Evolution Mining Limited (ASX:EVN) has approved the Ernest Henry Mine Extension Project in Queensland to progress to the Feasibility Study phase following completion of the Pre- Feasibility Study (PFS) which demonstrated a compelling opportunity to extend the Ernest Henry sub-level cave operation.
“In under 18 months of owning 100% of Ernest Henry, we have doubled copper and gold reserves and extended the mine life out to 2040. By any measure this is an outstanding achievement,” Managing Director and CEO, Lawrie Conway, said.
“The Pre-Feasibility Study demonstrates excellent financial returns, but the most exciting aspect is that all of the outstanding exploration success we are enjoying is not yet captured and will be included in Feasibility Study that we are now commencing.
We have never been so excited about the future of Ernest Henry.”
Mine Extension Pre-Feasibility Study Outcomes
The PFS indicates the base case has an incremental net present value (NPV) of $690M, with an internal rate of return (IRR) of 28%. Associated execution capital of $450-500M (study, infrastructure and mine development capital) includes approximately 60% of this capital providing infrastructure to extend below the 750mRL.
Based on the timings in the PFS, the majority of this capital is not required until FY27 and FY28. The PFS delivers an additional ~11 years of mine life, versus a ‘do nothing’ case that would have mining conclude in FY29 at 1125mRL.
The PFS will deliver an increase of approximately 56Mt for 343,000t of Cu and 609,000oz of Au payable below 1125mRL. There is also an associated increase in Ore Reserve of 44.7Mt at 0.70% Cu and 0.44g/t of Au.
The Mine Extension PFS evaluated options for the continuation of sub-level cave mining below the 1,125mRL, assessing conventional trucking against a crushing and conveyor (C&C) system, with due consideration for future geological upside.
The PFS has determined both options are value accretive, but the C&C option (between 1,100-750mRL) (base case) provides greater economic upside and optionality when anticipated Mineral Resource estimate growth is considered.
Whilst not included in the current PFS, there is a high likelihood of mineralization extensions and associated Mineral Resource growth from the current drilling (post December 2022 Mineral Resource estimate). The C&C option provides the optimal way to access potential value from future orebody extensions of the cave zone at increased depth.
The PFS has utilized the December 2022 Mineral Resource estimate. An updated Mineral Resource estimate will be completed in the September 2023 quarter to incorporate new drill data and will be used in the Feasibility Study. The Ore Reserve grade is expected to revert to the current mine grade when new drilling is included.
For further information please visit: https://evolutionmining.com.au/
