Evolution Mining has entered into a binding agreement to acquire China Molybdenum Co’s (CMOC) 80 per cent stake in the Northparkes copper-gold mine.
The Northparkes project is located 27km north-west of Parkes in the central west region of New South Wales, Australia. It has been in operation since 1994 and made history as the first mine to use the block cave mining method in Australia.
Evolution acquired 80 per cent of the project to diversify its portfolio and to increase its exposure to copper, which is expected to increase to about 30 per cent to total revenue in the 2023–24 financial year.
“The acquisition of Northparkes represents a unique opportunity to add another quality asset to our portfolio, strengthening our positioning as a business that prospers through the cycle,” Evolution Mining executive chair Jake Klein said.
“Northparkes is a day-1 cashflow producing asset with (an approximate) 30-year mine life, considerable upside and a well-established team that has a great track record and technical experience at the operation.”
Evolution will acquire Northparkes for up to $US475 million ($718 million), which comprises of $US400 million ($605 million) in upfront cash consideration and up to $US75 million ($113 million) in contingent consideration. Evolution will also acquire all the shares in CMOC Australian subsidiary CMOC Mining.
Sumitomo Groups, Sumitomo Metal Mining and Sumitomo Corporation, will retain its 20 per cent stake.
CMOC decided to divest its 80 per cent stake in the project to pursue other strategic initiatives more aligned to its objectives.
“Ultimately, this is a mutually beneficial outcome for both parties and an opportunity for Evolution to continue delivering on the successful track record of the operation,” Klein said.
The transaction will be funded by a fully underwritten institutional placement worth $525 million, and a new $200 million five-year term debt facility.
The deal is expected to be completed before the end of the year.
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