Evolution Mining sells Edna May mine to Ramelius Resources for $40mn

The second largest gold miner in Australia has announced the sale of one if its gold mines in a deal that could rise to $90mn.

Evolution Mining has entered into an agreement with Ramelius Resources to sell its Edna May gold mine, located in Western Australia.

The deal will see Ramelius pay $40m cash upon completion plus caped royalty payments. Ramelius will also pay “contingent consideration” of $20mn, which taking into account a maximum royalty payment of $30mn will see a maximum of $90mn payable.

Ramelius’ Managing Director, Mark Zeptner, today said: “The acquisition of Edna May represents the next step in our stated ambition to build on the strength of our existing operations at Mt Magnet and Vivien. Upon completion, we become a 200,000-ounce pa gold producer, with all operations within a one-hour flight from Perth.”

“Not only does this acquisition drive a significant increase in group Mineral Resources and Ore Reserves, as a going concern it also delivers excellent returns on our initial A$40M investment with minimal capex imposts.”

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“We are also particularly excited about the potential for Edna May to significantly increase both its Ore Reserves and annual production via further extensions which represent huge optionality for Ramelius in the future.”

“Our management team has the skills and experience to collaborate with the existing Edna May workforce to deliver on the turnaround started by Evolution and in extending the future potential of the mine.”

Edna May is located 350km east of Perth, Western Australia, near the town of Westonia. The current operation was developed by Catalpa Resources Ltd and commissioned in May 2010.

Ore is currently sourced from a single open pit mine and is processed through a conventional carbon in leach processing facility.  The mine produced 70,188 ounces of gold in FY2017.