The Evolution Mining Ltd (ASX: EVN) share price is slipping 1.93% to $5.09 on Thursday morning. This follows the company's announcement regarding an acquisition.
Evolution is an Australian mining and exploration company that owns and operates five gold and silver mines in New South Wales, Queensland and Western Australia.
Battle North acquisition complete
Evolution shares are down today after investors have reacted to the company's latest update.
In a statement to the ASX, Evolution advised it has formally completed the acquisition of Canadian-listed Battle North Gold Corp (TSE: BNAU).
Evolution tabled an offer in the middle of March to acquire all the issued share capital of Battle North. A definitive agreement valued the outstanding shares of Battle North at a price of $2.79 (C$2.65) apiece. At the time, this equated to a cash consideration of roughly $362 million (C$343 million). However, the Australian dollar currency was hedged shortly after entering the transaction, which resulted in a saving of $9.7 million.
Battle North assets include the Bateman Gold Project, which runs adjacent to Evolution's Red Lake Operations in Ontario, Canada. In addition, Evolution will also acquire a large gold exploration land package on the Long Canyon gold trend near the Nevada-Utah border in the United States.
Evolution took out a 5-year term loan of $440 million to fund the transaction and any other associated costs. The agreed repayment schedule will comprise a $50 million payment each year from FY22 to FY25. The full balance is expected to be finalised in FY26. The first tranche to be paid will fall in October this year for $15 million.
Evolution executive chair, Jake Klein touched on the takeover, saying:
This acquisition provides Evolution with an opportunity to expand our footprint in the region and create value by leveraging the infrastructure of the two operations.
The additional processing capacity from the new Bateman mill will also accelerate our ability to achieve our objective of producing in excess of 300,000 ounces of gold per annum from Red Lake.
Evolution share price summary
On valuation metrics, Evolution commands a market capitalisation of around $8.8 billion, with approximately 1.7 billion shares outstanding.
The Evolution share price has recently risen higher since hitting a 52-week low in March of $3.79. Year-to-date performance now stands at a gain of almost 10% for shareholders.
