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(Bloomberg) — Evolution Mining Ltd. will use its record profits off the back of high gold prices to push ahead with two major high-grade expansion plans, according to Chief Executive Officer Lawrie Conway.
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Australia’s second-largest gold miner will proceed with A$794 million ($562 million) worth of expansions at its Northparkes mine in New South Wales and its Ernest Henry copper-gold hub in Queensland, while also widening its footprint in Canada, Conway said in an interview with Bloomberg TV on Wednesday. The projects were chosen because of their high rate of return.
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Evolution shares rose as much as 7.3% in Sydney, after the company reported a record underlying profit of A$785 million over the half year ended Dec. 31. That was up 104% on an annual basis.
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The miner is focused on quality assets with higher rates of return, resisting pressure to simply pull ounces out of the ground with lower margins, Conway said. He added that Evolution’s portfolio to date is averaging an 18% return thanks to a historic rally in gold prices, which remain elevated.
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“When you look at the projects in the pipeline, they range from 23% right up to 48% if you take the current price environment,” he said. “It’s the right time to be investing in these projects because they’re going to generate materially higher returns than what the portfolio is already delivering.”
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The miner will fund the developments from its existing balance sheet of A$967 million, he added.
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Evolution’s closest peer, Northern Star Resources Ltd., will report its half-year earnings on Thursday.
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