Evolution Mining Limited

Thank you for standing by and welcome to the Evolution Mining Limited full year 2024 financial results. All participants are in listen-only mode. There will be a presentation followed by a 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. Jake Klein, Executive Chair. Please go ahead.

Thanks, Kayleigh. Good morning, everyone, and thank you all for joining us. We do really appreciate your interest in our company. I will make some very brief introductory comments, which will be starting on slide three, which we've titled, Position for Success, before handing over to Laurie and Barry to take you through our FY24 annual results and our FY25 guidance. Any set of results that headline record net profits, record underlying EBITDA, record earnings per share, and a more than doubling of our final dividend are a pleasure to present. I think this is the 13th set of annual results for the company that we are presenting, and I honestly feel that Evolution has never been better positioned to benefit from the very favorable markets that we find ourselves in. Gold and copper prices are very high, and as I articulated in my Diggers and Dealers presentation last week, I believe there is very good reason to believe they will go even higher. The acquisition of North Parks in December last year has exceeded our expectations in almost every aspect in the first seven months of our ownership, and it adds to the outstanding portfolio of gold and copper assets we have assembled. Our balance sheet is strong, and we are particularly pleased that our investment grade rating was reaffirmed last month. We continue our track record of being a dividend payer with our 23rd consecutive dividend, I declared today, noting that as our cash generation increases as planned, so will our dividends. Our team is well positioned and in place. The introduction recently of Matt O'Neill as Chief Operating Officer and Nancy Gee, Chief Technical Officer, mean that all our key leadership positions are filled with highly talented individuals. And finally, we know all eyes are on us to deliver FY25 guidance. I want to assure you, we are absolutely focused on delivery will not be distracted, and are looking forward to the challenge. With that, I'll hand over to Laurie.

Thank you, Jake, and good morning, everyone. It's a pleasure to present the FY24 results and where we are heading into FY25. The past year, through a number of challenges at us and the way the team has responded to deliver right across the business is a credit to all involved. Even in the past week, where we experienced a cyber incident, Our team has been able to respond quickly to contain the incident while protecting the health, safety and privacy of our people together with the company systems and data. We do not anticipate this incident to have any material impact on operations. As Jake mentioned, we've laid the foundations for more consistent delivery in FY25 and with the outlook on metal prices, this is only going to reward our shareholders further. As shown on slide four, There were many highlights and records during the past year. In the sustainability area, we saw improvement in all key metrics, which I will touch on soon. Our low-cost production of 717,000 ounces at a sector-leading all-in sustaining cost of $1,477 per ounce delivered over $1.5 billion and $580 million of operational and net mine cash flow, respectively. The operational performance resulted in a record underlying net profit which was up 135% to $482 million. There were multiple financial records achieved in the year and Barry will be taking us through these very shortly. We said last June that the cash generation would build through the year and we delivered that. We committed to deleverage the balance sheet even while investing in our organic projects which we also delivered. Our gearing is now down to 25% and expected to move below our next target range of 20%. We also said last year we would start to see improved returns for our shareholders. Our full-year dividend is up 75% to $0.07 per share. As we continue to deleverage the balance sheet and maintain a disciplined approach to our capital investment, we expect to see further improvements in our dividends. Turning to slide five and our sustainability performance. To enable us to operate safely and effectively, sustainability has to be integrated in everything we do. We have seen our total recordable injury frequency reduced by 13% in the last year and 28% in the last two years. At the same time, the team have done a great job in managing all the material and critical risks that can have a far greater impact on our business. We continue to make great progress on our commitment to reducing our carbon footprint with a 14.3% reduction in emissions as at the end of FY24 against the target of 30% reduction by 2030. So with six years to go, we are already nearly halfway to the target. We also focus heavily on leaving lasting legacies in the communities in which we operate. I've highlighted one here because it has had a profound impact not only on our team at Mingari, the Kalgoorlie community. Last year we committed funding to support the development of housing for women and children affected by domestic violence or homelessness. This is up and running now and what leaves me a little sad is that the number of people needing to use the facility has increased which correlates to increased abuse. We remain committed to the cause providing further funding in FY25 as well as continuing to advocate against domestic violence. Moving into FY25 and slide 6. Having laid the foundations in FY24 for high margin, high cash generation, we expect this to continue in FY25. Our production guidance is 710,000 to 780,000 ounces of gold and 70,000 to 80,000 tons of copper. Our all-in sustaining costs will continue to be one of the lowest in the sector at $1,475 to $1,575 per ounce. This cost guidance is for our continuing operations as it reflects the position going forward where Mount Rawdon will cease operations this year. Further details of our guidance are provided in the appendix of the presentation and our release. The guidance is fully aligned to all information that we have publicly released in the last few months. The guidance for FY25 will deliver high cash flows as evidenced on the charts on the right of this slide. These charts, I think, are the most important part of today's presentation. Assuming the midpoint of guidance and a range of metal prices from what we achieved in FY24 to current spot prices, the operating and mine cash flow before major capitals, can be significantly higher up to $1.8 and $1.6 million respectively. This means we will continue to leverage the balance sheet, be able to invest in our organic major projects in the same disciplined approach we have for the past few years and increase our dividends all at the same time. The cash flow we are now generating out of the portfolio will continue to provide us with great flexibility in these three areas of capital management. Lastly, on slide seven, for a little bit more detail on FY25. In terms of production, which I reiterate aligns to all previously released information, we will have a full year of north parks, but with a higher proportion of gulf production due to the mining of the E31 open pits. The planned major shaft maintenance was successfully completed in July, which now sets up the shaft for the current life of mine. Cowl underground will ramp up to 2 million tonnes during the year. The margin on these ounces will continue to improve as the operation ramps up to its full production rate of 2.4 million tonnes in FY26. Red Lake is expected to have higher production, building on the consistency established over the past three to six months. Importantly, our planned metal price assumptions, pardon me, at our planned metal price assumptions, the operation will be cash positive this year. As in prior years, the two largest operations in Cal and Ernest Henry will complete their planned major shutdowns in August and March. As outlined during the Cale site visit, the March shutdown is a longer shutdown at 28 days as we refurbish the mill for the next phase of mine life. Thus, the March quarter will be our lowest production quarter. In terms of major capital, we maintain the discipline of only investing in the projects when they are needed. We have not approved any new major projects in execution for FY25. The 4.2 project at Mungaree remains on schedule and budget, as does the project to establish the new mining centres for the increased tonnage required post-expansion. Studies at Ernest Henry and North Parks will continue as planned this year, while at Red Lake, as previously announced, we will be consolidating to one tailings facility over the next 18 months to both plants being utilised at near capacity going forward. On our cost and revenue sensitivities to cash flow and all in sustaining costs, they are well known and this allows us to focus on the right things to ensure that we maintain a low-cost position. I'll now hand over to Barry to go through the financial results.

Thank you, Laurie, and good morning, everyone. It's so exciting to present the set of results this morning of which many are all-time records for evolution. Turning to slide eight, the record financial performance. Underlying profit after tax, a record performance is up 135% on last year at $482 million. Underlying EBITDA at just over $1.5 billion is another record and up 67% on last year, driven by higher production, higher metal prices, and good cost control. After investing $740 million into our long-life high-margin business, and paying $80 million in dividends during the year, gearing reduced from 33% to 25%. We are delivering on our commitment to deleverage the balance sheet while continuing to invest in the business and pay dividends. On slide 9 now, delivering improved margins. In FY24, the EBITDA margin increased materially from 38% to 47%. This resulted in significant cash generation for FY24. Group cash flow improved by $483 million from an outflow in FY23 to an inflow of $367 million this year. It was driven by a $600 million increase in operating mine cash flow that translated into a 16-fold increase in net mine cash flow. As Laurie pointed out earlier, We expect this cash-generating momentum to continue. At spot prices, we will generate even more cash in FY25. As presented at our recent site visit, Cal is expected to be a consistent, strong cash generator over the coming years, returning $250 to $350 million per year of cash flow to the group after paying for the capital of the next phase of open-bit development. Ernest Henry will continue to reliably and predictably contribute to cash and will be able to self-fund the planned expansion project while returning cash to the group. North Parks made a significant cash contribution in the first six months of ownership, and the E48 sub-level cave that is being developed will maintain the production profile at a low capital intensity. Mangari 4.2 expansion. is on schedule and budget. This will transition the asset to a major cash generator to increase production and lower processing costs. At Red Lake, our focus is on cash generation, not volume, and this will be underpinned by the operational stability that was established in FY24. As mining at Mount Jordan is completed and we mill the stockpiles, it will make a good final cash contribution. Now turning to slide 10, increasing shareholder returns as we deleverage. Following the record financial performance, the board declared a 23rd consecutive dividend of $0.05 per share, fully franked. It amounts to a $100 million payout in total and is a 150% increase on the FY23 final dividend. It will be paid on 4 October. The shareholder is registered on 30 August. Our policy of paying around 50% of the cash flow is unchanged, and we consider gearing as well as reinvesting in the business when declaring dividends. The chart on the top right illustrates that. In times when gearing is higher and deleveraging is a priority, dividends are generally lower. As gearing peaked in FY23 and started to reduce, dividends started to pick up in FY24. As we continue to deleverage, we would expect this trend to continue. We are very pleased that our investment-grade credit rating was affirmed during the annual review in July. This underscores the quality of our portfolio and strong outlook from our high-quality, high-margin business. We delivered on our promise to start deleveraging in FY24 and gearing reduced from 33% to 25%. This was achieved at gold and copper prices, that will well be low current spot prices. And as explained earlier, current spot prices, we expect to generate more cash in FY25 that will drive gearing down further. Reflecting on my first whole year at Evolution, I'm very proud of what the whole team achieved. What stands out to me is that we doubled our liquidity position to almost $1 billion and made significant progress with deleveraging while investing in our organic growth projects and continuing to pay dividends. With that, I'll hand you back to Laurie. Thank you.

Thanks, Barry. Slide 11 summarizes well the past year and where we are heading. The combined efforts of everyone in the last year delivered outstanding record financial results and did this in a much safer manner than last year. We set out at the start of FY24 to move back into high-margin cash generation. We achieved this, and the plan we have in FY25 is set to continue that momentum. Having reduced gearing significantly and with the high margins, we've been able to increase our dividends. The acquisition of North Parks has only further enhanced the existing long-life, high-returning portfolio. We've made a number of organisational changes and improvements in planning, which puts us in a much better position to deliver in FY25. With that, Kayleigh, please open the line for questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Rahul Anand with Morgan Stanley.

Hi, good morning, Jake, Laurie and Barry. Thanks for the call. First question perhaps for Barry. Barry, thanks for clarifying that 50% payout is still the policy for the dividend going forward and higher gearings keeping it lower this year. But at what point do you think you've reached your target gearing or your target net debt? Are you able to perhaps spell it out for us as to what that level is when we return to that 50% payout? And in the event that the target gearing moves lower than your target rate, Do we expect further dividends over and above the 50% payout?

Yeah, thanks, Raoul. I'll hand it to Barry in a minute to talk on the deleveraging and the gearing. But I think if we look at it, the policy that we've had in place for a number of years, as Barry mentioned, in periods of lower gearing, we've paid higher dividends. And in periods where they've had the elevated gearing, the dividends are a bit lower. But if we look at it over the entire period of this policy, we've actually averaged well above 50% payout. So we, again, demonstrate that capital management of disciplined capital investment, keeping the debt position right and keeping the dividends. So, you know, I think it's not that we'll return back to that. It's that we've actually got an average above it. But as these cash flows continue to increase, there'll be further dividend improvement. Barry, you want to talk on the gear levels? Thanks. Thanks, Laurie.

Firstly, very, very happy with the trajectory of the gearing down a lot this year. That actually happened in nine months. At the end of the September quarter, we were at 33. As we go into FY25, as Laurie explained with the guidance, we expect the cash generation to continue building and be strong. We are driving that gearing further down. I think we kind of think about it in 5% increments. So I think the next stop that we'd be targeting is getting to 20, which will be a good outcome. And then I think on a long-term sustainable basis where we believe it sits comfortable, either around that 15% or just below that level. So when you look forward on gearing, kind of working hard towards that 20% and then down to 15%.

Got it, okay. So basically 20% is where you can start thinking about the 50% and then once you're below 15, you start thinking about higher numbers than the 50% pre-cash flow.

I mean, just to reiterate what Laurie said, if we look at it over time, we actually, the average payout is more than 50%. So we are there. There's just swings and roundabouts depending on leveraging and investment priorities. But over time, we are over 50% of group cash flow.

Okay, so the next question was on Northparks, perhaps one for Laurie and Jake. Look, you've talked about how Northparks has exceeded expectations in the first seven months of ownership. Can you help me perhaps test that comment a bit more? Where have you seen the exceeding of expectations mainly coming from? I note your guidance for next year is markedly higher. What's driving that? Is that better grades from the open pit? Or perhaps if you want to shed a bit of colour as to those comments, please. Thanks.

Yeah, well, it's Jake. Look, it's a 500 million tonne all-body, all-bodies field. It's got a 30-year reserve life. It's got a team of people with deep technical knowledge of caving, block and sub-level caving. It's been cash generative from day one, $75 million in the first seven months. We identified in the due diligence and are now implementing a lower capital intensive approach to the E48 sub-level cave option. And to me, what's really exciting is the early exploration success we're having, noting that it is such a large or what is 70 years of mine life, if you mind all the resources. So we're looking for geological upside that will leapfrog into the production profile earlier. And there is exciting early stage results coming through, which I think you would have seen on site that Major Tom and various other raw bodies. So, you know, very happy with the assets, the people, our joint venture partners being Sumitomo and Triple Flag as the stream partners, and just the way the site has gone about professionally. You know, they manage the shaft maintenance very efficiently and effectively, and it's just been a great asset to add to our portfolio.

Got it. And next year's guidance, better grades from the open pit?

Yeah, so what it is, Raoul, is that, as I mentioned, when we've got E31, there's two pits there. One of them is dominant in gold. So the gold production to the copper ratio is higher. Therefore, you're spreading those copper by-product credits over more ounces. That's why the cost changes. That's the only change in costs for North Parks in 2025 versus 2024.

Got it, okay. Am I allowed to ask one more, or are you keeping it to two?

It's up to the moderator, but you can ask any other question.

Look, you've got a chart in there which has got the highest sensitivity to operating costs, obviously even higher than the gold price. That's obvious, I guess. But, you know, the question is around where are you seeing the pressures on that cost base into 25? Obviously, we've talked a bit about labour in the past. second half of FY25, a good period to see some of that labor inflation slow down, I believe. Is that still the thinking? And then any other things to call out specifically in terms of the inflation in that cost base? That's the final thing.

The cost guidance for FY25 is in line with everything we said a couple of months ago. So We'll see labour, we've allowed for labour, total of movement of 5% for the year. We've then seen most of the others around 3%. Labour's 50% of our cost base. So it's an average about a 4% increase, 25 over 24. And that's what we've allowed for. And then if we look at it as we go into FY25 at the back end, so our labour... for our employees is for the full financial year. So we review our salaries now, and that applies for the full year. So it's about 12 months time we'd be looking at what's the impact on 26. If the economy does slow as predicted, then we would expect labor rates to not go at the rate that they did for this year. And in the other areas, we are seeing it start to stabilize, but it is dependent on what happens in the overall global economy in terms of inflation. And you're right, it does show that that's the larger one. That's a 5% movement in our costs. So if we saw a whole 5% inflation, that's what that would be. But it's not a 5% movement in the gold price that we've used as a sensitivity. That would be a lot higher than the costs.

Got it. Yep, fair. All right, I'll pass it on. Thank you.

Your next question comes from George Eadie with UBS.

Yeah, good day, gents. First question on Ernest Henry. Could you please just remind us the story here? So the extension fee study is due in March quarter next year, next calendar year, that is, and major capex won't come until FY25. Is that still right? And just on the capex, will any of the tailings and vents spend this year potentially fall in at FY26?

Okay, so just checking there, George, you said... a spend in 25, or did you mean 26, after the study? So the study will finish in March 25 for Ernest Henry. There is capital in our major capital this year that we've made the decision to invest around ventilation, refrigeration and trucking as we move down to the 1175, the extension area. We received approvals to go below the 1200 during FY24 And given the value of the project and the results we're seeing between Ernie Jr. and Ernie, the main ore body, we've made that decision to put some of that infrastructure in earlier. So that is where you'll see that different capital. After the study, we then move into more that development, but the main infrastructure around crushing and conveying is still out in that 27, 28, and 29 years, but mainly 27, 28.

Yeah, thanks, Laurie. And just clarifying on that, so the infrastructure you're putting in now, vent, refrigeration and trucking and that, is that in this year's capex, the 140, or could there be a bit slip in the next financial year?

Oh, look, in terms of Ernest Henry, I would expect that anything that could slip would be just delivery of the trucks. We're working on the ventilation as we speak. We really want to have that in place by the end of the March quarter. and the refrigeration by the end of June is really what we'd like to see because we're already starting to move down below the 1200 now and we'll be going lower by the end of the year.

Yep, okay, thanks for that. And maybe just a second down a similar line of thought now to Cal. So we've spoken to 200 to 230 million major capex a year here. FY25 is clearly a lot below. Can you maybe just give us again a bit more colour on the timeline of the CAPEX spend over the coming years? I know it's hard to predict, but rather than just sort of straight line modeling it for our sake.

I'll do the first part, but not maybe the second part. This year, as we talked about on site with the visit, where we are with Stage H, it is unlikely that we'll be moving into Stage I in FY25. Because of the weather impacts last year, the mine plan now will move through to the end of this year. We are still waiting for regulatory approval, which we were expecting in the December quarter. We will assess that when that comes through. So when we look at it for this year, there isn't anything in there for the open pits at Cal. What we do have in there is the closeouts on the IWL and the underground surface infrastructure as the main pieces for this year. So if you look at it, the 200 to 230 over five years still remains, but it's probably pushing out six to nine months based on where we are in the planning and approval. So you would assume that Cal will make more cash than what was originally planned for 25, and then that 200 to 230 will average over 26 in the next five years.

Too easy. Thanks for that, Laurie.

So our next question comes from Kate McCutcheon with Citi.

Hi. Morning, Laurie, Jake, and Barry. Slide six in your deck. I like it. Arrow's going up. So I can try to reconcile. Can you remind me what the non-cash impacts in the all-in sustaining costs are? If I remember, it's Rawdon and Cal that have the non-cash stockpile adjustments. Anything to call out, please?

Yeah. I didn't expect a non-cash, but we would expect that it's about this year, somewhere between $30 and $50 million will be the non-cash that will hit the AISC.

Okay, and it's mainly Rawdon and Carl?

Yes.

Okay, got it. And then guidance for the FY, what are you spending on exploration at the group? How much is Ernest Henry? And then can I use that as a segue to Bert? So has there been any further thinking on whether it could work as a separate access or whether it could also be accessed from the cave to take pressure off development?

I'll talk on Ernest Henry and Barry will get the exploration spend, which is not much different to what we talked on at Mangari. So the thinking there with Bert is that drilling is continuing. Glenn's wanting to see the results over the next three to six months. It takes him a bit to get him to commit, but I think he still believes that there's access coming off the pit wall, going in via a decline at some point, but we're probably 18 months away from finishing that program and study work before we were doing anything there. In terms of the expiration, I mean, it's around $60 billion this year. Mangari was around that $20, $25 that we talked about on site. Ernest Henry would be the next one in sort of around that $20 million mark. And then there's the other sort of greenfields and the like that's going on.

Okay, cool. And then, so Red Lake as well, I think there's a concern in the market that there's a risk of maybe an impairment there moving forward. I would have thought the resources were still there, but maybe if there's some comments that you can make to reassure the market, it's something that I keep hearing, which I'm not sure is entirely correct.

I just say, Kate, that we've just been through our board meetings, the audit committee meetings with PwC as auditors. There is no impairment at Red Lake and that's been signed off by PwC.

Okay, thank you.

Our next question comes from Jared Lucas with ABC News.

Good morning, guys. I just wanted to ask about the cybersecurity incident this week. You've obviously said no material impact on operations as expected, but obviously concerning enough that you had to release a statement to the ASX.

Yeah, Jarrod. I mean, I think the reason for releasing the statement is that the minute we had to report it to the authorities, we were therefore making something public. So in regards to the sensitivities around cyber incidents, we and the board made the decision to put that information out there. I mean, through the period from the 8th till Monday, we clearly worked through that containment and understanding impacts on systems and people, and we now believe that we've got that well under control and the like. And I think, you know, from our perspective around material impact, A number of these systems require connections to the external world through the internet and everything, and some of those systems get cut off for a period, which had a very minor impact on the operational assets for a couple of days.

Are you aware of any data that's been lost to the hackers?

Look, we're aware of... all of the different servers and information. There's nothing in there that is material, private or personal that has been lost. And in reality, when we look at all of our backup systems, there's probably nearly nothing that's going to be lost other than, say, for that period, for the 8th till the 10th, where you're going back to backups from a few days before that. But that's all that we're seeing at the moment.

Thanks, guys. I appreciate it.

So our next question comes from Matthew Friedman with MST Financial.

Sure, thanks. Morning, all. Firstly, can I ask on Red Lake, your FY25 guidance for gold production, 125,000 to 145,000 ounces. Laurie, previously you've talked to 140,000 to 150,000 as a sort of base case expectations for the assets. the market may have wrongly interpreted that as the run rate to expect for FY25 rather than the exit rate. Is that a fair assessment? Does the second half in FY25 look better than the first half as the asset continues to stabilise and improve? And is that medium-term sort of base case expectation still 140,000 to 150,000 ounces in your mind?

Mate, there's two short parts to that. Yes, to the... 140 to 150. And in terms of this year, we're basically making sure that the site is able to deliver as a bare minimum into that 125 to 145, maintain the consistency. From my perspective, you know, March was a good quarter. June had a little bit of an impact with seismicity. We want to see it consistent for a couple more quarters. So we're being a little bit conservative there.

Okay, got it. Thanks, Laurie. And you've said that That asset is going to be cash positive next year based on obviously your budget and your guidance. I'm guessing that's before the 65 to 75 million of major project capital, which you've called out as primarily going towards the tailings dam. Can I ask, when does that project finish and is that the entirety of that major project capex budget? Is there anything we need to sort of think about over the medium term in terms of major project capex spend? Thanks.

No, so the... The forecast and plan for Red Lake this year at our metal prices is it will be cash positive, net cash positive for the year.

Including the major project capex?

Yes. Okay, thanks. And it's not significant, but it is cash positive, which is the first thing they need to get to. And in terms of that tailings, that's, as I said, it's over the next 18 months that we'll be investing in that project. consolidation of the facility.

Okay, got it. Thank you. And then maybe just finally, maybe a bit more of a mechanical one, but Mount Rawdon, you've excluded that from oil and sustaining cost guidance. Will that be included in your underlying earnings that you report for FY25? I guess maybe one for Barry. How do we think about the reporting of that as a sort of continuing or discontinued operation? Thanks.

So Barry will deal with the underlying. So it is excluded from the AISC. We will report both. But at the end of the day, when you've got an asset that's moving into processing stockpiles from the second quarter, AISC of $3,000 to $3,500, but it's going to make $15 million to $20 million of free cash when the AISC is the same as the revenue side. Our view is that that's not a reflection of where the asset is going forward. It means including it in the AISC is about a $75 to $100 delta for the group. And that, for us, is when you go into FY26 and beyond, Mount Rawdon won't be there. You want to talk about the earnings?

Yeah, so, I mean, in terms of purely that stat P&L view on earnings, we usually exclude a lot of things of a once-off type nature in there. So from a stat P&L point of view, I think that the earnings would stay in the underlying, but we're providing this guidance excluding Roden to enable modeling forward of the ongoing cost base. But stat P&L, I'd see the earnings in the underlying next year.

Okay, thanks. That's pretty clear. And as you say, Laurie, it's cash positive, so that's the important thing. Cheers. Cheers.

So our next question comes from Daniel Morgan with Baron Joey. Mr. Morgan, your line is open.

Sorry, can you hear me?

Yes, we can.

Yeah, sorry, I was on mute. Could you just talk about the process that you undertook to set this guidance? You know, was it I guess a little bit more conservative than you might have done in previous years. And what are the major drivers within the business that might cause you to be at the most optimistic part of guidance, i.e. at the top end on production and low end on costs? And what are the risks, the major risks in the business that would maybe see the reverse? Thank you.

Okay, Dan, I'll try and... Keep it to a couple because if you talk to the operations, they could give me a list of 10 on the negative and one on the positive. I think when we look at it, if you're looking at it, it's weather. Weather certainly at Cal, it will impact Mount Rawdon, but it's got time to finish mining and processing through the course of the year. We've had some unseasonal weather. and rainfall over in the west in Mangari and the like. So weather has a role to play. I think when we look at it, there's nothing much from a mining perspective. We've got a large shutdown at Cow in March and April, so that one needs to run to plan because that links into feeding the underground. So we need to make sure that that comes through. I think on the upside is making sure that the stability that we've started to see at Red Lake continues and builds that momentum. We've talked about it where they used to need 3,000 tonnes a day out of the mines. They're now working on the basis of build a stockpile, maintain a stockpile. So they've got to be able to consistently be above that 3,000 tonnes a day. And then I just think if we look at it, we've got Ernest Henry and North Parks as caving operations. If they can continue their consistency and reliability, that gives us a base going forward. And then the uplift could be if the underground at Cal is able to get above the 2 million tonnes earlier than what we had expected through the year.

Okay. Thank you so much for your perspectives, Laurie.

Your next question comes from Al Harvey with JP Morgan.

Yeah, morning, Laurie and team. Just one from me. Just looking at the copper price assumed in on sustaining costs, Aussie dollar $14,350 a tonne, so thanks for that. I guess I'm just thinking about spot. Not that we like to latch too much onto spot, but at $13,500 a tonne, Aussie just want to step through the processes. How you landed at that, I assume it's kind of semi-related to consensus. And just as a follow-up, just wondering if you'd be willing to share the Aussie dollar assumption underpinning that copper price. I think it was $0.65 in last year's guide.

Yes, quite simply, in terms of setting that price, that was based on consensus. And actually, by the time we were finished, consensus had gone above that, and we decided not to lift our plan assumptions. We felt it was actually easier to go with what all of the market consensus was rather than choosing our own, just to make it simple. That sensitivity is sitting on slide seven as to where you can see what the copper price movement is. Yes, it is below at the moment, but we're looking at the range over the full year and the analysts have it at that sort of rate. And the second part of the exchange rate is about 65 and a half, I think, 67 and a half, sorry, for the year.

Great. Thanks for that, Laurie.

Your next question comes from John Bishop with Jordan Group.

Morning, guys. Thanks for taking the questions and well done on the result. Just a couple from me. Regarding Ernest Henry, I know the work's still in progress around development of BERT, but could you sort of give us a bit of a guide as to how the team's feeling around what BERT does to either the tonne throughput longer term or indeed grade? Because from what I can recall from your reserve and resource statement, we should expect Ernest Henry grades to sort of soften over the balance of life of mine if I think I'm correct.

Yeah, so in terms of Ernest Henry, we have seen as we've gone down the cave that grades come down and you've seen our production go from 95 down to sub-80 now over the last five years. But the drill results we've got in the extension are actually saying that the grades are holding up and the ratio of copper and gold is actually also holding up. So we sort of see that we're probably around the level of where Ernest Henry production rates out of the main ore body would be going forward if we're able to keep that mill running at full capacity. In terms of BERT, that still hasn't changed from what Glen's talked about at the June quarterly. We either come off the pit wall and put a decline down that then gives us capacity to go above the 6.8 million tonne processing rate. or if it does extend down and connect into the main ore body, it provides flexibility as to how we fully extract BERT. But as I said just earlier to Kate, we'd see that that's at least 18 months away from having a full picture. We're going as quick as we can on the drilling, given the great results that we saw in the June quarterly.

Yeah, that's evident, cracking results. And just switching to Cal, obviously still pending approvals. You've probably articulated this before but can you sort of indicate what the key risks are for final approval here?

So where we're at is we're in the dance with the regulator about providing us with what they would see as consent conditions. So they're requesting some further information. So the public display piece is closed and strong support for the project. We now wait for them to give us the consent conditions on which then we have to respond and then they make their final determination. So they're sort of the last three steps in that part of the process. On achieving that, then the project team needs to make the recommendations to the board around proceeding and the board needs to decide when to proceed forward.

Okay. Forgive my ignorance, but what does a consent condition look like? Is it Was it environmental or is it water management or is it all of the above?

It's all of those. So if we look at an example, when we got Stage H approval, we needed to move some of the road for the travel strop route. That was a consent condition we had to agree to. We had to provide support for road maintenance for some roads that we would be using. So it then comes back to us to discuss... and accept those conditions or discuss them with the regulator to see if there's alternatives.

Okay. I'm sorry to keep burying down, but is there anything that you've seen in your discourse with the regulator to date or specific areas of focus or are these fairly banal kind of conditions you're expecting here?

No. At the moment, it's not much different to other consent conditions for Mod 14 and the like that we had for Stage HP. and for the underground.

Awesome, thank you very much.

Your next question comes from Mitch Ryan with Jefferies.

Morning, thank you for taking my question. I'm just trying to reconcile today's guidance to the presentation on the 8th of May which you released to ASICS. When guidance was 750,000 ounces for FY24, And you made a statement that FY25 guidance would be, group reduction would be higher. Why is the bottom of the range so far below that then today? What's changed over the intervening period?

Mitch, the short answer is nothing has changed. If we look at it, 710 to 780, midpoint is 745. And I'll quote Jake here that to him, 5,000 ounces is roundings. So there's nothing that's really changed. Yes, it's a little bit lower in terms of the Red Lake in its range, but a couple of the other assets are actually higher, one of them being North Parks with the E31. So we see that. And if you look at last year's guidance where we used the plus minus five, you would have had it less than the $749,000. down to that lower number. So it's the same approach, nothing different from what we said on the 3rd of May.

I'll just add one build on that, Mitch. I'm very comfortable that this is consistent with all the outlook statements and conversations we've had with respect to guidance and outlook for FY25.

Yeah, okay. Sorry, I just thought growth would have implied that that was your baseline. That's it for me. Thank you.

There are no further questions at this time. I'll now hand back to Mr. Klein for closing remarks.

Thanks, Kelly, and thanks, everyone, for listening. We appreciate it. I do want to shout out to the team at Evolution, Laurie and the whole team. It's been a huge effort to deliver these results. It's taken a lot of effort from a lot of people across all our sites and on behalf of the board. We really appreciate that. I also just want to finish off with the same sentence and message that I gave in my introductory comments. We absolutely know that all eyes are on us to deliver FY25 guidance. We are focused on that delivery. We won't be distracted, and we're up for the challenge. Thanks, everyone.

That does conclude our conference today. Thank you for participating. You may now disconnect.