Here's why the Evolution (ASX:EVN) share price is charging higher

This gold miner is rising on Tuesday. Here's why…

| More on:
stock market gaining

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Evolution Mining Ltd (ASX: EVN) share price has started the week on a positive note.

In morning trade, the gold miner's shares are up 3% to $3.73.

Why is the Evolution share price rising?

Investors have been bidding the Evolution share price higher this morning following a rise in the gold price and the release of an announcement.

In respect to the latter, Evolution has announced a binding agreement with Navarre Minerals Limited (ASX: NML) to sell the Mt Carlton gold mine (including Crush Creek) in Queensland for a total consideration of up to $90 million.

The release notes that the total consideration comprises $40 million payable upon completion, up to $25 million contingent consideration payable on cumulative gold production milestones, and up to $25 million contingent consideration payable in the form of a 5% gold price linked royalty. This is applicable when the average spot gold price is greater than A$2,250 an ounce in a given quarter. The royalty is payable on production from both Mt Carlton and Crush Creek from 1 July 2023 for up to 15 years.

Evolution also revealed that it has agreed to participate in Navarre's equity raise up to a maximum shareholding of 19.9% (approximately $20 million). The final holding will be determined after its equity raise has concluded.

Evolution's Executive Chairman, Jake Klein, commented: "Mt Carlton was Evolution's first development project and has generated excellent returns for shareholders since it was commissioned in 2013. With the Company focused on delivery of growth projects at the cornerstone assets in the portfolio, we believe now is the time to hand Mt Carlton over to an emerging gold producer who can focus on extending the operation's mine life."

"The exposure we have retained will enable Evolution shareholders to benefit from the future success of the operation," he added.

Updated guidance

Evolution has updated its guidance to reflect the sale. Evolution has reduced its FY 2022 production slightly to 670,000 – 725,000 ounces.

Positively, the operation's higher costs mean that Evolution lowered its all-in sustaining cost (AISC) guidance by A$40 per ounce to A$1,180 – A$1,240 per ounce.

The Evolution share price is down 30% in 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Lion roaring in the wild, symbolising a rising Liontown share price.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors once again pulled back from record highs today.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Share Gainers

Why Accent, Dusk, Evolution Mining, and Zip shares are pushing higher today

These shares are having a great session. But why?

Read more »

Hands reaching high for a trophy with a sunset in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another day and another record high for ASX shares this Wednesday.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Gold

Have you heard of this ASX gold stock? It's up 114% in 8 days!

Investors have sent the ASX gold stock flying higher in July. But why?

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Share Gainers

Why Cettire, Core Lithium, Northern Star, and Step One shares are charging higher

These shares are having a good time on hump day. But why?

Read more »

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

It was back to earth for ASX investors this Tuesday.

Read more »

A man sees some good news on his phone and gives a little cheer.
Share Gainers

Why EOS, Hub24, Integrated Research, and Kingsgate shares are pushing higher

These shares are having a strong session. But why?

Read more »

happy mining worker fortescue share price
Share Gainers

Move over Lynas! How this ASX rare earths small-cap surged 106% in just 6 months

This ASX rare earths stock has more than doubled in less than half a year. But how?

Read more »