Gold’s historic price surge has opened the door to margin expansion for producers, but Australian gold and copper miner Evolution Mining MD and CEO Lawrie Conway has cautioned the sector to avoid past mistakes, warning against poor capital allocation during boom cycles.

“As an industry, we have been poor allocators of capital through these periods of record margins,” Conway told delegates at the Diggers and Dealers conference in Kalgoorlie.

“It’s imperative for us, as we go through this cycle, to apply discipline in terms of capital investment so that when the cycle turns, our shareholders aren’t left looking and saying, ‘Where is the cash?’”

Conway noted the rapid pace of gold’s rally, stating it had gained $1 000 in just four months – a record movement. While this creates a strong backdrop for gold miners, he stressed that shareholder returns must remain a priority.

Diversification also plays a key role in Evolution’s strategy, with copper providing a buffer during gold price volatility. “Copper is certainly a differentiator in our portfolio,” Conway said, referencing assets such as Ernest Henry and Northparkes, which generate 25% to 30% of Evolution’s revenue.

"With those two commodities, we are able to sustain our margin and not have that volatility in the portfolio."

He underlined copper’s role in the energy transition, but warned of a tightening market. “It is going to take in the order of $2-trillion in investment in copper mines to achieve that net zero target by 2050,” he said, adding that low treatment and refining charges pointed to a growing supply-demand gap and higher prices ahead.

On Evolution’s operations, Conway highlighted the long-life and high-return nature of its portfolio, with Cowal generating A$880-million in operating cash flow last year and now approved for an openpit extension to 2042. 

Ernest Henry continues to deliver strong results, with exploration indicating further mine-life extensions, while Northparkes – acquired only 18 months ago – has already delivered A$180-million in net cash and has significant future potential.

“Why Evolution? We have got an underlying focus on margin over ounces and continually improving the portfolio,” Conway said.

“We have seen our production increase three-and-a-half fold. We have increased mine life to 18 years, and we have been increasing our dividends – and we expect to continue to do that in this rising price environment.”