Evolution Mining has reached agreement with Norton Gold Fields to terminate Norton’s right to mine and process ore from Evolution’s Castle Hill deposit and other historic rights Norton held over certain Evolution tenements near Mungari in Western Australia.
|Location of the tenements impacted by the agreement with Norton Gold Fields Limited|
The tenements impacted by the Agreement are located approximately 25 kilometres northwest of Evolution’s Mungari processing facility, and contained several prospective deposits and exploration targets.
Hosting a Mineral Resource of 19.32 million tonnes grading 1.12g/t Au for 695,000 ounces of gold and an Ore Reserve of 5.35 million tonnes grading 1.38g/t Au for 236,000 ounces, Castle Hill is the most advanced and most significant deposit in the tenement package.
Castle Hill is now expected to provide base-load feed for the Mungari processing facility following forecast completion of the White Foil open-pit in FY20. Importantly, once developed, Castle Hill will be an operational hub that will provide operating synergies for several smaller nearby deposits and thereby reduce the cost to develop and mine these deposits. Infill drilling and engineering studies relevant to Castle Hill and the surrounding deposits will commence immediately.
The agreement with Norton also terminates historic rights including royalties, clawback rights and options to treat or purchase ore from certain tenements. Termination of these rights now allows Evolution to more aggressively explore these tenements and, where relevant, commence development planning. Commenting on the Agreement, Evolution’s Executive Chairman, Jake Klein, said that full ownership of Castle Hill materially extends the mine life at Mungari and provides the flexibility to optimise the long-term future of the operation.
In return for Norton terminating the right to mine, and other historic rights, Evolution will pay to Norton an initial upfront cash payment of A$12 million; an additional cash payment of A$3 million payable six months after completion of the transaction; and a 2 per cent net smelter return royalty over the first 38,000 ounces of gold production from certain tenements within the Castle Hill deposit area