Evolution to sell Edna May gold mine in WA for up to $90m

Evolution Mining has agreed to a deal to sell its Edna May gold mine to Ramelius Resources for up to $90m.

Evolution’s Edna May mine.

Evolution Mining has agreed to a deal to sell its Edna May gold mine in Western Australia to Ramelius Resources for up to $90 million.

The agreement comes a week after Evolution (EVN) said it was reviewing several offers for the mine, which was one of its founding assets and produced 70,188 troy ounces of gold in the last fiscal year and accounted for about 8 per cent of Evolution’s total gold output.

The sale of the mine, located about 350km east of Perth, will reduce the company’s all-in sustaining cost and raise the average estimated mine-life of Evolution’s operations, it said.

Deal terms comprise a $40 million upfront cash payment on completion and an up to $50 million contingency payment involving cash or Ramelius shares plus royalty payments.

Ramelius said the acquisition will significantly boost its mineral resources and ore resources, making it a 200,000-ounce a year gold producer with operations within one hour’s flight of Perth. It saw the potential to operate Edna May beyond the current four-year mine plan with an extended open pit or underground operation.

With the planned sale, Evolution said it now expected gold production in fiscal 2018 of between 750,000 and 805,000 ounces, down on previous guidance of 820,000-880,000 ounces.

Dow Jones Newswires