Evolution Mining (EVN) delivered strong June Q production of 195koz (+11% vs March Q) at an all-in sustaining cost (AISC) of $915/oz (-1% vs March Q) which was in line with our forecasts. Full year FY19 production of 753koz was in line with expectations and costs were higher at $924/oz (vs $850-900/oz guidance). Operating cashflow of $771m was in line with Argonauts estimates. In FY20, production growth remains flat at 725-775koz and major capital expenditure will increase to $195-235m (vs $181m in FY19). Most of this spend is associated with Cowal moving to 300kozpa via the Stage H cutback and plant expansion (~$130m) and Mt Carlton ~$60m. Exploration budgets have doubled to $80-105m driven by the increased success at Cowal. Despite the positives, we retain our SELL recommendation as the stock continues to trade ahead of our valuation of $4.21ps.
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