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Evolution gains more ground in WA

Evolution gains more ground in WA

Photo by Bloomberg

1st May 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed gold miner Evolution Mining has inked yet another transaction to expand its gold footprint, this time acquiring a 19.9% shareholding in fellow-listed Phoenix Gold.

Evolution on Friday told shareholders that the company had reached an agreement with Phoenix to subscribe for up to 105.9-million new shares in the company for a total investment of A$9-million.

The first tranche of the transaction would see Evolution subscribe for 44-million fully paid shares in Phoenix, at an issue price of 7.5c a share, subject to certain conditions, including the average daily spot price for gold not falling below A$1 300/oz for three consecutive days prior to the completion of the first tranche placement.

The second tranche would consist of a further 61.9-million fully paid ordinary shares, priced at 9.2c each, and would be subject to Foreign Investment Review Board approval, as well as shareholder and regulatory approvals.

Upon the completion of the second tranche of shares, Evolution would have the right to nominate a director to the Phoenix board, and to participate in any new share issues in the company. Evolution would also hold the right of first refusal over any future tenement sales or joint venture development within 75 km of the 1.5-million-tonne-a-year Mungari processing plant.

Phoenix holds a number of exploration and development assets located adjacent to gold miner La Mancha’s Australian operations, which were acquired by Evolution in April this year.

La Mancha’s Australian operations include the high-grade Frog’s Leg underground mine, as well as the adjacent White Foil openpit mine, in Western Australia, and the recently completed Mungari carbon-in-leach processing plant.

“The close proximity of the Phoenix tenements to the newly built Mungari processing plant provides obvious synergies and further strengthens our position in this important region following the proposed La Mancha transaction,” said Evolution executive chairperson Jake Klein.

“In addition, we see benefit in sharing the geological knowledge between our discovery teams to increase the probability of success in this world-class gold camp.”

The board of Phoenix has unanimously recommended that shareholders vote in favour of the transaction, with MD Jon Price saying on Friday that the transaction demonstrated confidence in the Phoenix story and the underlying potential of the company’s project holdings.

He noted that the agreement also meant that Phoenix and Evolution could start work on the highly prospective Zuleika shear zone during the June quarter.

“The Zuleika shear has demonstrated its ability to continue delivering new high-grade opencut and underground discoveries, and to partner with Evolution on an accelerated and extensive drilling programme is a great result for the business,” Price said.

The company has over 15 km of strike immediately north of the Kundana gold field which remains largely untested.

Meanwhile, Phoenix this week reported that the company produced 6 295 oz of gold from the toll treatment of 189 000 t of ore, during the quarter ended March. This was up from the 4 865 oz of gold recovered during the previous quarter.

Edited by Creamer Media Reporter

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