CANADA – Australia’s Evolution Mining Ltd has agreed to buy Canadian gold mining complex Red Lake from Newmont Goldcorp Corp for US$375 million in cash.
The Australian mining company also agreed to pay an additional $100 million to Newmont upon new resource discovery at the mine.
“Red Lake is an under-capitalized asset which, through a committed investment in development and exploration, is intended to become a cornerstone asset in the Evolution portfolio,” said Jake Klein, Evolution’s executive chairman.
Newmont, an American mining company, said in a statement that the sale was part of its efforts to streamline its asset base.
The deal follows the top global gold miners Newmont and Barrick Gold Corp’s decision to focus on their best performing mines, which had prompted expectations of mine sales around the world.
These expectations have materialized in a chain of recent investments by Australian miners into gold mining including BHP’s recent stake acquisition in SolGold Plc and Saracen Mineral Holdings Ltd acquiring Barrick’s 50% stake in Super Pit gold mine in November 2019.
Evolution has also made a commitment to spend US$100 million on existing operations and an additional US$50 million in exploration at Red Lake over the first three years after the completion of the deal.
The acquisition will be funded through an A$600 million (US$407 million) loan facility, the Australian gold explorer said in a statement.
Evolution mining was founded in 2011 as a mid-tier producer in Australia’s mining sector. The company’s first asset was an undervalued resource in North Queensland.
The company successfully turned that initial resource at Mt Carlton into one of the world’s highest-grade open pit gold mines.
Its recent acquisition is testament to its transition from a small mining company into a globally relevant gold mining business with a reputation of delivering value for all stakeholders.