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Evolution pays $550m for Barrick mine in NSW

Evolution pays $550m for Barrick mine in NSW

Photo by Bloomberg

25th May 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Gold miner Evolution Mining on Monday announced that it would spend $550-million to acquire the Cowal gold mine, in New South Wales, from fellow miner Barrick Gold.

Evolution executive chairperson Jake Klein described the acquisition as a “transformational” transaction for the company, pointing out that the large-scale project was estimated to produce between 230 000 oz/y and 260 000 oz/y, at an all-in sustaining cost (AISC) of between A$850/oz and A$900/oz.

Following the completion of the transaction, Evolution would produce between 630 000 oz/y and 700 000 oz/y, which would increase to between 760 000 oz/y and 860 000 oz/y, post completion of the proposed La Mancha Australia acquisition.

Furthermore, AISCs were expected to reduce from A$1 032/oz to between A$950/oz and A$1 020/oz, assuming the completion of both transactions.

“From day one, more than three and a half years ago, we set out to create a globally relevant, midtier Australian gold producer. We have consistently communicated a very clear strategy of our intention to leverage our operating success to upgrade the quality of our asset portfolio,” Klein said.

“With all five of Evolution’s existing operating assets performing well and generating strong cash flows, we are in an ideal position to grow our business at a time in the cycle where asset prices are attractive.”

Klein said that the addition of the Cowal asset to Evolution’s portfolio was an exciting step forward for the company and provided it with a cornerstone asset of the highest quality.

As of the end of December, the Cowal mine had a mineral resource of 94.5-million tonnes, grading 1.1 g/t gold for 3.4-million ounces, and an ore reserve of 41.5-million tonnes, grading 1.2 g/t gold for 1.6-million ounces.

The process plant had a capacity of 7.7-million tonnes a year, which currently had an operating permit to run at 7.5-million tonnes a year.

Klein said that Evolution had identified several areas where the company’s operating expertise could be applied to reduce costs and improve production efficiencies. The potential to revise reserve price assumptions also indicated an opportunity to materially increase reserves, resources and the mine life of the operation.

In addition to the operating assets, Evolution would also acquire a regional tenement package covering some 683 km2, with several existing identified exploration targets.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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