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Evolution Mining plans to pour millions into Red Lake gold complex

Australian miner on three-year spending spree to boost gold production, expand mill capacity and add 15 years of mine life
Red Lake mine camp (Evolution Mining)
(Evolution Mining)

Australia's Evolution Mining plans to sink a lot of money into its Red Lake gold mining and milling operations over the next three years.

The company's board of directors recently approved a plan with a three-year capital investment timetable for Red Lake with the intent to boost gold production to more than 350,000 ounces a year by 2026, and extend mine life in the prolific northwestern Ontario camp by more than 15 years.

In a July 16 news release outlining its strategy, Evolution said the May acquisition of its Red Lake neighbour - Battle North Gold's Bateman Mine - only served to "accelerate" its growth plan to restore Red Lake into one of Canada's premier mining districts.

With Bateman in the fold, Evolution's other operations consist of the Red Lake, Campbell and Cochenour mines with a large combined mineral resource of 11.1 million ounces and an ore reserve of 2.9 million ounces.

The Bateman Mine brought 733,000 ounces of mineral resources and 635,000 ounces of reserves into the picture.

The current mine life is 13 years, but Evolution, naturally, want to extend that.

When Evolution acquired the Red Lake Complex from Newmont in November 2019, the company committed to investing $100 million on existing operations and an additional $50 million in exploration.

In preparation to tap into a new gold system, the company is spending between $160 million and $175 million between 2022 and 2024 to build a surface decline to access new two mining fronts at the Upper Campbell area of the Red Lake mine.

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The Campbell Young Dickenson decline will enable 750,000 tonnes of ore to be mined by 2024. Eventually that will ramp up to more than one million tonnes by 2026.

At its McFinley deposit, between $65 million and $85 million will be spent on underground infrastructure work between 2022 and 2024. A bulk sample will be extracted next year.

The company is working on a study to expand capacity at the Campbell mill to more than 1.5 million tonnes per year over the next three years. Between $30 million and $40 million will go into that upgrade.

Same goes for the Bateman mill, with plans to expand to 900,000 tonnes per year beyond 2024, giving Evolution combined milling capacity at Red Lake to more than 2.0 million tonnes per year. The company has earmarked between $50 million and $60 million for improvements at Bateman.

Capital investment is also going into upgrading and consolidating the tailings storage facilities at Red Lake starting in 2023.

On the exploration side, the company is looking at a target in the Upper Campbell and Lower Red Lake areas of the Red Lake Mine.

Evolution said the target is approximately 60,000 to 70,000 tonnes, grading 5.0 to 5.5 grams per tonne for 9,600 to 15,400 ounces but there's been insufficient exploration to calculate a mineral resource. Part of three-year mine plan includes diamond drilling of this target.