Glencore plc (“Glencore”) and Evolution Mining (ASX: EVN) (“Evolution”) have entered into a long term agreement, for delivery of gold and copper calculated by reference to production at the Ernest Henry Mine (EHM) in Australia.
Evolution will have a 30% economic stake in the mine and be entitled to 100% of EHM gold production, subject to an agreed life of mine and block model.
Evolution will pay AUD880 million to Glencore upon closing of the transaction as well as ongoing monthly cash contributions equal to 30% of production and capital costs associated with copper concentrates. This transaction forms part of Glencore’s debt reduction plans initially announced on 7 September 2015. The transaction is subject to customary regulatory approvals and is expected to close by the end of Q4 2016.
Evolution will receive the equivalent of 30% of copper and silver payable and 100% of gold payable production from EHM. Glencore will purchase the copper and silver payable (in concentrate) delivered to Evolution for cash at market value.
This agreement recognises EHM as a world class copper-gold-silver mining operation with significant potential going forward. Glencore owns 100% of Ernest Henry Mining Pty Ltd, which owns and operates the Ernest Henry mine. Glencore will continue to manage the day to day operations at EHM.