Evolution in $720m copper-gold mine deal

Evolution Mining has inked a binding agreement to acquire a major interest in a copper and gold mine in New South Wales under a $720 million deal.

The ASX-listed miner emerged from a trading halt with an announcement that it had entered into a binding agreement to acquire an 80 per cent interest in CMOC Group’s Northparkes copper-gold mine.

The Sydney headquartered miner with an office in WA would pay US$400 million (AUS$608 million) in cash and a contingent consideration of up to US$75 million (AUS$114 million) to get its hands on the NSW asset.

Japanese investor Sumitomo Group will retain its 20 per cent interest in the project through the Northparkes joint venture structure.

Evolution also agreed to enter into an offtake agreement with IXM S.A- a subsidiary of CMOC- under which the subsidiary will buy a portion of the copper concentrates produced.

To fund the transaction, the miner is undertaking a AUS$525 million institutional placement and is taking on a AUS$200 million five-year term debt facility.

Evolution executive chair Jake Klein said the acquisition represented a unique opportunity to add another asset to its portfolio.

“Northparkes is a day-1 cashflow producing asset with an about 30-year mine life, considerable upside and a well-established team that has a great track record and technical experience at the operation,” he said in the ASX announcement.

“Following a long period of successful ownership, CMOC has decided to exit the asset in pursuit of other strategic initiatives more aligned to CMOC’s objectives.