Evolution Mining Limited

Thank you for standing by and welcome to the Evolution Mining FY25 Full Year 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. Laurie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you Kayleigh and good morning everyone. I'm joined on the call today by Matt O'Neill, our Chief Operating Officer and Peter O'Connor, our GM, Investor Relations. Today we released our FY25 full year financial results and an excellent set of results they are with many new records established and increased returns for our shareholders. These results were achieved through the efforts of our employees and contractors who I sincerely thank for their contribution during the year. To release our financial results today has also taken many long hours by the finance and investor relations team, so an extra special thanks to them. I'll be talking to the presentation we released on the ASX this morning. Slide 3 summarises well the benefits of safely delivering to guidance, maintaining a strong cost and capital discipline and banking the cash in a high middle price environment. Our statutory profit was up 119% to $926 million and our underlying profit doubled to $958 million. Our earnings per share of $0.46 per share was up 111%. All of these are records. EBITDA or operating cash flow was also a record at $2.2 billion at a very strong margin of 51%. A group cash flow of nearly $800 million was a record and an improvement of 114% on last year against only a 35% increase in the gold price. With the improvement in cash flows and the balance sheet position, we have today announced a final dividend of $0.13 per share fully franked, which is about three times last year's dividend. Therefore, our shareholders are benefiting from the quality of our portfolio, including the successful progressing of key projects at Mangari and Cow, which enable us to sustain these types of returns. I remind you that these record results have been delivered at an achieved gold price that was $800 per ounce below the spot price, which is very promising for FY26. Moving to slide four. We've said this for many years now that sustainability is integrated into everything we do and the results in FY25 show that this work is paying off. Our TRIF of five improved 35% over the prior year and reached its lowest point, meaning we delivered our plan with a strong focus on safety. We are tracking well on our net zero commitment. We are now over halfway towards our 30% reduction by 2030 at 16%. We're also making sure that the communities where we operate are benefiting from our presence and our success through the delivery of at least six high impact community projects over the last year. Turning to slide five. And this is probably one of the best slides in the deck. We're continuing to demonstrate that our margin over ounces approach is working with high margins at all levels, be that EBITDA, operating mine cash flow, net mine cash flow and group cash flow. The chart on the top right shows that we are banking the upside of the high price achieved last year with a margin ranging from $1,050 to $3,050 per ounce. As I said earlier, these were all delivered at an achieved price that was $800 per ounce below the current spot. Every $100 per ounce equates to $70 to $80 million additional cash flow and remember that 50% of this goes to shareholders per our dividend policy. Importantly, our portfolio is delivering great cash margins with an EBITDA margin ranging from 37% to 64% and the group average of 51%. Some highlights for the year included our Cash Cow Cow operation, generating $185 million. North Parks has delivered $182 million of net cash in the first 18 months of ownership, while Red Lake had a full-year net positive cash flow of $74 million. Most importantly, with an average mine life of 18 years and a sector-leading cost position, we can sustain these margins and cash flows over the long term. To slide six, we said last year as our gearing improved from 33% to 25%, we would start increasing our returns to shareholders. We have met that commitment. Our 25th consecutive dividend of 13 cents per share fully franked is a record, as is the full-year dividend of 20 cents per share. Both are about three times last year's dividend. It equates to about $400 million, which is approximately 32% of the total of all dividends up to 2024 being paid in one year. The DRP will be available for this dividend. Our balance sheet is in excellent shape with our investment grade rating reaffirmed last month in the normal annual review process. Our record financial performance improved our gearing to 15% and we are back into the normal operating gearing range. We should remember that our gearing was 25% at the start of the year which means we have improved by 10 percentage points or reduced it by 40%. We are basically unhedged, meaning we benefit from the current spot price, and then with our low-cost position, we can adequately withstand a drop in the gold price. Moving to guidance on slide 7. Our group guidance was previously announced last month. Today, we have provided detailed guidance by operations, and this is contained in the appendix of the presentation pack. As I said last month, FY26 is expected to be similar to FY25 where we are planning to safely deliver high margin significant cash flow. I'm not going to go through the details again but do want to reiterate a few things. Our all-in sustaining cost will see us remain as one of the lowest cost producers in the sector and we continue to control our costs. Our group capital investment will be around 200 and 100 million lower than our FY25 investment at the midpoint and top end of guidance respectively. We continue to have discipline in sequencing our capital projects. Our five-year plan total capital investment remains unchanged at 750 to 950 million per annum. However, the most important thing I want to highlight on this slide is the cash flow opportunity. At the midpoint of guidance and at the current spot price, we would generate over 2.75 billion and 2.5 billion of operating mine cash flow and mine cash flow before major capital, respectively. This is about 20% higher than FY25. And remember, our shareholders would receive half of that extra $500 million cash flow in dividends over and above the $400 that we declared for FY25. I think it is very clear that we are ensuring our shareholders are going to benefit from this cycle. Finally on slide 8, I just talked about the rewards we're able to provide for our shareholders. This is because our continued focus on safe and reliable delivery to plan, margin over ounces and making sure the cash from the higher metal prices hit the bank account. By doing that, we've declared dividend that is three times last year's dividend. We have a balance sheet with far greater flexibility but with the overarching discipline of sequencing the multiple growth projects appropriately. though we are going to be able to sustain this for many years given we have an 18-year mine life from a high-margin portfolio of assets. 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 Kate McCutcheon with Citi.