PERTH (miningweekly.com) – Gold miner Evolution Mining has exceeded its quarterly expectations during the three months to September.
The ASX-listed company on Wednesday reported that gold production in the quarter had reached 170 681 oz, which was above the guidance of between 155 000 oz and 167 000 oz.
All-in sustaining costs (AISC) for the quarter reached A$1 413/oz, which was lower than the guidance of A$1 450/oz, while all-in cost reached A$2 038/oz.
Evolution on Wednesday reported that the Cowal operation, in New South Wales, produced 52 513 oz of gold during the quarter, while the Mungari project, in Western Australia, produced 34 765 oz. In Queensland, the Ernest Henry mine contributed 23 882 oz of gold during the quarter, while the Mt Rawdon and Mt Carlton operations produced 20 042 oz and 15 710 oz respectively.
In Canada, the Red Lake project contributed 23 768 oz of production.
Evolution sold 163 046 oz of gold in the September quarter at an average gold price of A$2 364/oz, compared with the 169 146 oz sold in the June quarter at A$2 286/oz. Deliveries into the Australian hedge book totalled 25 000 oz at an average price of A$1 853/oz and 10 000 oz were delivered into the Canadian hedge book at an average price of C$2 271/oz. The remaining 128 046 oz were sold in the spot market, comprising 116 424 oz delivered at an average price of A$2 456/oz and 11 622 oz delivered at an average price of C$2 254/oz.
Capital investment for the quarter was A$125.3-million comprising A$35.7-million of sustaining capital and A$89.6-million of major project capital. The capital investments included a A$7.2-million spend on the Stage H mine development at Cowal, a A$10.8-million spend on the McFinley development at the Red Lake project, a A$7-million spend on the Cutters Ridge mine development at Mungari, and A$6.5-million at Mt Rawdon.
Subsequent to the quarter, Evolution struck an agreement with ASX-listed Navarre Minerals to divest of its Mt Carlton gold mine in a deal valued at A$90-million.
Under the terms of the agreement, Evolution would be paid an initial A$40-million on the completion of the transaction, comprising a cash component and up to A$20.4-million worth of Navarre shares.
Up to A$25-million will be payable on cumulative gold production milestones from Crush Creek with A$5-million payable upon achievement of 50 000 oz, A$5-million payable upon achievement of 100 000 oz and A$15-million payable upon achievement of 175 000 oz, while up to A$25-million will be in the form of a 5% gold price linked royalty where the average spot gold price is greater than A$2 250/oz in a given quarter.
The sale of Mt Carlton is expected to lower Evolution group AISC by A$40/oz to between A$1 180/oz and A$1 240/oz and reduces 2022 production to between 670 000 oz and 725 000 oz. Sustaining and major capital also reduce by between A$2-million and A$8-million and between A$10-million and A$15-million respectively.