Evolution Mining Limited advised that the Board has approved the Ernest Henry Mine Extension Project to progress to the Feasibility Study phase following the Pre-Feasibility Study (PFS) completion, 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,” Evolution 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,” Conway added.
According to the PFS, the base case has an incremental net present value (NPV) of $690 million and an IRR of 28%. A $450-500M3 associated execution capital (research, infrastructure, and mine development capital) contains roughly 60% of this expenditure supplying infrastructure to expand below the 750mRL. Based on the PFS timings, most of this capital will be required in FY27 and FY28. The PFS adds 11 years to mine life above a ‘do nothing’ case, which would see mining end in FY29 at 1125mRL.
The PFS will result in a 56 million tonnes increase for 343,000 tonnes of Cu and 609,000 ounces of Au, payable below 1125mRL. There is also a 44.7 million-tonne growth in Ore Reserves at 0.70% Cu and 0.44g/t Au.
The Mine Extension PFS assessed options for continuing sub-level cave mining below the 1,125mRL, comparing traditional trucking to a crushing and conveyor (C&C) system, with potential geological upside considered. Both alternatives have been assessed to be value accretive by the PFS; however, the C&C option (between 1,100-750mRL) (base scenario) gives higher economic upside and optionality when projected the Mineral Resource estimation increase is taken into account.
The Mine Extension PFS assessed options for continuing sub-level cave mining below the 1,125mRL, comparing traditional trucking to a crushing and conveyor (C&C) system, with potential geological upside considered. Both alternatives have been assessed to be value accretive by the PFS. However, the C&C option (between 1,100-750mRL) (base scenario) provides better economic upside and optionality when the expected Mineral Resource estimate increase is considered.
The Mine Extension PFS assessed options for continuing sub-level cave mining below the 1,125mRL, comparing traditional trucking to a crushing and conveyor (C&C) system, with potential geological upside considered. Both alternatives have been assessed to be value accretive by the PFS. However, the C&C option (between 1,100-750mRL) (base case) provides better economic upside and optionality when the expected Mineral Resource estimate increase is considered.
According to Evolution, while not included in the present PFS, there is a significant probability of mineralisation expansions and accompanying Mineral Resource increase from the current drilling (beyond the December 2022 Mineral Resource estimate). The C&C option is the best approach to gain access to potential value from future orebody expansions in the cave zone at greater depth.
The December 2022 Mineral Resource estimate was used in the PFS. A revised Mineral Resource estimate will be generated in the September 2023 quarter to incorporate fresh drill data and will be utilised in the Feasibility Study. The Ore Reserve grade is projected to return to the existing mine grade when new drilling is added.
