Evolution Mining Stock

All right. Good to go. Thank you for coming back in on time as well. We do have, I would say, a feedback-rich environment at lunch. I got told what we should have presented, what are the messages that we've already given by when we loaded up on the ASX this morning and why some assets aren't covered in more detail, but we'll try and answer all of those as we go through the presentation. We also do have a number of our investment banks and our debt banks here who have supported us over the years. They will be the most disappointed because Kirron is not buying anything and Fran doesn't need any any more debt. So enjoy the afternoon knowing that there's no work coming out of this for you.

All right. So I was told that there must be an announcement coming tomorrow, but not that I'm aware of. Normal forward-looking statements given this is -- it's also being webcast, the disclaimers there about what we're going to go through today. We'll have forward-looking statements, and everyone needs to take that into consideration when assessing.

So key messages really want to kick off in terms about where Evolution is at today and how that has come about over the last 15 years as we've started in 2011. And realistically, I think what we've done with our portfolio since 2011 has created something. And as we're coming up to 15 years, which is our tag is around a legacy that we want to leave behind. And I think the work that we're doing for our business, for our shareholders is certainly going to create that.

And the first one there is we've acquired well from 2015 until now. And really, what it is, though, what I want to demonstrate today is it's not what happens on the day 1 that we buy the asset. It's how we go about unlocking the value and improving the portfolio quality once we get ownership of those assets. And I'll add to that, to show that we're not emotionally attached to any of them that in that same period, we've sold well. We sold at the right time. We've made sure that those assets go into the right hands at the right times. And an example, where one of the assets that we sold was Pajingo. We sold that in 2016. It's still operating today. I think it was in our portfolio. It probably wouldn't be operating today because it wouldn't have been able to compete for the capital. And the other thing is, what Kirron and the team did really well is that we received all of our contingent consideration post that sale. About 18 months ago, we got the final payment. So we do sell well.

And then something to sort of address as well is that we have delivered consistent growth from the assets that we've got in the portfolio over the last 5 years. And our growth has come in production and margin. And whilst we do talk about production growth and everybody is focused on that, our focus is primarily on maintaining our margin rather than just increasing our ounces. And hopefully, you'll see that through today as well.

We've always had copper in the portfolio when we started 2011, Mt Carlton was in the portfolio, and it was copper into the business. And then our exposure increased as we got involved with Ernest Henry in 2016 and then took full ownership at the end of 2021 and picked up Northparkes in 2023. And I think having those 2 assets in the portfolio does create a difference for us in this sector, particularly when you look at the structural demand issues that are coming forward for copper.

And then there's significant upside in the portfolio. And hopefully, what you'll see today from Nancy and Glen is where that sits within the 3 core assets that we're going to touch on today. And to address one of the pieces of feedback I got at lunch time, the purpose of today was really -- it's 2 years after we established the technical function with Nancy and the team moving long-term planning, tech services and projects into one area away from the operations area, who had to deliver the day-to-day. And in that 2 years, Nancy and the team have been able to really look at the assets and what is the true potential that we can extract out of those and we've been studying those to the point where we can talk about them today.

It's nearly 3 years since we've acquired Northparkes, and we spent a couple of years on that, really understanding it. But the reason why Mungari and Red Lake are not getting a lot of attention here, we had actually only planned for today to address Cowal and Northparkes. But Glen and the team at Ernest Henry is the team up there, tells us and those who are on the last site visit, the only drill where there is metal, so Glen has had some great drill results, and he wanted to share those today. And hence, why Ernest Henry has been covered off on it today.

So very briefly, our strategy hasn't changed from day 1. We've had a very consistent strategy about making sure that we're a business that prospers through the cycle, that we continually upgrade the portfolio so that we're creating long-term stakeholder value right across the owners of the business, the communities we operate and for our workforce. That is underpinned by our values. So one of the things that does not get any alteration on value sets that you see on the bottom of the screen.

But what I want to just give you a bit of an insight into is we're looking at executing our strategy, those 4 -- 5 pillars there that you see that are key components of our strategy. And the importance they have in us being able to execute that strategy is what I'd just like to sort of touch on a little bit. So the two on your right around building the portfolio and the financial discipline, they really define for us the what, the where, the scale, the size of opportunities that we're going to look at. And then the balance sheet has to support that strategy. It's not there that we've got to adjust our strategy to support the balance sheet. So they are the sort of the starting points when we're looking at, well, what are we going to do with this business as we go forward. And then the 2 on the left, the first two around sustainability and our high-performing culture. They're the enablers to actually executing that strategy.

If we've got the license to operate in the areas and where we are and we're keeping our people safe and we're providing an environment where people can perform at high culture and they can deliver and they can be rewarded for that. That enables us to execute the strategy.

And then the middle one that I want to touch on a little bit more, that is the key thing that determines what we do both with the assets when we're looking at acquiring them and what we do with assets when we do acquire them because to extract the greatest value out of the assets, you've got to take the appropriate risk and you got to take appropriate risks around the geological, the operational and the financial, doesn't mean you put the whole business at risk, but it means if you are willing to take the right level of risk in those, you know what the risks are, what your mitigants are, that's when you can extract the most value. And I believe that over the last sort of 11 years as we've acquired assets, those 5 pillars have enabled us to execute the strategy well and to be able to deliver the portfolio that we've got today.

And so over the last 5 years from 2022 to today, we have actually grown our production pipeline. And we've grown that organically and inorganically. And we've grown at a rate of about 6% cumulatively per annum from 680,000 to 920,000 ounces on a gold equivalent basis. We put that on a gold equivalent basis because if you have the gold and copper as separate charts, it's very hard to work out where that growth has come over the last 5 years. So we've grown it through the acquisition at Northparkes and then we've also grown it at Cowal, Mungari and Red Lake over that period of time. So we've seen over 1/3 of our production increase in 5 years. Now we had the weather event this year at Ernest Henry. So that meant the net gold equivalent production was 890,000 ounces, but we have grown our production.

A good piece of work by Canaccord and everyone else does good work. But we've got to promote the ones that promote us. No, that's not true. It's really good because it's taking a long-term view around margin. So this is going from 2015 to 2026. So 10 years, but it's also now got 2026 information in there. And it's looking at how the all-in sustaining cost margin has performed over that time. And through the cycle, when you're dealing with inflation, you're dealing with COVID, you're dealing with low interest rates and what has happened with the metal prices in that period.

And so when you look at 2020 and '21, that's when COVID was and as you came out of COVID, you start to see that margin squeeze. And then that 5-year 2022 to 2026 from our perspective, which matches to that production growth on the previous slide. We've seen our margin expand. Our margin has expanded at a greater rate than the industry has, and that is through our cost discipline, the way we manage our balance sheet and we manage our costs, it's through acquisitions. So the acquisition of Northparkes, as you see '23 to '24, that margin started to widen because we acquired Northparkes in December 2023 and then the metal prices. So certainly with the copper, in '25 and now into '26 has increased that margin.

But what I really like about it is that in each and every one of those years, from 2015, our margin has been better than the industry average, and in the last couple of years by the changes in the portfolio, by having more copper in the portfolio, we've started to see that margin expand. And so flipping over to where copper and copper is a differentiator for us. We believe it's really important part of our portfolio. Henry, you just get back from Melbourne. NFL finished at 1:30 on Friday, right? So copper is a differentiator. And on the left-hand side, this is looking more at the industry and the structural disconnect that's going on right now. So the information here shows from S&P that over the period from now to 2040, there needs to be a 50% increase in supply of copper. So it's 14 million tonnes of copper that needs to be delivered into the market if they're going to meet the demand by 2040. And if you consider that the latest statistics are saying that the cost of bringing on 1 million tonnes of copper at the moment is about $2,000 a tonne.

So to bring that production into place by 2040, you're talking about $28 billion worth of investment. It's more you've got to have those discoveries. You've got the lead time to permit and lead time to develop. And the supply side isn't helping. So this is the first year in 10 years that there's a projected decrease in production year-on-year on the supply side. And then you look at the forecast and guidance for the next couple of years, there isn't that production growth.

So then on the right side, you've got where that fits in for Evolution. So it's 22% of our revenue today. And Ernest Henry and Northparkes are low-cost copper assets. You can see their cost on a C1 on a copper per pound basis. They are low cost. But importantly, we've got over 3 million tons of latent capacity already existing in our assets at Ernest Henry and Northparkes. But just as importantly, we've got ore bodies that are available today to start to fill that latent capacity.

So the acquisition of Carnaby Resources and the Greater Duchess project, which is on track to close in early November, gives us one opportunity. Bert as the underground, which is starting development this quarter, is another one that in the next 3 years, those 2 can come into production. And then all the land that we've picked up in and around Ernest Henry in trucking distance to the mine, the Corella exploration has also started. So at 2.2 million tonnes of latent capacity there with all sources available to us to bring in at Ernest Henry. And Northparkes, E22, a block cave starting development on that while at the same time, given the mineral resource we've got there, studies are underway to look at increasing mill capacity by 40% to 100%.

So those 2 assets provide a great opportunity to benefit from that structural demand supply position that's not playing out too well right now for copper. And so then it also will add to our competitive cost base that I talked about earlier. What this is showing here, the 2 lines is the Australian industry. So Australian producers, the range of all-in sustaining cost that's occurred over the last 5 years and the guidance there. The gold boxes are abnormal reported on a normal byproduct basis. And you can see that we are always around the bottom and our midpoint of guidance for '27 would see us below the Australian industry average.

The green boxes are showing it on a co-product basis. So it's taking out the byproduct credits and putting the gold -- the copper as a gold equivalent basis. What this is also showing is you can see a flattening in terms of us on a co-product basis and you overlay the production that's coming through on copper and gold over the next 5 years, that trend is we're moving down towards the middle on a co-product basis and certainly going to improve our margins as we go forward.

So spend a little bit of time now just reinforcing about how that value isn't just bought. It's what we do with the assets. And I just want to indulge you for a minute just going through what has happened with each of these assets since we've acquired them. 2014, our life average was 5 years, production average was around 100,000 ounces. That is the point before we started our first acquisition. So what have we done in terms of Cowal was the first asset. At the time, it was due to finish in 2024. It was producing 250,000 ounces and a reserve life of 15 years.

Since then, we've generated for an acquisition of $707 million. We've generated nearly $5 billion of operating cash flow out of this asset. It's fully repaid everything we've invested in that since. It's now got a mine life of 18 years with upside that we'll go through today. It's generating a rate of return that we going forward should move into the 15% to 20% bracket. And it has certainly got the most upside right now from an exploration standpoint.

Mungari, we've lifted the production and the mine life by 50% since we've acquired that. It's now, and we had to add a new bubble under this one where it's moved and repaid over 50% of all invested capital since we owned it, and it was $367 million last year alone in the first year of the expanded capacity. And what the focus there is really around what the underground can do to that.

Red Lake, we've seen it a lot more stable and consistent over the last couple of years. We have increased the mine life. We have increased the production rate. And when you consider last year, it generated nearly $300 million of cash flow, repaid 20% of invested capital in 1 year, starting to do what it needs to do into the portfolio on playing its role.

And Ernest Henry, we've increased production. We've increased the reserve life. Yes, part of that from 2016 and 2022 to today was taking 100% ownership. But similarly, $3.6 billion of operating revenue. It's generated a rate of return of 22% per annum since we've owned it. When we first got involved with Ernest Henry in 2016, it was due to finish operating today or this year, it now has 19, 20 years ahead of it and more upside.

And lastly, Northparkes. When we acquired Northparkes in December of '23, the key things that the market told us, the asset won't make any money, it's going to be capital intensive, and the stream overlay is too difficult for it. We knew through the due diligence, we needed to spend a couple of years to better understand the ore bodies, the sequencing of them, the role of the stream. And what we've been able to do is increase the production. We've got over 50% of that investment now fully repaid at a rate of 30% per annum since owning it, and that is post-stream. And we've now got opportunities with the 630 million tonnes of resource of growing the production rate, increasing the rate of return and certainly getting the payback along the lines of what we've seen in the first 2.5 years.

So in summary, those acquisitions and divestments, which have improved the portfolio. We've taken the average out now to a 17-year reserve life from 5 years. We've averaged an 18% return on investment out of those assets over that point of time. And as I showed earlier, we've increased our production rate while maintaining our margin. And that's really the key thing going back to the strategy of what we do with assets when we actually acquire them generates the greatest value for our shareholders.

So just having a little bit of a forward look, and I'm definitely not going to steal all of the highlights that Nancy and Scott and Glen want to go through. Cowal is a significant cash generator for us in the business. It's our largest producer but it can fund its own growth and generate enough cash back into the business. The key things for us is the underground where we've got potential for a second underground at reserve grades that are 2x the open pit. Rocky loves the word of -- and so does Glen -- displacing low-grade material. That is the objective of what we want to get out of the work that we're doing in the underground. E42 will be that base load production in 18 months' time that will take us through to the mid-2030s. While what we're seeing at E41 is giving us the greatest upside in terms of open pit in both in scale and grade. And that's really what we're focusing on in terms of the exploration over the next few years.

Copper, as I said, Ernest Henry earlier, but we're looking at about 6,000 tonnes of copper, 12,000 ounces of gold ramping up from FY '29 coming out of the Greater Duchess project that out of the Carnaby Resources gives us about 10,000 tonnes of copper, 5,000 ounces of gold from FY '30. The key thing about the Greater Duchess project is in our acquisition, the primary focus through our due diligence was, is the open pit viable? Is there something that can bring it into production to allow Glen and the team time to look at all the other ore bodies in and around there to extend that mine life even further given the capacity we've got in the plant. And the exploration potential can add another 10,000 tonnes of copper there.

So you're looking at 26,000 tonnes of copper, importantly, at Ernest Henry, which is about 50% of what we're currently producing at the asset. But what excites us the most is that extension beyond FY '42. We are getting drill results today that are showing extensions 900 meters below where we're mining. And we're studying that 1175 to -- sorry, the down to the 775 -- and sorry, the 775 down to the 500, and we're getting drill results below those. And the result there alone at 61 meters at 1.26% copper and 0.77 grams of gold when Glen brings up the model. When you see where that sits and what the real potential that, that's showing for extensions beyond FY '42.

Northparkes near-term growth is going to come from the coarse particle flotation, gives us 2% improvement in recoveries of gold and copper and it gives us the potential to lift the throughput rates by 0.5 million tonnes immediately when that project comes on and then gives upside to about 1 million tonnes coming from FY '28. E22, the key thing that comes out of that is the life of mine infrastructure and the twin declines, materials handling system, that gives us the confidence around 11 million tonne per annum underground mining capacity that then leads into that 10 million, 11 million tonne processing capacity that we're looking at.

And to answer your question I got at lunch time, it's not that we're saying that we're targeting that, and we're not going for the 15 million tonnes. The first step that we always said in this study is can we get enough materially out of the mine and enough power and water to get to that 10 million, 11 million tonnes. And then do we have enough water and power to be able to sustain it at 15 million tonnes per annum because we know we've got the resource to be able to run it at 15 million tonnes per annum. So that study is progressing. As we get to December, we'll be able to make a call on what sort of that production rate we're going to. And then from January to June, it's then looking at what's the sequence and the ore sources to feed that plant.

What we're also seeing in the exploration piece is in E26 South, which is off the ore bodies around E26, we're getting great results that Glen will show that's giving us another opportunity in the underground area outside the existing resources we've got there. And then the open pit really gives us flexibility around the operations between caving and those shallow open pits at E51, Major Tom and E44.

And then, as I mentioned earlier, yes, Mungari, Red Lake a lot of detail here, but they're really in that cash generation phase. Mungari, we've completed the expansion. We're now running at that 4.2 million tonnes. We're generating that cash that I said, $367 million last year. We've got the first 5 years per the feasibility study said we're able to keep that at 200,000 ounces per annum. The underground is most critical. We're getting -- targeting 20% of our production coming from there, which is at 4, 4.5 grams a tonne versus the 1 to 1.2 grams we get out of the baseload feed from Castle Hill. The more we can get in terms of exploration success at the underground, we've replaced and grown the resource and reserves there each year for the last 4 years. When we can get that to a 10-year sort of mine plan out of the underground, that allows us to look at developing faster and increasing the proportion of material coming from the underground.

Red Lake has to continue its stable quarter-on-quarter performance. Generating those positive cash flows while we do that study option around reprocessing of tails, which has got materially higher grades in there than what we're currently processing and we'll have that study completed by the end of FY '27.

So looking at it from a portfolio perspective and one thing I've said to a couple of people at lunchtime is that each of these assets have got a role to play in our portfolio over the next 3 to 5 years. Cowal is a significant cash generator. It is our largest cash generator, and it has got a lot of growth opportunity. So it is the asset that will get a lot of the attention over the next few years as we develop those opportunities.

Ernest Henry and Northparkes, likewise, they've got the greatest leverage for us to copper to grow our near-term production to extend the mine life for that supply-demand position that is not aligned. And then Mungari and Red Lake have got to be that stable cash flow, stable production. They've got to be producing 300,000 to 360,000 ounces every year at a good margin to generate the cash because what that does for us, those 2 assets over the next 3 to 5 years, yes, they will compete for capital. They will get capital invested in the business. But it derisks us from an operational standpoint so that we can continue our sustainable reliable production quarter-on-quarter, year-on-year, while we're investing in those growth projects over the next 3 to 5 years at Cowal, Ernest Henry and Northparkes, so that we do not have that production and cash disruption over that period.

So in summary, those 5 points that I said at the start, still stand. I believe we've acquired assets well. We've got the right assets in our portfolio. We've upgraded the quality of those assets over the last 5 years. We've delivered growth. We've delivered growth while growing and improving our margin. We've made sure that our margin is -- we are the lowest cost producer in the sector. We've got great exposure to copper and there's a lot of leverage to that. And as I said, we've got near-term opportunities to bring that into production. And there's even further upside that you'll see through the course of the afternoon.

And with that, I'll stop and allow for questions, Rocky, on time.

Matt Frydman from MST Financial. Lawrie, I thought the slide that you put up presenting your all-in sustaining costs on a co-product basis was quite interesting because it sort of frames evolution as more like a 1 million-ounce producer with the middle of the range cost structure or middle of the range all-in sustaining cost. So I guess my question is, do you feel a need to improve the cost structure of the portfolio to be more resilient in a lower gold price or a lower copper price? Or is it more a question of managing that relatively conservative balance sheet leverage and then trading that off against maybe a little bit more operating leverage?

Yes, Matt knows that we can always do better on the cost piece. I think as we go forward, that's -- the industry lines are going to increase. They're going to get higher. The top end is going to get higher, and I think we'll still be trending down towards the bottom end. What we wanted to show is that when you look on a co-product basis, at $2,700 and you put about -- on that basis, you put about $1,300 an ounce for major capital and exploration in there. At $4,000 for an achieved price of $6,000 a year, you're still going to be a significant cash generator.

So yes, we'll continue on the cost discipline. But if we're -- and when Fran presents later, if we've got opportunities to continue to invest in the business, they're getting returns that are far greater than 18%, we'll do that as well. The thing that we've got to be able to do, Matt, is we got to be able to do all of them at the same time. It doesn't mean you biased one to the other. You will in the short term. If you've got an operational issue and you've got to get the production, you'll probably erode your margin for a short bit. But the objective is, over the long term, you don't erode that margin.

Jon Sharp.

Just on Cowal, Lawrie, it seems like it's got a fair bit of upside. Is it -- can you just take us through, is that mainly grade from underground? What are your thoughts on expansion of the mill? Does it need volume and grade? Maybe just take us through that?

Yes. I think you'll see a little bit of it coming from Nancy and Glen, but the reality for us is that the underground and the potential second underground is going to allow us to then at the 8.8 million tonnes put more material from an underground through the plant. And then depending on the size of E41, I think that ultimately will determine whether the 8.8 million tonnes is enough from a processing capacity because when you consider everything at Cowal versus Northparkes, one thing that Cowal doesn't have is real estate. We've got 47 million tonnes of ore sitting on stockpile. We've got waste. We got the integrated waste landform. You got the paste plant.

So there's not a lot of space that if you are going to continue mining the open pit and you do get the underground, which were the second underground going, you have to look at ways of not leaving that on the stockpile. Therefore, you have to ultimately look at the expansion. I would say right now, and unless Nancy is going to present something different, the next 2 to 4 years is more about optimizing the ore sources rather than looking at expanding the plant.

Daniel Morgan at Barrenjoey. It looks like a key theme from today is a pivot towards greater growth across the assets. Just wondering if you could talk about what's driving that? Is it, a, natural evolution, pardon the pun, of all of the different assets where you feel like you've got a handle on the exploration or geology and a natural sequence to pivot towards more growth? Or is it the cash flow that's coming in from commodity prices, which are very buoyant and are causing you to look at your portfolio again and go, well, can we get these assets to grow or get better returns? What's driving the growth agenda?

Yes. It's not so much driving a growth agenda. I mean, as I said, we've grown over the last 5 years. We've increased our production organically, inorganically. What the last couple of years has enabled us to do through Glen's programs and Nancy's technical team looking at these assets, okay, how do we unlock value rather than just the growth. And we've now got to a point through all of that work to where we can sort of articulate what these assets look like over the next 3 to 5 years.

Internally, we've known there was always going to be that growth. But we've got enough information now to be able to sort of explain that to the market. And then ultimately, when you've got that 18% return and you've got a 17% reserve life, you've got to run harder to keep those production rates up, but you've got enough mineral resource and ore reserves to be able to look at that expansion of production.

And the last piece I would say is that in September '23, 30% gearing, everyone down the back saying we needed to raise equity. Therefore, where we were investing our money was very restricted. We're committed to the Mungari expansion. We were committing to studies at the Cowal OPC, getting Red Lake right that was losing money on us. Those things having fixed those and then the metal prices improving does allow us to look at how you accelerate some of that.

So it is a combination, but it's not like where we need to go out there and show growth. So we've done enough work now to sort of show what the potential of these assets are.

Dave Radclyffe from Global Mining Research. Lawrie, my question is about the Cowal underground. We're sort of talking about it, but we're not giving a lot of details. So maybe could you give us a bit of an idea of kind of the way forward and time lines when we get a new resource reserve investment decision? Because isn't the key at Cowal lifting the blended grade, and that's what expanding the underground would actually give you and that would obviously have the multiplier effect on the ounces.

So the first part I'm going to leave to Glen and Nancy this afternoon because they'll bring up the models and show you what we're looking at and then we can talk about the timing. The first part is that we've got to get the second -- the Regal Portal decline at the underground, that allows us to increase productivity and increase the tonnage we're getting out of there. We have put in a modification application to the regulator to lift our underground tonnage to 4 million tonnes per annum. And so that's what we're already working on. It is going to be predicated on the drill results and the program that Glen is running through this year.

And then from timing, if you consider for the existing underground, 2018 discovery, 2021 into production, that's -- it's going to be around that. We had to put a lot more infrastructure in place for the first underground mine that we wouldn't have to do. So at the end of this year is when we sort of get a good indication of the potential of a second underground and then you'd be looking at around a 3-year period from there.

All right. That's excellent. We're going to stay on time and move over to Nancy. Thank you.

I have the good slide. Yes. All right. So I hope I can answer a little bit more of your question and talk a little bit about the strategy and what are we looking for and what are we doing.

Before I start to talk about the strategy, I would like to briefly introduce myself. I'm very excited to discuss about the future opportunity that we have in the Evolution's portfolio. And as mentioned with Lawrie, we're going to focus on Cowal, Northparkes and Ernest Henry this afternoon. On my side, I joined Evolution a little bit more than 2 years ago after more than 2 decades with Agnico Eagle in Canada. I have over 34 years of experience in the mining industry. I have worked across operations, project development, technology, innovation and technical leadership. I have helped to build new mines, improve existing operations and support assets through each stage of their life cycle.

One lesson from that experience is that truly exceptional assets are rare. When I joined Evolution, I was immediately impressed by the quality of the portfolio, the depth of the resource base that we're going to discuss a lot today, the established infrastructure and most importantly, the capability of our people. One of my first priority was to establish a technical function and bring together a strong team focused on understanding, protect and growing the value of these assets. Over the past 2 years, our team has tested assumption, as you will see today, we have evaluated a lot of alternatives. We're still doing that, and we built a clear pathway for the future growth.

Today, I will focus on our disciplined reinvestment and technical work can unlock the long-term value and the production, the cash flow and the shareholder value. I hope you will see the same confidence and enthusiast that our team brings to this opportunity every day. Before I get into the detail, our strategy and growth opportunities, I want to highlight the common theme across the 3 operations: Cowal, Northparkes and Ernest Henry, we were going to talk about optionality. And this is what we have in front of us. That's why we have a very good amazing portfolio.

The projects we are advancing today are built on the known resources, disciplined technical work and a clear value creation pathway. However, the real strength on this portfolio lies in the ability to continue growing through exploration and discovery, and that's what Glen will show you and explain today. We have the opportunity to further expand our resource base, extend the mine life, enhance development sequencing and unlock additional value.

So I will talk about the strategy on how we see the next phase of the growth out of the asset. And then -- I will then hand over to Glen, so he will go with you through all the opportunity that we have in this portfolio. Disclaimer, I have to show it, everybody see it, understand it.

All right. Evolution's portfolio is built for longevity. We are found by cash generation today and strengthened by multiple pathways to create further value. Our portfolio demonstrates 3 key strengths: long-life assets with production, cash flow and reserve replacement potential, which is very important, strong cash generation. Fran will talk about that, that fund reinvestment for the future growth, and we have the value and optionality for the opportunity. The key message is that in the -- it's not a portfolio designed for the cycle, a single cycle commodity price. It is a portfolio with the asset quality, the cash generation and the technical option to create long-term value. And that's really the message that I want to bring through to the last one.

The big discussion when a lot of people arrived this morning, Cowal is a proven producer with global Tier 1 potential. So we'll begin to talk with Cowal where a strong operating base and responsible reinvestment are creating the platform for the next value of growth.

All right. Cowal is a mining system with multiple open pit underground and exploration growth areas. So that's what we have to remark. Cowal has 10 million ounces in mineral resources and 5.1 million in ore reserve across stockpile open pit and underground. The value proposition is no longer reliant on a single ore body. We have the underground. We have the broader open pit system, and we have the OPC North and South area that will give us multiple fronts for resource conversion and future development. Importantly, we have already invested in underground access, as Lawrie mentioned, and the processing capability. Further discovery and resource conversion can, therefore, leverage an established operating platform.

So what are we doing? We are studying near-term decision that can unlock while preserving optionality and supporting the ambition to create a Tier 1 operation. So that's what we are looking at. Today, Cowal operates from a strong base. The opportunity is to move this asset up to the value curve through the permitting, the mill capacity, the underground production, the mineral resource conversion, mineral resource growth and a disciplined response for the gold price environment. Our approach is deliberate, discovery drilling and related study are required to define the operational potential. The objective is not simple to produce more ounces, it is to build a larger long life and higher value operation that can deliver sustainable cash flow.

To achieve that, we have to do a lot of parallel study and approval that will be integrated to support the incremental value-based investment decision. So through FY '27, we are evaluating options for the GR pit, expansion of E41, underground expansion scenario, staged mill expansion pathways and the oxide pre-treatment. This work, along with the MOD 2, like Lawrie mentioned, approval process, the mineral resources conversion and continued evaluation of the Oban corridor that Glen will discuss and the E41 and the underground opportunity. All of that has to be looked at the same time. The combined outcomes will form an integrated business case that allows us to make incremental investment decision while we're going to retain the flexibility for further study and approval for FY '28 and onward. So that's the work that we are doing right now to try to unlock the value that we can have in Cowal so we can have a better path forward.

What does that mean in the mid- to long-term for Cowal? So Cowal is a reinvestment story today and a major cash flow story tomorrow. So we're going to want to try to still generate the cash flow. We have to reinvest right now to unlock the growth. So our objective on the short term is to deliver the OPC, drilling -- progress the drilling in the study, what we are doing. We have to secure the approval. So we are in movement in that one, so we can refine the next value. Then we can scale up the operation. So we can deliver [indiscernible] open pit and the underground growth and position to operation at a larger scale. And then we want to realize the Tier 1 vision, so commission the growth option and capture the benefits of scale. And then we're going to keep running because the runway is still open. There's a lot of discovery in that area. So we want to unlock the broader mineral district and leverage the mine life and the scale of these assets.

The takeaway is quite straightforward. It's the disciplined reinvestment can create substantial long-term shareholder value and I think for me, what is so interesting and fun is Cowal is not a mine approaching maturity. It's a mining district that is entering to the next generation of growth and that's what we are working on right now.

Northparkes. We are transforming and I say transforming because that's the case. We are transforming a stable operation into a major copper growth platform. There's so much copper there. So Northparkes, it's much more than the single growth project. It is a copper gold district with significant resource depth, established infrastructure and multiple development options. I will apply the long-term opportunity and the pathway we are assessing. And Scott will come right after me to update you on the current project execution and the work on the way to unlock that value.

The resource base provides scale and optionality while our technical work determines the highest value pathway. So it's a little bit like Cowal, it's the same structure, the same approach. Northparkes has a total mineral resources of 3.1 million ounces of gold and 2.5 million tonnes of copper compared with the ore reserve of 0.69, I didn't say 0.7, million ounces of gold and 400,000 tonnes of copper. The gap between the mineral resources and the ore reserves is I like the opportunity. This is our big opportunity but also there's still work that is required.

So our focus is not to go with the production target. It's really to determine the optimal development pathway that maximize value, manage risk and support long-term cash flow generation. The district provides a broad set of underground, open pit and stockpile option. So this is what we have in this picture there. So that gives us the flexibility in the sequencing, the capital allocation and the future development. And that's what we have to understand to unlock the full value of this district.

That's a big slide. So the strategy is really to go as an integrated open pit and case strategy, and that will help us to derisk and maximize the asset value. So there's all those concepts that have to go together. The existing production platforms include right now, we are with E26 Lift 1, E48 SLC and E22 that we are developing right now. Behind those source, we have in the pipeline, the study stage for the underground opportunity, where we are looking at MGH, we're looking at GRP, we are looking at E26 Lift 3 and E48 Lift 2. We have some surface opportunity as well, which is going to help us to unlock the value. So we have E28 Northeast. We have Major Tom, E51 and E44. Integrate those open pit with the cave production, provide the flexibility to the sequence to progressively increase the scale. The presentation shows -- so those tables show approximately, I will round it to 600 million tonnes of mineral resources and that's the scalable foundation for the future growth.

The key point is not only one project in isolation, cannot look just as one parameter. It is the depth of the pipeline and our ability to accelerate the preferred sequences while we're managing the risk. And that's really what we are studying right now and look at the option. So the study -- the expansion study is assessing processing scale, what we mentioned, the 11 million or more and the next generation of underground and surface ore possibility. The expansion study includes -- so we have some prefeasibility on the MGH block cave and the E44 open pit. And we have Major Tom and E51 as well. We have some concept studies that are up and going with E48 Lift 2, E26 Lift 3 and GRP. The studies are due for completion at FY '27, and we have a budget right now of $14 million to do that.

So this work is assessing the potential of an expansion to the mill or a new mining mill and a new plant and is designed to build confidence before the expansion and investment decision is made.

All right. We will develop and assess. We will construct and expand then we can transition to a long life with cost-efficient operation. That's what we want to do at Northparkes. To develop and assess, we are supporting right now the current operation. We need to maintain the production. We are developing E22. We are advancing the studies and we have to improve a little bit our processing capability, what we are doing as well. Construct and expand, we have to make the preferred expansion decision with the outcome of the study. We need to unlock value via open pit. We have to deliver metallurgical improvement with the Coarse Particle Flotation projects and the regrind projects as well that we're studying. We have to ramp up E22, and we have to establish MGH as the next block cave in the sequence.

That will give us a long-life cost-efficient operation that will optimize and operate block cave sequence. But those block caves will be supplemented with surface sources to deliver production with predictable cash flow.

Northparkes, it's not simply an expansion story. It's a strong copper producer. It is a long-term value creation story supported by substantial resource base, established infrastructure and a disciplined sequence of investment, and that's where we have to keep our focus.

Ernest Henry, strong cash flow and enduring value. I will now turn to Ernest Henry, one of the Evolution important cash-generating assets and an operation with meaningful potential beyond its current horizon. And there's so much potential. Ernest Henry combine consistent underground production, strong infrastructure and clear option for future expansion.

Ernest Henry has operated for more than 25 years with stable underground production since 2012. Evolution completed the full acquisition in January 2022, and the asset has delivered exceptional resource growth since acquisition. That's what Lawrie just showed us with this bubble.

The operation is now transitioning from a stable sub-level cave base through a planned investment phase. We are now tracking below the current crusher. We have additional ore sources, and we have some capital investment for longer life operation, which are central to this transition.

The future state of Bert is the red, and Scott will spend time to explain you that in more detail. As an independent ore sources, we have the further extension study below the 750 and the use of the latent mill capacity at Greater Duchess is one example of the optionality available to supplement the operation.

Much of the infrastructure is already in place that give us flexibility to test additional resources and extend mine life while continuing the generated cash. So strategic reinvestment in Ernest Henry creates capacity, new ore source flexibility, and this is a pathway to a sustainable steady state.

In the strategic reinvestment phase, we continue sublevel caving baseload. We established Bert as an independent mill feed. We are progressing drilling and expansion studies, and we delivered infrastructure for the mine extension area. So that's our short-term focus. The capacity realization comes from the tracking system and the better use of approximately 2.2 million tonnes per annum of latent capacity.

The presentation in [ Fi Bert ] as the additional 7,000 tonnes of copper and 14,000 tonnes of gold and Greater Duchess at approximately 10,000 tonnes of copper and 5,000 ounces of gold per annum. FY '30, around FY '30. Regional exploration provides future potential.

The steady-state ambition is a new mining horizon, full leverage of the infrastructure and consistent cash generation through efficient mining practice. Our strategy is simple, continue generating strong cash flow today while systematically building the foundation for the long-term value creation.

I will now -- the strategy pathway that we are talking are supported by active projects already in the pipeline. So I will ask Scott to go through the project and explain all the projects that has been made. And you don't need...

Good afternoon, everyone. Can you hear me at the back? Thumbs up, excellent. Thanks, Nancy. Good afternoon, everyone. My name is Scott Paddington. I joined Nancy's team in November this year to lead the group projects team. And our mandate is to develop the major studies that Nancy just talked about and to deliver on our major projects for the business. So it's very exciting times, as Nancy has pointed out.

I have over 2 decades of experience in the mining industry in technical operations, projects and studies roles. I spent 13 years with Newcrest, where I focused on some capital projects at Lihir, a mill expansion and capital projects at Red Chris in Canada. And then I went to Telfer and ran the operation, the mill and they mined for a little while as well.

So I'm very excited to join Evolution and what a great time to be here, as Nancy just pointed out, to build new mines and expand on our opportunities. Next -- so I'll just go into a bit more detail about the projects that Lawrie and Nancy have just talked about.

As you know, the second half of FY '26 was a very busy time. We had the open pit continuation project in execution at Cowal. In November, we approved the Coarse Particle Flotation project at Northparkes. And then we approved in February both E22 and the Bert mines at Northparkes and Ernest Henry.

So we started straightaway building our project team and went out to find some great leaders, and we've got many decades of experience now within our team executing mining, processing and infrastructure projects, including some key players from block cave construction in Mongolia and in Australia. So we're partnering with some really highly experienced contractors as well to complete our mining, engineering and construction phases of these projects.

All green ticks. So we're on track with each project. And over the next few slides, I'll take you through where we've been and where we're heading. So Cowal, we've talked about Cowal many times, and Lawrie's has talked about Cowal for a number of years. So I'm sure you're all over it. But those of you who were on the 2024 site visit and who are going back today, you'll see a significantly different mine site than you saw then.

In May 2025, we commenced construction of the North Bund. So we get this right. So the North Bund is here. And you can see at the top, this is preconstruction, and that was in August this year. So we've made -- we've released a significant package of land. That allowed us into E46 and really turning growth into reality.

We got into pre-stripping 5 months earlier than planned, which gave us first ore the mill in Q3 of FY '26. So we're moving quickly. This is a major civil project. So we're building 7 kilometers of Bund and reframing the shore line for Lake Cowal, giving us a lot of area to work in.

The North bund, you'll see we are finishing construction in the coming months. So you'll see that when we're on site. And the second phase of the project, which is the South bund, that kicked off in August. So we're away.

As you can see, the North bund enables access to GR pit, which E46, which Nancy and I both just discussed. And the South bund enables additional resource definition and E41. Combined, the two bunds allow us to expand the high stage of E42, which just commenced recently.

So as Nancy said, as Lawrie said, and I'll say, and no doubt you'll hear many, many times over the next few days, lots of opportunity at Cowal. So if I stay in New South Wales when we head off to NorthParkes. Nancy talked about the mineral endowment we have and the opportunities ahead of us. There are many and my team and many others are working on all the studies, but we also got a great team, as I said, working out on E22 and CPF.

E22 is really important for us. It's got two key components. It's obviously got the next block cave, E22, gives us nine years of mine life. So we're back into new block caves. The second is the twin declines, which houses the material handling system, which both Lawrie and Nancy talked about. So that gives us additional material handling capacity beyond our current hoisting constraint at 6.5 million tonnes.

So we'll start -- we'll get the conveyor started in FY '29. That's installation started, not running, okay? So after the Board approval in February, we went pretty hard at Northparkes and got started, focusing on the access drives between E48, which is here in E22. So we've done a lot of work there and a real credit to the Northparkes mining team because they took this on and they produced the first 300 meters of the project, which is fantastic.

And then we've gone off and we started with the box cut. So up in the top pictures there, May, we had a nice paddock. We just scraped the top off. And now in August, we're nearly completing the box cut and ready to cut the portal in the next month or 2. So very exciting times. And of course, in the background, we're doing the detailed engineering of the conveyor system, the ventilation system, buying a long lead items, sticking to plan.

And we've got Redpath coming on board as our principal mining contractor, and they've just started to mobilize in the last sic or eight weeks. Our next big project is the Coarse Particle Flotation. So this one, we're expanding the mill. This circuit sits behind the existing float, existing float cells and includes additional cyclones, hydrofloat cells, a Jameson cell and a new reagent mixing plant.

Lawrie mentioned that this is going to provide us with the ability to get to 8 million tonnes of throughput as well as adding 2% of recovery for both copper and gold. We began activity here with GR Engineering as our primary contractor to date, and we hit the ground running in July and worked through our July shutdown to install some key electrical -- sorry, electrical tie-ins.

But this work is really important for us so we can continue to build the plant and start to tie things in without impacting the operation outside of shutdowns. So we're currently deconstructing some of the old cells. As you can see, this is giving away Bert, sorry. There we go. Here, we're deconstructing old redundant parts of the plant, and that was a big day, a big lift. And that gives us access for the new infrastructure to be built on the existing footprint.

We're also kicking off the construction of the foundation. So those of you coming to site, you'll see a lot of concrete going in. That's the foundation of the new plant. So you can see Northparkes, we're doing great things, moving things forward, going after the growth that we've been talking about for years. And I'm really looking forward to showing you around when we get there. And that's the tour areas.

Now Bert, very exciting at Ernest Henry. Nancy outlined that Bert, of course, will be additional ore source for us to eat up some of that latent capacity. This is a small ore body off to the side of the Ernest Henry ore body, as you know. Bert will be a conventional sublevel open stoping operation with a new decline accessed by the highwall, north side of the highwall. It will give us another ventilation system, electrical systems and the cemented hydraulic fill plant.

Obviously, a different mining method. We need to backfill to get everything out of the ground. Since February, we've been pushing for the first portal cut, which I'm pleased to say will happen soon. In this photo, we go we're stabilizing what will be the portal. So this is now all moved away, and we're getting ready to go drill the portal.

Here, we spent a lot of time stabilizing the highwall, both at the portal face, so the shotcrete and rock bolts and all manner of steel in the wall. And then we went above that and we drag mesh down the wall to make sure we manage the risk of rock falls. So it's quite a safe place to work.

In addition, we're working on the detailed engineering of the hydraulic fill plant, doing some long lead item procurement and working on getting our infrastructure ready to go. Redpath is also our primary contractor at this site. So they're in the process of mobilizing to Bert at the moment as well.

And I said -- as I said, first cut coming shortly. That's it for my slide. So as you can see, we've got a lot of things happening, a lot of great, very exciting projects, and we're going to deliver value to the business over the next few years. It's fantastic timing. And of course, looking forward to taking you on the tour of some of these projects. That's it. Rocky, over to you.

Scott and Nancy are too efficient. They ahead of schedule and ahead of budget, Scott. So we are going to open it up for -- that's well done, especially the animation on Bert.

We're going to actually open it up for some Q&A for the next 10 minutes, and then we'll take the break given we are on a webcast. And if there's anything about Glen, we're going to defer it until after the break. We're going to start with Glen, but he's got to set up his -- all of these models. Adam, right there, Will.

Just starting on the Northparkes expansion. I mean you mentioned that 10 million to 11 million tonnes. I guess that's the first feasible stepping stone to maybe getting to the broader 15 million tonnes in an upside scenario. Just wondering if you could further elaborate on some of these infrastructure requirements that Lawrie talked to earlier on in the piece about water and power as two large considerations to getting to that upscale size.

I mean it strikes me that power should be easy enough to resolve, but particularly on water and I guess, other considerations we should be thinking about for expansions, particularly on the, I guess, the prioritization between copper-rich resource and gold resource? And could we see additional agreements with Triple Flag on some of that gold-rich material?

Yes, I'll answer the second bit, Adam, while Laura, do you want to bring the microphone up to Nancy to answer this. I mean in terms of the one with Triple Flag, I think the work that Kieran and the team did on E44 and the expansion has laid a foundation for us. What they've been very open about, if there are opportunities for us that we want to look at that are gold dominant, they're willing to engage on those.

I think if there's anything that is copper dominant, it's going to be hard to get them to engage because that was already in their plan when they took out the stream. What -- I'll just bring up the NorthParkes lay out. What we have had discussions with them about E31, E31 North, we finished mining those nearly two years ago now, and the team is wanting to go back and have a look as to whether or not there's either another cutback in there or we actually combine those as one open pit. And Kieran's had an initial discussion and say, well, if it does, they were gold dominant deposits. And it's not something that we would go and do without their involvement. And they've said, yes, do the drilling, and we'll be able to engage. What they need to be able to do is evaluate what the economics of those are. And so that's -- as we get any of these that we can show economic value out of those, they're willing to engage on it. But Nancy do you want to talk around the power the water the 15 million?

Yes. So we are doing, like I said, a lot of studies. On my point of view, the more risky part is the underground, so the mining aspect. So we have to make sure that we can bring if we go over the 11, 15, 16, 11 or 10, even 10 we need to feed the mill. So the mill expansion, that's something I think we can do. There's always solution. There's cost associated with it, but the mining is really the big part.

So that's why we are spending a lot of time to look, and I was talking about the importance to have open pit and underground to derisk the operation and then find a good sequence in terms of caving. So we are spending a lot of time right now to do that.

On the mill side, we are in -- I will use the PFS level for the 11 million tonnes. So we're going to see the outcome, what's the cost, the structure, the financial model to bring it up to line. I will say that at this stage, we don't see any big issue. We have solutions. It might be costly, but we have solution for the power and the water. Going to bigger than that, that's where it starts to be a little bit more complex. So we still have a lot of work to do, but we have option in front of us.

Just on the sequencing of the ore bodies for Northparkes, a very colorful chart. We don't have the years on the X-axis. Just wondering if you could put some frame around that, please?

You want a production target. I'll hand that back to Nancy in a second. The thing for us is, firstly, we've got to work out what size do we go to. If we go to 10 to 11 or if we go to 15, then you're compressing those. And one of the things, and Matt has said this for a number of months now, we've got enough resource there. We've got enough caving options.

Engineers would love to work there because for the next 20 to 30 years, you could just be continually bringing caves on and make no money. What we've got to work out is when do the sequences happen with the caving operations, the underground and the open pit. So the reason we haven't got the years is basically what we'll do is, as Nancy has said, we've got to finish that study, work out what size and scale we're going to be, when we then would build that and when they would come in. This one here at least shows where those ore bodies would allow over the next sort of 10 years coming into production. Do you want to add to that?

Yes. So what I should say is some of those ore body, that's why we need to study a lot. Some are close to the other ones. Some are restrained in terms of the geotech impact. So we cannot -- we have a sequence that we need to respect. So we are looking at that. And some of them doesn't need as much infrastructure as others. So that's why the trade-off around capital. But this is kind of the first one of the outlook or possibility that we can have in terms of sequencing.

Cool. Maybe just one follow-up. Do you tend to model on reserves only a portion of M&I resources in your mining inventory?

Both. We have the reserves, and we have a little bit of resource that can come in as well. But we are working to do a little bit more drilling to try to cover as much as we can.

Maybe just a totally different topic, Lawrie, if I may. I guess...

Just before we go off that, just to help you a bit, if you do look at the blue one is E22, when it's coming into production and how many years it's going to run for. So that might give you a bit of an indication on the years without actually labeling it, just to help.

Hence my reserves versus resources question. A lot of the mid-tier are now putting out aspirations, targets, ranges that you're a well-established 700,000 ounce producer or as Matt put it 100 like 1 million ounce producer if you include the copper units as well. You're undertaking a lot of studies and clearly, a theme today is about the optionality in the portfolio. So just how you sort of approach that tension between the emerging mid-tier that are saying they're going to do everything, whereas you're actually undertaking the fundamental studies to put it to market with a lot of meat on the bones.

I got it. Nancy, you talk about our planning piece. The thing I look at for some of these other presentations, I love Slide 2 that says this is not a production target, and there's a high likelihood that this will never come into production. We didn't think that was the best way to sort of put it in the market. I think if we can outline what our ore bodies are and what we're thinking about and when they could sort of come through the pipeline. But do you want to, Nancy, just touch on the studies and the resource and reserves and how we go about those?

Yes, I can. So we are following what Glen is doing in terms of resource and reserve. And if we saw some potential, we're going to accelerate some study to bring it in reserve ASAP. So -- and a lot of that is from drilling. So that's why we had quite a big budget in drilling as well to make sure that we are in the good ratio to convert those resource to reserves.

Lawrie on [indiscernible]. Can I just ask about Cowal? Sorry, Daniel Morgan from Barrenjoey. Can I just ask about Cowal? If I look at the M2 and I look at some of the materials you've outlined today, the southern protection bund at Cowal, it seems like it might be moving slightly or getting bigger to prepare for what is it, E30? Is it E31...

E41.

E41 to the south? Can you just talk about is E41 actually getting bigger? Are you preparing for that by moving the southern aspect of the Lake protection bund a little bit further out?

Yes, Scott?

Sure. It's really an opportunity, and Glen will take us through where he's going to be drilling and the work we're doing there. So if we have the approval to do that, we can give ourselves more space for E41 just in case. So there's more work to be done there. We've got the land. We just need -- there's a few things -- a few hurdles to crop to get through, but it frees us up some space.

Yes. I mean, then when you consider what we're getting out of E41 and when Glen goes through the model this afternoon, what we've done with Mod 2 is to say, well, okay, if it does, is there some optionality around expanding into that southern area.

The bund at the moment allows us to capture all of the E41 plan and a larger pit shell. This is more doing an inquiry about, okay, what would be conditions if we wanted to do further in the E41 if it gets larger. So it does allow for E41 to be bigger than what it was at the time of OPC. The Mod 2 is saying, well, what happens if it gets larger?

Matt Frydman from MST Financial again. Lawrie, can I ask hopefully a quick one on the Northparkes Coarse Particle Flotation expansion. I think in the past, you've said that adds about 0.5 million tonnes to processing capacity. So it takes you from that 7.5 million to about 8 million, which I think is on most of the slides. But then you also mentioned that beyond FY '28, it adds 1 million tonnes to capacity. So can you just talk us through that? And does that mean that Northparkes goes from 7.5 million to 8.5 million?

Scott is very happy to talk about that one. No. The initial project gets us that immediate bit and then the works that we're looking at is how do we optimize it further. Scott?

Yes, there's some debottlenecking work that's being done on site that's going to help us get more capacity. That's really all I can say.

CapEx...

No.

Hugo Nicolaci from Goldman Sachs. Two, if I can. Firstly, just looking at your aim for the future production on Slide 3. And just one quickly around Red Lake. Depending on how we sort of anchor that aim for the future, depending on whether Mungari is 200,000 ounces or Cowal's a Tier 1 500,000 ounce a year asset, seems to imply that Red Lake gets back to close to 200,000 ounces from the sort of 130,000 for '27. Can you just talk to what some of the moving pieces are and if that's right.

The not-to-scale footprint. No, a couple of things that I'll highlight, firstly, is that what this is also showing is that as we go over the next 5 to 10 years, we don't have a concentration risk at one asset. So it's not as though we get Cowal and in 5 years' time, it's making up 60%, 70% of our production. So Cowal will grow.

And as Cowal grows, yes, the others do. So when we look at it for Red Lake, the outcomes of the tails reprocessing study and the like, our expectations are that, that will be successful. And at some point, we then go above that sort of 35,000 to 40,000 ounces a quarter, get that more to the 40,000 to then ultimately 45,000 to 50,000. So in the next sort of 5 to 10 years, that's what we see happening there at Red Lake.

And at Mungari, it aligns very much to what I said earlier, we need to find a way through the drilling programs in the underground to be able to put a higher proportion of the underground, which is 4 to 4.5 grams versus the 1 to 1.2 through. So ideally, what we'd like to see is that they do both grow at the right time over the next 5 to 7 years.

Got it. And then just second one, sort of connecting the 2 themes to your earlier comments as well. You highlighted earlier the rising capital intensity in the mining sector. And if we look at Australia as an example, the capital intensity of building a gold project has doubled in the last three years. Evolution, you've obviously had the expanding cash generation in the portfolio ahead of peers.

But given the nature of the business and the growing skew to large underground, it's fair to say your capital intensity is probably also higher than what your peer average is. So if we look at the broader strategy, what do you think the right level of growth capital intensity either the asset or the portfolio is? And is it just a matter of if the project is above an investment hurdle, you'll do it if you can afford to? Or do you need to sequence some of these projects as well?

Yes. So this hasn't got my presentation, but in the appendix has got the guidance. If I use that as a base for this year, -- we need to spend -- so our depreciation per ounce equates to about $800 million to $1 billion a year. That's sort of what we've got to be reinvesting back in the business to keep our mine life at 17 years. I've said that if we get back, we're only investing $700 million of total capital in the year. Therefore, we've lost any optionality in the portfolio.

So I'm happy that we're spending at the rate we're spending at. In terms of then that growth piece, yes, it is capital intensive. If we go caves at both Ernest Henry and Northparkes, a lot of the capital is upfront, but then you do get the lower operating cost and you get the economies of scale there. I would say from our perspective, you're going to be seeing $300 million to $330 million of sustaining capital over the next -- and we said that with our guidance. That's sort of the rate you're going to see in the next three to five years.

Then the mine development and the growth capital is going to depend on when each of these projects sequence. So your mine development has to be ahead of your construction so that when you then finish the construction, the mine is ready to deliver. So hence, we've got that high mine development this year.

If the studies are successful and we go to that 11 million or 15 million tonnes, it's going to need to be ready. So therefore, that mine development probably continues for longer than the next few years. And then it just depends on when you sequence to do that construction.

That is a way of saying that if we're spending in the $1 billion to $1.3 billion each year over the next 10 years, and we've still got 17 years of reserve life in 10 years' time, I'll be very happy. So should our shareholders based on the rates of return those projects are generating.

David Radclyffe again from Global Mining Research. Just a follow-up question, if I can, on the Coarse Particle Flotation. Newcrest was really excited about the technology. Newmont seems less so. It's not that widely used, so we can't see a lot of examples. And obviously, at Cadia, we can't see the numbers or the uplift for well-known reasons with their issues. So could you talk maybe about how you've sort of -- how you think about those risks, how you've derisked it? Because it tends to be with these recovery improvement programs in the back rear mirror, if you like, it's very hard to actually see that uplift in recoveries with a lot of these projects.

There was a lot of work that was done before we approved this project. So there was a lot of test work, and we had a pilot plant as well that was running on site. So we can prove the technology and be very controllable with the technology. We are still running in parallel right now in the lab almost like every day, like some feed sample and just make sure we understand what will be the impact when the project will be up and running. So we have those up and running. So we are quite confident.

We have started a big group of a consortium, I will say, or a group with the University of Queensland. And Newmont and a lot of other peers are with us in that one, so we can share and learn about the technology and make sure we are going in a good direction. In this slide, we have the Coarse Particle Flotation, but we have other improvements as well that are identified metallurgical improvement that are part of our pathway, and that will help us to make sure we have minimum this recovery.

Yes, David, as all metallurgists promised the recoveries and you'd be at 120%, but we don't get there. But what Nancy and the team did and the site team, so you will see on site at the lab, how we've got our own sort of works that we've done there to sort of test it. We did do a lot of work with the team at Cadia in understanding their project and what worked and what didn't and the like in choosing what we've done here.

And so that's giving us the confidence on that side. The proof will be in early FY '28 when we start running it, turning it on -- end of FY '28, sorry. All right. We are going to break now for a short while so that Glen can get set up. We'll have some afternoon tea and other coffee for anyone who wants, and we'll come back what time Rocky is it can pass through.

[Break]

Well, good afternoon, everyone. A couple of things to begin with. I'm going to run through a couple of slides just to really talk about how we think about Discovery at Evolution and how it supports Evolution's growth goals. I think when I came in this morning really early just to set up and make sure the models were going to run okay, I realized that my aging eyes were really struggling. So I had to duck out to the pharmacy for the $5 set of pharmacy glasses to read this first time ever. But anyway, first time I'm running actual models in an Investor Day presentation as opposed to movies of them. So we'll see how that goes as well. So bear with me.

Look, yes, I'm pretty keen to get through these just to get into the models because that's the way we like to see these opportunities that we're drilling, and it's really the way in which I can share why we're excited about them.

Disclaimer, get through that.

So my theme today is pretty simple. It's creating value through discovery success. And over the years that I've been at Evolution, which is over 10 now and dating back before then as well, we put together a portfolio in what I consider some of the best geological addresses you can find. And that builds on the point that Lawrie made earlier, and that is acquisitions create the opportunity, but the value add comes from what you do with the asset once you own it. And for Evolution, it starts with discovery.

What excites me is that we're drilling around our operations at Cowal, Northparkes and Ernest Henry, where our discoveries have the potential to make a direct contribution to future production. And in the near term, we're supporting the growth opportunities that Nancy and Scott talked about earlier. So for example, at Cowal, we're looking for ways to improve both the scale and grade. Now that could be by growing the open pit resources or through what we think may become a new underground mining front at the operation. At Northparkes, we're focused on finding accessible ore sources that could support the expansion and provide greater operating flexibility.

At Ernest Henry, we're combining deep drilling success, the proposed Carnaby acquisition, and the regional exploration program that give us really a genuine opportunity to grow production and extend the mine life. And then Mungari and Red Lake are equally important, improving life of mine grade at Mungari, as Lawrie spoke to earlier, and as well at Red Lake targeting high-value future ore sources. But we're not only thinking about the next few years. We're also asking what could Evolution look like in 5 to 7 years from now. And that's where our greenfields portfolio comes in.

So our investment in Arizona Gold & Silver, the recent one gives us exposure to the Philadelphia high-grade zone project in Arizona. And in British Columbia, we have Two Times Fred and an option over the Clisbako project. So these are 2 drill-ready opportunities with the potential to discover high-grade resources. They are earlier stage opportunities, but they're in the right rocks and in the right locations, and we believe they can be big enough to move the dial for Evolution. Underlying all of this is a significant increase in drilling and exploration investment this year. That's a deliberate choice, as we see genuine high-value opportunities across the portfolio, and we're investing to unlock it.

This slide shows where we're putting the rigs and what we're doing with the money. So we have 11 rigs currently turning across 3 of our key operations, 4 at Cowal, 4 at Northparkes, and we have 3 at Ernest Henry. That level of drilling activity reflects both the quality of the opportunities that we have in front of us and confidence that we have in delivery. So at Cowal, we're running 1 RC rig and 1 diamond rig at E41, alongside 2 underground diamond rigs. Together, they're testing near-surface growth, extensions to E41, the potential connection from E41 back to E42, and the emerging underground opportunity along the Oban corridor.

At Northparkes, we have 2 diamond rigs drilling at E44 that Nancy spoke about earlier. One rig testing depth and strike extensions around the E31 open pits and the E51 as well and 1 underground rig delineating mineralization at E26 South. And at Ernest Henry, we have 2 directional diamond rigs drilling very deep holes to test the down-plunge extension of the ore body below the current mineral resource. And we have a third rig at Ernest Henry, which is drilling the regional targets. So this is a great point for me to actually pause on the presentation and actually jump into some of the models. So let's do that next.

All right. So we are going to start at Cowal. But before we dive into the drilling, it's worth just stepping back and remembering what we're trying to achieve. So we're targeting 2 opportunities. The first is growing the open pit inventory by extending mineralization around E41 and potentially linking it back to the main open pit at E42. The second is what we think could become a new underground mining front. It's higher risk, but it's also where some of the bigger upside is. And the reason it matters is because every additional quality tonne we can bring into the mine plan has the potential to improve the feed grade and create additional operational flexibility.

So in the open pits, that can mean displacing lower-grade stockpile material and kicking it down the road as far into the future as we possibly can. And in the underground, we're talking about ore that is roughly twice the grade of the open pit feed. So here on this leapfrog image, and sorry, I've got to put the glasses on now, we have -- we're going to start with Cowal. It's not far from Northparkes, over here in the center of the image. And what you can see is we have large land positions around each of the mines. And the other thing to point out here is that these green shapes represent the rocks that are really important in New South Wales. They're the most important for hosting the best gold and copper-gold deposits. And Evolution controls 2 of these belts, 1 here, 1 here of the 3 main ones that exist in New South Wales, Cadia being out here to the east.

So let's go and look at the site itself. And this is really just to bring some orientation to what it is we're actually looking at. So here's the E42 pit that I'm circling there. As Lawrie mentioned, we commenced production here at E46. Here is the sort of OPC North area with the Northern Lake Protection Bund, as Scott mentioned, that's due for completion shortly. And what I'm going to do next is just switch on where the planned pits are going, and we'll flip down the -- we'll just make that topo a bit more transparent. So these are the design pits for E46. So this is what they'll look like at the moment when they finish up, so E46, Regal and Galway here. This is the Stage I, cutback at E42, and the 2 E41 pits are located down at the bottom.

So what we're going to do now is then just look at what we have underneath. So I'm going to flip that topo off, get you off. We're going to go in here and looking from east to west now, and we'll just turn up some of the mineral resource. That's the regularized one. So here, we have the resource that sits outside of the pit and also define some of the underground. So the dark brown is the indicated. The beige is our inferred resource. So we'll get that down again and then look just coming on the underground, which is quite separate as we spin that around and look at how it's quite separate from the pit at E42. And then obviously, the top of the underground, as we can see, is the Regal and Galway pits in through there.

So the blue shapes that we have here are the reserve stopes. And if we come in a bit more, we can look at some of these gray shapes in here. These are the mined-out stopes that have already been extracted at the mine. And so the other thing that we can do now is turn on some of the planned development in the underground. So this should show you our current life of mine development for the underground at Cowal.

So now we know where we are. Let's have a look at some of the drilling results. So here is the slide that was in the ASX announcement this morning for the exploration results. So on this slide, we are looking at E41. So here is one of the E41 pits. It's a slice through there. Here is E42. The Oban drilling results are sitting over here on the right-hand side. I'm going to firstly really talk about what we're trying to do at E41. And I think importantly, what we're starting to see in some of these new results are some really impressive grades. And we're also drilling in an orientation that we now believe has the ability to get -- to actually expand the resource, not only at depth, but to bring it back towards the E42 open pit and take it through the sort of ridge area through here.

Now one of the reasons we believe that is if we look at the historic drilling directions, I'll turn that off, I will turn you off and you off, and so if we just rotate the whole mine around. What we can see is that the historic drilling direction was predominantly east-west. So you can see these drill fences here. These are east-west lines. You can see the same orientation through the pit. And we started that same drilling orientation when we were drilling the underground at Cowal off to the east side of E42.

Now one of the lessons we learned at -- in the underground is that many of the veins, the predominant vein set, are roughly parallel to these east-west fences. They're in the same direction. So we are either getting them randomly or we were stepping over them and missing them when ideally we want drilling to cut across them so that we can link them up from hole to hole, and that's how we estimate our resources.

So we've applied our learnings from the underground where we're able to do that, and we're starting to get the results at E41. And as we can see in the saddle here, as we sort of go across, that dominant drill direction is still east-west. And so we don't believe the program has really effectively tested that opportunity. So the idea is to understand whether that gap is real or to prove it's wrong and understand if we're dealing with a much larger mineral system. So what we'll do is we'll have a bit of a look at the RC program, so we can see this is what we're doing this year. I'll just flip off all of the historic stuff so that it doesn't confuse us.

So that's the RC drilling program that's going to close up, a lot of that inside of that Southern Lake Protection Bund. And we've got a bunch of diamond drilling going in here through the course of FY '27 as well. And so a lot of that diamond drilling is actually looking at the links between the 2 separate pits at E41 and exploring that area between 41 and 42. So that is how we're viewing E41 as the opportunity to grow that mineral resource.

So next we -- not that one, we are going to go to Oban, and we'll go to that one. Okay. So here is the other schematic in the ASX announcement this morning. So this is a depth slice of the underground. So it's about the 700-meter RL, or if you like, we will turn on the planned pit. So this is the planned pit for E42 Stage I. So it's basically the bottom of the pit. That's the level at which we've cut this horizontal section. And we can see those drill results, some of the historic ones and the one we announced this morning, which was quite attractive.

And what I'm going to do now is really talk about what we're seeing and why we really like this opportunity. So I'll turn off this plan, get that off. What I'm going to also do is just sharpen up this pink shape here. And I'm going to get rid of some of those built and some of the planned developments and the drilling. So all we're showing here at the moment is just a few things. So obviously, here is the bottom of Stage I in E42. We have this sort of gray-black surface through here. That's the Glenfiddich fault.

And all of these red dots are everything that's above 1 gram in an assay result in our drilling. And if you can -- so that I can pan in a bit, you can see some purples in there, that's everything above 5 grams. What is immediately apparent is that the gold likes contact, and it particularly likes this contact where it's hosted in volcanics, so that's everything out here in contact against this pink solid, which is what I call a diorite.

It doesn't matter what a diorite is. It's -- that's the name of the rock. It just happens to like that contact. It doesn't happen to really be inside the diorite, and we can rotate that around and show everything like that. The fault basically cuts mineralization, so it terminates against the fault. But what we found is as we've been drilling at Oban, and the reason why we did that drilling was it was linked to grade control. And we were doing grade control in the southern area of the underground, and we decided to push a handful of holes through that Glenfiddich fault, where we knew the underground would terminate, but just to see what was on the other side.

We've always known we've had this diorite because we've mined it deep into the E42 pit. So we knew it was there. We didn't always know where that eastern contact was. So we put a couple of drill holes all the way through till we got that contact. And these are these yellow disks here, which are -- which is the mineralized intervals that we've seen at Oban. And so we have an identical contact that's been repeated over here. So this is that contact of that diorite. And what I'm going to put on now is just show the level of drilling. So here is all the drilling in the underground. And what we can see is we've got a lot of drilling just in here, which is really what we've done for Oban.

But when you look along the length here and on the length there, there's not a lot to go by. And we know we have another diorite body up in here with not much drilling information on the contact. So if we play a little bit of what is here. So this is a ruler. And I can work out how long that is. It's about 1.5 kilometers. That's pretty good. That's the scale of the existing underground. So if I take the southern end of this contact and take it up to the northern end of that contact, I get 1.5 kilometers again. So we're repeating the scale. And then we have a little bit more up here. And if I can get that to work, we've got about 500 meters. So there's a couple of kilometers of scale on a contact in the diorite against volcanics, which we believe is -- let me get rid of that first, which we believe is as equally prospective as the existing underground.

So what are we going to do about that? We are going to put in a bucket load of drilling this year. So here's the drill program. A lot of it is going to be from the underground, and that's just Phase 1. And you can see when you look at what we've done, and this is just, again, a depth slice in that underground. When you look at what we've done, it's a lot. So there's a lot more work to do here. This is the phase of drilling we believe we need to do first to understand do we have an ore body that's going to start to develop along the eastern edge of this contact in the diorite. So that really is the story at Oban.

So next cab off the rank. We're going to take a bit of a look at Northparkes. So I'll let that come up and correct itself. Here we go. Bring you over. So there we were just looking at Cowal right there. So we're now up here at Northparkes. And I think one of the things at Northparkes that's actually quite interesting is that it's a really clear example of how the drilling bit plays a role at the front end of the growth options that Nancy was talking about earlier.

So if we expand the plant, we'll need additional ore sources, as Nancy mentioned. These need to be easily accessible and in locations that can be accelerated to production to support that growth when it's needed. And so what's really encouraging at Northparkes is we're seeing these opportunities really close to existing ore bodies and in established mining areas. So where we can leverage existing infrastructure.

So let's dive into what we're seeing there. So this is the 3D image, when it arrives, for Northparkes, and it's essentially what Scott was showing earlier in the 2D, but let's just have a bit of a look at what we're actually dealing with here. So you can see the topography underneath, E26 here, E48 there, and this is E22 over here. The E22 plan development. So here's the box cut. That should be in the right location. I think Scott, right there, and the dual declines that he described, and we also show the link -- the linkage drive back to E48.

What we're also showing in the blue are our reserves. So that's great. We've got E22 in reserves. Here is E26 Lift 1 North. And if I rotate around the side, we can start to see some of the ore bodies that Nancy was describing in that sequence for -- in the current sequence that we're looking for the underground. So let's start with what we have. So here's Lift 1 North in the blue there. This was Lift 1 in the gray, so that's mined out. This was Lift 2 in the gray. That's the Lift 2 extraction level. This is MJH there. That's the MJH ore body. It sits under Lift 1 North. This is Lift 3 that Nancy also described.

GRP is this big one over here, so that's GRP in there. What I might do, because it's confusing matters, is to switch the topography off for now. In the background, we just move over here. This is E48. Let's just go in and have a quick look at the sublevel cave. So you can see the sublevels there. That's the portion of E48 in the SLC, and this is Lift 2. So this is the sequence that Nancy was describing earlier.

And then, if we look at the open pit story that we have, this is E28 Northeast. So it's the next pit that is in the sequence for development. These are the mined-out areas, E31 South and E31 North, and the newly declared resources at E51 and Major Tom. So it gives you a bit of an impression of what we're dealing with at Northparkes. So let's go to some drilling results, and we'll start really with E26 or E26 South.

So what has our attention here. So let's just zoom in through here. So what we think we have is a new porphyry system emerging here adjacent to an existing one. So that is the really attractive opportunity. So what -- if we look at -- here are the results that you can see in the callout boxes, they are shown as the yellow discs again. So the yellow discs are everything above 0.3% copper. And what you can see just by those grades there, and those grades there, it's a copper-dominant system. So there's a couple of things for me, which really stand out.

The first is the consistency of those mineralized intervals. So you're getting a couple of hundred meters in each of these deeper drill holes. These have been drilled from the Lift 2 extraction level at E26, and what we also like about these intervals is that we have some internal runs at much higher grade. So that's what we're really starting to like. So let's turn off this 2D image for now and have a bit more of a look at where we think this is going to go. So here we go, here's that drilling again. So what we've been doing is sort of drilling out to the south of E26. We've been following it up plunge using some of the existing development to drill off out here.

And the next phase of work is going to look like this. And in fact, I've been reliably informed, we're pretty much almost concluded this drilling program underground at E26. So we will have results in the hopper pretty soon, and that's going to sort of guide and drive what we do next.

Now this is also where some of the geology becomes important. So you need to bear with me. We've always got to talk about a little bit of geology in one of these. So I'm going to turn off that surface topo, and I'm going to put on a solid stock below Altona, it's called. And let's sharpen that up a bit. And that's what we want to see. There we go. All right. So this is an intrusive body. And why it's important is that we see these shoulders that sort of run off into sort of cliffs or really steeply dipping zones. So here's the shoulder here, runs off into this really steep dipping zone.

Guess what, the porphyries at Northparkes love these positions around this intrusion. They love these steep shoulders that roll off the intrusion. We have E26 here. We rotate, we can see that ridge or shoulder position there at E48. If I bring it around, you'll be able to see that again. So it is -- here we go, it's right there. So there's that shoulder position again. It's a fundamental control on the localization and emplacement of these porphyry systems.

E22, it's a little more subtle, but there's a ridge coming in through here, and we can sort of lift it up. You can run your eye through there, and you can imagine it being there. It's a really important control. And in terms of where do you go next? Well, you're looking for these positions around this big intrusive stock. Now, the other piece about the geology here that's actually quite interesting is when we transition out of the stock into the overlying and surrounding volcanics. So here's the contact of the stock there. When we transition into the overlying volcanics, we typically see the best grades at Northparkes in all of the porphyry systems. So E48 is the same.

Where it is out of stock -- sorry, I'm just bringing in here to convince you. We have some of the higher grades that we're mining in the SLC at E48. It is hosted above that contact in the volcanics. And all of the E22, you can see is above. So they are where we're getting the best grades. So what I like about this new E26 South target, and bear with me, is the current drilling is in here, and we're chasing it up plunge to see where it continues because we don't know where it projects to surface. But if I put the surface back on, that is -- that's not going to show up quite like that, here we go. So that's the surface there.

Here's the contact there. There's a lot of space to move in here, where we can drill for higher grade. And that's going to be the objective of the surface program, assuming these results come back in -- confirming the orientation and the grade continuity in this new system. So that is E26. And what we also like about it is its proximity to the existing infrastructure. It's right there. So this is the challenge I'm going to put in front of Nancy, as she considers her mining sequence is these types of opportunities, where do they belong in the sequence as we start to drill them off.

So that is the story around E26 South, and we are going to now go to some of the open pit drilling. And as Nancy mentioned, this is also a really important stuff for us to understand in terms of what is the sequence and can we find more of these open pits. So here we have -- here's this funny-looking stock again. It's a -- this is a bit of a different relationship to what we saw below. There's a couple of things to point out. Major Tom here, E51 here, the E31s up in here, and here, all around the edge of the stock. So it's not just coincidence. This is a common position where these ore bodies tend to localize.

And what we've done in the last 12 months is a first phase of work that's understanding what are we getting as we drill around the stock, are there other opportunities? Pleasingly, there are. And these -- we're seeing these in the results. So these yellow discs, again, above 0.3. So we're seeing an ore body in through here. We're seeing an ore body in through here. Our best results occur in between E31 North and South. And so this is really the opportunity.

The gray surface underneath is quite interesting because it's the Altona fault. So it's a big fault discontinuity. So everything here that's developed here came from somewhere down here. It slid all the way up here. So they are not -- these porphyry systems are not spatially related to these. They are in time, but in space, they're not. So this fault has also been -- so it's actually pulled mineralization from depth and pulled it up. So it's actually been helping us. Geology tends not to, but in this case, it has. So it's brought deep stuff up to surface.

And what it also did, it was a little bit annoying because it came up over the top of part of E26, but completely hides GRP and completely hides E48. So that took a lot of deeper drilling to understand where they were located and took us a little bit longer. So this is the other consideration at Northparkes, we have to see through this fault as we're doing more drill targeting. But that is essentially what we're going to be doing.

And I do have a drill program just to show you all that we are going to be doing more work here. So we've actually just completed a fair bit of drilling around E31 South and North. And as you can see, we're following up on a number of these anomalies. And my comment to the team when we were talking about this about a week ago, so I think we're under-testing this. So I expect to see a fair bit more drilling, particularly given some of the results that we've been getting at Northparkes. So that's really what we're trying to do. So testing for additional open pit targets, and we're taking a geological model and really using it to deliver future success. So that is that story. So I'll wrap Northparkes up there, and then, we'll transition over to Ernest Henry.

So we're going to finish the slide show here. And in many ways, this is probably the easiest discovery story in the portfolio to explain because we've been successful here for a long period of time. And I'll show you sort of how that's evolved over time. But each time we drill deeper at Ernest Henry, we keep demonstrating the remarkable continuity of this ore body. And what we're trying to understand now is just how far that continuity extends.

All right. So here we are near Cloncurry, which is located here, Mount Isa to the west over here. The mine leases at Ernest Henry have this sort of little white inset there with the yellow circle. This is the land position that we've assembled around the mine. Here are the tenements that will come across with the Carnaby acquisition. And so really, what we're dealing with here is an opportunity really on 3 fronts. I think we have multiple avenues for growth, which is the ore body extension at depth. We've got the land position and the Royal Duchess at Carnaby, and then, we've also got that exploration ground around the mine.

All right. So let's go into and have a bit of a deeper look at Ernest Henry. So here's the pit here. That was -- that has been mined out. This is the resource as it would have been in the day. It's obviously been extracted. The shaft is here, and the processing facility is over there with the coarse ore stockpile right there. So that's essentially the basic infrastructure on surface. So let's just rotate this up and have a look at the ore body underneath. So we'll do that. I'll switch the topo off, get you out of the way.

All right. So one of the stories really at Ernest Henry is a remarkable resource growth that we've been able to deliver since we took the keys to the 100% ownership in 2022 -- early 2022. So this was at the end of '21, the resource model. And now, if I switch on all of the drilling traces, now this is everything that's been done at Ernest Henry, and that now informs the latest resource update. But if I switch that on, you can see the growth, all right?

So in fact, back in the day, I'll turn that drilling off because it gets in the way, this is all it was. In fact, it wasn't even in resource. It was just a couple of drill hits off to the side of the open pit. And we said -- we asked the question, what's that? We should get some more drilling into it, and we're able to extend it at depth, and there's a really lovely development story happening there. This was the only junior area. So we've done -- we've expanded the resource into these areas, and we know that the ore body is open at depth.

So if we now take a look at the reserves, we'll just quieten down the resource, we'll get that one off. So that's the resource underneath. The blue shapes are the reserve. So that's taking sort of -- that's the bottom of the current reserve, which Nancy was illustrating earlier. We do have some reserves sort of up in the mine in those eastern areas. And we can just -- well, Scott has already done it, but we'll just do it again for some giggles here. So here's the -- this will be the Bert development and here are the stopes that will be mined at Bert. So that's essentially what we have at Ernest Henry.

So the next slide really takes us to the result that was announced this morning. So here's the schematic that was in the slide deck. Here's the result that Lawrie has already mentioned in his presentation, but we really love the copper interval here and the gold. And the fact that really, we're sort of over 500 meters off the nearest drill hole up plunge. So it's really illustrating some remarkable continuity.

And I think if we just -- if I turn that image off, if we just come back in on it and rotate it around, you can see that's -- let me just do that. You can see the ore body is a little bit twisted, comes down here and then sort of rotates back the other way. But its down-plunge projection is right on target. So it's really, really predictable. We can see if we rotate -- look from -- that's going to be from west to east, we look there, yes, it's right where it should be.

So the question is not so much is it there. The question is how far does it really go at this type of thickness and grade and continuity. And that's the really exciting piece around what we're doing next. And if I just switch that on, these are the pierce points for the deep directional drilling program that we have currently running at the mine at the moment. Now you can see this is a -- this hole went something like 2.5 kilometers deep. It's a really deep hole.

Now one of the reasons why we're drilling with a surface rig is we wanted to decouple the drill program from the underground mining because that was -- we couldn't get it into the schedule when we needed to, to drill from underground. And we really just don't have the development down to a depth at the moment where we can launch from underground and drill shorter holes.

So we're doing -- we've got a directional drilling program from surface. This rig will stay in this position for a very long time as it drills part of this pattern. We actually have another rig side by side. So they sit, they're collaring on the west side of the waste rock dump here. We've got another rig. It's just drilled its first hole. And these rigs will sit here until we basically pick off this drilling pattern at depth to understand really the geometry, which is the important thing that we need to understand. We're confident we're going to get the grade.

So I really look forward to sharing those results as they come to bear through FY '27, but a really exciting opportunity to really keep pulling this ore body down at depth. And really, that's where I was going to leave it. But so as I look across the portfolio, Cowal, Northparkes and Ernest Henry. I see 3 pretty different discovery stories. So at Cowal, we're growing and connecting mineralized systems while testing the potential for another underground. At Northparkes, we're looking at identifying the next generation of ore sources that could support the expansion. And at Ernest Henry, we're continuing to extend one of Australia's really incredible copper-gold mineral deposits.

So there are different opportunities. The common objective is to convert that exploration success into resource and over to reserves and provide those options for future growth. So I will leave it there, and I can open it up to questions and get rid of these pharmacy glasses, which would be great.

So if you have questions on any of these models, I can pull them back up quite easily.

Jon Scholtz from Argonaut. Just a question on -- like especially the greenfields, if you're looking at gold versus copper, where do you align with what you chase more in that sense?

It's a good question. So the way we do that, we -- when we look at the greenfields portfolio and screen for those opportunities, there's a higher abundance of gold targets that are available for us to explore. When you go and look in the copper space, those -- it's a much smaller pool of exploration opportunities that we're screening for. And if I had to pick a ratio, it's not unlike what our sort of gold to copper production ratio is. It's that sort of 25% of the targets we would look at from a greenfields perspective in copper.

The other challenge in the greenfield space around copper is that there's a lot of competition for a really small pool of projects. So we feel we have more opportunities in the gold space. It doesn't mean that we're putting a line through copper. We're still looking really hard at it. But it generally means that we turn up more sort of gold exploration opportunities to bring into the portfolio.

And just at Cowal, that Southern bund that goes in, does that end off the exploration there, you won't go any further out to try and look something? Does it...

Yes. So right now, so I can prove I got the bund there. I don't have the bund there. So we'll just take a quick look at this underground because it's an important question. So the bund position, I'll come back to that. But this sort of shows what we're trying to do in the underground. So we are exploring out to the east, but there's a real sort of methodology and strategy to that.

So what we see, and if you can get your eye in, we have a series of splay structures. So most of the ore body lines up along the diorite contact here. We have a couple of these splays. This is the main fault where we have a lot of high grade sort of coming off to the east. This is another one here. You start to see another one here. We do have drilling targeting the eastern extensions of those splays because they are high grade. We do want to know how far east they go.

Now back to your question on the lake bund. So if we go to -- let's go to this one. Actually, no -- we'll go to the E41, so I'll turn off that slice. There's the bund there, and I will get rid of that long section. All right. So -- and let's turn on some of the drilling. I'm going to do that in that. So if we spin that around -- sorry, I'll just declutter that a bit for you, get rid of field traces and the assays. What we can see here is most of our drilling at -- in the E41 area occurs inside this Southern Lake Protection Bund or the OPC South, if you like.

So this is -- so these blue dots are all the RC drilling that we're going to be doing around up to the sort of edge of that lake protection bund, and we have some deeper diamond holes going in under those pits. These diamond holes are well and truly on land. So the edge of the lake is over here. And we are drilling over here because we know, and you can see just by the shape of the pit, it's quite linear through here. There's a high-grade structure known as the Clara fault. It comes through all the way through here. So we are drilling that outside of the bund, but on land. So that would be way out into the future. We're just trying to understand does that high grade continue beyond where we have it currently delineated.

Glen, Matt Frydman from MST again. I apologize because I'm going to ask you about one of the assets that you didn't just talk about. But Red Lake FY '27 exploration budget, $25 million to $40 million. That's, I think, the broadest range across the assets, but it's also at the upper end, potentially the most across any of the assets. And obviously, that's for an asset that Lawrie was kind of indicating might not even really have room to grow in the portfolio for maybe 5 or 7 years. So can you talk through, I guess, here, what's driving that range? What's the sort of opportunities that you're seeking? And is that sort of budget reflective of that's just the cost of reserve replacement at Red Lake? Or is there other specific things that you're sort of targeting there?

Yes, there's a number of things there, Matt, inside of that. We do have a large range because a lot of -- we have some contingent funding that's in there that would -- that is contingent on positive results being delivered by the existing program. We believe we will get those and we'll be able to award some of that to continue those drilling programs, but that's all success-based. So there's a portion of that up to $40 million, if you like, that's allocated there.

The other thing, if you look at the reserve to resource, basically conversion factor, it's at about 25% at the moment. And so that means there's a long resource tail. And part of the mission at Red Lake is to start improving that conversion factor, so to get it up to closer to at least 40% -- I think between 40% and 50% is about as good as you'll expect at a mine like Red Lake. It's very similar at Mungari, the similar types of systems.

So the idea is to -- there's a fair bit of resource definition drilling that's going to be done that consumes that budget, but that comes back to delivering that -- those future high-value ore sources. So it's not going to take us long to work through the underground reserves. We need to keep a lot of it in front of us. So that is really what we're doing. We do have some other exciting extension targets that we're drilling, and I hope to be able to talk about that in the next 12 months, but we've got to do the work first.

The extension targets you're talking about, is that the sort of contingent funding component that you were just referring to? Or yes, can you maybe just give us a bit of color on what the upside case could look like if some of those contingent programs come through positively?

Yes. So look, I think we're looking at areas such as aviation. So right now, that constitutes one of the largest resource areas. It's where we have a considerable amount of our reserve and production in FY '27 coming from aviation. So we've been looking or working pretty hard on extensions. And I expect to be able to award more of that contingent program into some of those extensions around aviation as we work through the year. So we will definitely be consuming some of it.

Just turning to Ernest Henry. You say that there is an additional 10,000 tonnes per annum copper from regional exploration. Can you tell us where you'll be focusing to make up that 10,000 tonnes?

Yes, I can. I go back to Ernest Henry. Stay with me. I'll not only tell you where we're doing, I'll show you. So this is probably the best image to use. We don't have all of our targets displayed. But what we're -- essentially, this ground came together, most of it anyway. We've sort of -- there's been 3 acquisitions over the last several years. But a big chunk of it came from when we bought about just a little over 1,000 square kilometers from Rio Tinto. So Rio had done -- been up in the district for many years, have done a lot of work.

They had screened it for Rio-scale copper gold systems in the IOCG space. Now we would love to find a Rio-scale IOCG copper-gold deposit, but we're probably not going to given that Rio are pretty good at what they do. So what Rio did, they found a number of mineral occurrences. They screened them at drill spacing that would essentially filter out anything that was going to be of a scale of interest or that would move the dial. But because we are looking at targets, and you can see the radius here, so that's pretty much everything is within 50 kilometers haulage distance at Ernest Henry, we're looking for much smaller style resources.

So there are mineral occurrences where we feel that we can deliver small open pits. And I'm envisaging in the range of 3 million to 5 million tonnes. I'd love them to be bigger, but let's just be modest for now. And if we -- and we do have targets that we're currently drilling. So for example, 10 kilometers north of the mine, just in here is our SC4 target. We have a diamond rig on there right now. And we're just drilling in this area here.

So we'll be able to share a bit more color on some of the outcomes of this exploration in the regional sense at the -- towards the end of the summer. So we'll drill right up to the summer -- start of the summer period, which is the wet season in Cloncurry and in that part of the world. And then we'll essentially pull together all of the results to determine where to next. And so I expect to be able to have an update later in the year around sort of what we're getting.

Daniel Morgan again, Barrenjoey. Glen, I'd just like to understand Northparkes a little bit more. If you could expand on what is a resource, what is a reserve, what needs to happen to bring a resource into reserve? Is that drill density? Is that you need a concept study, you need a feasibility study? And then as we're looking at some of these resources, what is the historical conversion of resource into reserve? And when I look at these resource blocks of different locations, what would you think about with regard to grade when you go from a resource to reserve? Because I imagine you're taking the center of a bigger pit.

So I'll start answering the question, and I might call a friend if Nancy has got more to add. So look, if we go back to this image here, and I'll just get rid of the topography. It's just a bit -- I'll get you back down there -- confuses matters a bit. So everything, Dan, that we're showing here, I'll just explain that again. So just to give you some perspective here. Everything in blue is reserve. So that's the Lift 1 North. Here, you can sort of see E48, SLC22 in reserve and then the reserve for E28 Northeast. That is essentially the reserve base at Northparkes at the moment.

Everything in brown, so these footprints are resources. So we have sufficient drilling in them to at least classify inferred, but most of them are better. We have a reasonably high proportion of indicated resource at Northparkes. And so really, some of these ore bodies require a bit more drilling. That's mainly because particularly as we're investigating block caves, it's really important to know where the edges of your cave footprint are going to be and not all of the edges have been that well defined in the drilling.

So that's essentially what the drilling program is doing. In terms of grade continuity within those footprints, it's really good. These are porphyry systems. So the grade continuity is geologically in the record, they are typically the best for continuity. So when you talk about reserve conversion, you basically get most of the resource converting within the footprint. Now the dilution is the thing that really affects the grade. It's just how much waste are you going to take around your ore body and incorporate it into your block cave, and that's the thing that's going to drive the grade. But if you could mine perfectly to the edges of these footprints, the grade wouldn't change by much. Nancy?

Yes. I can just add that most of them are quite well drilled, and we understand quite well the, I would say, mineralogy or grades and content of them, but we have to do the study. So that's why we have those big program in study, so we can have the study numbers and there's some geotech information that needs to come in those studies as well.

Brenton Saunders from Pendal. Glen, sorry, just back on Ernest Henry, Greater Duchess, where and what is that?

So the Greater Duchess is down in here.

And what stage of development or exploration? I mean, I see you've got it in a profile, you've got a copper and gold number next to it. Is that a satellite ore body?

Yes. These are the satellite ore bodies that we would be looking to truck to the Ernest Henry plant. Currently, at the moment, we've looked at the open pit resources, which do have studies that Carnaby has completed on them. And once we take the keys, we will be progressing those studies in terms of the open pits. Other opportunities there looking at sort of underground beyond the open pits and other exploration opportunities would need to be drilled. So there's a fair bit more work to come in terms of how we would expand that resource. But we've essentially acquired on the basis of the existing open pits.

[ David Wilson ] for [ First Sentier ]. Just back to Northparkes. So there's already quite a large resource at E26 South. I don't know how many tonnes, but the grade was at 0.5%. So you're drilling off to the side of that. Are you just chasing more grade? Or is there more size that you need to convert that area into reserves?

So I think there are 2 opportunities there. One is we -- the thing that stands out to me the most, and I'll just -- let's put the new assays put the new assays on. So that's the drilling so far. If we really come into it, the thing that excites me the most is the proximity to E26 and the existing infrastructure. Now we don't have a resource on this. This is a long way off that. We've got a lot more drilling to do. I'd say it's another 12 months away from being a resource in terms of what we understand. So what we're going to be doing is we're starting to track it up plunge, so up towards surface.

And there's a lot of space up in here. When I switch -- when we look at the existing drilling, there's a lot of space to keep one of these. So I think the opportunity is we've got grade, copper dominant down here. Where it fits in terms of the sequence, et cetera, we don't know that yet. But the real opportunity here in addition to being adjacent to existing infrastructure because that's really important. We've got the extraction level here already established.

There's crushers, there's access to the material handling system, all of that. So that's one really important aspect. I also spoke about as we move out of the -- do I have it here? Yes. Out of this, you recall, I was talking about the stock -- so as most of the drilling at the moment, you can see sort of is in the stock over the contact here. So what we're seeing is 200-meter runs of 0.35 with shorter intervals within that of 0.5. So that's -- it's got to be 0.5 to make a difference. The way we're going to look at that is to bring it up out of the stock because as I said, we know that when you transition out into the volcanics, that's where you get -- typically get the best grade. So we're following it up, and then there'll be a surface program in here to determine whether or not we have something meaningful.

David Radclyffe again from GMR. If we could go back to Ernest Henry -- so that deep hole is obviously really, really interesting. So could you maybe talk about how it is in the context of what you had expected as you were drilling down? So is it typical what you've seen in the deposit as you move down plunge? So you said it was in the right position, but is the tenor of the grade about what you expected? And then what actually happens if you are successful with that program of the holes you put up? Does this promote potentially rethink of what you were working on in terms of the infrastructure? Or is this why this program is happening because you identified it as a potential upside risk?

All very good questions. And some of them we don't really have the answers to at the moment because we still -- we just don't have the level of information. But in terms of where we're taking it. So to come back to the first part of your question, is it what we expected to get? Look, I was a little bit nervous that this thing may have disaggregated into a series of lenses, but in fact, it's just held together. So it's the main ore body that we've intersected in this hole. And I'll get that off, take that around. It is exactly where it should be, right?

In terms of -- you can just see how it lines up beautifully. That's dipping down that way. It goes right through. So we know -- and that's about the thickness of the main ore body, plus or minus 10, 15 meters, it's pretty close. So in terms of where to next, so if we just take a look at the west, so Nancy was talking about the study that she's doing below the 750 RL, which is the bottom of the reserve here. So that was down a couple of hundred meters through there. What I'm giving to Nancy is, well, we have a look at another 200 meters down because we're essentially -- so that's at the 750. We're down at the, call it, the 220 here. It's another 500 meters of potential mineralization that can be factored into the study that we're doing. Obviously, we need to drill it, but that's the direction which we're taking.

Yes. So Dave, what Glen's objective this year is to finish that drill program to see if there's enough mineralization below that study area that Nancy has got to hand that over to Nancy to say, well, okay, how deep does this go? What does it do to the infrastructure? What do we do with the mine longer term? And that's what we're targeting by the end of this year. Glen, as much as everyone wants to keep going through all your -- you have to move on to finance, tell us what she's doing with all this money that everyone else is making for it.

Well, today marks my first year anniversary with Evolution. And over the past year, I have been continually impressed by the commitment of our people, the quality of our assets and the opportunities within our portfolio. It is a privilege to be part of Evolution, and I'm excited about the value we can create for all stakeholders going forward. Across more than 20 years in the resource sector, including almost 17 years with BHP, across multiple commodities, geographies and market conditions, I have seen that long-term value is consistently created through a combination of quality, high-quality assets, strong margins, disciplined capital allocation and financial resilience. These attributes are highly relevant to Evolution today.

Our portfolio of high-quality assets provide us with the foundation for a high-margin business. We then remain focused on operating discipline and continuous improvement, converting favorable metal prices into significant cash flows. Now the real value doesn't come from just generating cash, but from consistently directing that capital to the highest returning opportunities across the portfolio while retaining balance sheet flexibility and delivering cash returns to our shareholders. The life of mine planning process that Nancy has discussed with us today gives us confidence both in the quality of our operations and future projects.

It provides a framework to our disciplined capital allocation and long-term value creation. So what our long-term plans demonstrate is that our high-margin operations will generate the cash flows and resilience needed through the cycle. Our balance sheet provides the flexibility to execute our strategy through the cycle. Our disciplined capital allocation prioritizes the highest returning growth opportunities, and we're continuing investing in the longevity and uplifting the quality of our portfolio while also rewarding our shareholders with fully franked dividends, supported by our increase in dividend policy, targeting 60% of annual group cash flow. Sorry, I was on the wrong slide. I can see it down there.

Okay. So the quality of our portfolio is demonstrated by the financial outcomes on this slide. While we have benefited from strong gold and copper prices, our focus remains on converting favorable market conditions into record EBITDA margins and record free cash flows. In FY '26, we delivered a record EBITDA margin of 57% and generated approximately $1,958 per ounce in group cash flows at an average realized gold price of around $6,000 per ounce. Looking ahead, at a gold price of $6,200 and based on the midpoint of FY '27 guidance, as shown on this slide, we estimate operating mine cash flows of approximately $3.6 billion.

Our focus then turns to the disciplined deployment of that cash to the highest returning opportunities across the portfolio. In FY '27, we are expected to invest approximately $1.3 billion to $1.4 billion in sustaining capital, major growth projects and growth initiatives, while increasing exploration investments by approximately 65%, as shared by Glen, as we continue to unlock the value across the business.

Now Mungari is an excellent example of this in action. The mill expansion was delivered around 9 months ahead of schedule, 15% below budget and successful commissioning and ramp-up in FY '26. The resulting uplift in margin is shown on this slide. And cash generation highlights that value is created through disciplined investment and strong project execution. As Lawrie noted earlier, we prioritize maintaining a sector-leading all-in sustaining cost through productivity, operational excellence and cost discipline.

Now Red Lake is a great example for this on the left of the slide and demonstrates this well. Despite operating in a high tariff Canadian environment, the team held the all-in sustaining cost broadly flat while increasing the EBITDA margins to 62% and delivered record net mine cash flows of $286 million in the year. As a result of banking the upside, we enter FY '27 with a significant financial flexibility, holding approximately $1.4 billion of cash and undrawn $525 million revolving credit facility and in a net cash position. We have a fully unhedged gold and copper portfolio, allowing our shareholders full exposure to strong metal prices and the substantial cash generation of the business.

As we have said before, we do not intend to hold excess cash on the balance sheet. If favorable metal prices persist, then capital will be allocated in line with our approach to reward our shareholders with higher returns. Our low-cost debt structure is aligned with our long-term plans with no debt maturities until November '28. This provides certainty and flexibility, allowing us to remain focused on operating and enhancing our portfolio rather than near-term refinancing requirements.

Our investment-grade credit rating and our strong relationships with a diverse group of global lenders provides us access to attractive long-term capital and further financial flexibility. We are comfortable to operate with a gearing of approximately 10% to 15% through the cycle. This reflects our philosophy that the balance sheet should enable long-term shareholder value creation, not constrain it. We have also demonstrated the ability to temporarily move outside the range while compelling value-accretive opportunities arise. For example, in FY '23, net gearing peaked to 33% through strong operational performance, higher metal prices, disciplined capital allocation and robust cash generation, we returned to a net cash position in FY '26 ahead of plan.

Our focus remains unchanged, operating high-quality operations safely and reliably, generating high cash margins and allocating capital in a disciplined manner to maximize long-term shareholder value. As demonstrated on this slide, we do this via accretive deals, organic growth and shareholder returns via fully franked dividends. Importantly, our cash flow and our balance sheet provides capacity to fund organic growth without having to sacrifice rewarding our shareholders with fully franked dividends.

A key differentiator for Evolution is our disciplined use of equity. Historically, equity has been raised only to support value-accretive acquisitions, not to repair the balance sheet, refinance debt or address operational challenges. This track record is reflected on this slide, with shareholders who have participated in acquisition-related equity raising benefited from strong long-term returns. As Lawrie called out earlier today, our success demonstrates the value is not created through acquisitions alone, but through the integration, optimization and growth delivered thereafter.

As Glen and Nancy have outlined, Evolution has multiple growth opportunities supported by intensive technical work, scenario analysis and financial modeling through our annual life of mine planning process. This planning process is one of the most important disciplines and underpins capital allocation across the business. It takes a long-term portfolio view, assessing opportunities across different metal prices, operational scenarios and development pathways to ensure that capital is directed to the highest risk-adjusted returns. It helps preserve future options by continuing to invest in studies, exploration, drilling, permitting and technical work.

The process also identifies operational constraints and bottleneck, helping us target investments that can increase productivity, extend mine life and enhance returns. And I particularly like this slide because it demonstrates the value created through our disciplined planning and capital allocation approach. While internal rate of return is only one of the several factors considered in an investment decision, it does provide a useful illustration. At current gold and copper prices, expected project returns are materially above the original Board-approved assumptions, highlighting both the quality of our portfolio and the significant value upside available to our shareholders.

We continue to reward our shareholders. We are a consistent dividend payer. Our record FY '26 final fully franked dividend of $0.21 per share marks our 27th consecutive dividend and reflects both the cash generation of our portfolio and our commitment to sharing the benefits with our shareholders. In August '26, the decision to increase our target dividend payout ratio to 60% reflects the confidence in our operation, the cash flow generation expectations and the flexibility of our balance sheet. This decision was not made based on current metal prices or our current financial position.

Rather, it represents a structural increase in shareholder participation in our cash flow generation. We continually test our portfolio and our balance sheet across a wide range of operational scenarios, development pathways and metal price assumptions. This includes funding all current approved projects, advancing future opportunities as shared by Glen and Nancy and maintain appropriate balance sheet investment grade through the cycle. As the graph on the left shows, we have delivered significant value for our shareholders, with total shareholder return of 258% in the last 3 years.

Now this equates to 53% annualized total shareholder returns. So as I reflect on my first year at Evolution, what stands out most is the caliber and energy of our people, the quality of the portfolio and the way we operate the business. Throughout today's presentation, we have highlighted a portfolio of high-quality option-rich operations that generate strong margins and robust cash flow with significant leverage to both gold and copper. We have also demonstrated that our financial strength is not an outcome of the current metal price environment. It reflects 15 years of disciplined operational execution, balance sheet management and thoughtful capital allocation.

Looking ahead, we are in exceptionally well positioned. Our high-margin operations provide the cash flow and resilience to invest through the cycles. Our balance sheet gives us the flexibility to execute through the cycle, and our capital allocation ensures we continue to direct the capital to the opportunities for the greatest long-term shareholder value. Thank you. I will now hand you over to Lawrie for final remarks.

Fran left the stage too quick. I'm sure there's some questions for Fran. So we will open it up for questions before closing remarks. I do reiterate, we do have a hard close because if we miss our flight slot this afternoon, we'll be spending the night here in Sydney. I'd prefer you to be out at the cold of [ Parkes ] tonight.

Any questions for Fran? Well done, Fran. Here we go. Matt, come on...

It's a bit cheeky and facetious, but obviously, balance sheet is in a really strong position, net cash, business is generating strong operating cash flow, so you can fund CapEx, you can fund more than the CapEx that you've outlined. Why not pay out 100% of group cash flow? I mean it's post CapEx. So if you wanted to increase your CapEx budget, you could. Yes, what are the considerations that drive that? And could that change going forward?

Yes, sure. So I guess the 60% was done over the life of mine plans as we sort of done various growth programs and its structural change. As I mentioned before, if the metal prices continue to persist, then we will absolutely be back looking at all forms of allocating out that cash to our shareholders.

Yes. I mean, Matt, we do have projects to invest in, and we've got the debt coming up in a few years. So our position is -- and it's fair that over the last 12 months, the most feedback we've had from shareholders is what we should do with the money. What we -- that extra 40%, what do you need with that? And it's a good problem to have. And as Fran said, we're not going to build up this large amount of cash. I think going from 50% to 60%, paying out 1/3 of all of our dividends over the last 13 years in 1 year is not a bad way to look at it. And as our franking credit balance has lifted nicely in the last 18 months, that's another avenue for us to look at.

Just while we -- Daniel Morgan, Barrenjoey. That debt piece that you've got, are there rights to potentially buy back that debt? I mean, noting that interest rates are very much on the rise, that 4.47% is quite low. So I imagine that if you were to repay it, it might be profitable.

Yes. So we have looked at it as part of our decisions going to the Board. And we won't stand and just look to gearing for the sake of gearing. We'll do it to make sure it maximizes shareholder value. You can pay it back with a make provision. But given it's at a fixed average of 4.47%, it made sense to hold that on the balance sheet. It's long term and matches our life of mine cash flows.

Do you want to just touch on that you can pay out the cheaper ones?

Yes, earlier in the years, you can look to them and balance them with the longer-term ones, which have a higher interest rate attached to them, absolutely. But as I said, we did look at that, and it made sense to keep the debt on the balance sheet. We'll continue to reassess every reporting period when we go to the Board with our recommendations.

Yes. Our cheapest one is the first one, Dan. So you could pay those without any sort of penalty. The ones that are longer dated are higher interest and they're the ones that have the make-whole. So right now, our view is that we'll let them sit where they are. All right. Thank you for your time this afternoon. Really do appreciate you coming along and showing an interest in Evolution and where we're trying to go and to enable us to give a bit of an insight as to the company, the strategy, where we're heading over the next sort of 3 to 5 years and then go a little bit deeper into Cowal, Ernest Henry and Northparkes, which have got most of the exploration upside right now and have also got the projects that are underway at those assets.

I'll leave you with the key messages from the start of the day. I think what we've shown over the last 11 years is that we've acquired well, we've sold assets at the right time. And what we've done with the assets once we've acquired them has really generated a significant value for our shareholders. In the last 5 years, with the portfolio we've got, we've demonstrated growth in production, but also growth in margin by keeping our costs focus and discipline in place and by having an approach whereby it is margin over ounces in the way that we manage the portfolio.

I do think that copper in Ernest Henry and Northparkes provide a differentiator for us in the industry and provides a differentiation for us in an industry where short-term supply is not matching the increase in demand in the short term and the ability to bring long-term production into the mix for what is needed in terms of a 50% uplift in demand for copper over the next 15 years and us having ore bodies at Ernest Henry and Northparkes with ready available ore sources to bring into production is certainly going to be a differentiation for us. We do look forward to those who are traveling out to Northparkes and Cowal over the next 2 days for you to firsthand see each of those operations.

But thank you on behalf of all of us at Evolution for your ongoing interest and support of us and for making the time today. Thank you.

Thank you for standing by, and welcome to the Evolution Mining Limited Full Year 2026 Financial Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Darcy, and good morning, everyone. I'm joined on the call today by Frances Summerhayes, our CFO; and Peter Rocky O'Connor, our GM, Investor Relations. Today, we released our FY '26 full year financial results on the ASX, including a presentation, which will be the reference point for the call. Fran is excited to go through the financial results. In our first year at Evolution, so many new financial records have been set and she is delivering a bumper record dividend. We also announced changes to our Board Tommy McKeith, who has been a director since 2014 will be retiring at our Annual General Meeting, and John Vann will be joining the Board on 1 December.

Tommy has been an invaluable contributor to the Board, Evolution and me personally. His knowledge and enthusiasm for the industry and almost every ore body is amazing. As Jake commented in the release, it is fitting to acknowledge and recognize the lasting impact he has had on our business, culture and success. Tommy will leave an enduring legacy, and we are extremely fortunate to benefit from his counsel, vision, wisdom and friendship throughout his tenure. John is a geoscientist with more than 3 decades of experience across global mining businesses. I'm sure he will be a valuable addition to our Board and look forward to working with John when he joins us in December.

Turning to the results and starting on Slide 3. Our record results reflect the quality of our portfolio and above all the dedication and efforts of the entire Evolution team. We are generating high returns and delivering on our commitment to shareholders. The record financial performance is on the back of safe, consistent and reliable operational delivery complemented by our disciplined approach to cost and capital management. As mentioned on the quarterly call last month, we delivered FY '26 safely with our total recordable injury frequency of 5.9 remaining low. Today, we also released our inaugural climate report under the new reporting standard, highlighting the positive work being undertaken throughout our business to leave a lasting sustainable legacy.

Our high-margin business is generating significant cash flow with a record cash flow of nearly $1.4 billion. The updated dividend policy with payout rate of targeting 60% of annual group cash flow is sector leading. This means a record final dividend of $0.21 per share. For context, the total FY '26 dividend of $833 million is more than our market cap was in early 2015 when we made our first major acquisition. The multiple projects at Northparkes, Ernest Henry and Cowal will generate high returns and further improve the quality of the portfolio when completed. We are set to continue our safe, reliable performance in FY '27 with guidance expected to sustain our high margin, high cash generation position. I will cover the guidance details later in the call.

Moving to Slide 4. This slide demonstrates our disciplined allocation of capital to drive sustained high returns. Our balance sheet supports our strategy through the cycle, be that for value-accretive acquisitions high returning organic growth investment or dividends. We adapt our allocation depending on market situations in the different stages of our mine plans. It is always done with a view to maximize our shareholder returns. While we've been mainly focused on advancing our organic growth pipeline in the past couple of years, we have not ignored accretive deals for our shareholders.

Over the past year, the allocation of funds between organic growth opportunities and dividends is almost a 50-50 split at around $830 million to $850 million for each of them. We have also done accretive deals. At approximately $250 million, this is smaller in scale than normal, yet they are just as important to the portfolio. It clearly shows that we have the capacity and flexibility to allocate into all 3 areas to sustain the high returns for shareholders, which Fran will demonstrate.

With that, I'll hand over to Fran.

Thank you, Lawrie, and good morning, everyone. It is my pleasure and privilege in my first year with Evolution to present our most successful financial results. These financial results reflect the quality of our portfolio, the consistency and resilience of our performance and the benefits of our high-margin operations. Importantly, we have banked the benefits of the higher metal prices, and we have shared this success with our shareholders. We are very proud of what our Evolution team has achieved. We delivered a record underlying EBITDA of $3.2 billion, up 44% from last financial year with an annual record underlying EBITDA margin of 57%. Our costs are sector leading with our all-in sustaining costs of $1,717 an ounce, resulting in an underlying net profit after tax of $1.6 billion, up 63%. This translates into a record group cash flow of $1.4 billion, up 76% from prior year. With earnings per share reaching a record $0.73 per share, up 57% on prior year.

These financial results demonstrate that we continue to deliver on our commitments to our shareholders, returning a record fully franked final dividend of $0.21 per share, up 62% and making a total dividend for FY '26 of $0.41 per share more than doubled from prior year and is 60% of our FY '26 group cash flow. Whilst we have degeared the balance sheet and achieved a net cash position, demonstrating that we can simultaneously invest in the business to enhance the portfolio while increasing our shareholder returns.

Highlighted on Slide 6. This year, we have achieved a record net mine cash flow of $2.1 billion, more than double from prior year. We invested $1.1 billion of capital into our operations with high returning growth projects that are all on schedule and budget. Across the portfolio, we have had annual record net mine cash flow at Cowal, Northparkes, Red Lake and Mungari. We continue to deliver consistently high EBITDA margins across the portfolio as demonstrated on the right side of this slide, with group EBITDA margin increasing 12% to 57%. Two standout year-on-year performance with Red Lake and Mungari.

Red Lake delivered an underlying EBITDA margin of 62% and reflecting consistent and reliable operational execution and cost control in a tough environment. This converts into almost 4x net mine cash flows than prior year. The operation has demonstrated its ability to sustainably generate returns and has earned the right to compete for capital within our portfolio. Mungari was another year-on-year standout, achieving an EBITDA margin of 65%, following the successful commissioning and ramp-up of the expanded 4.2 million tonnes per annum processing plant. The project was delivered 15% below budget and 9 months ahead of schedule.

Importantly, this directly converted into a net mine cash flow of $366 million, more than 3x from prior year. These operations highlight the value created through disciplined capital allocation, focused project execution and consistent operational delivery across the portfolio. We enter financial year 2027 with a fully unhedged gold and copper portfolio.

Moving to Slide 7. These all-time financial records for Evolution translate directly into record shareholder returns as we continue to deliver on our commitment in rewarding our shareholders. At year-end, the group held almost $1.4 billion of cash with an undrawn revolving credit facility of $525 million, providing us sufficient liquidity. During the year, we have repaid all our bank term debt, and we now only have our low-cost and long tenure U.S. private placement with an average fixed rate of 4.47%. The with the first tranche not due to be repaid until November '28.

During the year, we have maintained our investment-grade credit rating, reinforcing the quality of our portfolio, balance sheet, and long-term outlook. Following these record financial results, we are pleased to reward our shareholders with our highest ever dividend. After paying a record fully franked interim dividend of $0.20 per share, the Board has approved a 27th consecutive dividend and a record fully franked final dividend of $0.21 per share. Given our improved financial position and outlook, we have reviewed our dividend policy and increased the payout ratio to a target of 60% of annual group cash flow, a significant increase from the previous 50%. This sector-leading dividend policy is supported by our 17-year reserve life and reflects our confidence in the long-term strength of the business while reinforcing our commitment to rewarding our shareholders.

Since financial year '23, we have delivered on our commitment to deleverage the balance sheet, reducing gearing from 33% net debt to a net cash position in just 3 years, while continuing to invest in the business and deliver shareholder returns. Our capital management plan is designed to maximize long-term shareholder value while maintaining disciplined investment to continually enhance the quality of the portfolio and balance sheet.

As Slide 8 shows our record financial performance is underpinned by consistent and disciplined capital allocation. We continue to enhance the quality, resilience and longevity of our portfolio through investment in high-return growth opportunities while improving overall portfolio returns. The Board approved projects shown on this slide at half year results demonstrate this approach in action. Now while this is one financial metric we look at, based on the current gold and copper prices, the expected internal rates of return for these projects are materially higher than the original base case assumptions, providing additional value and upside for our shareholders in current market conditions.

As we enter financial year 2027, Evolution is in a position of considerable financial flexibility. We are operating in a supportive gold and copper price environment and focused on banking the upside. We have a high-quality and high-margin portfolio of assets a pipeline of fully self-funded, high-return growth opportunities and the financial capacity to execute on our strategy and continue to reward our shareholders.

I will now hand you back to Lawrie. Thank you.

Thank you, Fran. Slide 9 summarizes our FY '27 guidance. Charts on the right-hand side highlights our cash flow potential outcome at the midpoint of guidance at current prices and our sensitivities. Overall, our FY '27 plan will enable us to generate significant cash flows. At current prices, our operating mine cash flow would be around $3.6 billion, which is $200 million higher than FY '26, even allowing for cost escalation in FY '27. If the metal prices were around consensus levels, the cash flow would be approximately $3.4 billion at a range of $3.4 billion to $3.6 billion and allowing for our planned capital investment and other costs such as tax, exploration and overheads, our group cash flow will allow us to sustain meaningful dividends for shareholders. We know the main drivers to our cash flow, as shown on the sensitivities chart and we manage each of these in line with our cost and capital discipline.

In terms of the guidance details, our group production is guided at 660,000 to 730,000 ounces of gold and 63,000 to 70,000 tonnes of copper. Outside of Mt Rawdon finishing production this quarter, there is no material change in production capacity across the other operations. Production is weighted to the second half of the year as we complete the access to the second decline at the Cowal underground mine and access new mining areas in Red Lake. The normal semiannual major shutdowns will take place at Cowal and Ernest Henry in the September and March quarters.

For the September quarter, we are expected to produce in the range of 160,000 to 166,000 ounces and copper in the range of 16,000 to 17,000 tonnes. Our group all-in sustaining cost is guided at $1,795 to $1,995 per ounce, which will remain one of the lowest in the sector. This is based on a copper price of USD 5.72 per pound compared to the spot price that is approximately 15% higher.

As outlined last month, the main drivers to the change in the all-in sustaining cost is the impact of cost escalation assumed at 4% to 5% or $150 or $160 per ounce as well as the decision to invest an additional $50 million to $60 million in sustaining capital on fleet and infrastructure to ensure long-term operational reliability. Our group capital guidance aligns to our FY '27 outlook outlined in our June quarterly report. The main areas of investment for major projects and mine development are on the approved growth projects, namely E22, Coarse Particle Flotation and the expansion study at Northparkes, the open pit continuation project at Cowal the development of Bert at Ernest Henry. All these projects remain within the original approved budget.

In summary, on Slide 10, we have a high-margin business and a 17-year reserve life. We are very much focused on delivering sustained returns. The combined effort throughout our business over the past couple of years to deliver safe and reliable performance is set to continue in FY '27. We remain committed to margin over ounces, while at the same time making sure we capture the benefits of the high metal prices. All our growth projects remain on schedule and budget.

The balance sheet flexibility enables us to continue executing our strategy with confidence. Out of all of this, we make sure our shareholders benefit and our improved dividend policy targeting a 60% payout rate demonstrates that. For FY '26, the dividend is equal to 20% of our achieved gold price, which is an outstanding return for our shareholders. Darcy, please open the line for questions.

[Operator Instructions] Your first question comes from Kate McCutcheon with Bank of America.

Congrats on the results. Can we just revisit the CapEx again for '27, which you gave us last month. We previously have the $0.9 billion to $1.1 billion to FY '30. So say circa $5.6 billion, '27 to '30. Can you remind me what's in and out in terms of upcoming projects like Northparkes mill expansion, for example, and then I guess I'm trying to work out, do we still think about that same envelope spend for FY '30. And if it's just this year that's lumpier. Like how has that envelope changed? .

Yes. Thanks, Kate. Look, so the CapEx outlook of the $900 million to $1.1 billion FY '30. The projects that are in there, the OPC at Cowal, the E22 and Bert mine development, the Coarse Particle Flotation and obviously, our sustaining capital. So they are all of those projects. The outcome of the study at Northparkes will determine what we invest in terms of if we expand the capacity there. So the only changes to that previous outlook is the additional sustaining capital that we've outlined today and last month of $50 million to $60 million a year.

And we did say that we expect that to be at least for the next 3 years that we'll be investing at that higher rate. And this year, the $70 million to $90 million on studies and works that we're going to undertake for future growth options. So if you look at it, there's nothing in terms of capital inflation that we're building into that. There are no new major projects that we're bringing into that outlook and the existing ones that are in execution are all on schedule and on original budget. Does that clarify it for you? .

So the envelope is still essentially the same for the sustaining CapEx.

Correct.

Yes. Okay. And then we had the Carnaby deal that you announced for another 10,000 tonnes of copper a year. And I know you haven't got the keys to the asset yet, but when do you think you could have first ore to the Ernest Henry mill. And then secondly, there was the third-party tolling agreement with Glencore that you announced there kind of separately. What is the thinking there? Or how should we think about that part? .

So for the Carnaby deal, we expect that to close in November, subject to the Carnaby shareholder vote. We then have said it will be about a 12, 18 months to really close out that feasibility study. And then beyond that, you'd be looking at about another 12 to 18 months. So you are potentially looking up to about 3 years from October, November. In terms of the third-party deal, so that is linked to a project that Glencore has an offtake agreement on the Mt Margaret one. And so if that -- if that project starts, that ore would come through into the plant, given that we've got that capacity. And when we look at the Carnaby deal and that offtake agreement, we certainly have the capacity to do those as well as anything that may come out of the Corella exploration program that we're currently running.

Okay. And the Mt Margaret pit being the one that Xstrata previously mined the satellite? .

Yes.

Okay. Got it. And then just quickly, the noncash component that you've assumed in the Cowal all-in sustaining costs, please? .

Give me 30 seconds. Cowal in the noncash component is about $50 to $70 an ounce this year add to cost.

Your next question comes from Levi Spry, UBS.

Maybe a question for Fran, I guess, just following on from the capital questions, if I think about what's potentially coming next at Northparkes and maybe some of that Carnaby stuff and maybe some more Cowal. Can you walk us through the process to arrive at the 60%? What drives the upper band and maybe you can talk to potentially what other forms of returns may or may not have come into consideration? .

Yes, Levi, I'll get Fran to talk about the capital allocation and dividends, all I'm working on the basis is that since Frans arrived, we're paying a lot more out to shareholders. So she's got to build on that this year. And in the capital as I just said to Kate, all of the projects are in execution and studies are in our outlook. The next major ones really will be the outcome of the study at Northparkes this year. And then at Cowal, it will be the outcomes of the exploration and drilling that we've got going on at E41 and the underground potential for a second underground. They would be the next main pieces of capital.

In terms of Carnaby and the Great Duchess project, we believe there's a lot more work to firm up that feasibility study. And so once we take ownership in November, we're going to turn our attention to completing that study. And that's when we'll have the best indication to give you an outlook on what that capital would be. Fran, do you just want to talk on the 60%?

Yes, sure. Thanks, Levi. So our capital management plan is consistent and focused obviously on maximizing long-term -- and what I mean by that is based on our life of mine plans, the quality of our assets, we look at the most economic way to bring our reserves and resources to market. So we're focused on balance and be disciplined investing in our high-returning growth options and opportunities within the portfolio, but also balancing rewarding our shareholders via capital returns. So given our financial position, the confidence in the outlook and portfolio, the highest return outcomes for our shareholders is increasing our target dividend payout to 60% of annual group cash flow. So we'll be balanced in regards to investing in our business, maximize value and also maintain finance flexibility to confidently execute on our strategy.

But as we've said before, we don't see value, and we don't intend to accumulate excess cash on the balance sheet. So if the gold or copper prices remain supportive and continue to increase, resulting in, say, cash generation before our -- higher than our business requirements, obviously a good problem to have. We will continue to evaluate the full range of capital management options to reward our shareholders like we have done today.

Your next question comes from Matthew Frydman with MST Financial.

A couple more following up from similar themes. Maybe firstly on Carnaby. Can you comment at all on the structure of the consideration? Obviously, all scrip offer, you've got $1.35 billion in cash and pretty low cost debt, as Fran outlined. I know it's a very, very small amount of dilution, but wouldn't it be better for your existing shareholders to put some of that cash and balance sheet to work rather than issuing more equity. I guess, just wondering how you think about the structure there. And also how that relates to any other sort of bolt-on opportunities in general across your portfolio, whether you see any other opportunities for that sort of M&A? .

Yes, Matt. Look, I think when we look at it, we've got to also consider what was the Carnaby's Board and team's preference in terms of the transaction as well in that by us offering them scrip they can continue to participate in the upside on the project through taking shares in Evolution. I think the other thing -- and we do try to limit issuing the stock. And this is 1%. I think when you look at it, that is the best use of our scrip at the moment in this transaction. And then as we look at other things going forward, if you look at all of our other acquisitions, we've always used a mix of cash, debt and equity. And we will always do that depending on the size and the scale of it.

And maybe any other opportunities across your portfolio for similar sort of bolt-on acquisitions. Obviously, Ernest Henry has the benefit of latent mill capacity. But yes, how do you see that across your portfolio?

I think if we look across the portfolio, Cowal, we're able to keep that plant filled similarly at Red Lake, Ernest Henry, we've got the land at Corella as well as now looking at Carnaby, Northparkes, I think we've got enough ore bodies there to fill that plant, be it at current state or expand state and Mungari is probably one that's got capacity, but there's not a lot of options right now for us to bring something in that will improved the quality at Mungari.

That's helpful. And then maybe just following up on the sort of capital management plan questions. Obviously, the company has a pretty enviable track record on dividends, and you've increased that further today with an update to the policy. So I do feel a bit like I'm complaining that maybe the view is a bit too cold. But with the cash on the balance sheet, I guess, what made the Board reluctant to consider, I suppose, a broader range there or perhaps a special dividend or something to really sort of accelerate those shareholder returns in the current environment, current metal prices, current outlook?

Yes, Matt, I said over the last 6 months, no matter what capital management plan that Fran and the Board end up with. We're not going to please every shareholder. If we try to please everyone, we're probably going to please no one. I think when you look at $1.4 billion of group cash flow, we're paying out over $830 million of that back to our shareholders. I think that's an incredible rate of return. And then we could have easily gone higher than that, but I think that's a good step from a 50% to 60%. We've always said, and as Fran said just earlier, yes, we're not going to build a lot of cash and we can't control. If the metal prices stay where they are, as I outlined with our guidance, we will make significant cash flows this year. .

And if the prices are higher, therefore, the dividend cents per share will be higher for our shareholders. And then in the next 12 months, if they do stay there, Fran has got another good problem of set a new record for dividends and work out how much more to give back. And is that given back through specials, is it given back through buybacks or a higher payout rate? Sorry, we didn't please you.

No. That's a very pleasing outcome. Thanks, Lawrie.

Your next question comes from Daniel Morgan with Barrenjoey.

First question just on Ernest Henry. Obviously, cycling down in production of that and spend stepping up. Is this just for FY '27 or is this sort of the multiyear impact of developing down to get the life extension infrastructure? And just sort of trying to understand the production and spend outlook a bit more at Ernest Henry.

Yes, Dan, it's actually a combination. So as we know from the weather event when we were out of production through the March quarter and where the water ended up was down at the development level. So we've got to catch that up. We've got to put additional ventilation refrigeration. And then we do have the trucking back up to the existing materials handling system. So some of that, as we said, as we get to the second half of the year and we get the ventilation and everything in place and we can therefore lift the productivity. You'll see some of that come back through. And the other thing to note is that in FY '26 and '27 is we're going through some areas in the cave where there is no -- there's waste in with the mineralized ore. We've got to take that with us. So that is obviously displacing ore. Once we get through that zone, you then start to see it come back. So it is a combination of both of those.

You'd likely see what we've got this year, we get ventilation back next year. We go a little bit deeper. So production '27 and '28 would be pretty similar, and then you start to get into it where you get Bert, you get back into more ore out of the cave. And hopefully, not long after you get Carnaby coming through. I should be calling it Great Duchess.

And I know it is a small deal, but you've just done a deal on -- with Arizona Gold & Silver. Just trying to -- if you could maybe outline what you're trying to achieve through this investment, both the investment itself and how you've structured it .

Yes. So look, that's a new opportunity that Glen and the team identified. And so the area that where we've picked up with Arizona Gold & Silver, is highly prospective, but historically, it's only been considered for shallow drilling to do leaching operations. But this deposit, as we've seen some deeper drilling is certainly showing some really good grades and grades over an extended area. So that's the reason why we've sort of got interested and invested in this, and it is allowing then Arizona Gold & Silver in their drilling program. So we've farmed into it via just under 10% of the company with some warrants to acquire more of the company. And then certainly, as the program progresses. If it proves up, we've then got the option if we want to make a decision to take out that project or take out a further percentage of it.

[Operator Instructions] Your next question comes from James Redfern with RBC.

Most of my questions have been asked already, but maybe just maybe a question on the AISC guidance, please for FY '27. You mentioned it's based on a copper price of USD 5.72 a pound with spots around $6.60 which would indicate that maybe the AISC is flat year-on-year. Just wondering if you have any sort of sensitivities around AISC in relation to copper prices? And also, what are you seeing in terms of costs inflation in the industry outside of diesel costs? .

Yes. Sure. James, I'll hand to Fran in terms of the cost sensitivities outside of labor and diesel. But if you do look at Slide 14 in our presentation deck that we've released today is the AISC sensitivities. And so the copper price of around AUD 1,000 a tonne, therefore, about $0.30 a pound is worth $90 to $95 per ounce and every 1,000 tonnes of copper is worth about $25 to $30 an ounce. So in short, yes, if you saw the current price -- copper price sustained for the whole year, you're potentially looking at about $190 to $210 an ounce benefit, which would sort of bring you back in towards what we achieved in FY '26 and hence why -- and I do think when you look at the disruption in the copper market at the moment, we're a little bit more optimistic on the copper price and what it could do for our cash flows and AISC. Fran, do you want to touch on the cost drivers?

Yes, sure. Thanks, James. So in terms of cost drivers, obviously, our biggest cost driver being labor at 50%. We are seeing that increase around the 4.5%. And particularly pressure in Western Australia in terms of retention and absenteeism. So we're doing what we can there around employee engagement. Our next biggest part is a cost driver would be maintenance parts. And we're seeing that there's -- between about 3% and 10%, but we're focusing on our maintenance strategies and what we can do in regards to the cost pressures in maintenance.

Our next cost base would be electricity at about 9%, but we're pretty much locked in there for long-term contracts and big one focusing on lower costs and lower emissions to supply electricity there. And as you mentioned, diesel, but just remind you that diesel is low for us in terms of only 2% to 3% of our cost base, and that's mainly at Mungari and Cowal. Yes. But other than that, it fits within the envelope that Lawrie quoted to the 4% to 5% and reflected in our guidance.

Your next question comes from David Radclyffe with Global Mining Research.

I thought I'd ask you a similar question to everyone else about really, I guess, the link between capital and the production outlook. Maybe using Red Lake as an example, where we've got lower production going forward, and we've got more capital. So what is the way forward here for say Red Lake. If we take this is one that we don't get as much attention, and it does feel like a little bit, but we're still sort of stuck in the past. Is there any sort of optionality being opened up here from the extra development spend this year? I know you've talked about the tailings upside that maybe just seems still incremental, given that it's still very large, very high-grade resource. And maybe if there isn't sort of a way forward in this one, is it still core to the portfolio?

Yes. Look, Dave, I think there's a couple of things when you look at Red Lake. So firstly, when we talked about the sustaining capital and infrastructure, this is one asset that we have allocated more sustaining capital to in terms of fleet and fixed plant. We needed to do that. And also, we have increased the sustaining mine development at the operation to make sure that we can keep the production levels at that 30,000 to 40,000 ounces per quarter over the longer term. So it is seeing that lift. But I think if you first look at their all-in sustaining year-on-year, the inflation is that biggest driver that would add about $140 to $150 an ounce and then that additional bit of sustaining capital is what's getting you to the guidance range for this year.

So what we are doing is making sure we can make it more efficient and the cost level is able to reduce over time. Does it fit into the portfolio? I mean from our perspective, with the assets we've got and the projects we've got in the other operations over the next few years, having Red Lake and Mungari that are sitting there producing in the order of 320,000 to 350,000 ounces and generating cash back to the business. I think that's a perfect fit for the other 3 that are going through some high-return organic growth investment in the next 3 to 4 years.

Your next question comes from Mitch Ryan with Jefferies.

Just as Mt Rawdon process comes to an end. I think the prior closure estimate was roughly $100 million. Will the pumped hydro proposal be prioritized? What is the latest closure in rehab estimate? And is there any residual value to third-party interest in the mill or existing infrastructure there? .

Yes. Fran will talk you through the closure. I mean, from our perspective, at the metal prices, if they were to sustain or go higher, there's certainly a potential for a cutback, but we think that would be beneficial for someone else possibly. So there's nothing much in the way what we're considering for the operation will move into care and maintenance through this year as the priority right now, Fran?

Yes. So Mitch, in terms of the balance sheet, we always took a conservative approach with Mt Rawdon as if the pumped hydro would not go ahead. So the provision is sitting around $75 million discounted on the balance sheet. And that's a spend profile out to about 2044 with the majority of the capital plan spend is in the first 10 years, and you see that start to kick up in about 2030.

So, a rounding error. Okay.

That's definitely a Jake rounding error Mitch.

And just after the weather event at Ernest Henry, can you provide an update, do you have any expected insurance recoveries there? And what sort of the process is on receiving those if you do.

Yes. Look, so we do have insurance at the operation. And as with the 2023, we did receive insurance proceeds on that. In terms of this incident, same thing does exist in terms of the insurance coverage for some of the mobile fleet that was damaged or destroyed during the event that's covered and we're already getting replacement equipment in. In terms of the cost of recovery and remediation we're working through that now, and that will then go to the insurers. And so through FY '27 is when we'd see the outcomes of that claim. .

Your next question comes from Hugo Nicolaci with Goldman Sachs.

I know you've got site visits coming up, so I'll hold off recycling my question on the upside at Cowal. But maybe looking at Red Lake and building on David's question, just does look like we're sort of reset a little bit further at sort of 30,000 to 35,000 ounces a quarter from closer to 40,000. Are you able to just talk through a bit more detail just sort of some of those moving pieces and based on the potential study outcomes. Could we see that creep back up? Or is the study more focused on maintaining that lower rate from here?

Hugo. So yes, when you look at it this year, next year, it's more towards the 30,000 to 35,000 because of where we are. And as we said in the second half of this year, we accessed some new mine areas at Red Lake. And then when you look beyond the next couple of years, the work around the tails reprocessing and also some areas that we're putting some exploration dollars into about bringing that into is aimed at getting it to the 35,000 to 40,000 ounce per quarter and above that. And that's really what the current life of mine plan is showing and I think when you look at Red Lake, 3 mining areas, it just doesn't have a lot of, I guess, excess capacity or mine areas as some of the other operations have. And so we've got to work a little bit harder to get that back up at the 35,000 to 40,000.

Great. That's helpful. And maybe one for Fran, just on the balance sheet, is a 10% to 15% long-term gearing ratio is still what you're running with here? Or do you now potentially with the CapEx coming up, look to maintain a more conservative balance sheet near term? .

Well, over the long term and with the cycles, yes, we're still carrying the 10% to 15% net debt. But I'll also note, we are prepared to go outside of that for high-value options. So like we did say in '23, we're at 33% net debt. And then, obviously, within the 3 years, we're able to get into a net cash position with the higher metal prices. But yes, Hugo, it's 10% to 15%.

Great. And then just one more. Obviously, a lot of positives and things to look forward to, as you've reiterated today, just maybe the other side of the ledger, is there anything that concerns you in the near-term outlook? Is that underground performance or maybe things like labor availability? And if so, do you see any regions presenting particular issues at the moment? .

No. I think if we look at it, Hugo, we're always alert to what can happen on the downside. But where we sort of sit across the business, we want to continue the consistency that we had over the last couple of years and do that through '27 because if the metal prices stay where they are today. We want to make sure that we get that cash and can reward our shareholders. There's plenty of things that are keeping Matt, Nancy, Fran and the site GMs awake, but it's all part of being in the mining industry.

Your next question comes from Adam Baker with Macquarie.

Just one on the production guidance. I mean you mentioned it's weighted to the second half of the year. Just wondering if you can give us an approximate breakdown? Are we looking at a 48-52 split or what sort of quantum we're looking at there. And noting your opening remarks were indicating 160,000 to 166,000 ounces for gold. So looks like September quarter is going to be your seasonally weakest of the year.

That's correct, Adam. If we get the 160,000 to 166,000, then the other 3 quarters are going to be better than that. It goes to the 2 shutdowns quarters, which are the September and March quarters. And as we said, the second half is as we get access more in the underground at Cowal, a split. I'm not sort of going to get caught into that because there will be ups and downs. Our outlook is over the year. We'll deliver the 660,000 to 730,000 and the copper.

That's good. And just secondly on the balance sheet, in very, very good shape here. You've got undrawn $525 million revolver, no U.S. private placement repayments till FY '29. What further optimizations could we be doing from here over the next 12 months? .

Yes. I think over the next 12 months, it's really just delivering on our commitment that we're making in our FY '27 guidance range is there. Obviously, the $70 million to $90 million call-out from Lawrie in regards to study and growth to see if we can allocate our capital to high-returning investments. And then other than that, as I said, if we bank the upside of higher gold and copper prices, we don't want to carry and don't see value holding large amounts on the balance sheet. So we'll look to reallocate that out to shareholders.

Your next question comes from David Coates with Bell Potter.

This has been covered a little bit, but just back to Slide 4, which sort of lays out the kind of capital allocation as it's turned out for FY '26. Should we kind of -- it sounds like we should sort of see that as a bit of a template going forward sort of shareholder returns is like a top priority and then the balance kind of flexing between organic growth and accretive deals. Does that kind of fit with how you guys think about the capital allocation outlook? .

Dave, I think, as I said earlier on the call, what we've got to be able to demonstrate, and I think we have demonstrated is that we can work in all those 3 areas to get returns for our shareholders, and it does depend on what's happening at the time. And I look at Northparkes as the example, in 2023, we couldn't control the timing of when CMOC decided they wanted to exit. If something comes up in the next 12 months, and it's something that Kiernan and the team says to the Board and I that this is something we should bring in the portfolio. We'll go into that area. If there isn't, then we'll continue to invest in the organic growth.

But I'll go back to the earlier thing that we're investing in that $1.1 billion right now. Yes, we're allocating a couple of hundred million dollars more if metal prices stay where they are for last year, shareholders are still going to be getting somewhere around the $800 million to $850 million back. That's -- what we're trying to say is that we work in all 3 areas. It depends on what's happening at the time, but we don't just focus on one of them. And our balance sheet, we're very comfortable and confident that it will meet the requirements of all 3.

It's in a very flexible position at the moment. No doubt about that. And then secondly, sort of more micro kind of question, Red Lake, really strong improvement year-on-year. Obviously, gold prices helped out. What are the operational changes. What's that have enabled that improvement? .

Look, there's a number. We did have a KPI I'm not getting many questions on Red Lake. But I think this year's guidance is going to draw some attention. But essentially, the key things that changed there, Dave, is with a number of the areas that we're mining, we had to change the mix to get a good balance between some selective mining and bulk mining. And by having done that, by having changed out some of the fleet there and the workforce buy-in to that mine plan has enabled us to really get that improved reliability.

In terms of then the cost structure, it was around standardizing rosters, it was around being able to move people and equipment between the 3 mines. It was certainly around lifting when the productivity lifted, get the cost base down everyone started to participate in the quarterly performance bonus. Once they got that, they never wanted to go back to no bonuses. So that helped in terms of cost discipline and productivity. It's been a whole mix of things there at Red Lake.

The only thing I'd say is that it compared to all the other assets, it's one you can't -- you just can't stop I explained it to Rocky, it's like riding up the hill. The minute you stop pedaling, you'll be back down the bottom. Probably not a good analogy for Rocky who got hit by a car on a bike last week, but it's...

Your next question comes from Zane Guo with JPM.

Just following up on the all-in sustaining cost, understand that diesel price is only 3% of the cost, but nevertheless, keen to understand what diesel price you've assumed for FY '27. And just so on the 3% to 10% inflation on maintenance parts called out by Fran earlier, are you seeing similar cost pressures across your growth CapEx spend?

On the growth CapEx, no. I mean all of our projects are on the budget. We knew when we approved the project, there'd be some cost escalation and we've allowed for that, and we're not outside that range. In terms of diesel, look, it's somewhere in between what it spiked to when the situation first started and then where it sort of got back down to when tensions are eased for a period. But in terms -- as I said, and you mentioned that it's not a material cost for us when we look at it, the main users are at Mungari and Cowal in the open pit.

Yes, understood. And just a follow-up on Red Lake. What's the latest thinking around reprocessing the tails? And I guess, what are the hurdles you need to see to sanction the project and potential time lines?

Yes. So look, it's -- over the next 12 to 18 months, we'll finish that work. We've got drilling going on. We've got the study happening and then what we're going to look at is which -- we've got 3 plants there, which is going to be the best way to put that through, and then you've got the permitting. So you are talking at least 2.5, 3 years before you see anything coming through on that one.

We have a follow-up question from Kate McCutcheon with Bank of America.

I just wanted to see if Rocky is okay after that. But no, I do have a question on Cowal. So you've noted that back-end uplift in production with the second decline there. You did 2.4 million tonnes last year, annualized the last quarter at 2.77 million. What does your mine plan at Cowal, how have you annualizing in 2H? Or how do we think about a step-up in those underground tonnes with the second decline or does something offset with base positions of the decline that you got?

Yes. So Kate, good call out on Rocky. In terms of the Cowal underground, what you'll see in the second half is that we then have that capacity to go above the 2.4 million tonne annualized rate I think when you look at FY '26, we did have some easier areas to access and therefore, we're able to get some productivity. And we were going through a change in mining contractor there. So we did have two contractors working on the site in the June quarter as that transition happened. So that gave us a lift up there as well.

So as we go into the second half of the year, you get that capacity to go above 2.4 million targeting somewhere between 2.4 million and 2.6 million And then looking through the course of this year, what could we go beyond FY '27. And I think when we get to September with the investor update and the site visit and looking at Glenn's plans on the exploration, that's when you'll get a sort of, I think a better insight as to what we're thinking about in terms of the underground there.

There are no further questions at this time. I'll now hand back to Mr. Conway for any closing remarks.

Thank you, Darcy. Thank you, everyone, for your time today. I really do appreciate your interest in asking Fran what she's doing with all the cash and why she's spending so much capital on high returning projects that we've got in train. Do look forward to catching up with you who are attending our investor briefing and site visits at Northparkes next month. Thank you again for your time.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Evolution Mining Limited June 2026 Quarter Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Ashley, and good morning, everyone. I'm joined on the call today by Matt O'Neill, our Chief Operating Officer; Fran Summerhayes, our Chief Financial Officer; and Peter Rocky O'Connor, our GM, Investor Relations.

Today, we released our June quarterly report on the ASX and this will be the reference point for the call. The June quarter rounded out a great year for Evolution. FY '26 saw us deliver into our group guidance, deliver record cash flows move to a net cash position, and at the end of June, we are now fully unhedged. Our growth projects are on track and budget. We captured the benefits of the high metal prices while maintaining our discipline on cost and capital to be one of the lowest cost producers in the sector.

We delivered the quarter and the year safely with our total recordable injury frequency of 5.9 remaining low. FY '26 built on the improved consistent performance of the past couple of years. We produced 750 ounces of gold and 66,000 tonnes of copper at an all-in sustaining cost of $17.17 per ounce. Combined production equates to around 910,000 to 920,000 gold equivalent ounces. We achieved group gold all-in sustaining cost and capital guidance for the year. The all-in sustaining cost was within the improved guidance issued during the year and below the low end of our original guidance.

Our copper production was slightly below guidance due to the weather event in December at Ernest Henry However, when you look at Ernest Henry's performance in the June quarter, it's best for the year, including record cash flow, it shows the true quality of this operation. The operational performance for the year included another good quarter in June, where we produced 180,000 ounces of gold and 19,000 tonnes of copper at an all-in sustaining cost of $17.06 per ounce, which is an improvement of 23% on the March quarter.

We generated a record group cash flow for the year at just under $1.4 billion, with $374 million delivered during the June quarter. The quarterly cash flow was generated against an achieved gold price that was 13% lower than the March quarter. The FY '26 group cash flow was on the back of record mine cash flows of $3.4 billion and $2.1 billion of operating and net mine cash flows, respectively. All operations were net cash positive for the year and the quarter.

Looking at our cash flow on a margin basis is where you do see the quality of the portfolio. The chart on Page 1 of the report clearly shows our high margins with our all-in sustaining cost margin at 71% and our group cash flow margin at 33%. These were achieved at a gold price slightly above the current spot price. For the year, this equates to a group cash flow of around $2,000 per ounce, which is extremely healthy margin, considering this is after investing in our high-return organic growth projects. Even more important is that these margins are sustainable given our group reserve life of 15 years.

Another benefit the margin chart shows is the diversification of metal. Copper comprises approximately 22% of our revenue. Our all-in sustaining cost margin improved from 67% to 71% between the March and June quarters. Quarter-on-quarter, the gold price achieved was 13% lower while the achieved copper price was 3% higher and Ernest Henry was back to full production. This product mix definitely does help smooth our margin profile. Our cash balance at the end of June was $1.35 billion after paying our record interim dividend of $406 million during the quarter. We have no debt repayments due until FY '29.

We head into FY '27 as an unhedged producer having delivered the last of our hedge production during the June quarter. As mentioned earlier, all projects remain on schedule and budget. The Cowal open pit continuation project sees mining advancing in the main open pits and work about to commence on the Southern protection bond. We'll be ramping up development of the E22 Block Cave at North Park and Burt at Ernest Henry. We will release our FY '27 guidance with our full year results on 19 August. As we finalize our plans, we can provide some information on the FY '27 outlook.

No material changes to production capacity are planned other than the previously announced cessation of production at Mt Rawdon. Inflation remains elevated, and we are expecting a 4% to 5% impact on our FY '27 all-in sustaining cost equal to about $150 to $160 per ounce. With all operations having organic growth options in a group mine life of 15 years, we want to ensure long-term sustained operational reliability.

To achieve this, now is the right time to allocate additional investment in fleet replacement and infrastructure. Our sustaining capital investment is likely to be $50 million to $60 million above FY '26. The -- this capital was not in our previous outlook range, and we expect to invest at this rate for the next few years. Mine development will ramp up in FY '27 to support additional ore delivery from FY '29. The development will mainly be at North Parks, Cowal and Ernest Henry, as mentioned earlier. Major mine development is expected to be $130 million to $160 million above the FY '26 level.

However, this is timing related since this capital is within the original project budgets. Having finished FY '26 in a solid high margin position, we're still on track to remain one of the lowest cost producers in the sector with good cost and capital discipline that will reward our shareholders through dividends in addition to the high returns to be generated from our organic growth pipeline.

With that, I'll now hand over to Matt to take us through the operational performance.

Thanks, Lawrie. As already mentioned, the June quarter was another good quarter, resulting in us achieving full year guidance for gold, all-in sustaining costs and capital investment. And whilst our copper production was just below guidance, I am proud of the performance of the Ernest Henry operation, which is our major driver for copper.

Over the June quarter, the operation delivered record operating cash flows and its highest quarterly production of copper for the year. All of this while completing recovery activities and deordering the mine after the December rain event. Perhaps the aspect of this work that I'm most pleased with is that all of this was done without a single recordable incident, which is a testament to the team at Ernest Henry and the way they go about their work.

The key drivers for the June quarter's performance were a planned mill shutdown and the continued power outages in the region. Over the quarter, we also saw costs impacted by diesel increases an ore sorting trial and an increase in sustaining capital with the delivery of replacement mobile fleet.

In wrapping up the operational performance of financial year '26, we delivered to guidance on our key metrics, which allowed us to generate record cash flows on the back of strong gold and copper markets. Looking forward to the '27 financial year, we look to continue the theme of reliably delivering to plan.

I'll now hand back to Ashley so she can open the line for questions.

[Operator Instructions] Your first question today comes from Kate McCutcheon with Bank of America.

So we've got some FY '27 CapEx expectations and on my math, it will be above the top end of that 1.1 range you gave us earlier, excluding exploration, even if I stripped out that sustaining cap, can you just talk me through that filter in spend, what's being pulled forward? That would be great.

Yes. Sure. Thank you. So if I'll start with the mine development, that capital next year, as I said, around 1 up to 160 is actually the development that's needed for us to get to the ore in FY '29 for those projects at Cowal, North Park and Ernest Henry. So that is timing in terms of it's spent next year so that we get the ore. So that's within that $1.1 million capital over the next 3 years. So that's timing.

If I look at sustaining capital, the $50 million to $60 million that we've talked about, that is new. And then in terms of the study's capital that we're looking at, or projects for beyond FY '30, that is also new. And that's the 2 main ones that come into the capital guidance range for next year when we finalize it.

Okay. Cool. And then you called out organic growth options in your '27 Lam with that $70 to $90 million that you're going to stand, what are those studies? Or is there anything new and I guess, exciting that we're not familiar with that we might not be thinking about?

Look, I mean, I think if we look at it, as we know, with Cow, as we advance through in the underground drilling results that we're seeing there, the work that we're doing between E41 and E42, Therefore, it gives us an option to look at plant capacity at Cowal. I think there's other options at Ernest Henry around making sure we can keep filling that mill.

And then we're certainly looking at some upside potential at Mungari based on the drilling results we're seeing over there in terms of the mix of underground and open pit material. And then I think across the entire portfolio when Nancy and the team are looking at is how can we get better recoveries than what we're currently achieving. So there's a mix of all of those sorts of projects that we're looking at.

Your next question comes from Jonathon Sharp with JPMorgan.

Congratulations on the year. My first question, just to Henry. So hosting is expected to be around 10% or low capacity next year or this year. as you catch up in development. Can you just quantify the likely impact on gold and copper production, explain whether it's concentrated in the first half, and just maybe confirm when you expect to return to full capacity?

Yes. I'll get Matt to talk through what we're doing there operationally. But I think if you look at it year-on-year, given that we were out for a quarter in FY '26, and we are planning to operate for the full quarter this year. That's what Matt's told me. Then you'd probably see it more than an offset there, but do you want to just talk about the development focus, Matt?

Yes. So essentially from the rain event, what we saw was that we had the lower levels where our development was flooded, not the production levels. So we've caught back up and we've dewater those areas. We now need to focus in on the development to get ourselves in front on the next few levels. The mining method at Ernest Henry is a sublevel cave. So what we want to get back into is having 3 levels operating concurrently. With the restrictions we had after the rain event, we are running it to, and we want to get our development ahead and that levels developed out in front.

So there'll be some more development activities over at least the next 12 or 18 months, which will impact what comes through the hoist. We will host the waste, but it obviously doesn't have a lot of grade in it. So that's -- the hoist is fine. It's just that some of the product coming out of it won't have the gold or the copper that we wanted. So you'll see that, like I said, for probably about 18 months before we get back to normal run rates from there.

Okay. That explains it. And just second question on Cowal. You managed the quarter's rainfall. I saw there's quite a bit of rainfall in May with stockpile processing and pulled a December '26 shutdown forward. How does that leave FY '27 first half Cowal running, you at above underlying rate? And maybe just how much stockouts left if there's another wet weather event?

Yes. In terms of the impact on 27, it's for one of the probably helped us a little bit in the first quarter in that we've still got some of Stage H left to go through the mill. We've taken it all out of the pit, but it's still sitting in front of the mill. And in terms of the stockpiles, our original plan for the next 18 months or so at Cowal, while we do the cutback on E42 was to start processing stockpiles or stockpiles. So you're not going to see a material impact as a result of what we talked about with the rain in the June quarter. Everything will still continue to play in that's there.

Your next question comes from Levi Spry with UBS. .

Lawrie and Matt, maybe following on from that. So at Cowal for next year, can you talk a little bit more to the grade profile and how we should think about production levels? And then I guess the second decline, how we should think about what are the quantum of the sort of productivity benefits of having to access to underground from 2 months, I guess?

Yes. Yes, I'll come to -- so in terms of the grade profile, you will see the grade come off a little. In terms of timing quarter-on-quarter, you'll still see the major shuts probably being the key driver. The production or productivity increase that we're wanting from the second portal, the Regal portal. We're expecting to see that start to come through in the final quarter of the financial year.

So we're targeting a little bit of an increase in quarter 4 on the basis of really the trucking and the way that we're doing it. We're currently limited by the trucking through that single portal. And that second quarter will allow us to reroute the trucks and the way that we take the ore out of the mine. So we're looking for a reasonable improvement out of that. But again, remembering the underground ore is sort of 2.4, 2.5. So it's not the whole feed for the mine.

Yes, just in terms of how we should think about the productivity levels longer term. Is there a percentage extra times you can get out because of 2 entries?

Is that right, Lawrie? Yes, there is a yes. But in terms of what we would put forward we're wanting to increase on what we've got today in terms of what our target is. We're working through that once we've modeled it. We want to see how it works in reality.

Okay. And then just for FY '27 guidance overall, thanks for the extra detail. I guess the year has started. So can you talk to what are the elements of the maybe you're still sharpening the pencil on? Is it around past or is it certain parts of certain parts of the short-term mine plan?

Well, firstly, Levi, we normally put it out in August. What we've got to do is close out FY '26. And one of them is to see where each of the particularly the growth projects have finished and then now their updated schedule for FY '27. So that's oneof them, too. As sort of Matt talked about with Cowal in particular, we had to do the shut. We finished in stage. It's not all through. So just finalizing what the full year looks like. looks like there. But they're all of the things, but we do normally issue our guidance in August.

The next question comes from David Radclyffe with Global Mining Research.

Lawrie and Matt and team, just -- maybe a question follow-up to coming back to par on the underground there. I mean if you annualize the rate from the last quarter, which was the strongest I think you've achieved, you're closer to 2.8 million tonnes, and I thought the target was at sort of $2.4million, 2.5 million. So was this just everything going right for the quarter? Or is this a better indication of what we expect the rate to be going forward and then with upside with obviously the new portal, et cetera? .

Dave, I thank you and Levi for asking a good question. So yes, it was a good finish for the underground, but maybe you want to talk through Yes. 2.4 is where we were targeted and now we're looking at how we improve above that.

It is -- it was a really good quarter. We had transition in the mining contract on site. So we had a couple of extra resources around to do some of that work. That said, you'll get the normal technical answer of sequencing. But we are targeting somewhere around trying to maintain that rate if we -- if that's what we're -- we want to at least do that out of the Regal portal. We will still see regular variances with sequencing as we go, depending on where we are with the stopes but the productivity uplift that you're talking about there, that's a reasonable target.

Okay. Cool. And then maybe if I can focus -- a follow-up, I guess coming back to Ernest Henry, because I don't think we can have answered that. It sounds like the impact of the rain was worse than initially thought if we think of your guidance, I think you said 4,000 to 5,000 tonne impact. But now if there's an impact into this year, that's obviously more than that. Am I right in assuming there's no stockpiles left so there's no way to kind of make that back? And then just on that, then you have talked in the past about trying to secure potentially other ore sources or to trading opportunities ahead of it coming in, in '29. Has there been any progress made on those?

I'll answer the second part first, Dave, and then hand to Matt, just to clarify a bit further on Ernest Henry. But Kirron and the team are continuing to look. There are operators out there that are looking for material to come through the plant. And I do think 12 months we'll be able to find some alternative ore sources there. And also the Corella project, we've started drilling up there whilst it may not be in the next sort of 18 months, 2 years, but it is something that we've already identified in addition to it to going above the current mining and processing rates of the existing cave.

Just on the weather event, it wasn't that it was worse than we predicted. What we do was that we knew we would be out for most of March and then to get back into production, we needed to see what the impact was on the development levels, which weren't going to impact on '26. And so we knew there was because that's where all the water flow. And Matt and the team needed to get down there and get all of that water out and see what the impact is. But do you want to then talk about the development?

And essentially, that is the case. Now that we've dewatered the areas we've got open. We've had to do some repairs on the infrastructure down there. We've also had to do some modifications on the ventilation circuits. So those are sort of key technical things when I talk about the development of the mine, those are the things that I'm talking to. So to get our back into that 3 levels and another level sitting in front of us, that's the focus. When you've got those, the operation is quite stable, consistent and reliable.

So I don't want us to not focus on that and put ourselves into a sort of hand-to-mouth scenario. So that's really the work -- like I said, the 18 months is to open up the extra levels and finalize the ventilation circuit to get the operation up and running in 26. We did use some ventilation circuit capacity that we had planned for the future. We're now replacing some of that as well. So those activities weren't firmed up, if you like, in 26 months we dewater go down and have a look at what it all looked like. That's sort of where we've ended up landing with the plan.

Your next question comes from Hugo Nicolaci with Goldman Sachs.

Look, firstly, following on from Cowal, just expectations next year has obviously been falling, you were moving more to stockpile material. But from what we've highlighted today, your underground productivity is higher. The satellite pits are progressing well. you still got Stage 8 stock sitting there and then you now have one less shut to do in the year, is 300,000 ounces out of that asset achievable in for FY '27?

Go. This is why we haven't finished getting Board approval on the budget. You're joining the line of asking Matt good questions. Look, it's fair to say we had originally, at the halfway mark had that it was going to be a 10% lower production over '27 over '26. As Matt said, we've got some of the material that sort of didn't come out until the back end of the June quarter. That was previously planned to come into this year that shut that we decided to do in April to reduce.

It's not -- so the 2 major shuts in the September and March quarters will still happen. This was a smaller shut that was planned in December. We get some benefit there, and we are looking at getting some upside on the underground. I think when you look at the guidance, when we do finalize the plan, it won't be that 10% lower than what we've achieved in '26, but we're just working through that now.

Got it. Lawrie, sorry to add to the preempting guidance questions. And then secondly, more of a strategic one on Rawdon. With the hydro project now being prioritized by the government you do with that asset from here? And if there's a mill, there's gold in the ground, do you sell it to someone else let them do the cutback and get that liability off your books?

Yes. Look, that was a little bit disappointing in terms of where that project ended, but we -- as we've sort of said, it's not going to have a material impact on our plan for Rawdon. We move to closure and rehabilitation mode now. But we do look at those options, knowing as you've said, there's a mill there. There is some gold in round and there's a large pit that's already been developed. But our focus in the next in the next 6 months is on getting into that closure rehab mode.

Are there any costs sort of associated in that closure rehab mode to be aware of?

Yes. That's another one that we are finalizing right now, and we'll let you know in August. But we've previously -- so it's probably around $100 million close and rehab estimate. We'll update that as well. But it won't be as material amount of money spent this year compared to what we're doing over the next sort of 5 to 10 years.

Your next question comes from Daniel Morgan with Barrenjoey.

Another question for Cowal. It sounds like you're pitching back pitching back to a growth agenda in a number of areas. At Cowal, does the extra CapEx -- does that get us some satellite open pit or happening earlier. So are we investing in more fleet, more material movements so that we get better access to that in time. Like so when is the first ore from the OPC project, so not Stage I, when do we get that?

Yes. So effectively, some of the new fleet arrived towards the back end of '26. The balance will be in the first half of 7, which allows us to accelerate that mine development as we've sort of got in the quarterly date, we are into E46. We're mining there. So we do expect to get ore out of E46 in FY '27. We don't expect to get any ore out of Stage I. So as that fleet comes in, we can increase that mining rate. in both those areas. We won't be doing anything in E41 because we've got to do the Southern action bunk first, and that will be through all of FY '27.

Okay. And just back to the other portal opening up at the Cowal underground mining. Does this provide the optionality for future consideration of a parallel underground mine? Or do you think a third quarter might be necessary to contemplate that? What's the view there?

Yes. Dan Yes, it provides the optionality for a lot of those things, depending on how the drilling goes. At the moment, we're hopeful, optimistic in that area. The key one for the short term, we talked about spot activity but it does all the things you just mentioned as well.

Yes. So Lawrie, is it fair to say, I mean, it's clear you've outlined a little bit more CapEx than the market was expecting today. But basically, you haven't outlined or given us the benefits that I presume you will in future periods when you look at giving us information on what these projects are, the metrics behind them, what the returns look like. Basically, we've got extra CapEx, but not the benefits yet. Is that a fair assessment of what you've sort of announced there?

Yes and no, Dan. So I think if I look at it, any of the projects that we approve, we certainly put out what the economics are and what returns we're going to get out of those projects. If I look at it, the up to 160 in the mine development, which is timing. We've already put out there that with E22, but and E42 and the open pit continuation sort of what we get out of those that is timing. I think then when we look at the other studies work, that is really now based on each of the assets have got life extensions and growth options as we go through those studies, and we saw them with the coarse particle. You've got the regrind circuit that we're looking at Northparkes.

We've got how do we go above the 8.8 million tonnes at Cowal as we finish those things, we'll certainly let the market know. And then on the sustaining side, I mean, each of these assets, we've got 10-, 20-, 30-year mine lives already that they've been operating at -- and we do need to look at the fleet and the infrastructure and that's sort of the right time to put that capital back into the business. So that's sort of where we're at. Does that answer your question?

Yes. It just strikes me that there's a lot of studies happening and things -- and you're not yet ready on all of those to give the returns on all of them. I appreciate we've got some of them. But just putting in more CapEx into market forecast is probably not the right answer. It sounds like there's projects you're going to bring on?

Yes. But Dan, as I say, the up to 160 in the mine development is already in those project budgets. The study study money in 27 is sort of in that concept pre-fees. So we haven't got any production, and it's not that, that money is going to be spent every year in the next 5 years. It's the studies that we've identified to be done through '27.

Your next question comes from Adam Baker with Macquarie. .

Just going back to the ISA base, I mean, you've let a few, I guess, since as to what CapEx guidance and what sustaining going to look like next year. But just you called out the inflation of 4% to 5% being about $150 to $160 an ounce higher. But you've also called out sustaining capital increase about $50 million to $60 million by myostat's about $80 an ounce. So looking at the inflation plus the sustaining CapEx. By my back of the employed coupon getting to about [$19.50 ]. Does that sound about right, looking into next year? How do I lend there?

Is that your way out of asking maybe to give you the guidance without giving you the guidance? I could say I can't confirm or deny. But I think your math is right. We're very clear in terms of what we're seeing in inflationary impact and cost escalation, we're pretty clear that we've made a decision to take to the Board to increase our sustaining capital given the age of the equipment. So that -- those 2 combined does lift it by a couple of hundred dollars an ounce.

Yes. Perfect. And you also called out some increase in exploration, I think you're getting up to 130 to 150 in FY '27, which is perfectly reasonable given the strong growth pipeline that you've got. Just wanted to give us a bit more color on, I guess, what's the breakdown between brownfields and greenfields exploration. Where is the primary focus here is this on Northparkes, E44, et cetera. How much you're spending at traded in British Colombia, et cetera? Just any color would be appreciated.

Yes. Look, I think if you breaking it down, a lot of the brownfield is going to be at Mungari, Red Lake, Cowal, that's the primary focus of where most of the dollars. Then if you're looking into the greenfields, it's going to be in and around Ernest Henry and the Corella project and the Cloncurry North and the like. And then in terms of the greenfields in Canada, it's certainly going to be in BC and some in Ontario.

If I looked at it and I haven't got it right in front of me, but you're probably talking about 1/3 of it's going to be in the greenfields and the balance is going to be at the brownfields and regional brownfields right next to the operations. But we'll give all of that. It was a good ask of trying to get the guidance, but we'll give that next month.

Your next question comes from [ Daniel Rodden ] with Jefferies.

Apologies as we're going to ask another 1 on the guidance. But I just wanted to clarify on that 4% to 5% in sustaining cost inflation. On a net basis, you've talked about a bit of a production rollback, particularly the Henry and Cowal. Does that 4% to 5% inflation include any impacts from production changes that you would foresee in FY '27? Or is it purely on a like-for-like net cash cost basis?

Dan, it is based on where we see production ranging in FY '27 to come up with the $150 million to $160 million. .

That's perfect. And does that include, I guess, any changes in the expectations for cost relief on diesel? .

No. We've sort of -- well, I don't think anyone can work out what the price is going to be based on the daily movements in Iran, but we've allowed for these sort of be elevated above what it was pre pre-February in our plans for FY '27. And you can see in our quarterly report in the appendix that from the half year to the full year, our diesel cost went from being 2% of -- that's been the impact, and that is part of the 4% to 5% that we've allowed for.

Your next question comes from Matthew Frydman with MST Financial.

Sure. Lawrie and team, hopefully, a relatively quick one. $1.3 billion in cash on the balance sheet heading into the result and obviously a full year dividend. Is there anything that we need to be thinking about, I guess, in terms of shareholder returns, what's the right level of cash to keep on the balance sheet going forward?

Thanks, Matt. I think we've always said we're not going to build up a huge cash balance on the the books. We'll look at our dividend policy next month with the full year results with the Board, and we expect to update and continue on our commitment to increase returns to shareholders. I think what the cash balance is providing and no debt repayments till FY '29 is allowing us to look at the business and the mining capital reinvestment.

The studies on growth beyond FY '30, that's sort of, I think, an appropriate allocation of capital while still making sure that our shareholders get an increase in returns, and that's what we've always targeted to get back to that net cash build up a decent cash balance and then balance it between reinvestment in the business and returning to our shareholders. And so we'll update next month with the dividend policy review.

Yes. Got it. I guess an extension to that, I mean, obviously, your cash generation is pretty comfortably covering our growth optionality. How do you think about the attractive investments and buybacks? I guess you have relative to -- as another form of reinvesting in the business and the growth options that you've got. And yes, I guess, how attractive is in the scheme of things?

And then I guess, secondly, how does that compare to external opportunities across the sector. Obviously, you've got peers that are, I guess, making acquisitions externally rather than investing that capital within their own businesses. Yes, how do you guess what that I've given the a little bit of a pullback and you've got a pretty healthy balance sheet position to maybe make that most to that?

Yes. Look, buybacks, they're part of the equation when you're looking at returns for shareholders. One of the things that I've said in the last few months. It's the most amount of feedback from shareholders in terms of what to do with our money and how to get it back to the shareholders. I have no doubt whatever Fran recommends will not please every single shareholder, but I'm very confident this is going to come up with something that will make sure that we increase our returns to them, and we do it in an appropriate manner.

In terms of external opportunities, Karen and the team continue to look. There's not lot of opportunities out there right now that fit our portfolio, but it's certainly, yes, with where our cash balance is where the market is, with the metal prices coming off the highs from the first half, it does provide those opportunities. But at the moment, he hasn't come up with anything.

[Operator Instructions] Your next question comes from [ Belinda Humphreys ] with [ IQ Industry Queensland ].

I know Matt Rowden was covered a little before. I'm just wondering if going into a pumped hydro project with another private party maybe among the options that you would still be looking at?

Thanks, Belinda. If it was something that could keep Jake occupied for 3 years, I'd certainly be open to it. But I think our focus was always on this pathway with the Queensland government given the way that they are set up where they need to own a 50% of any of these renewable energy projects. So with that decision, our focus has turned to what do we do with this asset from a gold mine perspective.

And just ONE more question. You were talking about the importance of Cyrela as a potential future source for Ernest. Can you tell us a little more about that project?

Yes. So we picked up a large parcel of tenements from Rio Tinto last year. And we basically are now looking at what are the good targets that we can drill out that may provide us with an opportunity to process that material through the Ernest Henry plant. They're all within that trucking distance within $50,000 of the process plant. So that's where that land is just a side of Ernest Henry.

Any activity going on out there at the moment?

Yes, we've commenced drilling there. .

Thank you. There are no further questions at this time. I'll now hand back to Lawrie Conway for closing remarks.

Thank you, Ashley. I want to reiterate a couple of points in closing out the call. We started FY '26, wanting to continue to be consistent and reliable in our delivery and making sure that we bank the benefits of the high metal prices. We've delivered to our group guidance and taking full advantage of the current metal price environment, and we've set the business up to continue that in FY '27.

Our projects are all on schedule and budget, and we've got a lot of other options for further growth. balance sheet is very flexible and going to improve further as we go into '27, and I look forward to updating you next month with our full year results and guidance and what we plan to do with our dividend policy. So thank you for your time today.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Evolution Mining Limited March 2026 quarter results. [Operator Instructions]

I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Ashley, and good morning, everyone. I'm joined on the call today by Matt O'Neill, our Chief Operating Officer; Glenton Masterman, LVP Discovery; Fran Summerhayes, our CFO; and Peter Rocky O'Connor, our GM Investor. .

Today, we released our March quarterly report and an exploration update, which will be the reference points for the call. A key milestone and highlight for the quarter was the transition to a net cash position on the back of another very good quarter after generating $406 million in group cash flow at just under $2,500 per ounce, we are now in a net cash position of over $40 million.

Our cash balance at the end of the quarter was $1.37 billion, and we have no debt repayments until FY '29. The rapid deleveraging, where we have moved from over 30% gearing to net cash in just over 2 years, is a reflection of Evolution's high-margin portfolio consistently delivering to ensure the benefits of the high metal price environment are banked.

To put this into perspective, we have removed around $1.7 billion of net average achieved gold and copper prices that were $2,100 per ounce and $3,200 per tonne below current spot prices, while still investing in high-grade projects and paying dividends to our shareholders. We are on track to generate approximately $3.6 billion of operating mine cash flow in FY '26, where the June quarter is planned to further improve our net cash position.

The charts on Page 1 of the quarterly report are a great graphical representation of our cash-generating capability and the momentum being built while at the same time, investing in high-return projects that either grow production or extend mine life. This outcome is a credit to everyone involved in Evolution. We continue to safely deliver the plan with the right level of cost and capital discipline.

In the March quarter, we produced 170,000 ounces of gold and 11,000 tonnes of copper at an all-in sustaining cost of $2,220 per ounce for continuing operations. The high all-in sustaining cost for the quarter was driven by the lower production and especially the lower copper byproduct credits at Ernest Henry. We delivered the quarter safely with our TRIF remaining low at 5.9%.

The March quarter was expected to be a lower production quarter due to the impact of the weather event at Ernest Henry in December and the planned semiannual maintenance work at Cowal. Ernest Henry is now back to normal operations. The outcomes of the weather impact at Ernest Henry will mean that we are expected to be around the low end of the group copper guidance.

We remain on track to deliver our FY '26 group production at the all-in sustaining cost guidance of $16.40 to $17.60 per ounce. This all-in sustaining cost guidance is 6% lower or better than our original guidance. The group cash flow was on the back of $769 million and $486 million of operating and net mine cash flows, respectively. It should be noted that these were achieved despite Ernest Henry being cash flow negative for the quarter. Mine cash flows are on track to lift significantly in the June quarter.

All our projects remain on plan and budget. The recently approved Northparkes E22 coarse particle flotation and expansion study projects have progressed well in the first 6 weeks while the preparation to commence development of the bird deposit at Ernest Henry is underway. I want to make a couple of comments about the current global fuel supply situation.

To date, we have had no material operational impacts not just from fuel, but our overall consumables. Matt and Fran are actively managing our supply chain logistics and have appropriate response acting plans in place. The greater focus of the team is ensuring continuity of supply of all goods and services.

Specifically on fuel, supplies are contracted with major oil distribution companies who continue to fulfill their obligations. Fuel represents 2% of our total costs. And while there is a current elevated pricing, it is not having a material impact on our cost base.

On the exploration results released today, Glen and I are very excited at what they offer in terms of adding low-cost ounces to the portfolio. They show that Mungari and Cowal, there is a lot more gold to be discovered and what are already long-life operations. Some key highlights include the very encouraging results in the underground areas of Genesis and Arctic at Mungari, which supports our aim of extending the high-grade underground mine life at current production rates.

While at Cowal, significant high-grade results were received at the Ovan underground target Meanwhile, significant new results in multiple locations across the planned E41 open pit will provide useful insights into the full scale of the deposit ahead of its development. Regional exploration around Ernest Henry will be accelerated over the next 6 months following our consolidation of large tenement holdings surrounding the mine. We've also started work on the 2 most recent projects in British Columbia.

With that, I'll now hand over to Matt to take us through the operational performance

Thanks, Lawrie. As Lawrie has already mentioned, the operational performance for the March quarter was in line with our plan on the back of the renovated Ernest Henry in and the normal plant maintenance schedules. Our safety performance remains in a very healthy position with the continued strong performance in this area, thanks to the tireless work occurring across all parts of our business. and I'd like to take this opportunity to say a big thank you to all our employees, who contribute to this set.

On the production front, we are on track to meet full year guidance for gold and to land at the lower end of burdens for copper. The most significant operational milestone through the March quarter was the resumption of normal operations. And for me, the highlight of the work conducted by this team was the fact that it was completed without any significant injuries or incidents. .

Throughout the March quarter, the Cloncurry region continued to experience higher than average rainfall, which did slow our recovery activities, resulting in additional impacts to the full year production for Ernest Henry, which are now estimated to be between 9,000 to 11,000 ounces of gold and 6,000 to 8,000 tonnes of copper.

At Cowal, we also saw wet weather have an impact on the completion of mining Stage H in the E42 pit. Pleasingly, the processing plant operated uninterrupted with additional feed sourced from surface stockpiles throughout these weather events. We also completed the regular plant maintenance program on schedule at Cowal. As we move into the June quarter, we will be mining the final ore from Stage H. And as previously advised, we will then move to the stage I cut back and be processing stockpile ore in FY '27.

This will see Cowal producing around 10% lower ounces next year ever, importantly, we'll not see a material change in cash flows from the processing of the already mined ore. Northparkes, Red Lake and Mt Rawdon all performed in line with expectations, with the quarter's highlights at these operations being the approval by the Board of the growth projects at Northparkes, the cash flow generated at both Red Lake, which was a record $104 million for the quarter and nearly $225 million year-to-date. And at Mt Rawdon was $13 million in the quarter and over $30 million year-to-date from processing very low stock material.

Mt Rawdon is planned to complete processing at the end of this financial year. Mungari delivered a raft of new records over the quarter with the fully commissioned mill operating at nameplate capacity throughout the quarter. Most notable of these records are the quarterly net mine cash flow of $175 million and gold production of 51,000 ounces.

Mungari has generated over $320 million of net cash flow so far this year, confirming the decision to invest in the planned expansion and the establishment of the Castle Hill mining hub. Looking forward, we are well set for a strong final quarter with the return of Ernest Henry to normal operations, the continued strong performance at Mungari and Cowal having completed its annual maintenance program and mining back in Stage H.

I'll now hand over to Glen to talk through the exploration announcements made.

Thank you, Matt, and good morning, everyone. I'd like to turn your attention to our exploration announcement, which was also released this morning to give a brief update on where we've seen some some momentum over the last 6 months. Starting with Mungari. I want to briefly revisit some of the commentary I made the last time we updated our drilling results. What the team has achieved recently has fundamentally changed the view on historical geological thinking around, which had largely written off the potential for meaningful new discoveries particularly beyond the well-known high-grade tram track positions. By challenging that old geological mark, we've intersected high-grade veins in new structural positions outside where the traditional models were looking. That's significant because it effectively broken the old paradigm, opened up entirely new search spaces around Kundana. In practical terms, that gives us a much bigger opportunity to continue growing high-grade underground resources and reserves. The best example of this occurs at Genesis, where drilling has targeted extensions of a known system we discovered, which is shown in figure one of the update. Infill drilling across a 300-meter gap northwards towards the Barkers Mine, that previously had no drilling whatsoever, recently returned narrow intervals but at very high grades, including numerous short intervals grading about 10 ounces to the tonne, yielding intercepts better than 90-gram meters and confirming mineralization occurs continuously across this zone.

The results I am describing all occur outside the resource footprint and are importantly located near listing underground infrastructure. So it has real implications for extending mine life. At the nearby Arctic deposit, surface drilling but pit has also yielded high-grade results. These build on previously reported work and continue to demonstrate the potential to expand underground resources, particularly at depth where historical drilling has been limited.

The objective of ongoing follow-up drilling is to delineate the scale, continuity and geometry of these mineralized systems with the clear ambition of converting into a long-term underground reserve securing high-grade production over a longer mine life capable of maintaining at or above the currently achieved annualized rate of 200,000 ounces per annum.

Turning now to Cowal, where step-out drilling highlighted in Figure 2 of the release has been equally encouraging. We recently received results from the surface drilling at E41, which, as a reminder, is located a few hundred meters south of E42 and will be mined as part of the open pit continuation project. Results released this morning returned broad consistent intercepts beyond the outline of the planned E41 pit.

What's notable is that perpendicular to the mineralized veins rather than parallel as much of the historic drilling was is opening up areas that were previously considered well tested. This highlights clear potential to grow the E41 footprint, particularly to the north towards E42 and the underground mine.

I should also add that the E41 pit shape referenced in Figure 2 was optimized at a very conservative gold price of $1,760 per ounce. Underground at results continue to build confidence. Drilling is targeting major mine scale structures and a favorable geological contact that elsewhere at Cowal is known to host high-grade mineralization. Importantly, the recognition of this key contact illustrated in Figure 3 on Page 4, has unlocked an entirely new search space to the north and south between the E42 hit and the Glen, which has hardly ever been drilled. We received multiple high-grade intercepts that support the potential for Oben to evolve into a new independent mining front over time and a geological position where I'm confident further work will lead to the delineation of future resource ideation in the mine plan in the years ahead. This will be a major focus going forward. Looking beyond the operations, we're also continuing to build our longer-term pipeline. In North Queensland around Ernest Henry, we've expanded our landholding and identified several drill-ready copper gold projects with an aggressive drilling program planned over the June and September quarters.

And in Canada, permitting and community engagement are progressing at 2 time spread and Cosbacco in British Columbia with drilling planned across the summer field season. Meanwhile drilling is underlay at the October gold project joint venture in Ontario with assay results expected later in the June quarter. Overall, these results reflect our discovery strategy in action, continuing to unlock value in the short to medium term at our operating assets while building a strong pipeline of drill-ready and more advanced exploration plays with the potential to deliver new greenfields production opportunity in the medium to long term. With that, I'll turn the call back to Ashley to open the line for questions.

[Operator Instructions]

Your first question today comes from Hugo Nicolaci with Goldman Sachs.

First one just on Mungari. You got above nameplate through the quarter. I just wanted to get a sense of how much of that is running softer or are you already finding opportunities to start to push that nameplate a little bit .

Thanks, Hugo. I hand that to Matt asked in the same question while going at the higher rates, but it is all.

No, it's an obvious one when you look at those numbers. So it is some of the transitional or easy to have ore from Castle Hill that's causing the increase there. That said, it's obviously something that we're going to target. But at this stage, it's running at nameplate when we put what we designed for it.

That's helpful. And then second one, maybe a 2-part on exploration. I mean, obviously, some exciting drilling results that you put out today. I guess, just firstly, when should we start to see those flow into resource updates? Is that something for the update this year? And then secondly, at Cowal, I think the resource and asset life upside seems to be firming up at both the open pit and underground there. I think I asked you this last time, but at what point do we start to consider mill expansion studies at Cowal?

Glen will talk to the first 2 parts. The last bit about the plant expansion is I think as we get more information, we'll look at it. But it's going to be predicated on once we get into E46 and E41 as to what we do with the plant. So we're probably at least 12 months off worrying about that one. .

Yes, the results that we put out this morning for Mungari and for Cowal won't be captured in the next MRR update they've just come in a little too late for us like those. But we have already delivered a resource and reserve atnasys. So that is a growing kind of ongoing concern. It would be the best way to describe it. And what we're excited about is that we can see the opportunity unfolding along that trend between the Pope John pit. So it's a Honeywell structure that sits outboard of it. And it looks like it's going to link into markers, and we believe that we're going to fill in that gap between Genesis and Barkers and what we're looking to do, particularly in the next 12 months to drill that really aggressively so that we can capture it in the 2020 MROR statement. So that's the plan there. I would say turning to Cowal with the -- particularly what we're doing at Oven, there's a lot of space there. And if on Figure 3. One of the things that we really like at Oven is the contact that I described earlier. Pit appears to be very similar, if not a repeat, we haven't confirmed that of the contact which controls all the underground mineralization in the underground mine at the moment.

So another one of these that if -- what we're showing in that image is all of the drilling and there's hardly anything along it. So there's a long way to go there to explore, but we had the targeted open and we'll continue basically to expand the story as we know it, along strike, north and south and look to get more drilling into that space over the coming 12 to 18 months.

Fantastic. And last one, just I know you 100,000 to 200,000 away at Northparkes and Cowal, but any impacts to safety or mine disruption from the earthquake overnight? .

No, none from the Northparkes or Cowal.

Your next question comes from Kate McCutcheon, Bank of America.

Thank you for the '27 Cowal, remind you that. So for this year, still on track for the guidance. Help me think about the 4Q step-up here to get you to that circa 190-ounce level that you did a couple of quarters back? I assume it's Cowal plus Stage H grade with Ernest Henry normalizing. Can you just talk through that?

Yes. Matt, to add to it. I think he's got too much to add, but the 2 biggest drivers are Assets.

Yes, I think the 2 big ones that people are well aware of, finishing the scheduled maintenance at Cowal, Ernest Henry coming back online are the 2 primary. And then outside of that, the Mungari operation continuing to run at a pretty good rate. Northparkes is doing what it's done. You will see a little dip with Northparkes with the old stockpiles from E31 coming towards the end. But outside of that, business as usual with the uplift from the 2 ones that you identified. .

Okay. Got it. And then how the underground opportunity there. I like it. Returning hits of 1 to 2 grams under E41 and the undergo is extending. Obviously, the price is getting out more high-grade underground tonnes. And Glen spoke to this a little before, but I guess what do you need to get confidence to say, another exploration decline there? Or how do we think about timing on stage gate for a larger underground operation?

Okay. I was hoping someone would ask that. So look, I think when we -- if we go back to the discovery in of the underground mine, we -- particularly the Del Witty load, which really made the difference there. That was about a the first drill results into commencing production in the underground. So that is the time frame that we would be thinking. So on a minimum of 3 years. this is going to require a lot of drilling. We actually also have to get new positions into get -- well, to improve the angle of attack on the ore body, but the I should say. So that would be something that we need to be doing. And I'll be learning on that very heavily to help drive that us so that we can get the rigs in use to do that.

So I'd see that being a 3-year opportunity. And then I think sort of reflecting on the results at E41, the historical drilling has been largely oriented in an east-west direction and that, as we have learnt in the Cowal underground has been a suboptimal drilling orientation. So we've pivoted the rigs around now to hit those veins at a much better angle. And what we have seen historically in the underground is when we've done that, we do see, in some areas, improvement in grade. So we're hoping that as we start to fill that in at a much better angle, we'll see similar behavior E41. And then obviously, as I mentioned, there was -- the pit shell that we're showing there is a fairly conservative shell. So we do expect as we get resource drilling or resource base drilling into E41 that we can improve the way that pit optimizes.

Okay. Got it. And if I can sneak one, one quick one in. So the operating cash flow projected this year, you've noted no intent before to sit on a cash stockpile or do deals at record prices. Is it fair to assume the Board revisits the capital management policy at the FY or how do we think about capital earns?

Yes. So we previously said as we get to the end of the financial year, we -- once we've got our life of mine plans in Brian and the team will put together an updated capital management plan looking at what we do with dividend policies and capital returns. So that will come out with the full year financial results.

Next question comes from Levi Spry with UBS.

maybe another question for Fran and so just on the costs, Marcus obviously focused on across Allsec. Diesel is only a very small portion of your cost base and you're probably relatively but much better setup than some of your peers, but what about the rest of the pie chart? What are you seeing there? How do we think about what happens into FY '27?

Yes. Matt, I'll Levi -- just in regards to the costs, when you look at our cost structure, nearly 50% of our costs are labor. I would have said 6 months ago as inflation was sort of trending in the sort of 3.5%, 3.8% range and and trending down, and that's certainly changed now.

We would expect you're probably going to be seeing somewhere between 4% and 5% in terms of labor cost movement going into FY '27. When you then look at our other cost power fairly well set up there with Cowal and Northparkes pricing fixed, Ernest Henry and Mungari are through FY '27 as well in terms of pricing, but some slight escalation there. And then when you look at our consumables, it is going to be dependent upon how long the current situation lasts in terms of temporary pricing that would be requested to cover for additional logistics costs and the like.

But so given that, that's sort of 50% of our cost base, you're probably going to see a few percent increase in that bucket as well. But overall, I think it's still being well managed, but it does depend on what happens over the next 3 to 6 months.. .

Your next question comes from Daniel Morgan with Barrenjoe

.My question on Mungari just on costs. And for this question, can we just put diesel to one side for a moment about what we're experiencing in a live session. But just on costs, was this a representative quarter for Mungari I 2150 asked in previous quarters on the cost side, we had obviously some capitalization of different spend. And obviously, the project wasn't fully ramped up. Just wondering if you feel this is a representative quarter .

Yes, Dan, it's getting close. I mean, we expect that we set around a 16% reduction in all-in sustaining costs once it is running and depending then on the mix of the ore. We would see it's probably somewhere in the $22.50 to $23.50 range is what you would see, $24.00 at sort of the upper end, which would be in line with what we had projected. So it was a good quarter. Really predicated, I'd say, on the the campaign of the EKJV, higher-grade material, therefore, helping us in terms of both mining and processing costs there. So what you'd see in Q4 is slightly higher, but then you're getting close to the reflection of what Mungari will operate at. .

And just on Cowal, I mean it's quite clear that you're moving from Stage H and that high-grade ore next quarter towards Stage I, where you're going to be pushing back. Just wondering how long is it before you start to get material access to Stage I? Or is this FY '27, obviously, a lot of hard work through there, but do we start to see better grades in '28?

Yes, it will be first half of FY '28 is when we'll start to get back into Stage I ore and also be getting into good material coming out of E46 as well. But there will be nothing really of substance in and a little bit coming through in the first half and the second half of '28 when you see it start to ramp up in stage H. It's about 18 months. .

And last question just on Red Lake. Has been a bit of a better stability, delivery. I think one of the comments you said, set up for a good end of the year can we just expand on the latest live view of ops through the end of this year and anything beyond?

Yes. It's Matthew. Dan, it's essentially the final quarter, we're going to a couple of higher grade areas driving an expected a little bit of an uplift in trade. But the development, if you have to look through that, that's been really quite consistent. Same thing, a little bit of a drop with some ore in terms of throughput in the quarter. We had a few interrupters with power and the winter side of things. But outside of that, that's really where it's headed. So pretty consistent, pretty well set up for both grade and volume for the next quarter.

And is that sustainable or are the benefits sustainable?

So Dan, I mean, the position on Red Lake still hasn't changed. We're focused on getting 30,000 to 40,000 ounces out quarter in, quarter out positive cash and what Matt's been working well with John and the team is making sure they've got contingency in the system, given you know the difficulties you have at Red Lake with those make sure that when some things don't work out, they've got other areas to get to...

Okay. Sorry. You just cut off.

Our next question comes from Jon Sharp with JPMorgan.

First question, just on Ernest Henry. You've said you've returned to normal operations. Just -- can you just explain what exactly back to normal is? And is there any improvements there to go in this quarter and probably more importantly, -- has anything changed with dewatering or water management to prevent this happening again or even just decreasing the consequences. Just trying to understand if it remains an operational constraint in the future?

Yes. I'll address the first one. Normal operation is basically back to running out of the cave as we were prior to the event. So that's essentially what we've done. So running our truck loops and the crushers and everything back operating there.

There's some minor work still to go. We're still dewatering the bottom section of the mine. It's not an operational area. It's where we're doing our development. So there is still some dewatering activities occurring through there, but they don't impact the day-to-day operations at the moment. In terms of going forward, where we've done the investigations and we're working through that process as we talk now. There will be some learnings from it. But I think it's important to remember that event was sort of 3x what we've seen previously in '23. So while it's easy to sit here and say it's a one-off event. It's something that we need to learn from. And the key for us will be even preventing the water from getting there in the first place and then being able to work with it once it does. So we are learning from it and we will take steps to make sure we minimize the chance that it happens again. .

Yes. Okay. That's clear. And just a second question, Lawrie, you've reiterated this morning that you're tracking below the original all-in sustaining cost guidance. With 3 quarters now complete Ernest Henry back to normal. Do you have any -- or do you have enough visibility to indicate whether this year's all-in sustaining cost is likely to land below the midpoint of the updated range?

I won't put map into a difficult spot or ran by saying where our view is we're going to get in that range is there's a number of things that will determine it. You got the gold price, copper tonnes, copper price. One thing I will say, and as I mentioned on the call, the cost and capital discipline in the business. We're running very well in terms of our standing capital and our operating costs against budget. We'll be in the range. That's the political answer that you needed to give Matt some room.

Next question comes from Matthew Frydman with MST Financial.

Sure. Can I firstly extend on Levi's question on diesel. Obviously, pretty modest in isolation on the pie chart at 2%. Just so I'm clear, how does that play through in terms of the various kind of rises and falls across some of your mining contracts and other contracts you might have in place across the business that are sort of sensitive to diesel. Are there annular exposures outside of that sort of 2% in isolation that we should be thinking of? And then in particular, I suppose, your sort of CapEx plan, the major projects you've got in your pipeline presumably a lot of that is waste movement or underground development. So should we be thinking about, I guess, diesel or explosives or sort of other cost sensitivities there also -- and is it fair to kind of assume that, that sort of low single-digit number is a representative sensitivity in those areas of CapEx also?

Yes, Matt. I mean if you look at it, the rise and fall for any of the contracts that require use of diesel, be that haulage or mining contractors, you will see that diesel costs flow through. And as we've said, though, it's still captured in terms of the cost of our business. It's not the major part of it, Labor is still half and then you've got power at around 9%, 10% and the like.

So we're not seeing a material impact, but those rise and falls do come through. In terms of then the capital, yes, you look at the biggest mine development, We've got going over the next couple of years is at Cowal with E46, Stage I and the like. In terms of the mining cost. The material movement isn't going to be significantly higher or nothing that's of consequence for us in terms of our cost there. We just have to monitor it over the next few months to see where it all lands. Matt.

Understand. And maybe secondly, just quickly, it's -- I mean it's not a particularly material one, but obviously noting that in any during the quarter, you kind of highlighted nonoperating costs of $26 million related to recovery from the December quarter, presumably with the ongoing impacts in the March quarter in terms of whether there will be some ongoing, I guess, nonoperational recovery costs in future quarters. Can you give us a sort of indication of what we should expect there, whether that's going to be a bigger quantum in the June quarter or onwards? Yes, I expect there's some sort of tail costs there. .

Yes. Look, similar to what we had in March '23, you'll start out as a large amount of costs of recovery and getting equipment out and getting all the infrastructure back to normal and then it tails off. I would say, through the June quarter, you'll see some more. As Matt said, we've still got water at the bottom of the mine that we need to get out and the like. We've still got some equipment. So but it will trend down. I don't think you're going to see multiple quarters at $25 million, $26 million. But I think most of it is being captured in this first quarter.

Your next question comes from Adam Baker with Macquarie.

Congrats on achieving your net cash position. and appreciate a new capital management plan will be provided with the financial results. Just -- but I'm just trying to hear your initial thinking surrounding capital management moving forward. Do you think the current dividend policies fit for purpose or we see a change to this current dividend policy? Or could we potentially see an implementation of a buyback like some of your peers have done?

Yes, Adam, thanks for the acknowledgment of net cash. It's actually really pleasing to see the business get to that point with what we've been able to do over the last couple of years. It does give us a good problem. I think it's fair to say over the last 2 quarters, Fran and I have received the most amount of feedback from shareholders as to what to do with the cash versus increased dividends, reinvestments, specials, buybacks, we'll take all of that into consideration in the June year-end and discuss it with the Board. And as I said, it's a good problem to have. It's come earlier than we probably would have expected. But I think the interim dividend that we paid, which was a material lift based on the cash that we've generated, and we paid forward some of the second half cash. I think that's a good reflection of what shareholders should expect going forward.

That's positive, Sigal. And just a clarifying remark with Cowal. You mentioned 10% lower ounces for FY '27. Just wondering, is that 10% lower versus the midpoint of current guidance? Or is that 10% lower versus a lower point of guidance. Just trying to get the understanding here could be anywhere between 275,000 and 286,000 ounces. .

I'll try and help you out here, Adam, I'd say if you take work out your estimate for the June quarter and take 10% off the full year. That's going to give you a pretty good estimate of would be for next year. And Matt explained, we've finished the shutdown, you'll see an uplift in production in the fourth quarter, work that one through, and then that will give you the number for next year. Matt and Joe won't like means the guidance for next year is almost being set.

Your next question comes from Baden Moore with CLSA.

Thanks for your comments on your fuel supply situation. I was just wondering if you could talk a little bit more to the duration of your contract position. So what sort of time frames that you have in place? And then maybe whether you've had any conversations with government about how all your suppliers and how you might be prioritized for fuel in the event there is any level of rationing in the country? And then I guess the third layer might be, just what are the -- how do you think about just resilience and planning around if there's any disruption to supply. How do you plan around that? What are the safeguards for you?

Yes, I'll answer the second question first in terms of government. I mean, our position has always been that we're responsible for our operations and making sure that we've got on annuity of supply, and that's what Matt and Fran and the site teams are working through. We don't put out reliance on in terms of that government support. In terms of if they make a decision on rationing, we would address what the impact is on our operations at that point in time. I think -- the one thing I'd say is our open pits are the largest diesel consumers. And at both Mungari and Cowal, we do have stockpile material that we'd be able to put through the plant. .

It would mean you would slow some of your mine development down to preserve that use of diesel. So when we then look at the other consumables and everything like that, that is the work that Matt and Fran have got in place around what are our response actions that we need to take as we see any issues with consumables.

The good news is that through March, we had no interruptions on anything in terms of supply of consumables into the business, and the outlook into the June quarter is very similar. And then in the first part, the contracts are multiyear contracts. We've got very good relationships with the with the oil companies that are the distributors for us, we would see them, as I said on the call earlier, they're fulfilling their obligations.

We're not trying to do anything outside of the contract, and that's maintaining the really good relationship to guarantee our supply.

And just a quick follow-up. Can you talk to how many months inventory you'd have at hand? And then with the stockpiles you mentioned, I mean, how -- what's the duration that, that would run for before you'd have any sort of impact to your cash flow?

Yes. Look, I mean, in terms of volumes on site, as we've said, we've got adequate volumes on-site and continued delivery to our orders. So that's not seen as an issue much relevance to say what the percentages are because they'll change today, and they'll be different again next week as we either consume or get deliveries, but we've got adequate coverage. Then if you look at it, I mean, the biggest one is at Cowal, we've got over 47 million tonnes of stockpiled ore. We run at 8.8 million tonnes per annum. So I think it gives you enough understanding of on our largest operating asset, should we not be able to have fuel on-site.

Your next question comes from Belinda Humphries with IQ Industry Queensland.

Just wanted to talk about the exploration efforts near Ernest Henry. Are you able to go into a bit more detail about what's going to happen in the June and September quarters of meters drilled budget, that sort of thing? .

I'll hand that over to Glen. I don't think he's going to talk through the meters. I think you talked more to that the programs are more important for us.

Yes. So look, what we -- the real objective of the program on not just the recent tenements, but the sort of overall package that we've been sort of building up over the last several years is to identify new production opportunities that can support filling the mill at Ernest Henry, so we have latent capacity there. .

And so we're not looking for huge deposits. But if we find one, we absolutely take it, but we're looking for probably more modest store deposits that can help achieve that goal essentially. So the drilling programs, they'll commence in the next month or 2, we've been basically waiting.

There's been a lot of weather up there, we need to wait until everything is completely drive very difficult to get any access, particularly equipment until it is dry. So as soon as it is, we'll be drilling -- we gave some examples of the types of targets that we're looking at this morning in our update that gives you a bit of a sense, 10-Ks from Ernest Henry previous drilling identifying anomalies. These -- the consolidation of the tenements up there is the really exciting thing that's happening because bringing those together means that we can explore the full opportunity rather than piecemeal it on tenement to tenement. So that's actually really helped how we're going to prioritize the drilling program over the dry season. And so I just advised to stay tuned. We would look to be talking more about what we're getting in the -- at the end of the December quarter by the time we have some results from that drilling program. Thank you.

[Operator Instructions] Thank you. There are no further questions at this time. I'll now hand back to Mr. Conway for closing remarks.

Thanks, Ashley. It's pleasing to have delivered another very good quarter, and we're on track to deliver our group guidance and take full advantage of the current high metal prices. Having moved to net cash and no debt repayments to FY '29, we're certainly building the flexibility in. Upcoming, we'll release our 2025 MROR report in the next month. And then we also have an investor briefing and visits to Galen Northparkes. Thank you for your time on the call today. .

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Evolution Mining Limited FY '26 Half Year Financial Results Call. [Operator Instructions]

I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Cameron, and good morning, everyone. I'm joined on the call today by Fran Summerhayes, our Financial Officer; Nancy Gee, our Chief Technical Officer; and Rocky O'Connor, our GM, Investor Relations. Today, we released our FY '26 half year financial results along with announcing the approval of 2 key projects at our Cornerstone operations being 2 at North Park and Bert at Ernest Henry. The call today will reference the presentation we released this morning. The forward-looking statement details are provided on Slide 2, and people are encouraged to take note of these.

I'll be starting on Slide 3. I personally think today is a milestone day for Evolution. The work we have done executing our strategy since we formed in 2011 has demonstrated to be the right one. Today, we have a portfolio which is of the highest quality and are embarking on the next phase of growth while at the same time, delivering high returns for our shareholders, including record dividends. We've always said that by focusing on margin, we will make sure that our shareholders benefit. We will bank the cash, invest it wisely and read you along the way through share price appreciation and dividends.

Today shows that we are meeting that commitment. The record financial performance has been built up over the past 2 years of safely and consistently delivering to plan and capturing the benefits of a rising metal price environment. The business is in great shape, probably the best it has ever been, and it is right to be reinvesting in the high-margin suite of assets that we have. As you will see shortly, the returns on these investments will generate are some of the highest in the sector.

From a portfolio perspective, our operations are set to take advantage of the current environment. Cowal continues to be a material cash generator while investing for mine life extensions via the OPC project. Mungari has successfully transitioned back to being a major cash contributor for the group. Ernest Henry and Northparkes reliable cash generators and the projects announced today will enable us to lift returns through utilization of latent processing capacity and increasing our gold and copper production. Red Lake is showing what is capable of doing, having delivered over $200 million of cash in the last 18 months. and Mt Rawdon continues to contribute while we work through the final stages of the options to move to a renewable energy project.

Moving to Slide 4. The consistent performance is delivering high returns. Our underlying profit more than doubled to $785 million, while our group cash flow was 123% better at $608 million. The benefit for our shareholders is a record dividend of $0.20 per share, up 186%. Fran is excited to be going through the full details of the financials shortly.

We have continued our discipline in terms of capital allocation and only investing in projects if they demonstrate they can generate high rates of return. It is the right time now to be investing in the projects at Northparkes and Ernest Henry. The E22 and Burt projects will utilize excess processing capacity to increase production. At Northparkes to extract maximum value from the asset, the role of the stream that triple flag had needed to be sorted.

The collaboration and positive intent of the Triple Flag team has facilitated greater flexibility in evaluating the multiple ore bodies at Northparkes. The updated agreement allows us to move forward with E22 block cave and start studies on expanding production, including the potential development of the gold-rich ore deposit. It also provides a pathway to develop additional gold-rich deposits. We will receive a payment of $120 million in December and receive a materially higher proportion of the metal from the potential E44 deposit. Full details of the updated agreement are provided in the appendix of this presentation and a separate release. I do thank [ Sheldon Vander Coy ] and [ James Dee ], who worked closely with Karen Smith and our corporate development team to finalize the amendment.

On Slide 5, you'll see a summary of our disciplined approach to capital management. We have the right mix in terms of returns for our shareholders, investing for organic growth and acquisitions and having a balance sheet that underpins our strategy. Shareholders are receiving record dividends with over $400 million to be paid in April. We have lifted our planned total capital investment for FY '27 to '30 to between $900 million and $1,100 million per year. The driver to the change in outlook is only linked to the scale and scope of the projects or the new projects such as the coarse particle flotation and the expansion study at Northparkes. It is not due to any project overruns or the like.

For FY '26, our group major capital is updated to between $500 million and $605 million associated with starting investing in the projects announced today and the fact that the Cowal OPC project is ahead of schedule. We have now commenced development of the E46 pit brought forward from FY '28, the work on the southern bund and will increase our work on the integrated waste landform given the availability of more waste material. The overall project capital at the OPC remains unchanged at $430 million. Overall, this is good capital investment, and I will show you why on the next slide.

We also announced today an expansion of our Canadian footprint with 2 quality exploration targets in British Columbia. Our discovery team believe these targets have the potential to become evolution scale projects. will be extensively drilling these over the next 12 to 15 months. Our balance sheet is in great place. We're on track to move to net cash by the end of FY '26 and the balance sheet can support all components of our strategy.

Turning to Slide 6. And to me, this is the most important slide of the whole presentation. It clearly shows the quality of our portfolio and the discipline of our investments. The projects in execution or those just approved are all going to improve the group average rate of return as these projects are all above the 18%. We significantly at conservative gold and copper prices, the range of returns are 23% to 77%. These returns improved to 38% to 128% at a gold price that is 10% below today's price.

At Northparkes, the return from E48 could be as high as 128%. When we acquired the operation, we made a deliberate decision to take advantage of the installed infrastructure at E48, which bought us time to a fully assessed E22 and the Triple Flag agreement. This is a great example of how to allocate capital. Further highlighting the benefits of our capital allocation is the Cowal OPC project. We are 1 year into the project and is tracking ahead of schedule. Cowal delivered over $130 million of operating cash flow in January alone. This is an annualized rate of $1.6 billion and was delivered while utilizing some lower-grade stockpile material and is more than enough money to fund the OPC project.

Overall, we're investing in the right projects at the right time so as to improve the returns and the quality of the portfolio.

With that, I'll now hand over to Fran.

Thank you, Lawrie, and good morning, everyone. At my first results presentation with Evolution, it is a pleasure to be talking to a set of record financial results and rewarding our shareholders while we continue to invest in our quality assets.

On Slide 8, underlying EBITDA achieved $1.6 billion, up 59%. And record underlying profit after tax at $785 million, up 104%. These financial outcomes were driven by stable and safe performance on plan and consistent production, benefiting from the higher metal prices whilst protecting our margin with strong cost control. Highlighted by our record underlying EBITDA margin, which has improved by 14% to 57%, we are banking the benefits of high gold and copper prices with our sector-leading all-in sustaining costs with record group cash flow at $608 million, up 123%. Declaring a record interim dividend, this is 3x higher than the FY '25 interim dividend of $0.20 per share fully franked. Both operating and net mine cash flow for the half were all-time records.

As the Slide 9 shows, net mine cash flow is up 151% at $1.1 billion. delivering on our operational performance where we continued investing in our long-life, high-margin operations like the open pit continuation project at Cowal that is ahead of schedule and on budget. Mungari operation net mine cash flow is up almost 240% following the successful commissioning during the period on schedule the low-budget mill expansion project. Group operational cash flows -- sorry, operating cash costs and sustaining capital spend was in line with prior periods. As our underlying EBITDA margin increased from 50% to 57%, highlighting the quality and strong operational performance.

These strong margins are expected to continue with our improved all-in sustaining cost guidance for FY '26. We continue to bank the upside from the higher prices through consistent state on plan delivery, in turn, leading to a very favorable step change in our balance sheet, which was already at investment grade before.

Our balance sheet is in great shape, as the charts show on Slide 10. Since December 23, over the last 2 years, our gearing has significantly reduced from 30% to only 6%. During the half period, we've repaid all bank term loans with the final $280 million, which was repaid during the half. Now only remaining debt is our U.S. private placement. This is long tenure and low cost with an average fixed interest rate of 4.47% with our next payment not due to FY '29.

Our cash balance is $967 million. Net debt has significantly reduced from $1.6 billion to $362 million in the last 2 years. With the revolver credit facility remaining undrawn at $525 million available. Our total liquidity is at $1.4 billion. As cash generation and balance sheet strength has improved, shareholders are seeing this reflected in higher returns without compromising high value return on investment in our quality assets or balance sheet flexibility.

As we have said before, as gearing comes down, dividends are increasing. The chart on the top right of Slide 11, clearly illustrates that. In times when gearing reduces dividend increases. Gearing peaked in FY '23 following various acquisitions to establish a high-margin asset portfolio that is now generating significant cash flow. Gearing has reduced rapidly while dividends have picked up. The chart shows what it may look like if the final FY '26 dividend was the same as the interim dividend. Bearing in mind that the current gold spot price is around 23% higher than the half average gold price achieved. This could be up to $500 million in extra cash flows in half 2.

Our dividend policy remains unchanged. We are targeting an annual average 50% payout group cash flow. Following record financial performance, with strong group cash flow with the outlook on half 2 FY '26 with expected production guidance to be achieved, continue investment in the business and improved revised all-in sustaining costs, the Board has approved a fully franked dividend of $0.20 per share. This is 186% higher than the FY '25 interim dividend.

We have been and we are disciplined through the cycle dividend payers. This is the 26th consecutive dividend. And in a 6-month period, this interim dividend of $406 million represents almost 20% of the total dividends declared over a 13-year period, clearly shows that we are honoring our commitment and rewarding our shareholders. Aligned with our shareholders' feedback, the dividend reinvestment plan will continue to be on offer with no discounts.

With current spot prices, we are on track to be net cash by the end of FY '22 and while continuing to invest in our long-life, high-margin assets, which I will hand over to Nancy to share with you Thanks, Nancy.

Thank you, Fran. Today, we are pleased to outline the significant progress we are making as we continue to advance our assets and build long-term value for shareholders. The timing is highly favorable. Metal prices are trending, and we are exceptionally well positioned to leverage our growing copper portfolio at a time when global demand for copper is accelerating.

As Lawrie highlight, the Board has approved projects, both central to our strategy of investing in high-quality assets that generate sustained value. We have the E22 blood cave at Northparkes, which will underpin production for the next decade and the Bert project at Ernest Henry is a near-surface high-grade deposit that enhance mine life, optionality and cash generation.

On Slide 13, before we move into the detail of this project, I want to briefly reaffirm that we have a clear, disciplined strategy for every asset in our portfolio, and it is an exceptional portfolio. Ernest Henry and Northparkes are to standout example of that strategy at work. We continue to operate a high-quality, well-balanced suite of assets with a defined pathway for growth. The approval of E22 and Bert reinforce our disciplined capital allocation approach and investing in the asset, we know best, increasing our copper exposure and post an evolution to capture value in this training market.

Slide 14. Northparkes' growth strategy is anchored by 3 major investment streams, each designed to unlock the long-term potential of this highly scalable or system. We are now progressing the next chapters of Northparkes with the development of E22, the next major underground production source. The project carries a capital estimate of approximately $545 million on the evolution share. Northparkes has a long successful track record in block cave development. supported by highly experienced operating teams and strong underground infrastructure. This foundation positions us extremely well to deliver E22 efficiently and with a high level of technical confidence. The E22 project is fully approved with first production planned for the end of FY sustaining mill feed at approximately 7.4 million tonnes per ounce.

Slide 15. We are also progressing with the addition of a modular coarse particle flotation, CPF, circuit to the existing mill, a low impact, high-return upgrade design to deliver a 2% increase in copper recovery. This enhancement improved overall operational expenses and strengthened our financial performance. The coarse particle flotation project is a $75 million investment evolution share.

Over the past year, we have assessed several long-term growth. The Board has now approved a full extension study with a budget of 14 million evolution share. This study will evaluate the optimal structure processing scale access mind to meal integration option and define the development sequence required to unlock the next phase of Northparkes' growth potential.

Slide 16, how clients this scope of the extension study, but more importantly, it highlights the substantial upside embedded within this world-class copper system. We see Northparkes as much larger asset than it is today. This study is a critical step towards that future. The work on the way is evaluating options to materially increase while assessing new open pit opportunities alongside the next generation. In summary, this expansion study defined a sustainable processing envelope for Northparkes and position us to quantify and ultimately capture the full potential of a copper system capable of supporting certified higher reduction for [indiscernible].

Slide 17. Turning to Ernest Henry. The Board has approved the Bert project with a capital budget of $150 million. Bert is a near surface high-grade deposits that integrates seamlessly with our existing operations. It is a well-defined and well-driven deposit advanced by our discovery team. If geometries support efficient extraction through sublevel stoping with backfill enabling us to bring the or online with minimal disruption to the current operation. Commercial production is scheduled to begin in FY '29. Bert is a meaningful addition to the Ernest Henry long-term plan, enhancing both copper and gold exposure at the time when demand and market fundamentals remain highly supportive.

In closing, it is a very exciting period for Evolution. This project enhances production visibility increase our exposure to a favorable commodity cycle and continue to build long-term value for our shareholders.

Cameron, I will hand back to you for Q&A.

Sorry, that's to me, Nancy. So Slide 18 provides a good summary of the business. There's opportunities to deliver meaningful high returning growth from Northparkes and 1 Henry which further upgrades the quality of our existing portfolio. I acknowledge we haven't spent much time on the call around the triple flag amended agreement. For the analysts, this will no doubt take a bit of time to unpack and Rocky, Fran and Karen will make themselves available to provide further details in the coming days. However, we do believe it's been a genuine win-win for Evolution and Triple Flag and I do acknowledge that both teams who work closely to achieve that.

Finally, we're proud of the results we've released today which were only made possible by the teams across all of our sites, who continue to deliver safely to our operating plan. We're banking the benefits of the high metal prices through record cash flow, which enables us to reward shareholders with record dividends de-gear the balance sheet and fund the next phase of growth. I generally believe that Evolution has not been in better shape than it is today. Thank you.

Cameron. Please open the line for questions.

[Operator Instructions] Your first question today comes from Hugo Nicolaci from Goldman Sachs.

Lawrie, Fran, Nancy, congrats on a strong half year. First one for me, just in terms of Northparkes and the study there. I think Triple Flag highlighted sort of the study to 10, but you guys haven't put sort of a capacity number on that. I guess how should we think about sort of the sizing there in terms of the plant relative to some of the mine works that would be needed to do to get to sort of 10 or whether it's a full replication in terms of going to 14?

Yes. So Hugo, I mean the reason there's no fixed is as we previously talked about, it can be anywhere from 7.5% to a full replication to 15. What the study needs to work out is what's the right size and scale of the plant that matches the different ore bodies that will come through over the next 10 to 20 years. So our view is we think tends a minimal achievable one, but we'll go through that part esoteric Nancy, do you want to talk on the orebodies?

No, I think that's the thing we have all the ore body. So it's really a question of sequence to make sure we can fill the mill.

Got it. And just to clarify there, I mean, what's sort of the earliest you could bring deposits like MGH or things forward to then think about from our side whether that's a progressive expansion or whether that's a big expansion in one go relative to the mine sequencing?

I'll let Nancy talk to the mine sequencing. But effectively, our approach is that when the study is done, it would be a would be one upsize of the plant. We wouldn't be doing it in stages. When you look at it, you've got then E22 would come online in FY '30, '31 and ramp up. Those production sources give us enough to certainly go above the nameplate and above the permitted of 8.6%, what the scale is, is what the study needs to work through in the next 12 months. Nancy was just going to add a couple of comments.

Yes. I think the ramp-up will be done progressively. But as soon as possible to go to 10, 11, 12, but MGH will be like the same sequence that we talked initially. It's the same sequence. It's more accelerating and as some maybe other open bit stores to complete.

And that's where, Hugo, the work on E44 has a role to play. It's open pit and able to provide into the plant without the pressure on the undergrounds. .

Got it. That's helpful color. And then another one, if I could, on Cowal. I appreciate a number of projects across the portfolio progressing, but just on Cowal, you permitted there to 9.8. Obviously, you accelerate sort of the waste movements, the southern wall move, you potentially unlock a number of open pits that could potentially provide a bit more flexibility on feed. Could you just remind us what works on the plan need to be done to potentially get you to that permitted capacity and how we should think about the timing of those potential works?

So you've moved on quick Hugo. We only just said today that we're getting the Southern coming forward and E46 is ahead. I think the plant one is that's a little bit off in time frame. Our focus really is getting the 3 pits operating, the underground ramped up so that then the constraint becomes the plant. So the short answer is that's not in the horizon at the moment to go above the 8.8.

Your next question comes from Levi Spry at UBS.

Yes. Lawrie and team, so maybe sticking at Northparkes. So FID sometime FY '27, that was what I heard for the expansion?

Yes. By end of FY '27, the expansion studies will be finished. .

Yes. Got it. And then I guess just in terms of the amended agreement with triple plague over 44, how can we think about the process that would happen as part of that? What have we learned from the updated agreement today in the context of potential expansion?

What we've learned there, Levi, is that Triple Flag knew they had a role to play in unlocking all the opportunities at Northparkes because under the original agreement, E44 wouldn't have been developed in our lifetime because it was gold only. and we had to bear 100% of the cost. What it has done and what Kieran and the team have been able to work through with them is it's put a an in principle how these things can be assessed. But rightfully from triple flag site that need to know what is the ore body, what's the method of mining and everything that would be in the and the metal that would be attributable to it before they would commit to what their involvement would be.

Got it. Okay. And then just a technical question on the flotation. So good news there. Can I just confirm it's an extra 2% on what number? Is it 84 to 86? What's the absolute number now for the copper recoveries?

Yes, it's a 2% improvement from current performance. .

Your next question comes from Daniel Morgan at Barrenjoey.

First question just on the E22 project. If you look at Slide 14, and the other news you provided, you've got a twin decline configuration that comes up from E22 to surface. Just wondering what is the ore haulage capacity, which is included in the capital of the project explicitly? And then what option exists for greater numbers than that, that have been contemplated to just preserve option value at side?

So the capacity is at 6 million tonnes per annum. So the conveyor and all the system will be able to handle this 6 million tonnes per annum.

So it will be able to do 6 million tonnes per annum as in the scope of the project, but is there the potential that you could widen the belts, increase the power and get more than the 6 million tonnes under the scope?

Yes, we have. But the design right now and we have a forward tipping point as well. So that will give us more flexibility. So we think we can do more than 6. But right now, the design is for 6 million tonnes.

Yes. So in short there, Dan, one, we have allocated capital. If you look at the full $680 million, there's probably around $50 million extra optionality to go above that 6 million tonne per annum. But when we build it, the things that will go in other than as Nancy said, the tipping and the like, will work at the 6. So it's built for our option.

Yes. So I guess that takes you in principle to 12.5 of haulage from underground, if I've got the site correctly in my mind, and you could potentially do more than that if you upgraded the conveyors further. Is that accurate?

That's a good assessment. .

Okay. And then what is the potential for other gold-dominant open pits across the property to be potentially brought into that into are you going to do a body of work to explore more the open pit potential across the site? And if there are highly gold-dominant ore bodies, is that something for the future negotiations that this E44 agreement provides a pathway for?

Yes. Look, Dan, it's exactly that. So E44 is that first one that we knew based on the previous studies that we could look at now. We were never going to do any drilling on that under the previous arrangement. So that provides us. And when you look at E28 pits and up or the others that are more gold dominant, we look at drilling those, looking at the size and scale of those pits. And Glen and the team, I have no doubt now have a little bit more freedom to look at their drilling programs to say, gold dominant ones aren't excluded and if they identify any, then Kieran's going to go back to work and work out a new amendment. But I think the benefit that we've got there is by having the discussions with Triple Flag there's an understanding of how it works for both of us and the mechanics of how we can go through that have sort of been laid out now with E44.

Yes. And then if I just refer to Slide 16, where this is at Northparkes you've got a number of potential future ore sources laid out. So E22, obviously, you've got now. Well, you will be moving to execution now and that's sanctioned a bunch of PFS level studies. So it looks like major E51, 4 and MJH, I guess the most advanced things that would be sequenced. A, can I just confirm that that's accurate? And b, on MJH, is that block cave? Is that a sublevel curve? And would you just use -- can you use existing crushers capacity used to do MJH?

Yes. I'll hand that over to Nancy. But just in short, the ones that the PFS level studies are the ones that are into the expansion studies that we've approved today. So they're the ore bodies that will be assessed plant expansion, Nancy, on MJH.

Yes. MJH was looking to be a blood cape at this stage, and we are looking at different options for the crusher material handling system. But it's still open, and that's going to be a review in the next coming months.

Your next question comes from Mitch Ryan at Jefferies.

Fran, it's an impressive looking Slide 10. I hope you're not living the old CFO take any credit for that. Firstly, can you just talk to some of the metrics around that. Mining rates grade profile? Is it relatively homogenous through the planned time frame. Can we get some more metrics around it, please?

Yes. So, Mitch, I'll just get you to ask a bit on Bert again. It was very hard to hear what you were saying. .

Yes. Sorry. I'll Hopefully, this is better. I'm just hoping you can give us some more metrics around Bert, please. Can you give us mining rates, grade profile, operating costs, some of the key metrics that we should be thinking about modeling that?

Yes. Look, I'll hand that to Nancy to talk broadly around Bert and the metrics and then Rocky will certainly be able to provide more nation off-line on that.

Okay. So for Bert, we have ramping up, like we said, we start production in '29. '30 will be, I will say, full production for almost 4.5 years. So we're going to go to produce 700 million tonnes of core going from this deposit -- 700,000 of production.

And the grades are more or less double what the cave is.

Yes, 0.9%, yes, double.

So it's a 0.9% copper and gold? .

The gold is 0.82 as well.

And the operating costs, the cost per ton of mining or development meters. How should we think about some of the breakdowns there?

Yes. Look, Mitch, I'll get Rocky to follow all of those up with you. I mean that the operating costs well in line with normal stoping operations. There's nothing different at Bert to any of the others.

Okay. Yes. Perfect. And then looking forward to that information? And then secondly, exploration spend, how should we think about it now that you bought these Canadian properties into the portfolio for sort of FY '27 and beyond? Do we think that there's an increase in exploration costs or is it going to just sort of reallocation between what has been some of the spend in the other projects? Will they ramp down?

No. So these projects will be -- our assessment drilling will be done by the end of the amount of drilling going in there will be incremental to what we're doing because we're not going to redirect it away from Mungari, Cowal or any of the existing operations you're probably talking upwards of $10 million to $15 million over in those projects, depending on how successful the program goes.

Your next question comes from Matthew Frydman at MST Financial.

Sure. Can I ask a couple, please? Firstly, on Cowal, just following on from some of those earlier comments on the OPC. Obviously, a pretty reasonable driver for value in the business in the near term at least. So can you expound the fact that it's running ahead of schedule? I guess, what does that mean for timing of transition to open pit feed from E46 quantify how far ahead of schedule is looking? And also any impact or benefit not just from the open pit feed perspective, but any impact on the underground. Does that allow you to access particular underground early areas earlier than perhaps you'd planned? Yes, just wondering what the sort of quantity of that running ahead of schedule looks like.

Yes, Matt, it's only a couple of months. It's not significant in that regard. So it doesn't impact on the underground over the next couple of years. What it does do is that as the lake is drying out. As I said, we'll do the Southern end work. And then in E46, we will start to ramp up there as we finish in Stage H. The Stage H now will go out into the last quarter of this year because of weather that we've had in the last few months in the E42 pit. So that's allowing us to start work on E46. So in terms of next year, you'll still see almost the whole year on stockpile ore toward the back end of the year is when you get anything out of E46, which previously was scheduled for the start of FY '28.

Great. That's really helpful. And then secondly, in terms of the sort of incremental CapEx you've guided to, I guess, particularly over sort of FY '27 and onwards, can you kind of break down what projects or particular aspects of the projects weren't included in your sort of prior medium-term guidance around CapEx? I guess wondering where do I need to add CapEx versus what was already in that medium-term outlook, particularly given that you mentioned that the overall CapEx budget for the OPC is unchanged and actually part of the FY '26 increase is pulling that forward? So yes, just wondering outside of OPC where the CapEx is getting added versus your prior medium-term outlook. .

Yes, sure. So I mean, look, if we look at the 4 years, the main ones are at Northparkes, Ernest Henry and Cowal. And so if I look at Northparkes, E22, the scale and the future optionality that we're building in, and I mentioned to Dan, is one of them at E48, we're now getting 20% more metal. We've got 5 levels versus the study had -- we approved the coarse particle flotation and the expansion study. There's another one that's going on that -- around regrowing capacity at Northparkes.

And so when you look at all of those, you're talking in the order of $250 million to $300 million for all of those. Those items that weren't previously in there. And then similarly, when you look at Ernest Henry, Bert, as Nancy mentioned, the mining rates are going to be higher because we're basically getting about 50% more tonnes, which is then obviously doubling the metal, and we're also getting that. And we're obviously doing some studies of below the 775 that we're now bringing into plan.

So you're probably looking at around $120 million to $150 million there at Ernest Henry. That Cowal is going to go ahead of schedule, and we're doing the southern one earlier, that does open up an opportunity for us to bring mine development from FY '31 and '32 into '29 and '30. And then we have also acquired a secondhand village, which saved us about 50% on the capital cost at Cowal. So in that one, you're probably talking 20 -- sorry, $120 million to $140 million going at Cowal, and that will make up almost the major actually almost all of what we're talking about over that 4-year period.

Your next question comes from David Radclyffe with Global Mining Research. .

So if I could start on Northparkes and maybe ask Dan's question another way. On the last site visit, there was a discussion of the potential to operate E22 at up to 9 million tonnes. So just wondering what drove the decision here to keep it at the 6 and not go to the higher rate given the discussion around the mill upside does sound positive?

Yes. Look, Dave, I'll have to just go back and sort of refresh myself on the one a couple of years ago. But essentially, that was certainly predicated on the basis that you didn't have all the other ore sources that could be available to you. And so what we've looked at is what's the right size of the E22 cave. We believe that if we go, as I said, between 7.5 million to 15 million tonnes per annum, running that at anywhere between that 6 million to 7 million tonnes per annum or even a bit higher, makes the right sense for the asset and for the capital that we're going to invest into it now.

Okay. Maybe if I can follow up on the sequencing questions and just think about the open pit ore sources, given the current shaft can do 6.5%, so you're kind of limited in the near term. I'm not really clear about when you bring back open pit ore. It does sound like maybe E44 is now ahead of E51 on Major Tom. So what could the timing be on a new open pit?

Yes. Look, I wouldn't say that 844 comes ahead of the others. I mean we've got the drill results and the outcomes on major Tom and E51 and we'll advance those through the study period I think what it does do is that 44, you wouldn't be seeing that coming in until about FY'30into the plan. But what it does provide is the opportunity for us to look at the alternative ore sources that Nancy and the team are going to study through FY '27 to enable the plant expansion.

Okay. No, that's helpful. Maybe if I could just sneak one last one in. Obviously, at current gold prices Red Lake's on track to generate significant surpluses it does over the group, but it does have obviously significant optionality still. So is there any thoughts or studies underway to increase the spend at Red Lake? Or given that you've got so many projects you've talked about and just deploy the capital to those?

I think it's fair to say that the Red Lake team is starting to get a little bit of interest in asking for capital, having delivered about 6, 7 good quarters. I think the thing is that we've got a on life that's 15-plus years there. It's going to need some investment, it has to compete and I think the returns need to demonstrate that. But I think it's earning that right. We'll look at studies around tails reprocessing. We're looking at what are the options around whether that allows us to use the third plant, the [ Bateman mill ], what we do in terms of mining areas.

And certainly, when you talk to Glenn and the team there is still view that there's more to be discovered there, that will provide us opportunities to invest. I'd say it wouldn't be investing in taking the Red Lake and the Campbell mills higher, it would be -- does the Bateman mill provide optionality. So it's just getting there. I don't think they're willing to stick ahead too high up out of the trenches to ask for money, but they're certainly getting really for it as long as they keep levering quarter in, quarter out, they will enhance their chances.

[Operator Instructions] Your next question comes from Alex Barkley at RBC..

A question on the Northparkes permitting. I think I heard Nancy say E22 is fully approved. Is there already some kind of permit for the mill expansion? And a bit similar to David's question, was it always a 6 million tonne per annum E22 case that was under study work? And what exactly is the capacity that has been approved?

Yes, sure. So in terms of the permitting, yes, the permitting for E22 is all received, and we don't need anything to plant. But I mean, it's permitted to 8.6 million tonnes. So to go above that will require an approval, and that is what the study team will take into consideration during the expansion study next year. And then in terms of E22, it viewed as being 6% to 7%. And as was mentioned earlier, there was talk of the 9. I just need to go refresh in terms of what was considering -- which was the conveyor to surface, which is not what we're contemplating in this one. So it's 6 with capacity to 7 or optionality for 7 being built into the project.

Okay. Sure. And just a last one. Speaking of the 9 million tonnes that was talked about on site, you threw out a number around $120 million CapEx to get the mill to that point, say reaching 10 sort of thing. Is that CapEx number still in the ballpark? I mean that could well be what people are basing their expectations around. Just maybe a rough idea there would be helpful.

Yes. Look, I dare say that in the last 2 years, that number will have changed, and that's really what the study has got to look at in terms of the capacity -- sorry, going from 7.5% to 10% or 11% or 15%. The 120 certainly has gone up since that was done 2 years ago. And you got to remember that, that that actually when we were on site was based on a study that was done by CMO about 18 months before we took ownership around the potential expansion. So it's definitely changed since then, Alex.

Your next question comes from Adam Baker at Macquarie.

Just a follow-up on E22 CapEx of $55 million. Just wondering what the breakdown is over the next 5 years? I mean, is it a pretty even split across these years? Or will the CapEx spend be more back-end weighted? Does you accelerate the development in preparation for first production? .

Yes. Look, it will be almost smooth over the few years. We are a slow ramp-up in terms of the capital this year. And then you're probably for '27, '28 and '29, you'll see that ramp up from, say, just over -- and this is our 80% share, over $120 million in moving up to around the $150 million and then around the sort of $170 million, $180 in '29 and then it tails off in '30 as we get into it.

That's great. And just secondly, on the recovery activities at Ernest Henry following the rainfall event late in December, how things going there, you're back up and running? Or is there still a little bit of remediation to occur?

It's both. We're back up and running the shutdowns that Matt talked about in the call last month have been completed. So the sites now finishing the remediation work ramping up the mining activities. And then by the end of March, we'd be back to normal full run rate.

That does conclude our question-and-answer session. I'd like to hand the call back now to Mr. Conway for closing remarks.

Thank you, Cameron. Look, before signing off, I do want to call out a lot of people have put a lot of effort into getting all of the information out today. It's either in the finance team, investor relations, corporate development projects. studies. And of course, the teams at Northparkes and Ernest Henry to allow us to put the releases out today, and I do thank them for that. And I thank you for your time on the call today, and we'll talk soon. Thank you.

Thank you. That does conclude our call for today. Thanks for participating. You may now disconnect your lines. Thank you.

Thank you for standing by, and welcome to the Evolution Mining Limited December 2025 Quarter Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Jami, and good morning, everyone. I trust you've had a good brand and wish you a very healthy and successful 2026. I'm joined on the call today by Matt O'Neill, our Chief Operating Officer; Fran Summerhayes, our Chief Financial Officer; and Peter Rocio Connor, our GM, Investor Relations. Today, we released our December quarterly report, which will be a reference point for the call. Fran and I will be back in a few weeks when we release our FY '26 half year financial results.

Before going into our quarterly results, I want to take a moment to reflect on the tragic event that happened here at Bondi on 14 December. 15 people were murdered due to races. No violence is accepted even more so violence linked to racism. This heartless and active terrorism, whilst many people and families were enjoying the Bond Eye environment, specifically the Jewish community celebrating Hanke. I know this has impacted our country, including our team members at Evolution. The attack is something that should have been avoided. The lack of action by the federal government over the past 2.5 years on racism is inexcusable. The refuse to call a Royal Commission until the overwhelming majority of Australian spoke of the need for it -- and then to try and condense the time frame for political reasons is disappointing. It lacks leadership.

On the contrary, the leadership of the New South Wales state government with quick and strong action and support was very welcome. My biggest concern is that we learned nothing from this and do not make Australia a safer and more inclusive country. Our condolences go out to the family and friends of those who were murdered. Our thoughts and prayers go out to everyone who was impacted by the attack, and we also thank all the first responder volunteered support during this incident.

Turning back to Evolution. This was another quarter and the eighth consecutive quarter where we've safely delivered to plan. We produced 191,000 ounces of gold and 18,000 tonnes of copper at a very low all-in sustaining cost of $1,275 per ounce for continuing operations. We did it safely with our TRIF remaining low at 5.8 Gold production improved by 10%, while our all-in sustaining cost improved by 26%. Importantly, the cash generation has really gained momentum as we realize the benefits of the current metal price environment. Our underlying group cash flow improved 176% to $541 million or around $2,800 per ounce when normalizing for the FY '25 annual tax payment made during the quarter.

Reported cash flow was up 110% to $412 million. The cash flow was achieved at a gold price around $800 below current spot. The group cash flow was on the back of record mine cash flows with operating cash flow up 57%, just over $1 billion, while net mine cash flow doubled to $727 million, with the operations increasing their cash flows in the range of 55% to 140%. The cash flow charts on Page 1 of the report very clearly shows our cash-generating capacity. We are on track to deliver almost $4 billion of operating cash flow. This is 40% higher than when we issued our guidance in August and is anticipated to be 25% higher than what we have delivered in the first half. Our cash balance improved to $967 million after we repaid $110 million and $116 million in net dividends. We have no debt due until FY '29.

Our gearing is now at 6% compared to 11% at September and 30% just 2 years ago. We are well on track to being net cash this year, providing further balance sheet flexibility, including returns to shareholders. We remain on track to deliver original group production guidance of 710,000 to 780,000 ounces of gold and 70,000 to 80,000 tonnes of copper. Group copper production is expected to be at the low end of guidance due to the weather event at Ernest Henry. At the end of the quarter, Ernest Henry received 300 millimeters of rain in a 24-hour period, resulting in water ingress to the underground mine and temporary suspension of the operation. All personnel were safely accounted for and no injuries reported.

Recovery activities are progressing well with only short-term operational impacts expected. It is anticipated that the impact at Ernest Henry is about 7,000 to 8,000 ounces of gold and 4,000 to 5,000 tonnes of copper for FY '26. The Group all-in sustaining cost guidance is updated to $1,640 to $1,760 per ounce and is a 6% improvement on our original guidance, reflecting continued cost control, the impacts of higher by-product credits, partially offset by the Ernest Henry weather event. The updated group guidance further entrenches...

Matt will go through the operational performance soon. However, I do want to call out a couple of key highlights. About 2.5 years ago, some analysts were calling Cowal's best days behind it. 1 even saying that the cash cow was over. Well, this quarter, it delivered $361 million of operating cash flow at $4,500 per ounce and $284 million of net cash, which equates to more than $3 million per day even after investing in the OPC project. This level of cash flow alone is better than a number of Australian multi-asset, mid-tier companies. and the operation has at least 16 more years ahead of it.

Mungari delivered record net mine cash flow of $104 million, which is 142% improvement for the quarter and represents nearly 50% of the plant expansion project capital. At Red Lake, the operation is settling into the desired rhythm of 30,000 to 40,000 ounces per quarter and positive net cash flow. That produced 33,000 ounces and doubled their net mine cash flow to $80 million. They have now delivered over $200 million of net cash flow in the past 18 months. On the projects front, Mungari successfully moved to commercial production and the establishment of the Castle Hill mining hub is now complete, following the full ceiling of the haul road during the quarter. The Cowal OPC project made solid progress this quarter and remains on plan and budget. Studies for the next key growth projects being E22 at North Park and Ernest Henry are complete, and we'll go to our board for assessment during the March quarter.

With that, I'll now hand over to Matt to take through the operational...

Thanks, Lawrie. As noted, we have successfully completed another strong quarter of safely delivering to plan, and we remain on track to meet full year guidance, allowing us to continue to benefit from the rising metal price environment. I'm pleased our safety performance remains in a healthy position with the teams at each of the operations continuing to focus heavily on this area. We did see a small increase in our total recordable injury frequency rate this quarter, which was driven by an elevated number of injuries at our Cowal and Mungari operations during the month of October. Our safety focus remains on leading indicators, and we continue to perform strongly here.

On the production front, as noted, we're on track to meet full year guidance. For me, the production highlight of the December quarter was the successful ramp-up of the Mungari operation where we achieved an annualized run rate through the mill for the quarter of 4.1 million tonnes. Throughout the quarter, the team ran the new mill through a range of operational parameters, and I'm happy to say that they're very pleased with how it has performed.

Similarly to the September quarter, we had minor interruptions to mining activities in the open pit coal due to wet weather. Again, it was pleasing to see that the work the team have done on resilience and reliability pay off as we experienced only minor variations in the plant due to these events. As noted, works continue to progress well on the APC project with the project ahead of schedule and in line with budget. The Red Lake and Mt Rawdon operations continued to deliver in line with their plans with minimal variations throughout the December quarter.

As noted earlier in the call by Lawrie, Ernest Henry experienced a significant rain event at the back end of the quarter on the 29th of December. The Cloncurry region had its average annual rainfall of 420 millimeters fall in just a 72-hour period, 300 of which fell in just 24 hours. During this event, all personnel were evacuated safely from the mine via the shaft and the multiple dewatering systems, both in the pit and underground operated as designed to reduce the impact of the rain. We diverted water away from key infrastructure areas and into the bottom of the mine, minimizing the impact on mine infrastructure.

Whilst we are dewatering and remediating the mine, we've moved forward the scheduled February plant shutdown to align with these works. The processing plant shutdown is underway now and scheduled to be completed by the end of January. Current estimates are for full year production from Ernest Henry to be lower by between 7,000 and 8,000 ounces of gold and 4,000 to 5,000 tonnes of copper. At North Parks, we achieved a significant milestone during the December quarter, with the completion of the E26 sublevel cave after 10 years of operation and the successful ramp-up of E48 sublevel cave taking its place.

In summary, we remain on track to meet the group's full year guidance and take advantage of the strong market conditions we are currently enjoying. This brings the formal part of our update to an end, and I'll now hand back to Harmony for questions.

[Operator Instructions]. Your first question comes from Levi Spry from UBS.

I mean I guess, just firstly, on the -- moving to a net cash position sometime this half. Can you just talk a little bit around how the Board might address that in February, what the competing sort of interests are in terms of CapEx and exploration, maybe what you can bring forward potentially? And specifically, I'm thinking about your projects, but also the OTC and how you're going to optimize that going forward, North Parksburg?

Thanks, Liv. Happy New Year, and I'll get Frandon a couple of comments. Our cash flow only just has increased since the day she joined. The -- look, we will move to a net cash position over the remainder of this year. And it is highlights that if you deliver a plan essentially in an unhedged environment and do that safely, you actually get the benefits. What the Board will consider our policy is percentage of cash flow, targeting 50%. We look at it on a full year outlook basis. And at the end of each financial year, we look at the policy. So we look at the policy at the end of the year. I don't expect it to change too much, but we've got certainly flexibility around the percentage that we pay -- in terms of internally, I think our discipline around capital allocation and projects will remain key. We have seen that OPC is advancing well, and I was out there last week and it's actually a lot higher than what it was 6 months ago and 3 months ago, which is good for the project and does open up some flexibility around that project and what we do.

Exploration, I think Glenn is going at tilt, but he's looking at some opportunities there. And then obviously, the Board will consider E22 and during the quarter as well. So yes, well, as I said, we'll look to make sure we continue to reward shareholders in this environment, discipline around our capital option be that in projects and exploration, but a good problem for Fran to have as to what to do. Fran, anything to add?

No, you summarized it well.

Yes. Okay. And then just to eSerimaybe for Matt, look, a pretty significant event maybe lost a little bit in an otherwise very good quarter. What's the current status? So you expect the plant to turn back on at the end of the month, but interesting in terms of the mine and dewatering.

Yes. I'll get Matt to do that. I mean, yes, Lee, I think it didn't impact on the December quarter. As Matt said, it was right at the end but it is what we're going through into this quarter. And Matt outlined a little bit on the call, but maybe just at color around the mine and the plant and the surface.

Yes. So I'll start with the surface. Things went quite well for us on the surface with that volume of water. The plant is completely fine. And so what we chose to do is instead of having that shutdown in February is that we will do it ourselves and that we would bring it forward into January, so giving us a bit of time back in that month.

In terms of the mine, the infrastructure, there's some minor flooding remediation work that we need to do in areas that were sort of pockets rather than anything else as the water sort of moved through the mine, some of the pockets filled up and so that's tail end of 2 conveyors that doesn't take much to get back and then some works around a hydraulic pack that was sort of sitting in a pit in the crusher. So there's nothing material from the infrastructure side.

Currently, we're dewatering into the existing dewatering system quite significantly. So we're sort of up around sort of 35 megaliters a day. The current status is that that's progressing ahead of plan. And like I said, we'll turn the plant back on at the end of January and then work our way back through that, bringing the mine back on through that month as well.

And just a thing to point out, Levi, versus what we experienced in March 23 that the pumping stations and the main power substations were not impacted like they weren't really impacted at all this time.

No, that's right. We kept those operational throughout. We had a period where we didn't put people into the mine because we didn't want to put anyone at risk. And so we had tripped out until we got someone back in there to fix it. But outside of that, all of the infrastructure worked exactly as planned. The size of the event was probably the issue. It's almost triple the size of anything we've seen before. The $100 million a day was about the maximum from the last couple of events. And we did see that in the lead up to this event, and then we saw the 300 millimeter, so that the systems all worked as planned. The scale of that event isn't something that we've seen in that region for quite some time. And you could see around some of the neighbors in the area as well. the past to had some pretty significant impacts that they've not seen be -- that was the issue for us, but managed well, infrastructure good, and we'll get back up and running in the short term.

Your next question comes from Hugo Nicolaci from Goldman Sachs.

Lawrie, Matt, Fran, congrats on a fairly strong quarter. I just wanted to first question in and around sort of more strategic one. Obviously, this gold cycle has been pretty strong, if not unprecedented, with prices where they are, obviously, producer discipline has been pretty key in terms of capturing that operational leverage and not chasing low-grade ounces for the sake of volumes has been pretty has delivered a pretty good cash result. But looking at it from here, so the gold prices arguably more than double where a lot of these mine plans were set. I mean, is there room to start recutting how you look at these things to optimize value from here if this is the gold price going forward?

Yes. Look, I'll let Matt have a bit of talk about the plans and the mines the open pits and the underground. But essentially, we look at the current price environment and as we're mining in certain areas, if more material becomes economic, we're taking those, we're right into our life of mine and mineral resource or reserve review now. But we don't just let the short-term metal price drive the wrong behaviors, Matt?

Yes. We are taking advantage of that in the short term. But the discipline that I'll keep pushing with all of the operations is that any of the lower grade is not to displace any of the original plan or high-grade materials. So where that starts to help us is that when we can increase the capacity either through the plant or the materials handling systems, we can do that because most of the operations do have that capacity if we were to drop cutoff grades, we see some reasonable increases in some of those operations. And probably 1 of the key ones that sort of stands out in this environment, both copper and gold is North Park, and you'll see that that's where a lot of the work is occurring and a lot of the focus for trying to take advantage of that is sitting. So yes, we are doing it, but I don't want us to drop back to erode the margin significantly by chasing stuff that's economically viable in this market.

Got it. That's helpful. And then second one, just following on from Levi's question at Cowal on the OTC. I mean, obviously, ahead of schedule there. If you've got the team on site, how do you think about bringing forward the next stage -- or just maybe the recent rainfall we've seen maybe limit your ability to do that immediately?

Yes. Look, Hugo, I think what we're doing, the northern bond as we completed in the in the last quarter enables us to then start works around E46 and a lot of other surface infrastructure in the northern end, which is why it was scheduled first. The water in the lake is receding and receding at a good rate. And unfortunately, when I was at Cowal, they said they would have liked some of the weather that rain that Ernest Henry got because it is fairly dry out there and at North parks.

So when we look at it, it's anticipated that the late would be dry by the middle of this year. And you might recall when we approved the project this out, the south part of the late move was scheduled for FY '28 and scheduled to be dry. So it does provide an opportunity for us to consider bringing that 1 forward because you wouldn't want to be waiting a couple of years and find out that you got a wet late or a full lake again. So that's something that we're working through right now.

And then I think in terms of the other surface infrastructure and works that Joe and the team are looking at, I think, they will build that into the plan. It will allow us to look at the IWL, whether we build that up in preparation for having 2 and 3 open pits in the next couple of years do that earlier. Certainly, 1 thing that we'll look at is just anything else that can be done now in the environment that they're experiencing.

And then maybe last one, if I could, maybe 1 for Ann. Just can you remind us how the copper quotational pricing periods were just looking at the realized pricing on some of the byproducts, it looks pretty favorable versus average prices in the quarter. If you could just remind us if there's any timing or any impact there we should be considering?

Yes. Hua, it's not simple for you on your side to be able to, I guess, model them because at Ernest Henry, you've got a quotational period that gets nominated every month. At North Park, you've got a quotational period that gets nominated quarterly, and you've got 2 offtake partners in terms of Sumitomo joint venture partner and IXM as our offtake main partner. And so they have to nominate them.

And if we look at it in the -- at the end of September, we had about 8 shipments outstanding that were still open to pricing about 21,000 tonnes of copper. -- split sort of 3 at Ernest Henry and 5 at North Parks. They, at the end of September were priced around $15,000 a tonne. They then move to the December pricing, and that was around $18,500 a tonne. So that's what lifted our achieved copper price for the quarter by about $3,000 a tonne.

At the end of December, we've got about 4 shipments outstanding around 10,000 tonnes that will get finalized in this quarter. And then it depends on what each of the offtake partners nominate in the next 3 months for their pricing. So that's why it's a little bit difficult. Where we stand today, it's averaged about 19,200 month to date. That's what some of those shipments are going to get repriced at if they finalize this month. As I said, it's not easy for you. But it's really dependent on what the offtake partners or what they nominate.

Your next question comes from David Radclyffe from Global Mining Research.

So just a bit of a follow-up to Hugo's question. Because obviously, when you look at the quarter, it was really only Mungari that was setting a new record, and that obviously reflects the expanded capacity. But there is some late mill capacity across the group. So just trying to understand if there are any near-term opportunities you're considering to push throughput and take advantage of this environment -- and if not, what is the constraint there? Is it the fact that you're not prepared to budge on the current capital budget. Just trying to understand here how you could actually push the mills a bit harder.

Thanks, Dave. I'll let Matt just give a run-through on each of them. I mean -- but I will start off by saying it is not about the capital constraint. It is about making sure that if we commit the capital, we're going to get the returns. I think when we look at it, if you see the announcement today, the land around Ernest Henry, that we've now picked up that plus the previous project that we announced a while ago, that gives us a continuous footprint all the way around the plant. That's all within trucking distance. And so we've got program has already started. This 1 will be the next one. So that's giving us an opportunity because it's constrained by the mine and you obviously got birth. But we will look at all of those opportunities where we can that.

Yes. I think Ernest Henry is the main 1 for us. We do additional milling capacity available today. compared to what we bring through the mining system. So we are open to that, whether it's our own material through exploration or whether it's a toll agreement with people in the region. That's something that we're actively pursuing. Then outside of that, if I look at North Park and Cowal as the next 2, they are mill constrained. So we spent some money at Cowal on the mill setting it up for the next 20 years in the last financial year.

And -- we also spent a bit of money there on improving the recovery. So we are working on opportunities account to increase throughput through the mill, but it's something I'm certainly not wanting to rush through there. So those do essentially mill constrained with improvements and incremental improvements possible, and we can feed them from our own sources. Mungari is a similar story. So Mungari, obviously, now ramped up what we were wanting to do there. Our strategy there is to run the Castle Hill complex, which is running very well at our baseload feed and then supplement that with our underground feed, which is where the grade from grade comes from and gives us the ounces. The opportunity there is to be able to postpone or defer any of the lower-grade material from Castle Hill by putting in higher-grade product through the mill. And obviously, we run the finances on that depending on what we do.

So the exploration team, that's 1 of our key spend areas and where we do see an upside if we can get additional underground feed. We want it to come from our own material. That's where we make our best margin. That said, we do have opportunities where we will and can and have toll treated other people's product at a higher grade if the finances make sense for us from deferring that material. So those the areas outside of that Red Lake does have mill capacity. There's not a huge opportunity there for either increasing our own material, which is still the bottleneck from the mining operations. But third parties, there's not a huge amount around there, but those are things that John and the team are looking at when they come up. I think that's the run through of most of the operations.

Right. Maybe if I could just come back on Mungari there because I think on the site visit, you were still ramping it up and hadn't really tested it and it looks from the commentary that you may have sort of pushed it a little bit here with third parties. So -- are you confident -- you're obviously confident you can get to capacity. Did the engineers sort of leave anything there in terms of concern? Do you think you could run Mungari a bit higher than nameplate.

No, that's something we're investigating. At the moment, it did ramp up exactly as we wanted to. We had periods where we were above nameplate, but that was more related to the material -- or a little bit softer. So like most mills, depending on what we're putting through, it will give us a rate. But that's what I'd like us to do. At the moment, we're certainly not promising that, but that's what we're working on.

And I think if you look at it for the quarter, it annualized at a whole point -- special production.

Your next question comes from Daniel Morgan from Baron Jelly.

Lawrie, just going back to the Cal Southern bond decision. Can you just maybe expand what drives the decision to execute a bit faster on the Southern bond. Is it it's easier, costly, more productive and sort of costs? Or is it revenue items are you're going to have potentially access to more or more material, better grades and can grade sequence like what goes to the decision to execute earlier if you do so?

Yes. Dan, look, I think the primary 1 becomes where the lake is sitting at with the level of -- that it's receded as you'd recall, we've always planned to do it dry, it's more cost effective. So that's -- that is the primary decision point because it's not about what can we afford the capital as long as we're staying within the $430 million, we'll be fine. Then in terms of the second part of it is, what does it give the site in terms of flexibility. So having put all of that infrastructure around the southern area, it gets the ability to look at E41 and when we time that. But that's coming into FY '27 and beyond. And I think that's why the secondary piece is that flexibility it provides to Matt and the coal team is that for a period, we'll be on low-grade stockpile material. You're going through the cutback of Stage -- so if you can open up E46 and E41, it just derisks that operation a lot more.

Right. Another question. Just there is a footnote on Page 2 regarding North Park, where there's been some sort of a positive adjustment relating to stream deliveries, the number there is 1 mill that was an outflow. It just seems a bit lower than what I thought. Is there any -- can you just clear up what's going on there?

Yes. So during the period, there was a reconciliation of the finalized pricing and payments for the stream with Triple Flag and as the final pricing and everything that came through on that back for a number of periods resulted in a credit back to us. So that's why the $18 million, I think last quarter was about $32 million. So there was a benefit relating to the final pricing. That is one...

That's a one-off off? Or is it something that there's an annual true-up or something that we might see again in a year's time or that could be adverse or better or...

More of a one-off, Dan, is going through with triple flag about the whole mechanics of it, and we're obviously learning it in the first year. We've then done all the reconciliations with them, and that it's more of a one-off.

Okay. Very clear. Just shifting over to Red Lake. It looks in -- you've made a breakthrough at Koschner, where if I read that correctly, does that mean that you are no longer going to be using ore passes and that you're going to track down or down to the high-speed tram. And is there benefits in terms of grade and reconciliation that could come?

Yes, Dan, it's Matt. Look, we will still be using ore passes, but what it does do is derisk those -- we've got some duplication and contingency in that system given the issues we had earlier on. So we will still use all passes through that. The biggest benefit for us there will be ventilation as well. And also the mobility of some of our equipment. So it's more of an operational flexibility and reliability thing that it will give us. It doesn't necessarily impact grade and other bits and pieces at this stage. It does open up some other areas. And allow us to do things a little quicker, but that's really around operational flexibility that the benefit comes.

And just last question is mainly cost, I mean, obviously, there was a provisional pricing stuff that came through, but signs of cost control are evident as well. Just on Mungari specifically. There's obviously a bit going on with various third-party ore purchases. You had commercial declared partly through October. And so the AC number is not necessarily a completely clean as a go-forward guide. Just wondering if -- what's the latest view on what Mungari costs roughly are going to be on a clean basis?

Yes. Dan, I think when Matt talked about testing of the plant and everything the team took the opportunity around that are purchased to get that type of material through the plant earlier. So those costs and ounces are excluded. So when you look at what we've reported for Mungari for the quarter, that AISC and the costs are really about just our ore -- so it gives you a good reflection of -- so about $2,000 an ounce, you take it that most of October, there were commissioning costs. So you're going to be in the early low 2,000s -- going forward, when it hits the 50,000-ounce quarterly run rate is what you should expect to see. So we're at 1980, I think, was a quarterly cost for Mungari. As I said, some commissioning in there, but it is only on our ounces and our costs.

Your next question comes from Matthew Frydman from MST Financial.

Sure. Laurie, Happy New Year. I guess my question is a continuation of some of the earlier discussion. I'm very interested in the outcome of the 2 studies that are currently undergoing board review, and I'm sure you'll present that. And I guess I hate to sound a bit like over twist, but wondering what's next to be considered in terms of any sort of formalized growth studies out of those options that Matt discussed conceptually key growth projects that you're moving into that pipeline over time?

And I guess secondary question to that is just looking at your reserve on Marsden, obviously, a big low-grade reserve there in your numbers. I think it was last cut at $1,350 an ounce gold price. So we're only about $5,000 an ounce higher than that at the moment. So I guess at what point does that become a viable growth project -- or does that reserve need to be, I guess, reconsidered at all?

Matt, happy New Year. I definitely hope that our now nonexec chair is listening because he would love to hear about I'll start on that one. Look, I mean, for us, on Marsden, anything that we do there would have to be better than what we've got at North Park and Cowal. And so that's really what it's got to compete against at the moment. So it sort of sits there in the background. It certainly doesn't get the priority from the in the team, but it does get looked at. It's good to see that -- you talked about Burton E22 and you've moved straight on and going, okay, what's next.

I think for us, but is really important to Ernest Henry because of the capacity we've got in the plant. So that will be something that the Board will consider the studies are finished, and we'll take that to them this quarter. 22 really is what can unlock what we have at North Park in terms of increasing mining and processing capacity. We've got such a large resource there. We've got to look at how can we expand that over time because it's not going to reduce the NPV of the asset. So that's something, I think, when we take that through to the Board this quarter, it's like, okay, what does E22 give us as a -- we looked at a block cave, the sublevel hybrids tesort of the best outcome is the block cave, and we've talked about that previously. Now we've got to work out where does that fit into unlocking the rest of the operation around expanded capacity.

I think when you look at -- the other things is what's next. At Cowal, we've got the OPC going. We've got E46, E41, E42 operating, we get the undergrounded capacity. And what Matt's talked about is, okay, with all of those ore sources and the work we've done on the plant, are there ways to increase the processing and production rates at Cowal. And then I think when you look at Mungari, Matt also talked about it earlier. We've got the base feed at Castle Hill, the underground is really which is getting most of the exploration dollars is what gives us an opportunity of can we get more than 20% of our material going through that plant. And can we get the plant running at greater than nameplate.

Okay. And then maybe, I guess, the follow-up to that then is then how we think about capital allocation for the business going forward. As you just described, you're pretty advanced in terms of your capital spend across the majority of the portfolio. You've got a couple of formalized I guess, growth projects still in the pipeline in terms of burn and E22. But overall, clearly, the business is generating a lot of cash. How should we think about any kind of revision or revisiting of the capital allocation policy, I guess, in the absence of any other sort of big scale growth investments like Miles and like we just spoke about. And how does that look in the current gold and copper price environment in terms of how attractive that capital is to spend externally to the business?

Yes. Look, Matt, it's a good situation to be in. I mean, 2 years ago, we were getting asked that how can we afford these projects and now we're getting cash can we -- that discipline. I think we've outlined our capital sort of spend for the projects that are already in the pipeline. As being that $750 million to $950 million, what now with what we're seeing, the progress at Cowal and the outcomes of the studies and where the metal prices is what can we incrementally invest in, either bring projects forward, accelerate them or new projects to bring forward production growth. as long as if you look at the portfolio at the moment, the asset's average annual rate of return is sitting around that 16%. If we can generate those sorts of returns, then we would increase our capital allocation. If we were to increase that allocation by $100 million, $200 million a year, and we can generate those returns given the cash that we're generating today and where the balance sheet sits, I think that would be the best use of a part of the extra cash flow we're getting. We obviously are still remaining committed to increasing returns to shareholders through dividends, and they'll share in the increased cash flows automatically by our current policy. But if there's ways to through the second half of the year as well.

Got it. That's a sensible way to think about it, obviously. And obviously, the balance sheet has changed very quickly. So a nice position to be in. Thanks.

Your next question comes from Adam Baker from Macquarie.

And just back to Mungari. I noticed the 127,000 tonnes to 9,000 ounces gold is third-party ore process in the region. Just curious if you could touch further on that. Is this a normalized rate we could expect moving forward? I know you're looking at further opportunities. And just to give us a bit of flavor, -- are there any companies out there knocking at your door to process the material in the region? No, it's about 10% to 15% of your planned throughput capacity at the moment.

Yes. Look, Adam, I'd say, firstly, yes, there's people out there that would like for a brand new mill that's got capacity for them to put some ore through. I think as Matt outlined on the call, we used the opportunity to purchase that or to really test the plant through the commissioning rather than waiting until we get our or both the main ore out of Castle Hill and the underground through given we've got a large campaign this second half on the underground. So that was -- I would sort of almost say that's one-off. But if we've got capacity, we will take it because we believe with our mine plan, we've got 4.2 million tonnes of our ore that will go through the plant. If there is spare capacity, we would look at it. But right now, that is only really around the commissioning part of the plant that we did that purchase.

If we do, it's going to displace. I mean this 1 did -- yes, it made a profit didn't make a lot of money for us, but it allowed us to learn a lot about the plant.

Yes. And the reduction in cost guidance, I mean, that makes a lot of sense due to the stronger byproducts. Just trying to understand the 6% improvement at the midpoint -- how much of that would roughly be driven by the stronger byproducts versus it's a better-than-expected cost control from Mungari, et cetera?

Look, Adam, it's a combination of both what the split it depends on how we go through the second half. But like we're achieving $2,000, $3,000 a ton halfway through the year above what we had sort of guided at. Current price at 19 is sitting about 4.5 thousand above. So the byproduct credits are pretty important in that regard. But if you look at our gross operating and our net operating cost spend against our budget, it's pretty well in line, a little bit lower in some areas. And then when you look at our sustaining capital, we're actually tracking well against our guidance a little bit I'd say, a little bit of an opportunity for some of the sites to ask Matt for a little bit more money given the cash they're generating, but I do think the discipline around all of the capital has been very good across the business.

Your next question comes from Mitch Ryan from Jefferies.

I just wanted to sort of pick at 1 of your answers to Matt Frydman's question with regards to accelerating North Park, you sort of said you're obviously looking at E22 and accelerating that, but then also that expanding capacity. I just wanted to understand, is your thinking materially impacted by the triple flare agreement? And is there anything you're able to do around that with expanding North Park?

Yes. Look, Mitch, I mean, yes, when you look at North Parks, you've got a stream over it that we only get 40% of the gold and pay 100% of the cost. So it has an impact on what we can do in unlocking North parks. What I'd like is that we've engaged actively with them since we since we've owned the asset, they know they have a role to play, and we continue to work through what role they have in the site going forward in unlocking the value. I think because when we look at it, we've got -- it's permitted to 8.6%. It's running. It can get to 7.5 million -- we've got 600 million tonnes in resource. If you keep running at those rates, this mine is running for 75 years. So increasing processing capacity and mining capacity is the right thing to do at some point. but we've got to make sure that it's going to give us a good return, both on a pre- and post stream basis.

Okay. And then my second question relates to Ernest Henry. Just noting that you've obviously been able to pull forward some of those works. But were there any works that will be unable to be rescheduled into the shut that was bought forward? And if so, will they be deferred or completed later in the half.

The short answer probably is no. So nothing material. There were some minor tasks in the underground that we couldn't complete just based on access. So they will be completed, but they won't drive a processing plant shutdown or a material underground shutdown in the quarter. So I'd say 95% of the tasks we've been able to pull forward or deferred depending on which 1 it is.

Your next question comes from David Kurtz from Belote Securities.

Thanks for your time this morning and congratulations on a great quarter. it's a bit of a high-level question. There's been a lot of discussion and questions this morning about where you guys can value add? Is it dropping coalgate. Is it expanding plants? Is it maybe regional acquisitions. Just wondering -- and we're in this -- what's fairly unprecedented gold price environment, not just the price but still the rate that it's risen -- are there any -- out of all the sort of growth of value-adding options that you guys presumably are considering and have been discussed. What are the ones that are sort of flowing to the top as the best bank for your Bakken in this sort of environment as well at the moment? -- across the portfolio?

Yes. Lou, I'll get Matt to talk about what he sees as the opportunities at each of the assets. I mean, for us, if we can get more ounces or tonnes, copper tonnes out of any of our operations that basically improves our margin. That's really where we're going to focus. I mean I think we've always got to be conscious of is that in this current pricing environment, if you do approve a project and Cowal OPC as an example, and Mungari as an example, time to bring those to production is 2, 3 years' time. So you've got to have the real confidence in terms where the metal price will be in that time versus those short-term ones around improved marginal increases in processing capacity or recoveries or those things. They're the ones that you can certainly bring on straight away. But the others, you're going to be looking 2 to 3 years confidence that when you do bring them on, they're going to be in a good environment. And Mungari is an example, in '23, gold price was about 40% of what it was is today. and they're coming on at the right time. I've been involved in projects have gone the other way.

Matt, you want to talk about some of the things that we're looking at.

Yes. And solid from the ones that have already been spoken about of sort of if I just run through the operations quickly. The area that excites me most, if I pick Cowal is that I'm selling Glen thunder, but is the exploration and the resource potential that's there. So investing the money in the drilling, investing the money in the mining those 2 things, there's an opportunity to extend, which is not as exciting as growing, but there's also a pretty good opportunity there depending on where we see the long-term metal prices level out at, that you would grow Cowal again, that's pretty -- that's very exciting in terms of the results we're getting back through that, and Glenn will give an update next time we talk through that.

And then the other 1 there is also Mungari. In a similar vein, the margin and the value comes from the underground. So that the mill capacity is good, but if we can invest in our drilling and increase that percentage of underground through, that's where we get our growth in ounces without a material one. So they're our best bang for buck. And then like I said, earner exploration, you do have that capacity there. But the cave and whatever else is reasonably sort of restricted there. So additional ore sources around the region that we would see growth from that 1 as well.

Your next question comes from Zane Gol from JPMorgan.

Just the 1 for me today on capital management. How do you think about the dividend versus a buyback into the half?

Yes, Zane. We've talked about this previously. I mean, we -- buybacks are a part of a capital management plan that we look at I mean, for us, they need be sizable, if you're looking at 10% of the value of the organization as a benchmark. That's a large commitment over and I go back to the point of like if we've got projects that we can invest in that get a greater return for our shareholders, that will be the first priority -- the second part is that the flexibility around our dividend policy, where in this rising price environment, our shareholders will receive a greater portion of cash flow than what they have in the past. And I think that really gives the best value for our shareholders. So I don't expect that buybacks would be on the table for consideration by the Board this half year.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Conway for closing remarks.

Thanks, Amy, and thanks, everyone, for taking the time on the call today. We've got another safe and successful quarter. The cash flow is building the projects that we're running to are on plan and on budget, and we really look forward to updating you in a few weeks' time where Fran can tell you what we are doing with the cash as we release our half year results. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

11:00, so it must be 11:00, and let's get the show on the road. Good morning, everyone. My name is Jake Klein. I'm Evolution's Chair. It is a pleasure to welcome you to Evolution Mining's Annual General Meeting. Welcome, and thank you for joining us.

Evolution acknowledges the Gadigal people of the Eora Nation as the traditional custodians of the lands and waters of the Sydney CBD and pay our respects to their Elders past and present. We recognize their strengths and ongoing connection to the land, waters and communities as the custodians of their culture. I'd also like to acknowledge our First Nation partners in Canada.

In the unlikely event of an emergency, please leave via the emergency doors on either side of you to the left and right. Go through the courtyard. Fire wardens will be in place to direct you, and make your way directly to the front of the site and out of the gates. Upon exiting, please turn left and convene in the front of Hyde Park Barracks museum at Queens Square.

I'd like to introduce our Board members who are here today. Dialing in from her hometown in Perth, having just had an operation and unable to travel is Andrea Hall. Andrea is Chair of the Audit Committee and is a member of the Risk and Sustainability Committee. Andrea is up for reelection at this meeting. To my left is the one and only Lawrie Conway, who is Evolution's Managing Director and Chief Executive Officer. Next to Lawrie is Peter Smith. Peter is the Lead Independent Director. Peter is also Chair of the Risk and Sustainability Committee. Next to Peter is Jason Attew. Jason is a Canadian and a member of the Audit, and Nomination and Remuneration Committees.

Next to Jason is Vicky Binns. Vicky is a member of the Audit, and Nomination and Rem Committees. Vicky is up for reelection at this meeting. And to Vicky's left is Tommy McKeith. Tommy is Chair of the Nom and Rem Committee. Next to Tommy is Fiona Hick. And yes, [ LJ ], we did get the seating right. It does match the script. Fiona is a member of the Risk and Sustainability Committee. And next to Fiona is our Company Secretary, Evan Elstein. Evan is also the VP for Information Technology, Communication and Corporate Affairs.

We have a number of people here also from Evolution. I think this side of the room is pretty much all Evolution. But we have some members of the leadership team, which I'd like to introduce to you. The newest member of the LT is Fran Summerhayes, Chief Financial Officer. Fran joined Evolution on the 15th of September 2025 after a long and distinguished career at BHP and finally saw the light and joined Evolution. This is her first AGM. Maybe just stand up, Fran. Matt O'Neill, Chief Operations Officer; Nancy Guay, Chief Technical Officer, and I'm under good authority that, that is the correct way to pronounce your name. Glen Masterman, VP, Discovery; Paul Eagle, VP, People and Culture; Fiona Murfitt, VP, Sustainability; and Kirron Schmidt, VP, Corporate Development.

We do have a number of people who I think as shareholders, really, it would be worth meeting and talking to during the break after the meeting, and that is our general managers and colleagues in the room. We do have a number of people who are here from Evolution. They're all shareholders as are you and hence, here at the AGM as both owners of the company but also representatives and I think the people, particularly the GMs of the site, who are people who are making the Australian mining industry great in Australia and in Canada. So general managers of the sites, maybe just stand up, and people can see who you are. There you go, that handsome picture.

The order of proceedings for today will be as follows. We will work through the formal business of the meeting pursuant to the agenda set out in the Notice of Meeting that was issued on the 15th of October 2025. Copies of the Notice of Meeting are available at the front door. After all the agenda items have been dealt with, the formal AGM will be closed. Lawrie Conway will then give a company update presentation, and any questions received will be addressed.

This is our 14th Annual General Meeting as Evolution Mining, and it's really good to see a number of familiar faces here as shareholders who have been here, I think, at all 14 AGMs. I thank you for joining us here today, and I'm pleased to share with you some of today's highlights just as comments from me about the year under review, which was undoubtedly a very good year for Evolution and its shareholders.

With sustainability integrated into everything we do, keeping our people safe, healthy and well is central to who we are. This is why our safety performance improvement this year was very encouraging with our total recordable injury frequency rate coming down to its lowest level yet. Whilst it is only one indicator, it should provide you, our owners, with a level of confidence in our continued and strong commitment in keeping our people safe. We will remain vigilant, recognizing that safety needs to be continually worked on and can never be taken for granted.

This year is best described as one in which we did what we said we would do and we delivered. We were, of course, fortunate to be buoyed by high gold prices. It is hard to believe that the gold price is above AUD 6,000 an ounce. It is a tailwind, and it has benefited our entire sector, including Evolution. But what has helped distinguish this year as particularly special for Evolution was our continued focus and discipline on margin over volume and ensuring we bank that upside from the higher gold price and return cash to you in dividends as our shareholders.

This year, our Board declared our 24th and 25th consecutive dividends, resulting in a full year dividend of $0.20 per share, representing $400 million in total dividends returned to shareholders in 2025. And since 2013, when we paid our first dividend, our total return to shareholders stands at more than $1.7 billion.

In what was a record year for your company, we remain true to our disciplined strategy, evidenced by our high-quality portfolio supported by an excellent team. As we continue to benefit from higher commodity prices and a sustained case for a bull market in gold, we are well positioned for the future. Evolution is now included in the S&P/ASX 50 Index and the MSCI Index, which is something we would have considered really just aspirational when we began our journey of Evolution in 2011.

We are now a well-established global gold mining company with more recently -- with the more recent addition exposure to copper, committed to delivering long-term stakeholder value through low-cost production in a safe, environmentally and socially responsible way.

We are at a positive juncture in our business, but we will never stop working to be better. We recognize this takes daily commitments, a desire to succeed and a motivated team driven to continuously evolve and improve, and as those external shareholders are not part of the business, I really respect and recognize the people in this room and the more than 3,000 people across our business who really do that every day, aspire to improve and succeed every single day.

I stand here before you today as your now Non-Executive Chair, so any difficult questions can go straight to Lawrie, having transitioned at the end of the financial year from my executive role. We started this executive transition over 2 years ago because I think it was the right time for our company, and I'm really proud how Lawrie and I have worked together to deliver this outcome seamlessly and now positions the company and the team very well for its next chapter. I am extremely confident in Lawrie's leadership as Managing Director and Chief Executive Officer, supported by his experienced team.

The leadership team has been enhanced this year with the addition of Fran, who joined us as CFO from BHP. This appointment -- this follows the appointment of our Chief Operating Officer, Matt O'Neill and Nancy Guay as Chief Technical Officer just 12 months -- over 12 months ago. Evolution is in really good hands.

As I said to you a year ago, the world keeps -- the world has changed, and it keeps changing. Unfortunately, global tensions, political uncertainty and what the future holds remains a worrying constant. And this has been reflected in gold's remarkable price increase over the last year.

Our country's continued prosperity is dependent on the success of the resource sector. That really needs to be understood by the broader public. Our industry continues to play a pivotal role in Australia's economy. It contributes 57%, over half of total tax revenue and is generating nearly half of the country's income. Evolution is extremely proud to be a significant contributor to this, delivering $3.7 billion in economic value to Australia and Canada this year, which was a 16% increase over the prior year.

At last year's AGM, I also said that Australia needs to be committed to education and training, and I am proud that Evolution is playing its part. We recently announced a $1.25 million partnership with the University of Queensland to establish the Jim Askew Evolution Mining Fellowship, a 5-year initiative focused on unlocking unrealized potential in ore bodies to improve safety, efficiency and sustainability in mining. It is named in honor of Jim Askew, one of our founding directors and a well-respected leader in the resources sector. The fellowship will fund a dedicated post-doctoral research position at UQ's Sustainable Minerals Institute. It will also support additional postdoctoral researchers and higher degree research students. We're proud to partner with UQ to support research that will help shape the future of mining. We believe that innovation and sustainability go hand in hand, and this fellowship respects -- reflects our commitment, driving progress, sharing knowledge and creating value for the industry and the communities in which we operate.

In what has been a record year for Evolution, it's somewhat fitting that it also marks the final chapter for Mt Rawdon as an operating gold mine. We are well advanced in our vision to repurpose the site into pumped hydro station together with the Queensland government, and we welcome the Crisafulli Government's interest and involvement in this landmark project, which will facilitate low-cost renewable power and employment opportunities for decades to come.

But in the true spirit of our values and the essence of our culture, our Mt Rawdon team recently welcomed a very special visitor to site. Fortuitously and by coincidence, we were connected with David Muller, the person who had the vision to drill the first holes at the Mt Rawdon deposit almost 50 years ago and which led over the many years the making of a mine that has contributed so much to the region and Evolution.

David and 3 generations of the Muller family recently made their pilgrimage back to Mt Rawdon, marking a full circle and fitting final chapter for Mt Rawdon as a gold mine. I'd like to acknowledge and recognize David's vision and thank him for being one of those people in our industry that we depend on, someone with the knowledge, belief and vision to go from a few drill holes to a mine that's created value for stakeholders for almost 25 years.

At a time when mental health is increasingly important as we live in such a changing world, I was inspired by and proud of our Mungari team in Western Australia, who decided to think differently when they completed the Mungari 4.2 million tonne per annum plant expansion, and they painted one of their tanks in their expanded mill infrastructure blue, with a bright, bold and supportive mural with the words you're not alone. We hope all of our people feel that they are well supported wherever they are across our business, together with the people who live in the communities in which we operate. To my mind, this is one of the differentiating hallmarks of Evolution.

There are other fantastic examples of how we help across communities, whether it's our support for the CareFlight in Northwest Queensland or finding ways to provide medical support to regional communities where access is so limited.

For those of you who have attended previous AGMs, you may recall my enthusiasm about our graduate program. We have a bright future as a company, and it's the next generation of talent that we are attracting and retaining in our business who inspire my belief in our ability to continue to think differently, embrace AI, embed innovation and technology in our business.

We have an excellent portfolio of assets. Our Cowal Gold Operation, which recently celebrated 20 years of operations, embodies this and is a perfect example of our strategy in action. When we acquired Cowal in 2015, it was scheduled to finish mining in 2020 and process low-grade stockpiles for 4 years until closing in 2024, which was last year. But we could see the potential of its world-class orebody and under our ownership, supported and enabled by the appropriate regulatory approvals from the New South Wales and federal governments, Cowal's mine life has been extended time and time again.

Over the last 10 years, the operation produced 2.6 million ounces of gold, has paid over $200 million in royalties to the New South Wales government. And last year alone, we spent over $200 million regionally. Cowal is adding significant economic value and is creating positive social outcomes for the Central West New South Wales, and we're excited to know that this will continue at least into the 2040s with the opportunities for organic growth aplenty. As I've said many times, this embodies our strategy and our quest to secure the full potential of our portfolio, together with pursuing strategic growth opportunities that we are well known for.

Finally, on behalf of the Board, thank you for your support. You are the owners of the company, and we totally respect that. It is your belief in our vision and purpose as a company that motivates us to deliver for you. We have a bold team, a clear strategy and the absolute desire to succeed. Our future is bright, and I look forward to seeing you -- seeing what this year holds, building on the strong foundations, big tailwinds from the gold and copper price. And thank you for attending the 2025 Annual General Meeting.

So we'll now go to the formal proceedings. And before turning to these items of business, I will hand over to our Company Secretary, Evan Elstein, to note some procedural matters for today's meeting.

Thank you, Jake. This is a meeting of Evolution shareholders. As such, only shareholders, their appointed proxies or corporate representatives are entitled to make comments, ask questions or vote. All other attendees are very welcome as visitors and observers.

As the written questions received from shareholders prior to the meeting are of a general nature and not related to any specific resolution, they will be read out and addressed in the Q&A part of the meeting. You will be given the opportunity to make comments or ask questions in relation to the resolutions to be considered by the meeting. Shareholders with questions relating to specific resolutions are requested to ask them at the time the resolution is to be considered by the meeting.

At the appropriate time, the Chair will ask shareholders who wish to make a comment or to ask a question to raise their hand. Please state your name before asking your question and wait for the microphone to be provided.

The Chair has determined that we will hold a poll in relation to the items of business. The process will be that we will go through each resolution and then conduct the poll with respect to all the resolutions. After the completion of discussion and before the vote on a poll is taken for each item of business, the total number of valid proxies for that item and the manner in which they have been directed will be displayed on the screen. These numbers will be as at the closing time for receipt of proxies, which was 11:00 a.m. Australian Eastern Daylight Time on Tuesday, 18 November 2025. As noted in the Notice of Meeting, the Chair intends to vote proxies for the Chair in favor of the resolution.

For the purposes of the poll, Regi Harbron of MUFG Corporate Markets, the company's share registry, who have examined and prepared summaries of the proxy forms received, has been engaged to act as the returning officer. And Eve Argyrou of PricewaterhouseCoopers, the company's auditors, has been engaged to observe the poll and procedures before determination of the results is made.

When you registered your attendance at this meeting, voting shareholders and proxy holders were given a yellow admittance card. The card provides for the holding of a poll on any of the resolutions put to shareholders. On this card, you will find a series of boxes for voting. You must tick or mark the for or against boxes for your vote to be valid and counted for each resolution. If you wish to abstain from voting, please mark the abstain box on your voting paper next to the relevant resolution. If you are a proxy holder, you may only vote open or undirected votes allocated to you. If you wish to split these votes, you may write those open or discretionary numbers separately in the for or against box.

If you are a proxy holder and you do not lodge a vote on any of the resolutions, the votes on those resolutions will pass to the Chair of the meeting to exercise pursuant to the Corporations Act of 2001. The Chair must comply with the direction of the shareholder. Where no instructions have been given to the Chair on how to vote, as set out in the proxy form circulated to shareholders, the Chair has been expressly authorized to exercise those votes and intends to vote those shares in favor of all resolutions. If you have any questions in this regard, please make yourself known to a representative from MUFG Corporate Markets before lodging your voting paper.

Once all the resolutions have been read and questions relating thereto have been addressed and you have finished marking your card, representatives from MUFG Corporate Markets will collect your voting cards. After the votes have been counted and reviewed by the external auditor and after the company presentation, the results of the poll will be released on the ASX platform and displayed on the company's website following the conclusion of the meeting.

I'll now ask the Chair to proceed to the ordinary business of the meeting as set out in the agenda that appears in the Notice of Meeting.

Thanks, Evan. Did not read everything you've just said. I can advise that a quorum of members is present and call the meeting to order. The first item on the agenda is to receive and consider the financial statements of the company for the year ended 30 June 2025. The annual financial report of the company for the year ended 30 June 2025 together with associated reports of the directors and auditors have been made available to all shareholders electronically or in hard copy. I'll ask the Company Secretary to record that the report was tabled at the meeting. The company's auditor, PricewaterhouseCoopers, is present today and represented today by their audit partner, Brett Entwistle, if there are any questions specific to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the policy in relation to the preparation of its financial statements and the independence of the auditor in relation to the conduct of the audit.

Are there any questions related specifically to the financial statements? As there are no questions on the -- sorry, go ahead. I think we need the mic because it is being...

My name is [ Kevin Daly ]. I just got a slightly operational question as to how you respond to the high gold price. Do you try and maximize the grade of the ore you mine while the price is high? Or do you use lower grade ore, which possibly wouldn't be possible -- wouldn't be profitable when the gold price is lower and accept the lower result? Or do you do some combination of this? And of course, that depends on the extent to which you can control the grade of the ore you mine.

That's a good question, and thank you for it. But given that it's not related to financial statements, can I ask Evan to record that question, and we'll deal with it under -- once the formal meeting has closed. So we'll definitely address that. Any questions on the financial statements?

[ Steve O'Reilly ], shareholder. I'm just curious about the -- sorry, first of all, congratulations on a very successful year. I've been a shareholder for many years. It's great to see the doubling of the profit over the last few years. I'm just curious about the hedging position of the company and to what extent that may have changed as the gold price has increased substantially over the year.

So whilst it's not specifically related to the financial statements, I will answer that in saying that we have very minimal hedging in place at the moment, 50,000. So there's only 50,000 ounces left of hedging, which is rolling off in the near term. It's not our intention to put hedging in place. We used it as a tool to protect our capital investment, but it's not our intention to be a hedger of gold.

Any other questions on the financial statements? As there are no further questions on the financial statements, I will now proceed to the resolutions as set out in the Notice of the Meeting. I now go to resolution 1 of the agenda. The resolution to adopt the remuneration report is set out in full on the screen and in the Notice of Meeting. I will take the resolutions as read. Are there any questions related to this resolution?

Given there are no questions, I will go to resolution 2 of the agenda. This is a resolution to reelect Ms. Andrea Hall as a director of the company. It is set out in full on the screen and in the Notice of the Meeting. Andrea joined the Board of Evolution Mining on the 1st of October 2017. She is an experienced Non-Executive Director who currently sits on the Board of ASX-listed company, Perenti Group, where she is also Chair of the Audit and Risk Committee. Ms. Hall is also a Non-Executive Director of Commonwealth Superannuation Corporation, Western Power and Australian Naval Infrastructure. Andrea is the Chair of the Audit Committee and is a member of the Risk and Sustainability Committee. The Board, with Andrea abstaining, unanimously support her election.

I will now ask Andrea via phone from Perth to say a few words in support of her election. Andrea, are you there?

I am. Thank you, Jake. Good morning, everyone, and apologies for not being there in person. I'm excited by the opportunities that Evolution has before it, particularly the optimization, expansion and transformation of our cornerstone assets and by our talented management team and look forward to being able to contribute further to the continued realization of Evolution's strategy.

The value I bring to Evolution is that I'm an experienced Non-Executive Director and Audit Committee Chair. As a former KPMG partner and as an experienced Audit and Risk Committee Chair, I have a deep understanding of the financial and governance matters considered by our Audit Committee. Further, as a former risk consulting partner, I have a good understanding of both financial and nonfinancial risks that enable me to contribute strongly to the Risk and Sustainability Committee and more broadly to Evolution. Whilst I have worked with mining entities, I've also worked extensively with non-miners and bring those perspectives to Evolution. Once again, it is a privilege to sit on the Board of Evolution Mining, and I thank you for enabling that.

Thanks, Andrea. I will take the resolution as read. Are there any questions to Andrea?

As there are no questions, I will go to resolution 3 of the agenda. This resolution is to reelect Vicky or Victoria Binns as a Director of the company, and it's set out in full on the screen and in the Notice of the Meeting. Vicky, being a director, retires in accordance with clause 8.1(d) of the constitution of the company and being eligible for reelection is seeking reelection as a Director. Vicky joined the Evolution Mining Board on 1st April 2020 and is a member of the Audit, and Nomination, Remuneration Committees. The Board, with Vicky abstaining, unanimously support her election.

Vicky, over to you to say a few words to support your election campaign.

Many thanks, Jake, and good morning, fellow shareholders. It's a privilege to address you today to seek your support for my reelection as a Non-Executive Director of Evolution Mining. It's been a pleasure serving you and our shareholders, other key stakeholders, including our employees, our customers, our suppliers and our First Nation partners as well as the communities in which we operate.

I am a mining engineer who has spent more than 40 years in the resources, financial markets and commodity trading sectors, gaining extensive Asian and global experience in those areas. Since joining the Evolution Board 5 years ago, I focused on bringing that balance of technical understanding and financial and commercial rigor to our discussions.

The Board works closely with management to ensure that every project and investment decision reflects both strategic vision and financial discipline. Looking ahead, my priorities are clear: to uphold the Board's independence, to keep a strong focus on operational excellence and to make sure we continue creating cash and enduring value for all stakeholders in the short, medium and long term.

Evolution is a company with strong assets, strong leadership and even stronger potential. I believe I have the energy, experience and enthusiasm to continue to add value to the Board to help ensure that Evolution remains one of the most respected and trusted name in the Australian resource sector. Thank you.

Thanks, Vicky. I will take this resolution as read. Are there any questions?

As I have an interest in the outcome of the next resolution, I will hand the Chair of the meeting to the Company Secretary.

Thanks, Jake. I'll now go to resolution 4 of the agenda. The resolution to increase the maximum aggregate annual remuneration for Non-Executive Directors is set out in full on the screen and in the Notice of Meeting. Given the interest of the Non-Executive Directors in this item, the Board makes no recommendation to shareholders as to how to vote in relation to resolution 4. I'll take the resolution as read.

Are there any questions? Okay. As there are no questions, I'll hand the chair back to Jake.

There we go. Back on the long walk back to your chair. Got to start over here.

I'll now go to resolution 5 of the agenda, the resolution to issue performance rights to Mr. Lawrie Conway as set out in full on the screen and in the Notice of Meeting. The Board, with Mr. Conway abstaining, unanimously recommends that members vote to approve resolution 5. I will take the resolution as read. Are there any questions?

Steve O'Reilly again. I'm just wondering if you could just clarify something for me, Chair. Just looking at the various hurdles for the vesting and the various 25% components. I see there's like a peer group that will be compared to, and I think there's 7 companies in the peer group, and some of the actual hurdles seem to imply that there's more. So it talks about the ranking being ninth or eighth. But I think if I understand correctly, there's only 8 companies in the analysis. So I'm just curious about the ninth ranking. And even the eighth ranking, which would mean, I think, coming last in that group, would generate quite a substantial performance right.

That's not the intent. I think there's 15 peer companies that will be compared to, so eighth would be a 50 percentile comparator.

Okay. I was just looking at the notice. There seem to be 7 companies listed from AngloGold down to Westgold Resources. So if you have a look, if you got the Notice of Meeting in front of you on Page 11 -- on Page 13 of the Notice of Meeting, the peer group companies are listed there and the 14 companies plus Evolution makes 15 peer group companies.

Any other questions on that resolution?

I'll now go to resolution 6 of the agenda. This resolution is for the issue of securities under the Non-Executive Director equity plan, the NED equity plan, which is set out in full on screen and in the Notice of Meeting. I'll take the resolution as read. Are there any questions?

As there are no questions in relation to the resolutions put to the meeting, I will now open the poll. Please, can you fill out your voting cards? As a reminder, if you have any questions relating to the poll, please ask one of the representatives from MUFG Corporate Markets before lodging your voting card. Can representatives from MUFG Corporate Markets please collect the voting cards?

As the counting of the votes on these items may take some time and as previously advised, the results will be released on the ASX platform and on our website once the counting has been completed and reviewed by the external auditor and proceedings concluded. Ladies and gentlemen, that concludes the formal business of the meeting. I thank you all for your attendance and formally declare the meeting closed.

A presentation about the company will now be given by our Managing Director and CEO, Lawrie Conway. Following the presentation, we will open the floor for general questions and discussion with Evolution's Board and executives present.

Thank you, Jake. Good morning, everyone. Firstly, Jake, thank you for staying on as Non-Exec Chair. I think there's a lot of very happy shareholders, and I'm very happy because I get more time in my office without you in the office as previously the Executive Chair. So I do look forward to that going forward.

Prior to presenting this morning, I thought I'd just address the first question for you that you had earlier. I was going to get Matt and the general managers to explain each of their operations, but I thought Matt wasn't really up for that one. But quite simply, when -- we don't adjust our mine plans immediately just because of the changing metal price environment. We have long-term plans. We use lower metal price assumptions for those. But as we operate and we see that there is an opportunity to take advantage of the higher metal prices, we will do that.

So if we look at our large open pit operations at Cowal and at Mungari, as we're mining those, we actually will stockpile the lower grade material so that we put the higher-grade material through to maximize our margin. And across all of our operations in the underground, as we're mining those areas, we will look and see if there's economic material that we can extract and make more money in this metal price environment. So we don't really change materially our operations just purely because of a short-term change in pricing.

And I think if we look at Mt Rawdon, that is probably a very good example. So we finished mining there about 12 months ago. Ben is trying to make sure we go into FY '27 and keep operating there, Jake, not this year, because we've got very low-grade material that are on the stockpiles that we had mined over the time. And in this price environment, whilst it's a little bit higher in terms of our all-in sustaining cost, it actually makes very good money for us. So that's really what we're doing across the business. Is there anything further that you want?

[indiscernible]

Pleasure. So today, I just want to touch a little bit -- jake did speak about this in the opening speech, touch a little bit on FY '25 and then turn our attention to what we're doing as a company going forward because, effectively, delivering on the short term is what enables us to continue to execute against our strategy. And for me, what was pleasing was the work that we did through FY '24 in setting up for delivering in FY '25 certainly paid dividends for us. We got back to our mantra of we say, we do, we deliver by delivering to FY '25 guidance, both from a production and cost standpoint.

But importantly, as Jake laid out in his speech, we did that safely. We improved our total recordable injury frequency by 35% to get down to a record low 5, so it meant that we made sure that we did that safely. On that, we delivered guidance, as I said, and that delivery of guidance delivered us a record profit, which was double what it was the year before, and that is 2 years in a row that we've doubled our profit. We generated record group cash flow, just under $800 million. That was 3x what we did the year before. And it meant that the metal price environment that we're operating in flowed through to the bank account, which is important for us.

And for you, as shareholders, we're able to reward you as well. And as Jake said, we delivered a $0.20 dividend, $400 million return to our shareholders and tripling of our dividend. Importantly, though, that was done at a metal price that is well below what we're currently seeing. And so when we look at that, the foundations of FY '25 have set us up to deliver again in FY '26. We're on track to deliver that guidance, whereby we'll maintain our low-cost, high-margin position. And as I said, with a higher metal price environment for you as shareholders, that means the cash flow that we'll generate in FY '26 will be materially higher than what we delivered in FY '25.

So if we look at our strategy, the consistent execution of that strategy has significantly improved the quality of our portfolio. Firstly, all of those assets on this chart were not owned by the company when we started in 2011, and all of the assets outside of Mt Rawdon have subsequently been sold since we started.

The chart shows the quality of that portfolio. We've lifted our average mine life now to around 15 years based on reserves. And we've got an average rate of return out of those assets of 18% since we've owned them. The chart shows the reserve life and the production scale, but more importantly, I'll turn your attention to the color and the size of the bubbles, which represents the production -- sorry, the rates of return that we're getting on those assets and how much of the investment that we've made in those assets has been repaid. And a couple of things just to call out for you.

So if you look at Cowal and Ernest Henry, the yellow means that we've repaid 100% of everything we've invested in those assets. So if you consider that at Cowal, we paid just over $700 million 10 years ago, we've had that fully repaid, and we now have a life out to 2042. And for Cowal, which has been a very consistent performer for us, it delivered over $855 million of operating cash flow just in FY '25 alone.

If you turn to Ernest Henry, we acquired that in 2 parts in 2016 and 2021. We spent just on $2 billion buying that asset. It's fully repaid. It was due to finish operating in 2026 and now has a mine life out to 2042. And it's been a consistent cash generator since we've owned that in 2016.

And our most recent one is Northparkes, which we acquired in December 2023. It's been cash positive from day 1. And if you look at it, it's generated a rate of return in excess of 30% in just 2 years. So it really does demonstrate the quality of the portfolio that we've introduced at Evolution. And I'll talk a little bit about the upside that we've got.

And you will note down the bottom, I was going to talk about it later, but Mt Rawdon, as we do finish operating that, and as Jake outlined in his speech, it's a very unique way to close a mine that you can leave a long-term legacy in that community through a renewable energy project. And Jake has promised to have that done by February. Didn't say what year though, did you, Jake?

Another part of our discipline in terms of our strategy is that we do use your money very wisely. When we acquire assets, we use a combination of existing cash, debt facilities and equity. And if you look at the equity, the important thing is that we've only ever raised equity for value-accretive acquisitions. We've never asked you for your money to fix the balance sheet. We've never asked you to buy -- money to buy out hedge books or anything else. We have only used money to acquire value-accretive assets.

And so if you look at the chart there, it shows that if you participate in those equity raisings for Northparkes, Mungari, Cowal and Ernest Henry and retain that equity holding, in addition to that average 18% per annum that you're getting out of the assets that was on the previous slide, your equity has generated an average rate of return over 30%. So we do use your money wisely and we value that when we come to you to ask for an acquisition support.

So now I want to just talk a little bit about each of the assets and where we're going into the future with them. The thing that really excites me about Evolution is that every single asset in our portfolio has options for extending mine life, growing production and there's even more upside once we get into those assets. And it does demonstrate the work that we do in the due diligence when we go to look at these assets. We -- our most important part of that due diligence is what do we see as the upside that we can bring to that asset for you as our shareholders.

And first one up is Mungari. So we've just finished the expansion that Jake talked about. It was a $250 million investment that the Board just made the decision in June 2023. We delivered that under budget and ahead of schedule. It now will move Mungari back to a major cash contributor for the group with production of around 200,000 ounces per annum for at least the next 5 years and a mine life out to 2038.

Cowal, in April, the Board approved a $430 million open pit continuation project, which extends the open pit by 10 years and guarantees the operation out to at least 2042. As I said, it's been a major cash contributor since day 1. And when we look at Cowal and the investment in the open pit continuation project, Cowal will be able to fund that itself and still return cash to the group as we go through that project over the next few years. Pleasingly, at the moment, it is ahead of schedule, and it's on budget, which is great to see for Joe and the team.

Ernest Henry, as I mentioned earlier, it was due to finish in 2026. We've now got a mine life out to 2040. And the studies that we've done over the last 18 months have enabled us to not only keep the mine life out to 2040, but we're able to keep the processing capacity at the maximum of 6.8 or at its capacity all the way out to 2040. The previous pre-feasibility study had it only running to about 2033 before that production rate had to decline. In addition to that, because we've got processing capacity, we have been doing a study on a Bert orebody, which is up at the top of the pit that we can mine separate to the main orebody and therefore, increase the processing rate and production rate at Ernest Henry.

Northparkes has probably the largest sort of resource in terms of multiple orebodies, and we're working on how do we expand not only the mine life but also the production rate at that asset so that we can get greater returns than that 30% that we've been able to achieve in the first 2 years of ownership.

And at Red Lake, I think for us at Red Lake, the pleasing thing that John and the team have been able to do there over the last 18 months is get it back to being a consistent and reliable performer that's generating cash for the group. It generated $75 million of cash in FY '25, and when we get to the end of December, that will be at least 6 quarters in a row that it's been cash positive for the group. So it is starting to do exactly what we want it to do, but it's also got some low CapEx growth options that we can start to look at now that we've got a much more reliable and stable operation.

The other thing that I'd draw out is that these projects are all able to be funded over the next 5 years in our outlook that we provided in terms of our capital, but they're also going to be appropriately sequenced from not only a financial risk perspective but from an operational risk perspective.

So in summary, we're very pleased to have you as shareholders for what we see as a high-quality portfolio of assets. And as Jake said, we have a very bright future ahead of us at Evolution, whereby we will continue to safely deliver and consistently deliver the plan, bank the benefits of this high metal price environment to continue to return to you as shareholders via dividends and make sure we progress the multiple growth options that I've just walked through for you.

And with that, Jake, hand it back to you.

Thanks, Lawrie. I'll now just initially address the question that was submitted. The question reads as follows, now that Red Lake is finally showing a small positive cash flow relative to the size of the invested capital, is it time to consider gracefully exiting this poorly researched acquisition while demand for gold-producing mines is high as a result of record-high gold prices. Will the Board and management use the opportunity of record gold prices to offload the ill-advised Canadian asset? That's read verbatim.

The short answer to that shareholder is that, of course, all things will be considered in terms of maximizing the value of any asset, but we are not putting this asset up for sale. As Lawrie described, this asset has now generated 6 quarters of positive cash flow, and we feel that there is significant value to be created by operating the asset. Notwithstanding that, nothing is ever off the table if someone was to walk in and bid a price, which we thought was at least fair value or higher for the asset. But the asset is not for sale.

Any questions on -- to the floor?

My name is Craig Lee. I represent the Australian Shareholders' Association with my colleague, Julieanne Mills. And on behalf of the ASA, we'd like to congratulate yourselves on a fantastic year and particularly such a strong result. As you said, we're getting stronger by the year, and it's obviously a great demonstration of the leadership shown by this company.

I've got 2 questions. Just interested now that you've transferred to the nonexecutive position. At the ASA, we believe in moving -- it's early days, I know, but moving to Non-Independent Chairs. What are your thoughts on that into the future? Is that something that's on the horizon?

Craig, I think you -- just to paraphrase, I think you meant moving to Independent Chairs, not to Non-Independent Chairs because you have a Non-Independent Chair.

Exactly right. Exactly right.

Look, we recognize that from a governance perspective, that is a preferred position by groups like yourselves, and it's something the Board will take into account in due course. But at this stage, the general sense and feedback from shareholders is that the current position of having a Non-Independent Chair but having a lead Independent Director in Peter Smith is appropriate and suitable for the stage of the company.

Okay. That sounds great. And my other question is around Northparkes Triple Flag streaming implications. Can you quantify the impact of the Triple stream at Northparkes on the F '25 revenue, cash flow and the AISC? And explain how much further upside has effectively been sold forward through this streaming deal.

So before Lawrie scrambles to answer that question and finds the numbers, which he will know, I would have thrown it to Fran, but I think that's a bit unfair. I will just say that the streaming deal on Northparkes was done prior to our acquisition of the assets. So CMOC owned the assets, and they put the streaming deal in place. When we did our diligence on the asset, we knew that, that stream was in place, and we took it into account when we acquired the asset for AUD 550 million. Without that stream, the asset would have been significantly more valuable, and we would have had to pay a higher price. But just to clarify, it is not a stream that we put in place.

Lawrie, do you have those numbers or -- I don't think you need to press that.

Are you sure?

I don't think so. I was told before.

Good to see you listen, Jake. Look -- and Jake's right. So we had to inherit that stream. I think a couple of things to be clear on, though, that the work that we did in the acquisition, we were able to make sure that for that stream, we get the tax deductibility of delivering that metal because under the previous arrangements and the previous owners, they weren't able to have access to that. So it's not that you're losing that full impact of that stream.

So if we look at it in FY '25, it was just over $140 million that was delivered to Triple Flag. So it impacted in terms of the revenue. It didn't have an impact in terms of the all-in sustaining cost because it's on the revenue line, not the cost side. And as we go forward, essentially, when you look at it, it's -- based on the current life of mine plan, the Stage 1 of that stream will apply going forward for at least probably the next 20 years under the current operating environment that Northparkes is in, whereby they end up with 60% of gold and 90% of the silver.

[ Paul Hatfield ]. Red Lake has seen a decrease of 4.5 million ounces compared to the estimate in December 2023. Are we likely to see any more decreases there? Or is it you're fairly confident that what -- these established figures are correct?

So it did experience a decrease, and we feel that we now have the assets and the understanding of the orebodies to the point where there wouldn't be a material decrease going forward.

And am I right in saying that it's 30 grams per tonne on Red Lake? Is that...

No, that's...

I'm trying to work out from the report. I haven't had a chance to look at it.

There was an orebody that existed at Red Lake called the high-grade zone that averaged 30 to 50 grams a tonne. Regrettably, that was mined out by the previous owners, and we're left with an orebody of about 5-ish grams a tonne.

Okay. And lastly, so Red Lake at the moment isn't included in the compound annual growth rate there.

In terms of the returns on...

Yes. There -- it hasn't been going long enough to show a return.

No, it is showing a return now. It hasn't repaid fully its purchase price and investment, but in due course, assuming it continues to consistently perform, it will certainly start repaying some of its capital investment.

Yes, I'm just going by the slide. You didn't have Red Lake number.

No, it's not yet a gold color. But Lawrie and John's job is to turn that red into gold.

You'll see that Red Lake is actually just -- it's sitting behind the Evolution Group average, so it's got a similar mine life. So that's why it is identified on that chart, but it's sitting behind the Evolution Group average, and we can show you that after.

Mr. [ Good ], welcome.

Just a simple three-part question.

I need 3 parts today.

Just all on dividends. When making so much money, do you intend to increase the payout ratio or make special dividends or pay quarterly dividends?

That's 3 parts of the same question. Look, I think, [ Keith ], the reality is we're in a situation, which we didn't expect to be in. We are deleveraging materially faster than we expected to be. We are making and generating a lot of cash. Management's focus is on ensuring that, that cash gets banked. How we deploy that cash in due course will be something that the Board debates. But certainly, thinking about different ways of paying out dividends is part of that.

The one thing that I will assure you that we won't do is that we won't reduce the hurdles for investment of your money into our portfolio of assets, and we will remain disciplined. So in the event that we have excess cash, we will determine how to deploy that outside to shareholders.

Any other questions?

[ Gary Pierce ], a long-time, very happy shareholder. My question was I presume Lawrie didn't throw you under the bus when you suggested you're going to have Mt Rawdon up and running by February next year, is it?

Mt Rawdon has an option that the government of Queensland effectively own. So they have spent close on $40 million this year assessing the pumped hydro opportunity. And everything suggests that there are no fatal flaws to it and that it is the most advanced and most cost-efficient pumped hydro project to be able to be developed in Queensland. The challenges are that it is a significant investment. It's multiple billions of dollars, and the Queensland government is moving towards determining whether they want to exercise the option, which would be in the first half of next year.

It will take probably 2 years after that and some hundreds of millions of dollars to get to an FID investment decision, and then it will take billions of dollars of investment to get it to be a 1.3 gigawatt pumped hydro opportunity, which is part of the Crisafulli Government's plan. It is the best investment that they could make in renewable energy in terms of storage, but there are a number of hurdles to go through. We will not, as Evolution, be investing in a pumped hydro asset. We will be relying on the government of Queensland to be doing that for us. But it will be, in my view, one of the most unique and opportunities to showcase how mining on a disturbed land site can be converted into renewable long-term multigenerational renewable asset. So yes, I'm very excited and committed to doing that because I think it will showcase mining in a completely different way, and that's something that the mining industry needs to do to demonstrate its credentials to the larger community.

[ Sankar Krishnan ], I'm also a very long-term shareholder, happy. Just wanted to ask you whether AI technology has got any impact on the way you do business.

I would say that the mining industry, and I'd put Evolution in that category, have been slow adopters of AI, but it's something that Nancy and her team are looking at now. I think there are tremendous opportunities for embracing AI, particularly the speed at which AI is changing and the ability to implement that and introduce that to our business could have substantial and material changes. But we are early, early stage. The mining industry are late adopters, and I think it's a huge opportunity for both the industry and Evolution.

Another question about the pumped hydro. I love this concept. I think it's fantastic and they support what you're doing. And I think it will be great if it happens. But I just have a few concerns around governments not actually putting the money in. So if that doesn't happen, what is the backup plan?

Thanks. You should be concerned about the governments putting in the money. They'll put it somewhere else, but they'll definitely spend it. The backup plan is to either close the mine as contemplated, and Ben and the team and Fiona have done a lot of work in ensuring that, again, even if it didn't turn into a pumped hydro that it would be a model closure of a facility, and it's something that Evolution could be proud of.

Of course, there is the potential of the Stage 5 cutback and trying to access gold below that, which Evolution may or may not decide to do itself. But if the gold price were to remain around $6,000 an ounce, there is potential to potentially look at that. But that is not something that we would like to do ourselves at this stage.

So sorry, just to follow that up, that financially, do you have the funds there to support that remediation if that...

We do. It's accounted for in the -- in our financial statements.

Sorry, I have one more question. With respect to cash and cash equivalents you have in the balance sheet, do you hold gold also as an equivalent or...

We don't at this stage. It is something that we are contemplating. We do hold a lot of gold, but it is still in the ground and needs to be extracted. So there's multiple million ounces that we do hold, but it does need to be extracted. It is something that is on our agenda as to how do we manage our treasury given that we are in now the position where we have long-dated debt, which is -- it's low-cost debt. It's less than -- is it less than 4%? The private bonds that we placed at a very opportune time. And now that Fran is contemplating this good problem to have that she may have too much cash and what does she do with it, allocating it to gold is one thing that we are thinking about.

Any other questions?

No. Okay. Well, then we'll -- I'll just make one final comment. As I sit here listening to Lawrie's talk, I mean, this is a long document, which we have put in many, many hours to create for you. But when I was paging through it, it really does capture a year in which has been fantastic for Evolution, but it is the work not of a few people writing this report. It's the work of over 3,000 people working 24 hours a day. Our mines run 24 hours a day, 365 days a year to try and develop and create what is in this document.

So I do encourage you to read through it, at least look at the photos. They're great. And thank you for your support. But to this team over here, thank you so much for the contribution that you've made. You make Evolution the company it is today. So thank you.

We will now get to the good part of the meeting, and we'll be able to have some tea and cake, and you will be able to meet the people who are really creating the value for your company.

Thank you for standing by, and welcome to the Evolution Mining September 2025 Quarter Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Lawrie Conway, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Darcy, and good morning, everyone. I'm joined on the call today by Matt O'Neill, our Chief Operating Officer; Peter O'Connor, our General Manager, Investor Relations; and Frances Summerhayes, who joined us a month ago as our CFO. It's great to have Fran on board, and she's made an impressive start in the first month. I will have Fran make a couple of introductory comments about herself soon.

Today, we released the September quarterly report, which will be the reference point for the call. There are 3 key things to take away from the call today. Firstly, we're on track to deliver on our FY '26 commitments. That is is for group guidance, production, costs and capital. Our projects are on schedule and on budget, and our 5-year capital outlook remains unchanged.

Secondly, there's been a structural shift in the sector, both for gold and copper. Gold as a financial reserve has accelerated with central banks being net buyers of gold for 27 of the last 28 months. For the first time since 1996, Central Banks are holding more gold in reserves than U.S. Treasuries. In terms of copper, short-term supply issues matched with an increasing long-term demand forecast but no clear pathway for increased supply is seeing rising near-term and long-term copper prices.

Lastly, Evolution with a long-life low-margin portfolio, including 2 high-quality copper assets and minimal hedging is able to take advantage of the current metal price environment, invest for future growth generate high-margin returns for our shareholders for the long term, not just the next few years.

The September quarter was another quarter where we safely delivered to plan and starts FY '26 very well for Evolution. On the safety front, we maintained the improving trend with our TRIF remaining below 5. Production for the quarter was 174,000 gold ounces and 18,000 copper tonnes at a very low all-in sustaining cost of $1,724 per ounce for continuing operations. This performance delivered record net mine cash flow of $366 million and our second highest operating mine cash flow of $676 million.

Net mine cash flow for the quarter was up 23% against only a 4% increase in the achieved [ go. ] The benefit of copper in the portfolio is further evidenced with the price up 15% in the quarter.

A couple of record net mine cash flows to call out include $55 million at Northparkes and $39 million at Red Lake with that operation continuing their safe and reliable delivery of positive cash. Importantly, the cash generated in the September quarter was at prices well below the current spot prices. Spot prices are $1,200 per ounce and $1,300 per tonne above what we achieved in the September quarter. The 2 cash flow charts on the first page clearly demonstrate the potential for the year should these high prices remain. It means we would generate over $3.3 billion in operating mine cash flow and around $3.1 billion in mine cash flow before major capital, an improvement of around $570 million compared to where the spot prices were when we released our FY '26 guidance in August. It would also be $1 billion more cash flow than what we generated in FY '25.

Group cash flow for the quarter was $196 million. As outlined at the June call, we expected a working capital unwind in the September quarter. In the June quarter, we had higher capital predominantly associated with the plant expansion completion at Mungari, the commencement of the OPC project at Cowal and ventilation and truck work at Ernest Henry. This resulted in $35 million in high liabilities balance at the end of June, which were paid in the September quarter. We also had $26 million in higher receivables at the end of September due to higher volumes of concentrate sales outstanding compounded by the rising copper price in the quarter. This is actually a positive, though, as we receive those proceeds in the December quarter. We now expect working capital movements to return back to a normal rhythm where on a full year basis, the movement [indiscernible] each either in an inflow or an outflow.

Our balance sheet flexibility further improved with gearing now at 11% and a cash balance of $780 million. Our disciplined capital management continued during the quarter, repaying $170 million of our term loans. Post the quarter end, we paid the remaining $110 million. These loans are now fully repaid, and we have no debt repayment commitments until FY '29.

On the projects front, Mungari has successfully completed commissioning the expanded plant and will be in commercial production this month. The final project cost is now forecast at $212 million, which is 15% below the original budget. Given the $43 million of net mine cash flow for the quarter, Mungari is well on its way back to being a material cash contributor for Evolution and quickly paying back the project investment.

At Cowal, the OPC made a solid progress during the quarter with commissioning of the open pit trucks and completion of the Northern Lake protection band. The project remains on schedule and on budget.

With that, I'll now hand over to Fran to introduce herself before Matt takes us through the operational performance.

Thanks, Lawrie. I'm delighted to have joined Evolution Mining at a pivotal time for both the business and the broader industry, especially with the structural change happening with gold and the supply disruptions in copper. With increasing metal prices and a clear strategic focus, Evolution is well placed as one of the lowest cost gold producers, consistently and safely delivering robust margins and cash flows.

In my first month, I've had the opportunity to visit 3 of the operations and participate in Board meetings. What stood out for me is the depth of the safety culture and the openness and enthusiasm people have across the business for being part of Evolution. As the CFO, my initial focus is on listening, learning and building relationships including with our current and future investors and the analysts who cover us.

I bring a disciplined, value-driven approach to capital allocation and operational efficiency. It's an exciting time to be part of the Evolution team, and I am committed, along with the management team, in elevating the business and making a meaningful contribution to Evolution.

Thank you. Over to you now, Matt.

Thanks, Fran. As Lawrie noted, the September quarter was in line with our full year plan, and we remain on track to meet full year guidance, allowing us to continue to benefit from the rising metal price environment. We produced 174,000 ounces of gold and 18,000 tonnes of copper over the quarter. And pleasingly, we did this at a lower-than-planned AISC, helping us to generate a second consecutive record net mine cash flow.

Despite these positive metrics, the area I remain most proud of is our safety performance. Happily, I'm able to repeat a message I've given a number of times in these updates, which is to report that our performance in this area continues to be strong as evidenced by our total recordable injury frequency rate for the group dropping below 5. The consistency and predictability we are seeing in the operation continues to be built on the back of teamwork and collaboration across the entire Evolution team, and it's a credit to everyone involved. Our goal remains the same. We say, we do, we deliver, and I'm very pleased to say that I think we've done that this quarter.

As I noted earlier, our operations have started the year in line with plan and remain on track to meet full year guidance. Some items for note for the quarter were Cowal and Ernest Henry completing their regular biannual shutdown activities. We also had some minor interruptions to the open pit interruptions to the open pit activities or the mining activities at Cowal due to wet weather. However, it was pleasing to see the work the team have been doing on improving resilience pay off as we were able to feed the processing plant from our mine surface stocks, ensuring no mill downtime or feeding of subgrade stocks.

Works are progressing well on the OPC project. And as Lawrie noted, the [ Lake Protection Bond ] has been completed ahead of schedule within the September quarter.

Red Lake, Northparkes and Mt Rawdon continued to deliver in line with their plans. The ramp-up of the mill at Mungari continued through the [ quarter with ] final commissioning on track to be completed this month. And I'm happy to be able to report that throughput our expectations, and the team on site are very excited to see what they can achieve with the new plant.

This brings the formal part of our update to an end. I'll now hand back to Darcy for questions.

[Operator Instructions] Your first question comes from Kate McCutcheon from Citi.

Just starting at Ernest Henry, you gave us the update. So now that shaft is full to 2040 plus, and you pushed out that $200 million of CapEx outside the next 5-year profile. So that's a great outcome. How do I think about the incremental cost of that AOF material that will be trucked because I imagine that would be higher cost. So if we looked at dollar per tonne mining cost at Ernest Henry today, say, mid-30s, in real terms, what does that look like on the revised plan? Or is there anything you can talk to about that?

Yes, I'll hand that one to Matt.

Yes. Thanks, Lawrie. So the alternate ore sources, there's a variety of places that they're coming from, Kate. So a lot of them are actually going to be used through the old materials handling system. So they're going to be through passes back to the crusher in the same way that we mine those levels initially. There are a couple that we will truck and truck a little bit further into those passes. So there's not of a material shift. We're not trucking the material out of the pit. Like when that first -- that operation first started, we were trucking all the way to the surface, which obviously almost doubles the unit cost. That's not what we're doing with the alternate ore sources. We do a bit of rehab and we'll get back to the old systems of using the passes.

Sorry, the last -- below -- below the -- sorry -- when we get below the crushing horizon, which is we're into that area now, we are going to be trucking back up to the crushing horizon, and that's got a dedicated truck loop. Again, it's only a pretty short level, like it's 25 meters between levels. So obviously, the further we go, we'll increase the number of trucks and ventilation, which we've sort of documented pretty well over time. But again, they're not going out of the pit. So it's not a material step change in unit cost.

Okay. Got it. That is helpful. And then at Cowal, now that you finished that Northern Lake protection fund, is there scope to pull forward the Southern fund and putting that together? I don't mean to put the cart before the horse, but do you see scope to reduce that open cut feed gap later this year or a risk to the upside?

Kate, spoken like a good engineer. Yes, the work is finished. The site team is looking at whether we continue and do the Southern Lake Bond. But it's not needed. But given the works and the progress we've made on the Northern, they'll have a look at it. We know and we've said this previously, if we do need to do it as a wet move on the Southern Bond, the project allowed for dry, you're talking about $40 million to $60 million of incremental capital over and above the project budget, but it does give us access to the southern area. So that's something that we'll assess over the next 3 to 6 months.

Your next question comes from Daniel Morgan from Barrenjoey.

I guess my focus is also on the bond and the OPC. What would be the benefits of bringing forward the southern access, getting access to those open pits? Can you help us think about timing of grade of magnitude? I mean I know that you've just outlined an additional cost if it's a wet move. But with gold prices where they are bringing forward, that potential production would seem to be pretty beneficial, would it not?

Yes. Look, I'll hand that to Matt, Dan. I'd say that one -- there's 2 things from an overall perspective for the operation is that when we're time to do that in a few years, if you do have a couple of wet seasons, then what does that do to the time that it takes and the cost of actually doing that bond versus now while we've got the access. It does give us greater flexibility on the site. But Matt, do you want to talk about what it does operationally with the pits?

Yes. It's really around flexibility, Dan. But you wouldn't see anything materially increase in the next 12 to 18 months. Obviously, we're trying to work towards the northern area being pulled forward. And that works that they completed in the first quarter have allowed us to go a bit further in front than we were.

The Southern one will also open up some additional -- different material opens up some oxides, which we do like treating. It does help with our throughput. So it's an option for us that we're going to be chasing. But again, it comes with that price tag. So it's a question of when the extra ounces come through to offset the stockpiles that we're planning on treating now. And at the moment, it's not within the next sort of 12 or 18 months just in terms of where you'd sit it.

So Dan, in short, for your models, as Matt said, nothing over the next couple of years. If we did make that decision and let the market know, we would sort of say what does it do in terms of years 3 to 5.

Yes. That's very clear for now. On -- just staying on Cowal and just the more immediacy. Obviously, wet weather, it looks like you had some impact from the bottom of the pit, just having access to it temporarily. Where is access at currently? And should we expect that high-grade ore to come through this quarter or perhaps in the second half of the fiscal year?

Yes. So we've got access back. We were out for between 1.5 weeks and 2 weeks of impact in the pit over the course of the quarter, mainly in September. We have got ourselves back where it's pretty tight. I think as people will most be aware of when we get to the bottom of that pit, it gets pretty tight. Normal operations have resumed. We're expecting to see a kick up in the next quarter, and then we'll continue that through until that pit is finished. There's no change to the fact that, that pit will be finished this financial year, and then we'll go to the stockpiles after that.

And then just last question on Mungari, just the latest live update of the ore sources ramping up in Sympathy with the mill expansion.

Yes. So we're in front on the ore sources. So Castle Hill has done really well. The team out there with NRW have done a fantastic job. So very happy where that is, and we've got enough stocks in front of the mill now. We're running it through its final sort of stages of commissioning almost as we speak with different types of material and hardness and locations. So everything is performing quite well, and that's -- I'm pretty comfortable that by the end of October, we're in a good position where that mill is commissioned, and we're away, and we've got enough feed to achieve what we need to achieve.

Your next question comes from Andrew Bowler from Macquarie.

Just a question for me on capital returns. I mean you outlined on the front page, and I think it's pretty clear to everyone that if gold prices continue, you'll be in a net cash position by the end of the financial year. Is the review of the capital returns policy something you consider once you get back to that net cash position? Or is there -- is it very much a reinvestment story for some other projects potentially, for example, bringing a block cave on a little bit sooner than expected at Northparkes, et cetera? Or would you look to that capital returns line item with that excess cash?

Yes. Andrew, look, it's a good problem to have with the rapid rise in the gold price. I mean we said at the August call that as we've now got to 15%, we're now touching down to 10% gearing. That means we've got to look at what we do in terms of that capital returns for shareholders. We'll be doing that at the half year when we look at the interim and also as we go into the second half of the year.

Our policy of paying out around 50% of cash flows, I think, still works very well, and that means we've got some opportunities to look at that. I mean when you talk about the capital, our 5-year capital outlook allows for a block cave at E22, moving it forward. I mean, it was due to -- for decision in FY '27. So it wouldn't really change our capital spend over the next 5 years anyway. But as I said, when we get to the half year, we'll discuss with the Board as to what we do around those returns.

Understood. And just one more from me. Obviously, it was reported by the media during the quarter, there was some continued issues with the power supply in the Kalgoorlie region. From memory, Mungari is running off that local grid out near Kalgoorlie. Can you just talk through if there was any impact from that and what sort of mitigation strategies there are? Are you looking at adding a backup plant or potentially increasing renewable penetration there to sort of help smooth out that -- those reliability issues that Kalgoorlie is seeing at the moment?

Yes, it's Matt here. Yes, we did see interruptions at Mungari with the power issues that have been occurring there. So we had a number of shutdowns, some of them planned but with relatively short notice and others load shedding events where we had to take the plant down. We do have partial backup supply there. So we've got some generators as a result of the new investment. And so we use that to keep the plant alive, but it doesn't run the mill for want of a better term. It stops the sanding and creating operational problems. So yes, it did have an impact. We lost quite a few days, almost a week, if you like, with the interruptions from the power side there as well.

In terms of options going forward, we're like everybody else in that region. We'd like the government to do something about it. But also we would -- we're looking at what options do we have. I know other companies have done things themselves. So we're looking at all our options because those interruptions, we don't see them change in the short term.

Your next question comes from Hugo Nicolaci from Goldman Sachs.

Just first one for me on Mungari. It looks like your processing costs are still largely being capitalized. Should we expect that to normalize from this quarter forward, just given your processing rates ramped up? And where do you see those processing costs maybe on a per tonne basis normalizing to?

Yes. You want to cover that?

Yes, you will see it ramp up -- sorry, ramp up. You'll see it capitalizing, and you'll see it come up. We had a forecast of reducing AOSC by about 16%, I think, was a number, which at the moment, we see it in line with when we're looking at what we're looking at. So we'll keep running it in full mode for the next probably 2 quarters before we can give you a really good steer on where it is. But yes, it's in line with what the project expected. And at this stage, we haven't come up with any material variances in what we thought it would cost.

Got it. And then just one on cash generation. I guess understanding sort of where the costs may be normalized going forward. Just you highlighted at the start, obviously, the commodity price strength in both gold and copper. But if I look at the major cash generation before major capital, it's obviously down quarter-on-quarter. Are you able to just give us more color on the timing of those copper payments you highlighted and then where the costs may be normalize going forward from here?

Yes. So a few things there, Hugo. I mean the costs -- the only real change you'll see in the operating costs as we go forward is what Matt talked about as we ramp up production at Mungari. And so those processing costs will be sort of in the $16 to $18 a tonne in the second half of the year and the all-in sustaining cost comes down. The actual operating costs as we go forward. The other main driver will be obviously royalties on the gold and copper revenue. So we don't see a lot of change through the balance of the year. The guidance, as we've said, $1,720 to $1,880 remains in place.

In terms of then the concentrate, so it's different at each of the operations. So Ernest Henry has now reverted back to a 1-month quotational pricing period. It was -- at the end of June, it was on a 4-month. So the shipments, therefore, will be settled within basically 60 days rather than 120. So that is why that receivable balance will come down through the December quarter. Northparkes is on a 3-month pricing period. So that's not going to change too much in terms of the 10% final payments that we receive, and it is then going to be driven on shipments. So we had a big shipment quarter. We had 4 shipments this quarter at Northparkes as opposed to only -- I think it was 2 in the previous quarter. So that will sort of start to normalize, as I said, around our working capital.

And then just lastly on Cowal and the throughput there with the sort of lower throughput this quarter. Are you able to give us a steer in terms of what the profile in terms of tonnes and grade looks like for the rest of the year? And around that guidance, should we expect you to continue to process the higher-grade material off the stockpile to keep that sort of 1.3, 1.4 throughput grade?

Yes. The short answer is yes. We'll see it come back into that range a bit higher. And with where we sit in the pit and access back in the -- it will return to the normal operating range until probably quarter 4 where we see the pit completing, but we also see that being offset by the underground ore sort of ramping up through there, and that's going according to plan as well. So yes, it will kick up from first quarter, but it will sit in the normal ranges that you'd expect for the guidance.

Your next question comes from Baden Moore from CLSA.

The CapEx guide, it sounded like you're looking at bringing forward some production or at least looking at your growth options. 5-year guide at $750 million to $950 million, do you think that's still appropriate now just given where your cash flow is running to and the market seems to be signaling it's time to produce more.

And maybe just a second question. I was wondering if there's any change to how you're thinking about increasing your utilization on your Ernest Henry mill now you've got some certainty around what's happening in Isa.

Yes. So Baden, the CapEx profile, the $750 million to $950 million over the next 5 years, as we've outlined previously, and certainly, if you look at the deck that we issued at Denver, it outlines all of the projects. I mean, we've got the E22 at Northparkes, the OPC at Cowal, the Bert ore body at Ernest Henry, all of those projects are in there. So any acceleration of capital just because of the metal pricing would be incremental at this stage.

And then when you talk about the utilization at Ernest Henry, that is the study that is going on at Bert, which allows us to go in from the open pit and come out through there rather than using the materials handling system to enable us to get higher utilization of the installed capacity there.

So just to confirm, no read-through here that you'd necessarily be reviewing that $750 million to $950 million over the next 12 months?

Not unless there's other projects. And as I mentioned just earlier, if we bring forward that work on the Southern Lake Bund at Cowal, that is additional capital that we would have to bring in that's not in the 5-year outlook. And then if we make any other decisions across each of the assets, then we would update if there is a change in that capital. But the capital we've put out there for the next 5 years allows us to deliver those growth projects at each of the assets.

Your next question comes from Matthew Frydman from MST Financial.

Maybe firstly, a bit of a 2-parter on costs at Cowal. Clearly, a pretty big step-up in AISC quarter-on-quarter, running a little bit above your guidance range. Can you step us through the drivers behind that? I mean, is it purely just the shutdown activity and the rain that you alluded to? Or is there anything else that really needs to kind of normalize across the coming quarters in order to bring unit costs back into the guidance range?

And I guess the second part of the question is maybe thinking a little bit more longer term. How should we be thinking about the mining cost and the AISC as we come to the end of the year when the open pit finishes and obviously, you transition to more stockpiles? Clearly, quite a few moving parts there with the stockpile drawdown, the OPC being capitalized, et cetera. So what does that all mean for how we should think about unit costs compared to, I guess, the actual cash expenses coming out of the business into the back end of the year?

Matt, that was a lot of questions in one. I'll try and address it for you. And then if Matt wants to add anything, Matt, on our side, not you, wants to add anything, we will.

I mean the first thing I'd say is you got to look at Cowal, over the years, it has delivered to its numbers. It's on track to deliver the guidance. It was expected in the first quarter that you have the maintenance shutdown with lower production, but there the maintenance costs. So that's driven up the all-in sustaining cost. As Matt mentioned, we lost 1.5 weeks, 2 weeks on having to use stockpiles due to the wet weather. That's a noncash use of lower [ grade ] for the cost for this quarter, but the costs will come down as we mine the pit out through the rest of this year and displace that stockpile material. So if you look at it, we're going to deliver to the guidance range. We're on track for that. The costs were expected to be higher in the first quarter.

As you go into the next year, we then are processing stockpiles as we finish mining E42. That will be for about 18 months, 2 years. So therefore, your costs on an AISC basis are going to be fairly similar, if not a little bit higher because you're going down in terms of the grade of that stockpile material.

But I just bring you back to the bigger picture. I get it -- Look at Cowal, operating cash flow this quarter of $215 million. So that's an annualized rate of $860 million, which is more than what we generated last year. And if you take -- overlay it with the gold prices, for the rest of the year, you're probably looking about $250 million to $270 million extra cash flow. So it's almost like at Cowal, you buy 4 quarters and you get a fifth quarter free because it would generate over $1 billion of operating cash flow for the $100 to $200 an ounce on the noncash inventory that it does to the AISC, I'll take the operating cash flow every day.

Yes. Got it. And you sort of alluded to the fact that going into next year with the lower stockpile grade, the AISC will be broadly flat or maybe actually a little bit higher. But in terms of the actual cash generation of the business, as you're alluding to, it should actually improve materially given that you -- on a kind of expensing basis, those stockpiles are already -- you've already paid for them.

Absolutely. And being clear that next year, we do a full year on lower grade stockpiles. So production is going to be lower. Therefore, the AISC will be a bit higher on a noncash basis, but I'd expect it's going to make fairly similar cash flows before, obviously, the investment in the OP, the operating cash flows will be very solid. Yes.

Yes, exactly. Okay. That makes perfect sense. And then maybe just quickly, you alluded to in the text that the underground at Cowal ramping up to 30% of mill feed. I think previously, you said the target was 2.4 million tonnes per annum. Is that number still right? It sounds like if you're feeding -- depending on your throughput rate, if you're feeding 30% of mill feed there that maybe there's actually a little bit of upside risk to the underground. How should we, I guess, think about what your aspirations there are?

I'll hand this to Matt just to talk about where the underground will fit. We're not sort of upgrading that. That was this quarter. And so therefore, obviously, as we -- we had the mill outage for the maintenance for the quarter. Therefore, as we brought that online, the underground got priority feed over the open pit. And certainly, when we're out for the wet weather, the underground got priority feed. But Matt, do you want to talk about the big picture of the underground [ feed? ]

Yes. So we had a pretty strong quarter at the underground with the total material moved increasing to the point where we're pretty comfortable. 2.3, 2.4 is what we're going to be running at, and we've seen the team on site able to deliver that. So no plans to go further than that at this stage, obviously, investigating what can we do with where everything sits, but that's where it still sits and comfortable that, that's achieved or achievable with the team we've got.

[Operator Instructions] Your next question comes from Alex Barkley from RBC.

A question on Ernest Henry feasibility study. Just firstly confirming if that was completed and might it get released at some point? And then are you able to talk about some of the updates versus the PFS, maybe around life extensions or grade changes? Just any details.

Yes. Thanks, Alex. I'll get Matt to add to this. The feasibility study finished. And as we've said, essentially, with the amount of ore that we found below the existing [ 11 75 ] and where we're planning to put the materials handling infrastructure, it's now filled with ore. So that means that infrastructure has to go lower down in the cave, and that work will be done over the next sort of 12 to 18 months. But essentially, the outcome is that we continue mining. We mine below the 1,175 and we truck back up to the materials handling system. And as Matt said earlier, we'll also be mining additional ore sources that have been identified that we can use the existing materials handling system for.

So there's no real outcome on the study per se because essentially, all we're doing is increasing ventilation, refrigeration, adding in trucking and doing development. So it's just a continuation of the mining because we're not adding any of that infrastructure, which pushes the $200 million out of the next 5-year capital profile. And so that's really what the outcome of the study will be.

You want to talk about the mining? And one of the main things that came out of the study is that we actually keep the plant filled through to 2038, whereas the PFS had it declining from about 2033 through to 2038. So it now does keep it filled at 6.8 till 2038. You want to talk about just sort of the mining?

Yes. I mean same mining method at the moment. The mining below the crusher horizon sublevel caving truck back to the crushing horizon. Grade is not changing materially. To be honest, there's a little bit more gold in some of the places that we've seen, but you wouldn't see it as a material variance to what we've been mining so far. So all in all, the drilling that we did for that study sort of in a good way, said there's a lot more there. It's just now we got to work at where we put the infrastructure. So that work is ongoing, and it doesn't interrupt the existing operations for quite a few years yet.

Okay. That's all very helpful. Just the last one on the Mt Rawdon hydro project. You -- last quarter, you had a comment around the Queensland investment, but not this quarter. Why is that? Is it possible to get a quick update on the project and the timing there?

Yes, Alex, look, it's continuing to work to plan. I think if you look at news out of Queensland in the last sort of 4 to 6 weeks, they're doing a full relook around some older other renewable energy projects and focusing on all of that. Ours is still tracking to plan the commitment to the project. We're doing work on site that's being funded by the government and the expectations are that in the March quarter of next year, we'd get a sort of a final outcome on in terms of the government exercising that option on the project.

[Operator Instructions] Your next question comes from Ben Wood from UBS.

A few of the questions have already been asked. But I guess one from me is on the gross debt from here, noting that there are no obligations until FY '29 as sort of outlined in the release, but the continuation of the 100% pay down this quarter. How are you sort of thinking, I guess, about the gross debt pay down from here in respect to the capital allocation piece sort of asked by Dan before and just sort of noting that the gearing situation has greatly improved from even 12 months ago. So how are you thinking about that?

Yes, Ben, I mean, it's -- as I said earlier, it's a good problem to have. I mean, in terms of the gross debt, the next repayment is due in FY '29. And as it's in our U.S. private placement notes, you can't prepay those. So we won't be paying off any more gross debt between now and FY '29. That's a $273 million payment in the first half of FY '29. That would sort of be the next repayment. What we do with the cash that we're generating now is something that we will take and discuss with the Board as we come into the half year and again, as we come to the full year.

Certainly, as you would have seen over the last 2 years, as the gearing has come down, the dividends have gone up. As the cash flow has increased because of the pricing, we've also been increasing the dividend. So that's expected to continue. What we do with the extra cash is going to be discussed in the next 6 to 9 months.

Helpful to know that the early prepayment is not an option for the '29.

There are no further questions at this time. I'll now hand back to Mr. Conway for closing remarks.

Thank you, Darcy, and thanks, everyone, for your time on the call today. We've had another safe and consistent quarter, setting the foundations for FY '26 and on track to deliver guidance and certainly make sure we take advantage of the current high metal prices, be that gold, copper and silver. Thank you for your time today.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.