Evolution Mining Limited has entered into a binding agreement with Aeris Resources Limited to sell the Cracow gold mine in Queensland for a total consideration of up to A$125 million.
The total consideration consists of:
• A$60 million cash payable upon completion;
• A$15 million cash payable on 30 June 2022; and
• up to A$50 million contingent consideration payable in the form of a 10% net value royalty, based on gross revenues less C1 direct cash costs in relation to any gold produced at Cracow in the five-year period from 1 July 2022 to 30 June 2027.
Evolution has consistently stated that a key objective of its corporate strategy is to continuously seek to upgrade the quality of its portfolio and hold six to eight assets with an average mine life of at least ten years. The sale of Cracow is consistent with this strategy and reflects the completion of the Red Lake acquisition in April 2020 and the Company’s view that Cracow has more value in the hands of Aeris than in Evolution’s portfolio.
Commenting on the transaction, Evolution Executive Chairman, Jake Klein said:
“Cracow was acquired in 2011 as part of the formation of Evolution and has been a reliable asset within the portfolio. We thank everyone at Cracow for their contribution to Evolution. One of our sustainability commitments is to leave a lasting positive legacy in the communities in which we operate and we are confident that our relationships within the broader community around Cracow, including the traditional custodians of the land, the Wulli Wulli People, reflect this. We also believe that Aeris will prove to be a great partner for the community going forward.”
The sale is expected to close around the end of June 2020. Evolution is committed to assisting Aeris to ensure a healthy, safe, smooth, and orderly transition of ownership at the Cracow operations.
Treadstone Resource Partners acted as financial advisor to Evolution. Allens acted as a legal advisor to Evolution.
Source: Evolution Mining