The Evolution Mining Ltd (ASX: EVN) share price is crashing on Wednesday morning.
At the time of writing, the gold miner's shares are down 16% to $3.16.
This follows the release of the company's second quarter update before the market open.
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Evolution Mining share price sinks on quarterly update
For the three months ended 31 December, Evolution Mining reported gold production of 161,073 ounces at an all-in sustaining cost (AISC) of A$1,618 per ounce (US$1,052 per ounce).
While the former represents a 2% quarter on quarter increase, it was well short of the consensus estimate of approximately 191,000 ounces. This miss appears to have been driven by weaker production from Red Lake, Mungari, and Mt Rawdon.
And while Evolution's costs were largely flat on the previous quarter's ASIC of A$1,612 per ounce, this is still notably higher than its full-year target.
Gold sales
This weaker than expected performance is particularly disappointing given the strength of the gold price.
During the quarter, group sales of 169,507 ounces were made at an average gold price of A$3,089 per ounces.
This led to group cash flow coming in at $78.8 million (prior to dividends and Northparkes acquisition funding), which is up $105.2 million on the September quarter.
At the end of the period, the company had $191 million in cash and $716 million liquidity. Positively, its revolving credit facility has been fully repaid and is now undrawn.
Evolution's Managing Director and Chief Executive Officer, Lawrie Conway, said:
The December quarter saw a material change in the cash generation of the business with group cash flow of $78.8 million up by $105.2 million, and net mine cash flow up 85% to $131.8 million compared to the September quarter.
Momentum is expected to build in the second half of the year which will deliver on our commitment to deleverage the balance sheet.
Guidance reaffirmed
Looking ahead, Evolution has reiterated its guidance for FY 2024.
It continues to forecast annual gold production of 789,000 ounces (+/-5%), copper production of 62,500 tonnes (+/-5%) and an AISC of $1,340/oz (+/-5%).
But with first half production totalling just 319,377 ounces, it will need an exceptionally strong second half to achieve this.
Exploration update
Failing to stop the Evolution Mining share price from falling today was the release of an update on exploration activities at Cowal and Ernest Henry.
Pleasingly, exploration drill holes continue to return exciting intercepts, reinforcing the potential for resource growth and additional metal per vertical metre on key production levels.
Evolution's Vice President of Discovery, Glen Masterman, said:
The drilling results announced today continue to excite us and reiterate the potential for additional mineralisation in key domains outside of Mineral Resources at both Cowal and Ernest Henry.
We expect these results will be included in the December 2024 Mineral Resource update to be published in February 2025.
