Evolution Mining (EVN) delivered Dec Q production of 182koz (-9% vs Sept Q) which was below Company forecasts of 185-195koz and below Argonauts estimates of 196koz. All-in sustaining costs (AISC) of $973/oz (+9% QoQ) were above stated FY19 guidance. Overall, it was a weaker quarter of higher costs and lower production at all key assets, largely as a result of unplanned shutdowns and mine sequencing. Despite the weaker production, operating mine cashflow of $191.1m was only -3% lower QoQ thanks to a 4% uptick in the received gold price vs the Sept Q. 1HFY19 production came in at 382koz at AISC $928/oz which should see EVN reach the upper end of FY19 production guidance but at the higher end of cost guidance. We revise our target price upwards to $3.24ps and maintain our HOLD recommendation after recent share price strength.
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