Evolution Mining Limited (AU:EVN) shares were down around 10% to about AU$1.82 in the afternoon, after the Australian gold miner reported a production drop and softer sales prices.
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Production dips, but management remains upbeat
The company produced 161,098 ounces of gold in the September quarter, down from 172,722 ounces in the previous quarter. Moreover, Evolution received lower prices for the commodity compared to the previous quarter. Gold prices have been under pressure amid rising interest rates, while heavy rains have hurt Evolution’s production activities.
Despite the September quarter production setback, Evolution’s management remains hopeful. The company maintained its full-year gold production target of 720,000 ounces. Additionally, the company expects its costs to trend lower for the rest of FY23. Evolution finished the quarter with AU$923 million of liquidity, consisting of AU$398.1 million of cash at bank.
Evolution Mining share price forecast
According to TipRanks’ analyst rating consensus, Evolution Mining stock is a Moderate Buy based on six Buys, five Holds, and two Sells. The average Evolution Mining share price forecast of AU$2.83 implies over 53% upside potential.
Moreover, Evolution Mining stock is receiving favourable mentions on financial blogs. TipRanks data shows that financial blogger opinions are 93% Bullish on Evolution Mining, compared to a sector average of 73%.
Concluding thoughts
Evolution Mining’s September quarter production may not have lived up to the market expectations, but the company has a chance to offset that setback in the coming quarters. While there may be little that Evolution Mining can do about weak gold prices, the company can support its margins by controlling costs.
