Australia’s Evolution Mining said it’s seeing the results of its three-year turnaround plan to restore Red Lake as a premier gold mining region.
Sydney-based Evolution posted its June quarterly results - for the period running May 1 to June 30 - showing gold production is up, grades are higher, and operating costs are coming down.
In a webcast last week, Executive Chair Jake Klein said they’re “making good progress” at Red Lake in achieving a more consistent performance out of the northwestern Ontario mine complex acquired in March 2020.
The company called the past quarter it’s best to date with production up 17 per cent at 38,620 ounces compared to 33,056 ounces recorded during the last quarter.
Ore tonnes processed increased by eight per cent over the previous quarter to a record 258,000 tonnes. The gold grade also went up eight per cent to 5.11 grams per tonne (g/t) versus 4.74 g/t during the previous quarter.
Mine development rates - to reach new ore bodies - have been pushing ahead at a steady 1,200 metres per month for the last nine months.
All-in-Sustaining Costs for the quarter was $2,161 ounces, compared to $2,394 ounces during the last quarter.
Mine operating cash flow at Red Lake stood at $22 million.
Evolution is leaning on Red Lake to be a key driver in its company-wide plan to boost gold production by 25 per cent over the next two years.
In acquiring Red Lake, Evolution saw an undercapitalized asset in a high-grade camp that needed fresh eyes to re-interpret the gold base and intelligently inject capital to reinvigorate the operation, find ways to reduce operating costs, while boosting production.
With vast, untouched gold resources close to existing mine workings, Evolution maintains there’s enough gold in the system to extend operations well beyond its 13-year mining life.
To that end, the company is spending mega-millions to open up new ore bodies, including $53.7 million during the quarter to develop new mining fronts at Upper and Lower Campbell and Lower Red Lake. Contractors are digging a decline into Upper Campbell in preparation for the first ore to come topside in September.
Red Lake is Evolution’s only gold mine outside of Australia where they operate four mines in Queensland, New South Wales and Western Australia.
“We are confident about the future of Red Lake,” said Klein. “It is undergoing a transformation but one that will create significant value for our shareholders,” said Klein.
Klein added they plan to bring investors over for a site visit in September to view this “seeing-is-believing story” in person.
In these inflationary times, Klein said, and it’s important to have a stable of low-cost mines and business that can weather this cycle, “and I believe we are well-placed to do this.”