Evolution ready to join gold's top tier after $380m Cowal green light

Evolution Mining (ASX:EVN) is a step closer to launching its Cowal operations in regional New South Wales into the top-tier of Australian gold mines after the State Government approved its underground development.

The gold mine in the central west region of NSW is now permitted out to 2040, something which will enable a long term shift to higher grade underground ore sources.

These will be blended with ore from the E42 pit to turn the mine, bought from gold giant Barrick in the midst of its Australian fire sale in 2015, into one of Australia’s largest with a production profile of 350,000ozpa.

The $380 million underground development will underpin a massive step change for the project, which is expected to produce 230,000–250,000oz at all in sustaining costs of $1,180–1,220/oz in FY22.

It will generate 160 jobs in the construction phase and 230 new jobs during operations, with development of the Galway decline to be completed in the December Quarter and 37km of diamond drilling scheduled for FY22 to optimise the early stages of the mine, which Evolution boss Jake Klein says will be ‘world class’.

“The approval of this new underground mine at Cowal is a significant milestone for this world class operation,” he said.

“We have a bright future at Cowal with permitted mine life extended to 2040, and further job security for our local employees and contractors.”

Evolution shares were up 4% in early trade.

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Bardoc rings in the changes

Not such great news on the mine development front for gold hopeful Bardoc Gold (ASX:BDC), which this week halted plans to develop its eponymous gold project north of Kalgoorlie after reporting a major cost blowout.

It announced a strategic review and deferred the investment decision on the mine, which was due in late 2021.

Blaming supply chain issues and projected labour cost blowouts wrought by the pandemic, the company said the project would now cost $232 million, some $55 million and 31% above estimates in its March DFS.

The company said it was not willing to take the financial risk, with cost pressures expected to rise over the next 12-18 months on the back of rising steel, materials and other inputs, as well as the skilled worker shortage brought about by WA and Australia’s strict border policies.

It has now rung the changes, with Neil Biddle of Pilbara Minerals (ASX:PLS) fame stepping into an executive director role to lead the strategic review of the Bardoc project.

CEO Rob Ryan today left the company “by mutual agreement”, having steered the ship since March 2019.

“Rob is a high-calibre individual who has done a fantastic job in advancing the Bardoc Gold Project to this point. His hard work, dedication and resolve can not be doubted, and the huge effort he has put in on behalf of Bardoc shareholders over the past two years is greatly appreciated by everyone in the company,” Biddle said.

“However, it became apparent that Rob’s core skills of building and operating projects do not fit with our current direction, and we are pleased to have reached agreement with him to part company on amicable terms.

“Rob is an excellent senior mining and operations executive and we have no doubt he will prosper in the mining industry. We wish him all the best for the future.”