Today's Australian reporting that EVN planning a sale of...

Today's Australian reporting that EVN planning a sale of Mungari gold mine for $600M to $1B.

Would Mungari be a good fit for RMS?

EVOLUTION THOUGHT TO BE PLANNING SALE OF MUNGARI GOLD MINE

Speculation is mounting that Evolution Mining could soon place its Mungari gold mine up for sale that analysts value at between $600m and $1bn.

The understanding is that the $10bn listed gold miner controlled by Jake Klein has had suitors interested in the West Australian asset lately, including Zijin Mining, which owns the Norton Gold Fields in Kalgoorlie.

Other WA gold miners would also likely be interested in the asset, and a sale by Evolution would be logical given it is the only asset it owns in the state.

Compared to Evolution’s Northparkes gold and copper mine in NSW and Ernest Henry gold and copper mine in Queensland, the asset is thought to be subscale. Northparkes was purchased for $US475m to gain an 80 per cent interest in 2023 from China Moly.

Evolution also owns the Mt Rawdon gold mine in Queensland and Cowal gold mine in NSW.

It has largely lost its shareholder mandate for acquisitions after buying the Red Lake gold complex in Canada in 2019 from Newmont for up to $US475m, but later revealing production was lower than analysts had expected, causing its shares to fall.

The company may attract top dollar for Mungari should it sell now after the gold price hit record highs this year.

But some question whether the timing would be right for Evolution to sell given it is in the middle of the Mungari 4.2 expansion project.

Last financial year Mungari, 600km east of Perth, produced 123,673 ounces of gold at an all-in sustaining cost (AISC) of $2536 per ounce, with operating cash flow of $122.9m.

Evolution spent $135.4m during the year expanding its mill to increase processing capacity from 2 million tonnes per annum to 4.2mtpa.

The project is progressing on schedule and budget, with commissioning expected by the end of the March 2026 quarter.

Gold production this financial year is planned to be about 125,000 to 135,000 ounces at an AISC of $2550 to $2650.

Evolution had $1.6bn of net debt according to its company accounts and posted a 158 per cent rise in net profit to $422.3m.

Merger talks

Meanwhile, there’s been some chatter in the market of merger talks between Genesis Minerals and the $2.35bn Vault Minerals, a business that is the result of a merger between Silver Lake Resources and Red 5.

Speculation has existed for some time that the $2.8bn Genesis, which previously bought the gold assets of St Barbara, would purchase Vault, given the strong synergies in owning its gold mining assets close by in WA’s Leonora gold district.

However, Genesis Minerals managing director Raleigh Finlayson has said that further acquisitions were off the agenda until the company could bed down assets it had recently purchased.

The understanding, though, is that some talks have taken place, but they were called off after Vault delivered a disappointing quarterly update.