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Evolution Mining - June 2014 Quarterly Report
[July 31, 2014]

Evolution Mining - June 2014 Quarterly Report


(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 31 July 2014 Release date- 30072014 - Evolution has delivered its eleventh consecutive quarter of meeting or exceeding guidance.

June 2014 quarter Group production of 111,899oz gold equivalent was achieved at an average C1 cash cost of A$747/oz and an All-in Sustaining Cost (AISC) of A$1,057/oz. This compares with March 2014 quarter production of 101,408oz, at an average C1 cost of A$811/oz and AISC of A$1,079/oz. The performance in the June quarter was largely brought about by improved production at Mt Rawdon and Edna May.



Group production for FY14 totalled 427,703 gold equivalent ounces - in-line with original and unchanged guidance of 400,000 - 450,000 ounces.

This represents: A new production record for Evolution A 9% increase compared to FY13 (392,920oz) A concerted effort throughout FY14 to improve efficiency and reduce costs proved very successful with all cost metrics coming in below or at the lower end of original guidance. Group production for FY14 was achieved at: Average C1 cash cost of A$772/oz - compared to guidance of A$770 - A$820/oz AISC of A$1,070/oz - compared to guidance of A$1,080 - A$1,130/oz AIC of A$1,289/oz - compared to guidance of A$1,300 - A$1,370/oz Mt Carlton completed its first year of operation with an exceptional result, producing 87,952 gold equivalent ounces at A$634 per ounce - well above production guidance and well below cost guidance.


Cracow delivered another excellent result, producing 95,064 ounces at A$726 per ounce - also well above production guidance and over A$100/oz below the bottom end of cost guidance Mt Rawdon delivered arguably the best result, producing 103,755 ounces at A$670 per ounce - again reliably within production guidance and also well below cost guidance.

Pajingo and Edna May both achieved improved performance in the second half of the year following significant changes at both operations throughout FY14. Pajingo produced 60,766 ounces at A$894 per ounce and Edna May produced 80,165 ounces at A$1,017 per ounce. Both mines fell outside of guidance and tighter controls have been put in place to ensure improved reliability in FY15.

Group FY14 total capital spend (including all sustaining and growth capital) of A$152M was below the lower end of the A$160M to A$185M guidance due to cost savings and reprioritisation of certain capital expenditures. Group production for the September 2014 quarter is forecast to be approximately 100,000 ounces gold equivalent.

Outlook for FY15 Evolution is forecasting Group production in FY15 of 400,000 - 440,000 ounces gold equivalent. Group C1 cash costs are expected to be in the range of A$750/oz - A$820/oz and Group All-in Sustaining Costs (AISC) are expected to be in the range of A$1,050/oz - A$1,130/oz. The production forecast is similar to the result achieved in FY14 and reflects steady-state production at all operations. The operating cost forecasts show a reduction on prior year guidance; reflecting the on-going focus on cost saving initiatives and the results of initiatives implemented in the past 12 months.

At an AUD:USD exchange rate of 0.925 Evolution's costs are globally competitive and equate to C1 cash costs of US$695/oz to US$760/oz and AISC of US$970/oz to US$1,045/oz. Expenditure on sustaining capital in FY15 is forecast to be in the range of A$55 - A$75M. This is similar to FY14 expenditure of A$58M.

Investment in growth (major project) capital and discovery is additional to the costs included in AISC. Investment in major capital in FY15 is forecast to be in the range of A$80 - A$100M and exploration expenditure is expected to total approximately A$20 million. These costs are equivalent to approximately A$260/oz but this includes discretionary projects that can be reduced or rescheduled if required.

The bulk of the major capital expenditure is associated with the open pit cutbacks at Mt Rawdon (approximately 10Mt of waste) and Edna May (approximately 6Mt of waste). These cutbacks have been classified as major capital projects as the expenditure will provide access to ore later in the mine life (i.e. beyond FY15). Waste stripping related to ore accessed in FY15 is expensed. This treatment matches the treatment adopted for accounting purposes (in accordance with IFRIC 20).

In FY15 the total waste and ore movement equates to strip ratios at Mt Rawdon and Edna May of 4.8:1 and 4.6:1 respectively which includes the cutback material.

This is well above the remaining life-of-mine strip ratios for these mines of 1.8:1 and 2.3:1 respectively. All of Evolution's mines are expected to be cashflow positive at a gold price of A$1400/oz in FY15. At a gold price forecast of A$1400/oz Evolution is able to deliver on all of its scheduled capital and financing commitments and continue to fund its 2% gold royalty-style dividend policy.

Since mid-2013 the strategic focus of Evolution's exploration efforts has been to build a platform for step-change transformational discovery. Recent work has focused primarily on building 4D models supported by 2D and 3D seismic, to interrogate large historical databases to improve area selection and the location of specific drill targets.

The objective is to increase the likelihood of exploration success, shorten the timeframe, and decrease the cost and number of drill-holes to make new discoveries. With this work now coming to fruition, a significant increase in the amount of drilling is expected in FY15. Current plans estimate that more than 80,000m will be drilled at Evolution's mines and exploration properties (including the Tennant Creek JV) in FY15. Exploration expenditure is expected to total approximately A$20 million in FY15.

Definitions C1 cash cost - represents the cost for mining, processing and administration after accounting for movements in inventory (predominantly ore stockpiles). It includes net proceeds from by-product credits, but excludes the cost of royalties and capital costs for exploration, mine development and plant and equipment.

All-in Sustaining Cost (AISC) - is made up of the C1 cash cost plus royalty expense, sustaining capital expense and general corporate and administration expenses.

All-in Cost (AIC) - is made up of the AISC plus growth (major project) capital and discovery expenditure.

Assumptions Cracow, Pajingo, Mt Rawdon and Edna May production guidance refers only to gold production (i.e. silver production has not been included as a gold equivalent co-product but accounted for as a by-product). A silver price of A$23/oz is assumed for the by-product calculation Mt Carlton produces two distinct precious-metal concentrates, a gold-silver-copper concentrate from the V2 deposit and a silver-copper concentrate from the A39 deposit. Mining of the A39 deposit has now ceased and A39 stockpiled ore will continue to be treated through to the end of August 2014. Thereafter, production will come entirely from the V2 deposit. Mt Carlton is forecast to produce approximately 52,500 - 60,000 ounces of payable gold from the V2 deposit and approximately 740,000 ounces of payable silver from the A39 deposit in FY15.

Mt Carlton production guidance shown earlier in this section refers to payable metal (i.e. after smelter deductions) and sums the gold produced from the V2 deposit and the silver produced from the A39 deposit after converting A39 silver production to a gold equivalent figure (on the basis of a commodity price ratio of A$1,400/oz for gold and A$23/oz for silver) Mt Carlton cash cost guidance is based on total cash operating costs across the V2 and A39 deposits less by product credits from silver and copper in the V2 concentrate and copper in the A39 concentrate divided by the gold equivalent production figure. A silver price of A$23/oz and a copper price of A$3.30/lb are assumed for by product credits OPERATIONS Group Safety Performance Group total recordable injury frequency rate for the quarter reduced to 11.7 (Mar 2014 qtr: 13.3), a material improvement through FY14 and the lowest level since Evolution's formation. The lost time injury frequency rate also reduced to 1.7 (Mar 2014 qtr: 2.6). A Group-wide program in partnership with Alert Driving, aimed at reducing vehicle incidents, was completed by over 900 employees during FY14.

Cracow, Queensland (100%) True to form, Cracow delivered a reliable result with June quarter production of 23,376oz of gold at a C1 cash cost of A$821/oz, and AISC of A$1,155/oz (Mar 2014 qtr: 24,321oz, C1 A$616/oz, AISC A$938/oz). The operation continued to improve and consolidate systems with the June quarter concluding the first full year as a successful owner miner.

A total of 130,358t of ore was mined at an average grade of 5.63g/t Au. Primary ore sources were Roses Pride, Kilkenny, Empire and Tipperary orebodies. Grade was lower during the quarter as a result of lower grade areas available for mining and increased development ore.

Underground development increased, achieving the highest development metres in FY14 of 1,746m, comprising 1,149m of operating development and 597m of capital development. Backfilling was a priority along with operating development to improve stoping flexibility and provide access to diamond drill platforms for resource definition drilling in FY15. Empire continued to be developed with stoping expected to commence in the September 2014 quarter.

A total of 129,926t of ore was processed at an average grade of 6.03g/t Au. Gold recovery was 92.7% with plant utilisation of 95.8%. Work commenced on a crusher and mill circuit optimisation study during the quarter. Total gold production for FY14 was 95,064oz at an average cash cost of A$726/oz which compares with guidance of 82,500 - 90,000oz at A$840 - A$890/oz. The lower than expected cash cost was a direct result of the move to owner-miner and the cost savings being realised more quickly than expected.

Pajingo, Queensland (100%) June quarter production was 16,495oz of gold, compared to the March quarter production of 15,068oz. C1 cash costs reduced to A$780/oz with AISC also reducing slightly to A$1,099/oz (Mar 2014 qtr: C1 A$814/oz, AISC A$1,114/oz). This was a pleasing result given the significant cost reduction also achieved in the March quarter. The focus on cost reduction continued with plant, administration, and mining costs all reduced for the quarter.

Mine planning improvements continued to be a focus area. Significant grade control and resource definition drilling of over 12,172m was completed from underground.

Underground ore mined for the quarter increased to 87,176t at 6.15g/t Au and was sourced from the Sonia, Sonia East, Eva, Faith, Veracity and both Zed East/West orebodies. Underground development was slightly above plan as improvements in cycle times built on the progress made last quarter.

Ore treated was 87,592t grading 6.12g/t Au and gold recovery was 95.7%. Sharing of resources, systems, and knowledge continued between the underground operations of Cracow and Pajingo and is impacting positively on performance. Total gold production for FY14 was 60,766oz at an average cash cost of A$894/oz which compares with guidance of 72,500 - 80,000oz at A$800 - A$850/oz. During the first half of FY14 Pajingo was restructured to be a leaner operation with a move to campaign milling and a focus on underground operations only.

Production was impacted during this period by some rehabilitation work in the upper decline areas of the mine. The second half of FY14 saw a more consistent performance, with a strong focus on cost reduction, capital discipline and productivity improvement resulting in a significant reduction in costs. This sustained improvement in costs is reflected in the FY15 C1 cash cost guidance of A$700 - A$770/oz.

Edna May, Western Australia (100%) Gold production of 22,035oz was achieved in the June quarter at a C1 cash cost of A$945/oz and AISC of A$1,045/oz (Mar 2014 qtr: 17,879oz, C1 cash cost A$1,263/oz, AISC A$1,434/oz). Unit costs decreased due to higher grade and higher recovery.

Total material movement was 867,916t, comprising 526,092t of ore at 1.13g/t Au and 341,824t of waste. In addition, 164,332t of stockpiled ore was re-handled to the ROM pad. The waste mined comprised of 304,839t of operating waste from Stage 1 pit cutback and 36,985t of capital waste from Stage 2. Approximately 1,900,000t of Stage 2 capital waste mining is planned for the September 2014 quarter. Campaign mining to match mill throughput continued throughout the quarter.

A total of 660,022t of ore was treated at an average grade of 1.10g/t Au with an increase in gold recovery of 94.5% largely due to improved characterisation of ROM blend fingers. Average plant throughput was 7,253tpd a minor decrease quarter-on-quarter due to a rescheduled major shutdown in May and unexpected ball mill issues late in June, now resolved.

Total gold production for FY14 was 80,165oz at an average cash cost of A$1,017/oz which compares with guidance of 85,000 - 95,000oz at A$800 - A$850/oz. FY14 production was impacted by lower than expected grade and processing plant reliability issues that impacted throughput, especially in the first half of FY14. Plant throughput capacity and reliability improved following the successful installation of the variable speed drive to the SAG mill in March 2014.

In the prior quarter, Evolution reported that it had received expressions of interest from a number of parties interested in purchasing the Edna May mine and that this interest was being explored. Subsequent interaction with the interested parties demonstrated that a fair and reasonable value would not currently be achieved through divestment and discussions regarding potential divestment have been closed.

Mt Rawdon, Queensland (100%) Gold production of 29,800oz was achieved in the June quarter at a cash cost of A$533/oz and AISC of A$759/oz (Mar 2014 qtr: 18,033oz, cash cost A$1,139/oz, AISC A$1,285/oz).This was a significant improvement on the March quarter result and reflects the Stage 3 pit cutback now being at a depth where it is able to provide consistent ore tonnes and grade.

A significant milestone was reached on 1 July 2014 with the 40th tonne of gold (approximately 1.41Moz) poured since production commenced in 2001. The mine continues to perform strongly and has a current reserve base that supports a current mine life of ten years, demonstrating the robustness of the Mt Rawdon asset.

Total material movement for the quarter was 3,413,060t, comprising 1,396,028t of ore at 0.97g/t Au and 2,017,032t of waste. Total waste mined comprised 909,154t of capital waste and 1,107,878t of operating waste. Ore feed to the mill consisted of ore mined from Stage 3. The mill operated for 95.2% of the total hours.

A total of 871,123t of ore graded at 1.16g/t Au was treated in the quarter and gold recovery of 91.7% was achieved. Average throughput for the quarter was 9,572tpd. A planned 50 hour mill maintenance shutdown was completed during the quarter.

Work progressed in the June quarter towards the planned change over to owner mining from the previous contract arrangement. This process has run smoothly and the changeover occurred as planned on 1 July 2014. This was assisted greatly by the level of cooperation received in this period from Golding which was the long standing mining contractor at Mt Rawdon.

Mt Rawdon delivered an outstanding result for the full year again proving to be one of Evolution's most reliable operations. Production for FY14 totalled 103,755oz gold at a cash cost of A$670/oz, well within production guidance of 95,000 - 110,000oz and well below average cash cost guidance of A$725 - A$775/oz.

Mt Carlton, Queensland (100%) June quarter production was from the A39 silver deposit. A total of 1,721,201oz silver contained in 14,276 dry metric tonnes (dmt) of silver concentrate was produced with average silver recoveries of 82.4%. C1 cash costs were higher than the March quarter increasing to A$737/oz due to lower grades of A39 treated and less by-product credits associated with the A39 ore. AISC increased to A$983/oz (Mar 2014 qtr: C1 A$454/oz, AISC A$615/oz). This was primarily due to the lower ounces produced and to lower by-product credits received (no V2 ore processed in the current quarter).

Total material movement for the quarter from the A39 open pit was 455,429t comprising 331,447t of ore and 123,982 of waste. Material moved from the V2 pit totalled 441,628t comprising 8,593t of ore and 433,035t of waste. Mining of the A39 open pit has now ceased and A39 stockpiled ore will continue to be treated through to the end of August 2014. There is potential to mine an additional zone of ore from the A39 deposit by deepening the pit or by underground development, which is currently being investigated.

A total of 194,849 dry tonnes of A39 ore grading 334g/t Ag was treated during the quarter. Mill utilisation was 92.1% for the quarter. Metallurgical test work identified opportunities to further reduce circuit losses and improve the grade recovery curve.

Concentrate shipments for the June quarter was 14,975 wet metric tonnes (wmt), consisting of both A39 and V2 material. There were a total of 9,893wmt across three shipments of A39 concentrate. A total of 5,082wmt of V2 concentrate was dispatched across two shipments.

Current cost reduction strategies being undertaken include a reduction in power costs, an increase in mill throughput from 800,000tpa to 900,000tpa and further improvements to the efficiency of the concentrate bagging system. Mt Carlton significantly outperformed FY14 production and cash cost guidance in its first full year of production with total gold production of 87,952oz gold equivalent, well above production guidance of 65,000 - 75,000oz at an average cash cost of A$634/oz, well below cash cost guidance of A$700 - A$750/oz.

This outstanding result was achieved primarily due to quicker plant ramp-up and better access to higher grade ore than expected.

EXPLORATION Work completed over FY14 included building 3D geologic models and integrating geologic time to create 4D models. This data-mining, data acquisition and critical interpretation, combined with the acquisition of both 2D and 3D Seismic surveys represents a critical step in enabling Evolution to compress the timeframes for new discoveries around Pajingo, Cracow and Mt Carlton.

During the last two quarters Evolution has ramped-up drilling to test concepts emerging from the 4D studies. Drilling in the June quarter was undertaken at Cracow, Pajingo and Mt Carlton with 7,618m of resource definition drilling and 13,558m of exploration drilling completed. Exploration spend over the quarter was A$6.0 million, compared to A$3.0 million in the previous quarter. Total exploration drilling in FY14 was 28,623m and total expenditure in FY14 was A$16.8 million.

In FY14 a total of 14 framework and proof of concept holes were drilled along or close to the 2D seismic lines at Pajingo and Cracow. The results clearly show that zones of clay alteration spatially associated with mineralized faults and the larger-epithermal system can be accurately interpreted from the seismic sections.

The 4D studies and the direct targeting capabilities of 2D and 3D seismic has brought forward a number of high-quality exploration targets that will be drill-tested in FY15. A total of 80,000m of drilling has been budgeted across Evolution's projects and the Tennant Creek JV in FY15.

Cracow, Queensland Near Mine Exploration At Cracow, a wide-spaced surface diamond drilling program testing the 400m gap between the Empire South Lode and Coronation Lode was completed during the last two quarters. This program comprised a total of five holes plus two wedges. Results were encouraging and this area is now being referred to as the Imperial Lode. Drill testing of an area covering a strike length of 400m and vertical extent of 100 - 150m will be conducted in FY15 with the aim of defining an initial resource. Best results received during the June quarter include: 11.65m (6.31m etw) grading 4.74g/t Au from 574.35m including 2m grading 18.21g/t Au (CBK353W1) 4.4m (2.93m etw) grading 8.64g/t Au from 531.4m including 2.8m grading 12.49g/t Au (CBK353W2) Regional Exploration The 3D seismic survey and processing of a 3D data cube covering an area of 1.0km x 1.2km over the Royal-Phoenix vein system was completed during the quarter. In addition 14.8km of 2D seismic was acquired and processed. The 4D study was significantly progressed with the 3D model near completion.

This work includes the building of a paleostress model which allows the dilational potential of interpreted fault structures to be assessed. The knowledge from this work combined with fault mapping from the 3D seismic survey will help target zones of dilation on the interpreted faults.

Five exploration diamond holes for a total of 2,136m were completed in the June quarter on the eastern end of the 2D seismic line. These holes aimed to test along strike from wide zones of clay alteration intercepted in the initial seismic calibration drilling, and an interpreted dilational jog from magnetic data.

Of the results returned to date, hole KRC148A is considered potentially significant returning anomalous gold and silver values with associated tellurium and molybdenum, from a quartz-adularia stockwork breccia zone 349m - 354m downhole. The current interpretation suggests this intercept is at the base of a potentially mineralized vein system cross cutting the seismic line. Three drill holes targeting up-dip and along strike to the south and north of the KRC148A structure are planned for early FY15.

Pajingo, Queensland Regional Exploration A 3D seismic survey was completed in the June quarter and data is now being processed. This will result in a high resolution seismic cube, within which fault geometries, stratigraphy and potentially alteration may be mapped. The objectives of the 3D survey are to map the south-eastward extension of the Vera-Nancy fault beyond the Jandam and Zed orebodies and better define the structures that control the gold-silver mineralization at Moonlight, Lynne and Io. It is anticipated that new faults will be defined and the structural complexity in the area of the survey resolved.

This will see drilling commence in the September 2014 quarter within the area of the 3D survey. In the June quarter, a total of seven reverse circulation/diamond holes for 4,079m were completed on targets derived from the 4D modelling. Hole JMRD 3943A, designed to intersect veins 100m above the veins intersected in JMRD 3943 (March quarter 2014), successfully intersected structures predicted by the 4D modelling. Best intersections from both holes include: 7m grading 1.91g/t Au from 619m down hole including 1m grading 5.11g/t Au (JMRD3943) 1.6m grading 5.65g/t Au from 559.4m down hole including 0.5m grading 10.5g/t Au (JMRD 3943A) Mt Rawdon, Queensland At Mt Rawdon, an extensive soil sampling program was advanced covering the Company's leases north of the Burnett River. Near-mine exploration work including remapping and reinterpreting the geology in a 4km radius around the pit coupled with an extensive pit wall mapping exercise and analysis of the litho-geochemical results from 34 drill holes. This has led to an improved understanding of the mineralization controls at Mt Rawdon and has identified a high-priority target northwest of the pit.

Mt Carlton, Queensland Near Mine Exploration Near mine exploration programs focused on the reinterpretation of structural controls on mineralization within and below the V2 and A39 deposits to define controls on high grade mineralization and identify additional near mine targets.

Regional Exploration During the quarter, work built on the extensive alteration and litho-geochemistry studies completed during FY14.

Areas with potential for high-sulphidation epithermal mineralization have been prioritised for further exploration. An Induced Polarisation ('IP') survey comprising six lines for a total of 15 line kilometres was completed over the V2 Far East, eastern Capsize and Castle areas. A total of 12 diamond holes were completed for 4,436m.

An IP program undertaken during the quarter identified chargeability zones along the eastern extension of the Capsize Trend, extending the Capsize chargeability feature associated with copper mineralization over 4.7km (across 7 IP lines) with results indicating that the anomaly is intensifying to the east. This area comprises outcrops analogous to the host lithologies at V2 and A39, approximately two kilometres north-east of the Mt Carlton operations. Drill testing of these geophysical and alteration targets is planned in the September quarter.

FY15 drilling will focus on high-sulphidation epithermal and porphyry targets both around V2 and further to the east around the Castle prospect.

Tennant Creek, Northern Territory (earning 65%) During the quarter, Evolution entered into a farm-in and joint venture arrangement with Emmerson Resources Ltd (ASX: ERM) over the Tennant Creek gold-copper project located in central Northern Territory, Australia.

The Tennant Creek Mineral Field is historically one of Australia's highest grade gold and copper fields, having produced more than 5.5Moz of gold and 470,000t of copper from a variety of deposits, many of which are located within Emmerson Resources' tenement portfolio. Evolution believes that the application of new technology and innovative exploration techniques over the Tennant Creek gold-copper project area could uncover many more high-grade gold and copper deposits.

The Tennant Creek gold-copper project area tenements cover an area of approximately 2,500 km2. This highly prospective area has, in areas, seen limited modern exploration with only 8% of exploration drilling penetrating below 150m depth and only 6% of the tenement area subjected to certain modern exploration techniques. The integration of HeliTEM, aeromagnetic and gravity datasets, and structural analysis combined with innovative thinking to build refined metallogenic models provides real opportunities for new discoveries.

An initial drilling campaign of approximately 2,500m of both diamond and RC drilling commenced 1 July 2014 aimed at establishing further high-grade gold resources around the Eldorado and Chariot deposits.

Wirralie, Queensland During the quarter Evolution was granted three exploration tenements centred around the historic Wirralie gold mine in North Queensland. The tenements cover an area of approximately 890km2 surrounding the historic Wirralie gold mine (the tenements do not include the Wirralie gold mine).

The Wirralie area has not had any significant modern exploration since the late 1980's and as such is in need of systematic modern exploration to understand and unlock the potential of the area. Evolution believes the knowledge and expertise developed at its similar Queensland operations (Pajingo, Mt Carlton and Cracow) can be applied with good effect in the Wirralie district.

Initial exploration activity is expected to consist of data integration and review, development of refined metallogenic models and the acquisition of high-quality aeromagnetics and radiometrics over the tenement area.

CORPORATE Financial Performance Quarterly revenue was A$159 million which comprised revenue from the sale of gold dore of A$127 million and revenue from sale of Mt Carlton concentrate of A$32 million. Total gold sales were 97,058oz at an average price of A$1,422/oz. Silver sales of 932,540oz were achieved for the quarter at an average price of A$20.42/oz. Group copper sales from V2 and A39 product was 320 tonnes with an average realized price of A$7,014/t.

Deliveries into the hedge book were 20,455oz at an average price of A$1,569/oz. The Group's remaining gold was delivered on spot markets at an average price of A$1,383/oz. Evolution's total gold hedge book at quarter end was 164,319oz at an average price of A$1,597/oz.

Group C1 cash operating costs totalled A$83.6 million, or A$747/oz (Mar 2014 qtr: A$811/oz). Royalties accounted for an additional expense of A$8.6 million. Cracow continued to deliver significant cost savings after transitioning to owner mining, with a 32% reduction in the unit operating cost of mining in FY14 compared to FY13.

Total depreciation and amortisation expenses were A$37.1 million, or A$331/oz (Mar 2014 qtr: A$308/oz). Discovery expenditure in the quarter was A$6.0 million (Mar 2014 qtr: A$3.0 million).

Evolution achieved an average gold price of A$1,442/oz for its gold sales (including sales into the hedge book) for FY14 - representing an A$372/oz margin to AISC and an A$153/oz margin to AIC. For comparison, the average spot gold price for FY14 was A$1,411/oz.

Corporate Corporate administration costs were A$7.0 million (Mar 2014 qtr: A$4.5 million) with full year costs of A$19.4 million, a 19% reduction over FY13. As a result of strong operational cash flow, the Company repaid A$15.0 million of debt under its A$200 million Revolving Credit Facility, reducing the drawn debt to A$126.8 million, with a head room of A$73.2 million as planned.

Cash flow The end of the quarter cash balance of A$31.5 million (Mar 2014 qtr: A$36.7 million) reflected the repayment of A$15.0 million of debt in June and A$9.8 million of dore shipped in June not being converted to cash until the first week of July.

Operations delivered robust cash contribution of A$24.4 million after all sustaining and major project capital expenditure. Combined corporate administration expenditure and discovery costs were higher this quarter at A$13.0 million reflecting some catch up spending (A$7.5 million previous quarter), leaving an operating cash inflow of A$11.4 million (A$20.1 million previous quarter).

Financing cash outflows for the quarter were A$16.6 million consisting of a debt repayment outflow of A$15.0 million, an interest outflow of A$2.6 million, a decrease in receivables of A$5.7 million, a decrease in creditors of A$4.0 million, net short term Mt Carlton inventory financing outflow of A$0.4 million and other working capital outflow of A$0.3 million.

Capital Expenditure Total capital expenditure of A$30.2 million in the quarter (A$31.6 million prior quarter) reflected continued capital discipline across the Group. Capital expenditure consisted of A$19.0 million of sustaining capital and A$11.2 million of major project spend.

Expenditure of A$11.2 million was invested on major capital projects supporting future cash flows. It consisted of A$4.8 million on the Stage 4 cutback at Mt Rawdon, A$3.3 million on the Stage 2 cutback at the V2 pit at Mt Carlton, A$1.4 million of capital development at both Pajingo and Cracow, and A$0.3 million at Edna May.

Full year capital expenditure (A$152 million) fell below the guidance range of A$160 million to A$185 million reflecting strong discipline from sites to prioritise, reduce and reschedule projects where it could be appropriately done without compromising future operational performance.

FORWARD LOOKING STATEMENTS These materials prepared by Evolution Mining Limited (or 'the Company') include 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.

Contact: Evolution Mining Level 30, 175 Liverpool Street Sydney NSW 2000 Tel: (612) 9696 2900 Fax: (612) 9696 2901 (c) 2014 Electronic News Publishing -

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