Australian gold producer Evolution Mining says performance improvements at its Red Lake mine in Ontario are putting its turnaround plans for the operation ahead of schedule.
In the quarter ending Dec. 31 (Evolution's second quarter of 2021), production rose 27% to 33,709 oz. gold at an all-in sustaining costs (AISC) of A$1,937 per oz., generating A$10.3 million in net cash flow. The company says that puts it ahead of schedule in its plan to increase annual production to 200,000 oz. at an AISC of less than US$1,000 per oz.
During the previous quarter ending in September, which was affected by a temporary suspension in operations due to forest fires in the area, the mine produced 26,638 oz. of gold at an AISC of A$2,074 per oz.
Evolution acquired the operation last April from Newmont in a US$475-million deal.
For the recent quarter, the company recorded the highest operating and net mine cash flows it's seen from Red Lake since the acquisition, at A$34.2 million and A$10.3 million, respectively. (That compares with A$21.6 million and A$4.7 million, respectively, in the September quarter.)
In addition, Evolution expects a significant increase in Red Lake reserves in its next resource update in the first quarter. Total reported reserves when it acquired the mine were 1.2 to 1.4 million oz. gold.
Evolution released a JORC-compliant resource for Red Lake in September outlining 22.8 million indicated tonnes grading 7.77 g/t gold for 5.7 million oz. gold, and 25.5 million inferred tonnes grading 6.49 g/t gold for 5.3 million oz.
Four underground rigs are currently working on infill drilling and resource expansion at the Cochenour deposit (which is connected to Red Lake via a 5-km haulage drift) and the Twin Otter zone at Red Lake. Two additional rigs are focused on discovery drilling. For the quarter, 66 holes totalling 17,410 metres were completed.
Other work at the operations include a new surface decline; design work is under way with underground development slated to begin in the June quarter.
Looking further ahead, Evolution expects to complete a concept study assessing long-term expansion options for the operation later this year. The company's ultimate goal for Red Lake is production of 300,000 to 500,000 oz. a year.
Between its six mines in Australia and Canada, Evolution expects to produce a total of 670,000 to 730,000 oz. gold at an all-in sustaining cost (AISC) of A$1,240-1,300 per oz. for its full year 2021, ending in June.
So far, it's produced 350,326 oz. at an AISC of A$1,182 per oz.
Evolution ended the recent quarter with A$438.1 million in cash.
For more information, visit www.evolutionmining.com.au.