Evolution Mining agrees to buy 80% stake in Northparkes mine for up to $718m

The news: Australian-based gold miner Evolution Mining has agreed to buy an 80% stake in the Northparkes copper-gold mine from China's CMOC Group for up to $US475 million ($718 million).

The numbers: The acquisition will comprise $US400 million upfront and a contingent consideration of up to $US75 million. Evolution said the deal, which is expected to be completed by the end of the month, will be funded by a $525 million share placement and a $200 million five-year debt facility. Japanese multinational Sumitomo Group will retain a 20% stake in the New South Wales mine. Trading of Evolution shares was halted ahead of the announcement.

The context: Evolution also agreed to enter into an offtake agreement with CMOC subsidiary IXM, under which IXM will purchase copper concentrates produced from the Northparkes mine equal to Evolution’s 80% attributable interest over the life of mine’s existing ore reserves. In addition, Evolution said it will assume the obligations of CMOC as guarantor, which will see the ASX-listed miner deliver a percentage of its gold and silver production from Northparkes to precious metals streaming and royalty company Triple Flag.