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Costs fall at Evolution

21st April 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Gold miner Evolution Mining has reported a solid start to the year, with gold production in the March quarter reaching 148 787 oz, on par with the 148 084 oz produced in the December quarter.

C1 cash costs for the quarter fell to A$716/oz, from the A$947/oz reported in the December quarter, while all-in sustaining costs fell from A$1 348/oz to A$990/oz in the same period.

Gold sales for the March quarter reached 162 015 oz, slightly higher than the 155 287 oz sold in the previous quarter, as gold prices also increased from A$2 378/oz to A$2 464/oz. Copper sales for the quarter increased from 4 126 t to 13 439 t, with copper prices decreasing slightly from A$14 199/t to A$13 989/t in the same period.

Net mine cash flows for the March quarter increased by 135%, to A$124.5-million, Evolution reported, after mine capital investment of A$143.6-million.

Evolution noted that the higher copper production during the March quarter was attributable to the company taking full ownership of the Ernest Henry operation during January, which has demonstrated the transformational value of the asset.

In the first quarter under full Evolution ownership, Ernest Henry, in Queensland, produced 17 833 oz of gold and 13 352 t of copper at an exceptionally low all-in sustaining cost (AISC) of negative A$2 001/oz.

Evolution noted that the prefeasibility study on the mine extension at Ernest Henry is progressing well with completion on track for end of 2022 calendar year and an updated mineral resource estimate is planned for release in the September 2022 quarter.

Meanwhile, the Cowal operation, in New South Wales, produced 53 321 oz of gold during the quarter, at an AISC of A$1 292/oz, compared with the 50 371 oz produced in the previous quarter. Evolution told shareholders that the operation was impacted by significant rainfall on the east coast of Australia early in the quarter. Resourcing was also challenging owing to Covid-19 impacts, with over 25% of the Evolution and permanent contractor workforce testing positive during the quarter, with additional time lost owing to workers isolating as close contacts of positive cases.

The Mungari operation, in Western Australia, produced 33 296 oz of gold in the March quarter, compared with the 34 412 oz delivered in the December quarter.

Evolution said that the integration of the Kundana assets was underway to create ‘One Mungari’ with standardised systems and processes, and the sharing of equipment and workforce across what were previously three separately run operations. Operational synergies have already started to be realised with the combination of the underground maintenance and training teams.

At Mt Rawdon, in Queensland, Evolution produced 11 281 oz of gold, compared with the 12 377 oz delivered in the December quarter, as the mine experienced extreme weather and significant rainfall for the second consecutive quarter.

A significant rainfall event in February and March resulted in some instability in the north wall. Although this is being managed it did impact access to higher grade ore from the openpit and required the crusher to be shut down for nine days. The impact of this rain event has been incorporated into the revised group production guidance.

Red Lake, in Ontario, delivered a strong quarter with several records broken during the month of March. Gold production reached 33 056 oz for the quarter at an AISC A$2 394/oz, compared with the December quarter production of 19 832 oz, at an AISC of A$3 060/oz.

As a result of the extreme rainfall events in Australia, and the continued impact of the Covid-19 pandemic, Evolution on Thursday lowered its full-year production guidance from 670 000 oz to 650 000 oz, but has not changed its AISC guidance of between A$1 135/oz and A$1 195/oz.

Edited by Creamer Media Reporter

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