Investor Presentaiton
KEY RISKS - TRANSACTION
Employees
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES
The day-to-day operation of the Northparkes Mine is to a significant degree dependent upon the efforts of senior leadership personnel. While Evolution has every intention for the existing senior leadership team and workforce to remain employed following completion of the
Transaction, if one or more of the senior leadership personnel ceases their employment there can be no assurances that would be no detrimental impact on Evolution's operational performance at the Northparkes Mine.
Assignment and change of control risks
Some of the services contracts or other commercial arrangements with respect to the Northparkes Mine may contain assignment clauses, change of control clauses or similar/other provisions that may be triggered by the Transaction. If the relevant counterparties do not provide the
necessary consents (or waivers), then this may result in the termination of the applicable arrangements, the suspension of services or supplies under them or contractual damages or other payments. This may have an adverse effect on the operating performance of the Northparkes
Mine and, in turn, Evolution's operational and/or financial performance.
Inherited liabilities
If the Transaction completes, Evolution may become directly or indirectly liable for liabilities that have been incurred by or in relation to the Northparkes Mine, and in respect of which the warranties and indemnities in favour of Evolution (or its subsidiaries) under the Share Sale and
Purchase Agreement are not ultimately adequate (in terms of compensating Evolution for the financial or other impacts of such liabilities). Such liabilities may have an adverse effect on Evolution's operational or financial performance.
Risks associated with failure to realise benefits of the Transaction
After completion of the Transaction, Evolution will seek to pursue those strategies, operational objectives and benefits set out in this presentation and the accompanying ASX announcement. There is the risk that Evolution may be unable to realise these strategies, operational
objectives and benefits (in whole or in part) or that they will not materialise or will not materialise to the extent that Evolution anticipates. Any failure to meet these strategies, operational objectives and benefits could have an adverse effect on Evolution's operational or financial
performance, and the return on its investment in the Northparkes Mine.
Offtake Agreement
On completion of the Transaction, Evolution will enter into the Offtake Agreement. Given the Offtake Agreement will have a term referrable to the existing reserves of the Northparkes Mine, it will be Evolution's sole source of revenue in relation to its investment in the Northparkes
Mine. As with all contracts, there is a risk that the offtake party may not perform its obligations or may breach the Offtake Agreement. There is also a risk that the offtake party may become insolvent or may not be able to meet its future buying obligations under the Offtake
Agreement. In these circumstances, Evolution would need to consider alternative arrangements for the sale of the copper concentrate produced from the Northparkes Mine. This could have an adverse affect on Evolution's financial performance and return on its investment in the
Northparkes Mine.
Triple Flag Agreement
Evolution will become a party to a Metal Purchase and Sale Agreement with Triple Flag International Ltd (Triple Flag), under which Triple Flag paid an upfront cash payment of US$550 million and provides on-going payments equal to 10% of the spot gold price and spot silver price at
the time of delivery for gold and silver equal to 54.0% of the gold and 80.0% of the silver produced at the Northparkes Mine. Depending on fluctuations in the price of gold and silver, Evolution's returns on its investment in the Northparkes Mine may be adversely affected.
Evolution's proposed timing for completion of the Transaction could be delayed in certain circumstances as a consequence of the arrangements under the Metal Purchase and Sale Agreement with Triple Flag.
Tax Risks
Evolution may become liable for additional tax liabilities as a result of the Transaction, including in relation to the Triple Flag Stream and any other assets acquired from CMOC.
Evolution cannot guarantee any particular tax treatment of the Transaction nor of taxes imposed following completion of the Transaction. It is possible that this may be adverse to Evolution's operational and / or financial performance post-Transaction.
Evolution
MINING
50
50View entire presentation