EVOLUTION EXPANDS OPS IN $400M DEAL
EVOLUTION Mining will pay $400m to Northern Star Resources to consolidate the two companies’ gold operations east of Kalgoorlie, as the wave of changes around the historic West Australian gold hub continues.
The deal will see Evolution pick up Northern Star’s share of the Kundana group of mines to add to its own
Mungari operations, in a deal long seen as inevitable by analysts.
The price tag includes Northern Star’s 51 per cent share in the Raleigh, Hornet and Pegasus mines, part of the East Kundana joint venture with Rand Mining and Tribune Resources. It also includes Northern Star’s Millennium, Pope John and Moonbeam underground operations and a suite of near term development projects.
Collectively, the group of operating mines sit closer to Evolution’s existing Mungari processing plant than the plant Northern Star uses, and
Evolution said the deal promised to deliver significant cost savings.
Northern Star picked up the Kundana operations in Barrick Gold’s fire sale of its Australian assets in 2014, paying $75m for half of the East Kundana joint venture and the nearby Kanowna Belle mine, which it will keep. Evolution called a trading halt on Thursday as it looks to raise $400m to close the deal, issuing 104 million shares at $3.85 a share.
Evolution boss Jake Klein said in a statement the deal improved the company’s WA operations substantially, delivering a fourth cornerstone production hub to underpin its outlook.