (Dec
2021: 71.4Mt, 885kt copper, 1.67Moz gold). Further growth
potential exists with mineralisation intersected 300m
vertically below the Mine Extension Pre-Feasibility Study
(below the 775mRL).
The Mineral Resource classifications were also
significantly upgraded with 10.9 million tonnes (82%
increase) of Indicated Mineral Resources upgraded to
the Measured resource category and 6.2 million tonnes
(19% increase) of Inferred Mineral Resources upgraded to
Indicated resource category.
The new model includes 30,159 metres of new drilling
from 119 drillholes for a total aggregate increase of 28%
in contained copper and 24% in contained gold, along
with upgrades to the Mineral Resource classifications.
The update includes all drilling results to 31 May 2022 and
the model is depleted for mining to 30 June 2022. The
Mineral Resource was estimated into an interpreted 0.7%
copper grade shell consistent with the previous estimate
completed by Glencore.
Surface drilling commenced in the June quarter targeting
specific areas between the 1,200mRL and 775mRL which
have been difficult to access by the underground drilling.
The purpose of the surface holes is to drill the ore body
at a more optimal angle, continue upgrading resource
classification and to further delineate extensions of
mineralisation where they remain open within the Pre-
feasibility Study window. Future underground drilling will
link to extending the decline and establishing better drill
positions to intersect extensions of the orebody at depth.
The Mine Extension Pre-feasibility Study, due for
completion by December 2022, will benefit from the
results of the current surface drilling programs and the
results of the updated Mineral Resource estimate. Drilling
results will be included in the December 2022 Mineral
Resource and Ore Reserve update.
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. The region has outstanding potential with little exploration in rock
types not previously considered prospective and represents some of the greatest resource and exploration upside in the
Evolution portfolio.
The Mineral Resource at 31 December 2021 is estimated at 53.6 million tonnes at 6.82g/t gold for 11.7 million ounces,
an increase of 689,000 ounces (6%) compared to December 2020 estimate. This estimate includes the Maiden Mineral
Resource of the Bateman Gold Project of 5.1 million tonnes at 4.60g/t gold for 757,000 ounces.
FY22 resource definition drilling focused on reserve conversion priorities anticipated to come into the production schedule
over the next 12 to 24 months at Red Lake and Campbell. Step-out drilling targeted the gap between the Deep Sulphides
and Aviation areas as well as the down-plunge extension of Cochenour.
Discovery drilling at Lower Campbell tested the continuity of high-grade mineralisation along the Western R-Zone
structural corridor. Results confirmed grade continuity and highlight an opportunity for significant resource potential
between these intercepts at the bottom of the Lower Campbell Mineral Resource. Drilling is planned to extend the Mineral
Resource into the 550m gap to FY22 drill intercepts.
At the Bateman project, drilling has confirmed extensions to known mineralisation within the McFinley deposit adjacent to
the historic property boundary.
In FY23, a focus remains on converting the substantial resource base, especially at the higher grade Upper Campbell
orebody, and testing near mine high-grade zone like targets. Regionally, our focus is on targets within younger volcanic
packages that show the potential for a stand-alone mine or displace higher cost ounces in the mine plan.
Schematic north-south section looking west of the Ernest Henry orebody showing a total of 119 drillholes totalling 30,159 metres included in this
Mineral Resource update. A total of 71 drillholes (green) totalling 16,726m had assay results while 48 drillholes (pink) totalling 13,433m were
awaiting assay results
Plan view of Red Lake belt showing extent and location of Evolution tenements
30 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 31
Discovery
Discovery
Mungari
Upside potential at Mungari, particularly Kundana, was
reinforced by drilling in FY22 which delineated new areas
of high-grade mineralisation very close to existing areas
of development.
Resource extension drilling at Kundana included several
holes drilled 30 to 50m beyond the main Xmas ore body
structure to intersect and extend the Xmas Hangingwall
Lode (Genesis). An Inferred Mineral Resource for the
Xmas Hangingwall Lode was updated to 65,000 tonnes
at 46.7g/t gold for 97,000 ounces at 31 December 2021.
Drilling results are important because they locate and
extend the vein structure down dip and along strike.
Future drilling will target the high-grade lode portion
of the structure with the aim of expanding the Mineral
Resource into these locations.
The vein averages 30cm wide and has been modelled
along the same structural position as the Skinner’s trend
at Raleigh and is interpreted to link to a similar position
in the hangingwall of the Strzelecki Lode. The Strzelecki
hangingwall position has not been effectively tested and
represents a new target opportunity at Kundana with a
strike potential of 500m.
Mary Fault drilling at Rubicon/Hornet/Pegasus (RHP)
underground at East Kundana supports the potential for
a future resource.
Mungari Mineral Resources are estimated at 76.1 million
tonnes at 2.00g/t gold for 4.9 million ounces. Ore
Reserves are estimated at 20.6 million tonnes at 1.86g/t
gold for 1.2 million ounces.
Inclined long section view showing significant intersections (>4g/t gold) from diamond drilling targeting the interpreted extension of the
Western R Zone structure at Lower Campbell (development unsliced)
This information is extracted from ASX releases entitled “March 2022 Quarterly Report” dated 21 April 2022 and “December 2021 Quarterly Report’ dated 27
January 2022 available to view at www.evolutionmining.com.au. Evolution confirms that it is not aware of any new information or data that materially affects
information included in these releases. Evolution confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from the original market release. Reported intervals are downhole widths as true widths are not currently known. An estimated true width
(etw) is provided. The Red Lake Competent Person for the reporting of exploration results is Daniel Macklin
Location map of Mungari resource definition and regional projects
Diamond and sonic drilling on East Bay during the 2021-2022 winter, Bateman plant in the background
32 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 33
Discovery
Discovery
Cue project, WA (earning 75%)
In September 2019, we entered into an earn-in joint
venture agreement with Musgrave Minerals Limited
(ASX:MGV) (“Musgrave”) over the Cue exploration
project. Cue is located in the Murchison Province of
central Western Australia which hosts a gold endowment
in excess of 30 million ounces. We commenced to act as
the Earn-in Manager from 1 January 2022.
The Cue project is approximately 30km south of Cue and
is prospective for Archaean greenstone gold deposits.
The Cue joint venture covers a prospective mineralised
trend which is north of 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.
Diamond drilling in FY22 focused on delineating the scale
of the new high-grade zone identified in FY21 at West
Island as well as testing additional gold-in-regolith aircore
anomalies and defining new diamond drilling targets
through aircore drilling. Diamond drilling confirmed the
geological model developed at West Island whereby
mineralisation is hosted in multiple mineralised sulphide
lodes of limited strike constrained by the favourable
dolerite host unit. Results from aircore drilling continues
to delineate the favourable dolerite unit along strike which
is important for hosting the better grades at West Island
and has extended the gold mineralised footprint to 1.6km.
Drilling in FY23 is planned to continue to delineate the
potential scale of mineralisation at West Island and to
determine how best to domain and model
gold mineralisation.
Schematic cross section of mineralised horizons at Kundana
Xmas HW (Genesis) resource
Plan view of mineralisation trends at Kundana including Xmas hangingwall
Map showing the location and geology of the Cue project
34 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 35
Mineral Resources and Ore Reserves
Mineral Resources and Ore Reserves
Mineral Resources and
Ore Reserves
Group Mineral Resources
As at 31 December 2021, Group Mineral Resources are
estimated to contain approximately 29.6 million ounces
of gold and 1.4 million tonnes of copper. This represents
an increase of approximately 3.25 million ounces of
gold (~12%) and 541 thousand tonnes of copper (~63%)
compared with the estimate as at 31 December 2020.
Group Ore Reserves
As at 31 December 2021, Group Ore Reserves are
estimated to contain approximately 10.3 million ounces of
gold and 640 thousand tonnes of copper. This represents
an increase of approximately 449 thousand ounces of
gold (~5%) and 135 thousand tonnes of copper (~27%)
compared with the estimate as at 31 December 2020.
The Group Mineral Resource Statement as at 31 December
2021 is provided in Tables 3 and 5 and accounts for mining
depletion of in situ Mineral Resources of 576,000 ounces
of gold and 21,000 tonnes of copper. Mineral Resources
are reported inclusive of Ore Reserves but exclude mined
areas and areas sterilised by mining activities. The Ernest
Henry Mineral Resource estimate undertaken by Glencore
includes all exploration and resource definition drilling
information up to 31 March 2021 and has been depleted
for mining to 31 December 2021.
The Group Ore Reserve Statement as at 31 December
2021 is provided in Tables 4 and 6 and accounts for
mining depletion of in situ Ore Reserves of 520,000
ounces of gold and 21,000 tonnes of copper.
Commodity price assumptions
Evolution commodity price assumptions used to report
the December 2021 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.
Gold: A$1,450/oz for Ore Reserves, A$2,000/oz for
Mineral Resources
Silver: A$20.00/oz for Ore Reserves, A$26.00/oz for
Mineral Resources
Copper: A$6,000/t for Ore Reserves, A$9,000/t for
Mineral Resources
All open pit Mineral Resource estimates are reported
within optimised pit shells which have been developed
using a A$2,000/oz price assumption and take into
account forecast mining costs and metallurgical
recoveries. All underground Mineral Resources (except
Ernest Henry) are reported within underground mining
shapes (MSOs) using a A$2,000/oz price assumption
and take into account forecast mining costs and
metallurgical recoveries.
Whilst no cut-off grade has been explicitly applied for
reporting the Ernest Henry June 2022 Mineral Resource,
only blocks within the 0.7% Cu grade shell were reported.
The sub-level caving mining method applied at the Ernest
Henry operation does not allow blocks to be selectively
mined. Consequently, all blocks contained within the
interpreted 0.7% Cu grade shell no matter their estimated
grade (inclusive of low grade and waste material) are
reported within the reported Mineral Resource. Prior to
reporting, the Mineral Resource was depleted for mining
activities and sterilisation.
All open pit Ore Reserve estimates are reported within
detailed pit designs and all underground Ore Reserves
are reported within mineable underground shapes. Pit
designs and underground mining shapes have taken
into account all applicable modifying factors, forecast
mining costs and metallurgical recoveries and have
been developed subject to an economic test to verify
that economic extraction is justified. The economic test
includes all applicable capital 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. Assets may use different assumptions within this
range during optimisation or financial modelling stages
depending on specific requirements as documented in
their individual statements.
Glencore commodity price assumptions used to estimate
the Ernest Henry December 2021 Ore Reserves cut-off
grades are: gold price of US$1,300/oz, copper price of
US$6,500/t and exchange rate of AUD:USD of 0.75.
JORC 2012 and ASX listing
rules requirements
This annual statement of Mineral Resources and Ore
Reserves 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.
Changes since 31 December 2021 Mineral
Resources and Ore Reserves statement
Evolution’s Mineral Resources and Ore Reserves
Statement as at 31 December 2021 was released to the
ASX on 16 February 2022 in the report titled “Annual
Mineral Resources and Ore Reserves Statement”.
Subsequently, an updated Mineral Resource estimate for
Ernest Henry as at 30 June 2022 was completed and
released to the ASX on 1 August 2022 in the report titled
‘Material Increase in Ernest Henry Mineral Resource.’ Both
releases are available to view at
www.evolutionmining.com.au.
The Ernest Henry Mineral Resource is now estimated at
88.3 million tonnes at 1.28% copper and 0.73g/t gold for
1.13 million tonnes of contained insitu copper and 2.07
million ounces of contained insitu gold net of mining
depletion (Table 1). The new model includes 30,159
metres of new drilling from 119 drillholes for a total
aggregate increase of 28% in contained copper and 24%
in contained gold, along with upgrades to the Mineral
Resource classifications. The Mineral Resource was
estimated into an interpreted 0.7% copper grade shell
consistent with the previous estimate completed
by Glencore.
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 2021 other than changes due to normal
mining depletion during the six months ended 30
June 2022. All material assumptions and parameters
underpinning the estimates in the original release
continue to apply and have not materially changed.
The Company confirms that the form and context in
which the Competent Persons’ findings are presented
have not been materially modified from the
original releases.
Table 1: Ernest Henry – Total Mineral Resource at 30 June 2022
Measured
Indicated
Inferred
Total Resource
Tonnes (Mt)
Copper grade (%)
Copper insitu tonnes (kt)
Gold grade (g/t)
Gold insitu ounces (koz)
24.2
1.38
335
0.77
600
38.5
1.29
498
0.74
911
25.7
1.16
298
0.68
560
88.3
1.28
1,129
0.73
2,071
Dec 2021
Total
Resource
71.4
1.24
885
0.73
1,674
Note: Ernest Henry Mineral Resource is reported within an interpreted 0.7% Cu mineralised envelope which includes internal dilution of material below 0.7% Cu.
Data is reported to significant figures to reflect appropriate precision and may not sum precisely due to rounding. Mineral Resources are reported inclusive of Ore
Reserves. Ernest Henry Mineral Resource Competent Person is Phil Micale.
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, Competent Persons experience
and qualification are reviewed by Evolution’s Mineral
Resource and Ore Reserve Committee.
Competent Persons’ statement
The information in this report that relates to the 31
December 2021 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
Mining Limited (except for Aaron Meakin and Dean Basile)
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 in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’.
Aaron Meakin and Dean Basile are employed on a full-
time basis by CSA Global and MiningOne respectively.
The information in this report that relates to the 30
June 2022 Ernest Henry Mineral Resource is based on
information compiled by Phil Micale who is a full time
employee of Evolution Mining. Mr Micale is a Member of
the Australasian Institute of Mining and Metallurgy and
has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration
and to the activity which he has undertaken to qualify as
a Competent Person as defined in the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. Mr Micale consents
to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
Evolution employees acting as a Competent Person
may hold equity in Evolution Mining Limited and may
be entitled to participate in Evolution’s executive equity
long-term incentive plan, details of which are included
in Evolution’s annual Remuneration Report. Annual
replacement of depleted Ore Reserves is one of the
performance measures of Evolution’s long-term
incentive plans.
36 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 37
Mineral Resources and Ore Reserves
Mineral Resources and Ore Reserves
Table 2: Competent Persons list for the December 2021 Mineral Resources and Ore
Reserve estimates
Deposit
Competent Person Membership
Cowal Mineral Resource
James Biggam
AusIMM
Cowal Open Pit Ore Reserve
Dean Basile
AusIMM
Cowal Underground Ore Reserve
Joshua Northfield AusIMM
Bateman Gold Project Mineral Resource
Jason Krauss
Red Lake Mineral Resource
Jason Krauss
AIG
AIG
Red Lake Ore Reserve
Brad Armstrong
Professional
Engineers - Ontario
Mungari Mineral Resource
Brad Daddow
AIG
Mungari Open Pit Ore Reserve
Mungari Underground Ore Reserve
Ernest Henry Mineral Resource
Ernest Henry Ore Reserve
Mt Rawdon Mineral Resource
Mt Rawdon Ore Reserve
Marsden Mineral Resources
Marsden Ore Reserve
Chris Honey
Peter Merry
Aaron Meakin
Michael Corbett
Justin Watson
Martin Sonogan
James Biggam
Anton Kruger
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
Status
Member
Chartered
Professional
(Mining)
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Fellow
Member
number
112082
301633
211952
4711
4711
100152392
7736
204346
306163
113056
307897
205253
313927
112082
221292
Drilling at Lake Cowal
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38 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 39
Mineral Resources and Ore Reserves
Mineral Resources and Ore Reserves
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40 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 41
Mineral Resources and Ore Reserves
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42 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 43
FY22 Sustainability Report
FY22
Sustainability
Report
“Guided by our Sustainability purpose, we
foster trusted partnerships that enable
safe, reliable and sustainable operations
centred on the wellbeing of our people, the
environment and the communities in which
we operate. We take pride in managing our
business in a way that creates value for all
stakeholders”
James Askew
Board Risk and Sustainability Committee Chair
We acknowledge our First Nation Partners
and Indigenous Peoples throughout
Australia and Canada and recognise their
continuing connection to land, waters and
community. We pay our respects to them
and their cultures; and to Elders past,
present and emerging.
44 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 45
FY22 sustainability snapshot
FY22 sustainability snapshot
FY22 sustainability snapshot
Safety,
Wellbeing
and Risk
$2.5M
100%
in direct and indirect support to
our people and community since
COVID-19 pandemic began
of material and critical
actions closed as per
target
34%
reduction in Injury
Severity (compared to
FY21) during a period of
significant change
Safe and
successful
integration
of two new
acquisitions
and one
divestment
Active reporting,
learning and sharing
culture supported by
weekly risk-based
storytelling sessions
84%
increase in hazard
reporting compared
to FY21
Environment
752
hectares
of land rehabilitated on
mine sites
Progress on
Net Zero
commitments
43%
reduction in fresh
water demand per
dry tonne milled
(compared to FY20
baseline)
7%
reduction in emissions
intensity per tonne
of material mined
(compared to FY20
baseline)
Detailed
climate
scenario
study for
Cowal
>70%
renewable
electricity at
Red Lake
Community
and First
Nation
engagement
2
specific First Nation Partner Shared
Value Projects (SVPs) implemented
- the Galari Agricultural Company
and Gidarjil Murra Wolka Creations
Indigenous Art business.
Upgraded the Mt Perry Summit walk
to a safe and marketable Class 3
Standard, stimulating local tourism
and economic development and
providing training to 15 Gidarjil
Indigenous trainees
Economic
Active engagement with Local
Communities, First Nation Partners
and Indigenous Peoples
Strong partnerships through
locally supported projects
and engagement
4
High
approval
Indigenous trainees engaged for
two-year Certificate of Agriculture,
accredited through on the job
training with Galari Agricultural
Company
Social Licence to Operate score of
4.00 out of 5 in 2022 Independent
Stakeholder Perception Survey, and
a high ‘Reputation’ which was rated
4.04 out of 5
$2.38M2
committed to six Shared
Value Projects (~34%
increase compared to
FY21)
$2.03B
contribution to the
Australian and Canadian
economies3
$3.5M1
in direct community
investment (9% increase
compared to FY21)
$133M
in local spend (32% increase
compared to FY21)
$164M
contribution to local and regional
businesses4 and organisations (26%
increase compared to FY21)
1 All amounts are expressed in Australian dollars unless stated otherwise
2 Shared Value Project spend was $885K in FY22
3 Economic contributions include supplier payments, wages, dividend payments, interest, taxes, royalties, community investment,
payments to providers of capital and payments to financial institutions (interest)
4 Local and regional organisations are defined by postcode in relation to geographical proximity to Evolution mine sites
46 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 47
FY22 sustainability snapshot
FY22 sustainability snapshot
People
Introduction of
leader-led Inclusion
and Diversity
initiatives
100%
of employees had meaningful
values and culture conversations
with a senior people leader
30%
of the Graduate
Development program hires
in FY22 were females
72%
local employment across our
operations (compared to 67% in FY21)
Analysis and alignment
of gender pay parity
as a key component
of the FY22
Remuneration review
20%
females in
management
positions (increase
from 17% in FY21)
82%
of employees choosing to
stay in a competitive market
Environmental, Social and Governance
ratings performance
S&P Global
CSA SAM Corporate Sustainability Assessment S&P
Global: Inclusion in 2021 Dow Jones Sustainability Index
Australia and 4% improvement in year-on-year score.
ARA – Australian Reporting Awards
MSCI
MSCI rating score of ‘AA’ for resilience to long-term
ESG risks.6
Governance
ISS
Achieved increased ESG scores7, including a Level 1
(the highest) for Environment and a Level 2 for Social.
100%
of all integrated assets5 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
Sustainalytics
Significant upgrade in ESG Rating moving from a ‘Severe
Risk’ rating to a ‘Medium Risk’ Rating; ranked in the top
21st percentile8 globally.
Transparency with ESG
reporting agencies
including being
recognised for transparent
and quality reporting by
the Australasian Reporting
Awards (ARA)
Published 2021 Modern Slavery
Statement, and updated
Supplier Code of Conduct and
Procurement Statement
5 Ernest Henry was integrated into Evolution during second half of the financial year and will be audited
following completion of integration as part of the FY23 assurance plan
Continued alignment with
four key Environmental,
Social and Governance
(ESG) frameworks
including Global Reporting
Initiative (GRI) and Task
Force on Climate-Related
Financial Disclosures
(TCFD)
6 The use by Evolution 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 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
7 October 2021
8 Gold Industry
9 In FY21, the Galari Project was in feasibility stages and has now been launched as of FY22
48 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 49
‘Silver’ award for the 2021 Annual Report and ‘Bronze’
Award for the 2021 Sustainability Report
Shared Value
Projects
New
■ Yalga-binbi Girls Academy Program
■ Kalgoorlie-Boulder Chamber of Commerce & Industry
(KBCCI) treasure trail
■ University of Queensland’s Research for Early
Cancer Diagnosis Using Gold (extending to long haul
COVID-19)
■ Murra Wolka Project
■ Burnett Mary Regional Group Elliot Heads Wetlands,
research centre and seagrass nursery
■ Galari Agricultural Company9
– Progress from study phase to business set up and
launch
Ongoing
■ University of Queensland sustainable transformational
reuse and economic alternatives for mine waste study
■
1770 Cultural Immersion festival
■ Mt Rawdon Pumped Hydro
■ Red Lake Fire Recovery Support – Emergency services
capability uplift
The Executive Chair on Sustainability at Evolution
The Executive Chair on Sustainability at Evolution
The Executive Chair on
Sustainability at Evolution
On behalf of the Evolution team, I am pleased to present our FY22
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.
Evolution’s commitment to Sustainability has always
been core to us. It drives our thinking about who we are
and how we maintain our relevance for the future. Work
is such a big part of people’s lives, so we create a place
where we have a positive impact on the lives of our
people and communities.
On a global scale, we collectively experienced many
challenges throughout FY22. The COVID-19 pandemic has
impacted each of us in some way and is likely to continue
to do so throughput FY23. We adapted to the challenges
of COVID-19, floods and fires and adopted new ways to
accomplish key goals whilst supporting the people and
local communities to remain healthy and safe. I’m proud
of Evolution’s collective response and ongoing resilience,
care and dedication. I also reflect on the collective world’s
response which has demonstrated the importance of
collaboration, and that acting together, we have the best
chance to solve some of the world’s biggest problems.
The past year was a milestone for Evolution’s progress on
Sustainability. It marked the fifth year of publishing the
annual Sustainability Report and the tenth anniversary
of our business. We also acquired Ernest Henry in
Queensland, and the Kundana Assets in Western
Australia, and divested Mt Carlton in Queensland.
Acting on the Evolution Values of Safety, Excellence,
Accountability and Respect, we worked throughout FY22
to deliver strong Sustainability performance focused
on the health, safety and wellbeing of our people and
local communities. The relationships we have built with
the local communities and our First Nation Partners are
strong, and the Shared Value Projects reflect that we have
listened and worked collaboratively with the communities
in which we operate. It is this improvement and ongoing
commitment that will continue to underpin the mutual
respect that exists.
We were pleased to see the performance for
Sustainability was delivered to target or better across
all key metrics of health, safety, environment, water,
emissions, First Nation engagement, community, risk and
progress on Net Zero. However, we are never satisfied
with our performance in this area, so our focus to improve
is relentless. We recognise the right to work for fair wages
in safe and healthy conditions as a fundamental human
right and we ensure that the sites are designed to protect
the safety and health of all workers. We will continue to
protect the health and safety of all employees and local
communities.
Our people are our most important asset and we remain
committed to fostering a more diverse and inclusive
workplace where all people feel respected, connected,
and are able to do their best work. In FY22, close to 200
of our leaders completed Leading Inclusion training on
inclusive practices, behaviours and processes including
hiring practices. We are also committed to increasing
female and Indigenous participation across the business
to benefit from the different perspectives and experiences
that people from different backgrounds bring.
At Evolution, we want our workplace to be free of any
prejudice, bullying and harassment, where people are
physically and psychologically safe, healthy, and well. As
such, we have also reviewed and acted on learnings from
the inquiry held by the West Australian government into
sexual harassment against women in the fly-in, fly-out
workforce and Rio’s external review of its workplace
culture.
Significant social contributions through business activities
included a $2.03 billion contribution to the Australian and
Canadian economies, with a $164 million contribution
to the local and regional businesses and organisations.
Examples of Shared Value Projects and partnerships are
highlighted in this report, which we are proud and excited
to showcase.
Protection of the environment is one of the greatest
challenges the world faces and climate change is one
of largest issues accelerating the focus towards greater
ESG action. Whether protecting biodiversity, ensuring
climate resilience at our operations, managing water
use or delivering reductions in emissions, Evolution
acknowledges action is critical for a transition to a net
zero carbon emissions business.
We have a pathway to decarbonisation which includes the
assessment of potential investment in renewable energy
and investment in green technologies. We have continued
to focus on addressing greenhouse gas emissions by
assessing initiatives to improve energy efficiency, and
to identify lower carbon energy sources. In FY22 we
achieved a reduction in our emissions, both absolute and
intensity (per tonne of material mined) compared to the
FY20 emissions baseline. We also commenced a feasibility
study for the pumped hydro energy storage scheme
which could extend the commercial activity at Mt Rawdon
and deliver a material amount of renewable energy and
storage to the Queensland grid.
Investor focus on ESG factors continues to accelerate.
Improving the quality of our Sustainability reporting and
disclosure has been a priority in recent years. To enhance
transparent and efficient communication, we continued to
align reporting with the Global Reporting Initiative (GRI),
United Nations Global Compact (UNGC), Sustainable
Development Goals (SDGs) and the Task Force on
Climate-related Financial Disclosures (TCFD).
Our enhanced reporting has been recognised by key
ratings agencies including the Dow Jones Sustainability
Index Australia and maintaining our ‘AA’ rating from
MSCI. We published a second Modern Slavery Statement
and continued work towards meeting our compliance
obligations arising from the Australian Modern Slavery
Act 2018. We are also pleased to include the second
United Nations Global Compact “Communication on
Progress” within this Report. We believe that appropriate
disclosure is essential to the management of Evolution’s
sustainability strategy and targets. We are confident that
this Report is accurate, balanced, and informative and
provides the level of accountability and transparency that
we continually strive for.
Looking ahead to FY23 and beyond, we will continue to
listen to our stakeholders and protect our people and the
environment. We will enhance the ESG risk mitigation
processes and develop a more comprehensive approach
to addressing climate-related risks and exploring
opportunities around increasing renewable sources, and
investment in technology and biodiversity management,
linked to our Net Zero roadmap.
Sustainability is at the heart of who we are, and we are
committed to continually improving our performance
in FY23. I would like to acknowledge and thank all
staff, contractors, our First Nation Partners and
local communities for their dedication and ongoing
contribution to Evolution’s sustainability efforts which are
making a measurable impact.
Yours faithfully,
JAKE KLEIN
EXECUTIVE CHAIR
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About Evolution
About Evolution
About Evolution
Evolution Mining (Evolution) was formed in November
2011 and has evolved to become a leading, globally
relevant gold mining company. Evolution operates five
wholly owned mines in Australia and Canada and in FY22
produced 640,275 ounces of gold at a sector leading low
All-in Sustaining Cost of $1,240 per ounce:
■ Cowal in New South Wales on the lands of the Wiradjuri
People
Corporate strategy
Our Corporate strategy has remained consistent,
founded on:
■ A business that prospers through the cycle
■ Creating sustainable value for stakeholders in an
environmentally and socially responsible way
■ A high performing culture with values and reputation as
■ Ernest Henry in Queensland on the lands of the
non-negotiables
Mitakoodi People
■ Red Lake in Ontario, Canada on the traditional territory
of Treaty 3 on the lands of the Wabauskang and Lac
Seul First Nations
■ Mungari in Western Australia, on the lands of the
Maduwongga People and the Marlinyu Ghoorlie People
■ Mt Rawdon in Queensland located within the traditional
lands of the Byelee, Gooreng, Gurang and Taribelang
Bunda People who make up the Port Curtis Coral Coast
(PCCC) native title claim group
Company vision
Inspired people creating a premier global gold company
Sustainability purpose
To deliver long-term stakeholder value through safe,
reliable, low-cost gold production in an environmentally
and socially responsible way
■ Being willing to take appropriate geological, operational
and financial risks
■ A portfolio of up to 8 assets in Tier 1 jurisdictions
generating superior returns
■ Financial discipline centred around margin and
appropriate capital returns
“We are committed to
operating in a way that protects
and empowers people, respects
human rights, fosters socio-
economic development and
safeguards the environment”
Fiona Murfitt, VP Sustainability
Our values
Our values guide behaviours and decisions in the workplaces every day
Safety
Think before we act, every job, every day
Accountability
It is my responsibility, I own it
– good or bad
Excellence
Respect
We take pride in our work, deliver our best and
always strive to improve
We trust each other, act honestly and consider each
other’s opinions
Our approach to
Sustainability
To aid the cross-referencing of this Report’s
information on our material topics 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
We are committed to reporting our Sustainability
performance annually and consistently improving data
and information collection processes to ensure better
quality data, transparency and insights.
In the preparation of the Report, quality and relevant
information was gathered, recorded, analysed and
disclosed to prepare it 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 and external audit processes.
Contact
We welcome feedback and invite readers to send any
comments or enquiries about this report to
Fiona Murfitt - VP Sustainability at
esgreporting@evolutionmining.com.au
This Sustainability Report discloses
Evolution’s Sustainability related
performance for the financial year ended
30 June 2022.
Boundary and scope
Our FY22 Sustainability Report (Report) marks the fifth
year of annual reporting on the Sustainability topics that
are most material to the business and stakeholders. This
Report is for the period from 1 July 2021 to 30 June 2022
and discloses the Sustainability-related performance of
businesses within Evolution. It has been approved for
release by our Board of Directors.
The Report covers operations at our 100% owned gold
mines in Australia and Canada: Cowal in New South
Wales, Mt Rawdon in Queensland, Mungari in Western
Australia, Red Lake in Ontario and exploration activities in
Australia and Canada. In FY22, we acquired full ownership
of the Ernest Henry operation 10 in Queensland, Kundana
Assets11 in Western Australia and divested the Mt Carlton
operation12 in Queensland. Due to the period of ownership,
summaries on Ernest Henry and Mt Carlton are provided
in relevant sections. Unless specified, all figures in the
report include the abovementioned operations for the
period of ownership.
The Report should be read in conjunction with our FY22
Annual Report for information pertaining to our financial
Sustainability and performance.
Reporting approach
This Report is prepared in accordance with the Global
Reporting Initiative (GRI) standards (Core Option),
ensuring it presents a full and balanced picture of our
material topics and related impacts, as well as how these
impacts are managed. We engage with key internal and
external stakeholders to ensure we understand, and
report on, material Sustainability risks and opportunities.
The comprehensive independent materiality assessment
ensures the Sustainability performance and reporting
continues to align with the priorities of key stakeholders.
This Report is also aligned with the Task Force on
Climate-Related Financial Disclosures (TCFD), the United
Nations Global Compact (UNGC) and the United Nations
Sustainable Development Goals (SDGs).
10 Effective date 1 January 2022
11 Effective date 18 August 2021; Kundana Assets represent 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
12 Effective date 15 December 2021
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Environment
Environment
Environment
“Being responsible environmental stewards is a critical
part of our business. By using natural resources and
energy efficiently, recycling and reusing waste, and
working to protect nature, we deliver long-term value to
all stakeholders and leave a positive legacy”
Lawrie Conway, Finance Director and Chief Financial Officer
FY22 highlights:
■ Environmental standards embedded at all operations
■ No catastrophic or major (material) environmental
with a focus on environmental stewardship
events (including tailings)
■ Further aligned disclosures with the recommendations
■ Zero significant environmental fines
of TCFD through climate scenario study
■ Over 70%13 of electricity at Red Lake coming from
■ Progress on Net Zero commitments
renewable sources
■
7% reduction in emissions intensity per tonne of
material mined (compared to adjusted FY20 baseline)
■ Enhanced environmental stewardship through
governance and assurance practices
■ Detailed climate scenario study and decarbonisation
roadmap for Cowal
■
7,038 hectares of land within the current mining
footprint
■ 42% reduction in fresh water demand per dry tonne
■
752 hectares of land rehabilitated on mine sites
milled (compared to FY20 baseline)
■ Over $275,000 contributed to improve or enhance
environmental outcomes
13 Renewable electricity purchased from grid
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Environment
Approach
Environmental stewardship is essential in maintaining our social licence and trust within the communities in which we
operate. In accordance with the Sustainability and Strategic Planning Policy 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 Evolution risk framework to deliver against the social
licence obligations.
Environment
Environmental stewardship strategic approach
Continuous feedback and improvement
Mining life cycle
Proactive environmental
management
Environmental stewardship pillars
Response-driven
environmental management
EXPLORATION
DEVELOPMENT
PRODUCTION
■ Brownfield
■ Cowal
■ Cowal
and Greenfield
projects
■
Jurisdictions
include Canada,
Australia and
Joint Ventures
Underground
■ CYD Decline
development
at Red Lake
■ Ernest Henry
■ Mt Rawdon
■ Mungari
■ Red Lake
POST-CLOSURE
■ No mines are
at the closure
stage
PROGRESSIVE
REHABILITATION
■ Cowal
Waste Rock
emplacements
■ Pumped Hydro
Energy Storage
for Mt Rawdon
■ All operations
have historic
and ongoing
progressive
rehabilitation
■ Rehabilitation of
Exploration sites
undertaken in
accordance to
the schedule
We strive for sustainable consumption and production processes at all sites, to ensure we leave a positive legacy that
supports the needs of present and future generations.
Our strategic approach on environmental stewardship comprises both proactive and sustained environmental management,
underpinned by continuous feedback and improvement.
Evolution governance
framework
Risk based approach to
planning (includes climate
related risk)
Surface and groundwater
Effluent, tailings and waste
management
Efficient land use and nature
conservation
Embedded environmental
stewardship
Air and GHG emissions
Environmental management
system
Application of technology and
innovation
Circular economy evaluations
Climate change
Heritage protection
Post mine land use
Sustainable planning
Stakeholder engagement
Stakeholder environmental
capacity building
Environmental performance
transparency/Reporting
Timeous and effective
response to events/mitigation
of environmental harm
Assurance: Material risk
program
Climate Change adaptation
and mitigation plans
Continuous feedback and improvement
During FY22, we continued to:
■ Embed environmental stewardship across all operations
through integration of our Sustainability Performance
Standards and Strategic Planning Standards
■ Build capability and environmental awareness through
alignment with global standards and frameworks
■ Address climate related risk including water security
risk to reduce raw water demand
■ Plan for and manage extreme weather events such as
flooding and forest fire
■ Assess and implement energy efficiency and
greenhouse gas (GHG) emissions reduction initiatives
■ Monitor noise, vibration and air emissions to confirm
the effectiveness of the mitigating measures for the
protection and well-being of the environment and local
communities
■ Follow strict protocols for storage, handling, labelling,
and disposal of hazardous materials, including fuels,
chemicals and wastes for the protection of the
workforce and the environment
■ Monitor surface water, groundwater, land and nature to
■ Consult with stakeholders including the local
protect and enhance environmental values
communities on mine planning and post mine land use
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Environment
Environment
“We all want energy that is reliable and affordable, but that is no
longer enough. It must also be cleaner and therefore we need to
reimagine energy as we know it. This is a both a challenge and an
opportunity. It is clear to me, and to our stakeholders, that if we are
to play our part, we must act now – this is the right thing for the
world and the smart thing for Evolution”
Bob Fulker, Chief Operating Officer
Climate risk and Net Zero commitment (material topic)
Approach
We acknowledge that climate change presents an emerging
and increasing risk that will impact our operations,
stakeholders and the communities within which we operate.
It is an increasingly important issue for investors and
stakeholders, who are seeking to understand the impact of
climate change across their portfolios. A changing climate
also threatens the well-being of local communities.
We are committed to understanding and managing the
potential implications of climate change on the business
and stakeholders.
Responding to climate change is governed at Board
level through the Risk and Sustainability Committee.
The Leadership Team has primary responsibility for the
design and implementation of an effective position on,
and response to, climate change related risk. Robust
engagement with a variety of stakeholders (including
investors, policymakers, peer companies, non-governmental
organisations and communities) informs our climate change
strategy and operational objectives.
Milestone commitments in addressing the global issue of
climate change include:
Evolution’s climate change milestone commitments
■ Recognition of extreme weather,
water security and health and
well-being in the risk register
■ Emissions planning standard
■ Conceptual adoption of
the TCFD framework
■ Focused commitment through
emission reduction planning, strategic
group approach to renewable energy
sources, finanical modelling for
Emissions reduction funding potential
Pre-FY19
FY20
FY20
FY21
FY22
■ Release of Climate Risk Position Statement
■
Identification of physical and transitional
Risks including extreme weather, water
security, and energy and emissions as
physical risks and acknowledgement of
transitional risks and pandemic
■ Release of Net Zero Commitment, joining
UN Global Compact, reissue of climate
risk position statement, alignment with
ESG reporting frameworks, independent
materiality assessment
Net Zero commitment
In FY21, we committed to reducing our carbon emissions
by 30% (by 2030) and Net Zero by 2050 in line with
the Paris Agreement. This commitment recognised that
climate change is one of the most pressing problems
facing all of us and that we need to take serious action
if we are to have a future business, clean and productive
environment and healthy society.
The figure below illustrates the key levers and actions that
will guide us on our pathway to achieving our Net Zero
commitment. The key levers are:
1. Transition to renewables
■ Development of renewable solutions such as pumped
hydro at Mt Rawdon (refer to Case Study below)
■
2/3 of our emissions are Scope 2
2. Investment in low-emissions technologies
■ Transition to electric fleet or gaseous based fleet
■ Driven by industry and other key partners incl.
government, industry associations,
community groups etc
■
1/3 of our emissions are Scope 1
3. Biodiversity investment and management
■ Changing value of our ecosystems including nature,
biodiversity and rehabilitation (linked to Task Force on
Nature Related Financial Disclosures)
Conceptual pathway to Net Zero commitment
Phase 1
Phase 2
Phase 3
TRANSITION TO 100% RENEWABLE ENERGY
(~2/3 of current emissions are Scope 2)
Target >30% renewables
Wind, solar energy sources
New storage technologies
Develop value chain
partnerships
Target greater % of
renewables
Green hydrogen
Further develop value chain
partnerships
Leverage disruptive
technologies (not
required to achieve 100%)
Optimise value chain
partnerships
ELECTRIFICATION OF FLEET & EQUIPMENT
(~1/3 of current emissions are Scope 1)
Energy effi ciency initiatives/
low emission technologies
Further leverage disruptive
technology
Electric material movement
(BEV & FCEV)
Green hydrogen
Mine-of-the future design
Electrifi ed underground
operations
BIODIVERSITY INVESTMENT
& MANAGEMENT
Explore/invest off set and
biodiversity management
options
Alignment to Task Force on
Nature-Related Financial
Disclosures
Verifi ed and assured
biodiversity off sets
r
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2040
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2050
Net Zero target
58 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 59
Environment
Environment
The key pillars of work that shape our approach to achieving our Net Zero commitment are presented in the figure below.
Progress made in FY22 toward achieving our Net Zero commitment is summarised in the figure below.
Evolution’s approach to Net Zero
FY22 actions undertaken toward achieving Net Zero
1
3
5
7
EMISSIONS AND DATA
FORECASTING
• Current and forecast emissions data
split by value chain emissions
EMISSIONS REDUCTION
PATHWAYS
• Combining scenarios & financial
impact assessment to design
abatement pathways that are aligned
with science Renewables Strategy
VALUE CHAIN PARTNERSHIPS
• Understand current and future value
chains and emissions
• Build partnerships across the value
chain to meet common needs
INTERNAL AND EXTERNAL
REPORTING
• ESG Reporting
• Consistency between public
statements and activities
• Employee engagement
• Industry Association position
consistency
2
TCFD ALIGNMENT/ CLIMATE
SCENARIO ANALYSIS
• Assessing physical and transition
risks (regulatory, market, &
stakeholders) under various
scenarios (RCP, NGS etc.)
4
OPERATIONAL EMISSIONS
OPTIMISATION
• Optimising emissions reduction
projects between cost and strategic
advantage (i.e. NPV)
• Portfolio optimisation
6 PROJECT DEVELOPMENT
AND DEPLOYMENT
• Financing
• Capital allocation
• Strategic impacts
• Operational structure
In FY22, our mitigation and adaptation strategies to climate-related risks were further strengthened including: mapping
our value chain emissions to better understand emissions-intensive activities; integrating climate change measures into
strategic planning; increased focus on value chain partnerships; and continued education and awareness-raising on our Net
Zero approach and performance.
To align with climate science and the curbing of climate change aligned with the Paris Agreement targets, additional
validation of the decarbonisation roadmap was completed. In the medium-term, this will focus primarily on the energy
value chain, with a reduction in reliance on fossil fuels, moving to electricity generated by renewables. The longer-term
focus will be on storage and ways to replace diesel fuel in mobile fleets.
We have also established a dedicated Net Zero Project as part of the FY23 Balanced Business Plan, which will build upon
progress made in FY22. It will continue to embed our commitment to Net Zero into the capital investment process as well
as the business planning and operational delivery processes.
EMISSIONS AND
DATA FORECASTING
1
• Validated emissions baseline on
Life of Mine forecast dataset
• Validation against the
Greenhouse Gas Protocol
• Value chain emissions mapped -
focused on grinding, ventilation
and surface haulage
TCFD ALIGNMENT/
CLIMATE SCENARIO
ANALYSIS
2
3
EMISSIONS
REDUCTION PATHWAYS
• Conducted gap analysis against
Task Force on Climate-Related
Financial Disclosures - currently
at 90%
• Climate Scenario analysis at
Cowal - water security and
energy & emissions
• Developed high-level site
decarbonisation roadmaps
• Cowal Energy Audit undertaken
and findings fed into
decarbonisation roadmap
• Renewables Approach: a
draft sourcing strategy with
renewables component
developed for all assets
4
OPERATIONAL
EMISSIONS OPTIMISATION
VALUE CHAIN
PARTNERSHIPS
5
INTERNAL AND
EXTERNAL REPORTING
7
• Decarbonisation Evaluation Tool:
draft NPV and decarbonisation
tool developed for assessing
investment potential of
decarbonisation projects
• Decarbonisation opportunities
identified across the operations
• Member of Electric Mine
Consortium: focused on
emissions reduction through
electrification and other
technologies
• Sustainability Advantage:
participation in the Net
Zero Emissions Leadership
Accelerator Pilot
• Sustainable Procurement
Framework developed focused
on energy procurement
(renewables)
Performance: emissions (intensity)
performance tracking well against
the readjusted FY20 carbon
emissions baseline
Governance
We integrate climate change considerations into the overall business strategy through strong governance and risk
management, supported by risk management protocols and the Climate Risk Position Statement14. The management of
this applies ongoing continual improvement reflecting the transitional risk nature connected to emissions, which includes a
dynamic reporting environment. We support the Paris Agreement to avoid climate change and recognise activities either
directly or indirectly generate GHG emissions.
Climate-related risks are actively reported and supported by FY22 targets established to reduce emissions and improve
water security; prepare for extreme weather and health events; and to adopt responsible water management practices. The
Board is informed, via the Risk and Sustainability Committee, on progress against our climate risk targets as a minimum
three times a year. In FY22, the Board approved our approach towards a Net Zero future and also approved a Net Zero
strategic project for FY23 (as part of the Balanced Business Plan).
In alignment with the TCFD framework strategy and risk management pillars, we consider short, medium, and long-term
risks as noted below15:
■ Short-term: risks which may materialise in the current annual reporting period
■ Medium-term: risks that may materialise over a 2-5 year timeframe
■ Long-term: risks which may fundamentally impact the viability of our long-term business strategy and legacy extending
5-10-20 years
The inclusion of ESG factors within the remuneration strategy (referenced in the Remuneration section of the 2022 Annual
Report) reinforces the importance we place on delivering on our ESG commitments. This strengthens the link between
management remuneration and the management of climate risks.
14 Climate Risk Position Statement
15 All time horizons (i.e. short, medium and long term) were considered for each risk e.g for extreme weather events, we looked at cyclone (short term), droughts
(medium-term) and climate change long term
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Environment
Environment
Strategy
We are acutely aware of the potential social,
environmental, infrastructure and financial impacts that
the effects of climate change have on our operations.
We also recognise the crucial role of the mining sector
in contributing towards the shift to operating in a low-
carbon economy.
Our response to climate change is integrated into our
business strategy. A strategic approach to managing
environmental impacts and conserving natural resources
for climate related risk management has been developed.
Our approach acknowledges that climate change
influences the overall business through:
■ Physical climate-related parameters
■ Regulatory pressures from host countries
■ The Paris Agreement and alignment to science-based
climate targets
■ Community vulnerability in countries of operation
Climate scenario analysis
While accurately predicting how future policies and
climate impacts would unfold is challenging, scenario
analysis can help highlight the range of risks that climate
change may present.
In FY22, we completed scenario analysis of our largest
asset, Cowal. Cowal was selected to allow a comparison
of outcomes and to develop a deeper understanding to
inform future scenario analysis activities across
the portfolio.
The scenario analysis exercise was aligned with the
recommendations of the TCFD. Scenarios included:
1. Business-as-usual scenario where the world warms
over 4°C above pre-industrial temperatures (SSP5-
8.5 ‘Hot House World’)
2. Mid-range scenario (SSP2-4.5 ‘Slow and Steady’)
3. Well-below 2°C-aligned scenario (SSP1-2.6 ‘Speedy
Net Zero’)
The main sources of information for the scenario analysis
were the Intergovernmental Panel on Climate Change
(IPCC) (for physical risks) and the Network for Greening
the Financial System (NGFS) (for carbon pricing).
The analysis identified risks such as decreased annual
precipitation and water shortage from extended drought
and river flooding due to precipitation extremes,
electricity grid reliability and the potential impact of a
carbon price, at Cowal. These risk factors had previously
been identified and were further assessed.
In stress-testing against these scenarios, we’ve focused
on indicators that can be used to support internal
decision-making, while also informing stakeholders of our
position. Resilience measures will continue to be reviewed
and refined as the analysis evolves over time, including
options to incorporate more quantitative information.
Climate-related risks and opportunities
Our sites are in a range of climatic zones with varying vulnerabilities to both acute and chronic physical risks, including
extreme weather events; natural disasters; resource shortages; changes in the patterns and intensity of rainfall and storms;
water shortages; and changing temperatures.
Risk
Risk description
Water security:
Physical – chronic
■
If extreme climatic events worsen with increased water stress, floods, droughts, sea level rises,
as predicted by the climate models, further proactive management and mitigation measures
may be required to ensure that operations do not experience business interruption and loss of
production
■ Water-related infrastructure such as water supply reservoirs, dam spillways and river levees
have been designed for historic rainfall patterns
Carbon pricing:
Markets
Transition – policy
■
In response to climate change, governments will seek to reduce emissions from industry
through the implementation of rapidly rising carbon pricing mechanisms, such as emission
trading schemes or a carbon tax
■ This change presents a risk as there may be a period when increased carbon costs cannot be
passed through to customers
Each operation coordinates regular emergency scenario
drills in preparation for extreme weather events. Examples
of the scenario drills include inrush, fire, flood, cyclone
and significant hazardous spill response.
Opportunities associated with emerging low-carbon and
more energy-efficient technologies are being tracked
and assessed by operations and integrated into the
business strategies, including fuel-switching, negotiation
of contracts to increase the use of renewable and lower-
carbon energy sources, and improving energy efficiency.
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 the strategic planning integrated across
the business. The potential likelihood, severity, and
materiality of these risks and opportunities to operations
and communities have been proactively assessed
and forecasted. They have informed the reporting
requirements and targets outlined in:
■ Site Emergency Response Plans inclusive of
Trigger Action Response Plans at all operations
■ Pre-wet season planning at Ernest Henry and
Mt Rawdon
■ Detailed design of the Integrated Waste Landform
at Cowal
Regular monitoring of water level depths during extreme
weather conditions and the dissemination of extreme
weather preparation training at Mt Rawdon are examples
of Evolution’s resilience methods to managing extreme
weather events (or extreme climate-related natural
hazards).
Opportunity
Opportunity description
Operational efficiency
■ Driving decarbonisation through operational efficiency will play a key role in mitigating
climate change
■ Energy savings in diesel consumption can be gained through activities such as improved
payload management, idle time management and logistics and haulage optimisation
■ Opportunity to return economic value while also reducing air pollutants emitted from
construction and mining operations -generating greater income or returns for the same or
lower cost than an alternative may present commercial advantage to Evolution
Resource efficiency
Water
■ Potential for long-term climate change to impact water availability and quality
■ Demon strated efficiency in water use and management which provide enhanced corporate
reputation and/or investor ratings and new business opportunities and commercial
advantage to Evolution
Carbon pricing
■ Acknowledged global and national carbon price trends (operations are subject to an
environmental levy payment for Scope 2 emissions)
■ Developed a robust direct (Scope 1) and indirect (Scope 2) accounting program, including
resetting an emissions baseline and validating it in accordance with the GHG Protocol
■ Conducted a CO2 abatement cost review focussing on marginal abatement cost curves
(MACC)
■ Working on short and long-term plans to decarbonise the operations by 2050 (despite
exposure to carbon price being lower than others in the industry due to Evolution’s lower
emissions intensity). This includes plans to migrate to renewable energy sources and the
consideration of renewable fuel, electric fleet and/or hydrogen fuel adoption
■ Tested various carbon price forecasts for Australia and Canada as part of pre-feasibility and
feasibility projects
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Environment
Risk management
Risk management (including that of climate change related risks) is embedded into the day-to-day operational business
processes. Business risks associated with climate change impacts (including regulatory risks, physical climate parameter
changes and others) are noted as significant risks to operations.
Various risk management measures have been implemented, including conducting climate change risk and vulnerability
assessments to be continuously updated, integrating climate-related risks into mainstream risk management plans and
processes.
Climate-related risks and opportunities have been included in the strategic planning integrated across the business.
We manage physical climate risks through a risk management framework and in alignment with the Sustainability and
Strategic Planning Policy16 and TCFD. The potential likelihood, severity, and materiality of these risks and opportunities to
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 founded on 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 climatic regions. We are actively managing 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
Clear roles, responsibilities
and accountabilities
Sustainability and Strategic
Planning Policy
Sustainability Performance
Standards
Climate Risk Position
Statement
Risk Management Guidelines
(ISO 31000) for effective and
integrated risk management
Consideration of
climate-related risks
are assessed using
the same approach
applied to all 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
transitional) risks
Critical controls for
climate risk are being
managed effectively
Learning and
continual
improvement
Environment
The climate-related physical risks and mitigation identified as applicable to the 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
Extreme weather
events
■ Material damage to the
receiving environment,
assets and infrastructure;
disruptions to operations
and supply chains
■ Reduce raw water demand to support communities and
agriculture
■
Increase reuse of mine affected water through design,
construction and operation of process plant and tailings
facilities
■ Reduce total water demand through mine design and
process improvements
■
■
Investigate water saving technologies such as dry stacking
of tailings and optimised processing
Increase use of hypersaline and low-quality water not
suitable for other industries and communities
■ Real time dust, weather and stability monitoring including
open cut and underground mine and tailings
■ Mitigation barriers to protect sensitive receptors
■
Innovative dust suppression e.g. engineered tailings cover
pre-snow fall at Red Lake
■ Engineered design, construction and operation of all
significant infrastructure including buildings and plant
■ Trigger Action Response Plans for incoming threat of
cyclone/fire/flood/dust/storm etc
Energy and emissions
■ Footprint/demand creep
■ Developing energy
regulation, market demand
for sustainably produced
commodities and supplier
surety
■ Measures, targets – quantify scope 1, 2, 3 carbon emissions
■ Energy audits
■ Emission reduction planning
■ Partnering with industry for accelerated energy efficiency
■
Internal carbon pricing modelling/assessment
■ Technology and innovation pathways
Extreme health events
■ Food, water and viral
borne illness which could
be confined to site, the
community or global
■ Health and wellbeing programs and practice
■ Fatigue management and onsite medical care
■ Food and water standards and process
■ Pandemic response plans including protection of
communities and First Nation Partners and Indigenous
Peoples
■ Personal proximity devices for close contact tracing
■ Specialist support and advice
These risks and uncertainties could materially affect performance, future prospects or reputation. Material risks are
escalated to the Risk and Sustainability Committee and, as appropriate, to the Board.
16 Sustainability and Strategic Planning Policy
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Environment
Metrics and targets
We calculate key metrics and use targets to measure and monitor our performance and progress in managing climate-
related risks and opportunities in line with our strategy and risk management process. Our FY22 performance is presented
in the table below.
Metrics and targets
Status
Summary of progress in FY22
Goal: 30% reduction in emissions
by 2030 and Net Zero by 2050
(Scope 1 and 2)
■ Validated emissions baseline and forecast (in accordance
with the Greenhouse Gas Protocol)
■ Developed value chain emissions map
■ Modelled Net Zero pathway under a 1.5 degrees celsius and 2
On track
degrees celsius scenario
■ Developed site decarbonisation roadmaps which will be
integrated into site level emissions reduction plans in FY23
■ Conducted scoping and feasibility studies for electric vehicle
All operations complete 100%
actions in emission reduction plans
Achieved
use at sites
Key highlights:
■ CGO: 100% of underground vents work on demand,
monitored by sensors
■ CGO: Emission Reduction management plan developed
against life of mine plan
■ MGO: 100kg of old uniforms recycled via ‘Upparel’
■ MGO: Plastic wrap changed to a biodegradable wrap
■ MRO: Processing Plant Compressors were upgraded and
improved the energy efficiency by 16%
■ MRO: Wind turbine and solar options trialled for
telecommunications and weather towers.
■ RLO: Ventilation on Demand; ON post blasting only
■ RLO: New BEV Scoop ordered to site with a total of four
BEVs in service.
CASE STUDY:
Electric Mine Consortium
The Electric Mine Consortium (EMC), comprising
Evolution and other partner companies, has been
collaborating for over 12 months towards the goal of fully
electrified mines.
1.
Energy storage
2. Heavy underground equipment
3. Light and auxiliary equipment
In this short period, the collaborative approach has been
heralded as an example of inter-company collaboration
on key global challenges. The EMC noted that “never
in our experience have we seen this level of depth in
engagement and sharing between companies in such a
short space of time”.
Throughout the consortium process, significant
understanding has been gained of the broader industry
challenge of decarbonisation, and the role in which
electrification of mining operations can play. The EMC
has developed six working groups, each of which aim
to address a certain challenge area associated with the
transition to electrification. These are as follows:
4. Surface and long haulage
5. Mine design
6. Electrical infrastructure
The EMC is emerging as a key vehicle for the
decarbonisation of the mining industry and will remain
dynamic as the external environment continues to shift.
Environment
Task Force on Climate-Related Financial Disclosures
We recognise the recommendations of the TCFD, and
that operations may be impacted by future changes in
climate. In FY19, a strategic framework for climate change
which addressed governance, emissions assessments,
targets and initiatives, opportunities and threats and
communication was developed. Since then, we have
integrated a strategic climate focus to align with the
TCFD recommendations on Governance, Strategy, Risk
Management, and Metrics and Targets.
In FY22, a gap analysis of our TCFD disclosures was
independently conducted. The analysis validated
Evolution’s alignment to the TCFD framework as over
90% compliant.
Disclosure alignment with the recommendations of the
TCFD framework has been enhanced. This included
stress testing climate scenarios for Cowal and advance
understanding and disclosures of climate-related
financial impacts to the business. Clarifying the impact of
climate-related issues on operations and communicating
mitigation measures support our relevance for the
decades to come.
Evolution’s approach to TCFD alignment
Governance
Emission assessments
Targets and initiatives
Opportunities and threats
Communication
O R K
E W
FY22:
TCFD
Focus Area
M
A
R
F
C
I
G
E
T
A
R
T
S
Governance
Strategy
Risk management
Metrics and targets
“Clarifying the impact of climate-related issues on operations and
communicating mitigation measures supports our relevance for the
decades to come”
Fiona Murfitt, VP Sustainability
Criteria for updating baseline
Based on guidance from the GHG Protocol17, we will
update the baseline if there is a change greater than +/-
10 percent to our Scope 1 and 2 baseline year emissions
as a result of a major change in calculation methodology
or a change in Company profile (divestments/
acquisitions).
Refer to the FY22 ESG Performance Summary Data
document for our TCFD index and detailed disclosures.
Near-term emissions reduction strategy
In the near-term, electricity supply greening is the main
source of decarbonisation. As site decarbonisation
roadmaps are further developed and executed, energy
and emissions reduction work is being done at each
site to reduce consumption and wasted energy, and
improvement mechanisms are being shared across the
business. Options for renewable energy projects, site-
level efficiencies and conversion of power purchase
agreements are being studied. This includes the Pumped
Hydro Project at Mt Rawdon which has the potential to
make a significant contribution towards Queensland’s
renewable energy ambitions. Four major areas of
emissions present opportunities for decarbonisation:
power supply, mobile equipment, stationary combustion
and process emissions. To decarbonise these emission
sources and ultimately achieve the goal of Net Zero
emissions, activities to deliver cost competitive
reductions have been prioritised.
17 GHG Protocol refers to a set of comprehensive global standards issued by the World Resources Institute and World Business Council for Sustainable
Development to provide a framework to measure and report Scope 1, 2 and 3 GHG emissions from private and public sectors and across value chains.
66 Annual Report | www.evolutionmining.com.au
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Environment
Environment
Mt Rawdon open pit
Our progress on reducing emissions and supporting
climate action to date includes:
■
■
~30% of all electricity purchased from the grid was
renewable
Increasing transparency on climate disclosure by
formally supporting the TCFD
■ Collaborating with the Electric Mine Consortium to
reduce our carbon footprint through learning and
sharing planning and evaluation techniques and
technology and innovation
Existing solutions are actively being evaluated and
emerging technologies are being monitored to
determine the current and future viability of options. To
work towards Net Zero, we also continue to evaluate,
monitor and advance opportunities to:
■ Apply technology and innovation to lower emissions
(e.g. software monitoring of grinding efficiency,
adoptions of alternate/green reagents in processing)
■ Assess the potential for using emerging technologies
such as carbon capture and storage
■ Work with industry partners to advance carbon-
reduction technologies for mining
We continue to collaborate with partners as well as our
supply and value chain partners to identify emissions
reduction opportunities, including membership with the
Electric Mine Consortium.
CASE STUDY: Renewable powered
weather station and the Mt Rawdon
Pumped Hydro project
In keeping with our commitment to Net Zero and local
community engagement, the Mt Rawdon operation is
focused on a transition to renewable energy. Initiatives
during the operating phase include a renewable powered
weather station and for the post mine transition a
Pumped Hydro Feasibility Study for energy storage.
Mt Rawdon operation partnered with a regional wind
power company, Diffuse Energy, in a project to transition
their weather station fuel free. The weather station is
currently run on solar and has a backup that uses a
diesel generator to provide electricity.
The Maintenance team collaborated with Diffuse Energy
to install a wind turbine fan onto the weather station.
The $2,500 project supports a study into the feasibility
of similar equipment at the site.
The project further boosts the onsite usage of solar
energy and strengthens it with wind-generated
electricity. The weather station is set to be completely
emissions-free, and reliant on 100% renewable energy,
contributing to emissions reductions and leading to a
reduction in operating costs.
Integrated solar and wind will help to support the
installation of a regulator and battery capable of storing
energy generated by both renewable sources.
We are progressing a Feasibility Study on the Mt
Rawdon Pumped Hydro (MRPH) Project, which is
reviewing the conversion of the existing open pit into a
1-2GW pumped hydro project at the end of the mine’s
operating life. The MRPH Project is being progressed in
partnership with Infrastructure Capital Australia Partners
and the Feasibility Study is expected to be completed in
FY23.
Over the past year the MRPH Project has progressed its
design, stakeholder engagement, environmental surveys
and connection to the grid and while also commencing
in parallel with the permitting process, with the results to
date giving us further confidence in that the viability of
the MPRH project.
The MPRH Project is currently planned to be
commissioned in 2028 and can support the Queensland
government’s target of achieving 50% renewable
energy by 2030 as well as the Federal government’s
43% 2030 emissions reduction target by potentially
providing support to firm the supply of up to 6,000MW
of additional renewable generation (subject to the MRPH
project’s final configuration).
The MRPH use of the lower pit will be integrated into the
site’s progressive closure and rehabilitation, providing
ongoing jobs for the local community and extend
the mines contribution to the State economy and the
broader National Electricity Market (NEM). Planning with
decision-makers and experienced partners is ongoing.
Further information is provided on our website.
Mt Rawdon mine site - potential future
pumped hydro electricity generation plant
Energy and emissions (material topic)
Approach
We aim to reduce energy consumption and increase the use of renewable energy, while enhancing operational productivity.
When measuring emissions performance we apply a location-based method18, which reflects the average emissions
intensity of grids on which energy consumption occurs. Detailed monthly capture and analysis of the energy and emissions
performance is conducted in alignment with the Evolution Sustainability Standards19.
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 and aligned with the GHG Protocol due to the divestment of
Mt Carlton and acquisition of Ernest Henry and Kundana assets. This adjustment is reflected below in our emissions
performance.
Operations are proactively engaged in achieving the 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 recognise our contribution to greenhouse gas emissions, not only in terms of direct emissions, but also in terms of the
value chain and indirect emissions. Our Scope 1, 2 and 3 emissions are externally validated, with Scope 1 and 2 included in
this Report. The Scope 3 emissions are estimated values in anticipation of increasing data collection and achieving greater
transparency in our greenhouse gas reporting and we will continue to review and evaluate these over the coming year.
Performance
The FY22 Group emissions performance compared to FY20 is provided in the table below.
GHG emissions
FY22*
FY20 (adjusted
baseline)**
Change (%)
Greenhouse gas emissions Scope 1 (t CO2-e)
221,168
Greenhouse gas emissions Scope 2 (t CO2-e)
463,753
Total of Scope 1 and Scope 2 (t CO2-e)
684,921
222,928
477,450
700,378
-1%
-3%
-2%
*FY22 emissions actuals exclude three-month control of Mt Carlton and include 12-month data for Ernest Henry noting only six months of control
**FY20 emissions baseline validated in accordance with the GHG Protocol
**FY20 emissions baseline includes current/acquired assets and excludes divested asset (Mt Carlton)
GHG emissions broadly correlate with the energy-consumption trends because Scope 1 reflects emissions from
consumption of fuel while Scope 2 reflects emissions from consumption of electricity. In FY22, the total consumption of
energy from fuels and electricity continued to trend downwards with a 2% net reduction.
Red Lake are currently benchmarking the adoption of renewable energy for Evolution with 72% of their electricity from
renewable sources. Direct investment in renewable energy is the preferred strategy to address the transition to Net Zero
emissions with opportunity presenting through continuous greening of the grid in each jurisdiction Evolution operates in.
Solar and wind powered weather station at Mt Rawdon
18 Greenhouse Gas Protocol
19 Sustainability Performance Standards
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Environment
Environment
FY22 renewable vs non-renewable
electricity (GJ) consumption (%)
Renewable vs non-renewable electricity
consumption FY16 - FY22 (GWh)
FY22 Total energy consumption by operation (GJ)
30%
70%
6
4
5
2
9
4
3
4
4
8
1
4
9
1
4
4
4
5
5
1
5
4
6
3
8
0
8
6
0
3
4
8
8
2
1
3
2
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
Renewable electricity
Non-renewable electricity
Renewable electricity (GWh)
Non-renewable electricity (GWh)
Scope 2 emissions
Scope 2 emissions reflect two thirds of emissions, with Cowal operations in NSW contributing almost half of all emissions.
There will be an increased focus in FY23 on efficiencies improvement plans, looking to integrate solutions where they will
have the most impact.
FY22 Scope 1 and Scope 2 emissions by
operation (t CO2-e)
FY21 vs FY22 Total emissions (Scope 1
and Scope 2) by operation (t CO2-e)
9
2
3
9
9
1
,
5
7
3
,
1
0
1
l
a
w
o
C
1
4
2
0
3
,
7
0
6
6
,
4
1
2
4
7
,
4
7
2
5
4
,
7
1
4
3
6
,
3
8
1
,
9
2
e
k
a
L
d
e
R
i
r
a
g
n
u
M
n
o
d
w
a
R
t
M
1
9
0
0
2
1
,
7
6
7
4
1
,
y
r
n
e
H
t
s
e
n
r
E
,
4
0
7
0
0
3
,
8
3
2
0
9
2
l
a
w
o
C
8
4
8
6
3
,
6
3
3
8
2
,
e
k
a
L
d
e
R
4
7
7
6
6
1
,
8
8
4
9
1
1
,
6
0
3
3
3
1
,
8
5
8
4
3
1
,
2
6
0
5
9
,
0
0
6
2
9
,
i
r
a
g
n
u
M
n
o
d
w
a
R
t
M
y
r
n
e
H
t
s
e
n
r
E
Greenhouse gas emission Scope 2 (t CO2-e)
Greenhouse gas emission Scope 1 (t CO2-e)
FY22
FY21
Ernest
Henry, 18%
Mt Rawdon,
10%
Mungari,
16%
Cowal,
35%
Red Lake,
20%
Scope 3 GHG Emissions
Our (internal) Scope 3 emissions reporting is underpinned by the following principles:
■ Transparency in the methodology and selection of material sources – since Scope 3 is voluntary, we are very clear about
the path we’ve taken
■ Setting a good foundation and structure for reporting
■ Continuous improvement around disclosures in future years
According to the GHG Protocol, there are 15 reporting categories to consider when calculating Scope 3. In FY22, as a step
towards progress around Scope 3 GHG emissions associated with the value chain, we have:
■
■
Internally calculated Scope 3 emissions across five categories aligned with the Greenhouse Gas Protocol, including four
categories from upstream activities and one category from downstream
Identified which categories should be included and which can reasonably be excluded without significantly impacting
Evolution’s final emissions footprint
■ Validated data through third party
Scope 3 emissions will continue to be tracked and audited and will be fully disclosed in future reports.
Energy and GHG emissions intensity
Intensity ratios allow the analysis of energy consumption and GHG emissions data in the context of an organisation specific
metric. We use the “per tonne mined” intensity metric, as it enables us to analyse data in the context of activity at all sites.
The FY22 emissions intensity performance compared to FY20 baseline is presented below.
Emissions intensity (CO2-e)
FY22
(adjusted baseline)*
% change
Emissions intensity per tonne material mined (t Scope 1
and Scope 2 CO2-e/tonne)
0.0140
0.0151
7%
* Adjusted FY20 emissions baseline to include current assets and exclude divested asset (Mt Carlton)
FY20
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Environment
Environment
GHG emissions intensity FY20 - FY22 (t CO2-e/tonne of material mined)
Effluents and waste (material topic)
Approach
We ensure that the waste and product materials
generated from mining and processing are handled,
stored and disposed of appropriately. The most
substantial waste stream was 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 were handled in
accordance with the Evolution Sustainability Performance
Standards and licence conditions.
Operations managed waste in accordance with a site-
specific Waste Management Plan. Non-hazardous waste
streams such as cardboard, glass and plastic were
recycled, and general household waste were diverted
to landfill.
Each operation is unique in terms of potential for acid
mine drainage (AMD), neutral mine drainage (NMD) and
saline drainage (SD) potential generation through mineral
waste movement and placement. Where management of
potentially problematic material is uncertain or known to
occur, the operation implements progressive rehabilitation
activities to ensure the receiving environment is not
impacted during the operational and closure phases.
Management of mineral waste was achieved by
application of an integrated planning approach.
All mineral waste was geochemically categorised prior to
mining, haulage, treatment, placement and encapsulation
prior to rehabilitation. The integrated planning approach
ensures protection of environmental values of the natural
environment where we operate.
Performance
In FY22, the operations produced 27,088,189 tonnes
of waste rock to extract 22,815,747 tonnes of ore. This
represented a 1.19 ratio of waste to ore and a decrease
from the 3.3 FY21 ratio20. Moving less waste rock has
contributed to the efficiency across the operations.
The strip ratio decreased largely due to the inclusion
of Ernest Henry which uses a block caving mining
methodology. All material mined at Ernest Henry is
combined and processed thus zero waste is reported
for Ernest Henry. The strip ratio at Cowal reduced from
4.39 in FY21 to 1.25 in FY22. A higher proportion of waste
was mined in FY20 and FY21 due to the mining of the
cutback. The strip ratio at Mungari also reduced from 3.85
in FY21 to 2.87 in FY22.
Waste to ore strip ratio by operation FY20 - FY22*
7
5
1
0
0
.
8
4
1
0
0
.
7
2
1
0
0
.
0
0
3
0
0
.
3
5
2
0
0
.
0
8
2
0
0
.
9
6
1
0
0
.
7
4
1
0
0
.
5
2
1
0
0
.
4
9
0
0
0
.
0
2
1
0
0
.
8
1
1
0
0
.
1
8
1
0
0
.
7
0
2
0
0
.
0
1
2
0
0
.
1
5
1
0
0
.
9
2
1
0
0
.
0
4
1
0
0
.
Cowal
Red Lake
Mungari
Mt
Rawdon
Ernest
Henry
Evolution
Aggregate
FY20
FY21
FY22
and storage. The electric fleet brings the opportunity to
save on maintenance, cooling, and ventilation costs with
reducing expenditures related to diesel and power usage.
This cost-saving and energy efficiency has similarly been
seen in the recent changes to the underground vent fan
timers which are vital in clearing the drives post blasting
of headings. After assessing the timer programming, the
functionality of the fan timer switch was altered so that
operators can run them when needed rather than running
automatically. This project resulted in a 10% decrease in
total site electricity demand for two (2) 1-hour events
each day. This is now an embedded practice.
A 7% reduction in emissions intensity (per tonne of
material mined) was achieved in FY22 compared to the
FY20 baseline (0.015 CO2-e/t). The performance of 0.014
CO2-e/t material mined was within the target range. The
decrease in emissions intensity per tonne of material
mined are mainly attributed to efficiency improvements
at Cowal (19%), Mungari (26%) and Red Lake (7%). These
efficiency improvements can be attributed to a lower
demand for diesel and electricity per tonne of material
mined.
Evolution assumed control of Ernest Henry in January
2022 and are exploring opportunities to improve
performance in coming years through a transition to
renewables and application of innovative technology.
Case Study: Reducing emissions
through battery electric vehicles and
operational shifts
Each operation is empowered to implement emission
reductions specific to their operating strategy. For
example, Red Lake is pursuing fleet replacement and
energy efficiency through deepening partnerships with
Epiroc and Prairie Machine (Rokion) who are battery
electric vehicle (BEV) service providers, and through
operational changes via fan timers for the underground
ventilation.
Red Lake has leveraged off Epiroc’s offering of conversion
kits to transform diesel-powered loaders easily and
seamlessly to battery-electric driven. Two converted
diesel-powered Scooptram ST1030 machines have been
ordered for deployment underground. Two Scooptram
ST14 battery loaders designed based on the diesel ST14
version have also been ordered and are scheduled for
delivery in 2022. Three Rokion electric light vehicles,
two R100s and an R400 have also been ordered. These
items have been risk assessed in the field, have dedicated
charge stations and are capable of online data capture
7
3
5
.
9
3
4
.
5
2
.
1
7
6
0
.
6
5
0
.
8
8
.
1
5
8
3
.
7
8
2
.
5
5
.
1
5
8
.
1
2
4
2
.
3
4
6
.
9
1
.
4
3
5
3
.
6
0
3
.
0
3
3
.
9
1
.
1
Cowal
Red Lake
Mungari
Mt
Rawdon
Mt
Carlton
Total
Strip ratio FY20
Strip ratio FY21
Strip ratio FY22
*The strip ratio for Ernest Henry is 0 due to the Block cave mining method; all the
material being mined is considered ore.
Scooptram ST14 battery loaders
20 Adjusted FY20 figure to include current assets and exclude divested asset (Cracow).
72 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 73
Environment
Environment
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
activities are to be managed, including identification of
opportunities for waste minimisation, recycling and reuse.
During FY22, approximately 16,015 tonnes of non-mineral
waste was generated, of which 68% 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.
Recycling of non-mineral waste increased by 15% in
comparison to FY21, resulting 38% of the total non-
mineral waste being recycled across our operations.
CASE STUDY: Recycled core
trays & biodegradable sump lining
In line with growing discussions on circular economies
and reducing waste, we remain committed to being
innovative in the management of waste. At exploration
sites across Australia, this innovation has been seen with
trays that hold the core samples.
A few exploration sites have started utilising Discoverer
core trays which are made of recycled plastics. By utilising
Discoverer’s products, we are contributing to the 1.5
million kilograms of kerbside plastic saved from landfills
by Discoverer each year.
Tailings management (material topic)
Approach
We are committed to tailings management aligned with
global best practice for safety, the environment and
communities during all phases of the facility lifecycle. The
tailings management approach is open and transparent,
including a full list of tailings facilities (provided in the
Church of England Tailing Disclosure21).
The tailings facilities are planned, designed, constructed
and operated in alignment with leading industry practices
and guidelines. In alignment with the Global Industry
Standard on Tailings Management Standard (GISTM)22,
tailings management further integrates climate change,
stakeholder engagement, emergency management, local
communities, receiving environment, dam safety and post
mine land use.
Review and Assurance
Tailings risk assurance is achieved through rigorous
design, construction and operations management, routine
inspections and monitoring and independent review and
audit processes. Risk reduction is our highest priority,
and we are working toward this through continual review
and improvements of design and operation practices
to reduce the risk. Currently, a portion of the tailings
is repurposed at Mungari and Red Lake to stabilise
underground operations. This practice will include the
Cowal operation in 2023 as the underground mine is
developed.
Discovery team looking at core samples
21 Church of England Tailing Disclosure
22 Global Industry Standard on Tailings Management Standard
Performance
Material risk management: All sites have a Critical Control
program and regularly report on verification outcomes.
Monitoring and surveillance: All sites employ monitoring
and surveillance systems to monitor the facility
performance over time. Where applicable, real-time
monitoring is utilised and satellite monitoring is also
included for all the facilities. This information is integrated
into a management system with triggers and response by
all sites for active facilities.
Site-based responsible person: Sites are required to
identify a Responsible Person to ensure ownership and
proper management of the tailings facility.
Dam safety inspections: Formal dam safety inspections
are conducted at least annually by the Designer/Engineer
of Record, and reports are issued to the Responsible
Person for action on recommendations.
Independent review: We require operations to review
all designs and conduct dam safety reviews at regular
intervals. Where facilities have a High or Extreme
Consequence Classification it is required that the
operation engage an Independent Tailings Review Board
(ITRB) (LOD3). Red Lake established an ITRB in 2020
and other operations that complete annual tailings dam
risk reviews aligned with the requirements of GISTM. Mt
Rawdon will complete an ITRB in 2023.
Tailings governance: LOD2 tailings assurance is
undertaken annually with each operation conducting
a quarterly performance review focusing on
impoundment stability, integrity, risk review and the
planning coordination. Evolution Group, supported by
external advisors, provide oversight as to whether the
tailings facility design and performance meet accepted
standards/codes of practice. Performance reports are
provided to the Tailings Governance Committee and Risk
and Sustainability Committee.
Tailings risk was controlled and
further reduced in FY22 by:
7
active tailings
facilities globally
14Mt ORE
mined from open pit
8.8Mt ORE
mined from underground
640,273
gold ounces recovered
21.3Mt
discharged to tailings
24%
tailings reuse at Red Lake for
paste fill – 162 kt
14%
tailings reuse at
Mungari for
paste fill – 267 kt
Improved drainage recovery systems
in new construction at Cowal and
Mungari
Internal and external training from
operator to Board level
Continuation of quarterly Tailings
Governance meetings at site and
Group and oversight by the Risk and
Sustainability Committee
Independent biennial governance
audit for all operations and
Independent Tailings Review Board
for Red Lake
Recertification for Cowal and Red
Lake to the International Cyanide
Management Code
Studies – dry stacking, enhanced
thickening, reprocessing of tailings,
in-pit deposition
Board and Leadership Team Tailings
Awareness workshop
Tailings Community of Practice –
Material risk review; collaborative
development of Bowtie and Critical
Control Plans
74 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 75
Environment
Environment
Environmental compliance (material topic)
Approach
The operations are subject to environmental regulation in
the various jurisdictions in which it operates. Permitting,
approvals and legal compliance are crucial for the
effective management of mining-related activities to
protect environmental values as well as the interests and
rights of local communities.
Permit and licence provision supports minimum
requirements to ensure the health and safety of the
communities and the protection of the 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.
A uniform internal reporting system is used across
all sites. All environmental events, including non-
conformance 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).
Performance
In FY22, there were no significant fines paid (>
US$10,000) related to environmental impacts. There were
no material environmental incidents in FY22 (major or
catastrophic) and one reportable event (classified at a
moderate level) were notified to the relevant government
authority and the relevant agreed action was taken.
Cyanide destruction systems are adopted to reduce the
concentration of cyanide discharged to the facilities and
Cowal and Red Lake have been recertified against the
International Cyanide Management Code.
Air quality
Approach
We are committed to monitoring and mitigating its
impacts on air quality. The management of dust and other
airborne pollutants mitigates the impact on sensitive
receptors and occupational health issues.
The management and minimisation of air emissions
by mining operations is required to protect sensitive
receptors in the vicinity of the operations. Air quality is
managed according to the Sustainability Performance
Standards, sites’ licence to operate and regulations to
ensure that air emissions remain within the specified
emissions limits.
Air quality monitoring equipment is used to track and
validate the performance and efficiency in of air quality
management. Air quality monitoring is carried out by
third-party accredited laboratories on a quarterly basis
and externally reported. We continually seek ways to
improve air quality at all operations.
Performance
In FY22, all operations were in full compliance with
regulated limits for particulate emissions. Monitoring of
depositional dust at the operations met licence conditions.
Refer to the FY22 ESG Performance Summary Data
document for performance around air emissions related
to GHG emissions.
Water management (material topic)
Approach
We acknowledge access to safe, clean water is a
basic human right and central to maintaining healthy
ecosystems, to communities’ livelihoods and quality of life
and to the business’ Sustainability.
Globally, the social, cultural, environmental, ecological and
economic value of water has led to greater scrutiny of
responsible water use and expectations from stakeholders
for improved resource stewardship. This increased
awareness of water security, the acknowledgement of the
human right to water and sanitation, and recognition of
environmental linkages, such as climate change, form the
basis of our strategic approach to securing and efficiently
using water as a resource.
The Executive Chair is responsible for our water
management strategy and performance; the performance
is governed at the Board level through the Risk and
Sustainability Committee.
Our water strategy and operational objectives are
informed by robust engagement with a variety of
stakeholders, including investors, policymakers, peer
companies, non-governmental organisations and
local communities. We seek to minimise operational
water consumption, make effective use of water in the
processes, and ensure that any effluents are treated to
meet required water quality standards.
While the operations are not located in areas of
high-water stress, 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.
Performance
Total water withdrawn increased in FY22. The increase in
water withdrawn was due to the inclusion of Ernest Henry
operation, East Kundana Joint Venture and Kundana
operations at Mungari. Water security improved by a
decrease in freshwater demand: 0.31kL/dry tonne milled
(42% improvement in FY22 compared to FY20 baseline).
The 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 WBCSD
Global Water Tool, WRI Aqueduct Global Water Tool or
Water Footprint Network.
Total water reuse increased by 24% between FY21 and
FY22. Notable increases in water reuse were recorded
at Cowal (10%) and Mungari (17%), demonstrating the
increased focus and planning associated with water reuse
at all operations.
Water reuse FY18 - FY22 (ML)
0
8
6
8
,
8
1
0
7
,
5
9
1
,
9
5
4
5
8
,
8
8
0
,
1
1
5
7
4
9
,
2
5
7
2
1
,
2
0
8
,
1
1
0
7
8
,
1
2
3
6
6
4
1
,
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
2
2
Y
F
Each operation manages the hazardous chemicals
lifecycle in accordance with the minimum standards
outlined in the Sustainability Policy and Standards.
The use of hazardous chemicals is regulated by relevant
legislation in each jurisdiction and is subject to specific
licences, 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.
Performance
Total water use (ML)
■ Cyanide Code compliance at Red Lake and Cowal
Water recycled/reused (ML)
*Actuals reported as per assets owned at time of reporting
Detailed information on our water withdrawal, discharge
and consumption by source and region can be found in
the FY22 ESG Performance Data document.
In FY22, the water withdrawn intensity per tonne of ore
processed increased by 23%. The increase is attributed
to the inclusion of acquired assets Ernest Henry, East
Kundana Joint Venture and Kundana in the water
intensity measure. This is a whole of site water demand
measured as per DTM. Mungari with the inclusion of East
Kundana Joint Venture and Kundana has a relatively
high-water intensity of 3.10 kL/tonne; and Red Lake
has a water intensity of 4.11 kL/tonne. Noting that Red
Lake 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 controls.
Hazardous chemicals management
(material topic)
Approach
The operations have specific management plans and
guidelines governing collection, separation, storage, reuse,
and disposal of waste, reflecting local legislation and the
commitments in the environmental impact assessments.
Waste generation and disposal, including the activities
of waste disposal contractors, are monitored across all
operations according to regulatory requirements and
internal procedures.
Hazardous chemicals including the use of explosives,
cyanide and other dangerous goods are essential to
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 ecosystems.
■ Permit and or licence compliance for all explosives,
dangerous goods, chemicals and radiation devices
■ Chemical approval required prior to entering operations
including risk assessment
■ Emergency response spill scenario training at all
operations
■
Internal Audit and review validated by external auditors
Land use and biodiversity (material topic)
Approach
We have an important role in biodiversity stewardship
– contributing to the proper assessment of biodiversity
conditions, minimising habitat degradation, and planning
for habitat restoration during the life of mine cycle.
Local stakeholders are valuable sources of knowledge
concerning biodiversity, and we work closely with the
local communities to identify sensitive areas and monitor
any potential impacts. We incorporate all stakeholder
concerns into the environmental stewardship approach.
Our biodiversity strategy is linked to the stage of
development of 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. Sensitive
flora and fauna are only impacted where the internal and
external permitting process have been met and no other
alternative is available.
We strive to apply the mitigation hierarchy with the
ambition of no net loss in protecting biodiversity and
ecosystems. We do not conduct exploration or mining
operations in protected areas and commit to the
protection of World Heritage Sites.
Biodiversity Management Plans which meet the
requirements of the Sustainability Performance Standard
are in place at all sites, where required, and are regularly
reviewed. All activities are monitored in accordance with
obligations. Biodiversity assessments are undertaken
in the project planning phase to identify risk of impact
biodiversity and mitigation opportunities which inform
the development of operational plans at each site in
alignment with the standard.
76 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 77
Environment
Performance
■ No impact to any World Heritage Site
■ Disturbance permitting process embedded at all mine
MRO Sustainability Superintendent, Paul Wright, notes
that “Everyone associated with the local area and
Evolution can be proud of this trail”.
Social
Social
and exploration projects
Mine Closure: Rehabilitation (material topic)
■ Annual review of biodiversity management plans
Approach
■
7,038 hectares of land are currently managed under
biodiversity management plans related directly to
mining
■ Receiving environment protection through sediment
and erosion control including the Cowal Lake Protection
Bund
■ Partnerships with conservation NFP including Lake
Cowal Foundation and Burnett Mary Regional Group
■ The status of disturbed and rehabilitated land at the
operations can be found in the FY22 ESG Performance
Data document.
CASE STUDY: Mt Perry summit
walk opening
The creation of the Mt Perry summit nature walk was the
result of a partnership between Evolution, the Mt Perry
Community Development Board, Gidarjil Development
Corporation, North Burnett Regional Council, and
Queensland Parks and Wildlife Service. Throughout FY22,
the walk was upgraded to a safe and marketable Class 3
Standard, signage was implemented, tourism and local
economic development were stimulated, and training was
provided to 15 Indigenous trainees. Trainees were trained
in land management and construction qualifications while
building the track.
In August 2021, after two years of planning and a year
of construction, the new and improved Mt Perry summit
walk was officially launched. Created by local indigenous
trainees, with support from expert rangers and other
project partners, the walk is now open to the public who
can witness the diverse vegetation communities from dry
rainforest to fern-clad hillsides, and various fauna such as
wallabies, koalas, short-beaked echidna, and the rainbow
bee-eater.
The objective of our mine closure plans is to ensure
that the environment where mining activities take place
is restored to long-term sustainability, which may be
a similar condition to what existed before mining took
place, or a condition suitable for another use. We have
obligations to make operational and financial provisions
to ensure the mine closure plans, rehabilitation and
remediation activities are completed.
Closure planning is progressed at sites and financial
provisions updated accordingly. We plan for closure from
the earliest stages in the life of mines, ensuring allocation
of adequate resources for closure activities to be properly
implemented, managed and monitored throughout the
active-closure and post-closure phases.
The Mine Closure Planning Standard requires the use of
a responsible approach to land management through
the operational phase and into closure. Closure planning
requires the definition of site-specific closure objectives
and completion criteria for each operation. Closure
plans require to be developed to a level of detail that
reflects the stage of each mine’s life cycle, and they are
updated in accordance with the Standard and regulatory
requirements reflecting operational changes and
progressive rehabilitation requirements.
Progress reports on implementation and compliance
with ongoing reclamation commitments are submitted to
regulatory authorities and third-party auditors annually.
Performance
■ Enhanced stakeholder engagement in the planning
phase considered business as usual
■
■
7,038 hectares of land disturbed by mining activity
752 hectares of land rehabilitated
■ Site Closure Plans – 100% of all operational sites
■ Annual Mine Closure Assurance Audit and Mine Closure
Insurance Audit (LOD3)
■ Ongoing wetlands trial at Mt Rawdon
■ $416 million23 financial assurance approved by regulators
at 30 June, 2022 (refer to table below)
Operation
Type
Financial
Assurance
Cowal
Ernest Henry
Mungari
Mt Rawdon
Red Lake
Surety bond
Levy
Levy
Levy
Letter of credit
$64,902,072
$183,253,493
$49,473,395
$47,294,858
C$63,386,000
23 Red Lake’s rehabilitation liability converted from C$ to A$ using exchange rate as at 30 June, 2022
78 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 79
Environment
Health, Safety and Wellbeing
Health, Safety and
Wellbeing
FY22 highlights
COVID-19 management
supported people and the
community with minimal
operational interruption
96%
of actions in Safety
Improvement Plans
completed
100%
of material and critical
actions closed as per
target
$2.5M
in direct and indirect support to our people and
community since COVID-19 pandemic began
Refreshed audit program
completed with positive
independent assessment of
the protocols
Leading safety metric
improvements – proactive
reporting, field interactions,
action close out
Active reporting,
learning and sharing
culture supported by
weekly risk-based
storytelling sessions
Safe and successful
integration of two new
acquisitions and one
divestment
34%
reduction in Injury
Severity (compared to
FY21) during a period of
significant change
Increased services to meet
demand for mental health
and wellbeing support during
COVID-19
ZERO
fatalities
A strong culture of hazard
reporting continues with hazard
reporting up 84% in FY22
compared to FY21
80 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 81
Health, Safety & Wellbeing
Health, Safety & Wellbeing
Work health, safety & wellbeing (material topic)
Approach
Health, Safety and wellbeing has long been a core value
and strategic priority for Evolution. We are committed
to providing workplaces where our people including
contractors and business partners are physically and
psychologically safe, healthy, and well.
We take a holistic approach to risk identification and
management to provide a healthy and safe working
environment for our people. Risk management principles
are applied that seek to eliminate where practicable.
Where this is not possible, risk is managed within agreed
tolerability levels. This is supported 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.
In FY22, there were no work-related fatalities for
Evolution controlled locations or activities, and we
continue to build on efforts to improve health and safety
performance, reduce incident frequency and prevent the
recurrence of incidents. We believe that every injury is
preventable, with an ambition that we create a workplace
where people can thrive and contribute - where people
go home better than what they arrived.
The workforce remained actively involved in health and
safety throughout FY22 by participating in working
groups, pandemic crisis management teams, special
projects, business improvement initiatives, health
and safety committees. All activity sought ongoing
engagement, supported by designated employee health
and safety representatives.
We are never satisfied with our Health and Safety
performance and continual improvement requires a
collective effort across all levels of the organisation.
Evolution’s workforce is expected to comply with health
and safety requirements, supported by systems and
processes, including the Sustainability and Strategic
Planning Policy, and the associated Standards. Health and
Safety performance is measured using a combination of
lead and lagging indicators, with performance targets
established during the annual business planning process.
The primary lagging indicator for measuring health and
safety performance, and for benchmarking against peers,
is the Total Recordable Injury Frequency (TRIF). TRIF is
a Group-wide key performance indicator (KPI) and the
achievement of our annual safety targets forms part of
the remuneration package for employees and executives.
Other lagging indicators include the 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. The
Injury Severity rate looks at incidents in terms of the
actual number of days that were lost on average.
By continually striving to improve the health and safety
of our work practices, we can have a direct and positive
effect on the stakeholders, including our employees,
contractors, suppliers, and those who live and work in the
communities where we operate.
Governance, risk management & assurance
A strong health and safety culture is promoted across
the business through governance, with the Board being
ultimately responsible for Evolution’s health and safety
performance. The Leadership Team is accountable for
developing and implementing health and safety systems
and processes to deliver performance standards, with
General Managers accountable for performance at each
operation. We have health and safety committees at each
operation to support the leadership in decision making,
risk assessment, monitoring performance, and ensuring
widespread sharing of health and safety information.
Health and safety improvement plans have been
implemented across the business to achieve continuous
improvement in performance that is aligned with the
Risk management framework. This plan establishes clear
accountability for health and safety performance, details
the controls and practices for minimising hazards, and
ensures effective audits of health and safety systems.
There is also a requirement for regular reviews and
updates of these plans, informed by worker feedback.
Staying safe on site requires constant vigilance,
education, training and a high awareness of risk. We
strive to create strong safety culture grounded in risk and
hazard awareness. Some of the ways we work to embed a
safety culture include:
■ Leadership training: Site inductions, values training and
leadership essential training is undertaken annually. It
is also an expectation linked to targets and plans that
management undertake regular field safety interactions
■ Daily pre-start briefings: Each department holds a
health and safety briefing at the beginning of each shift
to discuss safety activities and review any incident that
may have occurred, including the findings and actions,
to consider how they relate to their own hazards and
controls
■ Monthly safety toolbox meetings: Each month
education and awareness campaigns on a wide range
of safety topics such as food safety, vehicle incidents,
hand injuries, fatigue management or the safe handling
of tools are completed
■ Regular safety inspections: All equipment and tools are
inspected at the start of each shift to ensure they are
fit for purpose. Regular personal protective equipment
(PPE) inspections are also conducted. It is a clear
expectation that workers comply with all requirements
and that they must not change or tamper with any
safety devices (including PPE)
■ Review, share and learn sessions: These calls are
undertaken weekly to share learnings related to
incidents so learnings can be shared to prevent
recurrence. This also promotes learning through active
storytelling and are supported by a two-page report on
the incident
■ Near miss reporting: We do not just report incidents
after they have happened. We also support proactive
reporting that includes any near-miss incidents, which
we view as an important early warning system that can
help prevent more serious incidents from occurring. This
includes reporting for all incidents related to drugs and
alcohol. Random testing occurs across all operations
■
Investigations and learning: Investigations, both
proactive and reactive and the sharing of outcomes
are a fundamental part of the approach to health and
safety. Incidents and any failure to adhere to established
obligations are investigated under a fair and just system.
All investigations outcomes are available online and
are also shared via a weekly incident update called the
“daily flash” report
Each incident is thoroughly reviewed and assessed by
the site Health, Safety and Environment (HSE) team to
identify the root cause and corrective actions to prevent
recurrence. The more near misses and hazards that are
reported, the better we can understand the risks on site
and work to manage and mitigate them.
Hazard identification and mitigation
Risk register
Each operation is supported by a risk register that
identifies the key risks associated with its operation. Each
risk is ranked according to its potential severity and is
supported by the risk source and the mitigating controls
required to reduce the potential severity to an acceptable
level.
Scheduled risk reviews are conducted at a site leadership
team-level and a regular review of safety management
across the business is undertaken as a minimum annually.
All leading and lagging indicators, and progress against
safety targets are reviewed. Additionally, all identified
corrective and preventative actions related to the lagging
indicators are assessed to ensure that they remain
relevant and effective or if additional mitigations are
required.
The risk register is updated as necessary to include any
additional key risks or controls which may have been
identified during a review of the performance indicators.
Incident reporting
It is mandatory for all employees and contractors to
report near-misses and incidents for investigation.
The level of investigation required is dependent on
the potential severity as determined through the
Evolution risk assessment matrix (RAM). Any event
rated moderate on the RAM is investigated and remedial
actions identified, with any High or Material events
investigated using a root cause analysis methodology.
All investigations are recorded within the incident
management system along with all corrective and
preventative actions which are tracked and reported
through to completion.
Hazard reporting
All workers are trained in hazard recognition, avoidance
and reporting. All hazards, regardless of the potential
severity, are entered into a hazard reporting system
including the corrective and preventative actions.
No hazard identified may be left uncontrolled and the
hazard reporting system is monitored on a daily basis
to track the close out of the corrective and preventative
actions. Any action overdue its target date triggers a
reporting and escalation process to the relevant level of
authority.
Take 5
Prior to the commencement of tasks, workers are
required to stop and assess the job at hand to identify
and control any potential hazards that may have not
already been addressed. The assessment is guided by
a ‘Take 5’ type checklist that assists in ensuring that
all possible controls are in place. Controls may include
additional hazard identification and/or controls through
a job safety analysis ‘JSA/JHA’, additional PPE, additional
training, or supervisor intervention.
Training
One of the important ways we embed safety culture
is through training which is integral to managing
health and safety. We continued to hold regular health
and safety meetings to review key hazards, risks and
required safeguards such as new-worker inductions,
emergency response and evacuation drills, crisis
management training, and basic hazard awareness
and task familiarisation. We also increased awareness,
communications campaigns, and training for employees
and contractors to support COVID-19 education and
prevention awareness, both on site and in the local
communities. Site-specific performance improvement,
capability programs and cultural initiatives are
implemented as required.
The approach to training includes building the value of
the importance of the topic – “the why”. It includes an
awareness and education component to help workers
understand the importance of staying safe on site, the
objectives of our policies and procedures along with
communication of procedures and standards and the
dissemination of technical knowledge.
Site-specific induction packages are completed prior to
arriving on site. These training packages allow operational
teams to receive site-specific information and transition
to site in a more streamlined manner. A robust health
and safety induction program is provided for employees,
contractors, sub-contractors and visitors. This provides
an overview of the business, vision and values; key
policies and procedures; and critical health, safety
and environmental information. It is compulsory for all
employees, contractors, sub-contractors and visitors at
Evolution’s sites to complete the safety induction, which
is deemed valid for two years post completion.
It is mandatory for all employees and contractors to
attend health and safety training relevant to their position
and the area in which they operate. Training packages
highlight the hazards associated with their position or
work area and the relevant controls that are in place
to mitigate these risks. The training material includes a
strong practical component to increase comprehension
of the training. It is reviewed regularly to ensure that the
material remains relevant, and employees and contractors
are refreshed periodically.
On average, each employee received 47 hours of health
and safety related training in FY22, largely associated
with annual refresher training. We continue to streamline
the training processes, conducting analysis of training
systems and onboarding process for all personnel joining
the business.
Communication
Regular health and safety bulletins and notices are
displayed on noticeboards, circulated amongst the mail
groups and discussed in the pre-shift meetings. The
content of these notices includes topics such as updates
or amendments to any policies or procedures, serious
injuries or incidents and the controls implemented to
prevent a recurrence, and a monthly update on safety
performance against performance indicators.
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Health, Safety & Wellbeing
Health, Safety & Wellbeing
A company-wide communication called the “Daily Flash
Report” is also sent out which includes an update on
incidents for the last 24 hours and a summary of the
month’s performance. The “Daily Flash Report” is also
used to share investigation findings once released as well
as other important health and safety information such
as industry alerts, monthly performance reports, general
communications, and shared learnings. These reports are
retained and stored on the intranet to ensure all workers
have full access to this information both current and
historical.
Performance
In FY22 we focused on building a learning and proactive
culture so that people fully understand the controls in
place relating to material and critical risks that keep them
healthy and safe in the workplace.
Each operation implemented 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 “excellent” to “requiring improvement” (at
one operation where the majority of injuries occurred).
Tailored programs and plans were designed to address
the specific needs of each site and were measured and
tracked which focus on leadership, in field interactions,
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 7024 recordable injuries during FY22, with
1825 being lost-time injuries, resulting in a TRIF of 10.3726.
Whilst the TRIF met the 10.75 target, the performance is
never at a place where we are satisfied, and we continue
to strive for improvement. 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, 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
the inclusion of a new material risk review process as
part of the FY22 assurance program. A deep dive into
the critical controls of six material risks across all sites
was conducted. This provided detailed analysis into the
current performance across the business and identified
areas of improvement and shared learnings. This new
process and findings were assessed and verified through
an external review and audit.
We are continually learning, improving, and sharing how
we create safe and healthy workplace with an emphasis
on preventing serious outcomes. There will be an increase
in use of technology and data driven insights to reduce
risk in the future.
Safety performance
comparison1
FY22
Number of safety interactions
45,096
Number of hazards reported
24,607
Significant incidents reviewed
with senior management (%)
100
Proactive significant incidents
27
TRIF2
TRIF target
LTIF3
Fatalities
10.664
10.75
2.81
0
FY21
49,107
13,337
100
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
7,128,241
5,612,323
5,323,912
4,570,433
1 Safety performance includes both employees and contractors and all assets, including Ernest Henry
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
4 10.37 excluding Ernest Henry
24 80 recordable injuries including Ernest Henry
25 20 lost-time injuries including Ernest Henry
26 Excluding Ernest Henry
Contractor health and safety
We communicate minimum expectations regarding
contractor health and safety requirements as a
component of the procurement process for all sites and
projects. These expectations form an integral part of the
signed agreements and subsequent contract reviews
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 are clear in
communicating the requirements and accountability for
supervision to ensure work is being carried out safely and
in line with Evolution’s Performance Standards.
We operate a ‘one team’ approach and report and review
all incidents including near misses from all workers,
including contractors. Like all employees, contractors are
required 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, work must cease 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
operations and are rigorously reviewed and assessed
to enable the business to be prepared to respond to an
incident and/or an emergency. The emergency response
teams comprise of workers 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 we respond 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
Group Crisis Management Team (CMT) in the event of a
crisis, and/or the site Incident Management Team (IMT),
both at a site and at a Group level.
FY22 has been a year where there has been an ongoing
and active CMT and IMTs application with responses
to floods, fires and ongoing management of COVID-19
across all locations. Specific examples where IMTs have
been established with support from a CMT include
COVID-19 at all locations, cyclones at Mt Carlton, flood
and rain events at Cowal, Red Lake and Mt Rawdon and
forest fires at Red Lake.
The capability of 234 members in the Emergency
Response Team (ERT) continued to be built to support
operations and to assist the communities through
significant incidents or threatening situations. 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
workers, assets and neighbours.
Wellbeing
We pursue a preventative approach in promoting a
healthy lifestyle and this is done by raising the employees’
awareness of their own physical and mental health status
with the expectation that this will inspire employees to
make key positive lifestyle changes.
A healthy workforce results in reduced absenteeism
(which can be costly in both business and personal
terms) and fosters an engaged and motivated workforce
functioning as part of a complete team. Health-related
campaigns are regularly communicated and discussed
through pre-shift meetings to promote awareness,
management, and preventative measures.
The range of topics covered are identified based on
prevalent medical conditions, and include common
noncommunicable diseases, communicable diseases,
mental wellbeing, personal hygiene, fatigue management
and the effect that seasonal environmental changes may
have on the body.
Mental health
There is an increased focus on the mental health of the
workforce. A mentally healthy workplace is a shared
responsibility between Evolution and its employees.
During the year, the following mental health initiatives
were undertaken:
■ Community events including R U OK? Day, Mental
Health Month, Movember, and the Blue Tree Project
■ Engaged psychologists and specialists to run
information sessions on mental health awareness and
provide COVID-19 specific health information
■ Supported training specific to psychological safety
All employees and their families continue to have access
to the Employee Assistance Program (EAP), which
provides confidential professional counselling and support
to employees with personal or work-related difficulties.
During FY22, 50 staff accessed 172 EAP sessions. Benefits
of both consultation types are leveraged to support
the workforce.
Capitalising on the benefits of an integrated care model
requires strong leadership, professional commitment,
quality and governance, and good management
structures. A proposed integrated health and wellness
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Health, Safety & Wellbeing
Health, Safety & Wellbeing
people are briefed prior to departing on any medium to
high-risk travel locations and support is also provided in
ensuring the safety of our people during the COVID-19
global pandemic. Given that geopolitical locations of
the operations, travel is also generally restricted from
geopolitical sensitive locations. Strict governance and
sig off protocols remain in place for all overseas travel
with oversight and approval required from the respective
Leadership Team member.
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.
An Evolution Community of Practice (CoP) has been
formed to champion a program of activities aimed at
reducing vehicle incident and near misses across the
business. This is focused on reducing risk through both
driver behaviour and targeting technological solutions to
improve the safety outcomes of vehicle operations.
Performance
100% of charter airlines in use through FY22 have
undergone the required third-party audit, confirming
compliance to regulatory and Evolution minimum
standards. There were no aviation related events in FY22.
Vehicle safety was an element of the FY22 assurance
audits with a Material Risk Review completed of the
Critical Controls identified at each site in relation
to Vehicle Interactions risks. Whilst improvement
opportunities were identified across all sites, there
were no risks requiring immediate action to be taken.
Action plans have been developed to address critical
control improvements from all audits which are tracked
and reported on through site risk review meetings and
findings will also be linked for learning to the CoP for
vehicle safety.
service at Evolution will continue to support an
integrated approach to care, where mental, physical and
psychosocial health care with wellbeing initiatives so
assessment, treatment and management of mental health
issues are focused on the needs of the individual.
Ways of working
Significant changes to the way we work have been made
in response to the COVID-19 pandemic. Employees have
been supported to find new ways to connect virtually,
develop and implement innovative solutions, and perform
their roles with increased agility. The most recent
employee engagement survey highlighted the value our
employees place on flexible working and the manner in
which it has been delivered.
Evolution’s flexible work environment has been a core
strength in supporting the employees during this time,
aided by employee-defined ways of working charters and
our Pandemic Leave Policy.
Fatigue management
We recognise the risks associated with employee
fatigue and the responsibility in providing the necessary
resources through policies, awareness, empowerment and
tools to mitigate the risks and maintain productivity.
As part of the employees’ duty of care requirements, all
individuals have an obligation that they arrive to work
in a satisfactory physical, mental and emotional state.
It is regularly communicated that every employee is
empowered to stop a work activity that they consider
hazardous and to report without prejudice, any issues of
fatigue to their supervisor.
Accommodation areas are structured to ensure that
employees’ welfare needs are addressed and that there
is suitable rest between shifts by implementing noise and
time curfews in these areas so that they are conducive to
an uninterrupted sleep.
To ensure that the controls in place are effective, a
fatigue investigation checklist is completed for all
incidents potentially related to fatigue to identify any
possible areas for improving fatigue management.
This is supported by mandatory fatigue training to be
undertaken as part of induction at operations.
CASE STUDY: Little Wings
Sponsorship
We operate in regional communities and acknowledge
like many rural and regional areas, there can be obstacles
in gaining specialist medical care. A donation from
Evolution allowed one-year-old Heath Barber to board
his last charity flight home from Westmead Children’s
hospital, following his final appointment in Sydney. Little
Wings applied for a grant from the 2021 Cowal Partnering
Program to support the non-profit. The successful grant
application means the non-profit can stay in the air
providing free, professional, and safe transport services
to sick children, like Heath, in rural and regional NSW. This
sponsorship and donation supports the resilience of the
community and the health and wellbeing of the people
within it.
Flight from Westmead Children’s Hospital
Transport safety (material topic)
Definition: Road and aviation incidents - includes
transportation to/from and within the site.
Approach
The risk related to transport safety (road and aviation)
varies based on the activities of the operations, the
location of assets and the local environments in which
we operate. These activities include the movement of
people, delivery of products or transporting goods and
equipment.
Minimum standards have been developed to define key
requirements related to transport safety and are outlined
within the Aviation and Travel, and Fixed and Mobile
Equipment Standards held under the Sustainability
Standards. Vehicle Interaction and Aviation have been
identified as Material risks at a Group level which require
bowtie risk assessments and critical control plans to be
in place. Verification activities are undertaken to verify
critical controls are effective and functioning as designed.
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, with external specialist
support engaged to assess specific aviation technical
matters and obligations.
International SOS have been engaged to support the
health, safety and security of our people as they travel
internationally and domestically. Travel is registered,
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People and Culture
People and Culture
People and Culture
“Evolution has always focused on creating a
positive and agile culture where our values
underpin everything we do. We are equally
committed to creating a fair, inclusive
and diverse workplace that supports us in
attracting and retaining talent”
Paul Eagle, VP People and Culture
People and Culture
FY22 highlights
Introduction of
leader-led Inclusion
and Diversity
initiatives
100%
of employees had meaningful
values and culture conversations
with a senior people leader
30%
of the Graduate
Development
program hires
in FY22 were
females
Continued to engage our employees,
seek feedback and actively work on
making Evolution the highlight of our
people’s careers, maintaining strong
engagement results despite the
impact of COVID-19
Built cultural awareness
through training and
collaboration with local
Indigenous communities
82%
of employees choosing to
stay in a competitive market
20%
females in
management
positions (increase
from 17% in FY21)
Analysis and alignment
of gender pay parity
as a key component
of the FY22
Remuneration review
72%
local employment across
our operations (compared
to 67% in FY21)
Updated Evolution Leave
Procedure to provide
employees with benefits that
address key social issues such
as closing the superannuation
gap for primary care givers on
parental leave and supporting
victims of domestic violence
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People and Culture
People and Culture
Approach
Our people underpin our success, supported by our
values. We work hard to strengthen our culture of respect
and transparency, and we actively listen to our people
and address concerns.
We are focused on attracting and retaining the best
talent and providing a dynamic workplace that offers a
range of experiences, career development opportunities,
and an inclusive environment where all employees are
treated with dignity and respect.
We are an equal opportunity employer who does
not discriminate on the grounds of gender, race, age,
ethnicity, nationality, disability, sexual orientation,
relationship status, religion or other attributes. We are
committed to respecting differences and enabling a
diverse mix of people to work effectively together, by
creating an environment where all people feel respected,
connected, and can do their best work.
We have a range of policies in place that outline the
expected standards of behaviour and create the basis for
an inclusive and diverse workforce, including our code of
conduct, Inclusion & Diversity Policy, and
Whistleblower Policy.
Performance
As of 30 June 2022, Evolution employed 2,689
permanent, fixed term and casual employees, compared
to 1,977 in FY21. The acquisitions during the financial
year expanded the workforce with the addition of
588 employees at Ernest Henry, 186 employees at
East Kundana and 125 at Kundana. During FY22 we
also divested our Mt Carlton operation which reduced
our workforce by 149. 82% 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 decreased
from 20% in FY21 to 19% in FY22 due to acquisitions
and divestments with female representation at Ernest
Henry lower than that at Mt Carlton. Whilst the overall
representation of female representation decreased, the
number of females in management positions increased to
20.1% in FY22 from 17% in FY21. Approximately 30% of the
Graduate Development Program hires 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. Indigenous makes up 6% of the
Evolution workforce.
Inclusion and Diversity (material topic)
Approach
We recognise the benefits of having an inclusive and
diverse workforce, where people’s diverse experiences,
perspectives and backgrounds are valued and utilised.
We aim to have everyone at Evolution feel respected,
comfortable and confident to bring their best work-self to
work every day and to grow both professionally
and personally.
Our people are the most significant enabler as they
drive business performance and success. It is our role to
ensure that the workforce feels equipped, engaged and
motivated to succeed. We do this by providing a safe
workplace (physically and psychologically), a supportive
team, strong leadership, meaningful work and career and
development pathways for those who have the appetite
and ambition.
Our refreshed Inclusion and Diversity Policy outlines our
commitments and applies to all aspects of employment,
including recruitment, training and development,
remuneration and performance management.
We believe in equal pay for work of equal value and
continue to identify and address any gender pay gap
issues. In the FY22 Remuneration review we analysed
the remuneration of employees specifically addressing
gender-based pay parity and alignment with market
conditions. We report annually to Workplace Gender
Equality Agency (WGEA) and use the report and industry
comparisons to look for improvements in policies and
practices to address any gender pay disparities
within Australia.
In FY22, our leave procedure was updated to close the
superannuation gap for people on parental leave. This will
see primary carers superannuation topped up on their
return to Evolution following their primary parental leave
for the period of up to 12 months. In addition, to support
the important issue of domestic violence, employees
are able to access an additional 5 days of paid domestic
violence leave in addition to those entitlements already
provided for under the Fair Work Act.
Inclusion awareness/Inclusion and Diversity project
We launched the Inclusion awareness project in FY22
to support our values driven culture, the communities
where we operate and our people to feel like they are
included and belong at Evolution. Inclusion drives more
positive diversity, and diverse backgrounds and thinking,
respectful teamwork, innovative outcomes and stronger
business results. We:
■ Established a group of Inclusion Awareness (IA) project
champions representing all sites and their interests to
provide input and two-way feedback into Evolution’s
Inclusion and Diversity efforts
■ Adopted a leader led approach to educating our
leaders and employees around Inclusion and Diversity
and establishing a baseline of what good looks like in
this space
■ Developed fit for purpose learning modules for our
people, offering face to face and online content
■ Managers once removed held “Living our Values”
conversations to check in on culture, values and
inclusion at Evolution
■ Conducted site audits of their inclusive practices,
facilities and symbols
■ Launched an Inclusion and Diversity intranet portal page
& Podcast – a Yarn or Two, and developed Inclusion and
Diversity story videos, featuring Evolution people
■ Surveyed our people to see what they thought about being their best selves at work and the supportive culture. We remain
dedicated to achieving a high performing culture with values and reputation as non-negotiables as outlined in our strategy.
With strong support from the Board and Leadership Team, the Inclusion and Awareness project will continue in FY23
(renamed as the I&D Project), as we recognise it is critical that we further increase momentum in this area and building on
an inclusive and diverse culture is something that takes time and continual focus
■ Actively communicated and discussed topical reports such as the Rio report to support open dialogue on expectations and
planning for our Inclusion & Diversity activities
Performance
During FY22, our workforce achieved 19 per cent female representation, and employees identifying as Indigenous
accounted for 6 percent of our workforce.
Refer to the FY22 ESG Performance Data document for more information about Evolution’s inclusion and diversity
performance based on age, gender and Indigenous representation.
As at 30 June 2022
As at 30 June 2021
Australian industry average
at April 2022
Overall female representation
19%
Management female representation
20%
Non-management female
representation
18.9%
Overall Indigenous representation
6%
20%
17%
20.2%
7%
19%
N/A
N/A
N/A
We undertook a range of inclusion and diversity related
initiatives during the reporting period which included:
■ Education of leaders on inclusive practices, behaviours
and processes including hiring practices
■ Continued to develop awareness and capability, through
the onboarding and refresher onboarding programs,
whereby we do not tolerate any form of unlawful
discrimination, harassment or bullying or any other type
of unethical behaviours that are not in keeping with
Evolution’s values
■ Reviewed and modified the Induction program to
highlight our commitment to inclusion and diversity
■ Reviewed the Leave Policy and Procedure that delivers
more favourable entitlements and benefits for Parental
Leave, Community Leave and Domestic Violence Leave
and Review of the Inclusion and Diversity Policy
In FY21, we launched the Cultural Recognition Position
Statement which reaffirmed our commitment to the
reconciliation process. Promoting Indigenous culture and
building the cultural awareness of our workforce is critical
to building relationships based on trust and respect.
In FY22, to further embed the commitment we developed
an Indigenous Relations approach which outlines how
we work in partnership to build cultural awareness,
knowledge and competency into our business practice,
empowering our people to be informed and considered
in our approach to partnerships, inclusion and diversity
and advancing outcomes for First Nation Partners and
Indigenous Peoples.
In FY23, we will launch an Australian focused cultural
competency program which outlines learning options to
build awareness of Aboriginal and Torres Strait Islander
cultures, histories and achievements. Cultural competency
is about personal, ongoing development and education
and this training will support the development of
Evolution leaders and First Nation relationship managers.
Cultural recognition
Other activities include:
Our vision for cultural recognition is one where all First
Nation Partners and Indigenous Peoples have equal
access to opportunities and resources, are treated equally
in all relationships and their cultures and histories are
celebrated and respected. Through cultural recognition,
our capacity to engage and collaborate effectively and
authentically will be enhanced and improve the outcome
for all parties.
Engagement occurs via our Sustainability teams, which
informs and supports the functions and sites to help
them understand Indigenous cultural protocols. These
teams also work with community leaders and recognised
Indigenous businesses to develop plans that effectively
deliver work across homelands which respect their ongoing
traditional custodianship and provide lasting employment
and subcontractor scope of work opportunities.
■ Participating in National Reconciliation week and
NAIDOC week celebrations
■ Holding smoking ceremonies conducted by local
Traditional Owners at the commencement of projects
■ Providing support systems to the business to increase
procurement with Aboriginal and Torres Strait
Islander businesses
■
Including a supported prequalification process for
inclusion of Indigenous businesses into our supply chains
■ Working with several Indigenous joint venture
partners to enable growth and expanded employment
opportunities for their people
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People and Culture
People and Culture
■ Embedding best practice cultural heritage monitoring
within large-scale on-country project deliveries
■ Nomination of traditional custodian business, Gidarjil
Development Corporation, for an industry award
celebrating Indigenous excellence
■ Development and distribution of Acknowledgement
of Country and land acknowledgement resources and
protocols
■
In FY23, implementation of Indigenous trainee and
apprenticeship programs at Mt Rawdon and Mungari,
and an Indigenous employment program at Ernest
Henry
We are committed to increasing our cultural competency
and capability, and to being an organisation that
demonstrates leadership and respects Indigenous
communities right across Australia and Canada.
CASE STUDY: NDRL Indigenous
All Stars game
Mt Rawdon and the Gidarjil Development Corporation
proudly came together to host the inaugural Northern
Districts Rugby League All Stars game in Gin Gin on 4
September 2021. The Mt Rawdon team was integral in
organising and hosting the event and were also major
sponsors of the game.
The Mt Rawdon team had been eager to support the
significant inaugural event within the local area that
could hopefully become an annual showcase event for
the region. Highlights of the day included a men’s and
women’s All Stars game, a smoking ceremony, cultural
dancing, and family entertainment. The jerseys utilised
by the teams were also created by a local Indigenous
artist, Chern’ee Sutton, who noted “It’s one thing to see
a jersey worn in one of the big stadiums, but it’s another
to see my design used in my local community” [Source:
BundabergNow].
The day was met with overwhelmingly positive feedback
with media attention across the region and from the
QRL and NRL. In the BundabergNow news platform,
Mt Rawdon’s Sustainability Manager Paul Wright was
proud in saying “We believe this sporting event is a great
opportunity to build on the positive relationships within
(the) community and demonstrate true reconciliation
across the region and showcase some of the local
sporting talent.”
Employee engagement (material topic)
We understand that an engaged and high performing
workforce is essential for the success and growth of
the business.
Bi-monthly voluntary employee engagement (via the
Teamgage platform) surveys are conducted, providing
people with an opportunity to let their leaders and team
members know what is important to them. The survey is
an important opportunity for people at all levels of the
workforce to provide honest feedback on how Evolution
performs across a range of key areas including excellence,
accountability, honest conversations, safety, collaboration,
respect, wellbeing, culture and belonging.
The results of the survey demonstrate that we
successfully sustained or improved over the period
against key culture measures, which are aligned to
our values.
Our overall combined engagement score was 79, which
is a strong result, representing a slight uplift from FY21.
In FY22, in line with our Inclusion and Diversity focus,
questions were added in addressing how comfortable
our people felt in bringing their best self to work, and
how supportive their site/team culture was in enabling
this. These questions received scores of between 71 – 91,
representing an encouraging result.
To address the valuable feedback from this survey, people
leaders consult with their teams to create and implement
action plans designed to improve the team effectiveness
and the environment within which they go about their
daily work.
Talent attraction and retention
(material topic)
Talented people are very important to the business, and
we are always keen to identify, attract and retain team
members who are highly skilled, and strongly aligned
with our values. We develop employees by engaging and
investing in their futures through a variety of internal and
external development offerings. We encourage people to
take up opportunities for development that complement
their individual needs, short and long-term career goals
and are aligned to business requirements. We focus on
developing people both personally and professionally,
which enables us to build organisational capability
and capacity.
Training and education
Extensive training is provided to increase or improve skills
and knowledge 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, Company values and
training and development needs and goals.
In FY22 the continued focus on development, leadership
and retention was measured through:
■ 81.5% of people fulfilling their stated development goals
■
Improved continuity in our leadership pipeline
effectively retaining and attracting top talent in the
management group
■ 30% of our leaders participating in dedicated leadership
development training, including three cohorts in the
senior leader coaching program and GOLD mid-senior
leadership program
■ All leaders at the superintendent level and above
participated in a multi-year leading inclusion program
aimed at leading with an inclusive mindset
and behaviours
■ 41% of vacant roles appointed through succession and
internal candidates, against a target of 35%
■ Delivery of a total of 128,306 training hours in FY22: an
average of 47 hours per employee (compared to 59
in FY21)
The rollout of our refreshed Leadership Development
suite of programs continued, underpinned by the
leadership behaviours. The leadership suite includes
leadership essentials; practical bite-sized learning for all
leaders, delivered on site; and leader induction, which is
aimed at supporting new and emerging leaders around
the fundamentals of being an effective leader. The
upgraded GOLD mid-senior development program was
delivered, focused on building leaders who are values
driven, resilient, agile, commercially minded, inclusive and
delivery focused. The Leader as Coach program was also
introduced in FY22 to support coaching capability with
senior leaders.
Graduate program
Our Graduate program has been delivering diversity
and equality in the graduate talent pipeline underpinned
by a robust and engaging recruitment and selection
process since 2013. A seventh cohort of new graduates
were welcomed to the business in January 2022. 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 plan.
In FY22, we undertook several initiatives to enhance
employee attraction and recruitment and better position
Evolution to achieve its ambitious growth plans over the
next two to three years. Initiatives included:
■ Launching an Employee Value Proposition project to
uncover why people join and stay, the main drivers
around their employee experience and the key channels
and approaches we can leverage to source great talent
■ Learning from the “Living our Values” conversations
with our people, stay interviews, data from exit
interviews, and employee surveys, to help inform
employee retention initiatives
■ Formalising flexible work arrangements, allowing
employees to work in ways that better suit their lifestyle
while maintaining access to development and career
progression opportunities
■ Enhancing the Employee Referral program to
supplement existing recruitment strategies. This
program incentivises current employees to refer suitably
qualified and skilled candidates to Evolution. Between
November 2021 and May 2022, 11% of new starters were
a result of referrals from Evolution employees
■ Continuing to review job advertisement templates
to ensure employment messaging attracts a diverse
workforce
■ Consolidated the reporting of recruitment statistics
through enhanced recruitment dashboards
We reviewed feedback from the candidate, hiring
manager and onboarding surveys to enhance our hiring
and onboarding practices and experience. Social media
channels, e.g., LinkedIn and Facebook, are used to
showcase diversity through sharing employee stories,
community initiatives and local activities. Partnerships
with Work180, JT Academy, Gold Industry Group and
other local and community associations helped to deliver
targeted talent attraction messaging to the candidate
market.
Retention rate
Strong levels of retention have been maintained across
the workforce in a highly contested and competitive
market. This reflects the targeted work undertaken
to attract and retain quality people to and within the
business. We continue to provide an environment where
employees want to do their best work, learn and develop
and experience the highlight of their career.
Recognising and rewarding our people
We have built a culture where our people ‘Act Like
an Owner’ (ALO) by treating Evolution as if it is their
own business. In FY22, 97 Group ALO initiatives were
generated that delivered significant value for the business
through change, improved safety, innovation, cost
reductions and efficiency gains.
We are in our eighth year of offering all eligible Australian
based employees $1,000 worth of Evolution shares,
through the employee share offering program, enabling
our employees to be owners of the business.
We undertake an annual pay and bonus review, aimed at
recognising and rewarding employee outcomes aligned
to organisational goals as well as the efforts of our people
throughout the year.
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People and Culture
Community
Employee relations
Our approach to employee relations focuses on
direct engagement with employees, establishing and
maintaining strong working relationship with employees
and unions, being proactive in consulting on any change,
and providing open forums for employees to
raise concerns.
We ensure compliance with employment law obligations
and pay in accordance with enterprise agreements,
minimum wages and other employment terms. We ensure
competitive remuneration by comparing within the
industry and AON remuneration surveys.
We actively manage recruitment and seek redeployment
or retraining for employees affected by workplace
changes. Where we are unable to redeploy employees,
our redundancy and outplacement programs support
employees with the transition.
We have a range of communication channels available to
our workers, including the employees direct supervisor
or manager, the people and culture representative,
regular team meetings at each sites and functions, the
intranet, incident reporting, informal channels through
management, and grievance mechanisms, which also
includes an independent 24/7 whistleblowing hotline.
Performance
All our employees have the right to freedom of
association.
In FY22, 29% of our employees were covered by collective
bargaining agreements. There were no strikes, lockouts or
work stoppages of significance at our sites in FY22.
No operations have been identified as being at risk
for incidents of child labour or having young workers
exposed to hazardous work. We have a strict proof of
age requirements for its workforce upon hiring that
prevent anyone under the legal industrial working age
from obtaining employment at any of our operation or
exploration sites. Similarly, operations are not considered
to be at risk for incidents of forced or compulsory
labour and this is also referenced in our Modern Slavery
Statement published annually27.
Non-discrimination
Through the Code of Conduct and Inclusion & Diversity
Policy, we are committed to creating an environment
where differences are respected, and the working
environment is diverse and inclusive. We do not permit
discrimination, bullying or harassment at any level of
Evolution or in any part of the employment relationship.
In the event that there is a suspected breach of our
Code of Conduct, or if concerns are raised, particularly
in relation to bullying or harassment, the People and
Culture team determine the appropriate course of action
to ensure we deliver on our policies, relevant legislative
requirements and also our values.
Case Study: Meet Beau Garland,
one of our graduates
Beau began his journey with Evolution in November
2020 as graduate geophysicist in the Discovery function.
With multiple opportunities available to him at the time,
Evolution stood out as the ‘right fit’ for Beau due to such
an accommodating and friendly interview process, a
warm and welcoming work environment, and a culture
that encouraged social and professional connections.
In his first year of the graduate program, Beau worked
on several projects to support his ongoing learning and
development. He was appreciative of the opportunity
to work extensively on the QGIS project, which will be
rolled out to all of Evolution’s exploration sites to improve
access to data in the geophysics space from FY23.
Geophysicist graduate, Beau Garland, using an ASD TerraSpec Halo
Mineral Identifier
27 2021 Modern Slavery Statement
Community
“We aim to contribute to the prosperity of our local communities
and countries across all stages of the life cycle of the assets by
creating direct employment opportunities, as well as supporting
local businesses through procurement of goods and services,
community investments and payments to governments, whilst
minimising our negative impacts”
Glen Masterman, VP Discovery
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Community
Community
Community
FY22 highlights
Active
engagement
with Local
Communities,
First Nation
Partners and
Indigenous
Peoples
0
zero material
community
impact
Incidents
100%
of actions in Community
Relations plans and First Nation
Engagement plans completed
$3.5M
in direct community
investment in FY22
0
zero material
Cultural Heritage
incidents
$133M
in local spend (32%
increase compared to FY21)
123
456
new Shared Value
Projects in FY22
Approach
Our success depends on our ability to maintain a strong
social licence to operate. We work as a trusted partner
with the local communities, respecting local culture,
and manage risks and opportunities associated with our
activities.
Our approach is to:
■ Build engaged and lasting relationships with the
communities in which we operate
■ Uphold fundamental human rights
■ Protect cultural heritage and First Nation partnerships
■
Invest in meaningful community projects and
sustainable development
■ Respect cultures, customs and values while engaging in
open and inclusive dialogue
We aim to deliver enduring prosperity and lasting
benefits to the communities in which we operate through
investment, community development, capacity building
and social infrastructure improvement. The communities
near the sites experience the most direct social,
environmental and economic impacts of the 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 the local communities and governments.
Understanding and proactively managing these benefits
and impacts is integral to the success of the operations.
We recognise genuine and effective stakeholder
engagement involves building relationships based on
mutual trust, respect and understanding. The importance
of consulting with people in making decisions that affect
their lives is expressed in the principle of free, prior and
informed consent (FPIC), which is applicable to the rights
of Indigenous Peoples in international law. FPIC is also
applicable to other ‘land-connected peoples’, such as
traditional and local communities living in rural areas near
mining sites. Our community stakeholder engagement
efforts are aimed at a continuous, iterative process of
communication and negotiation spanning the entire
planning and project cycles.
Each operation is responsible for developing and
implementing a Community Relations plan and First
Nation Engagement plan, which is approved annually and
for which the Executive Chair is ultimately accountable.
Operations provide updates on their plans on a monthly
basis to Group office.
We have dedicated Community Relations teams
that manages engagement with local communities,
pastoralists, private landowners, First Nation Partners
and Indigenous Peoples and local government as part of
tenement applications, regulatory approval processes and
ongoing operations. The team also works closely with our
First Nation Partners to ensure continued identification,
recognition and protection of all Cultural Heritage. The
team carries out heritage surveys across all operations in
alignment with the individual heritage agreements with
Traditional Owner groups and within the guidelines. These
surveys inform the location and design of the operations
to avoid areas of heritage significance.
We have several agreements in place with Traditional
Owners, which outline a range of obligations such
as heritage protocols, employment and business
opportunities, community engagement, cultural
awareness training, health and education initiatives, and
work ready programs. We continue to proactively work
with Traditional Owners to identify further opportunities
to collaborate.
We have created a Lead, Indigenous Relations &
Community Partnerships role to manage and support
stakeholder, community and Indigenous engagement
activities. This position is to ensure we have a consistent
and accessible resource in the local communities that can
support future Indigenous employees and businesses.
This resource is supported by the broader Sustainability
function at Group and site that supports the development
of durable and genuine relationships with the local
community and First Nation partnerships.
During FY22, we strengthened community connections
by:
■ Developing deeper relationships with members of the
communities in which we operate, including non-
government entities
■ Building awareness of projects to ensure they are
known and understood prior to approval processes
■ Engaging with non-government conservation
organisations and individuals
■ Conducting Evolution focused community forums
■ Participating in existing local community forums and
local shire meetings
■ Establishing relationships with schools and developing
work experience programs at mine sites for local high
schools
■ Hosting business development and employment
sessions
■ Further investing in community development
partnerships at a local level
■ Supporting school NAIDOC events, Country Week
events, regional fairs and community festivals
CASE STUDY: Immunostorm Chip
developed by University of Queensland
and Evolution provides life-saving early
warning diagnostics
In 2019, Evolution invested $900,000 over three years
into a partnership with the University of Queensland (UQ)
to support research and development of early diagnosis
technologies for cancer using gold nanoparticles. This
partnership resulted in an Immunostorm Chip technology
which positioned Evolution and UQ as innovators in
the biotechnology industry and improved health and
wellbeing globally. With the cancer test now progressing
through commercialisation, and contextualised by a
global pandemic, this partnership has turned its attention
to early detection for COVID-19 patients at risk of
long-term, damaging immune responses.
Given the sudden emergence of COVID-19, it has been a
challenge for medical experts to predict who will develop
a cytokine storm, which refers to the uncontrolled
release of cytokines resulting in hyperinflammation
which damages tissue. We extended our partnership
and increased the investment into the gold particle
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Community
Community
Cultural Heritage (material topic)
Approach
The identification and preservation of Indigenous
heritage is fundamental to Evolution’s approach to
operating sustainably and commitment to preserving
and promoting the First Nation Partners and Indigenous
Peoples’ history and culture.
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.
As the short-term custodians of the land in which we
operate, we respect the role of First Nation Partners and
Indigenous Peoples and consider environmental and
Cultural Heritage as both an 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 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 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 Peoples engagement.
Protecting Indigenous and historical Cultural Heritage
is a critical element of our management practices.
Prior to any development, we conduct archaeological
assessments to ensure cultural and heritage rights are
protected. Where there is significant archaeological and
Cultural Heritage present in or around the operations, we
have Cultural Heritage management plans. These include
avoidance of disturbing significant sites, or, if unavoidable,
minimising impacts and appropriately relocate or
excavate any sites. Artefacts uncovered during project
activities are recorded, documented and submitted to the
appropriate government department. We work closely
with Indigenous Nations to identify and preserve Cultural
Heritage sites and to incorporate traditional knowledge
studies where appropriate. We also educate employees
on respecting the customs and traditions of the local
communities, and support activities to promote the
culture of the host communities. In addition, we ensure
that cultural sites are identified in the impact assessments
and marked on maps so that they are not destroyed or
damaged by our activities.
Each of our projects and operations undergo regular
Sustainability audit and assurance programs that assess
performance against these standards and identify
opportunities for improvement. Sustainability audits
conducted in FY22 highlighted good alignment across all
operations in understanding and implementation of the
Social Responsibility Performance Standards. The results
of the 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.
Performance
As outlined in the Social Responsibility Performance
Standards, the site Community Relations teams liaise
with the First Nation Partners and Indigenous Peoples
and oversee the relationship agreements in place. The
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 and Indigenous Peoples. These agreements
are negotiated in good faith, fairly and equitably and
ensure we work in partnership with First Nation Partners
and Indigenous Peoples to support opportunities that
promote and support self-determination including:
■ 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
■ 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
■
In Canada, agreements with First Nation Partners
outline mutual commitments and responsibilities to
engage and consult on cultural resource surveys, and
identifications of culturally sensitive sites, among
many other environmental provisions. The agreements
provide substantive avenues for Indigenous Nations to
discuss with Evolution regarding environmental matters,
from the earliest stages of the projects to closure and
reclamation
Each operation and project 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 the stakeholders and to the Board.
Cultural Heritage impact or material changes are included
in the Risk and Sustainability Committee Report as a
standing report item for discussion and review.
During FY22, there were no new significant sites
identified through work conducted by Evolution.
Information regarding these sites is shared with the
Traditional Owners, and where required in law, with the
relevant government departments. Section 18 of the
Aboriginal Heritage Act 9WA) enables land users to
seek consent to disturb Aboriginal sites if it is deemed
such impact is unavoidable. In FY22, Evolution sought no
Section 18 clearances for Mungari, our Western
Australia operation.
CASE STUDY: National Aboriginal Day &
the blanket exercise
Following Canada’s National Aboriginal day in June,
the Red Lake operation acknowledged the day on site
through a blanket exercise that served as an interactive
demonstration of the removal of First Nation Partners
from the land.
University of Queensland’s Dr Alain Wuethrich
analysing the immunostorm chip
nanotechnology device which has been leveraged to
detect warning signals of this storm. Such a device
illustrates the potential for gold-based products in
medicine, provides critical medical information to guide
clinical decisions in triage, ensures efficient allocation of
resources, and saves lives.
Indigenous stakeholder outcomes
(material topic)
Approach
We are committed to respecting and enhancing the
rights, interests, concerns, traditional land uses and
cultural activities of the First Nation Partners and
Indigenous Peoples within the communities in which
we operate. For operations whose activities can
directly or indirectly affect Indigenous Peoples, the
Social Responsibility Performance Standards require
the establishment of formal procedures and processes
related to Indigenous Community engagement, economic
inclusion and Cultural Heritage conservation, while
meeting applicable legislative requirements.
The Stakeholder Engagement Standard and Guidance
provide direction on our relationships with Indigenous
Communities by outlining specific requirements around
engagement, communication, integration of community
input, monitoring and review.
We are taking action to make cultural recognition and
reconciliation a part of the business and culture through
the site First Nation engagement plans focused on
fostering trusting relationships for cultural recognition,
promoting the rights and outcomes of First Nation
Partners and Indigenous Peoples and building capacity
in cultural inclusion, skills and knowledge across sites and
Group office. This has been enhanced by including guest
speakers to share knowledge and experience in building
effective and respectful relationships in planning sessions,
National Reconciliation Week events and Leadership
Team meetings.
Indigenous Peoples, including First Nation Peoples 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 operation, Evolution
has a responsibility to meaningfully consult First
Nation communities and provide equitable access to
employment, training and educational opportunities.
We are also committed to increasing Indigenous
participation year-on-year in the business through
apprentice, trainee, graduate and employment programs,
and through Indigenous business opportunities. This
commitment will be underpinned by the Indigenous
Procurement Approach, which is under development and
will be finalised in FY23 and will provide a guide for all
local procurement plans.
The Community Relations teams at Group and sites work
with the First Nation Partners and Indigenous Peoples,
contractors and educational institutions to provide
and support training and employment opportunities to
Indigenous Peoples. The General Manager of the site is
responsible for First Nation engagement at a local level.
We aim to develop strong relationships that incorporate
a comprehensive approach to supporting self-
determination and with the aim of building appropriate
skills, capabilities and resources that ensure long-term
success and positive outcomes for their communities.
Performance
In FY22, 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.
Refer to the FY22 ESG Performance Data document
for activities that take place in or near areas where
Indigenous Peoples are located.
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Community
Community
The educational activity-built understanding among
the team by prompting reflection on Canada’s history
of Indigenous and non-Indigenous peoples. It simulated
pre-contact, treaty-making, colonisation, and resistance.
The activity forms one element of Evolution’s overall
commitment to enhancing cultural awareness and
competency across the whole organisation, and actions
are underpinned by close engagement with the First
Nation Partners and Indigenous Peoples.
CASE STUDY: 1770 Cultural Connections
Immersion Festival & Yarning tent
The 1770 Cultural Connections Immersion Festival
returned in 2021 to deliver cultural education, immersion,
and engagement to support reconciliation in the Burnett
region, and across the wider community and nation. 2021
marked the second year the 1770 Cultural Connections
Immersion Festival was run and attracted 1,600 visitors
across the two-day event. We committed to a three-year
Shared Value Project as a major sponsor of the event
and hosting local and visiting Elders in the yarning tent.
The yarning tent provided a physical space where people
could come together and speak with the Elders, as well
as take a break and relax in the shade. Our sponsorship
was highly praised by Dr Kerry Blackman – CEO, Gidarjil
Development Corporation who, like us, was eager to hear
that the mayor has agreed to support the festival into
perpetuity. This reaffirmed our dedication to ensuring
sustainable, positive legacies for the communities we
operate in. We will continue to sponsor the event in 2022
and 2023 and remain an active member of the festival
organising committee.
Evolution yarning tent set up at 1770 Cultural Connections Immersion
Festival
CASE STUDY:
Murals at Mungari
Six Kalgoorlie-Boulder artists worked with the Mungari
team to create a new backdrop for the administration
buildings which will help ensure more links to the
Indigenous culture remain a daily part of life and work
at Mungari operations. Capturing the stories of local
Indigenous families for generations to come a series
of colourful Dreamtime murals are in line with our
approach to integrating Sustainability into everything
we do. A team of Indigenous local artists painted artistic
impressions of wildlife, flora, and fauna which are now
permanently displayed to not only aesthetically improve
the surroundings but also help to pass down the stories of
local Indigenous elders and keep their messages present,
visible, and top of mind.
Our Mungari Integration Lead Ann-Marie Schell led the
team of artists which included Danielle Champion and
Em Sanders. The murals are based on Dreamtime stories
of Seven Sisters – a story that Danielle’s grandmother
passed down throughout the generations of her own
family. New totems, created from local land branches, are
also displayed across the site adding to the new murals
and acknowledgement of country signage.
Schell reflected, “I am truly grateful to Danielle for sharing
her stories and artwork, allowing us to experience the
beauty of a Dreamtime story as we arrive at work. The
artwork has created many conversations, and many have
commented that it brightens their day”.
Murals based on Dreamtime stories of Seven Sisters at
Mungari offices
Community engagement (material topic)
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 the local
communities and work to understand expectations,
share information and resolve issues as they arise. We
work to make a positive contribution to the communities,
with management plans in place to ensure responsible
operations, and we work collaboratively on issues
and opportunities. Many of our 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
the operations.
We have established direct and regular two-way
communication with communities using a variety of
forums, which we tailor to their unique needs. We have
worked with the communities to establish trusting
relationships and obtain and maintain their support.
We deliver critical infrastructure including health and
education facilities and supplies, which will support their
living standards for generations to come.
Performance
2022 stakeholder perception survey
In FY22, the fifth biennial stakeholder perception survey
was conducted to gauge stakeholder sentiment within
communities local to the operating sites, focusing on
reputation, quality of relationship and communication.
The stakeholder perception survey was undertaken by
Deloitte acting as an independent external facilitator.
Each site provided a list of identified stakeholders
who were invited to participate in in-depth telephone
interviews. A total of 96 in-depth surveys were
undertaken with key stakeholders, supported by a
public opinion poll involving 153 participants contacted
and surveyed within the postcodes of operational
communities.
The stakeholder mix included local community and
environment groups, education providers, employees,
government bodies, local residents and businesses and
Indigenous Groups. This make-up was distinct from the
2020 stakeholder perception survey participants, leading
to a change in score.
There was widespread acceptance of our activities and
an overall Social Licence to Operate score of 4.00 out of
5, placed at the ‘high approval’ category. For comparison,
Deloitte prescribes the mean score in over 2,000 cases of
social licence studied globally as 3.39.
Our ‘Reputation’ score was rated 4.04 out of 5. The
direction of Evolution’s reputation in 2021 was largely
positive, with 39% of stakeholders interviewed saying that
our reputation was improving.
The Social License to Operate score was strengthened
through stakeholder relationship development and
increased economic and other impacts. In FY23 and
beyond, we will further leverage our social capital and
collaborate on projects to help increase community
resilience and broaden the economic foundations and
opportunities within local communities. We will also build
upon relationships with local councils and industry bodies
to develop regional solutions for ongoing
economic viability.
Reputation score from
2022 stakeholder perception survey
Range
Category
5.00
4.30
3.93
3.56
3.08
2.40
1.00
Full trust
High approval
Low approval
High acceptance
Low acceptance
Withdrawn
Evolution score 4.00
CASE STUDY:
Little Finds project
The COVID-19 pandemic left a negative impact on
creatives, the arts, retail, tourism, and small business
sectors. To stimulate the local economy, business, and
creatives, Evolution partnered with E13, Euphorium, the
Department of Local Government and Lotterywest to
fund the Little Finds project. The project activates often
unseen areas of the city with creative urban interventions
to instil a sense of wonder, surprise, and delight
throughout the main precinct.
The urban installation has been funded to install over
20 new unique and unexpected artworks in the CBD of
Kalgoorlie from January 2022 to mid-2022. The project
provides quality outdoor entertainment for locals, visitors,
and tourists, contributing to the liveability of Kalgoorlie-
Boulder, and also the community pride.
In early June 2022, Little Finds was launched with a
community event and a final map of all Little Finds
around town being distributed. This event also marked
the end of Stage 1 of Little Finds, and the beginning of
Stage 2 of a new artistic venture ‘Junkadelic’ which is
similarly produced by Euphorium and E13 and currently
comprises four sculptures installed in the Community
Gardens and Karkula Park.
Evolution Mungari Team members proudly saw the
#littlefinds project develop and grow into a sustainable
and financially self-sufficient project supporting art
and creativity.
The Perch (2022) #littlefindsevolutionmining by Em Anders
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Community
Community
Community investment
Approach
We have an established tradition of supporting local
initiatives in the communities in which it operates and
have expanded support to nationally and globally relevant
programs. Maintaining existing partnerships, and actively
engaging local stakeholders, enables us to understand
local sentiments, needs, challenges, and aspirations for
sustainable development which supports our ability to
innovate and target the community investment programs,
including Shared Value Projects and sponsorships and
donations.
Our approach to community investment remains
contextual and targeted for each site, while upholding
our values, Sustainability Principles, and the core
guiding principles presented below. Each site has
a Community Relations team that is equipped and
responsible for identifying, assessing, and implementing
its own community investment initiatives, including
Shared Value Projects. Tools used for identifying and
assessing initiatives are updated with changing local
and operational conditions. The site General Managers
are responsible for overseeing community investment
projects and their contributions to sustainable
development. We have a growing focus on storytelling
and sharing community successes and lessons from these
projects throughout the business and wider.
CASE STUDY:
Gratitude project
Evolution and Bland Shire Council joined forces to
help recognise the wonderful work being done in the
community throughout the COVID-19 pandemic. The
Gratitude project was launched in September 2021 with
the aim of recognising essential workers or individuals
who helped keep the community going throughout the
toughest times of the pandemic.
The project encouraged the community to nominate
residents who went “above and beyond” and consistently
turned up to work to serve the community during times
of isolations and lockdowns. All nominations were entered
into a weekly draw for a chance to win a $100 Why Leave
Town card. More than 50 nominations were entered into
the draw, casting a spotlight on the positive contributions
of neighbours, colleagues, family, and friends. By October
2021, over $4,000 was directed back to the community in
the form of gift cards from over 30 applications.
Local MP Steph Cooke, who is Minister for Emergency
Services and Resilience, submitted a community
recognition statement in parliament about the project.
She said “Congratulations and thank you to Bland Shire
Council and Evolution for creating such an amazing
project.” Later, at a gala awards ceremony in Sydney,
the Bland Shire Council was announced as the winner of
the Local Government Professionals New South Wales
Community Partnerships award for the Gratitude project.
Charmaine Saltner, Lead, Indigenous Relations &
Community Partnerships commented “this is a great
reflection of the success of the project and demonstrates
that it doesn’t take a big financial investment to make
a big impact”. The sentiment was supported by Renee
Pettit, Community and External Relations Officer at Cowal
who noted “the care factor has more of an impact”.
Final winners of The Gratitude project drawn by Cowal Community
& External Relations Officer Renee Pettit, Michael McCormack MP
and Bland Shire Mayor Brian Monaghan
Our community investment program is underpinned by four guiding principles:
Community investment guiding principles
Attraction and retention
Build community
advocacy
Enhance outcomes for
First Nation Groups and
ATSI* people
Innovation and industry
relevance
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
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
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
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
* Aboriginal or Torres Strait Islander
Performance
Direct community investment
Total direct community investment expenditures across our operations and Group office in FY22 were approximately $3.5
million, and supported the following impact areas:
Community investment breakdown FY22 (%)
Arts, Culture
and Sport 5%
Other* 9%
Environmental
Stewardship 10%
Infrastructure
Capability 20%
Local Economic
Development 9%
Skills, Education
and Training 15%
Community
Resilience 19%
Health and
Wellbeing 13%
*'Other' refers to impacts external of the provided impact areas.
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Community
Community
The following table highlights key Shared Value Projects at the operations:
Shared Value
Project
Site
Purpose
Impact area
Outcomes
Shared Value
Project
Site
Purpose
Impact area
Outcomes
Red Lake Fire
Recovery
Support
(ongoing from
FY21)
Red
Lake
Enhancing emergency
capabilities within Red
Lake with physical
resources such as a fire
truck and volunteers
Community
Resilience
■ Arrival of an equipped and modern fire truck
in May 2022
■ More volunteers from Red Lake and
information sharing during the 2021/2022 fire
season
University of
Queensland
Research for
COVID-19
immune
response using
gold
Group
Extending the
partnership with UQ to
adapt research on gold
nanoparticles for early
detection of long haul
COVID-19 impacts
Health and
Wellbeing
■ An Immunostorm Chip technology that can
assist in predicting who will develop cytokine
storms which are associated with long-term
tissue damage
■ Enhanced knowledge sharing and
technological capacity in the face of a global
pandemic
■ Evolution and UQ have been positioned as
innovators in biotechnology
■
Increased potential for gold-based products in
medicine and diagnostics
■ Enhanced partnership with the University of
Queensland
Through community investment we aim to provide a framework that addresses challenges faced by local stakeholders and
catalyses long-term socio-economic development in local communities. To do so, we must strengthen the institutions that
support local economies, and build the skills and capabilities that diversify economic activity. Where possible we seek to
leverage other development resources and sources of funding available through partnership with other bodies.
Through our community investment we aim to be consistent with and supportive of other local development initiatives
and plans.
Galari
Agricultural
Company
Cowal
Strengthening a
partnership with the
Wiradjuri Condobolin
Corporation to address
significant youth
unemployment within the
Lachlan Region, including
young Indigenous men
and women
Indigenous
Stakeholder
Outcomes, and
Skills, Education
and Training
■ Addressing the shortfall in employment
Lachlan Shire
■ Revitalisation of the Galari farm
■ Two trainees being trained in land
management
■ Potential to train 80 young individuals each
year in agriculture and horticulture
■ Enhanced commitment to and capability of
First Nation Partners and Indigenous Peoples
in the region
■ Evolution investment of $800,000
■ A scalable framework for expanding the
business, and others in the future
Kalgoorlie
Treasure Trail
– Little Finds
project
Mungari
Following the negative
impact of COVID-19 on
local business, tourism
and creatives, Evolution
partnered with local
business Euphorium to
install unique and hidden
artworks around the CBD
of Kalgoorlie
■ Over 15 new unique, unexpected/hidden
artworks installed in the CBD of Kalgoorlie
Arts, Culture
and Sport, and
Local Economic
Development
■ Entertainment provided for locals, visitors and
tourists, e.g. through maps
■ Art plaques commemorating the partnership
■ A financially self-sufficient project transitioning
into its second and third stages of Junkadelic
Yalga-Binbi
Institute Girls
Academy
Mt
Rawdon
Capitalising on the
existing Yalga-Binbi
Institute project to
facilitate a Girls Academy
for the Year 7 to 12
bracket across the Wide
Bay Burnett Central
Queensland Region
1770 Cultural
Connection
Immersion
Festival
Mt
Rawdon
Continuing Evolution’s
support of the 1770
Cultural Connections
Immersion Festival as a
major sponsor in 2022
■ Education opportunities for young girls across
schools, including in Maryborough, Hervey
Bay, Cherbourg, Murgon, Bundaberg, and
Gladstone Region
Skills, Education
and Training,
and Inclusion
and Diversity
■ Promotion of self-worth, health and
employment outcomes
■ Workshops on leadership, health and
wellbeing, Indigenous bushfood lessons,
language, etc
■ Consolidating and strengthening of the Yalga-
Binbi Institute, enabling other ventures
Cultural
Heritage,
Community
Engagement,
Indigenous
Stakeholder
Outcomes,
Inclusion and
Diversity
■ Cultural education, immersion and
engagement activities
■ A yarning tent providing a spacious and
shaded environment allowing for the 1600
festival visitors to discuss with Elders and rest
■ Mayor has agreed to support the festival
into perpetuity, supporting Evolution’s
commitment to sustainable, positive legacies
for the communities
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Community
Community
CASE STUDY: Gidarjil Murra Wolka
art project
The Gidarjil Development Corporation, building upon
their successes of the recent purchase of the Murra
Wolka business and construction of a Cultural Tourism
Hub at the new Mon Repos Turtle Centre, aim to develop
a community-based project in the PCCC region where
artists can be engaged to produce new products specific
to the PCCC tribal groups.
This proposed project aims to provide sustainable
solutions to local employment options and opportunities
building on the existing goodwill and success of the
Yalga-Binbi Environmental Training Centre. It could
potentially enable long-term sustained income earning
potential for numerous artists across the region with
employment/income earning capacity for 8 to 10
Indigenous People in the PCCC region.
Our contribution has the potential to generate sustainable
employment for Indigenous communities in the region
and provide employment and training opportunities for
manufacturing, retail, distribution, and local artists is in
line with our values and partnership approach.
currently have two trainees who are being trained in land
management. In the long-term, it will potentially provide
training support for 80 youths each year in agriculture,
shearing, fencing, and fishing. This project supports the
establishment and long-term viability of the GAC and
strengthens our commitment to the First Nation Partners
and Indigenous Peoples of the area, our Native Title Deed,
and the ongoing success of the Wiradjuri Condobolin
Corporation.
In late May 2022, ABC TV Landline shared the story of
the Golden Gift which was about our support for the
WCC and GAC which is creating positive and sustainable
change for its trainees and wider community. WCC Chair,
Ally Coe, commented he was “terribly excited” to see
his dream and legacy take shape. In July, the GAC was
officially launched with a NAIDOC Week celebration and
ceremony.
Galari Agricultural Company opening ceremony during NAIDOC
Grievances
Approach
We have an established grievance mechanism through
which community members or other stakeholders can
express any concerns, issues or grievances about real or
perceived actions by a project that cause them concern.
The intent of the community grievance mechanism is to
ensure issues and grievances are managed consistently
and in accordance with relevant policies and procedures.
A well-designed grievance mechanism and procedure
brings benefits to Evolution and the communities in which
we operate, by ensuring the timely response to issues and
grievances.
The procedure assists us to:
■ Facilitate early resolution of grievances
■ Provide an open and responsive grievance management
process
■ Enable the Community teams to resolve grievances in a
consistent and effective manner
■ Avoid issues escalating
■
Identify risks and trends to inform strategies or work
plans and identify improvement opportunities
■ Meet compliance requirements
MRO Community Relations officer Anita Ward holding examples of
Murra Wolka art
CASE STUDY:
Galari Agricultural Company
Evolution and the Wiradjuri Condobolin Corporation
(WCC) have extended a close working relationship with
the official approval, lease arrangement, and progression
of the Galari Agricultural Company (GAC). Supported by
our investment of $800,000 over three years, the mission
of the GAC is to profitably run a livestock enterprise
focused on sheep and wool production whilst providing
training to and employment of Indigenous peoples.
The farming and training enterprise will be owned and
operated by the WCC.
In 2019, the Lachlan Shire’s unemployment rate was
7.2% compared to the state average of 4.5%. The GAC
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 FY22 ESG Performance Data document for
the total number of grievances filed through grievance
mechanisms at the operations in FY22.
Local employment (material topic)
Approach
We make it a priority to draw our workforce from the
local communities to ensure that the economic benefit
of employment remains in the local communities. Due to
the developed regions where we operate, we have been
fortunate to have the ability to source our workforce
locally. However, it is occasionally necessary to source
specific skills, levels of experience, or technical expertise
from abroad. This strategy helps build strong working
relationships with local communities.
Performance
72%
FY22 local
employment across
our operations
CASE STUDY: Revival of the West
Wyalong newspaper wins the NSW
Mining HSEC Award for Community
Excellence
We are extremely proud to congratulate Cowal Gold
Operations as the winner for the 2022 NSW Mining
HSEC Awards for Community Excellence. The closure
of the 126-year-old West Wyalong Advocate in early
2021 signalled the loss of a voice and history to the
West Wyalong community and the loss of Cowal Gold
operation’s communication with the local community.
Rather than sitting idly by the Cowal Community
Relations team of Mark Hartig, Steff Wills and Renee
Pettit partnered with owners, community stakeholders,
and the Bland Shire Council to revive the paper with
an independent Board of Directors through the not for
profit, West Wyalong Advocate Foundation.
This community partnership resulted in the revival and
publication of the West Wyalong advocate on the 14th of
May 2021. Since then, the Advocate and Evolution have
been met with overwhelming positivity – event organisers
and businesses are thrilled to have their services and
functions being publicised again, and community
members have perceived the revival as a gift at a time
when so many regional areas are losing their local voice.
Cowal has been praised by the community as a “white
knight” and has received significant media attention
following the revival. On the 25th of July, the project
received the coveted NSW Mining award for
Community Excellence.
NSW Mining HSEC Conference & Awards 2022
CASE STUDY: West Wyalong
community welcomes opening of
cinema
The red carpet has been rolled out and a little piece
of Hollywood finally returned to West Wyalong at the
grand opening of the Tivoli Theatre cinema at the historic
Masonic Hall. The dream to bring movie magic back to
the West Wyalong community has been realised through
$150,000 in funding from the Federal Government,
$450,000 from the New South Wales Government, and
$300,000 from Evolution. It was a community-initiated
project with many calling out for the much-wanted
facility.
Bland Shire General Manager Ray Smith was proud of
the community’s eagerness for the project and facility
itself which will serve as a state-of-the-art 85-seat cinema
and a multi-purpose venue for private functions, public
meetings, art exhibitions, charity events, conferences, and
drama productions. John Penhall, Cowal General Manager
noted that the opening was an exciting milestone for
West Wyalong, adding to the social life of the town. The
theatre will carry on the rich history of its namesake and
provide a lasting positive legacy for West Wyalong.
Cowal General Manager, John Penhall, attending cinema opening
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Community
Community
Sustainable procurement (material topic)
FY22 highlights:
■ $133M million local spend (32% increase compared to FY21)
■ 62%* of medium and high-risk suppliers assessed for modern slavery and human rights risks in FY22
■ Second Modern Slavery Statement released
■ Standard contract terms updated to consider modern slavery risks and expectations
* 62% of questionnaires issued were returned in FY22
Approach
We are committed to conducting business in a responsible way, and we expect the same commitment from
the contractors and suppliers. We seek contractors and suppliers who share our corporate values, follow
high standards of governance and compliance with all applicable laws and our policies, and are committed
to following our way of doing business. Sustainable procurement is a powerful lever for influencing the
Sustainability performance and business conduct of suppliers. By integrating Sustainability into procurement
policies and practices, businesses can manage Sustainability risks and opportunities, minimise adverse impacts
and promote positive environmental, social and economic outcomes.
Exploration & discovery
■ Drilling contractors
■ Surveying
■ Geology and geophysical
contractors Analytical laboratories
■ Health and Safety specialists
■ Earthmoving contractors
Environmental and water
consultants
Support services
■ Site accommodation management
■ PPE and PPC
services
■ Power, communication and IT
services Insurance
■ Legal and specialist support
Medical, health and safety services
Labour supply
■ Employee benefits
■ Water and waste management
Mining
■ Mining and haulage contractors,
■ Fuel, oil and tyre supply
plant and equipment
■ Cement and ground support supply
■ Explosives supply and blasting
services Fleet, maintenance, parts
and equipment
■ Blasting software and consultants
■ Mining communications
Geotechnical services
Processing
■ Operations and maintenance
■ Chemicals and reagents supply
contractors
■ Laboratory services Civil
■ Supply of grinding media and
contractors Fuel and gas supply
flocculants
Transportation
■ Freight services
■ Haulage services
■ Port services
Evolution’s supply chain
■ Stevedoring
■ Shipping Bus services
■ Air charter services Travel service
Evolution supply chain
We strive to improve the supply chain’s social and
ethical footprint, and work with suppliers that share
our values. We expect our suppliers to comply with all
applicable legislation and to demonstrate that they have
the attributes set out in the Modern Slavery Statement,
Supplier Code of Conduct and Procurement Statement,
which are approved by the Board.
The Human Rights Standard and Modern Slavery Business
Guide supports the Supplier Code of Conduct, which
outlines Evolution’s commitment to:
■ Prohibit any form of forced labour, including child
labour, slave labour and human trafficking
■ Work to comply with obligations under the Modern
Slavery Act 2018 (Cth) by undertaking risk assessments
to identify areas of the business and supply chains
where there is a risk of modern slavery practices, and
take necessary action to address those risks
■ Make contractual commitments with suppliers that
encourage them to adhere to our Supplier Code
of Conduct
■ Communicate this approach and commitment to
human rights to all stakeholders, including employees,
contractors and suppliers
Suppliers are required to be accountable for their actions
and commit to ensuring they conduct their business
in alignment with our values and behaviours. We have
also included a requirement in our contracts, for which
contractors must maintain awareness and compliance.
In FY22, we implemented a risk-based, phased approach
to our Sustainable Supplier Risk Management program,
including pre-qualification questionnaires related to key
Sustainability topics, risk analysis and segmentation, and
mitigation plans, where appropriate.
We recognise the opportunity to create a positive impact
on communities by making considered choices about how
and where we source the goods and services we need
to operate the business. Key sustainable procurement
activities continue to focus on the following areas:
■
Identifying, assessing, and addressing modern
slavery risks
■ Supporting regional communities
■
Increasing Indigenous participation
■ Supporting small businesses
In FY22, we have further strengthened Sustainability as a
performance driver in Evolution procurement by:
■ Developing the second Modern Slavery Statement
which aims to increase business awareness of modern
slavery risks and improve transparency across global
supply chains
■ Allocating more resources to lead the business
in promoting ethical sourcing practices and work
closely with the Sustainability team executing on our
Indigenous engagement and procurement strategies
■ Conducting Sustainability and business conduct
evaluations as part of the tender processes
■ Participating in the Modern Slavery Communities of
Practice (United Nations Global Compact)
■
Implementing the process to identify suppliers that are
at higher risk of modern slavery incidents
■ Requiring high-risk suppliers to complete Modern
Slavery Self-Assessment Questionnaires (SAQs)
■ Holding awareness sessions with the procurement team
on sustainable procurement and modern slavery
■ Business endorsement on three sustainable
procurement focus areas which align with identified
material risks and with Company goals for FY23. These
include a focus on:
■ Net Zero
■ Modern slavery
■
Indigenous procurement
Evaluation of Sustainability and business conduct
in tenders
In FY22, we implemented a more detailed evaluation
criteria for Sustainability and business conduct as
part of its standard tender process. Evaluation criteria
for Sustainability and business conduct include
considerations of corporate governance, the presence
of Sustainability policies, programs and reporting, the
quantification of greenhouse gas (GHG) emissions and
initiatives to reduce GHG emissions, policies or practices
to enhance inclusion and diversity, business ethics and
conduct, as well as community support.
Environmental and health and safety considerations
include a range of policies and management plans, risk
assessments, incident reporting and performance metrics.
Any person entering an Evolution site is required to
complete a corporate safety induction and a site specific
or workplace specific induction.
Modern slavery and human rights
(material topic)
Approach
We are committed to operating responsibly and
establishing and adhering to the highest ethical
standards. We reject any activities which may cause or
contribute to modern slavery, including forced or bonded
labour, child labour, human trafficking, slavery, servitude,
forced marriage or deceptive recruiting for labour
or services.
Respect for human rights is a core value of Evolution. Our
approach to human rights is supported by the conviction
that the activities can and should have a positive impact
on the lives, livelihoods and rights of individuals and
communities. We acknowledge that the operations could
potentially cause, contribute to, or be directly linked
to negative human rights impacts. We seek to prevent
and mitigate adverse impacts and to contribute to the
promotion of broader societal respect for, and protection
of, human rights.
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Community
Community
As a signatory to the UNGC, we have 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 our nine Sustainability Principles, human rights,
underpins the Human Rights Performance Standard,
as part of the Sustainability Performance Standards.
The Human Rights Performance Standard establishes
principles and actions for how we identify, prevent,
mitigate, track and report on human rights risks and
issues associated with projects and operations. The
Standard draws on the Universal Declaration of Human
Rights, the UN Guiding Principles on Business and
Human Rights, and the UNGC, and its key principles are
incorporated across the processes and systems.
Our second Modern Slavery Statement was approved
in FY22, and a commitment within the 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 consider that any form of modern slavery is
unacceptable and acknowledge our responsibility in
helping to eradicate it. During FY22, we continued to
apply a rigorous methodology to manage modern slavery
risks. We are working to progressively understand the
multiple tiers of suppliers that form the extended supply
chain.
Our risk assessment process sets a base level
identification of modern slavery risk by considering
country risk, and product/service category risk. We have
collaborated with each of the sites to determine medium
to high-risk suppliers and have issued 109 questionnaires
on human rights and modern slavery risks to those
identified suppliers. The assessments to date have not
identified any modern slavery practices in the operations
or supply chain, however we recognise this is an ongoing
process and remain vigilant.
In FY22, we:
■ Updated modern slavery self-assessment questionnaire
(SAQ) toolkit to understand the risk of modern slavery
in business operations and their supply chains
■ Amended supplier contracts to require them to conduct
their business in a manner that is consistent with the
Modern Slavery Act 2018 (Cth)
■ Rolled out Human rights and modern slavery training
across our Australian workforce:
■
12% of our Australian workforce and 100% of our
Australian procurement team received training
(outside of general induction training when
onboarding new employees which includes a
modern slavery component)
■ Our Australian workforce completed over 236
training hours. The training module includes:
● The basic principles of the Modern Slavery Act
2018 (Cth)
● How employees can identify and prevent
modern slavery and human trafficking
● What employees can do to ‘flag’ potential
modern slavery and human trafficking issues
to relevant parties within the business
Local and regional procurement
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 where we
operate.
Local and regional procurement practices focus on:
■ Promoting an open and shared culture across all our
workplaces
■ Providing ongoing training and education
■ Upholding equal opportunities, diversity and anti-
We engage with local communities. This includes hosting
information evenings with key contractors and their
communities to discuss subcontracting, supply and
employment opportunities on various projects.
Performance
In FY22, $164 million was spent directly with local and
regional suppliers, including $133 million with local
suppliers, a 32% increase compared to FY21. The increase
in this spend was due to efforts to more actively identify
opportunities to include local, regional and Indigenous
suppliers.
● What external help is available to identify and
discriminatory practices
■ Hiring employees, contractors and suppliers from the
local community
prevent modern slavery
For more information, see the 2021 Modern Slavery
Statement provided on the website.
Performance
In FY22, our assets were internally audited and verified,
including human rights and modern slavery risks, against
our Human Rights Performance Standard. No incidents
or violations of human rights, including the rights of
Indigenous peoples, freedom of association, child labour,
youth labour with exposure to high-risk work, or forced
labour involving our employees were recorded during
the reporting period; however, we recognise this is an
ongoing process and continue to review.
We requested 109 Modern SAQs from our suppliers
during the year and no modern slavery risks were
identified in our supply chain during FY22.
While no instances of modern slavery were identified,
several discussions were held with suppliers to better
understand their current business practices and encourage
them to work towards having robust policies and processes
to identify, investigate and remedy the risk of modern
slavery in their supply chain. We continue to monitor
and assess the high-risk supplier base to ensure their
understanding of our commitment towards sustainable
procurement practices across ours supply chain.
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Community
Governance
We understand that our
commitment to responsible
business principles is fundamental
to our success and ability to
be a trusted partner with our
stakeholders. Evolution’s corporate
governance framework ensures
robust oversight and management
accountability for all aspects of the
business including sustainability.
Everyone who works for or on
behalf of Evolution is held to high
standards that are expected to be
consistently met
Evan Elstein, Company Secretary and VP
Information Technology
Governance
FY22 highlights
100%
of all integrated assets internally
and externally audited and verified
with oversight from the Board Risk
and Sustainability Committee
$2.5M
in direct and indirect support to
our people and community since
COVID-19 pandemic began
Representation
with industry
working groups
in all jurisdictions
addressing
transitional risk
Published 2021
Modern Slavery
Statement, and
updated Supplier
Code of Conduct
and Procurement
Statement
95%
compliance on cyber awareness
training (against a target of >90%) 0
Zero reported
cases of
bribery or
corruption
Environmental – no material non-
conformance, positive self-reporting of
minor/technical non-conformance
Strategic uplift
in the integration
of Sustainability
Principles, Policies
and Standards
Published second
Modern Slavery
Statement
TSF Governance
Committee
providing effective
oversight of TSF
management
Alignment of disclosures with GRI,
TCFD and ASX Corporate Governance
Recommendation 7.428
28 ASX Corporate Governance Principles and Recommendations
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Governance
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.
Strategy focus
Our Sustainability strategy focuses on value creation to advance our Sustainability performance through:
Sustainability: Integrated Into Everything We Do
Evolution’s Sustainability Principles
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 sustainabil-
ity 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
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
Protect Cultural
Heritage and First
Nation Partner
relationships
Community
management
Our 'Net Zero'
future
Social licence to operate
through targeted
community plans
■ Unlocking potential through leadership to develop proactive behaviours
■ Disciplined, consistent and reliable risk management (including climate related risk) – the right way every time
■ A commitment to reduction in environmental footprint
■ Our Net Zero future
■ Further enhancing our Social Licence to Operate through targeted community plans
■ Protecting Cultural Heritage and First Nation Partner relationships
■ Strengthening reputation through shared stories supported by a strong reporting culture.
■ Resilience to transitional risk through improved disclosures
■ Assurance to promote ongoing and continual improvement
114 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 115
Governance
Governance
Sustainability and Strategic Planning Policy
The Sustainability and Strategic Planning Policy29 outlines how Sustainability is integrated into the business. These policies
focus on the holistic management of risks in:
Voluntary ESG disclosures and commitments to initiatives
We voluntarily aligns or adheres to the ESG-related industry reporting frameworks and initiatives presented in the figure
below. This allows us to demonstrate our commitment to high standards of environmental, social and governance policy
and performance. This transparency also allows external stakeholders to hold us to account.
■ Health, safety and wellbeing
■ Environment
■ Cultural Heritage
■ Human Rights
■ Risk-based decision making
■ Reporting, learning excellence, innovation, and continuous improvement
■ Crisis and emergency management and corporate governance
■ Accountabilities for risk, sustainability and strategic planning
Sustainability and Strategic Planning Standards
The Sustainability Standards30 and Strategic Planning Standards support the Sustainability and Strategic Planning Policy
in providing the minimum risk and Sustainability requirements to be met or exceeded in all areas of the business, including
operations, exploration and Group activities.
Integrated risk management framework
Integrated risk
management
framework
Sustainability Principles
Sustainability & Strategic
Planning Policy
Sustainability & Strategic
Planning Standards
Management System,
Operating Processes and
Procedures
Assurance
program
In FY22, the internal audit process for assessing compliance with these standards was reviewed and uplifted from an
implementation model to a compliance framework. Eleven of the standards were assessed along with five Material Risks
across each of the operations. The revised process was part of continual improvement to help identify and lift operational
control. The new process and all audit findings were independently verified by third-party auditors with positive results
received on the uplift in the overall assurance process.
29 Sustainability and Strategic Planning Policy
30 Sustainability Performance Standards
Evolution’s voluntary ESG disclosures and commitments
to industry and international Initiatives
Voluntary disclosures
Industry initiatives
International business initiatives
Global Reporting
Initiative (‘GRI’)
standards
■ Reporting of ESG
performance in
accordance with
GRI requirements
since FY21
International
Cyanide
Management
Code (‘ICMC’)
■ Cowal and Red
Lake recertified
to ICMC in FY22
United Nations
Guiding Principles
on Business and
Human Rights
(‘UNGP’)
■ 2021 Modern
Slavery
Statement
aligned with the
UNGP
Task Force
on Climate-
related Financial
Disclosures
(‘TCFD’)
■ Commenced
reporting in line
with TCFD in
FY20
■ 90% aligned with
TCFD in FY22
The Greenhouse
Gas Protocol:
A corporate
accounting
and reporting
standard
■ GHG emissions
disclosed in
accordance with
this standard
Global Industry
Standard
on Tailings
Management
(‘GISTM’)
■ Tailings
management
approach
integrates
climate change,
stakeholder
engagement,
emergency
management,
our communities,
receiving
environment,
dam safety and
post mine land
use
United Nations
Global Compact
(‘UNGC’)
Sustainability
Development
Goals (‘SDGs’)
■ Joined UN Global
Compact in 2021
■ Communication
of Progress
to the UNGC
reported annually
■ Positively
contributing to
progress on all
17 SDGs through
our activities and
initiatives
■ Collaborative
efforts with
government, civil
society and other
businesses
Sustainability materiality assessment
In this Report, a material Sustainability topic is one that reflects our most significant economic, environmental and/or social
impacts, or one that could substantively influence the assessments and decisions of our stakeholders, in accordance with
guidance from the GRI.
The content of this report was determined through an independent materiality assessment undertaken in FY21. The
materiality assessment helped 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.
The annual process for determining material Sustainability topics follows a three-year cycle and involves four phases:
identification, prioritisation, validation, and report and review. The first year (FY21) involved intensive consultation and
research to identify a full list of topics that were analysed by internal experts and external stakeholders and validated by
the Leadership Team. Sustainability topics in the mining industry are relatively consistent year over year, given the long-
term nature of operations. As such, the second year and upcoming third year will build on the results from the first year.
The assessment is updated to reflect emerging issues.
116 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 117
Governance
Governance
Evolution’s materiality process
1
2
3
4
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
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
Materiality matrix
ß Cyber Security
ß Employee Engagement
ß Hazardous Chemicals
Management
ß Transport Safety
ß Governance and Compliance
ß
Indigenous Stakeholder
Outcomes
ß Stakeholder Engagement
ß Talent Attraction and Retention
ß Effluents and Waste
ß
Innovation and Technology
ß Crisis Response (inc. Pandemic)
ß Community Engagement
ß Cultural Heritage
ß Energy and Emissions
ß Work Health, Safety and Wellbeing
ß Climate Risk
ß Diversity and Inclusion
ß Tailings Management
ß Environmental Compliance
ß Land Use and Biodiversity
ß Local Employment
ß Mine Legacy and Rehabilitation
ß Water Management
ß Anti-Bribery and Corruption
ß Modern Slavery and
Human Rights
ß Sustainable Procurement
Influence on stakeholder assessments & decisions ➤
Priority 1
Priority 2
Priority 3
Priority 4
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118 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 119
Environmental
Governance
Social
Material topics - definition and alignment with the UNSDGs
Governance
Performance (Progress against key targets)
In FY22, a number of measures and targets were used to quantify our progress toward key strategic objectives for FY22.
Performance against these goals, measures and targets were aligned with the Sustainability Principles and the FY22
Balanced Business Plan (BBP). The BBP is designed to be a balanced scorecard supported by five key business pillars: Zero
Harm and Sustainability, People, Operations, Growth and Financial Outcomes.
In FY22, our Sustainability related targets and measures were met or exceeded against relevant business pillars and all
supporting project objectives. Notably, we made significant progress towards Evolution’s Net Zero commitment in addition
to delivering agreed actions with the communities in which we operate (including Community Relations and First Nation
Engagement). The target of energy and emissions per tonne mined was also met and is discussed in more detail in the
Environment section.
Whilst we achieved our targets for health and safety, with the Total Recordable Injury Frequency (TRIF) delivered
better than target, we acknowledge that there will always be more work to do. Each operation was actively involved in
implementing robust plans and initiatives to help reduce the risk of incidents and to minimise the risk of injuries and illness.
Improvements were also seen in leading safety metrics such as increased proactive reporting, leadership, field interactions,
action close out and participation in weekly learning calls.
There has been ongoing commitment to the review of material actions to ensure these are addressed and closed out on
time (100% for FY22). 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 our Sustainability performance against key FY22 targets and objectives.
Objectives and targets
Timeframe Progress against targets and objectives
Progress
against targets
Environment
Achieve <0.54kL
freshwater demand per
dry tonne milled (DTM)
FY22
Progress on Net Zero
commitment
2050
100% of actions in
emission reduction plans
completed
Ongoing/
FY22
■ Achieved 0.31 kL freshwater demand per dry tonne milled
(DTM) against a target of 0.54
■ Completed third party validation of FY20 baseline with
inclusion of acquisitions (Ernest Henry and Kundana assets)
■ Completed value chain assessment for all current operations
■ Developed robust direct (Scope 1) and indirect (Scope 2)
accounting program, including resetting emissions baseline
Conducted a CO2 abatement cost review focussing on marginal
abatement cost curves (MACC)
■ Externally validated modelling of emissions data including all
input modelling (developed a draft NPV and decarbonisation
tool for assessing investment potential of decarbonisation
projects)
■ Further validated decarbonisation roadmap against a 1.5 and
2-degree scenario
■ Completed energy audit and decarbonisation roadmap for
Cowal with Mungari scheduled for FY23
■
7% reduction in emissions intensity per tonne of material mined
compared to the adjusted baseline year of FY20
■ Conducted independent audit of Scope 3 emissions
■ Developed draft sourcing strategy with a focus on renewables
■
100% of actions in emissions reduction plans completed
Health and safety
Total recordable injury
frequency (TRIF - per
million work hours at or
below 10.75 excluding
Ernest Henry
■ Zero fatalities
FY22
■ Recorded 10.37 TRIF (excluding Ernest Henry)31. All locations
were within target except Red Lake
●
●
●
●
Objectives and targets
Timeframe Progress against targets and objectives
Environment
Bow ties completed for
material risks
100% of actions closed
for material and critical
risks
100% of actions
in targeted Safety
Improvement Plans
completed
FY22
■
100% validated with no major gap
FY22
■
100% closed and validated in third party audit
Ongoing/
FY22
■ 96% of actions in Safety Improvement Plans completed (4% not
delivered due to training related COVID restrictions)
Data insights project -
INX
FY22
■ Delivered - Embedded a new reporting system to drive better
data insights
People
Increase engagement
and progress scores in
Evolution’s Employee
Teamgage Survey
Deliver dedicated
inclusion and diversity
project.
FY22
■ Engagement score slightly increased from 78 in FY21 to 79 in
FY22
FY22
■ Launched an Inclusion and Awareness project in FY22
100% of people having
meaningful values and
culture conversations
FY22
■
100% of employees had meaningful values and culture
conversations with a senior people leader
Community
100% of actions in
First Nation Partner
and community plans
completed
Zero material Cultural
Heritage incidents
ESG
FY22
■
■
100% of actions in Community plans completed
100% of actions in First Nation Engagement Plans completed
FY22
■ Zero material Cultural Heritage incidents
■ Evolution participates in external third-party performance
benchmarking initiatives and Sustainability related assessments,
including environment, social and governance (ESG) ratings
agencies. The higher levels of transparency have been
recognised through improvements in Evolution’s ESG scores
by key ESG ratings agencies. Refer to ‘Commitments and
Recognition’ section for more information on Evolution’s ESG
scores and the uplift achieved from FY21 to FY22
■ Completed TCFD gap analysis
■ Completed scenario analysis (energy and emissions and water
security) for Cowal, as part of further alignment with TCFD
recommendations
Externally validated third
party performance
FY22
TCFD alignment
FY22
● Achieved
Governance
Progress
against targets
●
●
●
●
●
●
●
●
●
●
●
31 10.66 TRIF including Ernest Henry
120 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 121
Governance
Governance
Stakeholder engagement (material topic)
Approach
We recognise the wide range of stakeholders where the
business operations have an impact and acknowledge
the importance of delivering against our obligations.
We believe that what is important to our stakeholders is
important for us to meet our strategic objectives. This
requires ongoing and effective engagement, where we
provide transparent and timely information and actively
encourage feedback from all stakeholders.
The Stakeholder Engagement Performance Standard
ensures a consistent approach to engaging with
communities, employees and other stakeholders. Each
of the sites use a systematic and recurring stakeholder
mapping process (e.g. social impact assessment) to
identify and prioritise stakeholders from direct and
indirect influence areas, and those interested in, or
potentially affected by site activities.
CASE STUDY: Burnett Mary Regional
Group Elliot Heads Wetlands, Research
Centre and Seagrass Nursery
The Burnett Mary Regional Group (BMRG) aims to
strengthen their research capability bringing together
existing projects and developing additional research and
education facilities across the region. Partnership with
BMRG is focused on the development of Elliot Heads
Wetland, Research Centre and Seagrass Nursery and
incorporating Sustainability into the development of this
new community.
The vision is to establish a coastal and marine research
centre, seagrass nursery and wetland trail, accessible to
the community. All of which would be connected to the
Cultural Heritage of the Traditional Owners of the region,
highlighting their connection to Land & Sea Country and
traditional practices.
In FY23, we will contribute towards the purchase of the
Elliot Heads research area, support the development of
the proposed Elliot Heads Wetland, Research Centre and
Seagrass Nursery, and contribute to the broader
Eco-Trail project.
Engagement with Local and Indigenous communities
All operations, exploration sites, projects and closed
properties identify, prioritise and directly engage with
local and Indigenous communities. Work in this area is
focused on:
■ Disclosing and appropriately communicating accurate
and timely information
■ Maintaining an open dialogue so all parties can fully
understand each other’s views and concerns
■ Engaging in decision-making around all activities
■ Collaborating on issues of mutual interest
■ Maintaining Evolution’s ability to operate
■ Understanding the potential impact of all activities on
the rights of Indigenous communities
Those responsible for engagement with local
communities and First Nation Partners and Indigenous
Peoples are trained to conduct dialogue that is focused
on building and maintaining relationships and addressing
issues important to those communities. This helps enable
engagement that is productive and constructive, and that
directly contributes to the building and maintenance of
long-term, trust-based relationships.
The table below provides an overview of stakeholder
groups engaged in FY22, key interests and concerns,
and how we generally respond to them. Updates on
stakeholder engagement are provided to the Board Risk
and Sustainability Committee three times per year.
Stakeholder type
How we listen
What matters
How we respond
Frequency of
engagement
More info
Daily, weekly,
monthly,
quarterly,
half-yearly and
annually
Sustainability
Report: People
& Culture
Regular
corporate
schedule and
teleconferences
As and when
required
Annual Report
Corporate
Governance
Statement
■ Communities of
■ Health and
practice
safety including
mental health
and wellbeing
■ Weekly business
updates from the
Executive Director
■ Feeling
engaged and
a sense of
belonging, and
being enabled
to do their job
■ Regular
performance
feedback
■ Communication
■ Promote
Evolution’s values
■ Ongoing
safety, health
and wellbeing
initiatives
■ Career &
■ Weekly staff
development
opportunities
meeting with the
Leadership Team
■ Fostering a
values-led
organisational
culture that
optimises
performance
■ Site prestart
meetings
■ Site townhalls and
updates
■ General Manager
updates
■ Mine life
■ Consistent
financial returns
■ Management
■
Investor briefings
of financial and
non-financial
risks
■ Full-year and
half-year results
briefings
■ High-quality
corporate
governance
■ Annual General
Meeting
■ ASX
■ Sustainability
announcements
and Climate
change risk
management
■ Health
and safety
performance
■ Cultural
Heritage
management
■ Commitment
to global best-
practice ESG
reporting
frameworks
■ Targeted specific
meetings
■ Local
■ Regular
employment
and contracting
opportunities
community
consultations and
communication
Employees and
contractors
■ Regular
feedback
sessions,
performance
reviews and
personal
development
plans
■ Regular
employee
surveys
(Teamgage)
■ Group and site
townhalls and
team meetings
Investors and
analysts
■ Regular
meetings
with investor
representatives
and financiers
First Nation
Partners and
Indigenous Peoples
■ Regular
community
and Cultural
Heritage
meetings
■ Stakeholder
perception
surveys
■ Community
grievance
mechanism
■ Community
events and
information
sessions
■ Economic
benefits
■ Cultural
Heritage
management
■ Cost of living
and potential
impacts on
local services
■ Cultural safety
Regular
schedule of
meetings
As and when
required
Sustainability
Report:
Community
■ Targeted
community
investment
programs, Shared
Value Projects etc.
■ Deliver on
Cultural Heritage
and Native Title
agreements
■ Regular
participation at
cultural events
Elliot Heads development area
■ Local social
media channels
■ Mine life
122 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 123
Governance
Governance
Stakeholder type
How we listen
What matters
How we respond
Frequency of
engagement
More info
Government and
regulators
■ Ongoing
dialogue with
regulators,
government
agencies and
broad range
of political
stakeholders
■ Economic
benefits
■ Environmental,
Cultural
Heritage, social
and financial
performance
■ Climate change
and greenhouse
gas emissions
■ Regulatory
compliance
■ Transparency
■ Cultural
Heritage
■ Regular
engagement
with all levels of
government
■ Direct submissions
to state
and federal
governments’
consultation
processes
■ Contribute
to industry
and business
associations
Regular
schedule of
meetings
Sustainability
Report:
Environment
As and when
required
Sustainability
Report:
Community
Non-government
organisations
■
Input into
social and
environmental
impact
assessments
■ Regular
participation
in industry
forums and
associations
■ Climate change
and greenhouse
gas emissions
■ Cultural
Heritage
■ Environmental
impacts
■ Transparency
■ Human rights
■ Engagement on
Shared Value
Projects
■ Commitment
to international
climate initiatives
and reporting
frameworks
■ Partnerships for
environmental
research
■ Engaged in the
United Nations
Global Compact
As and when
required
Sustainability
Report:
Community
Suppliers and
contractors
■ Supplier
networking
events
■ Workshops
with local
business
networks
■ Regular
reciprocal
supplier
performance
reviews
■ Embedded
supplier
relationship
management
with Tier 1
suppliers
■ Supplier
feedback
survey
■ Supply
opportunities
for projects
■ Health and
safety
■ Supporting
Indigenous
and local
contractors
■ Technology and
innovation
■ Capable and
effective
employees
■ Collaborate
to deliver
tangible safety
improvements
■ Collaborate
to improve
Indigenous
engagement
outcomes
■ Support programs
to develop local
business capacity
and capability
As and when
required
Sustainability
Report:
Sustainable
Procurement
CASE STUDY: Cowal-sourced gold used
to create the 2022 Melbourne Cup
Excitingly, gold from the Cowal operation is being used to
create the 2022 Melbourne Cup trophy. This is the fourth
time Evolution gold has been used to create the Cup,
and the second time for the Cowal operation. In keeping
with the country tour of the Cup, the regional community
of central western NSW in conjunction with local
partners across government, business, and education
celebrated the occasion. Regional events included street
parades, fashion events, and sporting and educational
opportunities for local families and businesses.
Truck operator Kacie Quaid with The Lexus Melbourne Cup at Cowal
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 there is a benefit in
constructive dialogue or advocacy, membership is maintained.
In FY22, Evolution was either a member of, or a participant in, the 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
Yes
Yes
No
Yes
Yes
No
Yes
NSW Government Sustainability Advantage N/A
United Nations Global Compact
Electric Mine Consortium
No
N/A
Yes
Yes
Yes
Yes
Yes
Yes
N/A
Yes
Yes (Modern Slavery Communities of Practice)
Yes
Commitments and recognition
We participate in external third-party performance benchmarking initiatives and Sustainability related assessments,
including environment, social and governance (ESG) ratings agencies. The higher levels of transparency have been
recognised through improvements in our ESG scores by key ESG ratings agencies.
Evolution’s ESG performance
Agency
FY22 score
FY21 score
Performance trend
Sustainalytics
29.2
40.4
ISS32,33
MSCI
S&P Global
Environment: 1
Environment: 6
Social: 2
Social: 8
AA
53
AA
51
Improved
Improved
Maintained
Improved
32 2021 scores
33 Updated October 21, 2021
124 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 125
Governance
Governance
MSCI
Governance & compliance (material topic)
A high rating of AA (on a scale of AAA-CCC) was
achieved in FY22 in the MSCI Ratings assessment, scoring
5.9 compared to the industry average of 4.7. We were
placed among the top five industry leaders for Labor
Management, Anticompetitive Practices and Business
Ethics & Fraud.
S&P Global CSA SAM
In November 2021, a score of 53 was achieved, a 4%
increase from FY21 (industry average of 34). Evolution
is one of only three gold companies on the Dow Jones
Sustainability Index - Australia.
ISS
Achieved a significant improvement in ISS score across
the ‘Social’ category (from ‘8’ to ‘2’) and ‘Environment’
category (from ‘6’ to ‘1’) (scale from 10-1 with “1” being the
highest possible rating).
Sustainalytics
Improved ESG Risk Rating from ’40.2’ in FY21 to ’29.2’
in FY22 (on a scale of 0-40+ with ‘0’ being ‘negligible
risk’ (best) and ‘40+’ being ‘severe risk’ (worst). This is
a marked improvement from FY21 and also from FY20
(when the score was 45). We are ranked 24 out of 123
companies in the precious metals industry and 19 out of
96 in the gold subindustry.
United Nations Global Compact
We were 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. The
Sustainability Principles align with the UNGC Principles
and SDGs.
34
35
Approach
We are committed to ensuring that our obligations and
responsibilities to its various stakeholders are supported
through its corporate governance practices. We believe
that adopting and operating in accordance with high
standards of corporate governance enhances our
sustainable long-term performance and value creation for
all stakeholders.
Our 2022 Corporate Governance Statement reports
against the ASX Corporate Governance Council’s
Fourth Edition Corporate Governance Principles and
Recommendations. Throughout the reporting period
that ended 30 June 2022, the Directors believe that our
governance arrangements align with the fourth edition
of the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations.
As per Recommendation 7.4, the Sustainability Report
provides detailed information on the management of
Evolution’s material environmental and social risks, with
a specific focus on climate risks, in alignment with the
TCFD.
Board of Directors
Ultimate responsibility and accountability for our
Sustainability strategy, priorities and performance is with
the Board of Directors. The Board is also the body that
formally reviews and approves our Sustainability Report.
The Board is supported by the following committees:
■ Audit Committee
■ Risk and Sustainability Committee
■ Nomination and Remuneration Committee
The Risk and Sustainability Committee oversees the
development and implementation of our Sustainability
goals, policies and standards on matters of workplace
health and safety; environmental, social governance
and risk, human rights and workforce engagement.
The Committee advises the Board on matters including
good industry practice, Sustainability performance,
compliance and licence to operate risk. The Committee
formally reviews and approves the Report and ensures
that all material topics are covered. The Executive Chair
has ultimate accountability/responsibility for Evolution’s
Sustainability performance (covering emissions, water,
health and safety, community and risk).
June 2022, the Evolution Board has eight members, six are independent, non-executive directors (67% male and 33%
female) and two are executive members (100% male).
The Board is structured to ensure that the Directors’ skills and experience align with our 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 the website.
Governance framework
STAKEHOLDERS
BOARD OF DIRECTORS
EXECUTIVE CHAIR
BOARD SUB COMMITTEES
NOMINATION AND
REMUNERATION
AUDIT
RISK AND SUSTAINABILITY
DELEGATION OF AUTHORITY
LEADERSHIP TEAM
TSF COMMITTEE
SENIOR MANAGEMENT
INVESTMENT
MANAGEMENT COMMITTEE
CORPORATE CULTURE,
VALUES AND
BEHAVIOUR
PERFORMANCE
STANDARDS, POLICIES
AND PROCEDURES
INTEGRATED RISK
MANAGEMENT
The material changes to policies in FY22 were the consolidation of the Sustainability Policy and Strategic Planning Policy
into a single document36, publication of the second Modern Slavery Statement37 , Procurement Statement 38, publication of
Cultural Recognition Statement and updated Supplier Code of Conduct39. Policies are available to view in the Corporate
Governance section of the website. The following policies were reviewed in the last financial year:
■ Anti-Bribery and Corruption Policy
■ Continuous Disclosure Policy
■
Inclusion and Diversity Policy
■ External Communications Policy
■ Shareholder Communication Policy
Australasian Reporting Awards
Board diversity
Evolution has been recognised by Australia’s leading
reporting awards, winning SILVER for our FY21 Annual
Report and BRONZE for the Report at this year’s
Australasian Reporting Awards.
We recognise the benefits that diversity provides to our
Board of Directors. A diverse mix of skills, expertise,
experience, perspectives, age, and characteristics leads
to diversity of thought and a more robust understanding
of opportunities, issues, and risks, thereby creating the
opportunity for improved decision outcomes. As of 30
■ Sustainability and Strategic Planning Policy (includes Safety, Health and Wellbeing, Environment, Tailings Storage Facility
(TSF), Social Responsibility and Cultural Heritage, Planning and Performance Reporting)
■ Cultural Recognition Position Statement (internal document)
Linking remuneration to Sustainability
To reflect our commitment to Sustainability, 30% of the annual short-term incentive plan (STIP) is linked to the achievement
of specific Sustainability targets each year. An additional element was included within the overall strategic objectives
component in FY22 focused on progress against the Net Zero commitment. More information on the Group’s remuneration
policy can be found in the FY22 Annual Report.
34 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
35 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
36 Sustainability and Strategic Planning Policy
37 Modern Slavery Statement
38 Procurement Statement
39 Supplier Code of Conduct
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Governance
Governance
Many communities were affected by the drought, forest
fires and flooding experienced in Australia and Canada
in FY22. We contributed over $600,000 in donations to
forest fire and drought relief and offered in-kind flood
relief through our volunteers and Community
Investment program.
CASE STUDY: Flood Relief following
Wyangala spill
In early November 2021, heavy rains and riverine flooding
threatened to cause damage across the region of the
Cowal operation. On November 11, the Wyangala Dam in
the Lachlan Valley was on watch as significant rainfall had
refilled the reservoir and threatened to exceed storage
capacity. The next day, the dam was spilling over with
Forbes and Condobolin expecting the Lachlan River to
continue to rise in the coming days. There were concerns
that rain inflows were expected to increase to a peak of
65-70 gigalitres, endangering the community. To protect
properties and community members most in danger from
the rising dam and Lachlan River, Evolution volunteers
across the Cowal operations, including from Sustainability,
Commercial, and Finance supported emergency services
by filling sandbags.
Extreme weather and health events
Each operation is located in geographically unique
parts of Australia and Canada and often adjacent to
landholders and regional communities. In a crisis, our
people are often first responders and make themselves
available to assist neighbours, community and
neighbouring mines. Through a TCFD alignment review
conducted in FY20, extreme weather was identified as
one of four 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 and broader
health events.
Operations prepare thorough mitigation actions including:
■ Providing for cyclone
■ Rain and wind proof infrastructure and shelter
■ Certified water storage and drainage network
■ Secured buildings and infrastructure
■ Telemetry weather detection systems including
lightning
■ Emergency response equipment including fire tenders
and ambulance and personnel, training, scenario and
competition
Operations’ response plans are formally 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
the communities.
Regulatory compliance
Regulatory compliance is essential to supporting our
licence to operate. We comply with relevant laws,
regulations, and authorisations as required during the
various stages of project development and operations.
We implement a suite of detailed management plans and
maintain a register of approvals, permits, and obligations
to assist in managing our responsibilities. We engage
with a range of specialist consultants and subject experts
(including legal due diligence) to advise on managing
compliance matters.
We routinely conduct targeted audits of compliance
against applicable regulatory standards and report
the outcomes to the Audit and Risk and Sustainability
Committees. During FY22, there were no instances of
non-compliance with regulatory authorities leading to any
fines or enforcement actions.
Crisis response (including pandemic)
(material topic)
There is an established risk-based Crisis Management and
Business Continuity approach to identify incidents that
have the potential to significantly disrupt the operation
and the relevant controls to mitigate the risk likelihood
and consequence.
The measures outlined incorporate the organisational
responsibilities, the available internal and external
resources, the communication, escalation and training
requirements, supported by clear processes, guidelines
and procedures to effectively manage the crisis. In FY22,
the execution of crisis management was ongoing given
the nature of COVID-19, flood, fire and water events.
This allowed for experience to be gained through real
exercises involving both operational and corporate teams.
CASE STUDY: Boost to
emergency services
Last year, we supported a capability uplift to local
emergency services of the Balmertown fire department
through the provision of a fit for purpose Fire Truck and
financial support to local businesses and the Municipality
of Red Lake. The truck arrived in May 2022, bringing relief
and assurance to the local emergency services and the
Evolution Red Lake team.
We contributed more than $545,000, and also provided
volunteers in 2021/2022 in response to forest fires,
flooding and threats to production in the Balmertown and
surrounding area.
Assurance and audit
An assurance plan is endorsed annually by the Leadership
Team and is submitted to the Risk and Sustainability
Committee for ratification. Outcomes of the FY22
assurance plan were audited by a third party. There were
areas for improvement identified across the Sustainability
portfolio that included health and safety, environment,
social responsibility and Cultural Heritage. As part of the
process, all sites were required to submit remedial action
plans for approval and ongoing tracking and reporting.
A leading indicator on ensuring all material and critical
actions has also been integrated into our scorecard and
is linked to the remuneration strategy. This reinforces
the importance of tracking, reporting and the closure
of findings that may arise from audit, incident review or
internal/external incidents. In FY22 there were no overdue
critical or material actions.
Risk mitigation and management
The successful delivery of our strategic objectives
depends on the effective identification, understanding
and mitigation of risks together with any associated
opportunities. We have an established risk management
framework and wider system of internal controls which
inform decision making in support of creating shared
value in a sustainable way.
A risk-based decision approach is supported by
the Sustainability and Strategic Planning Policy and
associated Standards, along with the Integrated Risk
Management Framework. Group and site systems and
procedures are developed to align with these key systems
and the principles of the international standards and
ICMM guidance.
In FY22 the Risk Management Framework underwent
review with updates currently being developed to further
drive consistency of assessment across the business, and
increased focus on the Group strategic risks.
Our Risk Management Framework is based on ISO 31000
and includes risk identification, analysis, monitoring and
reporting. The approach and related processes consider
a broad spectrum of stakeholders and potential internal
and external risk exposures and are used to identify and
leverage potential up-side, risk-related opportunities.
At the site and corporate levels, we conduct risk
assessments to evaluate operational, health and safety,
environmental, social, business, finance, and reputational
risks and opportunities, among others. Scheduled reviews
are conducted by functional risk owners, site-based
risk champions, and senior leaders at the enterprise,
functional and site levels.
The Risk and Sustainability Committee is responsible
for overseeing enterprise-level effectiveness of our
risk management program, and for knowing and
understanding the details of the material risks of the
business. As part of its oversight responsibility, the Board
ensures that a proper balance between risks incurred
and potential return to shareholders is maintained, that
risk management programs are in place and effective
(including internal control frameworks and insurance and
loss prevention efforts) and ensures implementation of
policies and standards for monitoring and managing risks.
A list of material enterprise risks is prepared for review by
the Board Risk and Sustainability Committee three times
per year, with follow-on reporting and discussion with
the Board.
Evolution and Balmertown fire department welcome new fire truck
Cowal volunteers filling sandbags for Wyangala Dam
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Governance
Governance
COVID-19 pandemic response
The health, safety and wellbeing of our employees, contractors and the communities where we operate is essential to how
we do business.
Our response to COVID-19 was managed in a structured way that included reference to the changing recommendations
of health authorities, and local and national regulatory requirements. The impacts to people and operations were felt
throughout the year, with short-term restrictions on workforce participation due to isolation demands or positive cases,
particularly when the pandemic was at its peak. Operations continued to safely operate during this time.
Extensive measures to prevent the spread of COVID-19 were implemented and continue to provide support to all
employees and local communities. Efforts are structured around five key pillars:
1. Prevention
Extensive preventive measures were implemented across all operations
to safeguard the health of our employees, contractors and community.
These included the promotion of vaccinations, the wearing of masks,
supporting physical distancing and good hygiene practices, implementing
remote work wherever feasible, enhanced cleaning and disinfecting
protocols, promoting personal preventive measures, and screening
all employees, contractors and external visitors for risk factors and
symptoms.
2. Worker support
Sick leave benefits were expanded
to ensure anyone that was
required to self-isolate remained
eligible for sick leave benefits, and
flexible working arrangements
were reviewed. New and
expanded employee services such
as Employee Assistance Program
(EAP) programs were extended
that included additional support
services and crisis counselling,
as well as other on demand
and virtual medical and mental
healthcare services. Specialist
medical advice and care was also
provided as required that included
the promotion and support of
vaccination clinics.
3. Communities and
public health
Support for Community groups
and employees remains and is
expected to continue through
FY23. Evolution has additionally
provided donations to the 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 the
communities. We We supported
critical social initiatives in
areas where we operate. This
included operating vaccination
clinics, providing masks and
rapid antigen test kits and other
community support efforts.
4. Business continuity
Despite the challenges, all
Evolution operations continued
to safely operate, with COVID-19
measures in place. These
measures followed best practices
and guidance from health and
government authorities. All
Evolution activities continue to be
underpinned by a continued focus
on leadership.
A COVID-19 Crisis Management
Team (CMT) was established,
chaired by the Vice President
Sustainability. The` CMT continues
today, with regular updates to the
Leadership Team and the Board.
Formalised COVID-19 management
teams at site remain in place.
We continue to identify and
implement measures and the
formally established Crisis
Management Team. This is led by
members of the Leadership Team
that remains as a formal response
mechanism.
5. Communications
To mitigate the mental and physical health impacts that lockdowns and periods of isolation may cause,
communication lines were strengthened across the business as well as with the Employee Assistance Program
(EAP). Sites also deployed technologies to enable risk mitigation and contact tracing, such as contact tracing cards
at Cowal and QR codes in the Sydney Office. The site access protocols were also strengthened at each site.
Ongoing communication around COVID-19
management to ensure a continual feedback loop
has been delivered where information, questions
and feedback is provided. This ensured ongoing
connection and feedback loop with the workforce
and community.
A small example of keeping people healthy,
maintaining safe and reliable operations and
supporting the communities was the support given
by the Ernest Henry team to community education
facilities when COVID-19 mandates changed. The
team donated personal protection equipment,
valued at $3,500, including 8,000 single-use masks
to the Cloncurry State School P-12, St Joseph’s
Catholic School, C&K Cloncurry Kindergarten, and
the Curry Kids Early Learning Centre
Cloncurry State School Principal and students
presented with face masks by EHO Sustainability
Manager, Adam Fewster
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, along with the associated corporate
governance, are included in the Whistleblower Policy41 and
Standard42.
The process is managed by an external third party in
conjunction with the People and Culture department.
Whistleblowing events and any actions are reported to
the Audit Committee and the Risk and Sustainability
Committee.
There were four Whistleblower cases reported in FY22 via
the FairCall (KPMG) service in Australia and Canada.
Each case was investigated, addressed and reported
through to the Board.
Political parties and public organisations
We do 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
FY22, no donations or payments were made to political
organisations.
Transparency and disclosure
We are committed to open and transparent dealings
with all the 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.
Tax Transparency Code
We are committed to open and transparent dealings
with all our stakeholders. Payment of tax is an
important element of our contribution to the economic
development of Australia and Canada. At a minimum, we
comply with the Australian Government’s Voluntary Tax
Transparency Code. Payments to government, including
taxes and royalties, is provided separately in the 2021
Tax Governance Statement available at the website43
and FY22 ESG Performance Data document (economic
performance section). Evolution has a publicly available
Board approved Tax Governance Policy that complies
with the guidance set out by the Australian Taxation
Office.
Business ethics
The Code of Conduct40 sets the standards for our people
to act ethically, responsibly and lawfully. It applies to
Directors, all employees, contractors and consultants
employed to undertake work on behalf of, or for Evolution
and its subsidiaries. It guides us in meeting 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.
We have established broad-based communication and
training programs to ensure that all individuals working at
the operations take cognisance of how they conduct their
duties, and we ensure that the Code is included as part
of contractual agreements with consultants, advisors and
contractors.
The Code is regularly reviewed to ensure that it remains
on par with industry standards, regulatory amendments
and the operating environment. During the reporting
period, work also commenced on reviewing the supplier
and vendor on-boarding processes to ensure alignment
with international and industry best practice standards
and frameworks.
All new employees in FY22 received Code of Conduct
training as part of the onboarding process.
Economic performance
Our performance is continuously monitored against its
stated objectives, opportunity and risk assessments are
conducted, and findings are integrated into the
financial strategy.
Refer to: Evolution’s economic performance is provided
in the financial section of FY22 Annual Report
Anti-bribery and corruption (material topic)
Evolution views any bribery or corruption behaviour as
unacceptable. We have an Anti-Bribery and Corruption
Policy which extends across all our businesses and
activities, and applies to Evolution Directors, officers,
employees, labour hire contractors and consultants
employed to undertake work on behalf of, or for Evolution
and its subsidiaries. Anti-bribery and corruption training is
provided to all employees.
We expect contractors, suppliers and business partners
to comply with the Anti-Bribery and Corruption Policy,
which is included in the Supplier Code of Conduct.
In addition, we have an anti-bribery and anti-corruption
clause in all our supplier contracts and undertake vendor
due diligence as part of the supplier onboarding and
contract renewal process.
All reported incidents of non-compliance or potential non-
compliance are taken seriously, reviewed, and investigated.
In FY22, there were no reported incidents of corruption.
40 Employee Code of Conduct
41 Whistleblower Policy
42 Whistleblower Standard
43 Tax Governance Statement
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Governance
Governance
In FY22 we:
■ Conducted cyber security risk assessments against
■ Engaged a managed cyber threat and response
our information technology and operating technology
environments
■
Implemented a dedicated operational technology (OT)
cyber governance framework to operate alongside the
existing IT cyber governance framework
■ Performed cyber security penetration testing and
remediation activities
■ Updated the IT/OT cyber security program based on
the cyber risk assessment findings
■ Conducted cyber supply chain risk assessments
■ Commenced an audit program for OT controls
assessments
■ Conducted desktop incident response simulations and
updated the response plans
provider
■ Reviewed and updated cyber security policies
Management and the Board have identified cyber
security as a critical risk and receive regular reports on
cyber security preparedness. Cyber security is a standing
agenda item on the Board Risk and Sustainability
Committee agenda with reporting occurring at
each Committee meeting which includes detail on
management’s efforts and initiatives to monitor and
prevent cyber incursions. Significant investment in a
comprehensive end-to-end IT system is driven by a
recognition that Evolution needs to continually invest in
cybersecurity.
Cyber security (material topic)
Like many businesses and organisations, we face constant and evolving cyber threats. The operating and control systems
at the sites increasingly use digital platforms and technology-based solutions. As such, the security of these systems is
crucial for operating our operations safely and efficiently, making cyber security one of our material business risks. We
remain vigilant regarding any cyber risks, and the workforce receives regular awareness training and communications on
what they should do to manage potential threats.
Evolution’s cyber security framework
Business objectives & risks
Cyber Threats
Unauthorised loss of data
Unauthorised change of
data
Cyber risk culture and
behaviour
Cyber risk management,
metrics & reporting
Secure
Vigilant
Resilient
Governance
Identity Lifecycle
Management
Role Based Access Control
Secure SDLC
User Access Control
Penetration Testing
Incident & Crisis Readiness
Privileged User Access
Control
Post Development
Application Protection
Cyber Threat Intelligence
Incident Response
Brand Protection
Business Continuity
Management and Disaster
Recovery
Asset Management
System Security
Security Event Monitoring
Malware Protection
Network Security
Patch Management
End User Device Security
Human Resources Security
Vulnerability Management
Physical Security
Data Loss Prevention
Cyber Analytics
Encryption
Information Lifecycle
Management (incl Backups)
Security Platform
Administration – Daily,
Weekly, Monthly, Quarterly
Data Privacy
Information Classification
Cloud Security
Third Party Risk
Management
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:
■ A cybersecurity policy applicable to all employees
■ A cybersecurity strategy program as part of Evolution’s overall information technology (IT) strategy
■ Clear responsibilities with a centralised IT function and dedicated capability
■ Cyber awareness training (95% compliance) supported by ongoing awareness alerts and education
■ Defined Disaster Recovery scenarios with Disaster Recovery testing on six-monthly cycles
■ Governance reporting and regular assurance including external audits, Incident Response exercises, penetration testing,
and assessment against standards and leading guidance
■ Regular cyber security risk assessments to ensure new technology is appraised for security risks before implementation
■ Encryption of laptops and mobile devices to ensure that information is inaccessible when these devices are lost or stolen
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Governance
Glossary
Glossary
“AA” rating
$
ALO
AMD
B
BBP
BEV
CMT
CN
Rating credibility used in the MSCI review. The lowest rating of “CCC” to the highest rating of
“AAA”
All amounts are expressed in Australian dollars unless stated otherwise
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
CO2-e
Carbon dioxide equivalent. A standard unit for measuring carbon footprints
COVID-19
CSA
CSIRO
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 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
LOD
LOM
M
ML
MSA
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
Line of Defence
Life of Mine
Million. Number equivalent to the product of a thousand and a thousand
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
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Governance
Glossary
MSCI
NGER
NIST
NIER
NGOs
NMD
NPI
PAF
PPE
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
S&P Global
Company that provides data, research, news and analytics to customers including institutional
investors and corporations
SAM
Scope 1
Scope 2
SD
STIP
t
SA
TARP
TCFD
TRIF
TSF
UN SDGs
WORK 180
Title for the Corporate Sustainability Assessment. SAM refers to historic naming when the CSA
was hosted by RobecoSAM AG. It is now transferred to S&P Global Switzerland SA and known as
the SAM Corporate Sustainability Assessment
Category of greenhouse gas emissions. Scope 1 is sometimes referred to as direct emissions and
refers to emissions released to the atmosphere as a direct result of an activity
Category of greenhouse gas emissions. Scope 2 refers to emissions released to the atmosphere
from the indirect consumption of an energy commodity
Saline drainage. This is saline and metal-rich drainage that has been produced by the oxidation of
metal sulphides that do not generate net acidity
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
Chief Financial Officer’s review
Chief Financial Officer’s
review
Total gold sold of 641,413 ounces included deliveries
into the Australian gold hedge book of 100,000 ounces
at an average price of $1,916 per ounce (FY21: 100,000
ounces, $1,829/oz) and into the Canadian hedge book
of 40,000 ounces at an average price of C$2,270 per
ounce. The remaining 501,413 ounces were sold at spot
comprising 435,336 ounces delivered at an average price
of $2,522/oz (30 June 2021: 456,001oz, $2,474/oz) and
66,077, ounces delivered at an average price of C$2,357/
oz (30 June 2021: 81,169 ounces, $2,361/oz). At 30 June
2022 the Group’s gold delivery commitments totalled
100,000 ounces at a price of $1,916/oz for the Australian
operations and 40,000 ounces at C$2,272/oz for Red
Lake with quarterly deliveries through to June 2023.
Copper revenue was a record with a 107% increase from
the prior year to $491.4 million (30 June 2021: $236.9
million), driven by an 81.8% increase in production to
38,834 tonnes and a 12.3% increase in copper price
of $12,546/t. The uplift in copper production was
attributable to the acquisition of full ownership of Ernest
Henry on 6 January 2022 (effective 1 January 2022).
Inventory costs expensed were $51.0 million lower
driven by the increased value of stockpile inventories
predominantly at Cowal and Mungari.
Royalties were higher than the prior year primarily driven
by higher achieved metal prices offset by lower metal
quantities sold. By-product revenue was up 9% due to
higher metal prices.
Tax expense for FY22 of $94.4 million is $56.5 million
lower than FY21 reflecting the lower profit achieved in
the year.
Operating mine cash flow decreased by 5% totalling
$893.3 million (30 June 2021: $937.3 million). Total capital
investment was $606.4 million (30 June 2021: $379.8
million) which included $147.0 million of sustaining
capital investment (30 June 2021: $105.7 million) and
$459.3 million of major capital investment (30 June 2021:
$274.1 million). The major capital investment related
predominantly to the underground project at Cowal and
growth projects at Red Lake.
In July 2021, the Group successfully completed a $400
million fully underwritten institutional placement of
approximately 104 million new fully paid ordinary
Evolution shares to institutional investors at a price of
$3.85 per share. The funds raised under the placement
were used to fund the acquisition of the Kundana
mine and Carbine project, a 51% interest in the East
Kundana Joint Venture (EKJV) and a 75% interest in
the West Kundana Joint Venture (the Kundana assets)
from Northern Star Resources Limited. The Group also
successfully raised approximately $68 million under the
In the 2022 financial year (FY22), Evolution delivered
its second highest statutory net profit on record with
commitment of returns to our shareholders maintained
with a full year dividend of 6 cents per share declared.
Evolution achieved a statutory net profit after tax of
$323.3 million for FY22, a 6.4% decrease on the prior
record year (30 June 2021: $345.3 million). Underlying
profit after tax was $274.7 million (30 June 2021: $354.3
million).
Group gold production was 640,275 ounces at an All-in
Sustaining Cost (AISC) of $1,259 per ounce (US$914/oz)1
which continues to place Evolution among the lowest
cost producers in the world. In FY23, Evolution has
guided higher production of 720,000 ounces (+/- 5%) at
an AISC of $1,240 per ounce (+/- 5%).
Revenue for the FY22 increased by 11% to $2,064.9 million
(30 June 2021: $1,864.1 million). The higher achieved gold
price of $2,425/oz (30 June 2021: $2,369/oz) was partially
offset by a decrease in sold ounces for the year to
641,413oz (30 June 2021: 677,150oz). Revenue comprised
of $1,556.1 million from gold, $491.4 million from copper
and $17.4 million from silver (30 June 2021: $1,605.0
million from gold, $236.9 million from copper and
$22.1 million from silver).
1 Using the average AUD:USD exchange rate of 0.7258 for the 12 months of FY22
136 Annual Report | www.evolutionmining.com.au
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Chief Financial Officer’s review
Board of Directors
Share Purchase Plan at $3.85 per new share in August
2021 with the funds to be used for general corporate
purposes. Both capital issues received exceptionally
strong support from investors.
During the year we repositioned the balance sheet to
align our debt structure to our expected cash flows from
our long-life suite of assets. Evolution received a maiden
investment grade credit rating and successfully priced
a US$550 million debt placement in the United States
private placement market. The drawdown of the inaugural
US Private Placement was completed in November 2021.
In August 2022, as part of the regular annual review
process, the Group received confirmation the investment
grade rating has been reaffirmed.
Consistent with Evolution’s strategy to continuously seek
to upgrade the quality of its portfolio, in October 2021 the
Company entered into a binding agreement with Navarre
Minerals Limited to sell the Mt Carlton gold mine in
Queensland for a total consideration of up to $90 million.
In November 2021, Evolution announced the acquisition
of full ownership of the Ernest Henry operation. The
Company previously held an economic interest in Ernest
Henry which is a large-scale, long-life, copper-gold mine
located ~38km north-east of Cloncurry, Queensland. An
immediate increase in copper production reduced the
Group’s AISC and positions Evolution as one of the lowest
cost gold producers in the world. The acquisition was
via an agreement with Glencore to acquire 100% of the
shares in Ernest Henry Mining Pty Ltd for $1 billion. To
complete the acquisition an initial consideration of $800
million was paid to Glencore on 6 January 2022, with the
remaining $200 million due and payable on 6 January
2023. The transaction was partly funded from a new
US$200 million US Private Placement maturing in FY31,
which settled on 15 February 2022.
Fully franked dividends of $146.6 million (FY21: $273.4
million) were paid during the year.
The Directors declared a final fully franked dividend
of 3.0 cents per share, which is the 19th consecutive
dividend (30 June 2021: 5.0 cents). This resulted in a full
year dividend of 6.0 cents per share being declared for
FY22, delivering over $110 million to shareholders for
the year. We did not change our dividend policy which
is to, whenever possible, pay 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.
In summary, the 2022 financial year was another year of
strong financial performance for Evolution. As we look
forward to FY23 and beyond, our strong cash position
and robust balance sheet will allow us to invest in the
growth opportunities within our portfolio which will
increase production of high margin ounces which is
expected to continue to generate superior returns for
our investors.
Yours faithfully
LAWRIE CONWAY
FINANCE DIRECTOR AND CHIEF FINANCIAL OFFICER
Financials
Statutory Profit after tax
Underlying Profit after tax
EBITDA
EBITDA Margin
Operating Mine Cash flow
Capital investment
Group Cash flow
Earnings per share
Full Year Dividend (fully franked)
Units
$M
$M
$M
%
$M
$M
$M
cps
cps
FY22
323.3
274.7
898.8
44%
893.3
606.4
110.5
17.7
6.0
FY21
345.3
354.3
914.2
49%
937.3
379.8
326.3
20.2
12.0
Change
(6%)
(22%)
(2%)
(11%)
(5%)
60%
(66%)
(12%)
(50%)
1 Cash flow before dividends, debt repayments, equity raises and any acquisitions or divestments
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 Chair
Mr Klein founded Evolution in
October 2011 following the merger
of Conquest Mining Limited and
Catalpa Resources Limited and
was appointed as Executive
Chair. Previously he served as the
Executive Chair of Conquest Mining.
Prior to that, Mr Klein was President
and CEO of Sino Gold Mining
Limited, where he was one of the
founders and led the development
of that company into the largest
foreign participant in the Chinese
gold industry. Sino Gold was listed
on the ASX in 2002 with a market
capitalisation of A$100 million
and was purchased by Eldorado
Gold Corporation in late 2009
for over A$2 billion. It became an
ASX/S&P 100 Company, operating
two award-winning gold mines and
engaging over 2,000 employees and
contractors in China. Prior to joining
Sino Gold (and its predecessor)
in 1995, Mr Klein was employed at
Macquarie Bank and PwC.
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.
Effective 31 August 2022, Lawrie
retired from the Board of Aurelia
Metals where he served as a Non-
executive Director from 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 (Chair 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.
138 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 139
Board of Directors
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 Chair of Prodigy
Gold NL and Genesis Minerals
Limited and Non-Executive Director
at Arrow Minerals Limited.
Mr McKeith is 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, Ms Hall 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. Ms Hall 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. Most recently
he was the President and CEO of
Gold Standard Ventures Corporation
until its acquisition by Orla Mining
in August 2022. 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 the Lead Independent
Director (effective 1 December 2021)
and 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 Chair 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, Sims Limited 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.
140 Annual Report | www.evolutionmining.com.au
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Annual Financial Report
Annual Financial Report
Annual Financial
Report
Content page
Appendix 4E
Directors’ report
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
Shareholder information
Corporate information
144
145-181
182
183
184
185
186
187-230
231
232-239
240-241
242
142 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 143
Appendix 4E
Appendix 4E
Evolution Mining Limited
Directors' Report
30 June 2022
APPENDIX 4E
EVOLUTION MINING LIMITED ACN 084 669 036
AND
CONTROLLED ENTITIES ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Results for Announcement to the Market
Key Information
30 June 2022
30 June 2021
Up / (down)
% Increase/
$'000
$'000
$'000
(decrease)
Revenues from contracts with customers
2,064,928
1,864,058
200,870
Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA)
898,814
914,235
(15,421)
11 %
(2) %
Statutory profit before income tax
417,748
496,172
(78,424)
(16) %
Profit from ordinary activities after income tax attributable to the
members
323,324
345,262
(21,938)
(6) %
Dividend Information
Final dividend for the year ended 30 June 2022
Dividend to be paid on 30 September 2022
Interim dividend for the year ended 30 June 2022
Dividend fully paid on 25 March 2022
Final dividend for the year ended 30 June 2021
Dividend fully paid on 28 September 2021
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
3.0
3.0
3.0
3.0
5.0
5.0
30 June 2022
$
30 June 2021
$
1.89
1.51
30 June 2022
Cents
17.74
17.70
30 June 2021
Cents
20.21
20.14
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.
Directors’ report
Directors’ report
Evolution Mining Limited
Directors' Report
30 June 2022
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 2022.
Directors
The Directors of the Group during the year ended 30 June 2022 and up to the date of this report are set out below. All Directors held their position as
a Director throughout the entire year and up to the date of this report unless otherwise stated.
Jacob (Jake) Klein
Lawrence (Lawrie) Conway
Jason Attew (i)
Thomas (Tommy) McKeith (ii)
James (Jim) Askew
Andrea Hall
Victoria (Vicky) Binns
Peter Smith
Executive Chair
Finance Director and Chief Financial Officer
Lead Independent Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
(i) Appointed as Lead Independent Director effective 1 December 2021
(ii) Ceased to be Lead Independent Director effective 1 December 2021
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 2022 include:
Portfolio
•
The past twelve months has seen Evolution continue to execute against our strategy through the acquisition of Kundana and EKJV to
consolidate the Mungari operation; move to 100% ownership of the Ernest Henry operation; and divestment of the Mt Carlton operation. These
changes to the portfolio have considerably improved the quality of the portfolio and will deliver superior returns over the long term for our
shareholders.
• While our operational performance in the past twelve months did not deliver to shareholders or our expectations, pleasingly the operations
ended FY22 in a position to deliver more consistently in FY23. We progressed well with our growth projects, in particular the Cowal
underground mine development and the new Upper Campbell underground mine at Red Lake and both projects are on schedule and budget.
Our studies for organic growth at our operations also advanced, including the mine extension at Ernest Henry; the plant expansion at Mungari;
the Pumped Hydro Project at Mt Rawdon; and multiple transformation projects at Red Lake.
•
The changes to our portfolio, together with the growth projects and studies, provide the solid platform for Evolution over the next few years
where production is planned to increase by around 25% and maintain a very low cost position. In FY23, production is planned to increase by
12.5% to around 720,000 ounces, increasing a further 11% to around 800,000 ounces in FY24. All-in Sustaining Cost (AISC) is planned to be
maintained at around A$1,240 per ounce in FY23 and FY24.
Sustainability
•
•
Sustainability has been at the core of Evolution since inception and is integrated into every aspect of the business. This captures the health,
safety, environment, First Nations engagement and broader community relations to ensure we operate in a socially and environmentally
responsible way. The Group publicly committed to transition to “Net Zero” greenhouse gas emissions by 2050 (scope 1 and 2) and a 30%
reduction in emissions by 2030. In FY22, we achieved a significant reduction in our net use of energy with our emissions per tonne of material
mined ~7% lower compared to the FY20 baseline.
Nation
The Group continues to be recognised for its Sustainability performance, achieving a sector leading rating in Sustainalytics, ISS and MSCI
ESG Ratings assessments and being one of three gold companies recognised in the Dow Jones Sustainability Index Australia.
1
144 Annual Report | evolutionmining.com
Annual Report | www.evolutionmining.com.au 145
Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Key highlights for the year (continued)
Sustainability (continued)
•
•
The Group demonstrated resilience and strong risk management though the COVID-19 pandemic. Operations were maintained, supported by
protocols developed to minimise risks to our people and communities that allowed safe production during this challenging time.
Notwithstanding these measures, regulatory isolation requirements resulted in high levels of COVID related absenteeism which adversely
impacted the performance during the year.
The Group remains committed to an improved health and safety performance with a heavy focus on leading indicators, increased reporting,
field leadership, action closure discipline and high-quality safety interactions. Overall health and safety improved across the Group, with
delivery on or better than target. The total recordable injury frequency (TRIF) was 10.66 (including 6 months at Ernest Henry) as at 30 June
2022.
Financials
•
•
•
•
•
•
•
•
•
•
The Group achieved a statutory net profit after tax of $323.3 million for the year (30 June 2021: $345.3 million).
Basic earnings per share was 17.74 cents per share (30 June 2021: 20.21 cents).
Fully franked dividends of $146.6 million (30 June 2021: $273.4 million) were paid during the year.
The Directors declared a final fully franked dividend of 3.0 cents per share, which is the 19th consecutive dividend (30 June 2021: 5.0 cents).
The aggregate amount of the final dividend to be paid on 30 September 2022 is estimated at $55.0 million.
The Group's key results are as follows:
◦
◦
Total gold production of 640,275oz at an AISC of $1,259/oz.
Operating mine and net mine cash flow of $893.3 million and $284.1 million respectively.
In July 2021, the Group successfully completed a $400 million fully underwritten institutional placement of approximately 104 million new fully
paid ordinary Evolution shares to institutional investors at a price of $3.85 per share. The funds raised under the placement were used to fund
the acquisition of the Kundana mine and Carbine project, a 51% interest in the EKJV, and a 75% interest in the West Kundana Joint Venture
(the Kundana assets). The Group also successfully raised approximately $68 million under the Share Purchase Plan at $3.85 per new share in
August 2021 with the funds to be used for general corporate purposes. Both capital issues received strong support from investors.
On 13 August 2021, the Group announced that it had received an investment grade credit rating and successfully priced a US$550 million
placement in the United States private placement market. The drawdown of the inaugural US Private Placement was completed in November
2021. On 4 August 2022, as part of the regular annual review process the Group received confirmation the investment grade rating has been
reaffirmed.
On 18 August 2021 the acquisition of the Kundana assets from Northern Star Resources Limited was completed with effective date being 1
August 2021. Processing of higher grade ore from Kundana commenced in late August and the first ore processing campaign for EKJV
(Evolution's interest 51%) was completed as planned in October 2021.
On 5 October 2021, consistent with the Group's strategy to continuously seek to upgrade the quality of its portfolio, Evolution entered into a
binding agreement with Navarre Minerals Limited to sell the Mt Carlton gold mine in Queensland for a total consideration of up to $90 million.
The sale was completed on 14 December 2021 with Navarre's economic interest in Mt Carlton commencing from 1 October 2021.
On 17 November 2021, the Group announced the acquisition of full ownership of the Ernest Henry operation. Evolution previously held an
economic interest in Ernest Henry which is a large-scale, long-life, copper-gold mine located ~38km north-east of Cloncurry, Queensland. An
immediate increase in copper production reduced the Group's All-in Sustaining Costs and positions Evolution as one of the lowest cost gold
producers in the world. The acquisition was via an agreement with Glencore to acquire 100% of the shares in Ernest Henry Mining Pty Ltd for
$1 billion. To complete the acquisition an initial consideration of $800 million was paid to Glencore on 6 January 2022, with the remaining $200
million due and payable on 6 January 2023. The transaction was partly funded from a new US$200 million US Private Placement maturing in
FY31, which settled on 15 February 2022.
Operations
•
Cowal achieved significant milestones during the year with the Board and regulatory approvals to commence construction of the new
Underground mine adjacent to the existing E42 open pit. The project has now awarded all material contracts and remains on budget and
schedule for critical path items, with first stope ore planned for Q4 FY23. The waste strip of Stage H completed in Q1 FY22 which has enabled
the operation to access higher grade ore. Construction of the Integrated Waste Landform continued as planned to provide tailings capacity to
support the life of mine.
Evolution Mining Limited
Directors' Report
30 June 2022
Key highlights for the year (continued)
Operations (continued)
•
•
Ernest Henry was successfully integrated into the Evolution portfolio. The significance of acquiring full ownership of the operation from 1
January 2022 is evidenced by the material net mine cash flow generated in FY22 at over $435 million. A new Mineral Resource estimate for
Ernest Henry was published on 1 August 2022, with contained copper increasing 28% and contained gold increasing 24%. This new Mineral
Resource estimate will inform the Pre-Feasibility study on a mine extension down to the 775mRL that is due for completion in December 2022.
At Red Lake the transformation focused on operational improvements to both mining and processing, with performance now at the rates
required to deliver FY23 production guidance. Development rates averaged over 1,200 metres per month for the last nine months of FY22
which has enabled the operation to access additional mining fronts and increase mining rates. Construction of the Campbell Young Dickenson
(CYD) decline ramped up during FY22 which will enable first stope ore from Upper Campbell to be mined in the September 2022 quarter. The
upper limits of the Campbell and Red Lake processing plant throughput rates were tested during FY22 and the result is that they are now
consistently processing at an annual equivalent of 1 million tonnes per annum.
• Mungari focussed on integrating the Kundana and EKJV operations as “one Mungari” during the year, with both cost and operational
benefits realised to date. The increase in mined grade, production and ongoing synergies demonstrate the strategic significance of that
acquisition. A Feasibility study on a mill expansion at Mungari is ongoing, and is due for completion by December 2022. An expanded mill
has the ability to unlock significant long-term value at the operation through increased processing capacity and lower costs.
•
The Mt Rawdon Pumped Hydro (MRPH) project has the potential to make a significant contribution towards Queensland's renewable energy
ambitions. The Feasibility Study is being completed with our partner, Ironstone Capital Australia, and is due for completion in June 2023.
Evolution will retain a 50% share of the MRPH project if the project proceeds.
Operating and Financial Review
Evolution is a leading, low-cost Australian gold mining company. As at 30 June 2022, the Group consisted of five wholly-owned operating mines:
Cowal in New South Wales; Ernest Henry and Mt Rawdon in Queensland; Mungari in Western Australia and Red Lake in Ontario, Canada.
The Group completed the acquisition of Kundana and EKJV on 18 August 2021, divested Mt Carlton on 14 December 2021 effective 1 October 2021
and acquired full ownership of Ernest Henry on 6 January 2022 with the effective date being 1 January 2022.
Evolution’s vision is for inspired people to create a premier global gold company which will generate superior returns for our shareholders and deliver
benefits to all of our stakeholders. The Group strives to build a reputation of sustainability, reliability and transparency. Financial discipline must be
core and embedded across the entire business. 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 up 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 places equal
importance on our ability to remain agile, recognise value and execute on opportunities to improve the portfolio. The restructure of the portfolio over
the past twelve months demonstrates our commitment to our strategy, ensuring margin over ounces is preserved and positions Evolution for the next
phase of growth.
The Group remains open to all quality gold, silver and gold-copper value accretive investments.
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Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Key highlights for the year (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 Mt Carlton
Gain on remeasurement of existing interest in Ernest Henry Mine
Transaction and integration costs (including stamp duty)
Underlying profit before income tax
Income tax expense
Tax benefit on sale of Mt Carlton
Tax effect of adjustments
Recognition of previously unrecognised tax losses
Underlying profit after income tax
Cash Flow
30 June 2022
$000
417,748
(9,958)
(154,206)
130,117
383,701
(94,424)
(4,902)
(9,652)
—
274,723
30 June 2021
$000
496,172
—
—
15,058
511,230
(150,910)
—
(4,517)
(1,461)
354,341
Operating mine cash flow decreased by 5% totalling $893.3 million (30 June 2021: $937.3 million). Total capital investment was $606.4 million (30
June 2021: $379.8 million) which included $147.1 million (30 June 2021: $105.7 million) of sustaining capital investment and $459.3 million (30 June
2021: $274.1 million) of major capital investment. The major capital investment related predominantly to the Underground Project at Cowal and
growth projects at Red Lake. Mine cash flow before major capital investment was $746.2 million (30 June 2021: $831.6 million).
Evolution Mining Limited
Directors' Report
30 June 2022
Key highlights for the year (continued)
Profit Overview
The Group achieved a statutory net profit after tax of $323.3 million for the year ended 30 June 2022 (30 June 2021: $345.3 million). The underlying
net profit after tax was $274.7 million for the year (30 June 2021: $354.3 million). The main drivers to the change in profit year on year has been the
acquisition and divestment of assets; higher achieved gold and copper prices offsetting lower production; and higher operating costs at existing
assets due to increased activities and slightly higher input costs. The following graph reflects the movements in the Group's profit after tax for the
year ended 30 June 2022 compared to the year ended 30 June 2021.
The divestment of Mt Carlton resulted in an increase to profit of $23.7 million.
Revenue at existing operations increased by $68.4m ($48.1m for gold and $20.3m for by-products), driven primarily by higher achieved metal prices
partially offset by lower quantities sold. The full acquisition of Ernest Henry contributed an additional $251.8m in by-product credits generated from an
additional 20,288t of copper and 85,067oz of silver.
The full acquisition of Ernest Henry and acquisition of Kundana and EKJV lead to the majority of the increase to Operating Costs which contributed
$145.7m and $104.1m respectively.
Operating Costs at other operations increased by $104.4m. During the year capitalisation of Stage H at Cowal was completed, resulting in lower
costs capitalised and now expensed. This equated to $37.9m being expensed, noting that from a cash perspective there was minor change as these
costs were being capitalised in FY2021. Red Lake tonnes mined and processed increased by 25% which resulted in mining costs increase by $9.7m
whilst processing costs increased $9.4m. In FY2022 Red Lake commenced shipping concentrate causing selling, refining and logistics costs to
increase by $6.6m.
All sites were adversely affected by recent increases in input costs due to the impact of Covid on supply chains, the Russia-Ukraine conflict, and
general inflationary pressures globally driving commodity prices higher. These price increases contributed to approximately 4.9% increase in
operating expenses, or $42.8m. Recent market cost pressures have been seen in the following cost categories; fuel, explosives, chemicals and
reagents, and steel prices impacting grinding media, liners and parts. Royalties were higher than the prior year, primarily driven by higher gold and
copper prices.
Inventory costs expensed were $51.0m lower driven by increased stockpile inventories predominantly at Cowal and Mungari.
Depreciation and Amortisation increased by $115.1m, largely due to the acquisition of Kundana/EKJV ($46.6m) and 100% Ernest Henry (64.4m).
Finance costs increased by $28.1m linked to the debt funding established for acquisitions during the year.
Tax expense for the year ended 30 June 2022 was $56.6m lower on the reduced profit for the year, and has been impacted by the tax effect of the
acquisitions and divestment during the year.
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Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Key highlights for the year (continued)
Key Results
The consolidated operating and financial results for the current and prior year are summarised below. All dollar figures refer to Australian thousand
dollars ($'000) unless otherwise stated.
Key Business Metrics
30 June 2022
30 June 2021
% Change (ii)
Total underground lateral development (m)
Total underground ore mined (kt)
Total open pit ore mined (kt)
Total open pit waste mined (kt)
Processed tonnes (kt)
Gold grade processed (g/t)
Gold production (oz)
Silver production (oz)
Copper production (t)
Unit cash operating cost ($/oz) (i)
All in sustaining cost ($/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
Sustaining Capital
Mine cash flow before major capital
Major Capital
Net mine cash flow*
38,282
8,482
13,845
25,164
21,388
1.11
640,275
542,972
38,834
864
1,259
2,045
2,425
31
12,546
2,064,928
1,107,971
(35,593)
430,989
898,814
44%
323,324
274,723
893,280
(147,057)
746,223
(459,314)
284,070
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
(105,684)
831,614
(274,141)
554,855
52 %
8 %
57 %
(19) %
(3) %
(2) %
(6) %
(17) %
82 %
2 %
(4) %
(21) %
2 %
(9) %
12 %
11 %
(22) %
(5) %
(21) %
(2) %
(10) %
(6) %
(22) %
(5) %
(39) %
(10) %
(68) %
(49) %
*Net mine cash flow FY22 figure includes restructuring costs of $3.8 million (30 June 2021: $3.6 million).
(i)
(ii)
(iii)
EBITDA, EBIT, Unit cash operating cost, All-in Sustaining Cost (AISC), and All-in Cost (AIC) are non-IFRS financial information and are not subject to audit.
EBITDA is reconciled to statutory profit in note 1(c) to the financial statements.
Percentage change represents positive/(negative) impact on the business
Ernest Henry mining and processing statistics are in 100% terms, while costs between 1 July 2021 and 31 December 2021 represent the Group's cost and not
solely the cost of Ernest Henry's operation. The Group took full ownership of Ernest Henry on 6 January 2022, with the effective date 1 January 2022.
Evolution Mining Limited
Directors' Report
30 June 2022
Mining Operations
Cowal
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Net mine cash flow before major capital ($'000)
Major capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2022
30 June 2021
247,418
(30,962)
216,456
(229,826)
(13,370)
227,105
1,245
2,305
270,689
(12,876)
257,813
(157,546)
100,267
210,847
1,042
1,855
Change
(23,271)
(18,086)
(41,357)
(72,280)
(113,637)
16,258
(203)
(450)
Cowal was the highest gold producer in the Group, achieving 227,105oz of gold at an AISC of $1,245/oz. Despite this, Cowal operated in a
challenging environment with COVID-19 and significant weather events impacting cash flow. Stage H mining successfully completed the major waste
stripping and commenced access to higher grade ore. In FY23 higher grade ore from Stage H combined with first stope ore from the underground
will drive the planned increase in production to around 275,000 ounces, with a further increase in FY24 to around 320,000 as underground mine
production ramps up.
Mine operating cash flow for the year was $247.4 million. Net mine cash flow was $(13.4) million post sustaining capital of $31.0 million and major
capital of $229.8 million.
Capital investment during the year consisted of major project capital which focused on finalising Stage H stripping, construction of the Integrated
Waste Landform (IWL) tailings facility and the execution of the Underground Project. The Underground Project achieved key milestones throughout
the year. All remaining government approvals were received, long-lead items were secured, and the primary mining and drilling contract awarded.
The underground diamond drilling program is progressing well and ahead of schedule. The project remains on budget and schedule and first stope
ore is expected to be mined in Q4 FY23.
Ernest Henry
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Net mine cash flow before major capital ($'000)
Major capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
Copper production (t)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2022
30 June 2021
474,165
(28,000)
446,165
(10,750)
435,415
84,145
38,271
(1,680)
(1,578)
323,203
(14,221)
308,982
—
308,982
92,397
17,592
(876)
(876)
Change
150,962
(13,779)
137,183
(10,750)
126,433
(8,252)
20,679
(804)
(702)
* Ernest Henry mining and processing statistics are in 100% terms, while costs between 1 July 2021 and 31 December 2021 represent the Group's cost and not solely the
cost of Ernest Henry's operation. The Group completed the acquisition of full ownership of Ernest Henry on 6 January 2022, with the effective date being 1 January 2022.
Evolution took 100% ownership of Ernest Henry on 6 January 2022, with the effective date being 1 January 2022. Gold production was 84,145oz at a
record low AISC of negative $(1,680)/oz. The record AISC result for Ernest Henry was primarily driven by 38,271 tonnes of copper sold, favourable
copper pricing of $12,545/t and gold production being delivered to plan.
Operating mine cash flow for the year was also a record at $474.2 million as was the net mine cash flow of $435.4 million, post sustaining capital of
$28.0 million and major capital of 10.8 million.
Ore mined was 6.4 million tonnes at an average grade of 0.52g/t gold and 1.04% copper. Underground development was 9,695m. Ore processed
was 6.4 million tonnes at an average grade of 0.50g/t gold and 1.01% copper.
The Concept Study on the mine extension below the 1,200mRL was completed and the Pre-Feasibility Study (PFS) has commenced, due for
completion in December 2022. The study in considering an extension from the 1,200mRL to the 775mRL which has the potential to unlock further
value at Ernest Henry. An updated Mineral Resource estimate that will inform the PFS was released on 1 August 2022 with contained copper
increasing 28% to 1.13 million tonnes and contained gold increasing 24% to 2.07 million ounces. The ore body remains open at depth with potential
for further resource additions with the completion of further drilling.
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Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Mining Operations (continued)
Red Lake
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Net mine cash flow before major capital ($'000)
Major capital ($'000)
Net mine cash flow ($'000) *
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2022
30 June 2021
Change
35,207
(45,850)
(10,643)
(153,380)
(167,830)
115,276
2,519
4,108
90,256
(46,773)
43,483
(46,265)
(5,628)
126,339
2,044
2,517
(55,049)
923
(54,126)
(107,115)
(162,202)
(11,063)
(475)
(1,591)
* Restructuring costs are included in net mine cash flow (FY22: $3.8 million; FY21: $2.8 million)
Red Lake produced 115,276oz of gold at an AISC of $2,519/oz. Mine operating cash flow for the full-year was $35.2 million. Net mine cash flow was
negative $(167.8) million after investing $45.9 million in Sustaining capital and $153.4 million in Major capital. The majority of these investments
covered new mobile equipment, recapitalisation of mine development in the Lower Red Lake and Lower Campbell mines, and construction of the
CYD decline to provide access to Upper Campbell. These investments support the longer term strategy of growing production to over 300,000
ounces per annum from FY27.
Ore mined was 841 thousand tonnes at an average grade of 4.54g/t gold for the year. Ore processed was 847 thousand tonnes at 4.67g/t gold.
Whilst production performance was below expectation, Red Lake achieved several key milestones throughout the year. Development metres
continued to improve and are now consistently above 1,200 metres per month, providing access to additional mining fronts. The Campbell and Red
Lake process plants performed exceptionally well, with annual equivalent throughput rates in the June 2022 quarter in excess of 1 million tonnes per
annum. Ongoing improvements to mining practices continue to drive reductions in stope dilution that improves mined grades. Ongoing advance in
the CYD decline will enable first stope ore to be mined from Upper Campbell in the September 2022 quarter.
Mungari
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Net mine cash flow before major capital ($'000)
Major capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2022
30 June 2021
Change
84,847
(30,307)
54,540
(41,762)
12,778
138,035
1,931
2,325
146,197
(20,526)
125,671
(52,480)
73,191
115,829
1,453
1,988
(61,350)
(9,781)
(71,131)
10,718
(60,413)
22,206
(478)
(337)
Mungari benefited from the acquisition of Kundana and the EKJV to produce 138,035oz of gold at an average AISC of $1,931/oz. The higher AISC
was driven by lower open pit ounces in FY22, as well as lower capitalised stripping, with costs being expensed in FY22. Additionally, the higher
ounces from underground had a higher cost base, including a higher proportion of development costs being expensed. The movement between
capitalisation of stripping and development to AISC did not increase the cash outflow.
Mine operating cash flow was a strong result at $84.8 million and net mine cash flow was $12.8 million for the full year.
Capital investment in the year was $72.1 million consisting mainly of underground development drilling, expansion of the Tailings Storage Facility and
costs for the plant expansion Pre-Feasibility Study.
Underground ore mined was 1.05 million tonnes at 3.53g/t gold. Total underground development was 9,760 metres. Open pit total material mined
was 7.34 million tonnes. Open pit ore mined was 1.07 million tonnes at a grade of 1.14g/t gold.
The integration of the Kundana assets is progressing to realise operational synergies and create “One Mungari” with standardised systems and
processes, and the sharing of equipment and workforce across what were previously three separately run operations.
Evolution Mining Limited
Directors' Report
30 June 2022
Mining Operations (continued)
Mt Rawdon
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Net mine cash flow before major capital ($'000)
Major capital ($'000)
Net mine cash flow ($'000)*
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2022
30 June 2021
Change
39,798
(8,290)
31,508
(22,621)
8,887
60,004
1,782
2,175
81,253
(9,307)
71,946
(12,713)
58,446
77,005
1,513
1,679
(41,455)
1,017
(40,438)
(9,908)
(49,559)
(17,001)
(269)
(496)
* Restructuring costs are included in net mine cash flow (FY22: $0.0 million; FY21: $0.7 million)
Mt Rawdon produced 60,004oz of gold at an AISC of $1,782/oz for the full year. The production result was lower than the prior year with extreme
weather events creating operational challenges due to instability in the North Wall during the March quarter. Processing throughput was strong but
production was impacted due to processing of low grade stockpiles whilst the wall issues were being managed. Access to higher grade ore was re-
established in the June 2022 quarter.
Mine operating cash flow of $39.8 million and net mine cash flow of $8.9 million was achieved for the year, post sustaining capital of $8.3 million and
major capital of $22.6 million. Capital investment for the year was primarily driven by mine development.
The Mt Rawdon Pumped Hydro project Feasibility Study continued during the year and is due for completion in June 2023. The project has the
potential to significantly contribute to Queensland’s renewable energy ambitions.
Mt Carlton (Divested on 14 December 2021, effective 1 October 2021).
Key Business Metrics
Operating cash flow ($'000)
Sustaining capital ($'000)
Net mine cash flow before major capital ($'000)
Major capital ($'000)
Net mine cash flow ($'000)
Gold production (oz)
All-in Sustaining Cost ($/oz)
All-in Cost ($/oz)
30 June 2022 *
30 June 2021
Change
11,841
(2,683)
9,158
(975)
8,183
15,710
1,823
1,991
25,698
(965)
24,733
(5,136)
19,597
58,371
1,937
2,105
(13,857)
(1,718)
(15,575)
4,161
(11,414)
(42,661)
114
114
* Figures shown for FY22 represent the three months of operation attributable to Evolution. Mt Carlton was divested effective 1 October 2021.
Mt Carlton was divested in December 2021, effective 1 October 2021. For the three months under the Group's ownership, Mt Carlton produced a
total of 15,710oz at an AISC of $1,823/oz.
Mine operating cash flow was $11.8 million. Net mine cash flow was $8.2 million, generated post sustaining capital of $2.7 million and major capital of
1.0 million.
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Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Financial Performance
Profit or Loss
Revenue for the year ended 30 June 2022 increased by 11% to $2,064.9 million (30 June 2021: $1,864.1 million). The higher achieved gold price of
$2,425/oz (30 June 2021: $2,369/oz) was partially offset by a decrease in sold ounces for the year to 641,413oz (30 June 2021: 677,150oz).
Revenue comprised of $1,556.1 million of gold, $491.4 million of copper and $17.4 million of silver revenue (30 June 2021: $1,605.0 million of gold,
$236.9 million of copper and $22.1 million of silver revenue).
Total gold sold included deliveries of 100,000 ounces into the Australian hedge book at an average price of $1,868/oz (30 June 2021: 100,000
ounces, $1,829/oz) and deliveries of 40,000 ounces into the Canadian hedge book at an average price of C$2,271/oz. The remaining 501,413
ounces were sold at spot comprising 435,336 ounces delivered at an average price of $2,522/oz (30 June 2021: 456,001oz, $2,474/oz) and 66,077,
ounces delivered at an average price of C$2,357/oz (30 June 2021: 81,169 ounces, $2,361/oz). At 30 June 2022 the Group's gold delivery
commitments totalled 100,000 ounces at a price of $1,916/oz for the Australian operations and 40,000 ounces at C$2,272/oz for Red Lake with
quarterly deliveries through to June 2023.
Copper revenue achieved a 107% increase from the prior year to $491.4 million (30 June 2021: $236.9 million), driven by an 85% increase in sales
to 39,293 tonnes and a 12.3% increase in copper price of $12,546/t. The uplift in copper production was driven by the acquisition of full ownership of
Ernest Henry on 6 January 2022 (effective 1 January 2022).
The Group achieved a statutory net profit after tax of $323.3 million for the year ended 30 June 2022 (30 June 2021: $345.3 million). The Group also
achieved an underlying net profit after tax of $274.7 million for the year (30 June 2021: $354.3million).
Balance Sheet
Total assets increased 68% during the year to $6,630.1 million (30 June 2021: $3,957.0 million). Cash and cash equivalents increased by $412.4
million driven by a number of factors including share capital issue, draw-down of US private placements, divestment of Mt Carlton and strong cash
generation from Ernest Henry. The excess cash received was mainly used to fund the acquisition of the Kundana and EKJV, the acquisition of the full
interest in Ernest Henry and further investment in the Cowal Underground Project and transformation projects at Red Lake.
The net carrying amount of property, plant and equipment increased by $672.5 million and mine development and exploration increased by $1,316.4
million, which was primarily driven by the acquisition of the remaining interest in Ernest Henry, acquisition of the Kundana assets and additions at
Cowal and Red Lake.
The adoption of hedge accounting to account for the cross currency swaps used to manage foreign exchange exposure from the US Private
Placements (USPP) has led to the recognition of $113.2 million non-current derivative asset, which is mostly offset by the foreign exchange
revaluation of the US Private Placements.
Total liabilities for the Group increased to $3,376.1 million at 30 June 2022, an increase of $1,953.9 million, or 137.4% on the prior period. The key
drivers consist of $1,162.2 million increase in interest bearing liabilities net of capitalised borrowing costs, $295.9 million increase relating to stamp
duty payable and the remaining purchase price payable for Ernest Henry, and $170.2 million increase in rehabilitation provisions resulting from the
acquisitions and the updated closure liabilities.
Cash Flow
Total cash outflows for the year amounted to $416.7 million inflow (30 June 2021: $211.9 million outflow).
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net movement in cash
Cash at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash at the end of the year
30 June 2022
30 June 2021
$'000
$'000
776,683
(1,828,032)
1,468,070
416,721
160,062
(4,356)
572,427
757,008
(724,115)
(244,787)
(211,894)
372,592
(636)
160,062
Change
$'000
19,675
(1,103,917)
1,712,857
628,615
(212,530)
(3,720)
412,365
Net cash outflows from investment activities were $1,828.0 million, an increase of $1,103.9 million from the prior period (30 June 2021: $724.1 million
outflow). Major items contributing to the increase in outflow was $390.9 million paid for the acquisition of the Kundana assets, and $809.0 million paid
for the acquisition of the remaining interest in Ernest Henry. The current year outflows was partially offset by the cash received from the disposal of
Mt Carlton for $30.3 million.
Evolution Mining Limited
Directors' Report
30 June 2022
Financial Performance (continued)
Cash Flow (continued)
Net cash inflows from financing activities were $1,468.1 million, an increase of $1,712.9 million from the prior year (30 June 2021: $244.8 million
outflow). Financing cash inflows during the year mainly consisted of the share capital issue of $467.9 million, drawdown of $440.0 million from Term
Loan Facility (”Facility E”) and drawdown of $1,022.9 million from the US Private Placements. Repayments for the year included $145.0 million on
the Revolver Facility (“Facility A”), $105.0 million on the Term Loan Facility (”Facility B”) and $50.0 million on the Term Loan Facility (”Facility E”).
Dividends paid during the year totalled $146.6 million.
Taxation
During the year, the Group made income tax payments of $71.1 million (30 June 2021: $96.7 million) and recognised an income tax expense of
$94.4 million (30 June 2021: $150.9 million).
The tax payments made in respect of the 30 June 2021 financial year combined with tax instalments paid over the course of the 30 June 2022
financial year have enabled the declaration of fully franked interim and final dividends.
Capital Investment
Capital investment for the year totalled $606.4 million (30 June 2021: $379.8 million). This consisted of sustaining capital, including near mine
exploration and resource definition, of $147.1 million (30 June 2021: $105.7 million) and mine development of $459.3 million (30 June 2021: $274.1
million). The main capital projects included the Underground Project, Integrated Waste Landform (IWL) tailings facility and drilling at Cowal,
underground mine development and discovery drilling at Red Lake, tailings storage facility expansion, pre-feasibility study for mill expansion, mine
development and underground development drilling at Mungari, and Open pit mine development, tails storage buttressing and fixed plant
maintenance at Mt Rawdon.
Financing
Total finance costs for the year were $49.3 million (30 June 2021: $21.1 million). Included in total finance costs are interest expenses of $43.1 million
(30 June 2021: $17.4 million), amortisation of debt establishment costs of $2.9 million (30 June 2021: $2.2 million), discount unwinding on mine
rehabilitation liabilities of $2.5 million (30 June 2021: $0.4 million) and interest expense on lease liability unwinding of $0.8 million (30 June 2021:
$1.2 million).
The increase in interest expense is resulted from the higher interest bearing liabilities assumed in the year used in the acquisition of assets. The
repayment periods and the outstanding balances on each debt facility as at 30 June 2022 are set out below:
Facility Name
Revolving Credit Facility – Facility A - $m
Performance Bond – Facility C $m
Performance Bond – Facility D CAD $m
Term Loan – Facility B - $m
Term Loan – Facility E - $m
US Private Placement - USD $m
US Private Placement - USD $m
US Private Placement - USD $m
Term Date
31 Mar 2023
30 Nov 2024
30 Nov 2024
15 Jan 2025
15 Apr 2026
8 Nov 2028
14 Feb 2031
8 Nov 2031
Facility Size
$m
$360.0
$360.0
$125.0
$570.0
$440.0
$200.0
$200.0
$350.0
Amount Drawn
$m
$0.0
$72.8
$66.9
$570.0
$440.0
$200.0
$200.0
$350.0
Available
Amount $m
$360.0
$287.2
$58.1
$0.0
$0.0
$0.0
$0.0
$0.0
Material business risks
The Group prepares its business plans using estimates of production and financial performance based on a range of assumptions and forecasts.
There is uncertainty in these assumptions and forecasts, and risk that variation from them could result in actual performance being different to
expected outcomes. The uncertainties arise from a range of factors, including the nature of the mining industry and general economic factors. The
material business risks faced by the Group that may have an impact on the operating and financial prospects of the Group as at 30 June 2022 are:
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.
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
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Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Material business risks (continued)
COVID-19 (continued)
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 continued to operate under protocols developed to minimise risks to our people and communities and ensured we could safely produce
during this challenging period.
Evolution Mining Limited
Directors' Report
30 June 2022
Material business risks (continued)
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.
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.
Environmental, health and safety, and permits
Fluctuations in the metal prices and currencies
The Group’s revenues are exposed to fluctuations in the gold, silver and copper prices. Volatility in the gold, silver and copper prices creates revenue
uncertainty and requires careful management of business performance to ensure that operating cash margins are maintained should the Australian
dollar price fall. Currency and commodity markets are linked, resulting in the potential for currency movements to be offset by movements in metal
prices and commodity cost inputs.
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.
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 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’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.
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.
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.
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,
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Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Material business risks (continued)
Risk management (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Material business risks (continued)
Environmental regulation and performance (continued)
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 event was notified to the relevant government authority and the relevant agreed action was taken. There have been no Level IV or Level V
events.
The event which was reported to the relevant government authority is in relation to a matter which remains under investigation with a mitigation plan
now in place. The event is in relation to the Ernest Henry Operation of which Evolution acquired full control in January 2022. There has been no
enforcement action undertaken by a relevant government authority in FY22.
Level III is classified as events with enforcement instruments, penalty or, potential for environmental impact >3 years. Two active enforcement
instruments between FY19 and FY21 have been closed with no further action by the relevant government authority.
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 3.0 cents per share. The aggregate amount of the final dividend to be paid on 30 September 2022 is estimated at $55.0 million.
Evolution Mining Limited shares will trade excluding entitlement to the dividend on 30 August 2022, with the record date being 31 August 2022 and
payment date of 30 September 2022.
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.
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 Chair 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 2022 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 events
FY22
1
FY21
4
FY20
4
FY19
8
FY18
9
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Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Information on Directors
Evolution Mining Limited
Directors' Report
30 June 2022
Information on Directors (continued)
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.
Jason Attew, BSc, MBA, Non-Executive Director
Jacob (Jake) Klein, BCom Hons, ACA, Executive Chair
Mr Klein founded Evolution in October 2011 following the merger of Conquest Mining Limited and Catalpa Resources Limited and was appointed as
Executive Chair. Previously he served as the Executive Chair of Conquest Mining.
Prior to that, Mr Klein was President and CEO of Sino Gold Mining Limited, where he was one of the founders and led the development of that
company into the largest foreign participant in the Chinese gold industry. Sino Gold was listed on the ASX in 2002 with a market capitalisation of
A$100 million and was purchased by Eldorado Gold Corporation in late 2009 for over A$2 billion. It became an ASX/S&P 100 Company, operating
two award-winning gold mines and engaging over 2,000 employees and contractors in China. Prior to joining Sino Gold (and its predecessor) in
1995, Mr Klein was employed at Macquarie Bank and PwC.
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 Attew is a mining industry veteran who has dedicated 25 years to the mining sector. Most recently he was the President and CEO of Gold
Standard Ventures Corporation until its acquisition by Orla Mining in August 2022. 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 the Lead Independent Director (effective 1 December 2021) and 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 Chair of Western Metals Limited.
Mr Conway is a Non-Executive Director of Aurelia Metals Ltd (appointed in June 2017).
Mr Smith is a Member of the Risk and Sustainability Committee.
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 (Chair
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 Prodigy Gold NL and is currently the Non-Executive Chairman of Genesis Minerals Limited and Non-Executive Director at
Arrow Minerals Limited.
Mr McKeith is Chair of the Nomination and Remuneration Committee.
Andrea Hall, BCom, FCA, M. App Fin, GAICD, Non-Executive Director
Ms Hall is a Chartered Accountant with more than 30 years’ experience in the financial services industry in roles involved in internal audit, risk
management, corporate and operational governance, external audit, financial management and strategic planning. Prior to retiring from KPMG in
2012, Andrea was a Perth-based partner within KPMG’s Risk Consulting Services where she serviced industries including mining, mining services,
transport, healthcare, insurance, property and government.
Ms Hall is currently a Non-Executive Director and Chair of the Audit and Risk Committee at ASX-listed Pioneer Credit Limited. Andrea is also a Non-
Executive Director 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
Ms Hall is the Chair of the Audit Committee and 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, Sims Limited 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.
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.
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Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
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 2022, and the
numbers of meetings attended by each Director were:
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Letter)
Dear Fellow Shareholder,
Jacob (Jake) Klein
Lawrence (Lawrie) Conway
James (Jim) Askew
Thomas (Tommy) McKeith
Andrea Hall
Jason Attew
Victoria (Vicky) Binns
Peter Smith
Board
Audit
Meetings of committees
Risk and
Sustainability
Nomination and
Remuneration
A
12
12
11
12
11
12
12
12
B
12
12
12
12
12
12
12
12
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.
On behalf of the Evolution Board, I am pleased to provide the Remuneration Report for the year ending 30 June 2022.
At Evolution, our values of Safety, Excellence, Accountability and Respect underpin how we work. This is for every person working for Evolution including
the Board.
The Board and Leadership team recognise that in FY22 we underperformed in terms of our delivery to plan and missed our production and cost targets.
This, together with a general retraction in market fundamentals resulted in a ~47% decrease in our share price over the year. We are disappointed by this
and have redoubled our commitment and put in place a number of initiatives to ensure we do what we say will we do.
However, we also recognise that FY22 has been a challenging year with several external factors impacting on operational performance. These included the
continuation of the COVID-19 pandemic which resulted in sizeable percentages of our workforce being absent at times, disruption, and delays to supply
chains, travel restrictions, managing through several extreme weather events in Australia and Canada, increasing labour market pressures and cost
inflation.
Notwithstanding these challenges Evolution has continued to improve the asset portfolio through organic and inorganic growth and strengthen our
alignment to our strategy centred around margin over volume, safe and efficient production, progressing sustainability initiatives and our pathway to net
zero, while aiming to maintain and enhance the Evolution culture supported by high quality talent.
This Remuneration Report will explain how our remuneration framework is linked to our business strategy, overall company performance and shareholder
returns. The remuneration outcomes for this year are reflective of our mixed operational performance and disappointing shareholder returns and are the
lowest in the Company's history.
FY22 Performance
For FY22 the overall performance was mixed with strong financial performance, with some missteps operationally during a challenging year.
Evolution’s health and safety performance improved through the past year, with a noticeable improvement at our Mungari operation resulting in a 60%
improvement in their Total Recordable Injury Frequency (TRIF) rate. The management of material and critical risks continued to be a core focus for the
Company and this area of the business has been managed well with the outcomes independently audited.
In terms of sustainability, the Company is proud of its ongoing positive relationship with the communities and First Nation partners where it operates.
Initiatives have also progressed towards its Net Zero commitments by 2050 (30% by 2030) aligned with the Paris Agreement. Managing energy
consumption and greenhouse gas (GHG) emissions continued, with a reduction (improvement) of around ~7% in the FY22 emissions intensity against
baseline.
Partners
Aligned to this, through increased transparency, due diligence, and reporting, Evolution’s broader Sustainability efforts were recognised externally through
improved ESG assessments and performance ratings by key ESG ratings agencies including MSCI (score moved from A to AA, with a performance rating
of leading), S&P Global (51 to a 53, performance rating above average), ISS (Environment score of 1 and social score of 2, performance rating of leading),
and Sustainalytics (40.2 to 29.2, performance rating of leading). In addition to this, Evolution won two awards as part of the Australasian Reporting Awards
(ARA).
The independent stakeholder perception survey was also completed with an overall score of 4 out of 5, maintaining a “high approval” category.
For FY22, Evolution delivered strong financial results including $2,064.9 million in revenue, $323.3 million in statutory profit and $146.6 million return to
shareholders while all debt commitments were satisfied during the year.
The Company increased its Gold Mineral Resources and Ore Reserves (MROR) as at 31 December 2021, with Mineral Resources increasing from 26.4
million ounces to 29.6 million ounces and Ore Reserves up from 9.9 million ounces to 10.3 million ounces net of mining depletion as at 31 December 2021.
Group Copper Mineral Resources increased from 904,000 tonnes to 1.44 million tonnes of copper and the Group Copper Ore Reserves increased from
505,000 tonnes to 640,000 tonnes of copper net of mining depletion.
Evolution continued to deliver on our margin over volume strategy, by maintaining the position as one of the lowest cost producers globally.
Our balance sheet was further strengthened via an investment grade rating and two successful US Private Placements. These placements moved the debt
profile out to longer dated debt at highly competitive and low fixed interest rates.
While there are a range of positive results and achievements throughout FY22, the Board and Leadership team acknowledge that in terms of delivery to
plan, production and cost targets were not met. The Board and Leadership team have discussed these at length and the learnings will be applied through
the FY23 year.
STI Outcomes
For FY22, STIP outcomes focused on five (5) key measures; safety, material and 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.
18
19
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Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Letter continued)
The STIP has proven to work effectively in rewarding employees relative to the overall company results and individual performance. The Key Management
Personnel (KMP) have the highest proportion of their STIP linked to the overall Company outcomes. The overall FY22 STIP outcome was the lowest
recorded for the Company which resulted in the outcomes for the KMP being significantly reduced to those awarded for FY21, in line with business
performance.
The strategic imperatives element of the STIP has a weighting of 30%. For FY22, the Board evaluated progress against Evolution’s Net Zero commitment,
growth, and extension of the Cowal and Red Lake operations and continued improvement of the portfolio quality via business development and discovery.
Balancing all factors, the Board awarded a score of 95% being between Threshold and Target for the strategic imperatives measure, resulting in an overall
STIP outcome of 69%, which the Board believes is an appropriate reflection of the overall performance for FY22. A full breakdown is provided in the report
170-171.
on page 26 - 27.
LTI Outcomes
Our LTIP performance measures directly link to shareholder expectations and reinforce our focus on delivering sustainable superior shareholder returns.
For the FY20 LTIPs, tested and vesting as of 30 June 2022, the measures focused on Absolute Shareholder Return, Relative Shareholder Return,
Earnings per share and Ore Reserve growth per share. For the performance against all measures over the three (3) year period, the Company achieved an
overall vesting outcome of 33.3%. Similar to the STIP outcomes, this is the lowest recorded result for the Company. A full breakdown is provided in the
174.
report on page 30.
Signed:
Tommy McKeith
Chair of the Nomination and Remuneration Committee
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited)
This Remuneration Report forms part of the Directors' Report for the year ended 30 June 2022. 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 FY22
e.
f.
g. Other Remuneration Information
h.
i.
j.
Transactions with KMP
Changes planned for remuneration in FY23
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
The health, safety and well-being of Evolution’s employees, contractors and the communities where we operate is core to how we operate.
Evolution managed its response to COVID-19 in a structured way that included reference to the changing recommendations of health authorities, and local
and national regulatory requirements. The impacts to people and operations were felt throughout the year, with short term restrictions on workforce
participation due to isolation demands or positive cases, particularly when the pandemic was at its peak. Operations continued to safely operate during this
time.
We implemented extensive measures to prevent the spread of COVID-19 and continue to provide support to all our employees and local communities. The
ongoing efforts continue to be structured around five key pillars:
1. Prevention
Evolution implemented extensive preventive measures across our operations to safeguard the health of our employees, contractors and community. These
included the promotion of vaccinations, the wearing of masks, supporting physical distancing and good hygiene practices, implementing remote work
wherever feasible, enhanced cleaning and disinfecting protocols, promoting personal preventive measures, and screening all employees, contractors and
external visitors for risk factors and symptoms.
2. Worker Support
We focused on operating safely and responsibly that supported employment and economic activity. Sick leave benefits were expanded to ensure anyone
that was required to self-isolate remained eligible for sick leave benefits and flexible working arrangements were reviewed. New and expanded employee
services such as Employee Assistance Program (EAP) programs were extended that included additional support services and crisis counselling, as well as
other on demand and virtual medical and mental healthcare services. Specialist medical advice and care was also provided as required that included the
promotion and support of vaccination clinics.
3. Communities and Public Health
Support for Community groups and employees remains and is expected to continue through FY23. 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. Evolution supported critical social initiatives in areas where we operate. This included operating vaccination clinics, providing masks and
rapid antigen test kits and other community support efforts. Examples of these initiatives have been addressed in more detail within the FY22 Sustainability
Report.
4. Business Continuity
Despite the challenges, all Evolution operations continued to safely operate, with COVID-19 measures in place. These measures followed best practices
and guidance from health and government authorities. All Evolution activities continue to be underpinned by our focus on health, safety and sustainability
leadership.
Evolution has established a COVID19 Crisis Management Team (CMT), which was chaired by the Vice President Sustainability. This CMT continues today,
with regular updates to the Leadership Team and the Board. Formalised COVID19 management teams remain in place.
We continue to identify and implement measures and the formally established Crisis Management Team, led by members of the Leadership team remains
as a formal response mechanism.
5. Communications
To mitigate the mental and physical health impacts that lockdowns and periods of isolation may cause, communication lines were strengthened across the
business as well as with the Employee Assistance Program (EAP). Sites also deployed technologies to enable risk mitigation and contact tracing, such as
contact tracing cards at Cowal and QR codes in the Sydney Office. The site access protocols were also strengthened at each site.
Ongoing communication around COVID-19 management to ensure a continual feedback loop has been delivered where information, questions and
feedback is provided. This ensured ongoing connection and feedback loop with the workforce and community.
20
21
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Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(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.
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(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 FY22 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 Chair 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
Position
Executive Chair
Finance Director and Chief Financial Officer
Non-Executive Director
Andrea Hall
Thomas McKeith
Jason Attew
Vicky Binns
Peter Smith
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt
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
For NEDs Remuneration information refer to page 30-31.
174-175
(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 Chair
Lawrie Conway
Finance Director and Chief
Financial Officer
Paul Eagle
Vice President People and
Culture
Evan Elstein
Company Secretary and Vice
President Information
Technology
875,000
300,000 fixed
Director's Fees
650,000
135,000 fixed
Director's Fees
6 months
6 months
3 months
6 months
450,000
3 months
6 months
450,000
3 months
6 months
Bob Fulker
Chief Operating Officer
600,000
3 months
6 months
Glen Masterman
Vice President Discovery and
Business Development
470,000
3 months
6 months
Fiona Murfitt
Vice President Sustainability
450,000
3 months
6 months
12 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
6 months
Total Fixed
Remuneration
*For a change of control event, the termination payment is 12 months Total Fixed Remuneration (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.
22
23
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Evolution Mining Limited
Directors' Report
30 June 2022
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 2022 financial year:
Component
Performance measure
Strategic objective
Total Fixed
Remuneration
(TFR)
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.
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
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.
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
Chair, 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 FY22, 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. The target and stretch for the Executive Chair
and the KMP are set at 60% and 90% of TFR respectively.
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 2022 financial year and
prior financial year is as follows:
CEO/Executive Chair
(FY22 & FY21)
Other KMP
(FY22 & FY21)
Target
26%
15%
59%
Target
31%
18%
51%
Stretch
18%
17%
65%
Stretch
23%
20%
57%
TFR
STI
LTI
TFR
STI
LTI
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(c) Remuneration Strategy and Framework (continued)
The target achievement remuneration ratio mix for 2023 financial year will be changed to the following. Refer to note (i) in the Remuneration Report for
details of the planned changes for remuneration in FY23.
CEO/Executive Chair
(FY23)
Other KMP
(FY23)
Target
25%
18%
57%
Target
29%
22%
49%
Stretch
18%
20%
62%
Stretch
22%
24%
54%
TFR
STI
LTI
TFR
STI
LTI
(d) Changes in relation to remuneration in FY22
No changes were made in relation to remuneration in FY22. Refer to note (i) for remuneration changes for FY23.
(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)
263.4
218.2
301.6
345.3
323.3
405.4
354.3
250.8
218.2
274.7
795.1
730.3
1,029.4
914.2
898.8
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
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
15.57
12.86
17.71
20.21
17.74
7.5
9.5
16.0
12.0
6.0
3.51
4.36
5.67
4.50
2.38
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
Annual Results
Cumulative Average
Annual Results
Cumulative Average
Annual Results
Cumulative Average
24
25
168 Annual Report | evolutionmining.com
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Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
(ii) STIP
STIP Overview
Component
Performance measure
Participation
Composition
Performance
conditions
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
2022 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.
FY22 STIP
considerations
At the time of setting the FY22 STIP measures, the Board determined it would consider the following factors when awarding
the score for the strategic imperatives measure:
1.
2.
3.
Sustainability - progress as per the Evolution Net Zero commitment
Key assets - growth and extension of our key assets (Cowal & Red lake operations) are on track as per
agreed schedule and budget
Business Development (BD) - Continued improvement of portfolio quality via BD and discovery, including
early-stage opportunities
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%
10.37
15%
150%
20%
$110.5m
20%
$1,259
Award
18.2 %
The overall outcome was an
the underlying
performance from FY21, noting the baseline was re-calibrated with
Board approval for the transactions completed in FY22. Mungari and
Red lake were the two sites that needed the most focus through FY22
and although progress was slow at Red Lake, pleasingly there was a
noticeable improvement at our Mungari operation, resulting in a 60%
improvement in their Total Recordable Injury Frequency (TRIF) rate.
improvement on
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 were completed for all sites and all sites achieved a satisfactory
rating or better.
0.0 %
The overall outcome of $110.5 million did not reach the threshold level of
$120 million and therefore the award for this measure was 0%. The
result for the year was predominantly driven by lower than planned
production and sales, higher operating costs offset by higher gold prices
and lower capital.
0.0 %
The result was a group AISC of $1,259, which didn’t achieve the
threshold level of $1,245 and therefore the award is 0%. The result for
the year was predominantly due to lower than planned gold sales and
lower by-product prices.
Measure
Weighting
Performance
Outcome
Strategic Imperatives
Award
28.5 %
30%
95%
1. Sustainability – progress as per the Evolution Net Zero commitment
The Company continued to move towards its goal of a 30% reduction in emissions by 2030,
with a ~7% reduction for FY22. As outlined on page 19-20 (letter to shareholders), Evolution
participates in external third-party performance benchmarking initiatives and sustainability
related assessments, including environment, social and governance (ESG) ratings agencies
and was recognised for improvements by key rating agencies as well winning two awards as
part of the Australian reporting awards (ARA).
163 - 164
2. Key assets - growth and extension of our key assets (CGO & RLO) are on track as per
agreed schedule and budget
CGO: Significant progress was made on the underground project with the Feasibility Study
completed and regulatory approval received. Despite the impacts of rising costs, the mine
optimisation plan has minimised the cost pressure impact on the project financials and project
budget. The project remains on schedule and on budget.
The IWL project has continued to track well against plan even though it has been the impacted
by weather and COVID.
The Cowal Open Pit Continuation project was approved by the Board to move to Feasibility
Phase. This included commencing consultation with stakeholders on the project. The
consultation process has progressed with positive engagement received from all key
stakeholders. The study remains on track and to budget.
RLO: The first phase of projects related to stabilising and establishing Red Lake for the growth
phase have been completed (projects included hoist automation, shaft decommissioning and
the Cochenour maintenance shop). The focus throughout FY22 has moved to the
transformation projects.
The CYD decline project went through a challenging start-up early in the project with delays in
mobilisation of the contractor and achievement of development meters. The team undertook
several key changes to move the project back on track with a reduction in schedule shortfall
being achieved in the last few months. The development meters are now consistently
achieving above 200m per month. Access to first Campbell ore is on track while initial stoping
is planned to be ahead of schedule.
The mass mining study project was completed, and a decision made to not proceed with the
next phase. This was a positive outcome as it addressed one of the long-term options and now
allows the team to focus on the more valuable options moving forward. The provincial and life
of mine plans identified several opportunities around the overall processing strategy for the 3
processing plants. The original project focused on restarting and grading the Bateman mill, but
during the FY23 Life of Mine plan work, a decision has been taken to defer this work and
instead look at a whole of operation processing optimization project. This project will also take
into consideration the improved performance at the Campbell mill which has been approved to
trial unconstrained processing rates in the second half of FY22. The optimization project will
continue into FY23.
3. 3. Business Development (BD) – Continued improvement of portfolio quality via BD and
discovery, including early-stage opportunities
The A$400m acquisition of Kundana from Northern Star Resources (announced on 22 July
2021) aimed at turning Mungari into a cornerstone asset.
Secured 100% ownership in Ernest Henry through the A$1bn acquisition of Glencore’s
remaining interest and creating another cornerstone asset in our portfolio (announced 17
November 2021) and increasing our Copper exposure. The original transaction was done in
2016 with Glencore for $880m, where we received 100% of the Gold revenue and 30% of the
Copper. This have proven to be a highly successful transaction, with the investment repaid in 4
years at an average rate of ~26% per annum achieved up to the time of acquiring the
remainder of the asset. In FY22 the mine delivered ~$435m in Net Mine Cash Flow with an
EBITDA margin of 62%.
We divested our smallest / lowest quality asset through the sale of Mt Carlton to Navarre
Minerals for up to A$90m (announced on 5 October 2021). Pleasingly, Navarre was very
appreciative of the support and level of transition help provided by our internal divestment
team and reinforced our desire to be good sellers as well as good buyers.
The company staked its first early stage project in Canada with the Lake St Joseph project
200km east of Red Lake prospective for Dixie Lake style deposits in analogous geologic
setting.
26
27
Overall Outcome
100%
69.2 %
170 Annual Report | evolutionmining.com
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Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
(ii) STIP (continued)
The STIP outcomes for the KMP are set out in the table below. The outcomes reflect the combination of the overall company performance for the year
(corporate component) as well as the individual KPI performance for the year (individual component) for each KMP member. For the Executive Chair, the
weighting is 70% corporate and 30% individual and for the remainder of the KMP, 60% corporate and 40% individual. The target and stretch for all KMP are
set at 60% and 90% of TFR respectively. The FY22 STIP outcomes for all KMP members are significantly lower than FY21 demonstrating the effectiveness
of the STIP program and aligning KMP outcomes with the business results.
Component
Performance measure
2022
Directors
Jacob Klein
Lawrie Conway
Key Management Personnel
Paul Eagle
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt
Total STIP Granted
($)
% of Maximum
Entitlement Granted
% of Maximum
Entitlement Forfeited
364,000
329,000
216,000
221,000
239,000
226,000
213,000
50.3 %
58.3 %
57.0 %
58.3 %
49.0 %
55.7 %
58.3 %
49.7 %
41.7 %
43.0 %
41.7 %
51.0 %
44.3 %
41.7 %
(iii) LTIP
LTIP Overview
Component
Performance measure
Participation
The Group LTIP applies to employees at the level of Manager, Superintendent / Senior Specialist, Functional Lead and
above across the Group.
Performance
period
Composition
Performance
conditions
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 (last approved by shareholders on 26 November 2020) provides for the issuance of Performance Rights to
Executive Directors and eligible employees. This LTIP was first introduced for employees at the level of Manager and above
and provides equity based “at risk” remuneration, up to maximum percentages, based on, and in addition to, each eligible
employee’s TFR. Effective from 1 July 2018, the LTIP was extended to the superintendent and senior technical level in the
Company. These incentives are aimed at retaining and incentivising those eligible employees on a basis that is aligned with
shareholder interests and are provided via Performance Rights.
The Performance Rights are issued for a specified period and each Performance Right is convertible into one ordinary share.
All Performance Rights expire on the earlier of their expiry date or termination of the employee’s employment subject to
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.
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
(iii) LTIP (continued)
LTIP Performance Measures
The following table outlines the performance measures for the LTIPs issued in FY22 and to be issued in FY23.
KPI's
Weighting
Measure
Criteria
FY22
FY23
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 last 12
months of the three year
performance 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. The shares on
issue used for the calculation are
the shares on issue at the time of
setting the Baseline and on a
weighted average basis over the
3 year testing period for the
calculation of the outcome.
Relative TSR
Performance
25%
Absolute
TSR
Performance
25%
Relative
AISC
Performance
25%
Increase in
ore reserves
per share
25%
Total LTI
100%
Threshold
9th to 15th ranking = 0
8th ranking = 33%
8th to 13th ranking = 0
7th ranking = 33%
Target
7th ranking = 50%
6th ranking = 50%
4th to 6th ranking = Straight-line pro-
rata between 50% and 100%
4th to 5th ranking = Straight-line pro-
rata between 50% and 100%
Top 3 ranking = 100%
Top 3 ranking = 100%
Exceptional
Threshold
Target
10% return per annum = 33%
10% return per annum = 33%
>10% to <15% = pro-rata between
33% and 66%
>10% to <15% = pro-rata between
33% and 66%
15% return per annum= 66%
15% return per annum= 66%
>15% to <20% = Straight-line pro-
rata between 66% and 100%
>15% to <20% = Straight-line pro-
rata between 66% and 100%
Exceptional
>20% return per annum = 100%
>20% return per annum = 100%
Threshold
9th to 15th ranking = 0
8th ranking = 33%
8th to 13th ranking = 0
7th ranking = 33%
Target
7th ranking = 50%
6th ranking = 50%
4th to 6th ranking = Straight-line pro-
rata between 50% and 100%
4th to 5th ranking = Straight-line pro-
rata between 50% and 100%
Exceptional
Threshold
Top 3 ranking = 100%
90% of Baseline Ore Reserves =
33%
Top 3 ranking = 100%
90% of Baseline Ore Reserves =
33%
>90% but below 100% of Baseline
Ore Reserves = Straight-line pro-rata
between 33% and 66%
>90% but below 100% of Baseline
Ore Reserves = Straight-line pro-rata
between 33% and 66%
Target
100% of Baseline Ore Reserves =
66%
100% of Baseline Ore Reserves =
66%
>100% of Baseline Ore Reserves
and below 120% of Baseline Ore
Reserves = Straight-line pro-rata
between 66% and 100%
>100% of Baseline Ore Reserves
and below 120% of Baseline Ore
Reserves = Straight-line pro-rata
between 66% and 100%
Exceptional
>120% and above of Baseline Ore
Reserves = 100%
>120% and above of Baseline Ore
Reserves = 100%
28
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Directors’ report
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
Directors’ report
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(f) Non-Executive Director Remuneration Outcomes (continued)
(e) Executive Remuneration Performance Measures and Outcomes – STIs and LTIs (continued)
Outlined in the table below is a summary of the fee structure by individual as at 30 June 2022. For remuneration outcomes please refer to table in section g
(i).
Performance Target
Relative TSR Performance
Measure
Percentile
Absolute TSR performance
Compound annual return
Growth in Earnings per share
Compound annual return
Weighting
FY20
Outcome
% of Maximum
Vested
% Vested
25 %
25 %
25 %
53rd
(3.2) %
7.0 %
— %
— %
— %
— %
33.3 %
8.3 %
Fixed
Remuneration
Leave
Entitlement**
Post-
Employment
Benefits
STI
LTI
Remuneration
Base Salary and
Fees
Movement
Superannuation
Bonus
Amortised Value *
Total
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
(iii) LTIP (continued)
LTIP Outcomes
Component
Performance measure
Award outcome for the year -
ESOP Performance Rights
Outcomes for the FY19 award which were approved by the Board and vested in August 2021 are set out as
follows:
Performance Target
Relative TSR Performance
Measure
Percentile
Absolute TSR performance
Compound annual return
Growth in Earnings per share
Compound annual return
Weighting
FY19
Outcome
% of Maximum
Vested
% Vested
25 %
25 %
25 %
30th
16.4 %
11.8 %
59.4 %
14.9 %
75.6 %
18.9 %
72.8 %
18.2 %
Increase in ore reserves per share
Percentage increase
25 %
125.1 %
100.0 %
25.0 %
Total
100.0 %
77.0 %
Outcomes for the FY20 award approved by the Board for vesting in August 2022 are set out as follows:
(i)
(ii)
(iii)
(iv)
(i)
(ii)
(iii)
(iv)
Increase in ore reserves per share
Percentage increase
25 %
129.0 %
100.0 %
25.0 %
Total
100.0 %
33.3 %
(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 cash 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 2022, the Equity Amount was $65,000 for each NED, other than the Lead Independent Director (LID), who received an Equity
Amount of $80,000. For 2023, the Equity Amount will be $65,000 for each NED, and $80,000 for the LID, which is unchanged from the prior year.
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 upcoming year's guidance, and where applicable, any 3 year outlook. For 2022,
the VWAP used to determine the number of share rights to be granted to each NED is $2.4580 .
Providing the NED remains a director of the Group, Share Rights will vest and automatically exercise 12 months after the grant date. The Share Rights
granted to NEDs under the NED Equity Plan are not subject to performance conditions or any other service requirements which could result in potential
forfeiture. Vested Share Rights will convert into ordinary shares on a one-for-one basis. Vested Share Rights will be satisfied by either issuing shares or
arranging for shares to be acquired on-market, subject to the Group's Securities Trading Policy and the inside information provisions of the Corporations
Act.
Upon the transfer to the relevant NED, the shares will be subject to disposal restrictions (Disposal Conditions) under the earlier of:
•
•
•
the NED ceasing to be a director of the Group; or
three years from the date of grant of the share rights; or
such longer period nominated by the NED at the time of the offer (up to a maximum 15 years from the date of grant).
Directors
James Askew
Andrea Hall
Thomas McKeith
Peter Smith
Vicky Binns
Jason Attew
Cash Component ($)
Equity ($)
Base Fees
Lead
Independent
Sub-Committee
Chair
Sub-Commitee
Member
Total Cash Fees
NED Equity
Plan Shares
Total per annum
($)
120,000
120,000
120,000
120,000
120,000
120,000
720,000
—
—
—
—
—
15,000
15,000
35,000
40,000
35,000
—
—
—
20,000
20,000
—
20,000
20,000
40,000
110,000
120,000
175,000
180,000
155,000
140,000
140,000
175,000
965,000
65,000
65,000
65,000
65,000
65,000
80,000
240,000
245,000
220,000
205,000
205,000
255,000
405,000
1,370,000
(g) Other remuneration information
(i) Remuneration Summary Table
Directors
1,082,106 1,083,980 18,217 30,574 23,568 21,694 364,000 583,000 1,607,044 1,177,278 3,094,935 2,896,526
Jacob Klein
738,306 740,179 36,171 51,645 23,568 21,694 329,000 460,000 892,699 646,785 2,019,744 1,920,303
Lawrie Conway
175,000 175,000 —
James Askew
Andrea Hall
164,384 164,384 —
Thomas McKeith 144,495 155,251 —
168,750 160,000 —
Jason Attew
127,854 127,854 —
Vicky Binns
Peter Smith
127,854 127,854 —
Key Management Personnel
398,306 400,179 14,124 12,148 23,568 21,694 216,000 300,000 629,692 474,594 1,281,690 1,208,615
Paul Eagle
398,306 400,179 15,739 8,423 23,568 21,694 221,000 300,000 629,692 482,847 1,288,305 1,213,143
Evan Elstein
Bob Fulker
518,306 520,180 5,069 25,450 23,568 21,694 239,000 385,000 809,415 618,275 1,595,358 1,570,599
Glen Masterman 428,306 430,180 14,554 5,345 23,568 21,694 226,000 340,000 674,626 516,408 1,367,054 1,313,627
382,021 383,306 22,466 20,840 23,568 21,694 213,000 300,000 443,870 177,230 1,084,925 903,070
Fiona Murfitt
4,853,994 4,868,526 126,340 154,425 221,433 206,515 1,808,000 2,668,000 6,071,308 4,381,119 13,081,075 12,278,585
— 61,673 52,638 236,673 227,638 —
— 61,673 52,638 242,495 232,638 —
— 66,868 64,786 225,812 234,786 —
— 70,710 52,638 239,460 212,638 —
— 61,673 32,501 202,312 172,501 —
— 61,673 32,501 202,312 172,501 —
—
— —
— 16,438 15,616
— 14,449 14,749
—
— —
— 12,785 12,146
— 12,785 12,146
—
—
—
—
—
—
*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.
Performance
related
remuneration
% of total
remuneration
2021
2022
64 % 61 %
60 % 58 %
—
—
—
—
—
—
66 % 64 %
66 % 65 %
66 % 64 %
66 % 65 %
61 % 53 %
30
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Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(g) Other remuneration information (continued)
(ii) Performance Rights granted, vested or lapsed in each financial year:
Granted
Vested
Forfeited
Subject to vesting
Testing date
Vesting (%) -
FY18
FY19
FY20
FY21
F22
Running Balance
6,586,571
(4,019,532)
5,699,933 6,038,033
—
(2,598,828)
5,166,893
—
8,853,605
—
(2,567,039)
—
(3,101,105) (1,851,528)
— 4,186,505
(1,047,487)
4,119,406
(968,999)
7,884,606
32,345,035
(6,618,360)
(9,536,158)
16,190,517
30/6/2020
93.7 %
30/6/2021
77.0%*
30/6/2022
33.3 %
30/6/2023
— %
30/6/2024
— %
—
— %
* 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.
(iii) Movement in Performance Rights in FY21 and FY22:
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
(iv) Performance Rights and Shares
2022 Number
2021 Number
12,770,473
8,853,605
(2,598,828)
13,776,882
5,166,893
(4,019,532)
(2,834,733)
(2,153,770)
16,190,517
12,770,473
At end of the year
Balance at
the start of
the year
Number of
new rights
granted
New grant
value at
grant date
Vested
Forfeited
Balance at
the end of
the year
Vested and
exercisable
To be
Forfeited
Unvested
Unamortised
value of SBP
expenses
Directors
Jacob Klein
Lawrie Conway
James Askew (i)
Andrea Hall (i)
Thomas McKeith
Jason Attew
Vicky Binns (i)
Peter Smith (i)
1,522,178
838,803
10,984
711,457 $ 1,928,048
395,404 $ 1,071,545
65,600
16,400 $
(381,621)
(206,865)
(10,984)
(114,314) 1,737,700
965,377
16,400
(61,965)
—
183,567 367,272 1,186,861 $ 1,195,839
664,476
101,953 203,982
26,435
—
659,442 $
16,400 $
—
10,984
13,519
10,984
10,984
10,984
16,400 $
65,600
(10,984)
16,400 $
20,184 $
16,400 $
16,400 $
65,600
80,736
65,600
65,600
(13,519)
(10,984)
(10,984)
(10,984)
—
—
—
—
—
16,400
16,400
20,184
16,400
16,400
—
—
—
—
—
—
—
—
—
—
16,400 $
16,400 $
20,184 $
16,400 $
16,400 $
26,435
26,435
32,534
26,435
26,435
Key Management Personnel
Paul Eagle
557,101
266,099 $
705,827
(133,954)
(40,125)
649,121
68,512 137,076
443,533 $
483,537
Evan Elstein
Bob Fulker
Glen Masterman
Fiona Murfitt
564,812
723,827
604,292
266,099 $
341,790 $
285,022 $
705,827
906,596
756,019
(139,888)
(178,040)
(149,214)
(41,902)
(53,331)
(44,697)
649,121
834,246
695,403
68,512 137,076
88,087 176,241
73,406 146,867
443,533 $
569,918 $
475,130 $
483,537
621,297
517,978
256,388
—
5,135,840 2,623,883 $ 7,161,182 (1,258,021)
255,828 $
678,584
—
512,216
(356,334) 6,145,368
30,535
454,892
614,572 1,229,608 4,301,188 $ 4,586,265
420,587 $
61,094
*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 13 September 2021. Jake Klein and Lawrie Conway's performance rights was
granted on 25 November 2021 following shareholder approval at the Annual General meeting. Non-Executive Directors had share rights granted on 26
November 2021.
(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.
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(g) Other remuneration information (continued)
(iv) Performance Rights and Shares (continued)
The fair value at grant date for the Key Management Personnel FY22 performance rights are stated below:
September 2021 Performance Rights issue
Fair value at grant date ($)
Relative TSR
Absolute TSR
Relative AISC
Growth in Ore
Reserves
2.19
1.08
3.67
3.67
The fair value at grant date for the Non-Executive Directors FY22 share rights were $4.0 and are based on one year service condition.
The fair value at grant date for the Jake Klein's and Lawrie Conway's FY22 performance rights are stated below:
November 2021 Performance Rights issue
Fair value at grant date ($)
(v) Directors and key management personnel equity holdings
Relative TSR
Absolute TSR
Relative AISC
Growth in Ore
Reserves
2.03
1.21
3.80
3.80
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
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
15,394,864
1,116,597
814,458
40,871
217,028
26,727
—
26,126
788,029
685,251
20,000
5,072
—
381,621
206,865
10,984
10,984
13,519
10,984
10,984
10,984
133,954
139,888
178,040
149,214
—
19,135,023
1,258,021
* The exercise price of the performance right is nil.
(h) Transactions with KMP
(a) Loans:
There are no loans provided to Key Management Personnel as at 30 June 2022.
65,585
3,895
103,896
—
3,896
—
25,800
13,896
—
(97,291)
(178,040)
(149,214)
—
(207,577)
15,842,070
1,327,357
929,338
51,855
234,443
37,711
36,784
51,006
921,983
727,848
20,000
5,072
—
20,185,467
(b) Related Party Transactions:
Directors fees were paid to Mr Jason Attew and International Mining & Finance Corp, for which Mr James Askew is a Director. Amounts
paid in the current financial year period are summarized as follows:
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Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(h) Transactions with KMP (continued)
(b) Related Party Transactions (continued)
Related party transactions
International Mining & Finance Corp
Jason Attew
Total
30 June 2022 *
30 June 2021
$
$
234,650
191,757
426,407
175,000
—
175,000
* Payment to International Mining & Finance Corp includes $59,650 expense reimbursements and payment to Jason Attew includes $21,990 expense
reimbursements. Expenses were mostly related to travel.
(i) Changes are planned for remuneration in FY23
Element
Changes for FY23
Reason for Change
TFR
Change to the KMP's Total Fixed
Remuneration (TFR)
STIP
Change to annual short term incentive
programs
LTIP
Change in the comparator group
Following the TFR’s of the KMP (excluding the VP Sustainability role as this
commenced after the freeze was agreed with the Board) being fixed for the last 3
years, the Board approved external market benchmarking to be undertaken by
KPMG. As a result of this, the KMP TFRs will be increased by an average of 7.3%
effective 1 July 2022. This is the equivalent of a 2.4% per annum increase over the 3
year period.
Following external benchmarking by KPMG, the Board agreed to upweight short term
incentive programs to enable the company to remain competitive in attracting and
retaining high quality talent as well as aligning the approach to the Company’s
desired remuneration philosophy of being positioned at P75 for total annual reward,
with the overall reward mix weighted towards the variable at risk components. The
approved change increases the KMP at risk components (STIP and LTIP) by up to
2% to 71-75% for target outcomes and 78-82% for stretch outcomes.
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.
Evolution Mining Limited
Directors' Report
30 June 2022
Remuneration Report (Audited) (continued)
(j) Summary of Key Terms
Below is a list of key terms with definitions used within the Directors' Report:
Key Term
Definition
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")
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 10% 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.
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Directors’ report
Directors’ report
Directors’ report (continued)
Directors’ report (continued)
Evolution Mining Limited
Directors' Report
30 June 2022
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:
◦
◦
◦
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.
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.
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 28(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.
Evolution Mining Limited
Directors' Report
30 June 2022
Non-audit services (continued)
Other assurance services
PricewaterhouseCoopers firm:
Other
Non PricewaterhouseCoopers audit firms
Internal audit services
Other assurance services
Total remuneration for other assurance services
Taxation services
PricewaterhouseCoopers firm:
Tax compliance services
Tax advisory 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
2022
$
2021
$
6,000
6,560
377,763
38,940
422,703
217,541
41,348
265,449
139,770
—
148,613
255,574
543,957
145,770
820,890
966,660
77,380
—
67,557
555,348
700,285
83,940
881,794
965,734
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 38.
182.
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 Chair
Sydney
Andrea Hall
Chair of the Audit Committee
36
37
180 Annual Report | evolutionmining.com
Annual Report | www.evolutionmining.com.au 181
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive income
Auditor’s independence declaration
Consolidated statement of profit or loss and
Evolution Mining Limited
other comprehensive income
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2022
Notes
30 June 2022
$'000
30 June 2021
$'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 remeasurement of existing interest in Ernest Henry Mine
Exploration and evaluation costs expensed
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense attributable to Owners of Evolution Mining Limited
Other comprehensive income
Changes in the fair value of equity investments at fair value through other comprehensive
income (FVOCI) net of tax (may not be reclassified to profit or loss)
Exchange differences on translation of foreign operations (may be reclassified to profit or
loss)
Cash flow reserve net of tax (may be reclassified to profit or loss)
Cost of hedging reserve net of tax (may be reclassified to profit or loss)
Other comprehensive income/(loss) 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
2
2
2
27
2
2
25 (c)
9
2
3
12(d)
12(d)
12(b)
12(c)
Earnings per share for profit attributable to Owners of Evolution Mining Limited:
Basic earnings per share
Diluted earnings per share
4
4
2,064,928
(1,572,842)
492,086
1,864,058
(1,285,131)
578,927
1,993
17,794
(13,879)
(38,547)
(130,117)
154,206
(16,507)
(49,281)
417,748
1,847
12,950
(11,371)
(37,107)
(15,058)
—
(12,877)
(21,140)
496,172
(94,424)
323,324
(150,910)
345,262
(13,194)
(25,861)
52,656
29,436
1,886
70,784
394,108
17,713
—
—
(8,148)
337,114
394,108
394,108
337,114
337,114
Cents
17.74
17.70
Cents
20.21
20.14
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
39
182 Annual Report | evolutionmining.com
Annual Report | www.evolutionmining.com.au 183
Consolidated balance sheet
Consolidated balance sheet
Evolution Mining Limited
Consolidated Balance Sheet
As at 30 June 2022
Notes
30 June 2022
30 June 2021
$'000
$'000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivables
Total current assets
Non-current assets
Inventories
Equity investments at fair value
Property, plant and equipment
Mine development and exploration
Right-of-use assets
Deferred tax assets
Derivative financial instruments
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Interest bearing liabilities
Current tax liabilities
Provisions
Derivative financial instruments
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
10
13
15
15
16
7
9
8
20
16(b)
17
14
11
19
16(b)
8
25(c)
11
19
20
8
18
12(a)
12(b)(c)(d)
12(e)
Capital and reserves attributable to owners of Evolution Mining Limited
Total equity
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
572,427
153,449
250,512
33,733
1,010,121
158,674
60,840
1,662,423
3,476,341
19,092
72,797
113,213
56,565
5,619,945
160,062
115,742
188,558
—
464,362
113,634
62,904
989,894
2,159,989
22,886
94,917
—
48,449
3,492,673
407,341
167,318
—
73,893
2,671
12,751
197,914
861,888
1,670,628
489,579
274,074
9,097
70,824
2,514,202
3,376,090
3,253,976
2,644,103
131,420
478,453
3,253,976
3,253,976
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
Consolidated statement of changes in equity
Consolidated statement of changes in equity
Evolution Mining Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Notes
Issued
capital
Share-based
payments
Financial
assets at
FVOCI
Foreign
currency
translation
Cash flow
hedge
reserve
Retained
earnings
Total equity
Balance at 1 July 2020
$'000
2,183,727
$'000
59,002
$'000
38,467
$'000
(47,746)
$'000
—
$'000
229,860
$'000
2,463,310
Profit after income tax expense
Changes in fair value of equity
investments at FVOCI net of tax
12(d)
Exchange differences on
translation of foreign operations
Total comprehensive income
Transactions with owners in their
capacity as owners:
Dividends provided for or paid
Recognition of share-based
payments
5
27
—
—
—
—
—
—
—
—
—
—
—
(25,861)
—
—
—
17,713
—
345,262
345,262
—
—
—
(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
Changes in fair value of equity
investments at FVOCI net of tax
Exchange differences on translation
of foreign operations
Cash flow hedge reserve net of tax
Cost of hedging net of tax
12(d)
12(b)
12(c)
Total comprehensive expense
Transactions with owners in their
capacity as owners:
Issue of share capital
Dividends provided for or paid
Recognition of share-based
payments
12(a)
5
27
—
—
—
—
—
460,376
—
—
(13,194)
—
—
—
—
(13,194)
52,656
—
—
52,656
—
—
—
—
—
—
—
11,230
460,376
11,230
—
—
—
—
—
—
—
—
—
—
—
—
(146,628)
460,376
(146,628)
—
11,230
—
(146,628)
324,978
—
—
—
—
301,757
323,324
2,534,890
323,324
—
(13,194)
—
52,656
29,436
1,886
31,322
—
—
323,324
29,436
1,886
394,108
Balance at 30 June 2022
2,644,103
78,063
(588)
22,623
31,322
478,453
3,253,976
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
6,630,066
3,957,035
Balance at 1 July 2021
Profit after income tax expense
2,183,727
66,833
—
12,606
—
(30,033)
—
40
41
184 Annual Report | evolutionmining.com
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Consolidated statement of cash flows
Notes to the consolidated financial statements
Consolidated statement of cash flows
Notes to the consolidated financial statements
Evolution Mining Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers, inclusive of GST
Payments to suppliers and employees, inclusive of GST
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 interest bearing liabilities
Repayment of interest bearing liabilities
Lease liability principal payments
Dividends paid
Proceeds from issue of shares
Net cash inflow/(outflow) 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 2022
$'000
30 June 2021
$'000
2,079,678
(1,161,357)
(32,174)
3,816
1,670
(43,891)
(71,059)
776,683
(432,916)
(236,187)
1,723
5,486
30,364
—
—
(1,196,502)
(1,828,032)
1,462,896
(300,000)
(16,111)
(146,628)
467,913
1,468,070
416,721
160,062
(4,356)
572,427
1,896,411
(1,014,355)
(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
2
6(a)
25
11
11
8
5
12(a)
10
10
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
Contents of the Notes to the Consolidated Financial Statements
Contents of the Notes to the consolidated financial statements
Business Performance
Business Performance
Income tax expense
Performance by Mine
Revenue and Expenses
Performance by Mine
1
Revenue and Expenses
2
Income tax expense
3
Earnings per share
4
Dividends
5
Dividends
Other cash flow information
6
Other cash flow information
Resource Assets and Liabilities
Earnings per share
Resource Assets and Liabilities
Property, plant and equipment
Property, plant and equipment
7
Leases
8
Mine development and exploration
9
Capital Structure, Financing and Working Capital
Mine development and exploration
Leases
Capital Structure, Financing and Working Capital
Equity and reserves
Interest bearing liabilities
Cash and cash equivalents
Cash and cash equivalents
10
Interest bearing liabilities
11
Equity and reserves
12
Trade and other receivables
13
Trade and other payables
14
Inventories
15
Financial assets and financial liabilities
16
Trade and other receivables
Trade and other payables
Inventories
Financial assets and financial liabilities
Other non-current assets
17
Other non-current assets
Other non-current liabilities
18
Other non-current liabilities
Provisions
19
Provisions
20
Deferred tax balances
Deferred tax balances
Risk and unrecognised items
Risk and unrecognised items
21
Financial risk management
Financial risk management
Contingent liabilities and contingent assets
22
Contingent liabilities and contingent assets
23
Commitments
24
Events occurring after the reporting period
Events occurring after the reporting period
Commitments
Other Disclosures
Other Disclosures
Share-based payments
Business Combinations
Remuneration of auditors
Related party transactions
25
Business Combinations
26
Related party transactions
27
Share-based payments
28
Remuneration of auditors
29
Deed of cross guarantee
30
Interests in other entities
31
Parent entity financial information
32
Deed of cross guarantee
Interests in other entities
Parent entity financial information
Summary of significant accounting policies
188
188
189
192
193
193
194
195
195
197
198
202
202
202
203
205
206
206
207
208
208
209
211
213
213
217
217
218
219
219
223
224
226
227
227
228
229
230
Page
44
44
45
48
49
49
50
51
51
53
54
58
58
58
59
61
62
62
63
64
64
65
67
69
69
73
73
74
75
75
79
80
82
83
83
84
85
86
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Summary of significant accounting policies
33
New accounting standards
New accounting standards
42
43
186 Annual Report | evolutionmining.com
Annual Report | www.evolutionmining.com.au 187
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
(continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(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 Chair 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 is not a separate segment and 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, transaction and integration costs and gain or
loss resulted from acquisition and divestment of subsidiaries.
The Group’s operations are conducted in the mining industry in Australia and Canada. Red Lake is 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 2022 is as follows:
Ernest
Henry
$'000
745,799
464,914
28,000
10,750
Cowal
$'000
532,665
286,083
30,962
229,826
Mungari
$'000
330,894
103,203
30,307
41,762
Revenue
EBITDA
Sustaining Capital
Major Capital
Total Capital
38,750
260,788
72,069
199,230
Red Lake Mt Rawdon Mt Carlton Exploration
$'000
Corporate
$'000
$'000
268,703
44,662
45,850
153,380
$'000
137,554
43,829
$'000
49,313
4,308
8,290
22,621
30,911
2,683
975
3,658
—
(16,507)
—
—
—
(31,678)
Total
$'000
— 2,064,928
898,814
965
—
965
147,057
459,314
606,371
The segment information for the reportable segments for the year ended 30 June 2021 is as follows:
Ernest
Henry
$'000
439,513
318,606
14,221
—
14,221
Revenue
EBITDA
Sustaining Capital
Major Capital
Total Capital
Cowal
Mungari
Red Lake Mt Rawdon Mt Carlton Exploration
Corporate
Total
$'000
495,792
288,173
12,876
157,546
170,422
$'000
278,162
138,602
20,526
52,481
73,007
$'000
294,277
$'000
187,717
$'000
168,597
97,079
46,773
46,265
93,037
83,250
9,307
12,713
22,021
33,620
965
5,136
6,102
$'000
—
(12,877)
—
—
—
$'000
$'000
— 1,864,058
(32,218)
1,016
—
1,016
914,235
105,684
274,141
379,826
Notes to the consolidated financial statements
(continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
1 Performance by Mine (continued)
(c) Segment reconciliation
Reconciliation of profit before income tax expense
EBITDA
Depreciation and amortisation
Interest income
Transaction and integration costs
Finance costs
Gain on sale of Mt Carlton
Gain on remeasurement of existing interest in Ernest Henry Mine
Profit before income tax expense
Recognition and measurement
30 June 2022
30 June 2021
$'000
$'000
898,814
(467,825)
1,993
(130,117)
(49,281)
9,958
154,206
417,748
914,235
(383,712)
1,847
(15,058)
(21,140)
—
—
496,172
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 Leadership Team which assesses the financial performance and position of the Group, and
makes strategic decisions. The Leadership Team has been identified as being the chief business decision maker, consisting of the Key Management
Personnel (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 2022
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
158,674
1,105,956
2,697,187
15,923
85
3,977,825
Canada
$'000
—
553,006
764,007
1,260
250
1,318,523
Total
$'000
158,674
1,658,962
3,461,194
17,183
335
5,296,348
30 June 2022
30 June 2021
$'000
$'000
1,556,051
17,446
491,431
2,064,928
1,604,997
22,127
236,934
1,864,058
44
45
188 Annual Report | evolutionmining.com
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
(continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
2 Revenue and Expenses (continued)
Disaggregation of revenue from contracts with customers
30 June 2022
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
526,984
330,333
38,444
134,823
256,937
268,530
5,681
—
561
—
3,190
7,679
2,731
—
5,110
483,752
173
—
— 1,556,051
—
—
17,446
491,431
532,665
330,894
49,313
137,554
745,799
268,703
— 2,064,928
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
Total Revenue from contracts
with customers
490,993
4,800
277,791
371
135,470
10,575
184,477
3,239
222,400
2,731
293,865
413
194,988 1,604,997
22,127
899
—
—
22,553
—
214,382
—
236,934
495,792
278,162
168,598
187,717
439,513
294,277
195,887 1,864,058
Revenues of $488.9 million (30 June 2021: $217.1 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 previous economic interest in Ernest Henry gold sales were recognised when
the metal was received from Glencore and sold by the Group. Post the acquisition of the full ownership of Ernest Henry, gold in concentrate sales are
recognised on shipment.
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 previous economic interest in Ernest Henry were recognised as accrued revenue in the same month as
their production was reported as the production is in the control of the customer. The transaction price for each contract is allocated entirely to this
performance obligation. Post the acquisition of the full ownership of Ernest Henry, copper and silver in concentrate sales are recognised on shipment.
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 four 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 (pre-acquisition of the full ownership)
The Group applied significant judgement as to when gold, silver and copper revenue should be recognised from the Ernest Henry Mine. Gold sales
were recognised by the Group when the bullion was delivered to the Group’s gold account and sold in the third month after the month of production.
Copper and silver sales were recognised as accrued revenue by the Group in the same month as their production was reported by the operator
Glencore. Copper and silver was sold in accordance with the Offtake Agreement with Glencore where the metal was sold immediately following
treatment and refining and was paid for in cash.
Notes to the consolidated financial statements
(continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
2 Revenue and Expenses (continued)
Other Income
Net foreign exchange gain
Gain on sale of Mt Carlton
Other
Total Other Income
Cost of sales
Mine operating costs
Royalty and other selling costs
Depreciation and amortisation expense
Corporate and other administration costs
Corporate overheads
Depreciation and amortisation expense
Transaction and integration costs
Contractor, consultants and advisory expense
Corporate and administration expense
Stamp duty on business combinations
Finance costs
Amortisation of debt establishment costs
Unwinding of discount on provisions
Interest expense unwinding - lease liability
Interest expense
Depreciation and amortisation
Cost of sales
Corporate and other administration costs
30 June 2022
30 June 2021
$'000
$'000
3,041
9,958
4,795
17,794
11,031
—
1,919
12,950
30 June 2022
30 June 2021
$'000
$'000
1,039,899
68,072
464,871
1,572,842
841,170
63,558
380,403
1,285,131
35,593
2,954
38,547
26,280
5,894
97,943
130,117
2,860
2,530
758
43,133
49,281
33,798
3,309
37,107
9,736
5,322
—
15,058
2,204
413
1,150
17,374
21,140
464,871
2,954
467,825
380,403
3,309
383,712
46
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
(continued)
Evolution Mining Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
3 Income tax expense
(a) Income tax expense
Current tax on profits for the period
Adjustments for current tax of prior periods
Deferred tax
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% ( 2021 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Adjustments for current tax of prior periods
Share-based payments
Accounting gain from sale of Mt Carlton
Tax loss on sale of Mt Carlton
Derecognise deferred tax asset on sale of Mt Carlton
Gain on remeasurement of existing interest in Ernest Henry Mine
Stamp duty
Previously unrecognised tax losses
Other
Adjustment for difference between Australian and overseas tax rates
Income tax expense
30 June 2022
30 June 2021
$'000
52,909
(3,774)
45,289
94,424
$'000
94,003
(408)
57,315
150,910
30 June 2022
30 June 2021
$'000
417,748
125,324
$'000
496,172
148,852
(3,774)
865
(2,988)
(41,841)
36,968
(46,262)
29,383
—
(2,999)
(252)
94,424
(408)
3,411
—
—
—
—
—
(1,461)
(1,039)
1,555
150,910
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 2022
Cents
30 June 2021
Cents
17.74
17.70
20.21
20.14
30 June 2022
30 June 2021
$'000
$'000
323,324
345,262
2022 Number
2021 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
1,822,135,441
4,704,814
1,826,840,255
1,708,094,924
6,248,654
1,714,343,578
(i)
Performance rights and share rights have been included in the determination of diluted earnings per share.
5 Dividends
(a)
Ordinary shares
Interim dividend - 2022 Interim dividend for the year ended 30 June 2022 of 3.0 cents per share fully franked
(30 June 2021: 7.0 cents per share fully franked) per fully paid share paid on 25 March 2022
Final dividend - 2021
Final dividend for the year ended 30 June 2021 of 5.0 cents per share fully franked (30 June 2020: 9.0 cents
per share fully franked) paid on 28 September 2021
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 3.0 cents per fully paid ordinary share (30 June 2021: 5.0 cents fully franked). The
aggregate amount of the proposed dividend expected to be paid on 30 September 2022 out of retained
earnings at 30 June 2022, but not recognised as a liability at period end, is
(c)
Franked dividends
30 June 2022
$'000
30 June 2021
$'000
54,990
119,606
91,638
146,628
153,759
273,365
30 June 2022
30 June 2021
$'000
$'000
54,990
91,300
The final dividend recommended after 30 June 2022 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 2023. The franking account balance at the end of the
financial year is $10.9 million (30 June 2021: $1.3 million).
48
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
6 Other cash flow information
Resource Assets and Liabilities
This section provides information that is relevant to understanding the composition and management of the Group's assets and liabilities.
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
30 June 2022
30 June 2021
$'000
$'000
7 Property, plant and equipment
Profit after income tax
Depreciation and amortisation
(Gain)/loss on disposal of assets
Share-based payments expense
Gain on sale of Mt Carlton
Gain on remeasurement of existing interest in Ernest Henry Mine
Exploration and evaluation costs expensed
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
(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
US Private Placements
Lease Liabilities
Net (debt)
Net (debt) at the beginning of the year
Cash inflow/(outflow) inflow
US Private Placement drawdown
Bank loan drawdown
Bank loan repayment
Foreign exchange rate adjustments*
Lease liabilities
Net (debt) as at end of the year
323,324
467,825
(979)
12,119
(9,958)
(154,206)
16,511
94,424
(71,059)
(29,419)
(57,021)
182,179
(1,978)
4,920
776,683
345,262
383,712
1,508
10,085
—
—
12,877
150,910
(96,740)
(8,112)
(12,044)
(29,393)
(829)
(226)
757,008
30 June 2022
$'000
30 June 2021
$'000
572,427
(760,000)
(1,088,692)
(21,848)
(1,298,113)
160,062
(620,000)
—
(25,102)
(485,040)
30 June 2022
30 June 2021
$'000
(485,040)
416,721
(1,022,896)
(440,000)
300,000
(70,152)
3,254
(1,298,113)
$'000
(240,540)
(211,894)
—
(145,000)
95,000
(636)
18,030
(485,040)
* Effects of exchange rate changes included $65.8 million foreign exchange revaluation on US Private Placements of USD $750.0 million.
** The Group's net debt gearing ratio excludes foreign exchange revaluations on US Private Placements and lease liabilities under AASB 16.
At 1 July 2021
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2022
Carrying amount at the beginning of the year
Additions
Amounts acquired in business combinations
Reclassifications
Disposals
Depreciation
Divestment of Mt Carlton
Exchange differences taken to reserve
Carrying amount at the end of the year
At 30 June 2022
Cost
Accumulated depreciation
Net carrying amount
Included in above
Assets in the course of construction
Freehold land
$'000
Plant and
equipment
$'000
Total
$'000
19,238
—
19,238
2,319,065
(1,348,409)
970,656
2,338,303
(1,348,409)
989,894
19,238
—
—
6,978
—
—
—
217
970,656
432,916
360,570
5,219
(1,187)
(113,912)
(37,909)
19,637
989,894
432,916
360,570
12,197
(1,187)
(113,912)
(37,909)
19,854
26,433
1,635,990
1,662,423
26,433
—
26,433
3,056,967
(1,420,977)
1,635,990
3,083,400
(1,420,977)
1,662,423
—
261,296
261,296
50
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
7 Property, plant and equipment (continued)
8 Leases
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 combinations
Reclassification
Disposal
Depreciation
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 were restated.
Recognition and measurement
Cost
Plant and equipment is carried at cost less accumulated depreciation and impairment. Cost equals 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.
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 2022
30 June 2021
$'000
$'000
16,218
2,612
262
19,092
19,202
3,673
11
22,886
30 June 2022
30 June 2021
$'000
$'000
12,751
9,097
21,848
14,418
10,684
25,102
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 2022
$'000
30 June 2021
$'000
12,847
1,430
210
14,487
7,300
775
11
8,086
30 June 2022
$'000
30 June 2021
$'000
758
421
1,179
651
1,897
2,548
The total cash outflow in the current year was $17.8 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 2022
Lease liabilities
Less than
1 year
$'000
Between 1
and 2 years
Between 2
and 5 years
$'000
$'000
Over 5
years
$'000
Total
contractual
cash flows
$'000
Carrying
amount
$'000
13,187
3,575
2,270
4,742
23,774
21,848
52
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
9 Mine development and exploration
9 Mine development and exploration (continued)
At 1 July 2021
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2022
Carrying amount at the beginning of the year
Additions
Amounts acquired in business combinations*
Transfers to Mine Development and Exploration
Amortisation
Divestment of Mt Carlton
Reclassifications
Write-off
Disposal
Exchange differences taken to reserve
Carrying amount at the end of the year
At 30 June 2022
Cost
Accumulated amortisation
Net carrying amount
Producing mines
Exploration and
evaluation
$'000
$'000
Total
$'000
3,870,426
(2,140,091)
1,730,335
429,654
4,300,080
—
429,654
(2,140,091)
2,159,989
1,730,335
266,722
1,351,225
65,269
(372,806)
(12,495)
(12,196)
—
443
27,109
429,654
44,659
64,129
(65,269)
—
(23,340)
(7,674)
(16,511)
—
7,087
2,159,989
311,381
1,415,354
—
(372,806)
(35,835)
(19,870)
(16,511)
443
34,196
3,043,606
432,735
3,476,341
5,525,365
(2,481,759)
3,043,606
438,327
(5,592)
5,963,692
(2,487,351)
432,735
3,476,341
* Producing mines acquired for Ernest Henry relates to the gain on the fair value remeasurement of the Group's pre-existing interest and the fair value of the remaining
interest acquired
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
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 depreciation
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
1,730,335
3,870,426
(2,140,091)
1,730,335
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
429,654
2,073,848
320,641
41,927
—
(274,619)
4,055
936
(12,874)
6,075
2,159,989
429,654
4,300,080
—
(2,140,091)
429,654
2,159,989
(i) Upon revising the provision fair values of Red Lake ( acquired 1 April 2020), prior year comparative figures were restated.
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.
54
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(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.
9 Mine development and exploration (continued)
Recognition and measurement (continued)
Mines under construction (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.
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Capital Structure and Financing
This section provides information on the Group's capital and financial management activities.
11 Interest bearing liabilities (continued)
Recognition and measurement
10 Cash and cash equivalents
Current assets
Cash at bank
Short term deposits
Total Current assets
Recognition and measurement
30 June 2022
$'000
30 June 2021
$'000
197,427
375,000
572,427
160,062
—
160,062
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.
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
US Private Placements
Less: Borrowing costs
Total Non-current liabilities
30 June 2022
$'000
30 June 2021
$'000
170,000
(2,682)
167,318
590,000
1,088,692
(8,064)
1,670,628
105,000
(2,157)
102,843
515,000
—
(6,611)
508,389
During the year, the Group successfully raised US$750 million through US Private Placement and arranged foreign exchange swaps to completely
eliminate foreign currency exposure on the future interest and principal repayments. The Group drew down Facility E of $440 million and made $50
million repayment, while $105 million was repaid for Facility B as per repayment schedule and $145 million was paid to return Facility A's line of
credit to be fully undrawn.
The repayment periods, facility size and amounts drawn at 30 June 2022 on each facility are set out below:
Facility Name
Term Date
Facility Size $m
Revolving Credit Facility – Facility A - $m
Performance Bond – Facility C $m
Performance Bond – Facility D CAD $m
Term Loan – Facility B - $m
Term Loan – Facility E - $m
US Private Placement - USD $m
US Private Placement - USD $m
US Private Placement - USD $m
31 Mar 2023
30 Nov 2024
30 Nov 2024
15 Jan 2025
15 Apr 2026
8 Nov 2028
14 Feb 2031
8 Nov 2031
$360.0
$360.0
$125.0
$570.0
$440.0
$200.0
$200.0
$350.0
Amount Drawn
Available Amount
$m
$0.0
$72.8
$66.9
$570.0
$440.0
$200.0
$200.0
$350.0
$m
$360.0
$287.2
$58.1
$0.0
$0.0
$0.0
$0.0
$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.
Balance at 1 July 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
Shares issued under institutional placement
Shares issued under Share Purchase Plan
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 2022
Number of
shares
$'000
1,704,413,975
4,019,532
2,183,727
—
179,733
53,845
—
—
1,708,667,085
2,183,727
103,896,104
17,639,298
2,529,221
207,536
68,439
392,858
67,518
—
—
—
1,833,007,683
2,644,103
(i) Information relating to the employee share scheme, including details of shares issued under the scheme, is set out in note 27.
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) Cash flow hedge reserve
The cash flow hedge reserve represents the cumulative amount of gains and losses on hedging instruments deemed effective in cash flow hedges. The
cumulative deferred gain or loss on the hedging instrument is recognised in profit or loss.
Balance at 1 July 2021
Movement
Gain arising on changes in fair value of hedging instruments designated as cash flow hedges
Income tax related to gain recognised in other comprehensive income during the period
Transfer out
Gain reclassified to profit or loss – hedged item has affected profit or loss
Income tax related to amounts reclassified to profit or loss
Balance at 30 June 2022
(c) Cost of hedging reserve
The cost of hedging reserve includes the effects of the following:
Cross currency interest rate swap
$'000
—
106,058
(31,817)
(64,007)
19,202
29,436
The change in fair value of the foreign currency basis spread of a financial instrument when the foreign currency basis spread of a financial instrument is
excluded from the designation of that financial instrument as the hedging instrument (consistent with the Group’s accounting policy to recognise non
designated component of foreign currency derivative in equity).
58
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
12 Equity and reserves (continued)
(c) Cost of hedging reserve (continued)
The changes in fair value of the foreign currency basis spread of a financial instrument, in relation to a transaction-related hedged item accumulated in
the cost of hedging reserve, are reclassified to profit or loss only when the hedged transaction affects profit or loss, or included as a basis adjustment to
the non-financial hedged item. The changes in fair value of foreign currency basis spread of a financial instrument, in relation to a time-period related
hedged item accumulated in the cash flow hedging reserve, are amortised to profit or loss on a rational basis over the term of the hedging relationship.
As at 30 June 2022, the amounts deferred in cost of hedging reserve are all time-period related.
Balance at 1 July 2021
Changes in fair value of the foreign currency basis spread in relation to time period related hedged items
during the period
Income tax related to changes in fair value of the foreign currency basis spread
Amortisation to profit or loss of changes in fair value of the foreign currency basis spread in relation to time-
period related hedged items
Income tax related to amounts reclassified to profit or loss
Balance at 30 June 2022
(d) Other reserves
Cross currency interest rate swap
$'000
0
923
(277)
1,772
(532)
1,886
30 June 2022
30 June 2021
Notes
$'000
$'000
Financial assets at FVOCI reserve
Share-based payments reserve
Foreign currency translation reserve
Movements:
Financial assets at FVOCI 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 reserve
Balance at the beginning of the year
Share based payments recognised
Balance at the end of the year
Foreign currency translation reserve
Balance at the beginning of the year
Currency translation differences arising during the year
Balance at the end of the year
Nature and purpose of other reserves
16(a)
(588)
78,063
22,623
100,098
12,606
(13,194)
(588)
66,833
11,230
78,063
(30,033)
52,656
22,623
12,606
66,833
(30,033)
49,406
38,467
(25,861)
12,606
59,002
7,831
66,833
(47,746)
17,713
(30,033)
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 27 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.
12 Equity and reserves (continued)
(e) Retained earnings
Movements in retained earnings were as follows:
Balance at the beginning of the year
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
Recognition and measurement
Accrued Revenue
30 June 2022
30 June 2021
$'000
301,757
(146,628)
323,324
478,453
$'000
229,860
(273,365)
345,262
301,757
30 June 2022
$'000
30 June 2021
$'000
—
123,774
8,596
12,993
8,086
153,449
58,088
21,207
6,172
10,752
19,523
115,742
No accrued revenue was recognized at 30 June 2022 (30 June 2021: $58.1 million). In the prior years, the accrued revenue was measured at fair value
through profit or loss, and related to silver and copper sales from the economic interest in Ernest Henry. Post the acquisition of full ownership of Ernest
Henry, revenue from gold, silver and copper sales is recognised upon shipment, and accrued revenue based on production is no longer applicable.
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.
The majority of the trade receivable balance relates to concentrate sales at Ernest Henry, 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.
60
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
14 Trade and other payables
Current liabilities
Trade creditors and accruals
Stamp Duty
Other payables
Total Current liabilities
Recognition and measurement
Trade creditors and accruals
30 June 2022
$'000
30 June 2021
$'000
245,869
97,943
63,529
407,341
142,376
—
48,601
190,977
16 Financial assets and financial liabilities
(a) Equity Investments at fair value
Listed securities - Non-current
Tribune Resources Ltd
Musgrave Minerals Ltd
Emmerson Resources Ltd
Riversgold Ltd
Navarre Minerals Ltd (i)
Other
Total Listed securities - Non-current
30 June 2022
30 June 2021
$'000
$'000
42,833
5,318
4,669
408
7,592
20
60,840
51,117
8,031
3,194
550
—
12
62,904
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.
15 Inventories
Current
Stores
Ore
Doré and concentrate
Metal in circuit
Metal in transit
Total current inventories
Non-current
Ore
Total non-current inventories
30 June 2022
$'000
30 June 2021
$'000
117,682
50,736
3,147
78,947
—
250,512
158,674
158,674
82,239
33,555
10,211
39,257
23,296
188,558
113,634
113,634
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 net realisable value for inventory stockpile was revalued higher by $3.0 million for the year ended 30 June 2022 (30 June 2021: write-down of $3.2
million).
(i) On completion of the Mt Carlton divestment, Evolution received 176,565,396 Navarre shares.
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.
(b) Hedging Instrument
Cross currency interest rate swaps
Financial assets - non-current
Financial liability - current
Total cross currency interest rate swaps
Recognition and measurement
30 June 2022
$'000
30 June 2021
$'000
113,213
(2,671)
110,542
—
—
—
The Group entered into derivative financial instruments (fixed to fixed cross currency interest rate swap contracts) to manage its exposure to foreign
exchange rate risk arising from the US private placements. Under the cross currency interest rate swap interest rate contracts (CCIRS), Evolution agrees
to exchange the fixed USD and fixed AUD interest amounts calculated on agreed notional principal amounts. Such contracts enable Evolution to mitigate
the exposure to cash flow variability arising from changes in foreign exchange rates.
Evolution designates the CCIRS contracts as cash flow hedges. As the critical terms of the CCIRS contracts and their corresponding hedged items are
the same, Evolution performs a qualitative assessment of effectiveness and it is expected that the value of the CCIRS contracts and the value of the
corresponding hedged items will systematically change in opposite direction in response to movements in the underlying foreign exchange rates. The
main source of hedge ineffectiveness in these hedge relationships is the effect of the counterparty and Evolution’s own credit risk on the fair value of the
CCIRS contracts, which is not reflected in the fair value of the hedged item attributable to the change in foreign exchanges rates.
The following tables details various information regarding CIRCS contracts outstanding at the end of the reporting period and their related hedged items.
Cross currency interest rate swaps
Less than 1 year
1 to 2 years
2 to 5 years
5 years +
Average FX strike rate
Average (USD) Interest rate
Average (AUD) Interest rate
Notional Amount (USD)
$'000
—
—
—
750,000
0.7332
3.0500%
3.6105%
62
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
16 Financial assets and financial liabilities (continued)
(b) Hedging Instrument (continued)
Hedging instruments
Carrying amount of the hedging instrument assets (liabilities)
Change in fair value used for calculating hedge ineffectiveness
Hedged items
Change in fair value used for calculating hedge ineffectiveness
Balance in cash flow hedge reserve for continuing hedges
17 Other non-current assets
Non-current assets -Other
Contingent consideration attributable to the Edna May Operation
Contingent consideration attributable to Tennant Creek
Contingent consideration attributable to the Cracow Operation
Contingent consideration attributable to the Mt Carlton Operation (i)
Other
Total other non-current assets
Cross Currency Interest Rate Swap
$'000
110,542
121,789
(131,116)
(44,746)
30 June 2022
30 June 2021
$'000
$'000
23,143
2,790
16,500
13,797
335
56,565
28,629
2,790
16,500
—
530
48,449
(i) Relates to contingent consideration recognised from the divestment of Mt Carlton effective from 1 October 2021.
Recognition and measurement
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 2022
30 June 2021
$'000
$'000
56,812
14,012
70,824
52,176
16,098
68,274
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 on 1 April 2020 and is now carried at AUD $56.8 million at
30 June 2022. 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 resource.
19 Provisions
Current
Employee entitlements
Total Current provisions
Non-current
Employee entitlements
Rehabilitation provision
Other long term provision
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 2022
Carrying amount at the beginning of the year
Charged to profit or loss
provision recognised
Re-measurement of provision
Amounts recognised in business combinations*
Exchange differences taken to reserve
Divestment of Mt Carlton
Carrying amount at the end of the year
30 June 2021
Carrying amount at the beginning of the year
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 2022
30 June 2021
$'000
$'000
73,893
73,893
38,448
38,448
7,030
482,126
423
489,579
563,472
6,743
312,230
423
319,396
357,844
Employee
Rehabilitation
$'000
$'000
Other
$'000
Total
$'000
45,191
312,230
423
357,844
4,795
—
39,237
164
(8,464)
80,923
—
78,303
124,164
(5,198)
(27,373)
482,126
—
—
—
—
423
4,795
78,303
163,401
(5,034)
(35,837)
563,472
45,892
259,630
423
305,945
(701)
—
—
45,191
43,580
8,266
754
312,230
—
—
—
—
423
—
(701)
43,580
8,266
754
357,844
* Amount acquired for Ernest Henry relates to fair value of the remaining interest acquired.
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.
64
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(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.
The increase in employee provision in FY22 is largely driven by the acquisition of full ownership of Ernest Henry and the acquisition of Kundana assets.
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 FY22 is largely driven by the acquisition of full ownership of Ernest Henry and the acquisition of Kundana
assets.
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.
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
Gain from derivative financial instruments recognised in equity
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
(b) Movement in deferred tax balances during the year
Balance at 1
July 2021
Recognised in
profit or loss
Recognised in
equity
Inventories
Equity investments at fair value
Exploration and evaluation
expenditure
Property, plant and equipment
Mine development
Employee benefits
Lease liabilities
Provisions
Share issue costs
Tax losses carried forward
Gain from derivative financial
instruments recognised in equity
Other
Deferred tax assets/ (liabilities)
$'000
31,983
—
(49,100)
(129,870)
(68,543)
10,189
2,030
75,392
—
52,967
—
$'000
—
—
$'000
—
3,146
14,031
52,758
(251,517)
2,322
21
45,934
—
—
—
—
—
—
—
—
—
—
—
(13,424)
—
(10,278)
3,865
(71,087)
(1,816)
(138,267)
30 June 2022
$'000
31,983
3,146
(33,808)
(77,600)
(386,911)
12,499
2,108
122,226
(13,424)
2,180
(337,601)
136,324
(201,277)
(242,593)
41,316
(201,277)
Utilised to
reduce tax
liability
$'000
Recognised
on business
combinations FX translation
$'000
$'000
—
—
—
—
—
—
—
—
—
78,494
—
—
78,494
—
—
—
—
(62,031)
—
—
—
—
—
—
—
—
1,261
(488)
(4,820)
(12)
57
900
—
4,863
—
(13,424)
—
(62,031)
131
1,892
2,180
(201,277)
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)
Balance at 30
June 2022
$'000
31,983
3,146
(33,808)
(77,600)
(386,911)
12,499
2,108
122,226
—
136,324
(c) Unrecognised deferred tax assets
The Group has unrecognised available tax losses of $292.7 million as at 30 June 2022 (30 June 2021: $307.5 million). For Canada, $238.6 million are
unrecognised temporary differences with $59.7 million as a deferred tax asset. For Australia, $4.1 million tax losses and a deferred tax asset of $1.2
million have not been recognised.
66
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(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.
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(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
Derivative financial instruments
Financial Liabilities
Trade and other payables
Interest bearing liabilities
Contingent consideration liabilities
Other Current Liabilities
Derivative financial instruments
30 June 2022
30 June 2021
$'000
$'000
572,427
50,683
102,766
60,840
56,565
113,213
956,494
407,341
1,837,946
56,812
197,914
2,671
2,502,684
160,062
43,411
72,331
62,904
48,449
—
387,157
190,977
611,232
52,176
—
—
854,385
(a) Derivatives
Derivatives are only used for economic hedging purposes and not as speculative investments. During the year, the Group entered into cross currency
interest rate swaps to mitigate the US dollar exposure arising from the US Private Placements of US$750.0 million. (30 June 2021: 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.
68
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
21 Financial risk management (continued)
(a)
Derivatives (continued)
21 Financial risk management (continued)
(d)
Interest rate risk (continued)
If both AUD and USD interest rates had been 1% higher and all other variables were held constant, the Group’s other comprehensive income would
decrease by $10.2 million mainly as a result of the changes in the fair value of cross currency swaps designated in cash flow hedge relationships.
If both AUD and USD interest rates had been 1% lower and all other variables were held constant, the Group's other comprehensive income would
increase by $11.1 million mainly as a result of the changes in the fair value of cross currency swaps designated in cash flow hedge relationships.
(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.
(i)
Financing arrangements
The Group had access to the following borrowing facilities at the end of the reporting period:
Existing debt facilities - Undrawn
Expiring within one year
Expiring beyond one year
30 June 2022
30 June 2021
$'000
$'000
360,000
—
360,000
—
655,000
655,000
(ii)
Maturities of financial liabilities
The tables below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for:
•
•
all non-derivative financial liabilities, and
net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the
cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the
impact of discounting is not significant.
Amounts accumulated in the cash flow hedge reserve are reclassified to the Statement of Profit or Loss and Other Comprehensive Income in the periods
when the hedged item affects profit or loss for instance when the forecast sale that is hedged takes place.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or
loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a
forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.
However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, fixed assets) the gains and losses
previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are
ultimately recognised in profit or loss as depreciation in the case of fixed assets.
(b)
Market risk
Foreign exchange risk
(i)
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. During the year, the Group entered into cross currency interest rate swaps to
mitigate the US dollar exposure arising from the US Private Placements of US$750.0 million.
As at 30 June 2022, the Group held US$14.4 million (30 June 2021: US$2.5 million) in US dollar currency bank accounts, C$25.6 million in Canadian
dollar currency bank account, outstanding receivables of US$90.1 million relating to Ernest Henry (30 June 2021: US$43.7 million).
The Group also recognised a USD denominated contingent consideration liability being US$39.1 million (30 June 2021: US$38.4 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 $2.0 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 $48.0 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 2022
covering sales of 100,000 oz (30 June 2021: 200,000 oz) of gold at an average forward price of $1,916 per ounce (30 June 2021: $1,892 per ounce) and
oz of gold at an average forward price of C$2,271 (30 June 2021: C$2,272).
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 2022 was $153.4 million (30 June 2021: $115.7 million). Cash and cash equivalents at 30 June 2022 were $572.4
million (30 June 2021: $160.1 million).
Interest rate risk
(d)
The Group is exposed to interest rate risk through its long term borrowings comprising $370.0 million on the Term Loan Facility ("Facility B") and $390.0
million on the Term Loan Facility ("Facility E"). 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 1% increase/decrease in the rate of interest on the long term
borrowings of the Group would be a decrease/increase of $5.0 million.
The Group is also exposed to interest rate risk arising from the cross currency swap contracts.
The sensitivity analyses below have been determined based on the exposure to interest rates for derivatives at the reporting date. A 1% increase or
decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably
possible change in interest rates.
70
71
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At 30 June 2022
Non-derivatives
Trade and other payables
Other Current Liabilities
Bank loans including interest
US Private Placement
Lease liabilities
Derivatives
Derivative instruments –
CCIRS:
- Inflow
- Outflow
At 30 June 2021
Non-derivatives
Trade and other payables
Bank loans including interest
Lease liabilities
(f)
Risk management
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
21 Financial risk management (continued)
(e) Liquidity risk (continued)
Cash (Inflows)/Outflows
Less than 1 year
$'000
Between 1 and 2
years
$'000
Between 2 and 5
years
$'000
Over 5 years
$'000
Total contractual
cash flows
$'000
Carrying amount
(assets)/
liabilities
$'000
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(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 2022 in respect of:
(i)
Claims
At the date of this report the Group was unaware of any material claims, actual or contemplated.
407,341
200,000
191,453
33,205
13,187
845,186
—
—
201,047
33,205
3,575
237,827
—
—
414,908
99,615
2,270
516,793
—
—
—
1,209,025
4,742
407,341
200,000
807,408
1,375,050
23,774
407,341
197,914
760,000
1,088,692
21,848
1,213,767
2,813,573
2,475,795
(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 2022. The total of these guarantees at 30 June 2022 was $148.0 million with various financial institutions (30 June
2021: $278.0 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.
(110,542)
23 Commitments
(33,205)
36,932
3,727
(33,205)
37,002
3,797
(99,615)
110,826
11,211
(1,209,025)
1,158,161
(1,375,050)
1,342,921
(50,864)
(32,129)
(110,542)
190,977
116,708
14,973
322,658
—
274,447
3,620
278,067
—
252,986
3,439
256,425
—
—
5,460
5,460
190,977
644,141
27,492
862,610
190,977
620,000
25,102
836,079
(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 2022
$'000
30 June 2021
$'000
11,513
31,032
50,320
92,865
13,787
28,173
36,556
78,516
(ii)
Capital commitments
The Group has the following capital commitments in relation to capital projects and joint venture requirements at each of the sites.
30 June 2022
30 June 2021
$'000
148,876
148,876
$'000
124,575
124,575
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.
Within one year
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 2022 Evolution has invested
capital of US$367.4 million on existing operations and US$73.4 million on exploration.
72
73
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
23 Commitments (continued)
(b) Gold delivery commitments
Australia
At 30 June 2022
Within one year
At 30 June 2021
Within one year
Later than one year but not greater than five years
Canada
At 30 June 2022
Within one year
At 30 June 2021
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
$'000
100,000
100,000
1,916
1,916
191,600
191,600
100,000
100,000
200,000
1,868
1,916
1,892
186,800
191,600
378,400
Gold for
physical delivery
oz
Average
contracted sales
price C$/oz
Value of
committed sales
C$'000
40,000
40,000
2,271
2,271
90,840
90,840
40,000
40,000
80,000
2,272
2,271
2,272
90,880
90,840
181,720
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
No matter or circumstance has occurred subsequent to the year end that has significantly affected, or may significantly affect, the operations of the
Group, the results of those operations or state of affairs of the Group or economic entity in subsequent financial years.
Subsequent to the end of the period on 1 August 2022, the group announced a material increase in the Ernest Henry Mineral Resource. The new model
includes 30,159 metres of new drilling from 119 drill holes for a total aggregate increase of 28% in contained copper and 24% in contained gold, along
with upgrades to the Mineral Resource classifications. The update includes all drilling results to 31 May 2022 and the model is depleted for mining to
June 30, 2022. The new Mineral Resource estimate is being used to inform the Mine Extension Pre-feasibility study (PFS) due for completion by
December 2022.
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) 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.
Purchase price accounting has been finalised. Details of the purchase consideration and the net assets acquired are as follows:
Purchase consideration
Cash paid
The assets and liabilities recognised on a provisional basis 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
(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
355,790
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
AUD
$'000
355,790
(7,345)
348,445
74
75
Integration costs of $0.7 million were incurred for Battle North and included in the statement of profit or loss for the year ended 30 June 2022. A total of
$3.9 million acquisition and integration costs was incurred in the year ended 30 June 2021.
218 Annual Report | evolutionmining.com
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
25 Business Combinations (continued)
b) Kundana Operations and EKJV Acquisition
(i)
Summary of acquisition
25 Business Combinations (continued)
b) Kundana Operations and EKJV Acquisition (continued)
(iii) Acquisition and Integration costs
On 18 August 2021, the Group announced the completion of the acquisition of the Kundana Assets (as defined below) from Northern Star Resources
Limited effective from 1 August 2021.
Acquisition and integration related costs incurred during the period were $27.3 million including $20.1 million stamp duty. The costs were not directly
attributable to the issue of shares and are included in the statement of profit or loss and in operating cash flows in the statement of cash flows for the
year ended 30 June 2022, excluding the stamp duty costs which were not paid as at 30 June 2022.
The Kundana Assets, located in the Eastern Goldfields of Western Australia, comprise:
▪ 100% interest in the Kundana Operations (“Kundana Operations”)
▪ 51% interest in the East Kundana Joint Venture ("EKJV")
▪ 100% interest in certain tenements comprising the Carbine Project (“Carbine”)
▪ 75% interest in the West Kundana Joint Venture (“WKJV”) (together, the “Acquisition Assets”)
The main Kundana Assets are located within 8km of Evolution’s Mungari Operations and represent an important strategic opportunity for Evolution to
consolidate the region, optimise the value of its existing infrastructure and capture significant operational synergies.
Details of the purchase consideration and the net assets acquired are as follows:
Purchase consideration
Cash paid
Purchase price accounting has been finalised. The assets and liabilities recognised are as follows:
Net assets acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Mine development and exploration
Right-of-use-assets
Deferred tax asset
Trade and other payables
Employee entitlements
Lease liabilities
Rehabilitation Provisions
Total
(ii) Outflow of cash to acquire subsidiary
Outflow of cash to acquire subsidiary
Cash paid
Less: balance acquired
Total outflow of cash - investing activities
AUD $'000
390,913
390,913
Fair Value
$'000
2,450
1,094
13,062
46,970
384,491
6,119
4,696
(23,519)
(6,837)
(6,334)
(31,279)
390,913
AUD
$'000
390,913
(2,450)
388,463
c) Ernest Henry Acquisition
(i)
Summary of acquisition
On 6 January 2022, the Group completed the acquisition of the full ownership of Ernest Henry, with effective date being 1 January 2022. Under AASB 3,
the acquisition by the Group to acquire the remaining 70% of copper and silver above the 1200mRL, and the 51% rights of Glencore of the copper, silver
and gold production rights below the 1200mRL results in a business combination achieved in stages or step acquisition. In a business combination
achieved in stages, the acquirer shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the
resulting gain or loss, if any, in profit or loss or other comprehensive income. The fair vale uplift on the net assets of the Group's existing stake in Ernest
Henry (representing 100% of gold and 30% of copper still to be mined above the 1200mRL) has been recognized as a gain of $154.2 million at 30 June
2022. The gain is estimated to be in the range of $100-$200 million upon finalisation of the purchase price allocation. The purchase price allocation and
fair value assessment are then applied to 100% of Ernest Henry mine net assets.
Details of the purchase consideration for the net assets acquired are as follows:
Purchase consideration
First tranche of purchase price payment paid on 6 January 2022*
Final working capital adjustment paid on 13 May 2022
Discounted value of second purchase price payment due on 6 January 2023 **
Total
AUD $'000
800,000
8,998
195,829
1,004,827
* $800.0 million cash paid on 6 January 2022 included $190.4 million tax clear exit payment.
** $195.8 million was $200.0 million discounted to 6 January 2021. Present value at 30 June 2022 was $197.9 million.
The provisional fair value of the Group's previously held economic interest in Ernest Henry mine is estimated at $450.7 million. The provisional fair value
for the 100% of Ernest Henry mine net assets is then estimated to be $1,455.5 million:
Fair Value Estimate
Previously held equity interest
Acquiring equity interest
Total
AUD
$'000
450,695
1,004,827
1,455,522
At the time the financial statements were authorised for issue, the group had not yet completed and were not required to complete the
accounting for the acquisition of Ernest Henry at 30 June 2022. In particular, the fair values of the assets and liabilities, including associated tax
balances and tax positions as a result of the acquisition have only been determined provisionally. The Group may recognise an adjustment to
these provisional values as a result of completing fair value accounting within 12 months following acquisition date. The provisional completion
balance sheet and purchase price accounting are as follows:
76
77
220 Annual Report | evolutionmining.com
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
25 Business Combinations (continued)
c) Ernest Henry Acquisition (continued)
(i)
Summary of acquisition (continued)
Net assets acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Mine development and exploration
Trade and other payables
Employee entitlements
Deferred tax liability
Rehabilitation Provisions
Total
(ii)
Outflow of cash to acquire subsidiary
Outflow of cash to acquire subsidiary in FY22:
First purchase price payment paid in cash
Final working capital adjustment
Total outflow of cash to acquire subsidiary
* Second purchase payment $200.0 million due on 06 Jan 2023
Provisional Fair
Value
$'000
959
3,932
32,221
313,600
1,382,332
(30,534)
(32,400)
(66,727)
(147,861)
1,455,522
AUD
$'000
800,000
8,998
808,998
(iii)
Gain from remeasurement of the fair value of the previously held equity interest
The gain from remeasurement of the fair value of the previously owned economic interest is preliminarily recognised at $154.2 million at 30 June 2022:
The previously held equity interest at acquisition date
Fair value of previously held interest
Carrying value as at date of acquisition
Gain from fair value remeasurement
(iv) Acquisition and Integration costs
AUD
$'000
450,695
296,489
154,206
Acquisition and integration related costs incurred during the period were $94.0 million including $76.8 million stamp duty. The costs were not directly
attributable to the issue of shares and are included in the statement of profit or loss and in operating cash flows in the statement of cash flows for the
year ended 30 June 2022, excluding the stamp duty costs which were not paid as at 30 June 2022.
25 Business Combinations (continued)
c) Ernest Henry Acquisition (continued)
(v) Revenue and profit contribution
The acquired business contributed revenues of $511.4 million and net profit of $192.0 million to the group for the period from 1 January to 30 June 2022.
If the acquisition had occurred on 1 July 2021, consolidated pro-forma revenue and profit for the year ended 30 June 2022 would have been $1,098.3
million and $533.3 million respectively. These amounts have been calculated using the subsidiary’s results and adjusting them for:
• differences in the accounting policies between the group and the subsidiary, and
• the additional depreciation and amortisation that would have been charged assuming the fair value adjustments to property, plant and equipment and
mine development assets had applied from 1 July 2021, together with the consequential tax effects.
26 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 30.
(c)
Non-executive directors and key management personnel compensation
Short-term employee benefits
Long Service Leave
Post-employment benefits
Share-based payments
30 June 2022
30 June 2021
$
$
6,661,994
126,340
221,433
6,071,308
13,081,075
7,536,526
154,425
206,515
4,381,119
12,278,585
163 - 179
Detailed remuneration disclosures are provided in the remuneration report on pages 19 to 35.
Directors fees were paid to Mr Jason Attew and International Mining & Finance Corp, for which Mr James Askew is a Director. Amounts paid in the
current financial year period are summarized as follows:
Related party transactions
International Mining & Finance Corp
Jason Attew
Total
30 June 2022 *
$
30 June 2021
$
234,650
191,757
426,407
175,000
—
175,000
* Payment to International Mining & Finance Corp includes $59,650 expense reimbursements and payment to Jason Attew includes $21,990 expense
reimbursements. Expenses were mostly related to travel.
78
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
27 Share-based payments
(a)
Types of share based payment plans
The Group has two Option and Performance Rights plans in existence:
(i)
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.
(ii)
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 2022
$'000
30 June 2021
$'000
Expense arising from equity settled share based payment transactions recognised in profit and loss
13,879
11,371
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
Outstanding balance at the end of the year
2022 Number
2021 Number
12,770,473
13,776,882
8,853,605
(2,598,828)
(2,834,733)
5,166,893
(4,019,532)
(2,153,770)
16,190,517
12,770,473
2022 Number
2021 Number
68,439
102,184
(68,439)
—
102,184
53,845
68,439
(53,845)
—
68,439
There were 102,184 Share Rights granted during the 2022 financial year. Provided the NEDs remain directors of the Group, Share Rights will vest and
automatically exercise 12 months after the grant date of 26 November 2021 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 2024. 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 2024.
27 Share-based payments (continued)
(c) Fair value determination (continued)
(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 2024 (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 2020, to the Ore Reserves as at 31 December 2023 on a per share basis, with testing to be performed at 30 June 2024.
The following tables list the inputs to the models used for the Performance Rights granted for the period:
September 2021 Performance Rights issue
Number of rights issued
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
November 2021 Performance Rights issue
Number of rights approved in AGM*
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
February 2022 Performance Rights issue
Number of rights issued
Spot price ($)
Risk-free rate (%)
Term (years)
Volatility (%)
Fair value at grant date ($)
Relative TSR
Absolute TSR
Relative AISC
Growth in Ore
Reserves
1,781,242
1,781,243
1,781,243
3.94
0.15%
2.80 years
42%
2.19
276,716
4.06
0.84%
2.60 years
42%
2.03
155,444
3.94
1.29%
2.37 years
43%
1.87
3.94
0.15%
2.80 years
42%
1.08
276,715
4.06
0.84%
2.60 years
42%
1.21
155,444
3.94
1.29%
2.37 years
43%
1.11
3.94
0.15%
2.80 years
42%
3.67
276,715
4.06
0.84%
2.60 years
42%
3.8
155,443
3.94
1.29%
2.37 years
43%
3.70
1,781,243
3.94
0.15%
2.80 years
42%
3.67
276,715
4.06
0.84%
2.60 years
42%
3.8
155,443
3.94
1.29%
2.37 years
43%
3.70
* November 2021 performance rights related to the Executive Chair and the Finance Director and Chief Financial Officer.
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.
80
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
27 Share-based payments (continued)
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.
28 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
Tax advisory services
Total remuneration for taxation services
2022 $
2021 $
987,000
—
6,000
993,000
139,770
—
139,770
640,757
79,830
6,560
727,147
77,380
—
77,380
Total remuneration of PricewaterhouseCoopers
1,132,770
804,527
(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
2022 $
2021 $
377,763
38,940
416,703
148,613
255,574
404,187
217,541
41,348
258,889
67,557
555,348
622,905
Total remuneration of non-PricewaterhouseCoopers audit firms
820,890
881,794
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.
29 Deed of cross guarantee
Evolution Mining Limited and those entities identified in note 30 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 2022 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.
30 Interests in other entities
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal subsidiaries in accordance with the
accounting policy described below:
Name of entity
Evolution Mining Management Services Pty Ltd
Conquest Mining Pty Ltd (i) (ii)
Mt Rawdon Operations Pty Ltd (i) (ii)
Evolution Mining (Connors Arc) Pty Ltd (i) (ii)
Evolution Mining (Cowal) Pty Ltd (i) (ii)
Evolution Mining Mungari Pty Ltd (i) (ii)
Toledo Holding (Ausco) Pty Ltd (i)
Evolution Mining (Mungari East) Pty Ltd (i) (ii)
Evolution Mining (Phoenix) Pty Limited (i) (ii)
Hayes Mining Pty Ltd (i)
Gilt-Edged Mining Pty Limited (v)
EKJV Management Pty Ltd (v)
Kundana Gold Pty Ltd (v)
Toledo Tenement Holdings Pty Ltd (v)
Evolution Mining (Aurum 2) Pty Ltd (i) (ii)
Evolution Mining Finance Pty Limited
Ernest Henry Mining Pty Ltd (vi)
Evolution Mining (Canada Holdings) Ltd (ii)
Evolution Mining Management Services (Canada) Ltd (ii)
Evolution Mining Gold Operations Ltd (ii)
Evolution Red Lake Nominee Ltd (ii)
Battle North Gold Corporation (ii) (iv) (vii)
Rubicon Nevada Corp (iv)
BNG Alaska Corp (iv)
Country of
Incorporation
Class of
shares
Equity holding
2022 %
2021 %
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Canada
Canada
Canada
Canada
USA
USA
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
(i) These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order 98/1418 issued by the
Australian Securities and Investments Commission. For further information refer to note 29.
(ii) These entities are considered to be the material controlled entities of the Group. Their principal activities are identifying, developing and operating
gold related projects.
(iii) These entities were divested during this financial year.
(iv) These entities have been acquired as part of the Battle North Gold acquisition.
(v) These entities have been acquired as part of the Kundana acquisition
(vi) This entity has been acquired as part of the Ernest Henry acquisition
(vii) This entity was amalgamated with Evolution Mining Gold Operations during the financial year.
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.
82
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Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
31 Parent entity financial information
32 Summary of significant accounting policies
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:
30 June 2022
$'000
30 June 2021
$'000
The financial report also complies with the International Financial Reporting Standards (IFRS) including interpretations as issued by the International
Accounting Standards Board (IASB).
(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).
Balance sheet
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Issued capital
Financial assets at FVOCI reserve
Share based payment reserve
Cash flow reserve
Cost of hedging reserve
Other
Accumulated losses
Total equity
Statement of Profit or Loss and Other Comprehensive Income
Profit for the year
Other comprehensive Income
Total comprehensive expense
(b) Guarantees entered into by the parent entity
The parent entity has provided bank guarantees, as detailed in note 22.
(c) Contingent liabilities of the parent entity
521,357
4,296,683
4,818,040
161,289
2,904,584
3,065,873
270,116
1,854,187
2,124,303
128,728
696,404
825,132
2,693,737
2,240,741
2,644,103
892
78,064
29,436
1,886
(77)
(60,566)
2,693,737
2,183,727
14,094
66,759
—
—
—
(23,839)
2,240,741
109,901
31,322
141,223
371,529
—
371,529
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 30.
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.
The parent entity did not have any contingent liabilities as at 30 June 2022. For information about guarantees given by the parent entity, please see
above.
(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.
(d) Derivative financial instruments and hedging
(i) Derivative financial instruments
The Group enters into derivative financial instruments (fixed to fixed cross currency interest rate swap contracts) to manage its exposure to foreign
exchange rate risk.
Derivatives are recognised initially at fair value and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is
recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
84
85
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Notes to the consolidated financial statements (continued)
Directors’ declaration
Notes to the consolidated financial statements
Evolution Mining Limited
(continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
(continued)
32 Summary of significant accounting policies (continued)
(d) Derivative financial instruments and hedging (continued)
(i) Derivative financial instruments (continued)
A derivative with a positive fair value is recognised as financial asset whereas a derivative with a negative fair value is recognised as a financial liability.
Derivatives are not offset in the financial statements unless the Group has both legal right and intention to offset. A derivative is presented as a
non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or
settled within 12 months.
(ii) Hedge Accounting
The Group designates certain derivatives as hedging instruments in respect of foreign currency risk and interest rate risk in cash flow hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk
management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis,
the Group documents whether the hedging instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the
hedged risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements:
a.
b.
c.
there is an economic relationship between the hedged item and the hedging instrument;
the effect of credit risk does not dominate the value changes that result from that economic relationship; and
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges
and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that
designated hedging relationship remains the same, the Group adjusts the hedge ratio of the hedging relationship (i.e. rebalances the hedge) so that it
meets the qualifying criteria again.
Foreign currency basis spread of a financial instrument is excluded from the designation of that financial instrument as the hedging instrument, the non-
designated foreign currency basis spread component is recognised in the cost of hedging reserve and amortised to profit or loss on a rational basis.
(iii) Cash flow hedges
The effective portion of changes in the fair value of derivative and other qualifying hedging instruments that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to the cumulative
change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit
or loss, and is included in the ‘other gains and losses’ line item.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the
hedged item affects profit or loss, in the same line as the recognised item. If the Group expects that some or all of the loss accumulated in the cash flow
hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss.
(iv) Discontinuation of hedge accounting
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after rebalancing,
if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for
prospectively.
For cash flow hedges, any gain or loss recognised in other comprehensive income and accumulated in cash flow hedge reserve at that time remains in
equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or
loss accumulated in cash flow hedge reserve is reclassified immediately to profit or loss. For fair value hedges, the fair value adjustment to the carrying
amount of the hedged item arising from the hedge risk is amortised to profit or loss from that date.
33 New accounting standards
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022 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.
Directors’ declaration
Evolution Mining Limited
Directors' Declaration 30 June 2022
In the Directors' opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 39 to 86 are in accordance with the Corporations Act 2001, including:
183 to 230
(i)
(ii)
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 2022 and of its performance for the year ended
on that date, and
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
they are, or may become, subject by virtue identified in note 29 will be able to meet any obligations of the deed of cross guarantee described in
note 29.
Note 32(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations
Act 2001.
This declaration is made in accordance with a resolution of Directors.
Jacob (Jake) Klein
Executive Chair
Sydney
Andrea Hall
Chair of the Audit Committee
86
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Independent auditor’s report
Independent auditor’s report
Independent auditor’s report
Independent auditor’s report (continued)
232 Annual Report | evolutionmining.com
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Independent auditor’s report
Independent auditor’s report
Independent auditor’s report (continued)
Independent auditor’s report (continued)
234 Annual Report | evolutionmining.com
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Independent auditor’s report
Independent auditor’s report
Independent auditor’s report (continued)
Independent auditor’s report (continued)
236 Annual Report | evolutionmining.com
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Independent auditor’s report
Independent auditor’s report
Independent auditor’s report (continued)
Independent auditor’s report (continued)
163 to 179
238 Annual Report | evolutionmining.com
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Shareholder information
Shareholder information
Shareholder information
Shareholder information
Capital (as at 19 September 2022)
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 16 September 2022)
1,834,914,135
36,182
3,428
A$2.03
Distribution of Fully Paid Shares (as at 16 September 2022)
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
1,624,324,235
88.52
130,994,467
36,363,987
37,601,115
5,630,331
7.14
1.98
2.05
0.31
1,834,914,135
100.00
287
5,153
4,861
14,176
11,705
36,182
3,428
0.79
14.24
13.43
39.18
32.35
100.00
9.47
Unmarketable Parcels
456,078
0.02
Substantial Shareholders (as at 31 August 2022)
Securities
%
No. of Holders
%
6 BNP PARIBAS NOMINEES PTY LTD
7 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
12,009,996
8 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
10,606,957
Twenty Largest Shareholders (as at 16 September 2022)
Fully Paid Ordinary Shares
Current balance
Issued capital %
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
781,828,549
2 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
413,215,100
3 CITICORP NOMINEES PTY LIMITED
4 BNP PARIBAS NOMS PTY LTD
5 NATIONAL NOMINEES LIMITED
9 ROXI PTY LIMITED
10 CITICORP NOMINEES PTY LIMITED
11 EQUITY PLAN SERVICES PTY LTD
12 LUJETA PTY LTD
13 PACIFIC CUSTODIANS PTY LIMITED
14 MUTUAL TRUST PTY LTD
15 PM1942 PTY LTD
153,792,627
66,401,230
47,286,818
17,917,253
8,983,784
6,966,733
5,432,067
4,507,692
4,361,569
3,428,217
3,137,500
2,827,490
42.61
22.52
8.38
3.62
2.58
0.98
0.65
0.58
0.49
0.38
0.30
0.25
0.24
0.19
0.17
0.15
0.15
0.14
0.14
0.14
84.64
15.36
Fully Paid Ordinary Shares
16 BNP PARIBAS NOMINEES PTY LTD
Australian Super
Van Eck Global
Total
Number
178,278,481
176,845,572
355,124,053
%
9.72
9.64
19.36
The disclosed number of ordinary shares held by substantial shareholders may not be equal to the actual number of ordinary shares held as at 31
August 2022 as only movements of at least 1% are required to be notified to the Australian Securities Exchange.
17 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2,730,938
18 NETWEALTH INVESTMENTS LIMITED
19 NETWEALTH INVESTMENTS LIMITED
20
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED-GSCO ECA
2,624,593
2,524,640
2,488,058
Total
1,553,071,811
Balance of register
281,842,324
Grand total
1,834,914,135
100.00
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.
240 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 241
Shareholder information
Corporate information
ABN 74 084 669 036
Board of Directors
Jake Klein
Executive Chair
Lawrie Conway Finance Director and CFO
Jim Askew
Non-executive Director
Tommy McKeith Non-executive Director
Andrea Hall
Non-executive Director
Jason Attew
Lead Independent Director
Vicky Binns
Non-executive Director
Peter Smith
Non-executive Director
Company Secretary
Evan Elstein
Registered and principal office
Level 24, 175 Liverpool Street
Sydney NSW 2000
T: +61 2 9696 2900
F: +61 2 9696 2901
Share Register
Link Market Services
Level 12, 680 George Street
SYDNEY NSW 2000
T: +61 1300 554 474
F: +61 2 9287 0303
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
242 Annual Report | www.evolutionmining.com.au
Annual Report | www.evolutionmining.com.au 243
Mungari operations, Western Australia
Level 24, 175 Liverpool Street SYDNEY NSW 2000
+61 2 9696 2900
+61 2 9696 2901
www.evolutionmining.com.au