KALGOORLIE (miningweekly.com) – Gold miner Evolution Mining was open to more acquisitions and could look at expanding its copper portfolio.

Speaking on the sidelines of the Diggers & Dealers conference, Evolution executive chairperson Jake Klein extolled the virtues of the company’s Ernest Henry gold/copper operation, in Queensland, which achieved full production capacity at the end of the June quarter, producing 9 122 oz of gold and 7 728 t of copper.

Evolution in June announced the results of a prefeasibility study at Ernest Henry which extended the mine life by another 11-years out to 2040, delivering a net present value of A$690-million and an internal rate of return of 28%.

The extension project would require a capital investment of between A$450-million and A$50-million, with some 60% of the capital providing infrastructure to extend the operation below the current 750m level.

The majority of the capital would not be required until the 2027 and 2028 financial years.

Evolution has approved a A$15-million spend on the feasibility study for the expansion project and would spend a further A$7.5-million on a drilling programme to add to the mine-life extension.

The ore reserve at Ernest Henry is currently estimated at 77.4-illion tonnes, with the project estimated to contain 589 000 t of copper and 1.109-million ounces of gold.

“We were exceptionally lucky and fortunate and had great timing to get Ernest Henry. It's an asset that I still pinch myself and wonder how we acquired it because it's a remarkably good asset. It generates a very large amount of cash-flow and it has great geological potential.

“Copper assets are generally much more capital intensive and larger if they're going to be low-cost corporate growth producing low-cost assets. So, the capital structures required in copper companies is generally larger and bigger than in gold companies. And we'd have to balance that,” Klein told journalists.

He noted that the takeover of gold major Newcrest Mining by US major Newmont was likely to result in acquisition opportunities in Australia, saying that Evolution would take a look at any asset that might make its way to market.

“I think we've always said we want six to eight assets, but we want to buy them wholesale and convert them into retail assets. So, we're not going to do something stupid, where we have great growth opportunities in our portfolio so we don't feel a compelling need to grow our asset size.

 I think our organization and our company could manage a couple more assets. But frankly, you know, we've had a challenging 12 months operationally. So just delivering predictable, reliable, consistent performance would be good for us from a shareholder perspective. That said, you know, you never know when an opportunity is going to come up and we we've always been up to at least looking at opportunities but only on the basis that it's a creative to our shareholders and improves the quality of our portfolio.”

The Evolution board in June also approved a A$250-million spend on the expansion of the Mungari plant, in Western Australia, from 2-million tonnes a year to 4.2-million tonnes a year.

Average annual gold production post commissioning is anticipated to be approximately 200 000 oz for the first five years between 2027 to 2032, a 50% increase from current production rates of approximately 135 000 oz/y. The expansion would also decrease the all-in sustaining costs at Mungari by some A$340/oz to A$1 750/oz over the life of mine.

Evolution’s focus over the next few years will be on discovering sufficient material to maintain production at 200 000 oz/y for the entire mine life, the company previously said.

The project will ramp up during the September 2023 quarter with a 30-month construction period, including long- lead items and approvals, for commissioning by the end of the March 2026 quarter.