DroneShield Ltd (ASX: DRO) shares are climbing in mid-morning trade following the company’s announcement of a contract win. At the time of writing, the DroneShield share price is swapping hands for 16.75 cents, up 8.06%.

What’s pushing the DroneShield share price higher?

The DroneShield share price is soaring following the company’s latest update released prior to this morning’s open.

In its announcement, DroneShield advised it has been awarded another government contract from a Five Eyes country. The term ‘Five Eyes’ relates to a signals alliance between the United States, Canada, Australia, the United Kingdom, and New Zealand.

DroneShield noted that the new order, valued at $1 million, exceeds the original purchase made by the high-profile government customer. The company received a $500,000 payment in the June 2020 quarter for the trial procurement of the same product.

It’s expected that the full payment of the current order will be accepted sometime in the June quarter of this year.

In further news boosting the DroneShield share price, the company also highlighted that current discussions are underway for follow-up orders with this customer. While the purchase amounts are still yet to be confirmed, DroneShield will update investors in due course.

What does DroneShield do?

According to DroneShield, the company is a global leader in drone security technology. It designs and develops detection systems that use specialised technology to protect people, organisations and critical infrastructure from drones.

Its multi-layered drone countermeasures include detection and disruption products which are much needed in the current environment.

Words from the CEO

DroneShield CEO Oleg Vornik welcomed the repeat order, saying:

We are pleased to continue to support and strengthen our partnership with this customer, who has some of the most demanding requirements globally.

This significantly larger follow-on order is a testament to both the industry leading capabilities of DroneShield products and an example of a common procurement pattern in our industry, where an initial order and evaluation might take some time, but once the solution has been validated and thoroughly vetted by the end user, larger follow-on orders result.

The DroneShield share price has risen by just under 40% since this time last year. Year to date, however, the company’s shares are down by around 7%.

More reading

• Why the Droneshield (ASX:DRO) share price will be on watch tomorrow
• Why the DroneShield (ASX:DRO) share price is lifting 6%

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Decmil Group Limited (ASX: DCG) share price is surging today after the company announced a contract win.

At the time of writing, the engineering company’s shares are up 5.26%, trading at 60 cents.

What did Decmil announce?

In this morning’s release, Decmil advised that Rail Projects Victoria has awarded the company a contract to upgrade the Gippsland rail.

Decmil will join its partners through the VicConnect Consortium to undertake several works for the project. The work includes extending the Morwell crossing loop, upgrading level crossings and signalling, and adding second platforms at Bunyip, Longwarry and Morwell.

This will increase the frequency of trains running off-peak between Traralgon and Melbourne to every 40 minutes.

The VicConnect Consortium is a strategic alliance of Decmil, Arup, and Cimic subsidiary, UGL.

The entire Gippsland project is worth $300 million, with Decmil’s share of the contract around $140 million. This brings the company’s order book to $570 million thus far.

The company expects to start the major works sometime in the early part of this year and finish by mid-to-late 2022.

The initiative falls under the Victorian Government’s $4 billion Regional Railway Revival program. It aims to improve every regional passenger rail line within Victoria while creating jobs in a COVID-19 environment. This includes the Ballarat line, Shepparton corridor, Warrnambool line, Geelong line, Bendigo and Echuca line, and the North-East line.

CEO commentary

Decmil CEO Dickie Dique welcomed the deal, saying:

We’re delighted that the contract for this important project has been awarded to VicConnect.

We believe that the alliance with UGL and Arup to successfully deliver the Gippsland Line Upgrade will mark the beginning of a long and fruitful association.

This award enables Decmil to utilise the company’s existing skillsets and equipment in a new market opportunity.

About the Decmil share price

The Decmil share price has fallen heavily over the past 12 months, losing more than 60%. Year-to-date, the company’s shares are down almost 10%.

Decmil commands a market capitalisation of $73 million at the current share price, with approximately 128 million shares on issue.

More reading

• Why the Decmil (ASX:DCG) share price jumped 9% today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The People Infrastructure Ltd (ASX: PPE) share price is charging notably higher on Monday morning.

At the time of writing, the workforce management company’s shares are up a solid 4% to $3.55.

This latest gain means the People Infrastructure share price is now up a sizeable 60% over the last 12 months.

Why is the People Infrastructure share price charging higher today?

Investors have been buying People Infrastructure shares this morning after it announced a new acquisition.

According to the release, the company has entered into a binding agreement to acquire the SwingShift Nurses business.

Swingshift Nurses was established in 2000 and is a leading nursing agency focused on the mental health market. It is a contracted preferred supplier to most public sector hospitals in the Victorian market.

The release explains that the two parties have agreed an acquisition price of $3.1 million. This is payable in cash upon completion and will be funded from People Infrastructure’s existing cash reserves.

Management expects the acquisition to be earnings per share accretive. It is also expecting the Swingshift Nurses business to generate $1 million in operating earnings in the first 12 months following completion.

Positively, this is expected to be a swift process, with management anticipating the acquisition completing in the coming weeks. This is subject to satisfaction of sale conditions.

People Infrastructure’s Chief Executive Officer, Declan Sherman, appears very positive on the acquisition.

He commented: “The acquisition of SwingShift Nurses is highly complementary to our existing Victorian nursing staffing business. The Business is well established in the Victorian market and will facilitate further growth into the mental health market.”

“People Infrastructure is especially attracted to the Business due to its strong position in the Victorian specialist nursing on-hire contracting market, and its long term relationships with its customers,” he concluded.

More reading

• Here’s why the People Infrastructure (ASX:PPE) share price is one to watch today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of People Infrastructure Ltd. The Motley Fool Australia has recommended People Infrastructure Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price is sinking on Monday morning.

At the time of writing, the iron ore producer’s shares are down 4% to $20.40.

Why is the Fortescue share price sinking today?

Investors have been selling Fortescue shares this morning after a decline in the spot iron ore price offset a positive announcement.

According to CommSec, the benchmark iron ore price fell by US$5.35 a tonne or 3.1% to US$165.70 a tonne on Friday night. This meant that over the week, the iron ore price fell by a total of US$8.95 or 5.1%.

The steel-making ingredient came under pressure last week when Chinese authorities curbed steel production in order to tackle rising pollution levels.

What did Fortescue announce?

The weakness in the iron ore price has ultimately offset an announcement by Fortescue revealing its plans to be carbon neutral by 2030. This is 10 years earlier than initially planned.

Fortescue’s Chairman, Dr Andrew Forrest, commented: “We have joined the global battle to defeat climate change. We are trialling and demonstrating green hydrogen technologies in global-scale commercial environments, while also rapidly evolving into a green hydrogen and electricity producer of similar scale.”

“Our commitment to demonstrate green hydrogen’s economic value in world-scale operations, and become a major energy exporter, while implementing the considerable facilities to support both, means that Fortescue has emerged not simply as a thought-leader and investor, but uniquely as an executor of major green hydrogen projects.”

How will Fortescue achieve this?

Dr Forrest revealed that the company is aiming to provide the missing links in the battle against climate change.

He explained: “Our aim is to provide the two “missing links” in the climate change battle, to create both the demand and the supply of green hydrogen. Due to its high energy performance and environmental neutrality, green hydrogen and direct green electricity has the potential to eliminate fossil fuels from supply chains. Once established, these advances will also substantially reduce Fortescue’s operating costs.”

Fortescue’s strong focus on green energy and our carbon neutrality targets will sit alongside our continuing excellence in, and commitment to, our iron ore business. While our green energy and industry initiatives may one day significantly outscale our iron ore business due to the global demand for renewable energy, our commitment to iron ore and resources globally remains indefeasible,” Dr Forrest concluded.

More reading

• ASX 200 Weekly Wrap: Calm restored to the ASX 200
• 5 things to watch on the ASX 200 on Thursday
• Here’s why the Fortescue (ASX:FMG) share price sank 8% today
• Why the Rio Tinto (ASX:RIO) share price is among the worst performers today
• Why Accent, Fortescue, Western Areas, & Zip shares are tumbling lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shareholders of ASX software company Altium Limited (ASX: ALU) may be left frustrated at the company’s performance over the last 12 months.

Like many ASX growth stocks, the Altium share price was savaged in the broad-based market sell-off that occurred at the height of the COVID-19 panic last March, with its share price plummeting from a high of well over $40 to just $23.11 in a matter of weeks.

However, over the next few months, Altium shares rallied strongly, reversing most of those coronavirus losses and climbing all the way back up to a 52-week high price of $40.21 by late October.

But, since then, the company’s shares have again slid lower, and at their current price of just $26.76, they are not far off the COVID-19 lows they posted almost exactly a year ago.

What’s going on with the Altium share price?

Altium released a string of market announcements throughout 2020 advising investors that COVID-19 headwinds were putting pressure on sales. In a June announcement, the company tried to reassure shareholders that it was on target to deliver strong revenue growth in challenging conditions but anticipated that its performance would still fall short of analyst expectations for FY20.

In the end, revenues increased by 10% in FY20 to US$189.1 million, with earnings before interest, tax, depreciation and amortisation expenses (EBITDA) up 13% to US$75.6 million.

The company’s efforts to brace the market for a potentially disappointing result seemed to have worked, and the Altium share price jumped 7% the week of the results release.

However, since then, concerns around the continuing impact that the COVID-19 pandemic will have on the company’s full-year FY21 results, coupled with some disappointing first-half revenue numbers, have seen the Altium share price drop precipitously.

At the same time, Altium has entered into plans with FSN Capital, a European private equity firm, to divest one of its software development divisions, TASKING. Altium has agreed to sell the division in a deal worth up to US$110 million, with US$10 million remaining conditional on Altium hitting certain performance targets throughout FY21.

TASKING revenue was flat year-on-year for FY20 as its software tools cater mainly to the automotive industry, and the COVID-19 pandemic severely impacted its performance. However, it still contributed US$19.8 million to Altium’s top-line revenue number.

The financials

The investor presentation at the company’s annual general meeting in November flagged the possibility for slower revenue growth over FY21. The company stated its expectation was for full-year revenue to increase by between 6% and 12% to between US$200 million and US$212 million. This implied there was the likely possibility that revenue growth could decline year-on-year.

In reality, it’s panning out worse than that. In mid-January, Altium announced that unaudited revenues for the first half FY21 had actually declined by 3% year-on-year to US$89.6 million. Despite the poor result, Altium decided not to adjust its FY21 outlook at the time, stating that it saw enough “positive signs” to remain confident that it could still hit its full-year target.

The problem is that this puts an incredible amount of pressure on the company to perform strongly over the second half of the year. And this creates unwanted risk, which investors typically aren’t keen on.  

More recent updates

In the investor presentation that accompanied its first-half FY21 results announcement in February, Altium did adjust its full-year outlook. It stated that it now expected full-year revenue (excluding the TASKING division it is in the process of divesting) to be in the range of US$190 million to US$195 million.

Given TASKING contributed US$19.8 million to Altium’s full-year FY20 revenue result, this would imply an increase in ‘core’ revenue of between 12% and 15%. This is actually higher than the 11% year-on-year revenue growth the company delivered (excluding TASKING) in FY20.

Only time will tell whether Altium can live up to its optimistic targets over the second half of FY21.

More reading

• 10 of the best ASX shares to buy in March
• ASX 200 tech shares set to rebound as bond yields fall
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX tech shares to buy after the selloff
• Is Altium’s (ASX:ALU) dividend growth star fading?

Rhys Brock owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Eagers Automotive Ltd (ASX: APE) shares are trading not far off their all-time high of $15.34.

The Eagers share price has managed to shrug off the worldwide disruption of the COVID-19 pandemic. After opening slightly lower today at $15.05, shares in Eagers have surged more than 420% since their March 2020 lows. 

So what’s been happening for the automotive dealer?

What’s been driving the Eagers share price?

Late last month, Eagers released its financial results for FY20. 

Despite COVID-19 lockdowns keeping consumers away from showrooms, Eagers declared statutory revenue of $8,749.7 million. The result was a strong improvement compared to $5,817 million in revenue for FY19. In addition, the automotive company reported a 102% increase in underlying profit after tax of $140.4 million. Despite the robust figures, the Eagers share price slumped 10% following the release of the company’s results. 

Due to the pandemic, Eagers did not pay a half-year dividend nor a final dividend for 2019. As a reward to shareholders, however, the company declared a full-year dividend for 2020 of 25 cents per share, a total of almost $64 million.

In its report for FY21, Eagers cited solid growth in its share of the new vehicle market as well as a more robust performance in its truck retailing segment. The company also noted a stronger performance in the truck retailing market for the full year.

Eagers highlighted the company’s pre-owned vehicle strategy, which delivered strong year-on-year growth. In addition, the company noted improved customer offerings including click and collect and online financing. 

Early momentum for FY21 was also reported by the company, with Eagers noting that orders have continued on a strong trajectory for the new financial year. The company expects supply constraints to ease and global manufacturers to re-open throughout the remainder of FY21.

Outlook 

Earlier this month, the Federal Chamber of Automotive Industries (FCAI) released new vehicle sales figures for February 2021. The data highlighted that new-car sales in Australia surged for the fourth month in a row. As a result, automotive companies like Eagers could be poised to benefit as the sector comes back to life.

In addition, the company also plans to radicalise how customers purchase vehicles. Eagers is Australia’s oldest listed automotive retail group, operating more than 230 showrooms across the country.

According to reports earlier this year, the automotive conglomerate plans to construct a mega-complex near Brisbane airport. The facility is expected to host a test track and two dozen showrooms. In addition, the company also plans on expanding new-car showrooms to shopping malls from the end of this year.

The Eagers share price is currently trading nearly 12% higher year to date.

More reading

• Australian new-car sales surge 4 months in a row
• ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound
• Here are 3 ASX 200 diamonds in the spotlight while the market sank today
• The Eagers (ASX:APE) share price is sliding today
• Eagers Automotive (ASX:APE) car sales coming to a mall near you

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Openpay Group Ltd (ASX: OPY) share price is under pressure on Monday despite the release of a positive announcement.

In morning trade the buy now pay later (BNPL) provider’s shares are down 3% to $2.56. This follows further weakness in the tech sector. 

What did Openpay announce?

This morning Openpay announced that it has entered into the Australian hospital segment via a partnership with St John of God Health Care. It is one of Australia’s largest Catholic providers of healthcare services, with hospitals in Victoria, New South Wales and Western Australia.

The company notes that this makes Openpay the first BNPL provider to enter the hospital segment.

According to the release, a six-month initial launch has now commenced at three St John of God Health Care hospitals. This allows patients to spread their hospital costs for elective surgery procedures across plans ranging from two to 12 months.

The hospitals taking part in the initial launch are St John of God Murdoch and Mt Lawley Hospitals in Perth and St John of God Berwick Hospital in south-east Melbourne.

At the end of the trial period, both parties will decide if a full rollout should then go ahead.

An alternative to health insurance

The Chief Operating Officer of St John of God Health Care’s Hospitals, Bryan Pyne, believes people should use private health insurance, but recognises that some individuals choose not to have coverage. He feels this service represents an alternative for these consumers.

He said: “There has always been a portion of patients who choose to self-fund their health care costs. Research conducted with these patients indicated an appetite for greater flexibility and availability of payment options, including the ability to smooth costs.”

“This partnership expands choice for these individuals and will provide a flexible alternative to self-funding procedures while minimising the burden of a lump sum payment for the cohort of patients that elect not to take out private health insurance. It provides these patients with more options to access private health care when they want it, allows them to choose their doctor and hospital, and to avoid long delays in accessing specialist care”, he concluded.

Openpay’s CEO, Michael Eidel, is also positive on the agreement.

He commented: “This agreement with St John of God Health Care positions Openpay as the first Australian BNPL provider to partner with a major private hospital group – it is a proud moment for us. We have seen in other areas of healthcare how important it is to provide a flexible budgeting tool to enable patients to access the care they need at the time they need it.”

“This partnership also provides patients the option to pay for elective surgery with the support of Openpay’s flexible plans. It is a natural extension of our work in areas such as optometry, dentistry and audiology, and it demonstrates our growing prominence in the healthcare vertical,” he added.

More reading

• Is Afterpay (ASX:APT)’s BNPL competition heating up?
• Why did the Openpay (ASX:OPY) share price slide today?
• The Zip (ASX:Z1P) share price is down 34% in less than a month
• Openpay (ASX:OPY) share price tumbles 6% on increasing loss
• Openpay (ASX:OPY) share price erases gains despite positive update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Investors can take heart following the big bounce in our best-loved ASX technology shares last week, but more dark clouds are hovering on the horizon.

Some experts believe that bond yields are close to the point that would trigger a bear market collapse in the Nasdaq-100 (INDEXNASDAQ: NDX), reported Bloomberg.

A bear market is a peak-to-trough fall of at least 20%. And if the tech-ladened US share benchmark slumps, it will likely drag many top performing ASX tech shares into the red.

Best performing ASX tech shares more at risk

This ASX sector has delivered the best returns since COVID-19 triggered a market meltdown a year ago. In case you are wondering, there are around 40 ASX tech shares with a market cap of at least $100 million that have at least doubled in price over the period.

These including pocket rockets like the Ioupay Ltd (ASX: IOU) share price, the Pointerra Ltd (ASX: 3DP) share price and Cirralto Ltd (ASX: CRO) share price. These are the three top performers with gains of between 6,186% and 2,600%!

Of course, we can’t forget the likes of the Afterpay Ltd (ASX: APT) share price and its other BNPL buddies either.

Bond yield trigger for tech bear market

But the stellar returns for tech shares could be undermined if the 10-year US government bond yield rises by as little as half a percentage point.

That’s the assessment of Ned Davis Research, which was reported in Bloomberg. The research firm’s model predicts that the Nasdaq 100 will fall by at least 20% if the US 10-year Treasury yield climbs to 2% this year.

The lift in the government bond yield will drive long-term Baa-rated corporate bonds to 4.5%. In such a scenario, the Nasdaq will have to fall 20% or more to stay attractive, all things being equal.

Venerable to vulnerable

Don’t be fooled into thinking that the big bounce in share prices of technology shares in the US and Australia are a mitigating force to the bearish prediction.

Large single-day rallies are more common in a downtrend, according to Bloomberg. The start of the tech crash in 2000 recorded 27 sessions where the NASDAQ surged by at least 4% in a day.

This compared to just six in 1999 as the tech boom was accelerating.

Rotation from tech to value shares

In another worrying sign, the performance gap between the Nasdaq 100 and the S&P 500 (INDEXSP: .INX) has exceeded that of the tech boom!

But what may be bad news for tech shares may be good news for the rest of the market. The S&P 500 didn’t hit its record high until 14 months after the Nasdaq 100 tumbled in March 2000.

More reading

• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling
• IOUpay and Zip were among the most traded ASX shares last week
• Here’s why the IOUpay (ASX:IOU) share price is pushing higher
• What is the go with the Cirralto (ASX:CRO) share price?
• These small cap ASX shares surged more than 100% in February

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointerra Limited. The Motley Fool Australia has recommended Pointerra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Althea Group Holdings Ltd (ASX: AGH) share price is pushing higher on Monday morning.

At the time of writing, the cannabis company’s shares are up 3% to 53 cents.

Why is the Althea share price pushing higher?

Investors have been buying Althea shares this morning after it released a presentation.

This presentation included details on its European expansion, its growth opportunities, and, unconventionally, a broker recommendation.

In respect to its European expansion, Althea estimates that it has a 1 billion pound opportunity in the UK market. This is a big positive given that it believes it currently has a 33% market share in the UK.

In addition, it estimates that the Germany market will be worth 7.7 billion euros by 2028. Positively, last month it made its first shipment into the potentially lucrative market.

Althea has also been selected to supply the French National Agency for Medicines and Health Products Safety with second-source medicinal cannabis products for its national pilot program. This program is aiming to assess the relevance and feasibility of legalising medicinal cannabis in France.

If all goes to plan, the company believes the France market could be worth 9.5 billion euros by 2028.

The rest of the world

On home soil, management estimates that it has a 25% share of the Australian market. It is forecasting the Oceania market to grow to be worth US$1.55 billion by 2024.

In Africa, the company is expecting to make its first shipment into the South African market later this year. This market is predicted to be worth US$667 million by 2023.

Finally, in North America the company’s Peak Processing Solutions business is estimated to have a US$2.7 billion market opportunity.

Clearly, the company has a lucrative global market opportunity to grow into. However, given the size of the market and the relatively low barriers of entry, competition is likely to grow strongly in the future.

Nevertheless, that hasn’t stopped analysts at PAC Partners from putting a spec buy and $1.48 price target on the company’s shares.

According to the presentation, the broker is predicting revenues of $20.5 million in FY 2021 and then $45.1 million in FY 2022.

More reading

• Why the Althea (ASX:AGH) share price is pushing higher today
• Why the Althea (ASX:AGH) share price is surging 8% higher today
• Here’s why the Althea (ASX:AGH) share price is racing 8% higher today
• What will Elite Cannabinoids mean for ASX cannabis shares?
• How did ASX cannabis shares perform in 1H FY21?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Evolution Mining Ltd (ASX: EVN) share price is on watch today after the company announced its acquisition of Battle North Gold Corporation. 

What could impact the Evolution share price today?

The Evolution share price will be in focus this morning after the company advised it is to acquire the Toronto Stock Exchange-listed Battle North Gold Corporation. Battle North is an emerging producer in the renowned Red Lake Gold District in Ontario, Canada. It is focused on developing its Bateman Gold Project which controls the second-largest exploration ground in the district. 

Evolution has agreed to acquire all of the issued and outstanding shares of Battle North at a price of C$2.65 per common share for a total consideration of approximately C$343 million. 

Evolution’s executive chairman Jake Klein commented:

This acquisition provides Evolution with an opportunity to expand our footprint in the region and create value by leveraging the infrastructure of the two operations. The additional processing capacity from the new Bateman mill will also accelerate our ability to achieve our objective of producing in excess of 300,000 ounces of gold per annum from Red Lake…

This expansion of our footprint will provide us with an opportunity to build on our track record as a safe and sustainable operator for the long term benefit of a broad range of stakeholders including the local workforce, regional communities and our Wabauskang and Lac Seul First Nation Partners.

The Bateman Gold Project will include a 28,000ha land package that neighbours Evolution’s Red Lake project. It also includes a new 650ktpa mill facility which is currently permitted for 450ktpa of production and expandable to 900ktpa with minimal capital. 

The feasibility study estimates a mineral reserve of 3.56 million tonnes with grading of 5.54g/t for 635,000 ounces of gold. The project would have an estimated mine life of 8 years with an annual production 74,000 oz at an all-in sustaining costs of US$865 per ounce. 

Outlook 

Evolution’s Red Lake project plays a pivotal role in the company’s growth outlook in the short to medium term. On 19 February, Ord Minnett commented that Red Lake was almost entirely responsible for Evolution’s increase in both resources and reserves in its half-year results. The Evolution share price fell by around 8% following the release of the company’s results. 

Red lake is expected to contribute 125,000 to 135,000 oz to the group’s forecast FY21 guidance of 670,000 to 730,000 oz. The company’s strategic acquisition of the Bateman Gold Project will likely accelerate Evolution’s long-term objective for Red Lake of producing 300,000 to 500,000 ounces per year. 

Evolution share price snapshot

Over the past year, the Evolution share price has increased by nearly 18%. However, during the last six months, the company’s shares have fallen by more than 35%. Evolution shares are also down by around 25% year to date.

Based on the current share price of $3.95, the company has a market capitalisation of around $6.75 billion.

More reading

• Is it time to give ASX gold shares another chance?
• 5 things to watch on the ASX 200 on Wednesday
• Why the Red 5 (ASX:RED) share price is soaring higher today
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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