Navarre snaps up NQ mine for $90m

VICTORIAN miner and explorer Navarre Minerals is buying the Mount Carlton gold mine in North Queensland for $90m.

Evolution Mining, which developed the gold, silver and copper operation 150km south of Townsville in 2013, says it is focusing on growth assets.

Evolution took a hit with the Mount Carlton mine last year when an ore body was found to be narrower than thought but the operation, which cost $180m to develop, has generated more than $655m in cash to June 2020 since production began.

Its gold was used to make the 2019 Melbourne Cup.

Evolution has entered a binding agreement with Navarre to sell the mine for a total consideration of $90m, including $40m payable upon completion, comprising a mix of equity and cash.

Also, Evolution has agreed to participate in Navarre’s equity raising to a maximum shareholding of 19.9 per cent, worth about $20m.

Up to $25m is payable on cumulative gold production milestones from the mine’s

Crush Creek, with $5m payable upon achievement of 50,000 ounces, $5m payable upon achievement of 100,000 ounces and $15m payable upon achievement of 175,000 ounces.

There is also up to a $25m consideration payable in the form of a 5 per cent gold pricelinked royalty where the average spot gold price is greater than $2250/oz in a given quarter.

The royalty is payable on production from both Mount Carlton and Crush Creek from July 1, 2023, for up to 15 years.

Evolution chairman Jake Klein said Mount Carlton had generated excellent returns for shareholders.

Mr Klein explained that with the company focused on the delivery of growth projects, it believed now was the time to hand Mount Carlton over to an emerging gold producer who could focus on extending the operation’s mine life.

The mine employs almost 200 people.

Navarre’s economic interest in Mount Carlton will commence from October 1, with the transaction expected to close in the December quarter.