Evolution approves Cowal extension ahead of schedule

The Cowal mine

Evolution Mining has greenlit an expansion to the Cowal gold processing plant in New South Wales 12 months ahead of plan.

The Cowal plant has been in operation since 2006 and currently has an annual ore processing capacity of 7.5 million tonnes. In the 2018 financial year it produced 258,000 ounces of gold.

The expansion, scheduled to start in the March 2019 quarter, is expected to cost between $25-30 million and will increase the plant’s annual capacity by 1.2 million tonnes to 8.7 million tonnes.

Evolution expects to begin commissioning of the upgraded plant a year later in the March 2020 quarter.

The company said the expansion could reduce processing costs by $1.25–1.75 per tonne, a reduction equivalent to between eight and 12 per cent.

Evolution has updated its three-year outlook to the 2021 financial year as a result of the Cowal expansion being approved earlier than expected.

It has upped its production estimates for the 2020 and 2021 financial years by 5000 ounces and 10,000-15,000 ounces, respectively.

The company’s three-year outlook also allows for a further $20 million expansion of the plant’s capacity to 9.8 million tonnes in the 2021 financial year, but no firm commitment has yet been made on this.

Evolution also held its annual general meeting this morning. Chairman Jake Klein cited the company’s record cash flows and profits for the 2018 financial year, as well as its focus on future production growth.

“Evolution remains focused on prioritising margins over production growth and is on track to deliver our group gold production guidance in financial year 2019 of 720,000–770,000 ounces at a sector leading [all-in sustaining cost] in the range of $850–$900 per ounce,” he said.