Evolution Mining, a leading Australian gold producer, is making a big-splash entry into Canada by acquiring the Red Lake Gold Complex from Newmont Goldcorp in a cash deal worth US$475 million.
The Sydney and Perth-head-quartered gold miner made the announcement on Nov. 26, Australian time.
The news release included details of a three-year "turnaround" plan to "reinvigorate" the northwestern Ontario gold camp by reducing operating costs, increasing production, and extending mine life.
According to the terms of the transaction, Evolution will pay Newmont Goldcorp US$375 million at close, plus an additional US$100 million contingent on a new resource discovery.
Evolution expects the deal to be finalized by March.
Newmont merged with Goldcorp and its mines in Timmins, Red Lake and at Musselwhite last April in a $10-billion deal. By September, they were taking offers for the Red Lake Complex.
Evolution called Red Lake an underfunded asset and said it's committed to spending US$100 million on the current underground mines, plus spend US$50 million in exploration to find new ones.
Evolution is debt-financing the acquistion through an AUD$600-million loan from its lenders.
The company owns five mines in New South Wales, Queensland, and Western Australia.
In a statement, Evolution executive chairman Jake Klein said they've had their eyes on making an entry into Canada since 2017.
"Red Lake is an undercapitalized asset which, through a committed investment in development and exploration, is intended to become a cornerstone asset in the Evolution portfolio.
"We have identified a range of opportunities to deliver an operational turnaround of the asset, which is expected to create significant value for our shareholders and improve the quality of our portfolio. The camp has significant exploration potential which, coupled with its relatively unexplored recent past, provides significant upside...