Evolution Mining has secured board approval for a project that will extend the operational life of its Cowal gold mine in New South Wales, Australia by a decade.

The Open Pit Continuation project will involve an estimated capital investment of A$430m ($273.4m), with open pit production now expected to continue through to 2042.

The decision follows regulatory approvals from the Australian federal government and the New South Wales Department of Planning, Housing and Infrastructure.

The expansion includes further development of the existing E42 pit and three new satellite pits, E46, GR, and E41, which are located adjacent to the current site.

According to Evolution Mining, the Cowal extension project is projected to deliver 1.94 million ounces of gold and is expected to yield an internal rate of return of 34% under a base case scenario using a gold price of A$3,300 per ounce.

At current spot prices, the projected return increases to 71%, with the payback period dropping from 4.5 years to 1.5 years.

The underground component of the Cowal operation is expected to reach a production rate of 2.4 million tonnes annually by FY2026, contributing about 30% of the mine’s feed and half of the total gold output.

The capital investment will be deployed over seven years, in line with previous estimates.

As part of the strategy to reduce upfront costs, Evolution Mining has secured 11 low-hour second-hand haul trucks, which the company states have delivered cost savings of approximately A$35m ($22.26m) compared to new equipment.

Major capital expenditure for FY2025 is now forecast between A$65m ($41.3m) and A$70m ($44.5m), covering fleet acquisition and infrastructure establishment. An additional A$5m ($3.2m) will be allocated to mine development activities necessary to commence full operations in July 2025.

Since its acquisition in 2015, Cowal has contributed more than A$1.62bn ($1.03bn) in net cash flow to Evolution Mining, with the site generating A$479m ($304.6m) in the first nine months of FY2025 alone.

The mine is expected to remain a significant cash flow contributor during the project’s execution period.

Evolution Mining managing director and CEO Lawrie Conway said: “Cowal is undoubtedly a world class asset and a key asset in the Evolution portfolio. The operation has fully repaid the acquisition cost and subsequent investment with a 17 year mine life remaining.

“Today, the Board has approved the project which has compelling returns of 71% at current spot gold price and a short payback period. It will contribute to the goal of sustaining Cowal’s current production rate, while at the same time delivering significant economic benefits for all stakeholders.”

Evolution Mining noted that exploration is ongoing at Cowal, with focus on identifying mineralisation that could support further underground mining. The open pit expansion is seen as enabling full-scale development of these underground opportunities, particularly targeting higher-grade ore bodies.

The Cowal extension marks a strategic milestone for Evolution Mining as it seeks to maintain stable production across its six operating sites. These include wholly owned operations at Cowal, Ernest Henry and Mt Rawdon in Queensland, Mungari in Western Australia, and Red Lake in Canada, along with an 80% stake in Northparkes in New South Wales.

For FY2025, Evolution Mining has maintained its production guidance of 710,000 to 780,000 ounces of gold and 70,000 to 80,000 tonnes of copper, with an all-in sustaining cost ranging between A$1,475 ($937.94) and A$1,575 ($1,001.53) per ounce.

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