Evolution Mining has set gold production targets for the next three years, which will be largely driven by the Cowal and Red Lake mines in New South Wales and Canada, respectively.
The gold producer aims to produce 790,000–850,000 ounces at an all-in sustaining cost of $1125–$1185 an ounce by the 2023 financial year.
As a comparison, the company delivered 746,463 ounces at an AISC of $1043 an ounce during the 2020 financial year.
Evolution expects its gold output to drop in the 2021 financial year, declaring its production guidance at 670,000–730,000 ounces.
“(The 2020 financial year) was a great year for Evolution with a strong improvement in safety and sustainability performance… Through our continued focus on upgrading the quality of our asset portfolio, we expect to deliver exciting organic growth in the coming years mainly driven Cowal and Red Lake,” Evolution chairman Jake Klein said.
The company has upgraded the Red Lake mineral resource estimate to 48 million tonnes grading 7.1 grams per tonne for 11 million ounces gold.
According to Evolution, this is materially higher than what was estimated during the due diligence.
Key drivers in the increase are related to the evaluation of mineral deposits at a wider range of cut-off grades, enabled by the lower cost assumptions at the Red Lake mine.
This allows Evolution to include lower cut-off grades in the mineral resource update.
Klein said the mineral resource indicated that Red Lake had the potential to be the most transformative, value-creating opportunity in Evolution’s history.
“It is a great example of applying a different lens to an opportunity and emerging with completely different results,” he said.
“The next steps will be to complete a new ore reserve estimate which we expect will result in a material upgrade to reserves and will present us the opportunity to re-imagine the future of the operation.”
Evolution also plans to invest $285 million to $355 million in Cowal expansion projects over the next three years. This includes commencing the Cowal underground mine late in the 2022 financial year, aimed to increase mine production to over 300,000 ounces a year.
The company has set a production guidance of 205,000–230,000 ounces for the Cowal mine for the 2021 financial year.