Evolution Mining Limited

question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Brian O'Hara, GM Investor Relations. Please go ahead.

Thanks, Izzy. Good morning and welcome to the Evolution Mining March 2020 quarterly conference call. This morning on the call, we have Jake Klein, Executive Chairman, Laurie Conway, CFO and Finance Director, and myself, all appropriately social distancing in Evolutions Group office here in Sydney. Also on the call, we have Bob Fulker, COO, and Glenn Masterman, VP Discovery and Business Development, who are dialling in remotely. The March 2020 quarter was one for the history books with the COVID-19 pandemic pandemic providing the catalyst for some of the largest and fastest declines in financial markets on record. With governments and central banks around the world responding to the crisis with promises of extraordinary monetary and fiscal stimulus, it's been reassuring to see gold performing its role as a relative store of value, with the Aussie dollar gold price up over 25% this year to a record high of over $2,700 per ounce. And despite being caught up in the extreme volatility of the broader markets in early March, gold equities have bounced back strongly, with a number of Australian and global gold producers currently trading at or near all-time highs. Among these, evolution continues to be a standout, with sector-leading cash generation per ounce, a focus on rewarding shareholders through growing dividends, strong balance sheet liquidity a reputation for reliable operational delivery from our diversified portfolio and an attractive growth profile driven by Cal and now Red Lake. Thank you and I'll hand you over to Jake.

Good morning everyone. Thanks Brian and thank you everyone for taking the time to join us on the call today. We really do appreciate it. I also hope that you, your families and colleagues are all healthy and well and navigating through these unprecedented times we are all confronting. At Evolution we do recognise that we own a very small minority of businesses that are operating in an environment where if we can get our colleagues to site and keep them healthy and safe, which we have been able to do so to date, we are in a very fortunate position where we can sell everything we produce at the current record high gold prices. We are doing our best to remain grounded, engage openly and transparently with our communities and respect the very tough times so many people are going through. To date, our management of the COVID-19 pandemic has been very good. We're navigating through this with authenticity and staying true to our health and safety values whilst continuing to keep our business strong. To date, there have been no reported cases for our employees or our contractors and no impact on our production related to COVID-19. Impressive examples of the commitment of our people are many and we are grateful to them. To minimise interruptions, our people have shown a willingness to go above and beyond and adjust to work longer rosters or in some key roles relocating to be near the sites so as to avoid interstate travel. Our safety is improving. We are not yet where we want to be. But the thing that gives me the most confidence is that Fiona Murford, our general manager of sustainability, is saying that after three months of being in the business, what a three months that has been, she believes there is a genuine level of care present across the company, which is the foundation of any great safety culture and any great corporate culture for that matter. Our continued work and focus in the area of sustainability was rewarded with an upgrade in our MSCI sustainability rating from triple B to A. As you have come to expect from evolution, our focus remains on margin and cash flow. We do believe that this should be a differentiating metric for shareholders who are analyzing the sector. Net mine cash flow increased 11% quarter on quarter to almost $160 million and group free cash flow increased 33% quarter on quarter to almost $112 million, both of which are very pleasing results. Cash flow continues to be strong and as of today our cash balance has increased to approximately $240 million and including our undrawn revolver facility our liquidity is around $600 million. Financial strength and robustness is important in these uncertain times. This quarter, you also see in our results the merits of having a portfolio of assets, with material contributions being made from some assets that have at times in the past been overshadowed by our larger assets. Mangari and Cracker both contributed record net mine cash flows this quarter. Mangari has generated a very impressive $73 million in net mine cash flow year to date and he's also having very encouraging exploration success. The June quarter will be a big one for us and one that we expect will bring us in at our guidance of around 725,000 ounces at an all in sustaining cost at the top end of our guidance range of 990 Australian dollars an ounce. These numbers exclude any contribution from Red Lake. The increase in production will mainly come from Mount Carlton as it accesses high-grade material for the first time from the underground mine that it has developed and also from Mount Rawdon that is expected to be back mining the higher-grade area of the pit after recovering from the rockfall it had in the September quarter. We were fortunate to have had access to the Red Lake site for over three months since signing the deal in late November to when the lockdown started. Buying an operation that you're not able to be at when you receive the keys is a first for all of us, but I think the collaboration, preparation, use of technology and engagement is a reflection of what I think is really special about evolution. If the first three weeks of our ownership are a guide to the future, Red Lake will exceed our most optimistic expectations. We were pleased that under the lockbox mechanism that has operated since 1 January, we will receive AU$18.8 million in April. We are also taking the opportunity to strengthen our team and get the right people in the right roles. At Red Lake, the transformation has started with the appointment of Amber Adams into the role of interim general manager and a 40% reduction of the site leadership team roles. I have been incredibly encouraged and impressed how Amber and her new team have embraced the challenge we have ahead of us to transform the operation. In a very important group role, I am pleased to announce the appointment of Amanda Weir as General Manager, Transformation and Effectiveness, a role that reports directly to our COO, Bob Fulker. Amanda has a very impressive track record with her last role being Head of Geoscience and Resource Engineering at Olympic Dam for BHP. Importantly, the drill rigs have kept turning and we continue to be encouraged by the success we're having at Cal, Manggari and now also at Red Lake, which you will hear more about from Glenn in a few minutes. With that, I'll hand over to Bob.