Evolution Mining Ltd has entered into a binding agreement with Navarre Minerals Ltd to sell the Mt Carlton gold mine (includes Crush Creek) in Queensland for a total consideration of up to A$90 million.
The total consideration consists of:
- AUS$40 million payable upon completion, comprising a mix of equity and cash. Evolution has agreed to participate in Navarre’s equity raise up to a maximum shareholding of 19.9% (approximately AUS$20 million), with the final holding determined after the equity raise has concluded.
- Up to AUS$25 million contingent consideration payable on cumulative gold production milestones from Crush Creek with AUS$5 million payable upon achievement of 50 000 oz, AUS$5 million payable upon achievement of 100 000 oz and AUS$15 million payable upon achievement of 175 000 oz.
- Up to AUS$25 million contingent consideration payable in the form of a 5% gold price linked royalty where the average spot gold price is greater than AUS$2250/oz in a given quarter. The royalty is payable on production from both Mt Carlton and Crush Creek from 1 July 2023 for up to 15 years.
Evolution has consistently stated that a key objective of its corporate strategy is to continuously seek to upgrade the quality of its portfolio through either acquisition or divestment and the sale of Mt Carlton is consistent with this strategy. Consistent with other divestments, Evolution will retain upside exposure to Mt Carlton through the shareholding in Navarre of up to 19.9% and the contingent considerations.
Navarre’s economic interest in Mt Carlton will commence from 1 October 2021, with the transaction expected to close in the December 2021 quarter. Evolution will be providing support to Navarre to ensure a safe and smooth transition of ownership.
Commenting on the transaction, Executive Chairman Jake Klein said:
“Mt Carlton was Evolution’s first development project and has generated excellent returns for shareholders since it was commissioned in 2013. With the company focussed on delivery of growth projects at the cornerstone assets in the portfolio, we believe now is the time to hand Mt Carlton over to an emerging gold producer who can focus on extending the operation’s mine life. The exposure we have retained will enable Evolution shareholders to benefit from the future success of the operation.
“Evolution would like to thank our employees, contractors, suppliers, the traditional custodians of the land the Birriah People, and the local community for their contribution to Mt Carlton’s success. We are confident that Navarre will be a great partner for those stakeholders in the future.”
Read the article online at: https://www.globalminingreview.com/mining/07102021/evolution-mining-to-divest-mt-carlton-gold-mine-to-navarre-minerals/