Evolution Mining executive chairperson Jake Klein
JOHANNESBURG (miningweekly.com) – Gold miner Evolution will sell the Pajingo gold mine and surrounding exploration tenements in North Queensland to an emerging Chinese miner for up to A$52-million, the ASX-listed company announced on Tuesday.
Minjar Gold will pay A$42-million in cash upfront for the gold mine, which started operating 30 years ago, as well as a 1% net smelter return royalty of up to A$10-million for gold production above 130 000 oz.
“Pajingo has made a very important contribution to our business over the last six years. Evolution has grown significantly in the past 18 months and it now makes strategic sense for the asset to be operated by an emerging gold producer that can provide the right level of focus on further extending the mine’s operating life,” commented Evolution executive chairperson Jake Klein.
The Australian miner last week announced that it would sell the mine, which is located about 50 km from Charters Towers and which produced 68 630 oz in the 2016 financial year. As a result of the sale, Evolution will book a loss on the sale of A$77.3-million based on the carrying value of the asset.
The sale is unconditional and is expected to close on September 1.
As a result of the sale, Evolution has lowered its 2017 financial year-end gold production guidance by about 60 000 oz to between 745 000 oz and 800 000 oz at an all-in sustaining cost (AISC) of between A$970/oz and A$1 030/oz. Group gold production for 2016 totalled 803 476 oz at an AISC of A$1 014/oz.