A major gold deposit in Western Australia has fallen under new ownership, following an investment and restructure of rights.
Evolution Mining has announced in a statement this week that has reached an agreement with Norton Gold Fields Limited to terminate the company’s right to mine and process ore from Castle Hill deposit.
The agreement will also see Norton terminate a number of historic rights that it held over certain Evolution tenements near Evolution’s Muingari mine.
Evolution will pay an initial upfront cash payment of A$12 million to Norton, with an additional A$3 million payable six months after competition of the transaction as well as a 2% net smelter return royalty over the first 38,000 ounces of gold production from identified tenements within the Castle Hill deposit area.
All tenements as part of the transaction are located within close proximity to Evolution’s Mungari processing facility and once developed, Castle Hill will be an operational hub that will provide operating synergies for several smaller nearby deposits and thereby reduce the cost to develop and mine these deposits.
“Full ownership of Castle Hill materially extends the mine life at Mungari and provides the flexibility to optimise the long-term future of the operation. Importantly, we now have control over the timing of development at Castle Hill,” said Jake Klein, Evolution’s Executive Chairman.
Castle Hill hosts a Mineral Resource of 19.32 million tonnes grading 1.12g/t Au for 695,000 ounces of gold and an Ore Reserve of 5.35 million tonnes grading 1.38g/t Au for 236,000 ounces. The Agreement delivers an immediate boost in Ore Reserves attributable to the Mungari operation and is expected to materially extend the mine life at Mungari.