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00:00Been talking about these highs time and time again for effort for gold I should say given what we're seeing with risk appetite across the world as we continue to deal with the pandemic issues . I'm wondering what your outlook is for gold in particular in dollar terms or hovering at near record highs. What way do you see this going. And what do you plan to do with the influx . Good morning. I think you'd have to say that the outlook for gold is is positive. Gold perform as well in periods of uncertainty. And we certainly have lots of uncertain times at the moment with these fiscal programs that all the governments are appropriately injecting into their economies and printing money. The one currency you cannot print is gold. And that's so it's got investors interests. It's seventeen hundred U.S. dollars today. We were certainly pleased to hear that Bank of America's forecast is 3000 U.S. dollars an ounce. And there's definitely a lot of positive sentiment around gold. That said from an evolution and company perspective we continue to be focused on margins and profitability. Exactly. So what will you do with all of that money flowing in. Are you going to pay down your dad. Are you going to look at emanations. What are your plans . We're going to do everything through the lens which we've always done it through which is let's see how we can improve the quality of our portfolio and create value for our shareholders . Late last year we acquired the Red Lake Mine in Canada that we see as a very deep value opportunity a turnaround opportunity that will ultimately in time become a very important part of the value creation at evolution and an important part of our portfolio. But you know we're a strong dividend payer. We pay half of our free cash flow to shareholders. Our last dividend payment in March was a record one hundred over 100 million Australian dollars to two shareholders. We're making lots of cash flow and we're going to husband that makes sure we take care of it. And if we cannot invest it appropriately and improve the quality of our portfolio we're going to give it back to shareholders . On your operations in Canada has evolution to face any impact because of the travel curbs in place because of this pandemic . So we were fortunate that we we signed the deal on the 26 of November and we've had access to site for over three months until we acquired ownership. We have a couple of representatives from evolution on site at the moment. We've we've put in a new management team in place and they have really stepped up to the challenge and starting to really make the changes that we see necessary for the transformation of this assets. Well it is an unusual situation that we couldn't be at the site on the day we got ownership media or capacity to do virtual conferencing town hall meetings . Technology is allowing us to be there virtually. And the team on onsite is really taking the running and doing very well at the moment. So let's talk a little bit about that positive sentiment when it comes to gold. We are seeing event demand for gold coins. Bar is soaring. Does that really translate into gold miners and trying to ramp up production . I think that's been a unfortunately a mistake of the past that the industry has made that as the gold price has gone up we've mined full volume rather than full value. And margin evolution right from when we have formed in late 2011 has consistently said that we are not going to be focused on volume but we're going to be focused on margin and profitability and quality of portfolio. So you can see that we're one of the lowest cost gold produced in the world. We recognize we operate in a very cyclical sector of the gold sector is cyclical. We're in a favorable phase. Hopefully it will become even more favorable . But from a business perspective we're running it so that we can be more profitable in the good times and make more money. But if the bad times did come back we will still prosper through that cycle. And does that include hedging more production trying to sort of lock in these higher prices . We've done a little bit of hedging and mainly to protect our capital investments at red like the asset. We've recently acquired we've done a small amount of hedging. Our hedge book is about 15 percent of our production going forward for the next three years. We think that's prudent just to ensure really it almost has insurance and to ensure that each side is able to pay for its capital and not and not be cash depleting and be able to be cash generative. And we use it as a protection mechanism . But we are largely unhedged and exposed to the upside in the gold price .

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Outlook for Gold Is Positive, Says Evolution Mining’s Klein

Jake Klein, executive chairman at Evolution Mining Ltd., discusses his outlook for gold, his business strategy and the operations in Canada. He speaks exclusively on “Bloomberg Daybreak: Asia.” (Source: Bloomberg)

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