Mining boss Ellison tells investors: ‘I hate what I’ve done’
The executive has been pressured to explain why the company made historical payments to offshore entities he controlled.
Australian gold miner Evolution Mining has agreed to buy an 80% stake in the Northparkes copper-gold mine in New South Wales state from Chinese miner CMOC Group for up to $831 million, the two companies said on Tuesday.
The purchase, to be funded in part by a A$525 million ($347.34 million) equity raising, will add incremental gold ounces to the country’s second-biggest gold miner and boosts its exposure to copper at a time when deposits of the metal are in hot demand due to the energy transition.
Evolution agreed to buy the stake for $400 million in cash and a copper price-linked contingent consideration of up to $75 million.
It will also take on CMOC’s $356 million gold and silver royalty stream liability that is based on an outstanding commitment of ounces at a long-term gold price of A$2,650 an ounce.
In addition to the equity raising, Evolution will take out a new A$200 million five-year term debt facility to help fund the deal, the gold miner said, adding it expected the purchase to complete before the end of 2023.
Japanese integrated trading company Sumitomo Corp and Sumitomo Metal Mining will continue to hold the remaining 20% interest in the Northparkes mine.
The mine, which was once owned by Rio Tinto, is expected to produce 25,000 metric tonnes of copper and 38,000 troy ounces of gold in the 2024 financial year.
Evolution will also acquire all the shares in CMOC’s Australian subsidiary, CMOC Mining Pty Ltd.
The company also agreed to enter into a supply agreement with trading house IXM SA, a CMOC unit, which will buy copper concentrates produced at the mine equivalent to Evolution’s 80% stake.
Trading in Evolution shares was halted while it completed the equity raising. Shares in CMOC were down 3.5% in morning trade.
($1 = 1.5115 Australian dollars)
(By Melanie Burton and Adwitiya Srivastava; Editing by Shinjini Ganguli and Jamie Freed)
Comments