Evolution Mining buys into Glencore’s Ernest Henry mine’s gold

Evolution has acquired a major stake in Glencore’s Ernest Henry copper gold mine.

Evolution will pay $880 million for a 30 per cent stake in the operation, and will be entitled to 100 per cent of the mine’s gold, and 30 per cent of its copper and silver production.

However, Glencore will continue to control the day to day operations of the mine.

According to Glencore, the deal will also see Evolution pay ongoing monthly cash contributions equal to 30 per cent of production and capital costs associated with copper concentrates.

The two miners have also entered into an agreement to co-operate in exploration opportunities in the region surrounding the mine, and potentially establishing an exploration joint venture.

The move comes only days after Evolution announced its intention to sell its Pajingo gold mine to Minjar gold for $52 million.

Commenting on the acquisition, Evolution executive chairman Jake Klein said, “Evolution has today gained exposure to a world-class mining asset in Ernest Henry.”

“Since inception we have consistently communicated a very clear strategy of upgrading the quality of our asset portfolio to create a globally relevant, mid-tier Australian gold producer. This acquisition, together with the recent divestment of Pajingo, is a substantial step forward in delivering on this strategy.”

Klein added: “The addition of low cost gold production from Ernest Henry to our portfolio gives us exposure to another high quality, long life asset that further underpins the future success of our business.”

Evolution will raise around $401 million through an underwritten, pro-rate accelerated renounceable entitle offer to fund part of the transaction, with the balance of the $880 million funded by a new $500 million term loan with a five year tenor, on top of Evolution’s existing debt facility.

 

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