Macquarie, Citi, StanChart on ticket for $US475m Evolution mining acquisition of Northparkes

Evolution Mining is expanding its operations on the east coast of Australia. Picture: David Gray, AFP

Evolution Mining hired Macquarie Capital for its acquisition of an 80 per cent stake in the Northparkes copper and gold mine from China Moly for up to $US475m.

The mine is based 27km northwest of Parkes in central west NSW and Evolution will pay $US400m up front with the remaining $US75m subject to certain performance hurdles.

The asset, which was previously owned by Rio Tinto, was up for sale through Citi and Standard Chartered this year and is considered a long life mine.

Evolution Mining was known to be an obvious contender, with its own asset right next door, while the special purpose acquisition company MAC was also taking a look.

Evolution says the price equates to 7 times earnings before interest, tax, depreciation and amortisation, which shareholders told this column they were comfortable with, backing the group’s management team.

Sumitomo will retain its 20 per cent stake in Northparkes.

The acquisition is being funded by a $525m fully underwritten placement and a $200m five-year debt facility.

Shares are being issued at $3.80 each after they closed at $4.14, making the raise an 8.2 per cent discount to the last close. It will also issue a share purchase plan.

The mine is expected to produce 15,000 ounces of gold for the six months to June 2024 and 12,500 tonnes of copper.