PERTH (miningweekly.com) –  Gold miner Evolution Mining has warned of significantly higher costs and lower production at its Mt Carlton mine, in Queensland, after orebodies turned out to be narrower than previously thought.

Evolution on Friday reported that recent grade control and resource definition drilling at the V2 openpit had returned results identifying the West and East lode orebodies were narrowing at shallower levels than previously modelled. A geological review of the underground resource model has resulted in similar geological interpretation as the openpit.

The unanticipated loss of ore tonnes in the areas planned to be mined over the remainder of the 2020 financial year was expected to result in production at Mt Cartlon reaching between 70 000 oz to 75 000 oz, instead of the original guidance of between 95 000 oz and 105 000 oz for the full 2020.

The lower production at Mt Carlton is expected to result in the all-in sustaining cost (AISC) to increase from the previous guidance of between A$800/oz and A$850/oz, to between A$1 150/oz and A$1 225/oz.

The lower production from Mt Cartlon is further expected to affect group production during the full year, with Evolution now estimating production to be at the bottom-end of the guidance of around 725 000 oz, with AISC to reach between A$940/oz and A$990/oz.

The Mt Carlton operation is scheduled to produce significantly higher ounces in the June quarter, from the mining of thick, high-grade areas in the pit and underground, with the underground developing having broken through to the East Lode earlier this month, encountering the orebody where expected.

The ore development will continue through to the March quarter of this year, and stoping is expected to begin in the June quarter.

Drilling is also expected to start at the Crush Creek project, some 30 km south of Mt Carlton, during the June quarter, with the aim of confirming and extending the high-grade vein style mineralisation intersected in historic drilling.

Meanwhile, the miner reported that group gold production for the December quarter had reached 170 890 oz, down from the 191 967 oz produced in the previous quarter while all-in sustaining costs were A$1 069/oz.

Year-to-date production has been reported at 362 857 oz, while the all-in sustaining costs have been reported at A$1 040/oz.

Meanwhile, the miner reported that its Cowal operation, in New South Wales, would undergo a number of modifications to decrease its reliance on surface fresh water.

The mine is currently operating under Stage 3 water restrictions, but Evolution noted that given the ongoing severe drought conditions and resulting water crisis experienced in the region, there was potential for the water restrictions to increase.

In collaboration with local stakeholders through infrastructure and resources sharing, Evolution has progressed the installation of a second pipeline across Lake Cowal, which will increase pumping capacity by 30%. The pipeline will secure the ability to pump water from current and future saline bore fields, the Bland Creek paleochannel, as well as the Jemalong Weir.

Evolution will also progress increased extraction of saline water through an additional two bores in the Easter Saline Bore Field, and an additional saline bore field has been identified to the south, with testing of this field to start in the March quarter.

The miner will also increase its reliance on reuse and recycled water.