Evolution Mining (ASX:EVN) will take over La Mancha Resources’ Australian gold assets. In the new deal, the miner will acquire La Mancha’s Frog’s Leg and White Foil mines and the Mungari plant in Western Australia. The Luxembourg-based private company will be issued 322m new fully-paid ordinary shares of Evolution, which will represent 31 per cent of the share capital, making the private company the largest shareholder. The two companies will enter into a long-term strategic partnership for future growth, with the private company providing the miner with an initial $100m cash injection. “The two companies believe that the combined group will be very well positioned to take advantage of future growth opportunities, especially in the current market environment,” Evolution said in an announcement to the ASX.
The acquisition will increase the miners gold production by 150,000 ounces to 530,000 to 600,000 ounces for the financial year, making it the third largest Australian gold miner by production. Its all-in sustaining costs was previously projected to be A$960 to A$1030 per ounce, but in another announcement on Monday the all-in sustaining cost was revised to A$1024 per ounce. The deal will require approval from Australia’s Foreign Investment Review Board and from the company’s current shareholders. Evolution Chairman Jake Klein believes the acquisition is exactly what the company has been looking for, saying “The La Mancha Australia assets are an excellent addition to our existing portfolio, and exactly the type of high-quality, low-cost producing assets that we have been seeking to acquire.”
Shares of EVN are down .5c, or .54 per cent, at 92.5c per share around 2:23pm on Monday. EVN has advanced 2.81 per cent in the last 12 months and 41.86 per cent so far this year.