The company is expected to invest A$380m ($280m) to achieve commercial production at the underground mine project
Evolution Mining has announced that its board has approved the development of the Cowal underground mine in Australia and increase the gold production at Red Lake project in Canada.
The company is expected to invest A$380m ($280m) between 2022 and 2023 to achieve commercial production at the Cowal project.
The investment will include A$240m ($177m) for surface infrastructure, paste plant, process plant modifications and accommodation village, while A$140m ($130m) will be spent to cover initial mine development costs.
According to Evolution, the addition of a new mining front at Cowal is expected to help offer a higher-grade ore source, which will be integrated with the current E42 open pit and stockpiled ore.
The feasibility study for Cowal showed a strong investment case with an internal rate of return of 15% and a mine life of around 17 years.
Evolution Mining executive chairman Jake Klein said: “Cowal is undoubtedly a world class asset and a key asset in the Evolution portfolio.
“Today, the Board has approved the development of an underground mine that contributes to our goal of Cowal producing350,000 ounces of low-cost gold a year and extend its mine life out beyond 17years,while at the same time injecting significant economic benefit for all stakeholders.”
Evolution has also approved a programme to increase the gold production at Red Lake to 350,000 ounces per annum by financial year (FY) 2026.
Under the stage one transformation, the project is expected to produce 200,000 ounces per annum at an AISC of less than less than $1,000 per ounce.
In May this year, the company completed the Battle North acquisition to support Red Lake’s growth plans to deliver value from of its 11Moz mineral resource.
The investment will help expand mine life of Red Lake to beyond 15 years.