Red Lake's biggest mine operator just got a bit bigger.
Evolution Mining, operators of the Red Lake Mine Complex, is acquiring Battle North Gold and the Bateman gold project, a resuscitated underground mine project in the northwestern Ontario gold mining camp.
Bateman contains more than 14,000 metres of underground workings, a shaft and hoist, and almost turn-key surface facilities in place with a project timeline to enter commercial production at the end of 2022.
The transaction price tag is $343 million.
The Bateman project is 10 kilometres northeast of Evolution's Cochenour Mine.
Toronto-based Battle North's board of directors recently approved construction plans to upgrade the once-shuttered operation. The first gold pour at Bateman was tentatively scheduled for the end of this year.
Evolution, the Sydney and Perth, Australia-based company moved into the historic high-grade gold camp in northwestern Ontario in November 2019 by acquiring the Red Lake Gold Complex, and its three mines, from Newmont in a cash deal worth US$475. It was the Western Australian gold miner's first foray into Canada.
Battle North is the former Rubicon Minerals. The Bateman Project was once dubbed the Phoenix Gold Project, which operated briefly in 2015 until mining operations were suddenly halted in 2015. The company entered creditor protection.
After the previous management team was sacked, Ogilvie, the former Kirkland Lake Gold CEO was brought in to recalculate the gold resource, help refinance the project, and return it to financial viability.
The company changed its name and that of the mine project last summer.
A feasibility study released last fall projects an 8.2 year mine life at Bateman with 602,987 ounces of production. Gold exploration still continues on the company's 28,266-hectare property, one of the largest land packages in the Red Lake camp.
"The all-cash offer is at a significant premium to market and reflects the extraordinary efforts of the Battle North team to create value at the Bateman Gold Project and ultimately deliver an outstanding outcome for Battle North's shareholders," said Ogilvie, Battle North's president and CEO in a March 14 news release.
"We believe that there are unique and undeniable merits to combining the Red Lake assets of Battle North and Evolution and this Transaction reduces development and execution risk. Evolution is a highly regarded mining company with a demonstrated ability to successfully operate internationally. The Battle North team looks forward to working with Evolution to close the Transaction and smoothly transition operations to the new team."
For expansion-minded Evolution, Ogilvie's success in the Red Lake camp in reviving this project was not lost on Evolution Executive Chairman Jake Klein.
"Both Evolution and Battle North started the negotiation with a clear alignment that a consolidation of the properties would create value that would not be available if they were developed and operated separately. George and his team have done a very good job at progressing the Bateman Gold Project to this point and recognize that this is an ideal window to consolidate the properties ahead of the construction of the Bateman mine which is now in its early stages," Klein said in a statement.
"This acquisition provides Evolution with an opportunity to expand our footprint in the region and create value by leveraging the infrastructure of the two operations. The additional processing capacity from the new Bateman mill will also accelerate our ability to achieve our objective of producing in excess of 300,000 ounces of gold per annum from Red Lake.
"In the 12 months that we have been operating at Red Lake we have demonstrated that we are a committed steward of the region. This expansion of our footprint will provide us with an opportunity to build on our track record as a safe and sustainable operator for the long term benefit of a broad range of stakeholders including the local workforce, regional communities and our Wabauskang and Lac Seul First Nation Partners," added Klein.
The definitive arrangement agreement reached involves Evolution acquiring all of the issued and outstanding shares of Battle North at a price of C$2.65 per common share in cash.
Battle North shareholders still have to approve the deal in a special meeting slated for May.
Should all conditions be met, the transaction is expected to close by the second quarter of this year.