Evolution Mining has awarded a contract to GR Engineering Services to complete plant expansion works at its Mungari gold mine near Kalgoorlie in WA.
Expected to total $155 million, the works are part of the company’s commitment to invest $250 million in the site to increase its processing capacity from two million tonnes per annum to 4.2 million tonnes per annum.
“The award of this contract is a major milestone for the Mungari Future Growth project,” Evolution Mining managing director and chief executive officer Lawrie Conway said.
“It secures the critical processing plant infrastructure within our budgeted costs, locking in over 60 per cent of the project costs and secures a delivery time within the approved project schedule.
“The feasibility study established a sound investment case with an internal rate of return for the project of between 19 per cent and 28 per cent, at a conservative $2400 per ounce and spot price of $2965 per ounce respectively.”
Initial engineering design and procurement works have commenced with site works expected to commence in mid-January 2024.
The project has an estimated 30-month construction period including long-lead items and approvals, with commissioning expected by the end of the March 2026 quarter.
Targeting a gold production of 200,000 ounces per annum for the life of the mine, the project is expected to reduce Mungari’s all-in sustaining cost (AISC) by 18 per cent to $1750 per ounce and extend the mine life to 2038.
Mungari’s mine life was recently extended in late June to 15 years following expansion efforts at the gold mine, as well as the company’s Ernest Henry gold mine.
Conway said Evolution plans to establish the Mungari project as a cornerstone asset of the company.
“We are also confident that we will be able to discover additional ounces which will add further to the value of the project and are excited about the future at Mungari.”