Evolution Mining strikes $375 million deal with Newmont for Canadian gold mining complex

Australia’s Evolution Mining has promised to plough new investment into the Red Lake gold complex in Ontario, Canada after acquiring the properties from Newmont Goldcorp for US$375 million in cash.

In a news release, Evolution said it plans to spend $50 million on exploration and $100 million on existing operations at the underground mining complex if the acquisition closes as expected by the end of March.

The ASX-listed miner has also agreed to pay an additional $100 million to Newmont upon new resource discovery across the complex.

Since production started in 1949, Red Lake has produced more than 25 million ounces of gold and last year the collective mines produced 276,000 ounces of gold. However, production is forecast to drop to 150-160,000 ounces this year.

“Red Lake is an under-capitalised asset which, through a committed investment in development and exploration, is intended to become a cornerstone asset in the Evolution portfolio,” said the firm’s executive chairman Jake Klein.

For Newmont, the sale forms part of a strategy to release non-core assets and focus on its best performing mines. This divestment plan is shared by fellow top gold producer Barrick Gold, after it recently sold its 50% stake in the Super pit gold mine in Kalgoorlie, Australia.