Evolution to sell Pajingo gold mine to Chinese firm

Evolution has agreed to sell the Pajingo gold mine to Chinese company Minjar Gold for $52 million.

The sale includes the surrounding exploration tenements, and consists of a $42 million up-front cash payment and a one per cent net smelter return royalty up to $10 million for gold production above 130,000 ounces.

“Evolution has grown significantly in the past 18 months and it now makes strategic sense for the asset to be operated by an emerging gold producer that can provide the right level of focus on further extending the mine’s operating life,” Evolution executive chairman Jake Klein said.

The sale is unconditional.

Evolution first announced its inclination to divest Pajingo last week, at the time stating, “Evolution has consistently stated that a key object of its business strategy is to improve the quality of its asset portfolio over time.”

“This includes continuously evaluating a wide range of acquisition and divestment opportunities that Evolution believes are in the best interests of shareholders. A sale of Pajingo gold mine would be consistent with this strategy.”

Evolution will book a loss of $77.3 million on the sale, based on the carrying value of the asset.

The sale will close on 1 September.

Following the announcement of the sale, Klein thanked the team at Pajingo, adding it “had made a very important contribution to our business over the last six years”.

As a result of the sale, Evolution has cut its production guidance from 800,000-860,000 ounces of gold down to 745,000-800,000 ounces at an all in sustaining cost of $970-$1030 per ounce.

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