Evolution Mining acquires interest in Northparkes Copper-Gold Mine

Evolution will acquire Northparkes, located in New South Wales, for total cash consideration of up to US$475 million, comprised of:

1. upfront cash consideration of US$400 million; and
2. contingent consideration of up to US$75 million.

Sumitomo Metal Mining and Sumitomo Corporation (and affiliates) will retain their 20% interest in the Northparkes JV. Under the Transaction structure, Evolution will acquire all the shares in CMOC’s Australian subsidiary, CMOC Mining Pty Ltd, which will not trigger any preemptive rights.

Evolution has also agreed to enter into an offtake agreement (on market equivalent terms) with IXM S.A. (a subsidiary of CMOC) under which IXM will purchase from Evolution copper concentrates produced from the Northparkes mine equal to Evolution’s 80% attributable interest over the life of mine’s existing Ore Reserves.

In addition, Evolution will assume the obligations of CMOC Limited as guarantor under the Triple Flag Metal Purchase and Sale Agreement under which Evolution will deliver a percentage of its attributable gold and silver production from Northparkes to Triple Flag over the operation.

The Transaction will be funded by an AUS$525 million fully underwritten institutional placement and a new AUS$200 million 5-year Term Debt Facility. In addition to the Placement, Evolution will also undertake a nonunderwritten share purchase plan for Evolution’s eligible retail shareholders, which will be used to assist with integration costs related to the Transaction and general working capital.

Completion of the Transaction is expected to occur before the end of December 2023.

Commenting on the Transaction, Evolution’s Executive Chair, Jake Klein said: ‘The acquisition of Northparkes represents a unique opportunity to add another quality asset to our portfolio, strengthening our positioning as a business that prospers through the cycle. Northparkes is a Day-1 cashflow producing asset with a ~30-year mine life, considerable upside and a well-established team that has a great track record and technical experience at the operation.

‘Following a long period of a successful ownership, CMOC has decided to exit the asset in pursuit of other strategic initiatives more aligned to CMOC’s objectives. Ultimately, this is a mutually beneficial outcome for both parties and an opportunity for Evolution to continue delivering on the successful track record of the operation,’ Mr Klein added.

Evolution’s Managing Director and Chief Executive Officer, Lawrie Conway commented: ‘Positioned in the Lachlan Fold Belt, one of Australia’s most prospective Copper-Gold belts, Northparkes has a long history of Ore Reserve replenishment and growth, increasing Reserves by 49% since 1994, with a current Ore Reserve of 101 million t. In addition, the asset is favourably located close to well-capitalised infrastructure, featuring concentrated mining options with five deposits situated within a two-kilometre radius.

‘Following a period of higher capital investment, the asset is now entering a cash flow generation phase, aligned with our strategy to continue to deleverage our balance sheet while delivering returns to our shareholders. Notably, the transaction funding structure reflects our commitment to balance sheet management with no debt repayments due under this facility until 3Q25,’ Mr Conway added.

Read the article online at: https://www.globalminingreview.com/finance-business/07122023/evolution-mining-acquires-interest-in-northparkes-copper-gold-mine/