Evolution board approves Edna May underground project

JOHANNESBURG (miningweekly.com) – The Evolution Mining board has given its approval for the Phase 1 development of the Edna May underground project, which is expected to materially improve production at the Western Australia-based mine.

The midtier gold producer, which owned mines in Queensland, New South Wales and Western Australia, stated on Thursday that an initial capital investment of A$16-million would target a resource base of about 200 000 oz.

“The development of Phase 1 potentially offers an attractive return on investment and is expected to materially improve production and cost flow at Edna May. It will also provide better access to drill out deeper zones, which, if successful, would further increase reserves and extend mine life,” Evolution stated in its half-year financial results announcement.

The portal was planned to be cut in the June 2016 quarter with production from the underground mine expected from the 2018 financial year.

Meanwhile, Evolution reported a statutory net loss of A$15.47-million in the half-year ended December 31, compared with a net profit of A$43.07-million a year earlier. The decrease was largely attributed to acquisition and integration costs of about A$54-million and fair value accounting adjustments of A$38.4-million related to the completion of the acquisition of the Cowal, Mungari and Phoenix assets.

Its underlying half-year profit was A$107.85-million, which was an increase of 150% on that of the December 2014 half-year period of A$43.07-million. The improvement was driven by record production and the inclusion of the first half-year results for the newly acquired Cowal and Mungari assets.

Evolution reported record half-year production of 377 869 oz, compared with 220 444 oz in the first half of 2015.  All operations produced positive cash flow, resulting in group mine net cash flow of A$202.9-million after all sustaining and major capital expenditure. The Cowal, Mungari and Mt Carlton mines were the main cash flow contributors.

Evolution’s sales revenue for the half-year period was $607.1-million, which was an 87% increase on the prior corresponding period.