Jun 19, 2020

Resource blow for Evolution at Mount Carlton

Resource blow for Evolution at Mount Carlton

Evolution Mining has been forced to drop about 75,000 ounces of gold from its Mount Carlton life of mine plan.

It follows an extensive grade control infill program of 204 drill holes (33,000m) to update the North Queensland site’s resource block model.

Evolution is now looking at ways to maximise the future value of the asset, including work on the nearby Crush Creek Joint Venture project, which it sees as having the potential to be an important source of ore feed.

Evolution has reduced its 2020 financial year production guidance at Mount Carlton from 70,000–75,000 ounces to about 60,000 ounces. The forecast for next financial year is even less, at 50,000 ounces.

In a statement to the ASX, the company said Mount Carlton had generated $665 million of operating cash flow since commencing production and had fully repaid all of its initial development capital and subsequent investments to deliver an average return of 19 per cent per annum.

The updated life of mine plan reflects a material change to the carrying value of the operation, resulting in a non-cash impairment of $75–$100 million post-tax expected to be recorded in the full year accounts.

Major focus on Crush Creek

“We are disappointed to be recording an impairment at Mount Carlton,” Evolution chairman Jake Klein said.

“We will be working hard over the next six months to optimise the future of the operation and to further understand the size and quality of the Crush Creek project.”

Drilling started at Crush Creek, 30km south-east of Mount Carlton, in April with the aim of confirming and expanding the in situ mineral inventory at the Delta and BV7 prospects.

Evolution says encouraging results are reinforcing its belief that gold mineralisation at Crush Creek has the potential to provide mine life extensions at Mount Carlton.

Two diamond rigs are currently on site, with a reverse circulation (RC) rig scheduled to arrive during the September 2020 quarter.

Evolution said it had launched resource modelling, metallurgical test work and engineering studies, to be advanced as more drilling information came to hand.