PERTH (miningweekly.com) Gold miner Evolution Mining has struck a A$90-million agreement with fellow listed Navarre Minerals to sell its Mt Carlton gold mine, in Queensland.

Mt Carlton was Evolutions 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 operations mine life, said Evolution executive chairperson Jake Klein.

Under the terms of the agreement, Evolution would be paid an initial A$40-million on the completion of the transaction, comprising a cash component and up to A$20.4-million worth of Navarre shares.

Up to A$25-million will be payable on cumulative gold production milestones from Crush Creek with A$5-million payable upon achievement of 50 000 oz, A$5-million payable upon achievement of 100 000 oz and A$15-million payable upon achievement of 175 000 oz, while up to A$25-million will be in the form of a 5% gold price linked royalty where the average spot gold price is greater than A$2 250/oz in a given quarter.

The royalty is payable on production from both Mt Carlton and Crush Creek from July 2023 for up to 15 years.

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 Carltons success. We are confident that Navarre will be a great partner for those stakeholders in the future, said Klein.

Navarre on Tuesday told shareholders that the transaction would instantly transform the company into a self-funded gold producer with premier exploration assets across Victoria and Queensland.

Mt Carlton is a proven, high-margin operation and an attractive vehicle for Navarre to transition from gold exploration company to producer particularly given the Mt Carlton operations successful history of production and its potential for significant mine life extension, said Navarre MD Ian Hollland.

Under the transaction, Navarre will inherit a well-established operation and a highly experienced site operating team and workforce which we are confident will fit in with Navarres own culture and focus on potential for further discovery and resource addition.

To fund the initial A$40-million up-front purchase price, Navarre will undertake a fully underwritten placement consisting of some 533-million shares, at a price of 7.5c each, to raise up to A$40-million.

Evolution has agreed to participate in the equity raise, with the companys shareholding in Navarre capped at 19.9%, with the final shareholding to be determined after the equity raise has been concluded.

Navarre on Tuesday said that the balance of the placement proceeds would go towards associated transaction costs and general corporate purposes.

The Mt Cartlon transaction is subject to a number of conditions, including Navarre acquiring shareholder approval to conduct the share placement, and to issue shares to Evolution.

The Mt Carlton operations comprise an openpit and underground mine, and a 950 000 t/y processing plant situated on a tenement package of approximately 815 km2.

Future mining operations at Mt Carlton will be supplemented by the nearby Crush Creek deposit, which hosts an initial high grade resource containing 126 000 oz goldat 3.5 g/t from only nine months of concentrated drilling. This asset was acquired by Evolution in late 2020.

In the 2021 financial year, the Mt Carlton operations produced 58 371 oz of gold at an all-in sustaining cost (AISC) of A$1 937/oz, including A$19.6-million of net mine cash flow in the fourth quarter alone. The operationis expected to produce between 45 000 oz and 50 000 oz of gold in the 2022 financial year at an AISC of A$1 650/oz to A$1 700/oz.

Evolution on Tuesday said that the sale of Mt Carlton lowers group AISC by A$40/oz to between A$1 180/oz and A$1 240/oz and reduces 2022 production to between 670 000 oz and 725 000 oz. Sustaining and major capital also reduce by between A$2-million and A$8-million and between A$10-million and A$15-million respectively.

Here is the original post:
Evolution sells Mt Carlton - Creamer Media's Mining Weekly

Comments are closed.