Evolution Mining Ltd. is appointing new leaders at the Red Lake gold mine in Ontario to address culture issues impacting production following a "difficult quarter."

The mine's output for the December 2022 quarter was below expectations, and the noncompliance, dilution and absenteeism issues affecting it "all center around culture and leadership," CEO Lawrence Conway told a Jan. 24 quarterly results call.

Red Lake, which Evolution bought from Newmont Corp. in April 2020 for US$375 million, produced 24,960 ounces of gold in the second quarter of its fiscal 2023, down from 36,140 ounces in the prior quarter but more than the 19,832 ounces in the year-ago period, when a significant portion of its workforce were unavailable due to COVID-19.

In its report for the quarter ended Dec. 31, 2022, Evolution announced several key management and operational changes for Red Lake, including appointing Thomas Lethbridge as head of operations. Lethbridge was formerly Newcrest Mining Ltd.'s head of operations at Cadia Valley gold-copper operation in New South Wales and, before that, general manager of Evolution's Mt Rawdon gold mine in Queensland.

Having noticed a "concerning trend" of noncompliance to plan at Red Lake during the December 2022 quarter that "needed immediate rectification," COO Bob Fulker said he will focus on the mine and "spend significant time at the operation until it regains consistent plan delivery" while Evolution searches for a new site lead.

"It's getting the supervisors and superintendents to make sure that we stay with the plan and don't go back to the old habits," Conway said. "We had to make those changes so that we [don't] come into this quarter with something that wasn't going to give us the ability to deliver a better outcome for the [fiscal] year."

Evolution Executive Chair Jake Klein had acknowledged in April 2020 after acquiring Red Lake that the mine required a change in cost structure, efficiency, productivity and culture to "really make it a great mine again."

"We weren't there on day one when we acquired it" when international borders were closed, and "changing from an operation that used to be 30, 40, 50 grams [of gold] a tonne to sub-10 grams per tonne means you've got to operate differently, be more efficient and need more modern equipment," Conway said on the recent quarterly call.

Conway noted that the Red Lake mine has been in operation for over 50 years, and a shift in operations means getting workers to buy into the changes Evolution is introducing.

"The people's accepting of their own personal accountability and that of everybody to deliver is actually lifting and is actually changing," Fulker said. "We get this right, then we get access to the 11 million ounces of resource that we've got there."

Fulker told the call that his operational changes have already delivered a monthly run rate in January of 1,500 meters in development drilling, 18,000 meters of production drilling and 80,000 tonnes of ore mined.

"When you look at the development meters, the tonnes we're [now] getting [and] the processing plant improvements, it does actually work. We've just got to stop slipping back into old habits and have the leadership on site to make sure we stay the journey," Conway said.

Evolution's group gold output for the second quarter of its fiscal 2023 rose to 166,404 ounces from 148,084 ounces a year prior, while all-in sustaining costs fell to A$1,099 per ounce from A$1,347/oz. The company's fiscal 2023 guidance for production and all-in sustaining costs remains unchanged at 720,000 ounces and A$1,240/oz.

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