{"id":55774,"date":"2014-08-11T04:27:04","date_gmt":"2014-08-11T08:27:04","guid":{"rendered":"http:\/\/countingpips.com\/?p=55774"},"modified":"2014-08-11T04:27:04","modified_gmt":"2014-08-11T08:27:04","slug":"why-the-evolution-mining-price-fell-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/08\/why-the-evolution-mining-price-fell-today\/","title":{"rendered":"Why the Evolution Mining Price Fell Today"},"content":{"rendered":"
August 11, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

What Happened to the Evolution Mining Share Price?<\/h2>\n

Shares of Evolution Mining [ASX:EVN]<\/strong> fell by 5.77% on Monday, closing at $0.735. <\/p>\n

Why Did This Happen to Evolution Mining?<\/h2>\n

Evolution shareholders have had a roller coaster ride this year. The share price was up over 100% at one stage, but has been on the reverse ever since. <\/p>\n

Evolution has attracted interest following its growing gold production base over the past couple of years. Operations are full steam ahead. The company produced 427,703 ounces of gold last year and plans to do a similar result this year. <\/p>\n

Furthermore, total costs for the company fell from AU$1,178 per ounce in 2013 to AU$1,040 per ounce last year. Next year, the company is aiming to produce its gold at in the range of AU$1,050\u20131,130 per ounce (US$970\u20131,050\/oz). In my view, this cost of production is good but not great. <\/p>\n

Nonetheless, the issue for the company is that its all in cost still stands at AU$1,289 (US$1,196) per ounce of gold. <\/p>

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A company\u2019s all in costs include its ability to cover finance and capital costs. In EVN\u2019s case, this cost reflects the company\u2019s true \u2018breakeven\u2019 cost. And there\u2019s little margin remaining between the current gold price and the company\u2019s breakeven price. <\/p>\n

The gold price currently stands at US$1,305 per ounce. And it has been struggling to get momentum over the past month when it briefly touched US$1,330 per ounce. And based on my analysis, gold will head below US$1,000 per ounce heading in 2015.<\/p>\n

I\u2019ve provided significant fundamental and technical analysis on this in Diggers and Drillers.<\/p>\n

If I\u2019m correct, Evolution shareholders will likely be in for a world of pain heading into 2015. <\/p>\n

What Now for Evolution Mining?<\/h2>\n

Evolution is not a cheap stock. It has significant debt, totalling over $126.8 million. <\/p>\n

Saying this, the company pays a small dividend (2% of gold production) and the management team has a proven track record of reliability. <\/p>\n

Looking at the company\u2019s cash generation capability, a concern for me is the rising Aussie dollar which is tightening margins. For the June 2014 quarter, the Aussie dollar averaged US93.3 cents. If it falls lower, this is good for shareholders. <\/p>\n

Nonetheless, with a high breakeven price and leveraged balance sheet, the gold price is the most important indicator to watch for the stock.<\/p>\n

As I\u2019ve discussed in Money Morning, I\u2019m bearish on the gold price. In this case, the volatile gold price remains the biggest risk for punters. <\/p>\n

Jason Stevenson+<\/a>
Resources Analyst, Money Morning<\/em><\/strong> <\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

The post Why the Evolution Mining Price Fell Today<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

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\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What Happened to the Evolution Mining Share Price? Shares of Evolution Mining [ASX:EVN] fell by 5.77% on Monday, closing at $0.735. Why Did This Happen to Evolution Mining? Evolution shareholders have had a roller coaster ride this year. The share price was up over 100% at one stage, but has been on the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-55774","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/55774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=55774"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/55774\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=55774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=55774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=55774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}