PERTH (miningweekly.com) – Gold miner Evolution Mining has struck a C$343-million deal to acquire TSX-listed Battle North Gold Corporation, to gain ownership of the Bateman gold project in the Red Lake gold district, in Ontario.

Evolution executive chairperson Jake Klein said on Monday that the acquisition of Battle North would provide the company with an opportunity to expand its footprint in the Red Lake region and to create value by leveraging the infrastructure of the Bateman project and its own Red Lake project.

“The additional processing capacity from the new Bateman mill will also accelerate our ability to achieve our objective of producing in excess of 300 000 oz/y of gold from Red Lake. In the 12 months we have been operating at Red Lake, we have demonstrated that we are a committed steward in the region,” said Klein.

“This expansion of our footprint will provide us with the opportunity to build our track record as a safe and sustainable operator for the long-term benefit of a broad range of stakeholders, including the local workforce, regional communities and our Wabauskang and Lac Seul First Nation partners.”

The Bateman project covers some 28 000 ha and includes a new 650 000 t/y mill facility. The project is currently permitted for 450 000 t/y, and is expandable to 900 000 t/y with minimal capital investment.

The project is currently estimated to host a reserve of some 3.5-million tonnes, grading 5.54 g/t gold for 635 000 oz of contained gold, and a resource estimate of 1.71-million tonnes, grading 7.09 g/t gold for 390 000 oz of contained gold.

A feasibility study previously estimated that the project would produce some 74 000 oz/y over a mine life of eight years, at an all-in sustaining cost of $865/oz.

Under the terms of the proposed transaction, Evolution has agreed to acquire all of the issued and outstanding shares of Battle North at a price of C$2.65 a share in cash.

The offer price represents a 46% premium over Battle North’s closing price on March 12, and a 54% premium to the company’s 20-day volume weighted average share price.

“The all cash offer is at a significant premium to market and reflects the extraordinary efforts of the Battle North team to create value at the Bateman gold project and ultimately deliver an outstanding outcome for Battle North’s shareholders,” said Battle North president, CEO and director George Ogilvie.

“We believe that there are unique and undeniable merits to combining the Red Lake assets of Battle North and Evolution and this transaction reduces development and execution risk. Evolution is a highly regarded mining company with a demonstrated ability to successfully operate internationally,” he added.

The transaction will be subject to a number of conditions, including more than 66% of Battle North shareholders supporting the transaction at a shareholder meeting currently scheduled for May this year.

Evolution noted that the transaction would be funded from the company’s current cash balance and available credit facilities, and would not require Evolution shareholder approval.