News: EVN UPDATE 1-Australia's Evolution Mining announces mine extension plans

(Adds details of mine extension, debt restructuring plans)

June 5 (Reuters) - Australia's Evolution Mining (EVN) said on Monday it has approved extension projects for its Mungari mine in Western Australia and Ernest Henry mine in Queensland in an effort to increase its capacity for gold production

Evolution Mining plans to invest A$250 million ($165 million) to increase throughput from 2 million tonnes per annum to 4.2 million tonnes per annum at the Mungari Mine, after the completion of a feasibility study.

The plant expansion will reduce All-In-Sustaining Costs (AISC) for Mungari by 18% to A$1,750 per ounce while extending the mine life out to 15 years, the gold miner said.

Average annual gold production post commissioning is anticipated to be approximately 200,000 ounces for five years, a 50% rise from the current production rates of approximately 135,000 ounces.

Additionally, the New South Wales-based company plans to invest A$15 million for feasibility study and A$7.5 million for drilling programme at the Ernest Henry mine to eventually extend the mine life by 17 years to 2040.

Separately, the company said it has restructured its debt maturity profile which involved a $200 million U.S. Private Placement and the replacement of the existing A$590 million term loan facilities, to increase balance sheet flexibility. ($1 = 1.5152 Australian dollars)