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DIGGeRs & DeALeRs

Evolution removes risk

from Red Lake

t has taken Evolution Mining Ltd only ternational travel, the Evolution team has ownership, Red Lake produced 27,428oz
Inine months to completely reset the dial once again proved the doubters wrong at an AISC of $1,943/oz, having con-
for its Red Lake gold operation in Cana- and only four months after officially tak- servatively guided 25,000oz at $2,100/oz
da, flagging the potential for production of ing the wheel at Red Lake, the company from the mine in the three months to the
up to 500,000 ozpa from its newest asset unveiled an 11 moz gold resource which end of June.
in the years ahead. all but ensures the 70-year-old mine in Evolution is expecting an output of
When Evolution announced the pro- Ontario will continue ticking over for at 125,000-135,000oz with an AISC range
posed acquisition of Red Lake from least a few more decades. of $2,050-2,100/oz from Red Lake in
Newmont Corp late last year for $US375 Speaking on the company’s virtual in- FY2021, with overall group guidance set
million (plus a contingent consideration vestor call in early September, Evolution at 670,000-730,000oz at $1,240-1,300/
of $US100 million for the addition of up executive chairman Jake Klein indicated oz AISC.
to 5 moz over the next five years), the the opportunity to add further ounces to Klein said aspirations for production
company told investors it was giving it- the existing resource base (48.1mt @ 7.1 of 300,000-500,000 ozpa gold at Red
self three years to have the mine churn- g/t gold for 11 moz) still remained. Lake could arrive much sooner than an-
ing out in excess of 200,000 ozpa at an “We are getting drill results from the ticipated.
AISC of less than $US1,000/oz. lower areas of Red Lake which are really “I can only give you some anecdo-
tal perspective as to the conversations
[chief operating officer] Bob Fulker and
I had when we looked at that resource,”
he said.
“Bob was saying ‘gee Jake, if we’ve
got an 11 moz resource and we mine it at
200,000 ozpa that’s going to take us 50
years to mine; we better go faster than
that’, which is true. And that’s where we
have to recalibrate completely.
“The mine had been depleting its re-
serves and resources way too quickly
and was really in a harvesting mode
and headed towards closure because
of a lack of exploration or development
expenditure. We need to rebuild that up,
get the inventory up and start to make
the mill the constraining feature.
“Bob has thrown around numbers that
Only nine months after making a move on the asset, Evolution is eyeing future production clearly suggest even optimising these
of 300,000-500,000 ozpa gold from Red Lake in Ontario, Canada current mills at their current 1.1 mtpa
capacity is not going to be big enough,
but that’s going to be determined by the
At the time, Red Lake appeared very emphasising the justification we had for scale of opportunity and the potential of
much the unloved asset with its output the investment decision earlier on and it.”
slumping dramatically over the preced- there’s lot of potential upside over there,” Klein paid tribute to the likes of Glen
ing five years and guidance for FY2020 Klein said. Masterman (vice-president of discovery
estimated in the realm of just 150,000- “The next step is going to be to develop and business development) and Dean
160,000oz. AISC had also blown out to a new reserve estimate, that will be done Frederickson (manager geology and
$US1,600/oz. and completed with our annual state- planning) for their efforts to fast-track
It loomed as a very risky acquisition for ment which will be out in the first quarter Red Lake’s potential. In fact, Freder-
Evolution which had just been crowned of next year. That should show a signifi- ickson – integral in establishing the im-
Miner of the Year by Paydirt’s sister pub- cant uplift in the reserves and will allow proved mine life forecast for Evolution’s
lication Gold Mining Journal for achiev- us to start assessing these potential op- Cowal gold mine in New South Wales
ing consistent production across its port- portunities.” – requested to relocate to Canada for
folio. The company was also heralded for Klein said travel restrictions and other 18 months, citing a desire to be part of
being one of the world’s lowest-cost gold limitations resulting from the global COV- “something special” at what is now the
producers with group AISC for FY2019 of ID-19 pandemic had impacted his com- company’s largest and highest-grade as-
just $924/oz ($US661/oz). pany’s transformational vision for Red set.
Despite a global health crisis which has Lake “much less than we anticipated”. There has also been a major cultural
placed unprecedented restrictions on in- In the only quarter under full Evolution shift among the workforce at Red Lake,

Page 32 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT