Evolution Mining has entered into a binding agreement with Minjar Gold to sell the Pajingo gold mine and surrounding exploration tenements in North Queensland for up to $52 million in cash and royalties.
This includes a $42 million upfront cash payment and a 1 per cent NSR (net smelter return) royalty of up to $10 million for gold production above 130,000 ounces.
In an announcement to the market today, Evolution said the transaction was unconditional as Minjar Gold has met all the requirements in relation to Chinese approvals and FIRB approval for the transaction.
The Pajingo mine, 50km south of Charters Towers, has been operating since 1986 and produced 68,630 ounces of gold last financial year.
“Pajingo has made a very important contribution to our business over the last six years,” Evolution executive chairman Jake Klein said.
“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.
“We thank all of our team at Pajingo for their contribution to Evolution. Their level of focus and commitment has ensured Pajingo continues to be a profitable gold mine 30 years after commencing production.”
Evolution will book a loss on the sale of $77.3 million based on the carrying value of the asset. The sale is expected to close on September 1.
The Evolution portfolio also includes the Queensland operations of Mount Carlton, Cracow and Mount Rawdon as well as assets in Western Australia and New South Wales.
- 1983: Pajingo field was discovered by Battle Mountain Gold Company
- 1986: First gold production from open pit mines
- 1991: Joint venture formed between Battle Mountain Gold and Normandy Mining Limited
- 2001: Newmont acquired Battle Mountain Gold
- 2002: Newmont Mining Corporation acquired 100 per cent of Pajingo via its takeover of Normandy Mining
- 2007: North Queensland Metals and Heemskirk Consolidated purchased Pajingo from Newmont
- 2010: Conquest acquired 100 per cent of Pajingo via its takeover of North Queensland Metals and purchase from Heemskirk Consolidated
- 2011: Evolution acquired 100 per cent of Pajingo via Catalpa Resources and Conquest Mining merging and the concurrent acquisition of Newcrest Mining’s Cracow and Mt Rawdon gold mines