Evolution Mining (ASX: EVN) has agreed to sell its Cracow gold mine for up to $125 million.
What is Evolution Mining?
Evolution Mining was formed in November 2011 and is one of Australia’s largest gold miners. It owns gold mines called Cowal in New South Wales, Mt Carlton, Cracow and Mt Rawdon in Queensland, and Mungari in Western Australia.
Evolution Mining sells Cracow gold mine
Evolution Mining is going to sell its Cracow gold mine in Queensland for a total consideration of up to $125 million. The buyer is Aeris Resources (ASX: AIS).
The total $125 million is split up into different sections. The first $60 million is payable upon completion, $15 million is then payable on 30 June 2022 and the final $50 million is a maximum contingent based on a 10% net royalty from the mine in relation to any gold produced in the period from 1 July 2022 to 30 June 2027.
Why is Evolution Mining doing this?
The gold miner said it’s always aiming to increase the quality of its portfolio and hold six to eight assets with an average mine life of at lease a decade. The sale fits with this strategy after the completion of the Red Lake acquisition in April 2020. It also makes more sense for Cracow to be in Aeris’ hands rather than Evolution.
The sale is expected to close around the end of June 2020.
Gold and agriculture are probably the only commodities that I would consider investing in. Gold can be a useful hedge against share market falls. Evolution is probably one of the better gold miners on the ASX. The gold price is pretty high right now though.
[ls_content_block id=”14945″ para=”paragraphs”]
Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
