Investor Presentaiton
TRANSACTION SUMMARY
Evolution Mining ("Evolution" or the "Company") has entered into a binding agreement to acquire an 80% interest in the Northparkes Copper-Gold Mine ("Northparkes" or "Northparkes JV") from
CMOC Group Limited ("CMOC") (the "Transaction"), for total cash consideration of up to US$475m, comprised of:
-
an upfront cash consideration of US$400m; and
contingent consideration of up to US$75m ("Contingent Consideration")1
Transaction
details
Due diligence
and JORC
reporting
Valuation and
key metrics
Sumitomo Metal Mining and Sumitomo Corporation (and its affiliates) (together "Sumitomo Group" or "Sumitomo") will retain their 20% interest in the Northparkes JV
Under the Transaction structure, Evolution will acquire all the shares in CMOC's Australian subsidiary CMOC Mining Pty Ltd, which will not trigger any pre-emptive rights²
Evolution will assume the obligations of CMOC Limited as guarantor under the Triple Flag Metal Purchase and Sale Agreement ("Triple Flag Stream") (slide 15 for additional information)
Evolution has also agreed to enter into an offtake agreement (on market equivalent terms) with IXM S.A. ("IXM") (a subsidiary of CMOC) under which IXM will purchase from Evolution copper
concentrates produced from the Northparkes mine equal to Evolution's 80% attributable interest over the life of mine's existing Ore Reserves
Information provided in relation to the Northparkes Resource and Reserve estimate was reported by CMOC in a report titled "Annual Results Announcement for the Year Ended 31 December 2022"
filed with the Hong Kong Stock Exchange dated 17 March 2023
Whilst Evolution has undertaken extensive diligence on the Northparkes Resources and Reserves estimate, it is possible that these estimates may change following evaluation and / or further
exploration work, requiring an updated estimate to be reported under and in accordance with the JORC Code 2012
Nothing has come to Evolution's attention that causes it to question the accuracy or reliability of CMOC's estimates; however, Evolution has not independently validated CMOC's estimates and
therefore is not to be regarded as reporting, adopting or endorsing those estimates
Evolution intends to release a JORC Code 2012 compliant Mineral Resources and Ore Reserves statement for Northparkes during Q3 FY24
Based on an acquisition Enterprise Value ("EV") of US$756m³ implies:
-
an EV / FY23 EBITDA multiple of 7.0x4; and an EV / Reserve multiple of US$0.58/lb CuEq5; and an EV / Resource multiple of US$0.10/lb CuEq6
The transaction is accretive to Evolution across a variety of key per share metrics, notably:
Evolution
MINING
-
Gold-equivalent production (+5%) for FY24E7; and Resources (AuEq) (+32%)8; and Reserves (AuEq) (+9%)⁹
Pro-forma gearing post-Placement of ~34% 10 and current dividend policy unchanged
11View entire presentation