These Aussie gold rivals just raised $74 million by selling mines to China, Canada
Australian gold miners Evolution Mining (ASX:CAH) and Northern Star Resources (ASX:NST) have inked two key deals, for a combined $74 million (A$96 million) within 24 hours of one another, to sell some of their higher-cost local operations.
Evolution, Australia’s second-largest bullion miner, said Tuesday it would sell its Pajingog mine and surrounding exploration claims in North Queensland to an emerging Chinese miner for up to US$40 million (A$52 million)
Minjar Gold will pay A$42 million in cash plus up to another $10m in future royalties for the mine, which produced 68,630 ounces of gold in the year to June 30, the lowest total among Evolution’s operations.
The Sydney-based miner had previously flagged it would consider offers for its higher-cost sites as it aims to improve the quality of its portfolio.
The transaction comes only a day after rival Northern Star Resources signed a legally-binding conditional agreement with Canada’s Billabong Gold to sell its Plutonic mine, in Western Australia, for an initial $37.5 million.
The deal with Billabong, controlled by Chris Bradbrook — a well-known mining executive based in Toronto — is potentially worth up to $37.5 million, with $12.5 million to be paid in cash and a further $25 million to be paid in either shares.
Northern Star expects a further $28 million down the road, subject to certain milestones and royalty arrangements.
The gold producer, with operations in Western Australia and the Northern Territory, acquired Plutonic and the Kanowana Belle gold mines from Barrick Gold in 2014 for a combined $100 million.
The sale announced yesterday also included Northern Star’s Hermes mine, which it purchased last year.
Gold has regained its lustre this year as investors seek havens from volatile markets and weak interest rates. The metal has gained 26% to date, triggering a fresh wave of global mergers and acquisitions in the sector.