- Evolution Mining (EVN) completes a billion dollar acquisition of the Ernest Henry copper-gold mine, located northeast of Cloncurry, Queensland
- In 2016, Evolution acquired an economic interest in Ernest Henry from Glencore, through joint ventures
- Now, EVN will acquire all the shares in Ernest Henry Mining from Glencore, after paying $800 million cash, with the $200 million balance due January 6, 2023
- Evolution says increased copper production at the mine will reduce all in sustaining costs and put EVN as one of the lowest cost gold producers in the world
- Shares have been trading 2.2 per cent lower at $3.99
Evolution Mining (EVN) has completed the acquisition of the Ernest Henry copper-gold mine, located northeast of Cloncurry, Queensland.
In 2016, Evolution acquired an economic interest in Ernest Henry from Anglo-Swiss multinational commodity trading and mining company Glencore, through joint ventures.
Now, through an agreement to acquire all the shares in Ernest Henry Mining, EVN has paid $800 million cash to Glencore with the balance of $200 million due on January 6, 2023.
The initial joint ventures delivered 100 per cent of future gold and 30 per cent of future copper and silver produced within an agreed life of mine area, which saw Evolution pay 30 per cent of the operating costs and capital of the operation.
Outside of the life of mine area, EVN held a 49 per cent interest in future additional copper, gold and silver production, and paid 49 per cent of the operating and capital costs.
With full legal ownership, Evolution said the copper-gold mine will generate immediate benefits from increased copper production, which in turn will reduce group all-in sustaining costs by around 12 per cent on a full-year basis.
According to EVN, this will put it as one of the lowest-cost gold producers in the world.
Additionally, the company has identified growth potential below the current operating footprint, which is the subject of a pre-feasibility study.
Executive Chairman Jake Klein said completing this transaction is transformational for Evolution and demonstrates an ability to identify and secure accretive opportunities that also improve the quality of the company portfolio.
“Ernest Henry is a world class operation in a Tier 1 jurisdiction which we know well through our previous economic interest investment in 2016,” he said.
Including Ernest Henry, Evolution operates five wholly-owned mines – Mt Rawdon also in Queensland, Cowal in New South Wales, Mungari in Western Australia, and Red Lake in Ontario, Canada.
The company’s financial year 2022 production guidance is 670,000 – 725,000 ounces of gold at an all-in sustaining cost of $1,135 – A$1,195 per ounce, which it said is a sector-leading amount.
Shares were trading 2.2 per cent lower at $3.99 at 12:02 pm AEDT.