Evolution Mining Limited

Thank you for standing by and welcome to the Evolution Mining Limited FY26 Half Year Financial Results Call. All participants are in a 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 1 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 Cameron and good morning everyone. I'm joined on the call today by Fran Summer-Hayes, our Financial Officer, Nancy Gee, our Chief Technical Officer, and Rocky O'Connor, our GM, Investor Relations. Today we released our FY26 half-year financial results, along with announcing the approval of two key projects at our cornerstone operations, being E22 at North Parks and BERT at Ernest Henry. The call today will reference the presentation we released this morning. The forward-looking statement details are provided on slide two and people are encouraged to take note of these. I'll be starting on slide three. I personally think today is a milestone day for evolution. The work we have done executing our strategy since we formed in 2011 has demonstrated to be the right one. Today we have a portfolio which is of the highest quality and are embarking on the next phase of growth while at the same time delivering high returns for our shareholders including record dividends. We've always said that by focusing on margin we will make sure that our shareholders benefit. We will bank the cash, invest it wisely and reward you along the way through share price appreciation and dividends. Today shows that we are meeting that commitment. The record financial performance has been built up over the past two years of safely and consistently delivering to plan and capturing the benefits of a rising metal price environment. The business is in great shape, probably the best it has ever been and it is right to be reinvesting in the high margin suite of assets that we have. As you will see shortly, the returns on these investments we'll generate are some of the highest in the sector. From a portfolio perspective, our operations are set to take advantage of the current environment. CAL continues to be a material cash generator while investing for mine life extensions via the OPC project. Mangari has successfully transitioned back to being a major cash contributor for the group. Ernest Henry and North Park are reliable cash generators and the projects announced today will enable us to lift returns through utilisation of latent processing capacity and increasing our gold and copper production. Red Lake is showing what it is capable of doing, having delivered over $200 million of cash in the last 18 months. and Mount Rawdon continues to contribute while we work through the final stages of the options to move to a renewable energy project. Moving to slide four, the consistent performance is delivering high returns. Our underlying profit more than doubled to $785 million while our group cash flow was 123% better at $608 million. The benefit for our shareholders is a record dividend of 20 cents per share up 186%. Fran is excited to be going through the full details of the financial shortly. We have continued our discipline in terms of capital allocation and only investing in projects if they demonstrate they can generate high rates of return. It is the right time now to be investing in the projects at North Parks and Ernest Henry. The E22 and BERT projects will utilise excess processing capacity to increase production. At North Parks, to extract maximum value from the asset, the role of the stream that Triple Flag had needed to be sorted. The collaboration and positive intent of the Triple Flag team has facilitated greater flexibility in evaluating the multiple ore bodies at North Parks. The updated agreement allows us to move forward with the E22 blockade and start studies on expanding production including the potential development of the gold rich ore deposit. It also provides a pathway to develop additional gold rich deposits. We will receive a payment of $120 million in December and receive a materially higher proportion of the metal from the potential E44 deposit. Full details of the updated agreement are provided in the appendix of this presentation and a separate release. I do thank Sheldon van de Kooij and James Dendel who worked closely with Kieran Smith and our corporate development team to finalise the amendment. On slide five you'll see a summary of our disciplined approach to capital management. We have the right mix in terms of returns for our shareholders, investing for organic growth and acquisitions and having a balance sheet that underpins our strategy. Shareholders are receiving record dividends with over $400 million to be paid in April. We have lifted our planned total capital investment for FY27 to 30 to between $9 and $1,100 million per year. The driver to the change in outlook is only linked to the scale and scope of the projects or the new projects such as the coarse particle flotation and the expansion study at North Parks. It is not due to any project overruns or the like. For FY26 our group major capital is updated to between $500 and $605 million associated with starting investing in the projects announced today and the fact that the Cal OPC project is ahead of schedule. We have now commenced development of the E46 pit, brought forward from FY28 the work on the southern bund and will increase our work on the integrated wasteland form given the availability of more waste material. The overall project capital at the OPC remains unchanged at $430 million. Overall this is good capital investment and I will show you why on the next slide. We also announced today an expansion of our Canadian footprint with two quality exploration targets in British Columbia. Our discovery team believe these targets have the potential to become evolution scale projects. We'll be extensively drilling these over the next 12 to 15 months. Our balance sheet is in great place. We're on track to move to net cash by the end of FY26 and the balance sheet can support all components of our strategy. Turning to slide six, and to me, this is the most important slide of the whole presentation. It clearly shows the quality of our portfolio and the discipline of our investments. The projects in execution, or those just approved, are all going to improve the group average rate of return as these projects are all above the 18%. Significantly, at conservative gold and copper prices, the range of returns are 23% to 77%. These returns improved to 38% to 128% at a goal price that is 10% below today's price. At North Parks, the return from E48 could be as high as 128%. When we acquired the operation, we made a deliberate decision to take advantage of the installed infrastructure at E48, which brought us time to a fully assessed E22 and the triple flag agreement. This is a great example of how to allocate capital. Further highlighting the benefits of our capital allocation is the CAL OPC project. We are one year into the project and is tracking ahead of schedule. CAL delivered over $130 million of operating cash flow in January alone. This is an annualised rate of $1.6 billion and was delivered while utilising some lower grade stockpile material and is more than enough money to fund the OPC project. Overall, we're investing in the right projects at the right time so as to improve the returns and the quality of the portfolio. With that, I'll now hand over to Fran.

Thank you, Laurie, and good morning, everyone. At my first results presentation with Evolution, it is a pleasure to be talking to a set of record financial results and rewarding our shareholders while we continue to invest in our quality assets. On slide 8, underlying EBITDA achieved $1.6 billion, up 59%, and record underlying profit after tax at $785 million, up 104%. These financial outcomes were driven by stable and safe performance, on-plan and consistent production, benefiting from the higher metal prices whilst protecting our margin with strong cost control. Highlighted by our record underlying EBITDA margin, which has improved by 14% to 57%, we are banking the benefits of high gold and copper prices with our sector-leading all-in sustaining costs. With record group cash flow at $608 million, up 123%, declaring a record interim dividend. This is three times higher than the FY25 interim dividend of 20 cents per share, fully franked. Both operating and net mine cash flow for the half were all time records. As the slide nine shows, net mine cash flow is up 151% at 1.1 billion. delivering on our operational performance while we continued investing in our long life, high margin operations, like the open pit continuation project at Cow that is ahead of schedule and on budget. Manggari operation net mine cash flow is up almost 240% following the successful commissioning during the period on schedule and below budget mill expansion project. Group operational cash flows, sorry, operating cash cost and sustaining capital spend was in line with prior periods. As our underlying EBITDA margin increased from 50% to 57%, highlighting the quality and strong operational performance. These strong margins are expected to continue with our improved all-in sustaining cost guidance for FY26. We continue to bank the upside from the higher prices through consistent, safe, on-plan delivery, in turn leading to a very favourable step change in our balance sheet, which was already at investment grade before. Our balance sheet is in great shape, as the charts show on slide 10. Since December 23, over the last two years, our gearing has significantly reduced from 30% to only 6%. During the half period, we've repaid all bank term loans with the final 280 million, which was repaid during the half. Now, only remaining debt is our US private placement. This is long tenure and low cost with an average fixed interest rate of 4.47%, with our next payment not due to FY29. Our cash balance is $967 million. Net debt has significantly reduced from $1.6 billion to $362 million in the last two years. With the revolver credit facility remaining undrawn at $525 million available, our total liquidity is at $1.6 billion. As cash generation and balance sheet strength has improved, shareholders are seeing this reflected in higher returns without compromising high value return on investment in our quality assets or balance sheet flexibility. As we have said before, as gearing comes down, dividends are increasing. The chart on the top right of slide 11 clearly illustrates that in times when gearing reduces, dividend increases. Gearing peaked in FY23 following various acquisitions to establish a high margin asset portfolio that is now generating significant cash flow. Gearing has reduced rapidly while dividends have picked up. The chart shows what it may look like if the final FY26 dividend was the same as the interim dividend. bearing in mind that the current gold spot price is around 23% higher than the half average gold price achieved. This could be up to $500 million in extra cash flows in half too. Our dividend policy remains unchanged. We are targeting an annual average 50% payout group cash flow. Following record financial performance with strong group cash flow with the outlook on half to FY26 with expected production guidance to be achieved, continue investment in the business and improved revised all-in sustaining cost. The board has approved a fully franked dividend of 20 cents per share. This is 186% higher than the FY25 interim dividend. We have been and we are disciplined through the cycle dividend payers. This is the 26th consecutive dividend and in a six-month period this interim dividend of $406 million represents almost 20% of the total dividends declared over a 13-year period. Clearly shows that we are honouring our commitment and rewarding our shareholders. Aligned with our shareholders' feedback, the dividend reinvestment plan will continue to be on offer with no discounts. With current spot prices, we're on track to be net cash by the end of FY26 while continuing to invest in our long-life high-margin assets, which I will hand over to Nancy to share with you. Thanks, Nancy.