The Evolution Mining Ltd (ASX: EVN) share price is backtracking on Thursday afternoon. This comes after the company provided investors with an update on the acquisition of the Ernest Henry copper-gold mine.
At the time of writing, the Evolution shares are fetching for $3.98 a pop, down 2.45%.
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Ernest Henry acquisition complete
With the S&P/ASX 200 Index (ASX: XJO) sinking 1.27% to 7,470 points, the Evolution share price has not been spared.
Despite falling wayside today, the company announced it has completed the full ownership of Ernest Henry located in north-western Queensland.
In mid-November, Evolution entered into an agreement with Glencore to acquire all the issued share capital of Ernest Henry for $1 billion.
So far, Evolution has paid $800 million from its existing cash reserves as part of the deal. The remaining $200 million is due on the first anniversary of the completed transaction (6 January 2023).
Acquiring Ernest Henry is expected to yield a number of economic benefits for Evolution.
In particular, the company noted that copper production will increase while lowering its all-in sustaining costs by around 12% on an annualised basis. This is will cement Evolution as one of the lowest cost gold producers in the world.
Evolution executive chair, Jake Klein commented:
Acquiring full ownership of Ernest Henry is transformational for Evolution and again demonstrates our track record of identifying and securing opportunities that are both accretive and improve the quality of the portfolio.
Ernest Henry is a world class operation in a Tier 1 jurisdiction which we know well through our previous economic interest investment in 2016. I extend a warm welcome to our new colleagues that join Evolution today.
Evolution share price summary
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.
Over the past 12 months, the Evolution share price has lost more than 20% in value. A deterioration in commodity prices throughout the latter part of 2021 caused investors to run for the hills.
On valuation metrics, Evolution commands a market capitalisation of around $7.32 billion, with approximately 1.83 billion shares outstanding.
