Morning, everyone. Thanks for coming along. Wow. Big turnout. Appreciate it.
Sorry? Little room. We'll get a bigger one next year. I never thought Evolution would have an AGM with this many people. I'm wondering whether to wear my glasses or not.
That would be a first in an AGM for me as well. The print is about size eighteen. But good morning. Thanks for joining us. I'd like to start by acknowledging the Gadigal people of the Eora nation on whose land we meet today and I pay my respects to their elders past and present and also to all Aboriginal and Torres Strait Islander peoples here today.
It is my absolute pleasure to welcome you all to the Annual General Meeting of Evolution Mining Limited. Hello, Guy. We are delighted that you have been able to join us today. And as I think most of you know, I hope you know, I'm Jake Klein, the Executive Chairman of Evolution. Before proceeding, please ensure that your mobile phone is either switched off or on silent.
Thank you. And in the unlikely event of the emergency, you are asked to leave by the doors behind you to your right and go down the staircase to the foyer and meet outside the ANZ Bank on Phillips Street. Firstly, I'd like to introduce your Board members. On my left is Laurie Conway, our Finance Director and Chief Financial Officer. Next to Lori is Jim Askew.
Jim is a member of the Risk and Sustainability Committee and the Nomination and REM Committee. On Jim's left is Tommy McKeith. Tommy is the Chair of the Nomination and REM Committee and is a member of the Risk and Sustainability Committee. Tommy is also the Lead Independent Director. On Tommy's left is Cobb Johnston.
Cobb is the Chairman of the Risk and Sustainability Committee and is a member of the Audit Committee. Cobb is up for reelection at this meeting. On Cobb's left is Graham Freestone. Graham is a member of the Audit Committee and a member of the NOM and REM Committee. Graham was appointed as a Director of the Cotelpa Resources Board, so he's in fact the longest serving Director on this Board.
And regrettably today, we are farewelling Graham, he retires after ten outstanding years of service at the end of this month. Next to Graham is Andre Hall. Andre is the Chair of the Audit Committee. And on Andre's left is our Company Secretary, Evan Elstein. Evan is also the VP for Information Technology.
I'd also like to take the opportunity to introduce us introduce you to our newest Director, Jason Attu, who is sitting here in front. You may have seen the announcement lodged on the ASX platform today that he's been appointed to the Board effective January. Jason brings with him extensive skills from about Canada, the capital markets and the Red Lake mine, being previously the CFO of Goldcorp. Jason, we're delighted that you've agreed to join the Board and look forward to learning more about Canada. Two members of our leadership team, Bob Fulker, our COO and Paul Eagle, VP, People and Culture are currently at our newest site, Red Lake today.
We thought it was really important even though we had a lot of big events this week, including the announcement of the Red Lake deal. We had a Board meeting yesterday and we've got the AGM today and our Christmas party tonight that we had people, a senior delegation of people on the ground when the announcement was made. And I'm really pleased that they are there because the reception they've had and engagement they've had from the Red Lake team has been fantastic. Glenn Masterman, VP, Discovery and Business Development is also here. Where is Glenn?
Glenn, you'll hear from when we do the corporate presentation and completion of the formal part of the meeting. Also joining us today, and I'm sorry to take time to go through all of this, but I really think it's important that you see and meet and hear and see the many, many people who are doing such fantastic work on your behalf as shareholders. I'm not going be able to introduce everyone, but I think you need to meet the site managers and our general managers, Craig Fawcett, our General Manager from Andrew Miller, our General Manager, Mangari Jason Floyd, General Manager, Cracow Anton Kruger, formerly from the country of the Rugby World Champions, General Manager, Mount Carlton Jamie Code, General Manager, Mount Rawdon Mark Boone, General Manager, Transformation and Effectiveness Martin Cummings, General Manager, Commercial and did a terrific job at organizing the funding package for the Red Lake deal Brian O'Hara, General Manager, Investor Relations, who also outstanding job in getting all the presentations and messaging right for the Red Lake deal and today. Kieran Schmidt, who did all the heavy lifting on the Red Lake deal. I don't think Kieran slept for the last few weeks, but on behalf of shareholders, thank you, Kieran.
Peter O'Ballet, General Manager, Information Technology. I should and would like to have gone through everyone over here because there are so many more important evolution people here. They're all, I think, shareholders of the company and are here as both shareholders and employees. But it a special group of people and of course, there's thirteen seventy other people out on-site right now making gold safely for us right now. We'll work through the formal business of the meeting pursuant to the agenda set out on the notice of meeting that was issued on the 10/25/2019.
Copies of the notice of the meeting are available at the front door. After all of the agenda items have been dealt with, the formal AGM will be closed and then we'll have a presentation where Glenn and Laurie will update you on various matters relating to the company. Evolution, as a number of you know and have been here since the company was formed as both shareholders, employees, colleagues was formed in November 2011. So we're only eight years old as a company. It was at a time when nearly three quarters of Australia's annual gold production was owned by foreign operators.
From the very beginning, we developed a clear and consistent strategy to capitalize on what we felt would be a transformational period in the Australian gold industry. We set out to become a globally relevant mid tier Australian gold company that could prosper through the cycle. In the years that followed, we had the courage to act countercyclically to acquire great assets from offshore companies, which are divesting assets in Australia to repair their balance sheets, what I describe as motivated sellers. Through focus and commitments, we have added significant value to these assets, which are now cornerstone assets in our portfolio. Today, we are a very different company from what started out, but our vision and strategy has not changed.
In the financial year 2019, we produced 753,000 ounces of gold at an all in sustaining cost of AUD924 an ounce or in U. S. Dollar terms USD661 an ounce. This ranks Evolution as one of the lowest cost gold producers in the world. No amount of financial or operational success is worth anything if we can't keep our people safe.
In the financial year 2019, Evolution's group recordable injury frequency rate rose to eight point three from its previous five point five. We are disappointed with this performance and all sites have refocused their efforts on embedding behavioral safety initiatives improvements. On a positive note, we have seen an improvement in the reporting culture, a reduction in the severity of injuries and improved responsiveness to investigating significant incidents and implementing corrective actions. We continue to relentlessly pursue our strategy of upgrading the quality of our asset portfolio with the overriding imperatives of patience and discipline. Before this week, it had been over three years since we announced our last major acquisition, which was an economic interest in the Ernest Henry mine, which is in August 2016.
With rising valuations for quality Australian gold assets, in 2017, our business development focus brought into North America and particularly into the low risk jurisdiction of Canada, where asset valuations on a comparative basis were relatively low. For three years, we have assessed a range of assets through the lens of whether they would improve the quality of our portfolio, present an opportunity for operational improvements, had high geological prospectivity and would be accretive to our shareholders. We have found an asset that ticks all of these boxes in the Red Lake Complex in Ontario, Canada. On Tuesday morning, we agreed to acquire the asset from Newmont Goldcorp for US375 million dollars which will be fully funded debt funded by a new five year million term loan. We believe that through a well directed investment of USD100 million in capital and USD50 million in exploration over the next three years, we can restore Red Lake's position as a low cost gold producer.
In time, we see the asset is being able to produce in excess of 200,000 ounces every year for less than US1000 dollars an ounce. Newmont Goldcorp shares our vision for the asset and has retained exposure to future upside through a contingency payment of up to US100 million dollars for certain hurdles of increased mineral resources capped at a total of US100 million dollars for discovery of an additional 5,000,000 ounces of resource. Our upfront payment of US375 million dollars was derived by taking the reserve case, then adopting a moderate view of known conversion of resources to reserves and applying a conservative overall gold price assumption. So we think we have received good value for the current reserves and resources and only pay for the potential upside through the contingent payment mechanism, which is dependent on success. The acquisition is highly accretive with increases to production reserves per share of 25% and resources per share of 46%, noting that the resources and reserves will be downgraded when we apply a new conservative modeling approach to that, but it will still be very accretive on those metrics.
But we also understand and accept that it is the cost per ounce side that we need to work on to truly demonstrate the value of this acquisition. It is a turnaround opportunity that we are confident will in time become a cornerstone asset for Evolution. I also want to give you some context around the behind our decision and why we see this as a fantastic turnaround opportunity. Just like in the property sector where the old adage is location, location, location, Red Lake has a trophy geological address. The Red Lake complex has historically produced over 25,000,000 ounces at 20 grams a ton, making it the largest highest grade gold camp in the world outside of South Africa.
Our initial interest was amplified when Glenn Masterman, our VP, Discovery and Business Development, concluded that it was the most exciting geological property he and his team had reviewed. The next appropriate question for you to ask is how did such a high grade camp, one that drove Goldcorp in its best years to be the world's largest gold company, become a high cost mine and cannot be turned around? Here again, we think there are very clear, logical and rational reasons. And with renovation and reinvigoration, this trophy address can once again be a low cost operation. If we reflect back to 2015, Goldcorp was coming off a period of significant capital investment after building a number of new mines, including Cerro Negro, Eleonore and Panasquito.
That year, the Red Lake mine, which we've just acquired, produced 376,000 ounces at an all in sustaining cost of US906 dollars an ounce. In 2016, Goldcorp announced a twenty-twenty-twenty strategy, which aims to increase production by 20%, reduce costs by 20% and increase reserves by 20% at each of its assets. Our due diligence and discussions with management identified this as a critical juncture for the Red Lake operation. Whilst the strategy may have had merit at other Goldcorp operations, it was not suited to Red Lake at that time, because by 2016, the high grade zone was effectively depleted and that high grade zone produced 7,000,000 ounces at 60 grams a ton. And a very selective approach towards narrow vein mining was required to ensure its continued profitability.
So implementing a strategy that prioritized volume over value at a time when capital was being appropriately directed towards other assets meant that the mine started suffering from chasing increased tons without a proportional increase in investment in exploration and mine development that was critical to its future sustainability. Likewise, when Newmont acquired Goldcorp at the beginning of this calendar year, their focus was appropriately on the larger Goldcorp assets. And for the last twelve months, there has effectively been a freeze on capital expenditure and exploration at Red Lake. That's the position the mine finds itself in today. It is behind the proverbial eight ball with high costs and lower production, having suffered from at least five years of underinvestment in capital development and exploration.
We see this as a clear opportunity for a complete reset of the operation. This vision and view is shared by both Newmont Goldcorp and the site team, but we also recognize that it's going to take time and we think it's likely to be a three year journey. However, for less than 10% of our market capitalization, we are confident that we have secured a cornerstone asset for Evolution that has the potential in time to produce over 200,000 ounces of gold a year with a long mine life at less than US1000 dollars an ounce. As I mentioned before, it will take a significant investment and that's why the commitment to spend over $100,000,000 capital and mine development and the $50,000,000 in exploration over the next three years was critical to both Newmont Goldcorp in our proposal and to the site team and to the future of the mine. The key elements which highlight the potential of this to be a cornerstone asset for Evolution are in place.
First and foremost, the operation has an outstanding safety performance, which is a great credit to the site team. There is a sound reserve base as at the 06/30/2018, which was the last published reserve of 2,100,000 ounces and a large resource base totaling 7,000,000 ounces grading 11.2 grams per ton. It should be noted that we're going to have to deplete from June 2018 and we will apply conservative estimates, more conservative estimates to that resource and reserve estimates. So we have suggested and guided that it will be a 30% to 40% reduction initially to those resource and reserve numbers. Nevertheless, it is still a significant high grade mineral inventory with roughly a life of mine of thirteen years on the current reserve base.
There is also outstanding exploration upside and Newmont Goldcorp share this view as evidenced by their strong desire to retain exposure to this exploration upside via the contingent payment mechanism. There are many good highly skilled people on-site and there is also recognition and acceptance that to turn the site back into a low cost, high margin, profitable and sustainable business will require change. Finally, our extensive due diligence identified a number of areas for operational improvement and productivity changes. So in summary, it's an operation that has significant potential, but desperately needs a reset. Sounds like an ideal buy.
We see many elements in this operation that are similar to other assets that have been acquired from majors and have proven successful for the acquiring company. And for us, of course, our best example is the Cowal Mine, where there is clear and recognizable upside, but the asset has not been able to get the attention, focus and allocation of capital needed to revitalize the operation within the larger organization. As I've said, Newmont Goldcorp understand and agree with the turnaround potential of Red Lake, recognizing that in their portfolio, it just would not have the priority required to achieve this. They have been exceptionally good to deal with since the process began and are committed to helping us succeed at the operation by agreeing to give us access to the wide range of skills and knowledge within their organization to support our success. I'm also optimistic that this will lead to other opportunities for Newmont Goldcorp and Evolution to work together.
So ladies and gentlemen, undoubtedly the next exciting chapter of Evolution's history has begun. It's also true that with the Australian dollar gold price currently near record highs at AUD 2,150, there is no doubt that it is a fantastic time to be an Australian gold producer. But if history is any guide, we are also entering a challenging period if we wish to remain a credible and high margin business and so we at Evolution are determined to stay focused, true to our core attributes and DNA that has made us successful to date and be humble about all the success that we have achieved to date. Over the five years to thirty June twenty nineteen, since we acquired Mungari, Cal and the economic interest in Ernest Henry, we have generated over $1,500,000,000 in free cash, which has enabled us to repay $910,000,000 of debt, return $345,000,000 in dividends to you, our shareholders and grow our cash balance to over $300,000,000 All of this was achieved at a gold price that averaged over that five year period AUD $16.26 per ounce, which is substantially below the current price. Our mineral resource and reserves are perhaps the best gauge of the sustainability of this cash generation.
In FY 2019, we were again successful at adding to the resource and reserves after allowing for mining depletion. Over the last five years, our discovery budget has grown from CAD20 million to over CAD80 million and our average reserve life has increased from five years to ten years. In 2019, Evolution reported statutory net profit of AUD218 million, and this was achieved on the back of operating mine cash flow of $772,000,000 net mine cash flow of almost $500,000,000 and group free cash flow of $292,000,000 For those of you who have been at several of these AGMs, you may recall the dark time in 2015 when numbers were materially lower than that by factors of 10. These continued strong results moved the balance sheet to a net cash position and allowed us to further increase the final dividend declared in August 2019 by $0.50 to $06 per share fully franked. Importantly, the Red Lake acquisition funding allows us for an unchanged dividend policy.
Our portfolio of assets has again demonstrated the benefits of diversification by delivering another consistent operational performance. We continue to focus on the transformation and effectiveness of our business with our innovation pipeline delivering a number of projects into operating phase, including the high intensity grinding, Hig mill at Cracow, the Float Tails leach plant drilling at Mt Rawdon. Cowal continued to deliver reliable low cost production with 251,000 ounces of gold produced at an all in sustaining cost of AUD995 an ounce. Mt Carlton also had another strong year with production of just over 102,000 ounces at $737 an ounce. Ernest Henry continued to be an impressive contributor to the portfolio producing just under 100,000 ounces of gold and all in sustaining cost of negative $539 an ounce and generated alone $222,000,000 of free cash flow in the FY 2019 year.
We continue to invest capital in projects that improve our business and generate an appropriate return on our funds, your funds. In FY 2019, capital expenditure totaled $275,000,000 of which $180,000,000 was major capital. The main major capital projects included the Cowal Stage H development, the Float Tails Leach project and the E46 land acquisition costs, underground mine development at Cracow, Mt Carlton and Mungari and the capital waste stripping at Mt Carlton and Mt Rawdon. We do believe that there are plenty of organic growth opportunities within our business and earlier stage opportunities and they present a tremendous opportunity to create shareholder value. Since Glen Masterman joined Evolution three years ago to head our Discovery team, he has been building out our Discovery strategy, defining our strengths and targets, assembling a fantastic team and building momentum in this critical area.
We currently have four early stage exploration partnerships and a number of others in the pipeline. We have committed to spending between AUD80 million and AUD105 million on discovery in FY 2020, which is almost double what we spent in FY 2019 and as I said earlier, multiples of any previous year. Drilling at Kawamangari and across our greenfield projects are expected to consume the lion's share of this FY 2020 discovery budget. FY twenty nineteen was the second year we released report outlining the efforts of our people to ensure our business is sustainable for the future and for all stakeholders. Evolution continues to deliver measurable value for our business and the communities in which we operate by furthering our objective of delivering long term shareholder stakeholder value through safe low cost gold production in an environmentally sound and socially responsible manner.
I'm proud that our higher levels transparency have been recognized to the point where Evolution was included in this year's Dow Jones Sustainability Index in Australia, Evolution being the only ASX listed gold company to be included in this index. And this reflects our commitment to improve Evolution's performance and reporting on topics of safety, excellence in environmental stewardship, helping our communities thrive and developing our people. Mining is often portrayed negatively in many areas of the mainstream media. As an industry, I believe strongly that we need to get better at articulating the enormous contribution our industry has made to Australia's past economic prosperity and the importance of our sector to its future. At Evolution alone, in the twelve months in FY 2019, so to June 3039, we contributed around AUD 1,300,000,000.0 to the economy and provided much needed jobs in our country's regional areas.
Importantly, we have nine shared value projects underway, underway, which are designed to create a tangible, sustainable legacy in our communities beyond the life of the mine. The communities in which we operate and our employees are potentially our most powerful advocates. We need to continually work to demonstrate that we are worthy of their support and trust. Across our entire business, our people have continued to work incredibly hard during FY 2019 and I would like to thank each and every Evolution Evolution employee and contractor for their contribution. I'd also like to acknowledge the outstanding effort of our team in securing the Red Lake deal.
Right throughout the company involving multiple areas through an extensive due diligence process, technical, legal, commercial contract negotiations, securing debt funding, finalizing the announcements and presentations, our people on your behalf have stepped up and worked unbelievably hard. As I jokingly said to one of my colleagues and this will be like my last dig at the Wallabies, if the Wallabies had worked as hard as our team has, they would be the Rugby World Champions today. Our people are our most important asset and we want to make every person's time at Evolution a highlight of their career. I also appreciate the support that our leadership team has received from the Board of Directors this year and recognize this as a critical ingredient for our success. In particular, I'd like to thank formerly Graham Freestone, who is stepping down from the Board.
Graham has been a member of the Board since the company's formation in 2011, and we are sincerely grateful for the significant contribution he has made to Evolution's growth over these years. As I've mentioned, I'd like to welcome Jason Akyu, who adds very important and relevant skills to the Board. Finally, Evolution, you can be confident has a strong platform of high quality assets with an average reserve life of over ten years. All assets are located in the safe jurisdictions of Australia and now one in Canada with a highly skilled workforce and an attractive operating environment. Our balance sheet is strong, our assets are generating substantial cash flow and our business is well positioned to prosper from the current gold price and also very importantly through the cycle.
Thank you. So before turning to the items of business, I'll hand over to our company secretary, Evan Elstein, to note some procedural matters for today's meeting.
This is a meeting of Evolution shareholders. As such, only shareholders, their appointed proxies or corporate representatives are entitled to make comments, ask questions or vote. All other attendees are very welcome as observers. As no written questions from shareholders were received prior to the meeting, there are no questions for the Chairman to address at this stage of the meeting. You'll be given the opportunity to make comments or ask questions in relation to the resolutions to be considered by the meeting.
As such, shareholders with questions relating to specific resolutions are requested to ask them at the time the resolution is to be considered by the meeting. At the appropriate time, the Chairman will ask shareholders who wish to make a comment or to ask a question to raise their hand. Please state your name before asking your question. The Chairman has determined that we will hold a poll in relation to all the items of business. The process will be that we will go through each resolution and then conduct the poll with respect to all the resolutions.
After the completion of discussion and before the vote on a poll is taken for each item of business, the total number of valid proxies for that item and the manner in which they have been directed will be displayed on the screens. These numbers will be as at the closing time for receipt of proxies, which was 11AM Sydney time on Tuesday, twenty six November twenty nineteen. As noted in the notice of meeting, the proxies for the Chairman in favor of the resolution. For the purpose of the poll, Nicholas O'Hagan of Link Market Services, the company's shared registrars, who have examined and prepared summaries of the proxy forms received has been engaged to act as the returning officer. And Martin Clason of PricewaterhouseCoopers, the company's auditors, has been engaged to observe the poll and procedures before a determination of the results is made.
When you registered your attendance at this meeting, voting shareholders and proxy holders were given a yellow admittance card. The card provides for the holding of a poll on any of the resolutions put to shareholders. On this card, you will find a series of boxes for voting. You must tick or mark the for or against boxes for your vote to be valid and counted for each resolution. If you wish to abstain from voting, please mark the abstain box on your voting paper next to the relevant resolution.
If you are a proxy holder, you must comply with the direction of the shareholder if you wish to lodge a valid vote. The for and against votes are shown on the schedule attached to the poll paper. If the shareholder has given you the discretion on how to vote, you should include that number of votes in the number you write in the for or against boxes. Alternatively, you may wish to write these discretionary numbers separately in the for or against box. If you are a proxy holder and you do not lodge a vote on any of the resolutions, the votes on those resolutions will pass to the Chair of the Meeting to exercise pursuant to the Corporations Act of 02/2001.
The Chair must comply with the direction of the shareholder. When no instructions have been given to the Chair on how to vote as set out in the proxy form circulated to shareholders, the Chair has been expressly authorized to exercise those votes and intends to vote those shares in favor of all resolutions. If you have any questions in this regard, please make yourself known to a representative from Link Market Services before lodging your voting paper. Once all the resolutions have been read and questions relating there to you have been addressed and you have finished marking your card, representatives from Link Market Services will collect all voting cards. After the votes have been counted and reviewed by the external auditor and after the company's presentation, the results of the poll will be released on the ASX platform and displayed on the company's website following the conclusion of the meeting.
I'll now ask the Chairman to proceed to the ordinary business of the meeting as set out in the agenda that appears in the notice of meeting. The notice of meeting was dispatched to shareholders on Friday, 10/25/2019 And accordingly, this meeting is deemed to have been properly convened.
Thanks, Evan. I can advise that a quorum of members is present and now call the meeting to order. It was a long preamble I gave to the start of the meeting. The first item on the agenda is to receive and consider the financial statements of the company for the year ended thirty June twenty nineteen. The annual financial report of the company for the year ended thirty June twenty nineteen, together with the associated reports of directors and auditors, has been made available to all shareholders electronically or in hard copy.
Unless there are any questions, I will ask company's secretary to record that the report was tabled at the meeting. The company's auditor, PricewaterhouseCoopers, is represented here today by audit partner, Mark Upcroft. And if there are any questions specific to the conduct of the audit, the preparation and the content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of its financial statements and the independence of the auditors in relation to the conduct of the audit. Are there any questions relating specifically to the financial statements? Seeing there are no questions on the financial statements, I will now proceed to the resolution as set out in the notice of the meeting.
I will go to resolution one of the agenda. The resolution to adopt the remuneration report is set out on the screen and in the notice of the meeting. I will take the resolution as read. Are there any questions to this resolution? As there are no questions, I will now put it to the votes now.
Go to the next resolution. I mean, we will note over there that whilst the resolution overwhelmingly has the proxies in favor of the resolution, more than 25% will have voted against and therefore we will incur our first strike. That is as a result unless someone has more than 1% of the shares here. That is really as a result of one proxy advisor recommending against this resolution. We will work with that proxy advisor to try and understand their issues better and to try and address them in FY 2020.
I now go to Resolution two of the agenda, the resolution to reelect Cobb Johnston as a Director of the company as set out in full on the screen and in the notice of the meeting. Mr. Johnston being a Director who retires in accordance with Clause 8.1D of the constitution of the company and being eligible for reelection is seeking reelection as a director. Mr. Johnson is a mining engineer with over thirty years experience in the resource sector.
He has served as General Manager at some of Australia's largest gold mines or mines, including the Kalgoorlie Super Pit in Western Australia, the Olympic Dam mine in South Australia and the North Parks mine in New South Wales. He has extensive international experience including Canada, China, Africa and South America. Mr. Johnson is Chairman of Aurilia Metals Limited since November 2016 and he was the Lead Independent Director at Evolution from the 11/25/2015 to the 11/30/2018 and remains the Chair of the Risk and Sustainability Committee and a member of the Audit Committee. Mr.
Johnson was a former Executive Director of Magnus Resources and Neo Metals Limited and Metallum Limited. I'll take the resolution as read. Are there any questions? Racing through this. I'll now go to Resolution three of the agenda.
The resolution to approve the issue of securities under the Non Executive Director Equity Plan, the NED Equity Plan is set out in full on the screen and in the notice of the meeting. I'll take the resolution as read. Are there any questions relating to this? As I have an interest in the outcome of the next resolution, I will hand the chair of the meeting to Mr. Tommy McKeith, chair of the Nomination and Remuneration Committee.
Thanks, Jake, and morning, everybody. I now go to Resolution four of the agenda. The resolution to issue performance rights to Mr. Jake Klein is set out in full on the screen and in the notice of meeting. I will take the resolution as read.
Are there any questions? We are racing through it. No, think I carry on. So as there were no questions, I'll go on to resolution Number five of the agenda. The resolution to issue performance rights to Mr.
Laurie Conway is set out in full on the screen and in the notice of meeting. I'll take the resolution as read. Are there any questions? As there are none, I think I'll hand back to Jake. It's yours.
Contribution to the company as all of our leadership team, but again also the effort in getting our financing package, helping us through the negotiation has been fantastic. I now go to Resolution six of the agenda. The resolution to increase in maximum aggregate remuneration of non executive directors is set out in full on the screen and in the notice of the meeting. I'll take the resolution as read. Are there any questions?
I will now open the poll. Can you all please fill out your voting cards? As a reminder, if there are any questions, please ask one of the representatives from Link Market Services before lodging your voting card. Please can representatives from Link Market Services start collecting the voting cards once they complete? Didn't like myself.
So I don't I don't think I yeah. I think they're all in. Okay. As the counting of the votes on these items may take some time and as previously advised, the results will be released on the ASX platform and on our website once the counting has completed and reviewed by the external auditor and proceedings concluded. So that concludes our formal business of the meeting.
I really do want to thank you for your attendance and formally declare the meeting closed. I also want to congratulate Cobb on his reelection. Farewell, Graham again and welcome, Jason. Following we'll now have a short presentation. I'm sure you've heard quite enough from me.
I'll just talk to a couple of slides and then Glenn and Laurie will update you on some of the other matters related to the business and then we'll have questions. Please stay after the presentation and after the closure of the meeting to talk to our Board, to talk to a number of the our executives and people in the company. I think that will be the most impressive thing that you find out about the company today. I think as I mentioned earlier in my address, really the strategy has not changed since we formed Evolution in 2011. We want to be a globally relevant mid tier gold company.
We think that the right size for that is six to eight assets. With the acquisition of Red Lake, we now have seven assets. We operate six of them. We want to build a reputation for sustainability, reliability and transparency. We have and I hope we've demonstrated financial discipline.
That dollar that we spend needs to deliver a return for our shareholders, not on the basis that we believe that the gold price is going up, but we believe that we can get a better return from investing it, otherwise we should give it back to you. And as I mentioned earlier, Glenn and his team really do have an active exploration pipeline going because one of the greatest ways you can create value in a gold company is through the discovery of more gold. We are gold focused, but as we've demonstrated in the Ernest Henry interest, we are open to copper gold opportunities where the copper is a byproduct credits. And really again at the center of all of that is people. We want our people's time at Evolution to be a highlight of their career.
And it is very gratifying that when people do decide to leave our company, a lot of people mention the fact that they do think of their time at Evolution as a highlight of their career. We've talked about the sustainability principles that we've published this last financial year, because this we've talked a lot about the what, how many ounce of gold, how many at what cost, but this is how we do it. And this tries to capture the how and it's about really delivering long term value to all the stakeholders, shareholders, the communities in which we operate, our employees employees and recognizing that we are mining a finite resource. We hope that it goes on for longer, but ultimately these mines will close and we have an obligation to leave that site and that place in a better space than when we started mining. So it's shared value projects, which leave a legacy after the mine is closed is a critical project for us.
And then we've spoken about our people as well as being the absolute foundation and cornerstone of this company. We don't want to be a company where systems overwhelm us. We want to be a company empowered, where they can feel that they make a difference, whatever they're doing, whatever job, we want them to feel empowered and part of this journey and success that we're having. We've got a graduate program, which is something I think quite unique for a company of our size, but we believe that that really is starting to bring in the next leaders of our organization at an early stage. We have an Act Like an Owner program, which tries to encourage every person in the company to come up with ideas about how to improve what they're doing.
Again, job they're doing, we can do it better and we recognize that. And we are trying to build on diversity and build opportunities for people to work more flexibly and to allow a more diverse organization. We have great people in our organization and I'm very proud to be the leader of the organization, but I know that it's I'm only here today because of the incredible work which they do. I think you know this and I've talked about this, it is really a snapshot. Probably the most interesting thing is the chart on the right hand side, which shows the dividends in an FY 2019 year zero 09/05 fully franked was paid to you as a shareholder.
With that, I'm going to hand over to Glen.
Thanks, Jake, and good morning, everyone. I'm going to quickly skip through these next couple of slides because the message has been quite adequately covered in Jake's earlier address. But what I'd like to do is spend the first few moments of my address this morning with a brief description of the Red Lake Gold Complex along with a summary of our vision for the future. Mining operations at Red Lake are situated about 180 kilometers north of the town of Dryden in Northwestern Ontario in Canada. Access is by Sealed Highway connecting to the Trans Canada Highway.
That's about 180 kilometers south of the mine. And there are commercial air services operating from Thunder Bay and Winnipeg. Now more importantly, gold was discovered at Red Lake back in 1922 with production commencing in the late 1940s. And the current operations consist of Red Lake, Campbell and the Kosher Mining complexes. These are serviced by five underground shafts, two mills and an autoclave.
And the operations employ predominantly a local workforce. And as you can see in the chart in the bottom right there, have developed an impressive safety culture, particularly over the last four years. Mining operations consist of a combination of long haul mechanized underhand or overhand cut and fill techniques with backfill of open stope excavations as required. Evolution's plans consist of introducing a number of operational enhancements, including improving management of geological data, improving practices to increase mining recovery and reduce dilution, improvements in fleet efficiency and effectiveness, rationalization of material movement and increasing resource definition drilling to convert the large resource base to reserves. The bottom line is that the underground operations have been restricted from capital required to invest in critical development to establish access to future production areas.
As a result, and as Jake mentioned earlier, we're committing to a significant investment in development of the underground in order to reestablish that access and to bring production back to over 200,000 ounces per annum over the course of the next three years. Increasing production from the underground will also allow us to start bringing the mills back to our long term objective of over 900,000 tons per annum. On the processing side of things, we're considering optimizing processing plants and consolidation of the facilities, installation and commissioning of the Acacia Reactor to improve gold recoveries, strategic blending of the mill feed, improvements in utilization and the potential application of ore sorting. In respect of exploration, I'd like to provide a brief geological overview of the Red Lake Gold Complex. The underground mines consist of light gold deposits hosted by key greenstone rocks of the Red Lake Greenstone Belt.
That belt hosts a variety of deposits including the Red Lake, Campbell And Cochina mines, the past producing Madsen Mine and other nearby deposits such as Phoenix and Osaka. The most prolific and highest grade mineralization is hosted in mafic and ultramafic rocks, which is structurally repeated in multiple positions across the camp. One of the reasons Evolution really likes our key in Greenstone gold settings is because of their ability to generate deeply developed high grade mineralization that persist to great debts. The Red Lake Complex is certainly one these types of systems with mineralization starting at surface and extending over 2.5 kilometers deep. One of the unique qualities of the Red Lake Camp is the ability to host extremely high grade mineralization in very small footprints.
For example, the high grade zone, which was discovered in 1995, produced 7,000,000 ounces grading 64 grams per tonne. And remembering of course that the discovery of this high grade zone occurred fifty years after the commencement of production at Red Lake. Total ore mined from this high grade zone was approximately 3,500,000 tons and it occupied a pretty small footprint of only 100 meters by 50 meters inside a pipe like geometry that plunge for over a kilometer of depth. And we believe there are more of these types of high grade opportunities to discover and they remain hidden across this really large land package, which is four fifty square kilometers. I'd like to finish by really summarizing some of the key growth opportunities we have identified at Red Lake.
It's a highly endowed Akeen Greenstone Gold Camp, which has historically generated some of the highest grade production in North America. There's been very limited exploration investment, particularly over the last several years and this implies a significant opportunity remains in which non resources can be potentially extended and with significant space to drill as indicated by historic depths of development of the main Red Lake ore bodies. There's an experienced team in place with new target ideas which have been developed over the last several years. And what it's really requiring is some new investment. The small footprint, as I mentioned, the high grade zone does imply that the camp remains highly prospective.
And Evolution is committed to reinvigorating exploration by investing US50 million dollars over the next three years. With that, I'd like to hand over to Laurie.
Thank you, Glenn, and good morning, everyone. And Jake, just yes, we will stay humble, including talking about Rugby World Cup for the next four years. Looking at our balance sheet, which is really important to being able to execute our strategy. The strong cash generation that Jake talked about in FY 2019, where we generated over $290,000,000 of group cash flow moved us to a net cash position through the year. This was after all of our operations again for FY 2019 delivered positive net mine cash flow.
Our relentless focus over the years on costs and margins positioned us perfectly to fund the Red Lake acquisition. This focus has ensured that the cash generated was being banked and that the balance sheet was strong. We've always said that we're comfortable to leverage up the balance sheet for acquisitions, so long as we have a pathway to quickly deleverage as was evidenced by the Cowal and Ernest Henry transactions. For Red Lake, it is a little bit different in that with the current strength of the balance sheet, our gearing will be a modest 13% on closing. We have fully funded this acquisition via a debt facility of five years, 600,000,000 term loan and the amortization profile has been matched to the investment that we require at Red Lake.
We'd like to thank all of our banks for their support on this transaction and the timeliness in which we were able to execute it. The continued strong cash generation during FY 2020 and this funding structure for Red Lake means that we expect to have in excess of $600,000,000 of liquidity on closing the transaction. We've also taken the decision to pay out the Ernest Henry term loan upon completion of the Red Lake acquisition. This is on the basis there's no benefit in maintaining both facilities and the associated costs. At the same time, we have established required performance bond facilities at Red Lake as well as renewing our revolver facility and performance bond facility for existing assets for a further three years.
The cash generation of the existing portfolio assets as well as the funding structure for Red Lake will ensure that there's no change to our dividend policy. We plan to continue paying our dividends based on the percentage of group cash flow before debt with a targeted payout rate of 50%. From a finance perspective, it's pleasing to have a balance sheet which supports our business strategy by being able to fund organic growth opportunities, fund growth acquisitions and invest in turning around a long term quality asset such as Red Lake, while consistently paying dividends. Our balance sheet strength is a critical component of our strategy execution. In wrapping up, Evolution through the execution of a clear and consistent strategy as outlined by Jake, means we have a diversified portfolio of assets in Tier jurisdictions.
We have continued to upgrade the portfolio quality through acquisitions and divestments with the Red Lake acquisition being the latest example. Our diversified portfolio has a very good mineral endowment with 21,700,000 ounces of resources and 9,500,000 ounces of reserves, with a group mine life of over ten years and excellent organic growth potential at many of our assets. Red Lake will increase our production by 22% and provide further benefit to the portfolio where there's less dependency upon one asset to deliver all of the returns. Red Lake will also favorably improve our production mix whereby 56% of our production assets with a mine life of eight or more years. For the existing portfolio, they have been cash positive for each year of the last five years or for the period of Evolution's ownership.
While we will be investing considerably at Red Lake over the next few years to reinvigorate the asset, we expect that in the long run, Red Lake will be a cornerstone asset of the portfolio and we will remain one of the low cost gold producers. Thank you for your time.