The Ernest Henry mine in Queensland is poised to play a critical role for Evolution Mining as the company continues its climb up the ASX.
The gold-copper asset was Evolution’s most cash-generative asset in the second quarter of the 2022 financial year (FY22), delivering net mine cash flow of $79.5 million for the three months. This was even before the company made its 100 per cent acquisition of the project.
Evolution completed its move to take full ownership of Ernest Henry earlier this month, with the company paying $800 million to Glencore for the acquisition, with an additional $200 million due 12 months on from the transaction.
Evolution initially bought into Ernest Henry in 2016, paying Glencore $880 million to acquire 100 per cent of the gold production, and 30 per cent of the copper and silver production from the mine, with additional expenditure conditions and provisions on the mine.
The acquisition increased Evolution’s FY22 copper production guidance from 17,000-19,000 tonnes to 34,000-38,000 tonnes – a key component to the company’s continued growth.
“Ernest Henry is expected to generate immediate benefits from increased copper production via increased cash flow and lower group AISC (all-in sustaining cost),” the company stated in its quarterly report.
“The operation also has attractive growth potential below the current operating footprint which is the subject of a pre-feasibility study (PFS). Mineralisation has also been intersected 400 metres vertically below the PFS area and is open at depth.”
Evolution hopes to complete the PFS in the first half of the 2023 financial year, which could realise a further 4-5 years of mine life to the project’s 875 mrl (meters relative level).
Evolution’s interest in Ernest Henry delivered 21,903 ounces of gold (100 per cent stake) and 4119 tonnes of copper (30 per cent stake) at an AISC of negative $882 per ounce (oz) for the quarter.
The company also produced 60,371 ounces of gold from its Cowal operations in New South Wales at an AISC of $998/oz, 34,412 ounces of gold from its Mungari operations in Western Australia at an AISC of $1829/oz, and 12,377 ounces of gold from its Mt Rawdon operations in QLD at an AISC of $1842/oz.