Evolution Mining (ASX:EVN): Born from a merger 15 years ago, now the ASX’s 2nd largest gold miner

Its another day, and so it’s time to look at another gold miner – today it is Evolution Mining’s (ASX:EVN) turn in the spotlight. As of mid-June 2025 it is the 2nd largest gold miner behind Northern Star (ASX:NST) and the 35th largest company on the ASX, newly added to the ASX 50 in the June 2025 rebalance. Let’s take a look at how it got there and what is next.

Evolution Mining’s history

Evolution was formed in 2011 by a merger of Conquest Mining and Catalpa Resources. The latter owned the Edna May Mine in WA’s Goldfields while the former owned the Mt Carlton project in Queensland and the Panjingo gold mine. The deal also saw the company buy assets belonging to Newcrest, one of which was Mt Rawdon. At the time, there were few Australian gold miners (most gold miners were foreign owned), but Evolution aspired to make a name for Australia in its own backyard.

The company has grown through organic growth of its mines, and also through M&A. It bought Cowral in 2015, Ernest Henry in 2016, divested Edna May to Ramelius in 2017, bought Red Lake in 2020, divested Mt Carlton in 2021 and Northparkes in 2023.

Today its portfolio of mines include:

• Cowral and Northparkes in NSW (owning 80% of the latter)
• Ernest Henry and Mt Rawdon in Queensland,
• Mungari in WA,
• Red Lake in Canada’s Ontario province

Evolution has Mineral Resources of 30Moz of gold and 4.4Moz of copper. Ore Reserves at 11Moz gold and 1.4Mt of copper, representing an average mine life of 15 years. 8.9Moz is from Cowral, 2.8Moz from Ernest Henry, 7.2Moz (each) from Mungari and Red Lake, 1.1Moz from Marsden and 3Moz from Mountparkes.

In FY24, Evolution made a profit of $422m on a statutory basis and $482m on an underlying basis, both figures more than double. In the first half of FY25, it produced a record performance, again most than doubling its profits (in fact more than tripling on a statutory basis). It has guided to 710-780,000/oz gold and 70-80,000/t copper at an AISC of A$1,475-1,575 per ounce. With gold prices over A$5,000 – that’s going to be a fair bit of cash.

Consensus estimates expect revenues to grow $1.1bn to $4.3bn, EBITDA to grow $700m to $2.2bn and its profit to more than double. For FY26, they expect $4.8bn revenue, $2.65bn EBITDA and another 47% jump in profit. Even so, Evolution is trading at 13.1x P/E and 0.32x PEG for FY26. Whilst its $18bn market cap doesn’t scream cheap, these multiples tell a different story.

What is there to worry about?

Commodity prices, arguably, but it is difficult to see a scenario that’d cause gold prices to collapse substantially. The lives of its mines could give cause for concern, none will last forever. But the company is working on extending the lives of its mines.

In April, Evolution announced it extended its Cowal operation to 2042, in a step that will generate a 71% rate of return at the current gold price or 30% at a gold price of A$3,300/oz. Again, prices are above A$5,000/oz right now. It also announced an expansion of Mungari that’ll extend its life to 2038.

Why Evolution stands out

One way is its exposure to copper – this commodity derives 25% of group revenue. It has a Resource of 4,400kt of copper, more than half of which is at Mountparkes.

We are very bullish on copper, we think it’ll be the commodity of the next decade. Copper is important, both in respect of ‘conventional industrial technologies’ like in wiring, but also decarbonisation technologies such as in renewable energy systems and in electric vehicles. An EV uses nearly four times the quantity of copper compared to a traditional fuel-powered car.

This demand is not just for copper itself, but also for copper companies – BHP went so far as to offer A$75bn for Anglo American, but still got knocked back. Capstone could well be a takeover target in the years ahead. It is a similar situation with ASX copper stocks. There is a shortage of pure-play copper stocks since Oz Minerals’ acquisition. This was a successful acquisition of BHP which paid $10bn about a year ago to take it over.

Evolution also offers exposure to hydrogen. No, not production…yet. But it is planning to close Mt Rawdon in 2028 and then build a renewable energy storage system.

Conclusion

This company is the second largest gold miner for many reasons. Because it has a portfolio of high-quality, long-life assets and is on a couple of hot commodities (even if only one is being lauded right now).

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